WTO farm program 'boxes' and proposals at a glancePublished on 11/21/2005During the trade discussions, there's been a lot of talk about different colored "boxes." What exactly are these so-called boxes? The boxes are how World Trade Organization negotiators classify farm programs and their impact on trade. Here is a description of the different boxes and proposed changes in the boxes made by the United States to the World Trade Organization, according to the U.S. Trade Representative's Office: Amber box: This box includes domestic support programs that are considered the most trade distorting. In the United States, that would be price support programs, loan deficiency payments and marketing loan gains. The United States has proposed a 60 percent cut in its amber box. Currently, the United States is allowed to spend $19 billion under WTO rules and spent about $17 billion this year. That would drop to $7.6 billion. WTO rules allow the European Union more than four times the amount of amber box support than the United States, which encourages surplus production and makes it difficult for U.S. producers to compete in global markets. For the European Union, the United States has proposed an 83 percent cut from $88 billion to $15 billion. Green box: This box contains domestic support programs considered the least trade distorting because they minimally affect trade. Examples are research, Extension, disaster payments and conservation efforts. The United States has proposed no material changes in the criteria and no cap on expenditures. Blue box: This box refers to farm program payments tied to limits on production. The United States currently has no programs to fit in this box, but U.S. countercyclical payments would be included in the blue box under the current WTO negotiations. WTO rules allow an unlimited amount of money to be spent in this category. The United States has proposed a blue box cap of 2.5 percent of the total value of agricultural production in a given country. De minimis box: This box includes domestic support programs that are considered to be amber box but account for less than 5 percent of the value of total agricultural production for non-product specific programs or that account for less than 5 percent of the value of a commodity's production for product-specific programs. These programs can be subtracted from the amber box. The United States has proposed a 50 percent reduction in the current allowance from 5 percent to 2.5 percent. | |




