Draft Paper – Not to be cited without author’s permission
order to stay in business. The United States has long “hidden” a big part of its subsidies here, and the June 2003 reform of the EU’s Common Agricultural Policy (CAP) was designed to ostensibly eliminate the export subsidies that were causing major friction with the US, the Cairn’s group, and everybody else, and replace them with an equal amount ‘de-coupled’ payments, thus not affecting the overall size of the EU subsidies at all. By doing the so the EU came into line with the US Farm Bill, claiming just like the US does, that the bulk of its payments are non-trade distorting and thus permissible.
When the EU switched over the to the American system of de-coupled payments, they eliminated the need to pay for price supports or subsidize exports. Essentially, the EU now allows internal prices to fall down to world price levels, and compensates farmers for lost income with de-coupled payments. Export subsidies are then no longer need to make European exports competitive, because they are essentially being produced now at
‘dumping’ prices on the EU domestic market. significant ‘discipline’ from the WTO.
Thus does dumping go on without
The Missing Boxes
As if the combination of Amber, Blue and Green boxes did not offer multinational companies enough ways to get a foot up on poor countries in the global market for agricultural goods, there are all kinds of other ‘support’ to agribusiness enterprises in the these countries that are unavailable or impossible in poor countries. If it were possible— and it is difficult—to accurately add up all the support in the first three boxes, we would then have to estimate and add on the even harder to calculate additional supports that French analysts Jacques Betholet calls, with tongue in cheek, the Gold, Brown, Purple and White boxes. These, plus concrete production costs, would then give us an implicit real total production cost with which to compare the prices at which US and EU products reach world markets, thus giving the ability to estimate the true amount of dumping going on. From the Betholet perspective, there is Amber, Blue and Green box dumping, and then there is also Gold, Brown, Purple and White box dumping.
The Gold box: “Living in the First World” By the simple virtue of being based in a wealthy country, agribusinesses benefit from all kinds of hidden subsidies, especially in the broad sense of the non-specific and non- agricultural subsidies which underlie the higher competitiveness of their products relative to poor countries. In reality, there is a continuum from non-specific agricultural subsidies to non-agricultural general subsidies which apply to all sectors, and it would be arbitrary to separate specific support for agricultural research, education, extension, and infrastructure from general support for all research, education, social security, infrastructure, etc. , and everything else that lowers transactions costs of all kinds under higher levels of economic development (like enforcement of contracts, for instance, and well developed, publicly paid for transportation and energy infrastructure.).
Brown box: Social dumping All of the major agroexport countries practice what might be called ‘social dumping,’ whether they are ‘developed’ country exporters like the US, EU, Canada and Australia, or ‘developing’ country export powers like Brazil, China, South Africa and Chile. Social