Regulation in the frame of WTO
Legal basis for taking obligations in the field of agriculture is the WTO Agreement on Agriculture. Support having distorting affect on international trade in agricultural products according to WTO is subject to reduction. Regarding that all state support measures are divided into «green» и «yellow» measures baskets:
«green basket» - measures of the basket can be granted without restrictions to as they do not make or make a minimal affect on trade.
Reference: example of such measures is the support directed to branch institutional development, for instance, construction of agricultural infrastructure, fulfillment of scientific researches, agricultural animals and plants pest and diseases control, as well targeted payment to agricultural producers in case of their losses.
«yellow basket» - integrated cost of direct and indirect support of agricultural producers affecting the price and cost of products includes the following:
- АМП – subsidies subject to reductions, подлежащие сокращению (about the third part).
- de minimis – subsidies in the amount of 5% off agriculture gross output (for developing countries – 10%) are excluded from restrictions;
- special and differential regime (S&D regime). «Developing countries» are exempted from reduction of investment subsidies and the subsidies on production facilities cheapening (such as water, chemical pesticides and POL), being granted to producers with low profits or poor resources. Reference: to reserve the right for S&D regime application is not a simple task.
Tax privilege are not included into the «yellow basket» and respectively not subject to reduction.
It should be also noted that WTO regulations prohibit granting support to goods exportation. Reference: export support is specified by WTO as a subsidy provision of which is connected with execution of export transactions. At that regarding agricultural products in the frame of WTO there is a certain exclusion which is in its turn spread only to those WTO member-countries which have reserved the right for their application and taken obligations on their stage-by-stage reduction. Such benefit is provided to a short list of countries. Reference: in spite of the fact that some accessing countries have all formal grounds for getting export subsidies, reserving such a right is a complicated task. Moreover, developed WTO country-members within the new round of negotiations on further agricultural markets reforming are lobbying the issue of complete elimination of export subsidies in any forms. Currently there already reached a preliminary agreement on their complete abolishment by 2013.
Negotiations designated to agricultural issues are being conducted at multilateral level based on the information submitted by the accessing country in its tables on settlements. Support volume settlements are conducted based on the branch subsiding for the recent three representative years (the so-called «base period») in compliance with the methodology of WTO Secretariat WT/АСС/4. The volume of subsiding the own branch by the country in the frame of WTO membership depends on the results of negotiations. At present Kazakhstan is in the process of active negotiations on agriculture in the frame of negotiations regarding WTO accession.