Domestic support
29. The concept of "boxes" in defining
acceptable domestic support payments to agriculture was introduced
as a result of the informal Blair House Accord reached in 1992
by the EU and the US. The terms are in common usage although they
are not contained in the Agreement on Agriculture.[49]
Of the three boxes, amber measures are linked to production
support and it is the total amount spent in this area which had
to be progressively reduced by a total of 20 per cent of each
member's AMS by 2000. In terms of the EU, this translates into
a ceiling of 67.2 billion euros in 2000. Table 2, provided by
MAFF, indicates that the EU, with the Agenda 2000 changes, will
be well within the limit set by the Uruguay Agreement. MAFF pointed
out that this projection suggests that "in the next round
the EU could offer cuts in the AMS commitment without changing
the CAP".[50]
Professor Swinbank suggested that it "could readily agree
a further 20 per cent reduction in the AMS limit" on this
basis, even if the EU is enlarged beyond the current 15 countries.[51]
However, MAFF also pointed out that making the AMS reductions
product-specific would "reduce the EU's flexibility to offset
the maintenance of support for one sector by reductions in another".[52]
Moreover, the forecast is predicated upon the continued existence
of the blue box. If the blue box is abolished and the payments
it currently contains are included in the AMS, the EU would have
far less room for manoeuvre.
The blue box
30. The so-called blue box is for direct payments
made under production-limiting programmes based on acreage and
headage payments. These are an obvious target for those wishing
to see more progress towards trade liberalisation in agriculture.
At the moment, the EU is the only major user of the blue box which
includes the CAP arable area and livestock headage payments.[53]
Retention of the blue box has therefore been adopted as part of
the EU's official position, even though the RSPB has predicted
that "the EU will be joined by few other countries (perhaps
only Japan, Norway, Switzerland and South Korea)" in its
defence.[54]
The position of the US, always central to determining likely outcomes
in these negotiations, is somewhat ambivalent on this issue. The
NFU observed that "one or two years ago, we would have said
that the prospects of retaining the blue box were dubious because
the European Union was isolated, and that if we wanted to keep
the blue box we would probably pay a high price and possibly an
excessive price to do so", but "the latest developments
in the American agricultural policy" ("substantial aid
in the last two years which certainly does not seem to be green
box measures") could lead them to revise this opinion.[55]
When we ourselves visited Washington, US officials were keen to
stress that they had not as yet expressed an opinion on the future
of the blue box. However, it is unlikely that it will emerge from
the talks unscathed.
47 Q 261. Back
48 Ev.
p. 84. Back
49 Ev.
p. 4, para 23. Back
50 Ev.
p. 74, para 12. Back
51 Ev.
p. 4, para 23. Back
52 Ev.
p. 74, para 144. Back
53 Ev.
p. 5, para 27. Back
54 Ev.
p. 113, para 3.1.4. Back
55 Q
134. Back
