Under the WTO, export subsidies for agriculture were, for the first time, subject to effective rules. Member countries established maximum ceilings on the quantity of subsidized exports and budgetary outlays for export subsidies on a product-specific basis, subject to reductions over time. Subsidization in excess of these levels constitutes a WTO violation. Export subsidies generally are the most trade distorting of government policies because they allow subsidizing countries to displace competitive producers in world markets. During the Uruguay Round, the WTO began the process of reducing the use of export subsidies in agricultural trade.
Governments provide internal support to their producers in many ways.
Some of these policies have significant consequences beyond a country's borders. Such policies can impose costs on other countries and world markets by encouraging overproduction or inducing production of specific commodities. Under the WTO, policies that seriously distorted trade were differentiated from those with minimal trade effects. The AMS essentially totals, commodity by commodity, a country's support measures linked to production. Generally, these policies involve transfers from consumers or are linked to production of specific commodities.