2019 Trade Aid May Violate WTO Commitments

A recent independent report suggests U.S. trade aid in 2019 for farmers may surpass limits set in World Trade Organization commitments. The report for the American Enterprise Institute by Joe Glauber, a former Department of Agriculture Chief Economist, suggests the size of payments made to producers in 2019 may encourage other WTO members to challenge the payments.

Glauber wrote, a long-term concern is "how trade compensation comports with U.S. obligations in the WTO and, more generally, how it will affect future U.S. efforts to seek further reforms in the WTO.”

President Trump and his administration have approved the payments, roughly $28 billion, to offset any harm by other countries retaliating against the Trump trade agenda. Glauber said current WTO rules require that annual U.S. domestic supports that distort trade flows not exceed a maximum of $19.1 billion.

Since the WTO disciplines went into effect in 1995, United States levels of support have remained in that annual limit.

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