Aggregate Measurement of Support (AMS) : Joint Proposal by India & China in WTO (Important)

India and China jointly asked for elimination of the Aggregate Measurement of Support (AMS) or Amber Box to the World Trade Organisation (WTO) . These are most trade-distorting forms of farm subsidies given by developed countries.

Three Categories of Domestic Support
  • Important proposal by India and China for upcoming 11th Ministerial Conference of the WTO to be held in Buenos Aires in December 2017.
  • Counters efforts to remove subsidies of the developing countries while letting the developed countries retain their huge farm subsidies.

Background

  • Developed countries, including the US, the EU, and Canada provide trade-distorting subsidies to their farmers at much higher levels than ceiling of developing countries.
  • Developed countries have more than 90% of global AMS entitlements amounting to nearly US $ 160 bn.
  • Developing countries, including India and China largely do not have AMS entitlements.
  • In developed world, subsidies for many items over 50% and some even more that 100% of the value of production of the product concerned, while developing countries forced to contain it within 10% of the value of production.
  • Developed members have huge amount of AMS beyond their de minimis- minimal amounts of domestic support allowed even though they distort trade that is up to 5% of the value of production for developed countries, 10% for developing.
  • Elimination of AMS according to India and China believe is the starting point of reforms.
  • Subsidies in India provide a subsistence amount of about US $ 260 per farmer per annum compared to over 100 times more in some developed countries.

Examrace Team at Aug 21, 2021