Export subsidies and other export support measures

As a result of high commodity prices in recent years and domestic reforms, the value of export subsidies has significantly reduced since the 2000s. In times of low prices, countries have often resorted to export subsidies — and history has shown that once one country does so, others quickly follow suit. Thanks to the decision adopted by ministers in Nairobi, WTO members will no longer be able to resort to such action in the future.

Under the Ministerial Decision on Export Competition (WT/MIN(15)/45) adopted in Nairobi, developed countries have agreed to immediately remove export subsidies, except for a handful of agriculture products for which the deadline was the end of 2020. Developing countries agreed to do so by 2018, with a longer time-frame until the end of 2022 in some limited cases. In addition, developing countries keep the flexibility of covering marketing and transport costs for agriculture exports until the end of 2023, while the poorest and food-importing developing countries will enjoy additional time to cut export subsidies.

The Nairobi decision also contains rules to minimize the possible distorting impact on international trade of other export policies, such as export finance, international food aid and operations of agricultural exporting state trading enterprises, so that these policies cannot be used to support agriculture exports and circumvent the provisions on export subsidies. These policies include maximum repayment terms for export financing programmes for agriculture exporters supported by the government (18 months as a general rule), provisions on state trading enterprises engaging in agriculture trade, and disciplines to ensure that food aid does not displace trade and does not cause adverse effects on domestic production.

Export competition has been a longstanding issue in the WTO’s agricultural negotiations and the elimination of all forms of agricultural export subsidies was one of the key targets in the United Nations Sustainable Development Goals launched in 2015.

The proliferation of export subsidies in the years leading up to the launch of the Uruguay Round in 1986 was one of the major issues addressed in these negotiations and they remained a heated topic for many years in the WTO. While export subsidies for industrial products have been generally prohibited for over 50 years, such subsidies in agricultural products had only been subject to limited disciplines. Ministers had agreed at the WTO 2013 Bali Ministerial Conference that members would “exercise utmost restraint” in using any form of export subsidy, and “ensure to the maximum extent possible” that progress would be maintained in eliminating all forms of export subsidies. The Nairobi decision represents a major step forward by fully eliminating any form of agricultural export subsidies.

Implementation of the Nairobi decision

Following the 2015 Nairobi Ministerial Conference, WTO members with export subsidy entitlements have taken steps to eliminate them from their WTO schedule of commitments.

The current situation regarding the modification of schedules by members with export subsidies reduction commitments can be found in Table 3 of G/AG/W/125/Rev.13.

The Committee on Agriculture monitors the implementation of the Nairobi decision. The committee undertakes annual reviews of members' agriculture export subsidies and other export measures. To aid the review, the WTO Secretariat compiles background information on members' export subsidies, export finance support, agriculture state trading enterprises and international food aid.

In addition, the committee reviews every three years the disciplines contained in the decision, with the first such review having taken place in 2018 (see report).