Short Note On Agreement On Agriculture

Although agriculture has always been under GATT, there have been some significant differences in the rules for primary agricultural products as opposed to industrial products before the WTO. The 1947 GATT allowed countries to use export subsidies for primary agricultural products, while export subsidies for industrial products were prohibited. The only conditions were that agricultural export subsidies should not be used to cover more than a fair share of world merchandise exports (Article XVI:3 of GATT). The GATT rules also allowed countries to resort, under certain conditions, to import restrictions (for example. B import quota), particularly where these restrictions were necessary to impose effective measures to limit domestic production (Article XI, paragraph 2, sub c) of the GATT). This derogation was also conditional on the fact that a minimum share of imports relative to domestic production was maintained. The reform of the 2003 CAP, which decoupled most of the existing direct aid, and the sectoral reforms that followed led to the deferral of most aid under the amber box and the blue box to the green box (61.6 billion euros in 2016/2017, see table below). Aid under the “amber box” (AMS) has fallen sharply, from EUR 81 billion at the beginning of the period of the agreement to EUR 6.9 billion between 2016 and 2017, even with successive waves of expansion. The European Union thus largely respects the commitments made in Marrakech (72.38 billion euros per year) for the AMS. In addition, the “blue box” reached 4.6 billion euros during the same notification period. While the volume of world agricultural exports has increased significantly in recent decades, its growth rate has remained below that of industrial enterprises, resulting in a steady decline in the share of agriculture in world merchandise trade.

In 1998, agricultural trade accounted for 10.5% of total merchandise trade, taking into account trade in services, while agriculture`s share of world exports was 8.5%. However, in the field of world trade, agriculture still lays ahead of sectors such as mining products, automotive products, chemicals, textiles and clothing, or iron and steel. Among agricultural products marketed internationally, food accounts for almost 80% of the total. The other main category of agricultural products is raw materials. Since the mid-1980s, trade in processed agricultural products and other quality agricultural products has grown much faster than trade in staple foodstuffs, such as cereals. Export subsidies are the third pillar. The 1995 agricultural agreement required industrialized countries to reduce export subsidies by at least 36% (in value terms) or by 21% (by volume) over a six-year value. For developing countries, the agreement called for reductions of 24% (in value) and 14% (in volume) over ten years. WTO members made important decisions on agriculture at the WTO Ministerial Conference in Nairobi, Kenya, in 2015.

These include the obligation to remove agricultural export subsidies, decisions on public storage for food security purposes, a special safeguard mechanism for developing countries and trade rules for cotton. At the WTO Ministerial Conference in Bali, Indonesia, in 2013, ministers also agreed on a range of agriculture-related issues. The 1947 GATT initially applied to agriculture, but was incomplete, and the signatory states (or “contracting parties”) excluded this sector from the scope of the principles set out in the general agreement. During the period 1947-1994, members were allowed to use export subsidies for primary agricultural products and to impose import restrictions under certain conditions, so that the main agricultural raw materials were confronted