The United States has reported its farm subsidy spending for 2008 to the World Trade Organization, indicating a slight overall increase from the previous year. The notification appears to demonstrate that while trade-distorting support remains low, in part a function of high farm prices that year, spending on payments delinked from production was higher than ever before.
The notification reports that the United States spent $6.25 billion in amber box spending, a category that includes the most trade-distorting form of permitted support under the WTO's "traffic light" system for classifying farm subsidies. Washington also spent $6.7 billion in de minimis spending, a category of trade-distorting support that is currently allowed in small amounts under WTO rules so long as it falls below 5 percent of the value of production.
Green box spending –– allowed without limits, on the basis that it causes no more than minimal trade distortion –– was reported to be $81.59 billion, an increase of around $5 billion from the previous year. Other categories of support did not appear to have increased.
Combined spending on amber, blue and de minimis support –– known as "overall trade-distorting support," or OTDS –– was less than $7 billion from 2006 to 2008, a figure that is significantly lower than the $14.5 billion ceiling U.S. officials have proposed in the Doha Round of trade talks. However, U.S. OTDS reached $24 billion in 1999 and 2000, and was as high as $19 billion in 2005.
Despite fluctuations in trade-distorting support, green box spending in the United States has continued to grow steadily since 1999, and is now at a historic high. Many developing countries remain concerned that the large amounts of support notified in this category do in fact cause more than minimal trade distortion, by providing U.S. producers with a competitive advantage over producers elsewhere. The U.S. notification to the WTO (G/AG/N/USA/77) is available at this link.
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