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Agriculture

Agricultural produce is protected by high tariff barriers, production support and the use of export subsidies in many countries. Over the years there have been attempts to reduce barriers to trade in the agricultural sector, but it was not until the Uruguay Round that, for the first time, a comprehensive 'Agreement on Agriculture' was concluded, bringing this area firmly within the scope of WTO rules.

There are three major planks to the Agriculture Agreement. Firstly the improvement of import access by reducing tariffs and providing new access opportunities; secondly, a reduction in the volume and value of subsidised exports, and thirdly the reduction of domestic support measures subsidising production. While the Uruguay Round took an important first step in eliminating these barriers to free trade, there is still more work to be done. The Agreement on Agriculture contains a commitment to continue the reform process in the negotiations which started in March 2000.

At the World Trade Organisation (WTO) 5th Ministerial in Doha, which took place in November 2001, another important step was taken. Building on the work already undertaken in the negotiations on the Agreement in Agriculture, the Ministerial Declaration further committed the WTO members to firm negotiations without prejudging their outcome on substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade distorting domestic support. At the same time, the Doha Declaration committed members to take account of non-trade concerns (e.g. environment, rural/social development, animal welfare) and to negotiate special and differential treatment for developing countries.

The Doha Development Agenda set an ambitious time table which required modalities (rules and commitments) to be agreed by 31 March 2003 and detailed schedules to be prepared in time for the next WTO Ministerial, to be held September 2003 in Cancun, Mexico. The Chair of the Agriculture negotiating group, Stuart Harbinson, proposed draft modalities in February, but disappointingly, WTO Members did not reach agreement on these by the 31 March deadline.

Since the 31 March, further technical work has been undertaken on some elements of Harbinson’s modalities, but this has not bridged gaps between WTO members’ positions on the main issues (cuts to domestic support and export subsidies and increases in market access). In order to make progress, WTO Trade Ministers attending the recent mini-Ministerial meeting in Montreal (28/29 July) therefore requested the EU and US to work together on developing a compromise proposal by mid-August.

The EU and US presented their joint paper to other WTO Members on 13 August. This paper proposes the main elements of a framework for a new WTO Agriculture agreement, setting out an approach on domestic and export subsidies reductions and market access increases. There are no figures and many important issues (Special and Differential Treatment, the peace clause, sectoral initiative to name a few) are not addressed in detail, but remain on the table for further discussion.

Although it is clearly a significant step forward that the EU and US have agreed an overall approach to the negotiations, they represent only 16 of the WTO’s 147 members and the paper must now be discussed and agreed by all WTO members if this kind of approach is to be adopted at Cancun. A series of WTO discussions to further discuss this paper are now taking place in Geneva.

For more information on this agreement, see the agriculture pages of the WTO website. The UK Government supports further progress in this area including further fundamental reform of the EU's Common Agricultural Policy (CAP). For more information about the EU's agriculture policy see the EU website.

Last updated 26 August 2003

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