NAFTA AGRICULTURE FACT SHEET:
Agricultural Subsidies

Domestic Support

• Recognizing both the importance of domestic support measures to their respective agricultural sectors and the potential effect of such measures on trade, each of the NAFTA countries will endeavor to move toward domestic support policies that are not trade-distorting.
• In addition, the three countries recognize that a country may change its domestic support mechanisms so long as such change is in compliance with applicable GATT/WTO obligations.

Export Subsidies

• Recognizing that the use of export subsidies within the free trade area is inappropriate except to counter subsidized imports from a non-NAFTA country, the NAFTA provides that:

1. a NAFTA exporting country must give 3 days notice of its intent to use an export subsidy measure on agricultural exports to another NAFTA country;
2. when an exporting NAFTA country considers that a NAFTA country is importing non-NAFTA agricultural goods that benefit from export subsidies, it may request consultations on measures the importing country could take against such subsidized imports; and
3. if the importing country adopts mutually agreed measures to counter the export subsidy measure, the NAFTA exporting country will not introduce its own export subsidy.

• The bilateral prohibition on export subsidies in the U.S.-Canada Free Trade Agreement was incorporated into the NAFTA and will remain in place on U.S.-Canadian agricultural trade.

Last modified: Friday, November 18, 2005