Agreement On Agriculture Does Not Cover

The first pillar of the agricultural agreement is “national support”. AoA subdivide national aid into two categories: trade distortion and non-trade distortion (or mini-trade distortion). The WTO Agreement on Agriculture negotiated in the Uruguay Round (1986-1994) includes the classification of subsidies by “boxes” according to the consequences of production and trade: amber (most directly related to the level of production), blue (production limitation programmes that still distort trade) and green (minimum distortion). [3] While payments in the yellow box were to be reduced, payments in the green box were exempt from reduction obligations. Detailed rules for green box payments are set out in Annex 2 of the AoA. However, everyone must meet the “basic requirement” of paragraph 1 not to cause more than a minimal distortion of trade or production and must be provided by a state-funded programme, which does not include transfers from consumers or price support to producers. [1] On the eve of the GATT Ministerial Conference held in Punta del Este, Uruguay in 1986, the agricultural lobbies of the industrialised countries strongly opposed agricultural compromises. In this context, the idea of excluding “trade-neutral” production and subsidies from WTO commitments was first proposed by the US in 1987 and reiterated shortly thereafter by the EU. [2] By ensuring continued support for farmers, it has also neutralised resistance. In exchange for the inclusion of agriculture in WTO disciplines and a commitment to reduce trade-distorting subsidies in the future, industrialized countries would be allowed to maintain subsidies that “cause no more than minimal trade distortions” in order to achieve various public policy objectives. [1] The Uruguay Round of agricultural negotiations were not easy, as the scale of the negotiations and their political sensitivity necessarily put much time in doubt to reach agreement on the new rules and it took a lot of technical work to put in place strong means of formalising commitments in policy areas beyond the framework of previous GATT practice. The Agreement on Agriculture and the Agreement on the Application of Sanitary and Phytosanitary Measures were negotiated in parallel and a decision on measures to be taken regarding the potential negative effects of the reform programme on least developed and net food-importing developing countries was also part of the overall outcome.

Before the Uruguay Round negotiations, it became increasingly clear that the causes of disorder in world agriculture went beyond the problems of access to imports, traditionally at the centre of the GATT negotiations. In order to get to the bottom of the problems, disciplinary measures were deemed essential for all measures concerning agricultural trade, including domestic agricultural policy and agricultural export subsidies. . . .

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