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Introduction:

  • The Uruguay Round of global trade discussions culminated in the formal ratification of several agreements in Marrakesh, Morocco, in April 1994. Among these was the WTO Agreement on Agriculture.
  • The Agreement on Agriculture came into effect on January 1, 1995. According to its provisions, industrialized countries were required to fulfill their reduction obligations within six years, by the year 2000,
  • while developing countries had a ten-year period, concluding in 2004. Least developed countries were exempt from making any cutbacks.

Body:

The WTO Agreement on Agriculture encompasses three primary areas of agriculture and trade policy:

Market Access:

  • Includes tariffication, tariff reductions, and enhanced access opportunities.
  • Ordinary tariffs, including those arising from tariffication, were to be reduced by an average of 36%, with a minimum 15% reduction for each tariff item over six years.
  • Developing countries, facing balance-of-payments challenges and quantitative restrictions, were permitted to implement ceiling bindings instead of tariffs.
  • Example: India utilized ceiling bindings to maintain flexibility in its tariff policies, ensuring the protection of its agricultural sector while complying with WTO rules.

Domestic Support:

  • Measures subject to reduction commitments required a 20% cut in overall support from 1986-88 levels for developed nations (13.3% for developing countries).
  • Policies providing domestic support of less than 5% of the production value for developed nations and less than 10% for developing countries are exempt from reduction commitments.
  • Example: India’s Minimum Support Price (MSP) program for essential crops falls under the domestic support measures, with efforts to keep support within the de minimis limits set by the WTO.

Export Subsidies:

  • Commitments include reducing export subsidies. Developed countries must cut export subsidy expenditure by 36% and volume by 21% over six years, based on 1986-1990 levels.
  • Developing countries need to reduce their export subsidy expenditure by 24% and volume by 14%, with reductions made over ten years.
  • The Agreement also prohibits the introduction of new subsidies for products not already subject to reduction commitments.
  • Example: India has had to navigate these commitments, particularly in sectors like sugar, where export subsidies were significant for maintaining competitive parity in global markets.

Conclusion:

The recent WTO ministerial conference ended without resolving key issues critical to India, such as finding a permanent solution to the public food stockholding (PSH) program and curbing fisheries subsidies that contribute to overcapacity and overfishing.

Nonetheless, WTO members agreed to extend the moratorium on imposing import duties on e-commerce trade for an additional two years.

This extension reflects the ongoing negotiation challenges and the need for continued dialogue to address the diverse interests of developing nations like India within the WTO framework.

Legacy Editor Changed status to publish June 6, 2024