Agreement on Agriculture (AoA) is one of the agreements of the World Trade Organization (WTO). The AoA aims to promote free and fair trade in agricultural products between member countries. ● It was signed at the Uruguay Round and entered into force on 1 January 1995, the same day the WTO officially entered into force. ● The Agreement provides for three types of agricultural subsidies: ○ Amber subsidies (prohibited) ○ Blue subsidies (can be sued) ○ Green subsidies (not sued)
WTO Agreements on Agriculture Agreements on Agriculture ● Agreement on Agriculture (AoA) is one of the agreements of the World Trade Organization (WTO) The AoA aims to promote free and fair trade in agricultural products between member countries ● It was signed at the Uruguay Round and entered into force on January 1995, the same day the WTO officially entered into force ● The Agreement provides for three types of agricultural subsidies: ○ Amber subsidies (prohibited) ○ Blue subsidies (can be sued) ○ Green subsidies (not sued) WTO Agricultural Subsidies Boxes Green Box Amber Box Blue Box Subsidies that not distort trade, or cause minimal disruption No limit Broad range of subsidies Limited to 5% of agricultural production (10% for developing countries) Broad range of subsidies allowed but must be designed to minimize trade distortion No limit Objectives The WTO Agriculture Agreement provides a framework for the long-term reform of agricultural trade and domestic policies It represents a significant step towards reforming agricultural trade and making it fairer and more competitive Three pillars The provisions and commitments in the Agreement on Agriculture are built around three main groups of issues known as the three pillars Market access Domestic support Export subsidies Reducing trade barriers for imported agricultural products Provide regulations and commitments to administer subsidies to domestic production and other similar programs, including those that stimulate the price increase of agricultural products sold by farms or income guarantee programs for farmers Provide regulations and commitments to manage subsidies for agricultural exports or other similar measures that make agricultural exports artificially competitive in international markets Special and Differential Treatment The AoA ● Recognizes that developing countries may face unique challenges in implementing the agreement ● Includes provisions for special and differential treatment ● Allow these countries to implement the agreement at a slower pace and with greater flexibility Dispute Settlement The AoA includes a dispute settlement mechanism that allows member countries to resolve disputes related to the agreement This mechanism is designed to ensure that member countries comply with the rules of the agreement and resolve any disputes in a fair and transparent manner Criticism ● ● The Agreement has been criticised by civil society groups for reducing tariff protections for small farmers, a key source of income in developing countries, while simultaneously allowing rich countries to continue subsidizing agriculture at home The Agreement was criticised by non-government organizations for categorizing subsidies into trade-distorting domestic subsidies (the "amber box"), which have to be reduced, and non-trade-distorting subsisies (blue and green boxes), which escape discipline and thus can be increased As efficient agricultural exporters press WTO members to reduce their trade-distorting "amber box" and "blue box" support, developed countries' green box spending has increased Conclusion The AoA has played an important role in promoting free and fair trade in agricultural products between member countries While there have been some challenges in implementing the agreement, it has helped to reduce trade barriers and increase transparency in agricultural trade Thank you for you attention! THREE PILLARS OF THE AGREEMENT ON AGRICULTURE DOMESTIC SUPPORT MARKET ACCESS EXPORT SUBSIDIES DOMESTIC SUPPORT Domestic support aims to settle regulations and commitments to give subsidies to domestic production and other similar programs, including those that stimulate the price increase of farm produce or guarantee program income for farmers The AoA includes the classification of subsidies by "boxes" depending on the consequences of production and trade: GREEN (MINIMAL DISTORTION) BLUE (PRODUCTION-LIMITING PROGRAMS THAT STILL DISTORT TRADE) AMBER (MOST DIRECTLY LINKED TO PRODUCTION LEVELS) MARKET ACCESS Market access refers to the reduction of tariff (or non-tariff) barriers to trade by WTO members The AoA consists of tariff reductions of: 36% average reduction — developed countries — with a minimum of 15% per-tariff line reduction in next six years 24% average reduction — developing countries — with a minimum of 10% per-tariff line reduction