Introduction

The European Commission initiated, at the end of 2007, a process to review the reform of the Common Agricultural Policy (CAP) agreed in 2003 and which applies until 2014. These negotiations initiated the debate about the future of the European budget for the agricultural sector after 2014.

The present and future of the CAP cannot properly be understood without an appreciation of the World Trade Organisation (WTO) negotiations. The WTO's Uruguay Round was supposed to reduce agricultural subsidies, but the 1994 Agreement on Agriculture nonetheless was sufficiently vague to allow rich countries, including the European Union, to pass reforms that would not end trade-distorting agricultural subsidies and hence would not stop dumping. Furthermore, the 2001 Doha Ministerial Declaration stated that WTO member states were committed to sustainable development, and that future progress in trade liberalisation would take into consideration and address the needs and vulnerabilities of developing countries.

A central problem is the assumption of the “minimally trade distorting” nature of green box measures, which is a very subjective concept. This ambiguity has allowed the European Union and United States, instead of complying with WTO requirements, simply to shift subsidies from the amber and blue boxes and hide them in the green box, allowing them to maintain or even increase the high level of support provided by these countries to agricultural production.