The CASE ANALYSIS: Agricultural Subsidies.

The CASE ANALYSIS: Agricultural Subsidies.

Write a 5 page paper (1500 or more words) in APA format in response to the e questions

1. Provide an overview of this case analysis; summarize the key points.
2. Discuss how the Uruguay Round and the Doha Development Agenda impact agricultural subsidies.
3. Discuss the findings in Table 7.3 (page 145). How would you address the findings in a presentation?

Below is a recommended outline.

4. Cover page (See APA Sample paper)
5. Introduction
6. A thesis statement
7. Purpose of paper
8. Overview of paper
9. Body (Cite sources using in-text citations.)
10. Provide an overview of this case analysis; summarize the key points.
11. Discuss how the Uruguay Round and the Doha Development Agenda impact agricultural subsidies.
12. Discuss the findings in Table 7.3 (page 145). How would you address the findings in a presentation?

Conclusion – Summary of main points

1. Lessons Learned and Recommendations
2. References – List the references you cited in the text of your paper according to APA format.

(Note: Do not include references that are not cited in the text of your paper)

 

Agricultural Subsidies

Agricultural issues have long sparked conflict among the members of the WTO. Some cases have pitted high-income countries against each other, among them disputes between the United States and Japan over apples and EU-U.S. disputes over bananas. More recently, the WTO’s Doha Development Agenda has tried to address agricultural issues that are central to relations between developing and industrial countries. In particular, three issues are on the table: tariffs and quotas (market access), export subsidies given by countries to encourage farm exports, and production subsidies granted directly to farmers. Direct subsidies are viewed as harmful because they lead to overproduction, squeeze out imports, and in some cases result in the dumping of the surplus product in foreign markets.

 

 

 

TABLE 7.3   Agricultural Subsidies 2007.

Agricultural Subsidies   (Millions of US$)         As a Percent of Farm Receipts

Australia                     1,827                                 6

Canada                        7,001                               18

European Union          134,318                            26

Japan                              35,230                             45

United States                  32,663                            10

The original GATT agreement included language on agriculture, but there were so many loopholes that it had little impact. Not until the Uruguay Round was finalized in 1993, nearly 50 years after the signing of the original GATT agreement, were significant changes made in the rules for agricultural trade. Many quotas were converted to tariffs, and industrial countries agreed to reduce their direct support for the farm sector by 20 percent. Indirect supports such as research and development and infrastructure construction were recognized as necessary, desirable, and permissible.

While direct-support payments were curtailed, the Uruguay Round left intact direct payments to farmers that theoretically do not increase production, are part of a country’s environmental or regional development plan, or are intended to limit production. If you think these are a lot of loopholes, you are right. Consequently, the current round of trade negotiations, the Doha Development Agenda, has taken up the issue of agriculture again, and developing countries in particular are pushing to limit government practices that block their access to markets in high-income countries or that subsidize production by industrial countries. Table 7.3 shows the range of direct-support payments to agricultural producers in many industrial nations. The twenty-seven members of the EU are grouped together because their trade and agricultural policies are formulated at the EU level, not at the national level. In terms of both absolute support and the percent- age of its GDP that it transfers to farmers, the EU is the biggest subsidizer. Japan is close in percentage terms but is at about one-half the level in absolute dollar amounts. The United States is also a large subsidizer, and Canada is similar. Not all countries subsidize agriculture, however. Australia’s supports are less than one-half the level of the United States as a share of GDP, and despite the lower support levels, it uses its comparative advantages to be among the top fifteen agricultural exporting countries in the world.

Reference:

Gerber J. (2011). Regional Trade Agreements. International Economics. 5th Ed. Pearson Education: Boston, MA.