What is an export subsidy?

In finalizing the HK Ministerial the most contentious issue on agriculture and cotton is on export subsidies and a trade-distorting export subsidy. Thus the central question is: what is an export subsidy and a trade-distorting export subsidy?

1. Paragraph 6 of the 17 December Draft states on agriculture: "We agree to develop detailed modalities that ensure the parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect by [2010] [5 years from commencement of implementation]".

2. Paragraph 11 on cotton states: "Export subsidies for cotton will be eliminated by developed countries in 2006.