• CAP & dumping

CAP & dumping

This document examines and compares U.S. and E.U. commodity policies. It provides a description of the basic mechanisms of U.S. and EU commodity policies, and also examines the factors that influence the direction of both countries’ policies.

The document highlights that in recent years, particularly under the disciplines of the Uruguay Round Agreement on Agriculture (URAA), both the United States and the European Union have made significant changes to their commodity policies making them increasingly similar. However differences in their commodity policies have given rise to numerous trade disputes over the years and have hindered progress in reducing trade barriers, first in the General Agreement on Tariffs and Trade (GATT) and currently in the World Trade Organisation (WTO). The most notable differences can be found in:

• their reliance on income versus price support
• their use of surplus disposal and supply control
• their reliance on border measures

The two countries also face similar pressures from tight budgets and trade constraints and increasing public connection of agricultural policy with issues beyond traditional goals for supporting production agriculture. Although levels of interest and pressure regarding commodity policies have not been the same in both countries.

The document concludes that the future direction of farm policy in neither country is clear, but while significant differences will undoubtedly remain, some of the discussion suggests the possibility that U.S. and EU farm policies could be headed in a similar direction.

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