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Trade in Agriculture

The Uruguay Round reform programme for trade in agriculture from WTO web-site.

1. Introduction
   • Share of agriculture in world trade is about 7%, average annual growth rate is 4%.
   • Before the WTO
     1. Export subsidies on agricultural primary products were allowed, subject to constrain not to capture more than an "equitable share"(Art. 16:3 of GATT);
     2. Import quotas were allowed when necessary to limit domestic production, subject to constrain of minimum import access (Art. 11:2(c) of GATT).
   • Uruguay Round Agreement on Agriculture
     • SCOPE: market access, domestic support, export subsidies;
     • PRODUCT COVERAGE: basic products (milk), product derived from them (butter), processed products (chocolate and sausages), as well as wines, spirits and tobacco products, fibres such as cotton, wool and silk, and raw animal skins destined for leather production. Fish and fish products are not included, nor are forestry products;
     • IMPLEMENTATION PERIOD; 6 years (Developed countries), 10 years (Developing countries), 9 years Peace clause;
     • Committee on Agriculture.
2. Market Access
   • Bound tariffs-ONLY + reduction commitments;
   
   
   

   Tariffs	Developed countries 6 years: 1995-2000	Developing countries 10 years: 1995-2000
   average cut	36%	24%
   minimum cut	15%	10%

   
   
   • Tariff Quota Commitments: current import access should be at levels of 1986-88 base period, if current access < 5% of domestic consumption, then it should expand to reach 5% in 2000 (Dev-ed) or 2004 (Dev-ing).
     Exmpl. Canadian tariff-quota on cheese (20,411,866 tonnes): within access 3.32¢/kg, over access 245.6% but not <451.5¢/kg.
   • Non-tariff BORDER measures (quotas, min. import prices, discretionary licensing, VERs) are PROHIBITED, though non-tariff import restrictions consistent with GATT (BOP: art. 12 & 18; Safeguards: art. 19; Exceptions: art. 20) or SPM and TBT are applicable.
   • Special Safeguard in the form of additional tariffs (art.5 of AoA) but not within tariff quotas: Volume trigger or Price trigger.
3. Domestic Support
   • GREEN Box: no, or minimal, distortive effect on trade:
     • Government services, including research; pest and disease control; training and advisory services; marketing and promotion services; infrastructural services, including electricity, roads, water; food aid to population in need,
     • Direct payments to producers not conditioned with production and prices;
   • Developmental measures designed to encourage agricultural and rural development;
   • BLUE Box: Direct payments under production limiting programmes;
   • De minimis: no commitement to reduce if product-specific and non-product-specific support is <5% for dev-ed and <10% for dev-ing countries.
   • Reduction commitments
   
   
   

   Domestic support	Developed countries 6 years: 1995-2000	Developing countries 10 years: 1995-2000
   total AMS cuts for sector (base period: 1986-88)	20%	13%

   
   
   • Aggregate Measurement of Support: all product-specific support and non-product-specific support.
   • Price support: the most important type of policy measure within the non-exempt category. It can be provided (i) through administered prices (involving transfers from consumers), (ii) through direct payments from governments.
4. Export competition/subsidies
• DEFINITION: direct export subsidies contingent on export performance; cost reduction measures; subsidies on incorporated products; etc.
• Reduction commitments: on a product-specific basis (23 products) expressed in volume and budgetary outlays.




Exports	Developed countries 6 years: 1995-2000	Developing countries 10 years: 1995-2000
value of subsidies	36%	24%
subsidized quantities (base period: 1986-90)	21%	14%



5. Peace Clause
• 9 years no countervailing measure on Green Box domestic support.


6. Continuation clause
• Further negotiation beginning from 2000 to with the objective to establish a fair and market-oriented agricultural trading system.