in next ten years EXPORT SUBSIDIES Export subsidies set regulations and commitments to give subsidies on agricultural exports or other similar measures that render agricultural exports artificially competitive in international markets For developed countries: Distinct reduction commitments on both volume (21%) and budgetary outlays (36%) over six years For developing countries: Two-thirds of the reduction is required for developed countries over ten years AOA ALSO AIMS TO SUPPORT LEAST DEVELOPED AND DEVELOPING COUNTRIES The agreement allows governments to encourage the rural economy but should adopt policies that are less distorting of trade The Agreement allows flexibility in the implementation of commitments SPECIAL SAFEGUARD MECHANISM Developing countries not need to reduce subsidies or cut 06 tariffs as much as developed countries, this is called the Special Safeguard Mechanism (SSM) SSM would allow developing countries to impose additional safety measures in the event of an abnormal surge in imports or the entry of unusually cheap imports.) They also have a longer transition period to fulfill their commitments Least developed countries not have to fulfill the same commitments as developed and developing countries 12 SPECIAL PRODUCTS WTO members agreed to allow developing countries to assign or make an appropriate list of products for tariff lines as Special Products (SPs) based on "food security, livelihood security, and rural development" THANK YOU WTO Agreement on Agriculture Nguyễn Thị Hương Trà - 2113790060 TMAE301(GD2-HK2-2223).2 Table of contents ► Introduction ► Three main pillars ► Mechanisms for developing countries Introduction The Agreement on Agriculture (AoA) is a WTO treaty that was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) and formally ratified in 1994 at Marrakesh, Morocco The AoA came into effect in 1995 Introduction ● ● ● ● ● According to its provisions, developing countries were to complete their reduction commitments by 2000 and developing countries by 2004 The Least Developed Countries were not required to make any reductions The Agreement covers products that are normally considered part of agriculture but excludes forestry and fishery products and also rubber, sisal, jute, coir and abaca The focus of the AoA is the elimination of what are called “trade distorting” agricultural subsidies According to the WTO, the overall aim of the Agreement is “to establish a fairer trading system that will increase market access and improve the livelihoods of farmers around the world.” Three main features Market Access ● ● This includes: ● Tariffication – implies all non-tariff barriers to be abolished and converted to tariffs Non-tariff barriers include variable levies, minimum import prices, quotas, state trading measures, discretionary licensing, etc ● Tariff reduction – Developing countries were obligated to reduce tariffs by 24% in 10 years ● Access opportunities – Minimum access equal to 3% of domestic consumption in 1986-88 will have to be established for the year 1995 rising to 5% at the end of the implementation period This head includes improving access to markets by removing trade barriers Three main features Domestic support: Domestic support aims to settle regulations and commitments to give subsidies to domestic production and other similar programs, including those that stimulate the price increase of farm produce or guarantee program income for farmers The AoA includes the classification of subsidies by "boxes" depending on the consequences of production and trade: ● amber (most directly linked to production levels) ● blue (production-limiting programs that still distort trade) ● green (minimal distortion) Three main features Export Subsidies ● ● ● Here, there are provisions related to member countries’ commitments to reduce export subsidies Developed countries are mandated to reduce their export subsidy volume by 21% and expenditure by 36% in years, in equal installment (from 1986 –1990 levels) Developing countries need to reduce export subsidy volume by 14% and expenditure by 24% over ten years in equal installments Mechanisms for developing countries Special Safeguard Mechanism Developing countries not need to reduce subsidies or cut tariffs as much as developed countries, this is called the Special Safeguard Mechanism (SSM) SSM would allow developing countries to impose additional safety measures in the event of an abnormal surge in imports or the entry of unusually cheap imports.) Special Products: WTO members agreed to allow developing countries to assign or make an appropriate list of products for tariff lines as Special Products (SPs) based on "food security, livelihood security, and rural development" Thanks for listening! WTO Agreement on Agriculture Nguyễn Thị Hương Trà - 2113790060 TMAE301(GD2-HK2-2223).2