The impact of trade liberalization on agricultural biological diversity: domestic support measures and their effects on agricultural biological diversity

This study provides an in-depth analysis of the potential implications for biodiversity of a reduction in and reform of agricultural support activities. It is an update an earlier note prepared by the Executive Secretary of the Convention on Biological Diversity (CBD) which gave a broad analysis of the different impacts trade liberalisation may have on agricultural biological diversity.

This document is organised as follows:

• chapter 2 gives an overview of the key international agreement to liberalise agricultural markets, the Uruguay Round Agreement on Agriculture (URAA), giving special attention to the disciplines on domestic support
• chapter 3 summarises the main developments after the URAA, again giving special focus to domestic support
• chapter 4 sets out the general framework to analyse the impact of domestic support policies on agricultural biodiversity
• subsequent sections adopt the usual WTO approach to categorise specific support measures into "boxes"
• chapter 5 addresses trade-distorting, Amber Box policies
• chapter 6 deals with Green Box support, which is considered, in the Agreement on Agriculture, as being not or minimally trade distorting
• chapter 7 analyses payments under agri-environmental programmes. Such payments are part of the Green Box, but are of special interest for the purpose of this study
• chapter 8 considers the special case of payments under the Blue Box.

The final chapter provides the following findings and conclusions:

• despite a number of methodological problems in designing agri-environmental programmes for the conservation and sustainable use of agricultural biodiversity, mainly related to the lack of reliable and practicable agri-biodiversity indicators and to the problem of choosing appropriate benchmarks, it seems that well-targeted, designed and implemented programmes that are based, to the extent possible, on scientifically sound environmental performance indicators, are able to contribute to internalise positive external effects of agricultural production on biodiversity
• the process of reducing trade-distorting domestic support policies has the potential to generate synergies with the objectives of the CBD to conserve and sustainably use biological diversity
• specifically, a reduction of Amber Box support policies can contribute to easing the pressure on agricultural biodiversity stemming from agricultural expansion and intensification, especially if complemented with well-designed "flanking" policies both in implementing and in other countries.