Essay on the Salient Features of the Agreement on Agriculture made under GATT, 1994 !
Agriculture has hitherto remained outside the framework of GATT and the industrialised countries have been heavily subsidising and protecting their agriculture thereby completely distorting world production and trade of temperate zone agriculture foodstuffs.
Agreement on Agriculture was made under GATT, 1994 to achieve greater liberalization of trade in agriculture and also with the following objectives:
i. To establish a basis for initiating a process of reform of trade in agriculture;
ADVERTISEMENTS:
ii. To establish a fair and market-oriented agricultural trading system;
iii. To provide for substantial progressive reductions in agricultural support and protection sustained over an agreed period of time, resulting in correcting and preventing restrictions and distortions in world agricultural markets;
iv. To achieve specific binding commitments in market access, domestic support, export competition;
v. To provide special and differential treatment for developing countries is an integral element of the negotiations, and taking into account the possible negative effects of the implementation of the reform programme on least-developed and net food-importing developing countries.
1. Product Coverage (Art. 2):
ADVERTISEMENTS:
This Agreement applies to the agricultural products listed in Annexe I. i.e. mannitol, sorbitol, essential oils, albuminoidal substances, hides and skins, raw furskins, raw silk, wool and animal hair, raw cotton, raw flax, raw hemp etc.
2. Incorporation of Concessions and Commitments (Art. 3):
The domestic support and export subsidy commitments in Part IV of each Member’s Schedule constitute commitments limiting subsidization and are hereby made an integral part of GATT, 1994. A member shall not provide support in favour of domestic producers in excess of the commitment levels. A Member shall not provide the listed export subsidies in respect of the specified agricultural products or groups of products in excess of the budgetary outlay and quantity commitment levels specified therein and shall not provide such subsidies in respect of any agricultural product not specified in that section of its Schedule.
3. Market Access (Art. 4):
Market access concessions contained in Schedules relate to binding and reductions of tariffs, and to other market access commitments as specified therein. Members shall not maintain, resort to, or revert to any measures of the kind which have been required to be converted into ordinary customs duties, except as otherwise provided for in Art. 5 and Annex 5.
4. Special Safeguard Provisions (Art.5):
“Special treatment” consists of conditions which show that a country is not a significant world market player with respect to the agricultural product. Specifically, a country’s imports of the processed agricultural product should not exceed 3% of domestic consumption between 1986- 88, no export subsidies should have been provided since 1986 and the primary product should be subject to production restructing measures.
ADVERTISEMENTS:
The product should also be designated in the schedule as being subject to non-trade concerns such as food security and environmental protection. In addition, market access for the processed product must correspond to 4% of 1986-88 domestic consumption of the produce increased by 8% of 1986-88 domestic consumption in every year of the implementation period (1995-2001). If Special Treatment is discontinued in 2001, the country must provide consumption and must also reduce customs duties by 15%.
A country may maintain Non-Tariff Barriers (NTBs) with respect to a primary agricultural product which is a predominant staple in the traditional diet of a developing country. If “Special Treatment” and minimum market access are provided corresponding to 1% of 1986-88 domestic consumption , in 1995 and increased to 2% of 1986-88 domestic consumption in 2000. From the year 2001, the 2% minimum access opportunity is to be increased in equal annual instalments to 4% of 1986-88 domestic consumption by 2005. The resulting level of minimum access opportunities must be maintained in the schedule of the developing country concerned.