A product is to be considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country. Economists have never been very happy with the idea of singling out dumping as a prohibited practice. For one thing, setting different prices for different customers is a perfectly legitimate business strategy—like the discounts that airlines offer to students, senior citizens, and travelers who are willing to stay over a weekend, all falling under the rubric of “price discrimination.”
AGREEMENTS ON AGRICULTURE BÙI LÊ THÀNH AN - 2112150002 TABLE OF CONTENT About AOA Categories WTO Agricultural Subsidies Boxes Criticism ABOU T AOA BÙI LÊ THÀNH AN 2112150002 The Agreement on Agriculture (AoA) is a World Trade Organisation treaty that focuses on reducing the agricultural support and subsidies given to domestic producers by countries It is one of the most contentious agreements within the WTO It 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 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.” MAIN CONTENTS The terms of the WTO Agriculture Agreement focus mainly on three broad categories of agriculture and trade policy: 01 Market access “Tariffs only”, please 03 02 Export subsidies Domestics support Some you can, some you can’t Limits on spending and quantities 01 ● ● Market access The new rule for market access in agricultural products is “tariff only” Countries have to convert non-tariff barriers to tariffs (Non-tariff barriers include variable levies, minimum import prices, quotas, state trading measures, discretionary licensing, ) — a process called tariffication — or "bind" their tariffs, creating a ceiling that could not be increased in future Also, market access refers to the reduction of tariff barriers to trade by WTO members The reductions in agricultural subsidies and protection agreed in the Uruguay Round Only the figures for cutting export subsidies appear in the agreement Developed countries years (1995 - 2004) Developing countries 10 years (1995 2005) Tariffs : - Average cut for all agricultural products -36% -24% - Minimum cut per product -15% -10% -20% -13% Domestic support : Total AMS cuts for sector (base period: 1986-88) Exports - Value of subsidies -36% -24% - Subsidized quantities (base period: 1986-90) -21% -14% Least developed countries (LDCs) were exempt from tariff reductions 02 Domestic support This concerns the policy support and subsidies given by countries to enhance domestic production WTO has classified agricultural subsidies and policies into different boxes, which are explained in a section below in detail Green box Amber box Blue box Measures with minimal impact on trade can be used freely Includes subsidies that distort international trade by making the products of the country cheaper as compared to similar products from other countries in the global market Tends to limit production are classified under the Blue Box Its opponents argue that these payments are only partly decoupled from production Countries in favour say that these subsidies are needed for agricultural reform Subsidies that not distort trade or cause only minimal distortion They are allowed without any limit and can include income support for farmers that are decoupled from current production levels/prices 03 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 ● Least-developed countries not need to make any cuts ● During the six-year implementation period, developing countries are allowed under certain conditions to use subsidies to reduce the costs of marketing and transporting exports AGREEMENT ON AGRICULTURE INTRODUCTION The Agreement on Agriculture (AoA) is an international treaty of the World Trade Organization It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on January 1, 1995 OVERALL AIM The Agreement on Agriculture (AoA) has the overall aim to establish a fairer trading system that will increase market access and improve the livelihoods of farmers around the world 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