Do Green Box Subsidies Distort Agricultural Production and International Trade?

This issue of Commonwealth Trade Hot Topics explores whether agricultural subsidies grouped under the 'green box' (GB) category cause production and trade distortions. It reports the extent to which GB subsidies have increased over time in the European Union and the USA, and provides estimates of the extent to which they have led to increased agricultural production and distorted global trade. It argues that there is a strong case for reopening the issue of domestic support provided under GB in the post-Bali work programme and proposes broad principles that can be used to discipline GB subsidies.