In the 1980s, industrialised countries’ massive market interventions in agriculture led to overproduction. The surplus products were put on world markets at subsidised prices, which distorted international trade. This entailed significant expenses for the developed countries while also destroying the market for agricultural products from developing countries. This environment made it increasingly important to create an agreement that would set binding rules for members’ domestic agricultural support. Disciplines in the agricultural sector were therefore integrated into the WTO/GATT rules at the end of the Uruguay Round in 1995.
WTO Agreement on Agriculture
The WTO Agreement on Agriculture aims to reform agricultural trade to create more competitive market conditions and fair trade rules. The agreement consists of general rules, applying to all WTO members, which provide for significant, progressive reductions in agricultural support and border protection. In addition, individual members have undertaken specific commitments on domestic support and border protection, which are set out in documents known as schedules of commitments. The Agriculture Committee monitors compliance with and implementation of the general rules from the agreement and the schedules of commitments.
The Agreement on Agriculture rests on the following three pillars:
- Domestic support
- Market access
- Export competition