Agreement on Agriculture: general issues
The Uruguay Round Agreement on Agriculture (AoA) represents a fundamental change in the way agriculture is treated under the rules governing trade among WTO member countries. Prior to the Uruguay Round, rules on trade in agricultural products in the General Agreement on Tariffs and Trade (GATT) were largely ineffective due to a number of loopholes and exceptions that, in effect, excluded much of this trade from most of the disciplines applied to trade in manufactured goods. But under the AoA, countries agreed to reduce agricultural support and protection in the areas of market access, domestic support, and export subsidies—sometimes referred to as the "three pillars" of the agreement.

Under market access, countries agreed to open markets by prohibiting nontariff barriers, converting nontariff barriers to tariffs, and reducing tariffs. Countries also agreed to reduce expenditures on export subsidies and the quantity of agricultural products exported with subsidies. Domestic support reductions were achieved through commitments to reduce a country's aggregate measurement of support (AMS)—a numerical measure of the value of most trade-distorting domestic policies. The AoA was to be implemented between 1995 and 2000 in industrial countries and between 1995 and 2004 in developing countries.

A few additional aspects of the AoA are worth noting. First, the AoA recognized that the long-term objective of substantial progressive reductions in support and protection is an ongoing process. As a result, it committed members to initiate negotiations by the end of 1999 to continue the process of reform. Agriculture and services were the only areas where negotiations on further trade liberalization had been mandated in the WTO Agreements. The agricultural negotiations, which began in January 2000, are now well into their fourth year.

Second, the AoA protected subsidies that comply with the agreement from being challenged under other WTO agreements. Without this "peace clause," countries would have greater freedom to take action against each other's subsidies under the Subsidies and Countervailing Measures Agreement and related provisions. The peace clause, which is due to expire at the end of 2003, is an issue in the current negotiations. Proposals range from extending the peace clause in its current form, to revising it to restrict the type of policies or countries covered, to allowing it to lapse altogether.

Finally, the AoA allowed WTO members to invoke Special Safeguards (SSG) for agricultural commodities subject to tariffication, when a sudden surge in imports or drop in price occurs. Under this provision, WTO members are allowed to temporarily roll back trade liberalization in order to provide an industry with time to adjust to increased competition from imports. For example, the SSG provision allowed countries to levy an additional, time-limited duty on an imported product if the import volume exceeds a pre-set volume trigger, or if the price of the imported product is below the set trigger level. Some countries have proposed abolishing the SSG, while others have proposed continuing it, or revising it to prevent it being used against developing country imports. Some developing countries have proposed that only they be allowed to use special safeguards. At present, use of special safeguards is scheduled to remain in force for the duration of the reform process.

The readings below address general issues related to the Uruguay Round Agreement on Agriculture. New readings relating to AoA issues will be posted as they become available.

• Multilateralism and Regionalism: Dual Strategies for Trade Reform, Amber Waves, September 2003
• Non-Trade Concerns: International Debate and U.S. Policy, Agricultural Outlook, June-July 2002
• Calculating Damages in WTO Trade Disputes, Agricultural Outlook, April 2002
• EU Preferential Trading Agreements: Heightened Competition for U.S., Agricultural Outlook, December 2001
• The Current WTO Agricultural Negotiations: Options for Progress (Synthesis), Commissioned Paper No. 18, International Agricultural Trade Research Consortium, November 2001
• Agricultural Policy Reform in the WTO—The Road Ahead, AER 802, May 2001
• The Road Ahead: Agricultural Policy Reform in the WTO—Summary Report, AER 797, January 2001
• WTO Negotiations: Potential Gains from Ag Policy Reform, Agricultural Outlook, January 2001
• The WTO’s Three Pillars: Vision and Reality, December 2000
• The Use and Abuse of Multifunctionality, November 1999
• AoA issues series:
  

  Agriculture in the Uruguay Round
  Export subsidies
  Domestic support policies
  Green box policies and the environment
  Market access: tariffication and tariff reduction
  Tariff-rate quota administration
  

• Text of the Agreement on Agriculture
• WTO Pressures for Agricultural Policy Change, The EU's CAP: Pressures for Change, October 1999
• Regional Trade Agreements and U.S. Agriculture: An Overview, AIB 745, October 1998
• Regional Trade Agreements and U.S. Agriculture, AER 771, November 1998
• Uruguay Round Agreement on Agriculture: The Record to Date, Agricultural Outlook, December 1998
• Agriculture in the WTO, WRS-98-4, December 1998
• Improvements in WTO Dispute Settlement, Agriculture in the WTO, December 1998
• Fast-Track Authority: Issues for U.S. Agriculture, Agricultural Outlook, November 1997
• Agriculture and the WTO: The Road Ahead, Agricultural Outlook, December 1996

for more information, contact: John Wainio
web administration: webadmin@ers.usda.gov
page updated: October 6, 2003