The evolving context for analyzing domestic support is assessed in this chapter with focus on issues that have attracted particular analytical attention. The first issues relate to the potential of green box decoupled income support and other exempted direct payments, particularly by the EU and the United States, to have trade-distorting or production effects, and the compliance of such measures with policy-specific exemption criteria and conditions. The second issues arises around calculation of MPS under the Agriculture Agreement versus economic support, compliance of MPS with AMS commitments, economic implications of compliance, the eventual infeasibility of providing support by means of administered prices, and the legal consequences for developing countries of excessive MPS resulting from acquisition at administered prices of public stocks for food security purposes. These and other dimensions of domestic support under the Agreement’s rules offer scope for further analysis to underpin members’ policy choices.

This chapter examines the often-misunderstood WTO disciplines on domestic support. Limits, allowances and exemptions under the Agriculture Agreement are detailed. This includes examining members’ Bound Total AMS (BTAMS) and the calculation of Aggregate Measurements of Support (AMSs), market price support (MPS), annual Current Total AMS (CTAMS), and de minimis exclusions from CTAMS. The exemptions from limit are described through Art. 6.2 for developing countries (special and differential treatment), Art. 6.5 (blue box) production-limiting programs and Annex 2 (green box) measures addressing non-trade concerns and meeting the requirement of at most minimal trade-distorting or production effects. The different space for limited support among different groups of developed and developing countries is highlighted. Relationship of the Agriculture and SCM Agreements regarding actionable subsides, prohibited export subsidies and countervailing measures are described and 16 disputes on domestic support under these Agreements are summarized. In short, a complex set of rules govern domestic support.