3 - The Uruguay Round Agreement on Agriculture in practice: how open are the OECD markets?

Summary

Introduction

Prior to the WTO the rules that applied to agricultural primary products deviated from the general GATT rules. This resulted in a proliferation of impediments to agricultural trade by means of import bans, quotas setting the maximum level of imports, variable import levies, minimum import prices, and non-tariff measures maintained by state trading enterprises. The URAA has fundamentally changed the way agriculture was treated under the GATT. It imposed specific commitments to reduce support and protection in the areas of domestic support, market access, and export competition. It also strengthened and made more operationally effective rules and disciplines in each of these areas, including export prohibitions and restrictions. It is being implemented over a six-year period (ten years for developing countries) and began in 1995.

The market access provisions established disciplines on trade distorting practices while maintaining historical trade volumes and creating increased access opportunities in highly protected markets. Most importantly, non-tariff barriers (NTBs), such as quantitative import restrictions, variable import levies, and discretionary import licensing, were banned. These barriers were converted to ordinary tariffs (tariffication). Existing and new tariffs were bound and subject to reduction. Developed countries agreed to reduce agricultural tariffs from their base period rates by a total of 36 percent, on a simple average basis, with a minimum cut of 15 percent for each tariff. Current access commitments were put in place to ensure that there was no erosion in market access as a result of the URAA.