Agreement On Agriculture Notes

While the volume of world agricultural exports has increased significantly in recent decades, its growth rate is lower than that of industry, which has led to a steady decline in the share of agriculture in world trade. In 1998, taking into account trade in services, agricultural trade accounted for 10.5% of total merchandise trade and agriculture`s share of world exports fell to 8.5%. However, in world trade, agriculture remains ahead of sectors such as mining, automotive, chemicals, textiles and clothing, or iron and steel. Among the agricultural products traded internationally, foodstuffs account for almost 80% of the total. The other main category of agricultural products is the raw material. Since the mid-1980s, trade in processed agricultural products and other quality agricultural products has grown much faster than trade in primary commodities such as cereals. The deal has been criticized by civil society groups for reducing tariff protection for smallholder farmers, an important source of income in developing countries, while allowing rich countries to continue subsidizing domestic agriculture. National agricultural support schemes are governed by the Agreement on Agriculture (AoA), which entered into force in 1995 and was negotiated during the Uruguay Round (1986-1994). The long-term objective of the AoA is to establish a fair and market-oriented agricultural trading system and to initiate a reform process by negotiating commitments on assistance and protection and establishing stronger and more operationally effective rules and disciplines. Agriculture is therefore special because the sector has a separate agreement whose provisions are given priority.

The CAP is also affected by agricultural concessions granted to a large number of countries under several multilateral and bilateral agreements, as well as unilateral derogations granted under the Generalised System of Preferences (GSP). These preferential agreements explain the high level of EU agricultural imports from developing countries (3.2.10, Table VI). As regards the General Agreement on Tariffs and Trade (GATT), signed in Geneva in 1947, and the Agreement establishing the World Trade Organisation (WTO), signed in Marrakesh in 1994 (OJ L 347, 27.7.1997, p. 1). The European Union and its Member States shall act in accordance with Article 207 (common commercial policy) and Articles 217 and 218 (international agreements) of the Treaty on the Functioning of the European Union (5.2.2). The 2003 CAP reform, which decoupled most of the existing direct aid, and the subsequent sectoral reforms resulted in the postponement of most of the aid under the yellow and blue boxes in the green box (€61.6 billion for the period 2016-2017, see table below). Aid granted under the „Amber Box“ (AMS or Aggregate Measurement of Support) decreased sharply, from EUR 81 billion at the beginning of the contractual period to EUR 6.9 billion over the period 2016-2017, even with successive waves of enlargement. The European Union is thus largely respecting the commitments made in Marrakesh (€72.38 billion per year) for the AMS. In addition, the „Blue Box“ reached €4.6 billion during the same registration period. Export subsidies are the third pillar. The 1995 agricultural agreement required industrialized countries to reduce export subsidies by at least 36% (in value) and 21% (in volume) over six years.

For developing countries, the agreement required reductions of 24 per cent (in value) and 14 per cent (in volume) over ten years. The GATT 1947 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 benefit from export subsidies on primary agricultural products and, under certain conditions, to impose import restrictions, so that the main agricultural raw materials faced barriers to trade in unusual proportions in other product sectors. . . .