Presentation on Agreement on

Agriculture
Submitted by: Avantika Sharma

Background to the Uruguay Round

World agriculture in disarray - growing US-EU tension on
farm subsidies
The growing costs of agricultural protectionism
Launch of Uruguay Round 1986
"to achieve greater liberalisation of trade in agriculture and
bring all measures affecting import access and export
competition under strengthened and more operationally
effective GATT rules and disciplines"
Significance of the Uruguay Round
the most comprehensive coverage of all negotiating rounds to date
included the participation of more than 100 countries

Players in the Uruguay Round

The US : moving away from dependent agriculture
paradigm to a competitive agriculture paradigm, and see
access to export markets as the underpinning for this
The EU: anxious to avoid escalating budget cost of farm
support and wanting a deal as compatible with the CAP as
possible
Cairns Group: consisting of 14 agricultural exporters from
both the developed and developing world keen on
liberalisation
Other developing countries concerned about the cost of
food imports
Other high-income countries anxious to avoid
liberalisation

Progress of Uruguay Round negotiations

The opening negotiating positions
US proposed the zero option all agricultural subsidies and quantitative
restrictions be phased out over ten years
EU wanted to negotiate on commodity by commodity basis (e.g. rebalancing)

the stalled Montreal Mid-Term Review in December 1988

Cairns Group walked away from tentative agreements in other areas because
no serious engagement on agriculture

Geneva Accord April 1989 : US dropped zero option and agreed

negotiations should proceed along three pillars
Heysel meeting December 1990: breakdown because of EU
unwillingness to limit export subsidies

Progress of Uruguay Round negotiations

Dunkel draft Final Act in end-1991
Covered all aspects of the negotiations
First text with quantitative proposals in each of the three pillars

[MacSharry CAP reform May 1992]

Blair House I agreement November 1992

Lessened extent of export subsidy cuts, protected EU and US

compensation payments under production limiting programmes (blue
box) and introduced peace clause

Blair House II agreement December 1993

Made some concessions to EU to mollify France

Geneva Agreement, December 1993

Following which verification process of country schedules

Marrakesh Final Act, April 1994

Single undertaking

Tariffication
Tariffication required countries to convert their existing
NTBs into tariff equivalents. These tariff equivalents are
established for the base period (1986-1988) and are
entered in the Country Schedules as the base rate of tariff.
Developing countries had the choice of offering tariff
bindings instead of establishing tariff equivalents.
It discourages future use of NTBs, subject to certain
exemptions. These exemptions are defined under the
Special Treatment provision that allows countries to claim
exemption from tariffication commitments for certain
sensitive products.

Tariff reduction
For developed countries, an unweighted average of 36
percent, subject to a minimum reduction of 15 percent in
each tariff line over a six year implementation period.
For developing countries the commitments are 24 percent
and 10 percent respectively, and the implementation period
extends to ten years.
For least-developed countries there were no reduction
commitments.
Special Safeguards provisions, that enable a country which
has used tariffication to apply additional tariffs to certain
specified commodities, where import prices are
particularly low, or where there is a sudden surge in
imports.

Market access commitments

Countries are required to maintain

current levels of access, for each
individual product, where the
current level is based upon the
volume of imports during the base
period (1986-88).

For commodities subject to

tariffication, a minimum access
should be established at not less
than 3 percent of domestic
consumption during the base
period. This minimum level is to
rise to 5 percent by the year 2000 in
the case of developed countries,
and by 2004 in the case of
developing countries.

Domestic support commitments

Divided domestic support policies into three types:
Policies deemed to have a substantial impact on the
patterns and flow of trade are classified in what is called
the 'amber box and are subject to reduction commitments;
policies that are not deemed to have a major effect on
production and trade are placed in the 'green box';
policies that fall into neither of these categories, but are,
perhaps, somewhere in between, are known as 'blue box'
policies.

Disciplining amber box policies

All domestic support deemed to have a distortionary effect
on trade is summed and included in a measure called the
Aggregate Measure of Support (AMS);
AMS includes
Market price support where support provided by administrative
support prices e.g. intervention (but not if provided by tariff
protection alone)
Calculated on the basis of world reference prices in 1986-88
Coupled direct payments

De minimis exemptions 5% for product specific and 5%

for non-product specific support
Progressive reduction in AMS levels by 20% over 6 years.

The blue box

Direct payments under production-limiting programmes
are exempted from AMS reduction if:
such payments are based on fixed area and yields; or
such payments are made on 85 percent or less of the base
level of production; or
livestock payments are made on a fixed number of head.

Export subsidy commitments

No new export subsidies can be introduced
Developed countries committed to reducing the volume of subsidised
exports by 21 percent and the expenditure on subsidies by 36 percent,
both over a six-year implementation period (1995-2000).
For export subsidies the base period is generally taken to be the period
1986-1990.