Monday, November 09, 2020

WTO Limits on Farm Subsidies

 I've wondered whether USDA would run into problems with the WTO's limits on farm program payments. A recent CRS report analyzed the problem.

The last paragraph of the summary says:

If the United States were to exceed its WTO annual spending limit, then offending farm programs (whether ad hoc or traditional) could be vulnerable to challenge by another WTO member under the WTO’s dispute settlement rules. However, if the payment programs that appear likely to cause the United States to exceed its WTO spending limits in 2019 and 2020 prove to be temporary, then a successful WTO challenge might not necessarily result in an adverse ruling against the United States or any other authorized retaliation (e.g., permission to rais e tariffs on U.S. products), depending on the outcome of a WTO dispute settlement proceeding. 

The issue is summarized as this:

The U.S. government provided up to $60.4 billion in ad hoc payments to agricultural producers cumulatively in 2018, 2019, and 2020, in addition to existing farm support. These payments have raised concerns among some U.S. trading partners, as well as market watchers and policymakers, that U.S. domestic farm subsidy outlays might exceed its annual WTO spending limit of $19.1 billion in one or more of those three years. [emphasis added]


I bolded the numbers because the last I'd heard it was $48 billion. I'm sure the $60 billion had little to do with the election results.

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