Three Pillars Of Agreement On Agriculture


    The agricultural agreement consists of three pillars: domestic support, market access and export subsidies. The reform of the 2003 CAP, which decoupled most of the existing direct aid, and the sectoral reforms that followed led to the deferral of most aid under the amber box and the blue box to the green box (61.6 billion euros in 2016/2017, see table below). Aid under the “amber box” (AMS) has fallen sharply, from EUR 81 billion at the beginning of the period of the agreement to EUR 6.9 billion between 2016 and 2017, even with successive waves of expansion. The European Union thus largely respects the commitments made in Marrakech (72.38 billion euros per year) for the AMS. In addition, the “blue box” reached 4.6 billion euros during the same notification period. On the basis of the agreement on agriculture, WTO member states have committed to implementing an agricultural policy reform programme that sets out specific binding commitments in three important areas: these agreements have some flexibility in their implementation by both developing countries and WTO member countries (special and differentiated treatment) and least developed countries (LDCs) and net food-importing developing countries (special provisions). In the 1980s, public payments to agricultural producers in industrialized countries generated large crop surpluses, which were unloaded by export subsidies on the world market, causing food prices to fall. Tax pressure on safeguards has increased, due to both lower import duty revenues and increased domestic spending. Meanwhile, the global economy has entered a cycle of recession and the perception that market opening could improve economic conditions has led to calls for a new round of multilateral trade negotiations. [2] The cycle would open up markets for high-tech services and goods and ultimately generate much-needed efficiency gains. To engage developing countries, many of which were new international disciplines, agriculture, textiles and clothing were added to the big deal.

    [1] In 2003, at the WTO ministerial meeting in Cancun, no significant progress was made on the liberalization of agricultural markets in developed and developing countries. If this round of negotiations is to be successful, it must continue the momentum of reform that has been achieved through the Uruguay round. Agricultural liberalization has the potential to significantly improve well-being in both developed and developing countries. This report, prepared by the Australian Bureau of Agriculture and Economic Resources for the Commonwealth Secretariat, examines the benefits of liberalization and examines the closely linked use of the three pillars of domestic support, export subsidies and restrictions on market access to global agricultural trade that distort competition.