WORLD TRADE ORGANISATION

(AGREEMENT ON AGRICULTURE)

(GROUP-2, SEC-A)
WTO- Introduction
 The World Trade Organization (WTO) deals with the
rules of trade between nations at a global or near-
global level.
 It’s an organization for liberalizing trade.
 WTO is a place where member governments go, to try
to sort out the trade problems they face with each
other.
 And it also helps to settle disputes through some
neutral procedure based on an agreed legal
foundation.
WTO- A REVIEW
 Established: 1 January 1995
 Created by: Uruguay Round negotiations (1986–94)
 Location: Geneva, Switzerland
 Membership: 150 countries (till 11 January 2007)
 Head: Pascal Lamy (director-general)
 Functions:
• Administering WTO trade agreements
• Forum for trade negotiations
• Handling trade disputes
• Monitoring national trade policies
• Technical assistance and training for developing countries
• Cooperation with other international organizations
AGREEMENT ON AGRICULTURE
 Some major developed countries had been subsidizing
their agricultural products for a long time with the
result that other agricultural exporters were put to
great disadvantage.
 Now there is a commitment to cut down subsidies
both on production and on exports
 AOA was to initiate a process of reforms in the trade
of agricultural products.
 Decisions on measures concerning the possible
negative effects of the reform program on least
developed and net food importing developing
countries also part of the package.
Three Pillars of AOA
The AoA has three central concepts, or "pillars":
 Domestic support,

 Market access and

 Export subsidies
Domestic support
 The AoA structures domestic support into three
categories or "boxes":
-a Green Box : fixed payments to producers for
environmental programs
-an Amber Box: domestic subsidies that
governments have agreed to reduce but not
eliminate
-a Blue Box: subsidies which can be increased
without limit
Market access
 It refers to the reduction of tariff (or
non-tariff) barriers to trade by WTO
member-states
 Three aspects of market access are:-
-Tariff levels,
-Special safeguard (SSG) and
-Tariff rate quotas (TRQ).
EXPORT SUBSIDY:
 The 1995 AoA required developed
countries to reduce export subsidies by
at least 35% and by at least 21% over
the 5 years to 2000.
 For developing countries the
percentage cuts are 24% and 14%
respectively in equal annual installment
over 10 years.
Contd…
Export subsidies: Refers to subsidies
contingent upon export performance
It includes
 Payments in kind to a firm, industry
 Payments on exports financed by
government action
 Provision to reduce cost of marketing
exports
Main deficiencies and imbalances
 Need for domestic food production
 Non-commercial farming
 High tariffs in developed countries
 Tariff quotas provided for country specific
 Major developed countries have put prohibitive tariffs
on some product lines by taking advantage of the
tariffication process.
 The liberalization of trade in services has benefited
the ICs and their suppliers, whereas the developing
countries have enjoyed very little benefit.
 Uncertainty about specific domestic support
Other exemptions include:
 Investment subsidies in the
Agriculture sector
 Input support to low income/resource
poor farmers
 Support for diversification from illicit
narcotic crops
THANK YOU !