The International Institute for Sustainable Development's Global Subsidies Initiative has released a draft version of its model template for notifying subsidies to the World Trade Organization, in what the organization hopes will be a first step towards a multilateral, multi-stakeholder process for improving the current system of subsidy notification.

Under the WTO's Agreement on Subsidies and Countervailing Measures (ASCM) -- the first multilateral agreement to establish disciplines on its members' use of subsidies -- countries are provided the right to examine other countries' subsidies programs in a transparent way. One of the reasons why negotiators included this requirement was to level the playing field between large and small, rich and poor countries. The framers of the ASCM knew that if countries did not share information on their subsidies, providing enough information at least for others to be able to probe further, the ability of one country to challenge another's sub¬sidies would be skewed towards those countries with the largest resources and international presence, who are best able to monitor what is happening in the rest of the world.

However, these high hopes have not been achieved. Late last year, the WTO Secretariat said that almost half of the WTO membership had failed to notify some or all of the required information in the 1995-2000 period. Indeed, the United States and the EU, both large agricultural subsidizers, have not submitted notifications on domestic support since 2001.

The reasons for the poor reporting performance of many WTO Members have been partly systemic, owing to the way the WTO operates, and partly to issues specific to subsidies and the disciplines placed on them. A fundamental flaw in the reporting requirement is that although it is obligatory, sanctions for non-compliance or poor compliance are weak. This encourages convergence towards the lowest minimum standard of reporting and discourages countries that might otherwise welcome a higher standard of reporting from putting more resources into their own data-collection and reporting efforts. Fear of self-incrimination is also probably behind the low and incomplete reporting rates, but also behind the tendency for countries to invert the original intent of the Article 25 requirement.

The GSI's proposed new template for WTO subsidy notifications is designed to address some of the problems inherent in the current notification format which contribute to poor compliance.

The draft template, intended for external review, can be accessed on-line from the GSI's website at www.globalsubsidies.org.

Comments should be sent to Ronald Steenblik, the GSI's Director of Research, at rsteenblikATiisd.org.