WTO Compliance and Domestic Farm Policy Change

Abstract

The establishment of the WTO in 1995 posed a challenge for the conduct of domestic farm policies. Both the levels of support and the instruments used were constrained by the Agreement on Agriculture and other parts of the Uruguay Round Agreement. This chapter explores the experience of the period since 1995 to see to what extent the WTO commitments have shaped domestic farm policies, particularly in the United States and the European Union. This influence can come about either through the negotiated constraints on policy outcomes or through the litigation of complaints by other countries. Notifications of domestic support levels show little direct impact on US farm policy but the outcome of litigation has had some influence on policy choices. In the European Union, the reform of the CAP has been much more influenced by WTO subsidy constraints but somewhat less by litigation.