2006 World Trade Organization Report (Subsidies, Trade and the WTO)
The Economy had a lower growth in 2005
UE largest economies below 2%
Lower percentage
UE destinations
Trade in Textiles and Clothing
The expiry of the agreement
Causing
Replacement of domestic production by suppliers from lower income countries
Production declines
The importance of Developed countries' market decrease.
Growing importance of developing countries
Ex: China
Lack of diversfications
Royalties and Fee Payments
faster than commercial services
Are among affiliated companies
causing
Countries remain dominant in receipts and payments
East Asian economies got strong
High level of foreign Investment
Singapour, China, and the Republic of Korea
Increased loyalties and fee payments
due to
High oil prices
Slacking of product capacity
Increased wage
Increased demand of
Time investment
Oil exporters invest more in goods than before
Investments in liquid assets
but in US bonds
Consequences
Decreased od US & Euro
Japan stagnated
US dollar appreciation
improve its deficit
Low inflation growth
Reduced oil consumption of OCDE countries
Optimization of the energy
Less than the preceding years
The impact of natural disasters
Could be
Notable
Considerable (in somes industries)
Depends on how
How tradable is the devasted sector
How integrated it is in the global economy
Consequences
National level
Macroecnomic activity weakens
Tourism is not affected
Sri Lanka Tsunami in December 2004
International arena
Exports fall
Lack of production
Important inputs may be short
Major utilities may be disrupt
Transportation bottlenecks
Imports rise
Foreign goods or services
Terrorist Attacks
Effects
Localized and temporary
The costs may rise
Some industries may be affected
Tightened security
Why Governments Subsidize
Industrial Development
To develope industries
Agriculture
Services
State intervention
Control that the diserable investments are made
Could lead to market failure
Could not be as efficient as it should
Production of Knowledge goods
State promotes Development and Research
Benefical on a social perspective
The government will need to invest in more resources
Intelectual Property Systems
Strategic Trade Policy
Secure national advantage in economies of scale
R&D intensive industries
Risk of dissipate funds
Hurtful for active partners
Distribution
To change the distribution of income in societies
for equality
on agriculture
Environmental Protection
also with regulations, laws, tariffs, taxes
Useful for
Facilitate adjustments of new environmental regulations
Correct asymmentries
Others
National security
Food
Energy
Non- trade concerns
Agriculture
Increasing commodities production
Non- commodities
Cultural heritage
Trade liberalization erodes national identity (subsidies helf not to)
Bibliography
Thornton, R. (12 oct 2015). What are Subsidies? Retrieved from: https://www.youtube.com/watch?v=EhvimG6kSa0
Learn Liberty. (28 ene 2015). Should We Subsidize Scientific Research? Retrieved from: https://www.youtube.com/watch?v=ozJHw9NrK4E
WTO. (2006). World Trade Report 2006 Exploring the links between subsidies, trade and the WTO. Retrieved from: https://www.wto.org/english/res_e/booksp_e/anrep_e/world_trade_report06_e.pdf
Incidence
In
Agriculture
Welfare loss
Providers
Distortion
Importers
Exporters
AMS
Domestic support
Reduction of commitments
Trade distorting
Minimis levels
UE, US, JAPAN
Distribution by commodities
Export subsidies
Export subsidies
Notifiable
Non- notifiable
Export credit, guarantees
State- trading enterprises (market power)
Price discrimination
Privilage
Food aid
Services
Measures
Developed
Grants
Developing
Tax incentives
Transport
Universal Access
Environmental
Railway
Security
Telecommunications
Universal Service
Universal Service Funds
Developing
Availability
Developed
Affordability
Financial Service
Objectives
Keep banks afloat
Restructure
Equity injections
Tax Incentives
Tourism
Developed
Marketing Support SME
Developing
Infrastructure
Audiovisual
Promotion domestic content
Cultural objectives (policy instruments)
Industry
Subsidies & GDP
Horizontal (fiscal incentives, policies, EPZs)
Latinamerica
The Caribbean
Specific
Automotive indsutry
Recipients
Minning, steel, forestry
Coal
development, energy security
restructing
Fishing
Stable subsidies
Objectives
Substainability
Development
Income support
Environmental
Protection
Subsidies
Incidence (overview)
Countries
Developed Subsidies
Developing Subsidies
Variation in sectorial distribution
Hard to find comprehensive information
International Data
Cross country comparability
Limited number of sectors
Addtional Sources
Reports
National
Notifications
WTO
Requirements
Information
Reasons
Who
Policy objectives
Theory
Correct market failure
International Perspective
Competitive threat
Severe effects
Nullify national welfare
WTO rules
Subsidies
Non- disruptive
Economic Analysis
Why
Desirability
Merits
Aware of the costs
Definition
Unrequited transfer
WTO agreement
Forms of subsidy
Specificity
Distinguish the recipients
subsidies
specific
general
also
Subtema
Budgetary outlays
Provision of goods and services
Affectation of prices
Subsidies and the WTO
Subsidies to manufactured exports in developing countries
Increase welfare
Infant Marketing
Export processing zones
Job, income, skills
Funtional policies
Permissive policies
Protectionist bias
Distortion
Nullifying remedial actions
Subsidy competition
Evolution of rules
Consultation
Exports Subsidies
Agricultural products
Tokyo Round Agreement
Countervailing duties
Non- agricultural goods
Uruguay Roun Agreement
Definition of subsidies
Concept of specificity
Differential treatment
Anti- subsidy remedies
Unilateral
Countervailing duties
Consumer
Producer
Multilateral
Dispute settlement
Agreement on Agriculture
Different rules (reduction commitment)
Domestic support
Export subsidies
Special treatment
Lesser (liberalization)
Higher de minimis thresholds
General Agreement on Trade in Services
Disciplines
Use of diseminatory subsidies
Negotiation mandate
The Doha Development Agenda
Andrea Romero and Angie Yépez
Export promotion policies vs Import Substitution Policies
Export Promotion Policies
Countries with comparative advantages are better
Import Substitution Policies
Cost of subsidies are more transparent than tarifs