Agreement on Agriculture

Agreement on Agriculture. It is one of the principal legal accords established under the Marrakesh Agreement that founded the World Trade Organization. The agreement aimed to reform international agricultural trade by reducing trade-distorting subsidies and barriers, marking a significant shift from the protectionist policies that characterized much of the 20th century. Its negotiation was a central and contentious part of the Uruguay Round of multilateral trade talks, seeking to integrate agriculture more fully into the global trading system governed by the General Agreement on Tariffs and Trade.

Background and history

Prior to the Uruguay Round, agricultural trade was largely exempt from the disciplines of the General Agreement on Tariffs and Trade, leading to widespread use of export subsidies, high tariffs, and substantial domestic support by major economies. This resulted in chronic surpluses, volatile world prices, and frequent trade disputes, such as those between the United States and the European Economic Community during the Chicken War and later conflicts over oilseeds. The launch of the Uruguay Round in Punta del Este in 1986 explicitly included agriculture on the negotiating agenda, driven by a coalition of agricultural exporting nations known as the Cairns Group. The negotiations were protracted and difficult, nearly causing the collapse of the entire round, before a breakthrough was achieved with the Blair House Accord between the United States and the European Communities.

Key provisions and structure

The agreement is organized around three central pillars: market access, domestic support, and export competition. The market access pillar required the conversion of all non-tariff barriers into equivalent ordinary customs duties through a process called "tariffication," and mandated reductions in these tariffs. The domestic support pillar established categories like the highly trade-distorting Amber Box, with reduction commitments, and the permitted Green Box and Blue Box measures. The export competition pillar scheduled reductions in the value and volume of export subsidies and imposed disciplines on other practices such as export credits and state trading enterprises. Specific provisions for developing countries were included under the concept of Special and Differential Treatment.

Implementation and impact

Implementation began with the establishment of the World Trade Organization in 1995, with members submitting schedules of commitments. The agreement succeeded in reducing some subsidy levels and bringing agricultural trade under multilateral rules, but its impact has been uneven. Critics argue it has not sufficiently addressed the high subsidies in developed nations, such as the United States Farm Bill or the European Union's Common Agricultural Policy, while forcing market openings in developing countries. This perceived inequity has fueled discontent, prominently expressed by groups like the G33 coalition and was a major factor in the collapse of the WTO Ministerial Conference of 2005 in Hong Kong and subsequent difficulties in the Doha Development Round.

Negotiations and challenges

Continuing negotiations have been a central part of the Doha Development Round, launched in 2001, but have repeatedly stalled due to deep divisions. Key challenges include demands by the United States and the European Union for greater market access in emerging economies, and insistence by developing countries like India and Brazil for deeper cuts in domestic support by wealthy nations. The Bali Package in 2013 addressed some issues like public stockholding for food security, a priority for India, but broader reform remains elusive. Recent developments include the elimination of agricultural export subsidies at the WTO Ministerial Conference of 2015 in Nairobi, though new forms of support and protectionism continue to provoke disputes.

Related agreements and context

The Agreement on Agriculture operates within the broader framework of World Trade Organization law, alongside other multilateral agreements on goods such as the Agreement on the Application of Sanitary and Phytosanitary Measures and the Agreement on Technical Barriers to Trade. It is intrinsically linked to negotiations on trade in services under the General Agreement on Trade in Services and rules on intellectual property under the Agreement on Trade-Related Aspects of Intellectual Property Rights. Regional trade pacts like the United States–Mexico–Canada Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership often include agricultural provisions that build upon or diverge from its disciplines. Its legacy is also examined in relation to global food security debates and the mandates of institutions like the Food and Agriculture Organization and the World Bank.

Category:World Trade Organization agreements Category:Agriculture treaties Category:1994 treaties