The outcome
of this case enabled Thailand to continue producing and exporting
a large amount of sugar at a less-distorted price. Without over-subsidized
sugar from the EC, the Thai sugar trade will mitigate Thai cane farmers’
poverty, and offset the trade deficit in some degree from non-agricultural
imports. As a developing country highly dependent on agricultural
exports, Thailand benefits from the law of agricultural export subsidies
which provides a mechanism to end illegal subsidies from the powerful
member like the EC. When other countries over-subsidize their agricultural
products, developing countries can assert their rights under the Agreement.
However,
the law of agricultural export subsidies needs further development.
The “reduction commitments” standard still allows WTO
Members to subsidized their products so long as subsidization does
not exceed the ceiling provided in the commitments. As a result, exporting
countries not subsidizing their products, like Thailand in this case,
are still affected by the distortion caused by export subsidies. The
brunt of the impact is on poor farmers.
In
the Doha Development Agenda (DDA), WTO Members tentatively agreed
to use the “reduction commitments” standard again and
consequently remove all types of agricultural export subsidies by
the end of 2013.(123) However, it is not certain that the result will obtain. Past arguments
about agricultural trade are being resurrected and history will probably
be repeated. The U.S. and the Cairns Group again are on the free trade
side, and the EC is standing opposed. Undoubtedly, they want the result
of the negotiations to fit their domestic policies and interests.
A new compromise agreement may not further the liberalization of trade
to the benefit of developing countries. If the new agreement includes
a higher level of free trade than the “reduction commitments”
standard, it will also likely exact other concessions, within or apart
from the agricultural sector. Like the previous round, the less-powerful
countries reached the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS Agreement) in exchange of putting the “reduction
commitments” standard into the AoA. A new agreement of this
kind might raise a new dilemma.
APPENDIX
Thailand Population between 1979 and 2004
Population (million) |
1979-1981 |
1989-1991 |
1999-2001 |
2003 |
2004 |
Total population |
46.33 |
54.39 |
60.92 |
62.83 |
63.47 |
Population in rural area |
33.93 (73%) |
38.39 (71%) |
41.95 (69%) |
42.84 (68%) |
43.08 (68%) |
Population in agricultural sector |
32.88 (71%) |
34.83 (64%) |
34.39 (56%) |
33.99 (54%) |
33.83 (53%) |
Source: FAO Statistical Yearbook 2004