Sought to achieve 'greater liberalisation of trade in agriculture.. by increasing discipline on the use of all direct and indirect subsidies and other measures affecting directly or indirectly agricultural trade..'. the inclusion of indirect subsidies allowed domestic agricultural support to be included in the negotiations, even though it did not necessarily result in a direct restriction of trade.
Initial US negotiating offer of the 'zero option' not seen as credible by the EU. US particularly keen to eliminate export subsidies. Cairns Group brought together developed and developing country agricultural exporters with a liberalising agenda. EU had a defensive position; while it was willing to see disciplines imposed on trade-distorting agricultural policies, it also wanted to be able to maintain the main features of the CAP. Other high-protectionist countries, such as Japan, were reluctant participants.
Not only did participants differ with respect to the ultimate degree of liberalisation sought, but they also differed on the means. The US favoured a rules approach, i.e. writing rules which would indicate which policies were permitted and which policies were outlawed. Their objective, of course, was to get export subsidies outlawed. The EU, on the other hand, revived an approach they first proposed during the 1960s Kennedy Round of trade negotiations which was to bind (and reduce) the overall level of support provided to farmers, but to leave it up to countries themselves to decide what mix of policy instruments they wanted to use to achieve this level of support. Both approaches found their way into the Final Agreement.
Developing countries walked away from tentative agreements in other areas because no serious engagement had occurred on agriculture.
These reforms were crucial in allowing the EU to sign up to a progressive reduction in support. In fact, MacSharry did not reduce overall support to EU farmers but merely changed its composition, but together with the 'Blue Box' (see below) this was sufficient to enable the EU to sign.
Proposed the three-pillar structure of disciplines on market access, export subsidies and domestic supports which became the basis for the eventual Agreement.
French remained unhappy with the Dunkel draft and further concessions were made to the EU at this bilateral US-EU meeting, including front-loading of export subsidies and introduction of the 'Blue Box'.
After signing of the Agreement, countries had four months to submit their schedules of offers in line with the procedures contained in the Modalities document and have them verified by other countries. This process was done very hastily and many 'short-cuts' taken by countries were not picked up at this stage.
| Policy |
Developed countries |
Developing countries |
| Market access | Prohibition on use of non-tariff barriers Conversion of NTBs to bound tariffs no higher than 1986-88 tariff equivalent Average tariff reduction of 36% (minimum 15%) over 6 years Minimum access opportunities of 3% rising to 5% of domestic consumption implemented through Tariff Rate Quotas Special safeguard provisions against import surges |
For ordinary tariffs not previously bound, could commit to maximum ('ceiling') tariffs not necessarily
related to previous levels Average tariff reductoin of 24% (minimum 10%) oer 10 years Minimum access opportunities of 2% rising to 4% of domestic consumption Least developed countries must bind tariffs but exempt from reduction commitment |
| Export subsidies | Ban on new export subsidies Existing subsidies to be reduced by 21% in volume and by 36% in expenditure List of export subsidies defined |
Existing subsidies to be reduced by 14% in volume and by 24% in expenditure |
| Domestic support | Policies divided into three groups (i) permitted policies ('Green Box') (ii) other policies to be included in the Aggregate Measure of Support ('Amber box') subject to reduction commitments De minimis provision allows exclusion of product-specific support less than 5% of output value from AMS Total AMS support to be reduced by 20% over 6 years (iii) Decoupled direct payments placed in a 'Blue Box' and also excluded from the AMS |
Developing countries allowed to include additional policies, e.g. investment and input subsidies, in the Green
Box De minimis provision allows exclusion of product-specific suppot less than 10% of output value from AMS Total AMS support to be reduced by 13.3% over 10 years Least developed countries must bind AMS support level but not required to reduce it |
| Sanitary and phtyosanitary standards | Reaffirms right of countries to set their own health and safety standards Lays down conditions where countries do not harmonise on international standards |
|
| Other aspects | Peace clause WTO Committee on Agriculture formed to oversee Agreement Disputes subject to Dispute Settlement Mechanism Agreement to re-open negotiations before the end of 1999 |
Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Countries |
Many of these articles and book chapters cover the same material so you should be selective
in what you read.
Healy, S., Pearce, R. and Stockbridge, M., 1998, The Implications of the Uruguay
Round Agreement for Developing Countries, Training Materials for Agricultural Planning
41, Rome, FAO. Lecky Library 382.4 +83.(Read Part 1, Chapter 1-3)
(although the focus is on how the URA affects developing countries, the manual provides
a good general overview of the agreement as well. Hard copies in the Lecky Library. It is also available online, but unfortunately not as a pdf file, and must be read online. Click on the chapter titles to bring up the whole chapter. Alternative to O'Connor reading ).
O'Conner, B., 2003, 'Agriculture', Module 3.15 of an online course on dispute settlement organised by UNCTAD.(Read Chapters 1-4).
(reviews the Uruguay Round Agreement on Agriculture and contains useful summary review questions at the end of each section. Alternative to Healy et al. FAO reading)
WTO Secretariat, 2005. 'Agriculture', in Trading Into the Future: The Introduction
to the WTO.
(very brief summary of the main provisions of the Uruguay Round Agreement on Agriculture)
Supplementary reading
WTO, Legal Text of the Agreement on Agriculture, available online.
Harvey, D., 1997, 'The GATT, the WTO and the CAP', Ch. 17 in Ritson, C. and Harvey, D., The Common Agricultural Policy, 2nd edition, Wallingford, CABI.
Rayner, A., Ingersent, K. and Hine, R., 1994, Agriculture in the Uruguay Round: an assessment, Economic Journal
103, Nov, pp. 1513-1527.
(a useful short review of the background to and progress of the negotiations.
This article draws on the fuller account by the same authors, see Ingersent, K., Rayner, A. and Hine, R.,
1994, Agriculture in the Uruguay Round, London, Macmillan).
Ingersent, K., Rayner, A. and Hine, R., 1995, Ex-post evaluation of the Uruguay Round Agriculture Agreement, World Economy 18, 5, 707-728.
Swinbank, A. and Tanner, C., 1996, Farm Policy and Trade Conflict: the Uruguay Round and Common Agricultural
Policy Reform, Ann Arbor, University of Michigan Press.
(written for an American audience, book contains good chapters on CAP and the 1992 CAP reform, as well as an account
of the Uruguay Round negotiations and a good chapter 7 on the outcome and how it affects the CAP)
Ingersent, K., Rayner, A. and Hine, R, 1994, Agriculture in the Uruguay Round, London, Macmillan.
Josling, T., Tangermann, S. and Warley, T., 1996, Agriculture and the GATT, New York, St Martin's Press.