Biofuels subsidies and the law of the WTO

Jun 2009

The growth of biofuel production has also attracted attention for its negative impact on global food prices. Less attention has been paid, however, to the broader trade and economic impacts of the subsidies and incentives underlying this growth in production and, in particular, their World Trade Organization (WTO) implications. Considering these subsidies through a WTO prism is not an end in itself. Rather, the WTO disciplines on subsidies provide an important framework to constrain the proliferation of trade-distorting subsidies that can lead to global inequities, particularly for developing and least-developed countries. Moreover, the history of trade negotiations, especially in the agricultural sector, indicates that, once in place, trade-distorting subsidies prove very difficult to reform.
This paper reviews biofuel measures that are commonly used in major producing countries against WTO subsidies disciplines. These measures are found in a range of laws and policies relating to energy, the environment and agriculture.

By: T. Harmer

 
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