WTO Rules of Agriculture Subsidies and the Development

This study tries to explore a rule based agricultural subsidy policies for a WTO member including Korea. Also, better understanding of agricultural subsidy practices would be helpful to seek the way for DDA completion. With the expiration of “peace clause” of the AoA, agricultural subsidy disputes occur frequently. Also, WTO member’s agriculture subsides should accomplish all obligations under the AoA and the ASCM both. The WTO cases concerning agricultural subsidies provide many normative disciplines of the AoA and the ASCM. For example, pricecontingent subsidies could be “contingent upon export performance” which is qualified as prohibited export subsidies under Article 3.1(b) of the ASCM. Also, certain category of product export could be cross-subsidized even though direct subsidy is not given to it. Concerning Korea (Republic of), it is doubt that the Korean government seriously considers the detail aspects of WTO rules and practices like price- contingent or cross-subsidized effects when it takes the subsidy measures. Concerning agricultural subsidy in the DDA negotiation, there are serious controversy between the agricultural product export and the import countries and between the developed and the developing countries. To complete the negotiation, the United State and the EU are hesitant to make a final political decision. The WTO rules on agricultural subsidies will substantially be tightened if the DDA negotiation is successfully completed. For the completion of DDA, it is necessary to discuss on installing another kind of “peace clause” to ease the burden of reduction commitment. The agricultural support policies of the United States and the EU will substantially influence on the policy of Korea and its market upon the effectuation of Korea-EU FTA and of the Korea- U.S. FTA. As the measures for the FTAs, moreover, the Korean government plans to increase agricultural supports for the injuries resulted from the additional opening. However, introduction of a new agricultural subsidy or increase of governmental supports may provoke the question on legality of those FTAs as well as the agricultural subsidies. Moreover, Korea seems to be classified as developed country when DDA negation would be completed. In the case, Korea, one of the other nations among developed countries should reduce 55% of OTDS and 45% of total AMS according to a tiered formula.