The WTO Legal Regime for the Actionability of Agricultural Subsidies after the Expiry of the Peace Clause

• Main Author: Cunha, Fabio C.
• Language: en
• Published: 2012
• Subjects: WTO; subsidies; agriculture; AOA; Article 13; Challengeability
• Online Access: http://hdl.handle.net/10393/22673

Because of the Agreement on Agriculture’s (AoA) Article 13, dubbed the “Peace Clause,” the challengeability of agricultural subsidies has been limited; Article 13 had the power to prevent several types of legal challenges. The Peace Clause has expired, and now many agricultural subsidies can be challenged under substantive provisions of the General Agreement on Tariffs and Trade (GATT 1994) and the Agreement on Subsidies and Countervailing Measures (SCM Agreement). However, there has been some uncertainty, because the new arrangement of agricultural subsidies’ challengeability is being defined by the interpretation and correlation of three different WTO agreements. This study verified, using a two-pronged method, that there is no conflict among the GATT 1994, the SCM Agreement and the AoA, and for this reason, they have to be applied together to regulate agricultural subsidies. This does not mean that all SCM Agreement provisions are automatically applied to agricultural subsidies, with a consequent free ride for challenges to agricultural subsidies. A successful challenge still has to overcome the SCM Agreement’s higher thresholds for challengeability compared with those of the GATT 1994 period. This condemnation became more difficult after the implementation of the WTO. Consequently, the goals established in the AoA of substantial and progressive reductions in agricultural support and protection still have to be accomplished.