The Agreement on Agriculture

Governments intervene in the agricultural sector for a number of reasons, including the desire to provide adequate food for the population, to achieve self-sufficiency and to promote rural welfare. Concerns of this sort are not present in any other trade sector. Although at least in theory the GATT covered trade in agricultural products, the Contracting Parties were unwilling to subject their domestic agricultural policies to the same disciplines as industrial products. As a result, distortions, in the form of high tariff and non-tariff barriers, characterized the international market for agricultural goods. In addition, many developed countries, in particular the United States and the European Community (“EC”), 1 have given huge amounts of support to their farmers, and surplus production generated by this support has been disposed of on the international market with the help of subsidies.

Although the reference to the European Community is only legally correct since the Treaty of Maastricht (1993), it is used throughout this chapter for the sake of convenience.

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References

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  43. See Jeffrey Estabrook, European Community Resistance to the Enforcement of GATT Panel Decisions on Sugar Export Subsidies, 15 Cornell Int’l L.J. 397 (1982). Google Scholar
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  46. Report of the GATT Panel (unadopted), European Economic Community, Subsidies on Export of Wheat Flour, SCM/42 (1983), The filing of the case constituted a “breach” of the implied understanding between the United States and the EC reached during the Tokyo Round that the former would not use the Subsidies Code to attack the CAP. see Robert Hudec, ‘Transcending the Ostensible’: Some Reflections on the Nature of Litigation between Governments, 72 Minn. L Rev. 101 (1987), for discussion of this understanding. Google Scholar
  47. The response of the United States was to sell at less than half the market price, thus eliminating the EC from the world’s largest market for wheat flour, Egypt. See Marsha Echols, Just Friends: The US-EEC Agricultural Export Subsidies Stand-off, Proceedings of the 77th Annual Meeting of the American Society of International Law 119 (1983). Google Scholar
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  72. It has been pointed out that a breach of Article XI:1 necessarily constitutes a breach of Article 4.2 of the Agreement on Agriculture, Report of Panel, Korea-Measures Affecting Imported of Fresh, Chilled and Frozen Beef, WT/DS161/R and WT/DS169/R (2000), ¶ 7.62. Google Scholar
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  95. Under United States law, for example, a countervailing duty investigation must be initiated upon the filing of a petition in proper form, and the government has no discretion to exercise “due restraint”. The due restraint provision may simply mean that Members agree not to self-initiate investigations as opposed to initiating upon a petition filed on behalf of a domestic industry. If so, it is a fairly meaningless concession because it is extremely rare for governments to self-initiate countervailing duty investigations. The United States has only self-initiated one countervailing duty investigation, Certain Softwood Lumber From Canada, 57 Fed. Reg. 22570 (1992). A GATT Panel held that the initiation was not inconsistent with Article 2 of the Tokyo Round Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade. Report of the GATT panel (adopted) United States—Measures Affecting Imports of Softwood Lumber From Canada, BISD 40th Supp. 358 (1994). Google Scholar
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  97. For further discussion, see Didier Chambovey, How the Expiry of the Peace Clause (Article 13 of the WTO Agreement on Agriculture) Might Alter Disciplines on Agricultural Subsidies in the WTO Framework, 36 J. WORLD TRADE 305 (2002). ArticleGoogle Scholar
  98. The decision is reproduced in The Legal Texts: Theresults of Theuruguayround Ofmultilateral Trade Negotiations (1999) at 392. Google Scholar
  99. On the issue of trade performance of developing countries, see WTO Secretariat Study, G/AG/NG/S/6 and Rev.1—Agricultural Trade Performance of Developing Countries 1990–1999. Google Scholar
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  102. The Cairns group now includes Argentina, Australia, Bolivia, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, the Philippines, South Africa, Thailand and Uruguay. See G/AG/NG/W/54, Cairns Group Negotiating Proposal—Market Access, and statement by Australia on the proposal, G/AG/NG/W/60, in which it is noted that the average tariff on agricultural products is more than eight times higher than the average tariff on industrial products. See also, e.g., G/AG/NG/W/12, WTO Negotiations on Agriculture Market Access—A Negotiating Proposal by Canada, and a statement by Canada in support of the Cairns Group proposal, G/AG/NG/W/23. Google Scholar
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  104. Id, para. 9. Other Members support this approach, see G/AG/NG/W/98, Korea—Proposal for WTO Negotiations on Agriculture, ¶ 3 and G/AG/NG/W/101, Norway—WTO Agriculture Negotiations, ¶ 12. Google Scholar
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  1. University College, Dublin Joseph A. McMahon ( Professor of Commercial Law )
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  3. SAIS-Bologna, Johns Hopkins University, Bologna Michael G. Plummer ( Professor of International Economics ) ( Professor of International Economics )

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McMahon, J.A. (2005). The Agreement on Agriculture. In: Macrory, P.F.J., Appleton, A.E., Plummer, M.G. (eds) The World Trade Organization: Legal, Economic and Political Analysis. Springer, Boston, MA. https://doi.org/10.1007/0-387-22688-5_6

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