Domestic support and export subsidy policies have been employed largely by developed economies to protect their agricultural sectors. Under the Export Competition commitments, each member undertakes not to provide export subsidies or any financial contribution other than in conformity with the Agreement and with the commitments as specified in that member's schedule. The financial contribution may involve a direct transfer of funds, potential direct transfers (such as loan guarantees), the forging of revenue by the government, or the public provision of goods and services, other than infrastructure, or the government purchase of goods; or any form of income or price support. The Agreement prohibits subsidies contingent upon export performance or upon the use of domestic goods in preference to imported goods. GATT members have also entered into commitment to reduce those classes of subsidies specified in the Agreement as actionable with accompanying target dates and a desired level of action required. The bound reduced of export subsidies are defined in Article 9(1) of the Agreement. These are to be reduced by 24% in terms of value (budget outlays) and 14% in volume over a 10-year period by developing countries. For developed countries, the corresponding figures are 36% and 21%
over 6 years.
African Development Bank Economic Research Working Paper Series Enhancing Africa’s Trade: From Marginalization to an Export-Led Approach to Development Milton A. Iyoha Professor, Department of Economics & Statistics University of Benin, Nigeria Economic Research Working Paper No 77 (August 2005)
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The African Development Bank is the
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