Water policy, agricultural trade and WTO rules

By impacting national choices that affect relative prices of water, WTO rules may indirectly influence water allocation within and among countries. In addition WTO rules are relevant for national choices regarding behind-the-border-policies, such as labeling, that influence consumer choices. Today, irrigated agriculture accounts for approximately 70 percent of total water withdrawal and trade in agricultural products is sometimes also described as trade in 'virtual water'. This chapter examines in the field of agriculture the rules embedded in the WTO framework that can have direct or indirect impact on the types of policies countries choose to manage water resources. The chapter takes a close look at two broad categories of WTO rules-those focused on subsidies and those focused on consumer information and labeling. This chapter uses economic theory and legal analysis to provide a deeper understanding of the possible implications of WTO institutional framework on outcomes for water policies.