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1. AGRICULTURE Jay-Ann Marie E. Tuyogon

2. A. Overview
The Agreement on Agriculture (hereinafter the ‘ AoA Agreement’) came into force on 1 January 1995. The Preamble to the Agreement recognizes that the agreed long-term objective of the reform process initiated by the Uruguay Round reform program is to establish a fair and market-oriented agricultural trading system. The reform program comprises specific commitments to reduce support and protection in the areas of domestic support, export subsidies and market access, and through the establishment of strengthened and more operationally effective GATT rules and disciplines. The Agreement also takes into account non-trade concerns, including food security and the need to protect the environment, and provides S&D for DCs, including an improvement in the opportunities and terms of access for agricultural products of particular export interest to these members.
B. Coverage and Definitions
Article 2 provides that the Agreement applies to the products listed in Annex 1 to the Agreement, hereinafter referred to as agricultural products. The Agreement

3. B. Coverage and Definitions
Article 2 provides that the Agreement applies to the products listed in Annex 1 to the Agreement, hereinafter referred to as agricultural products. The Agreement defines in its Annex 1 agricultural products by reference to the harmonized system of product classification – the definition covers not only ( i ) basic agricultural products such as wheat, milk and live animals; but also (ii) the products derived from them such as bread, butter and meat; as well as (iii) all processed agricultural products such as chocolate and sausages. The coverage includes wines, spirits and tobacco products, fibers such as cotton, wool and silk, and raw animal skins destined for leather production. Fish and fish products are not included, nor are forestry products.
C. Key Aspects of the Agreement
The Agreement establishes a number of generally applicable rules with regard to trade-related agricultural measures, primarily in the areas of MA, domestic support and export competition. These rules relate to country-specific commitments to improve MA and reduce trade-distorting subsidies contained in the individual country’s schedules of the WTO members, and constitute an integral part of the GATT. This subsection shall outline key features of provisions in the Agreement on area of MA, domestic support and export competition.

4. 1. Market Access
a. Tariff-only protection On the MA side, the Uruguay Round resulted in a key systemic change: the switch from a situation where a myriad of NTBs impeded agricultural trade flows to a regime of bound tariff-only protection plus reduction commitments. The key aspects of this fundamental change have been to stimulate investment, production and trade in agriculture by i . Making agricultural MA conditions more transparent, predictable and competitive;
ii. Establishing or strengthening the link between national and international agricultural markets; and thus
iii. Relying more prominently on the market for guiding scarce resources into their most productive uses both within the agricultural sector and economy-
wide.
In many cases, tariffs were the only form of protection for agricultural products before the Uruguay Round – the Round led to the ‘binding’ in the WTO of a maximum level for these tariffs.
For many other products, however, market access restrictions involved non- tariff barriers. This was frequently, although not only, the case for major temperate zone agricultural products. The Uruguay Round negotiations aimed to remove such barriers. For this purpose, a ‘ tariffication ’ package was agreed which, among other measures, provided for the replacement of agriculture-specific non-tariff measures with a tariff affording an equivalent level of protection.

5. Following the entry into force of the Agreement, there is now a prohibition on agriculture-specific NTB, and the tariffs on virtually all agricultural products traded internationally are bound in the WTO.
B. Tariff reductions
The Agreement requires that developed country members have agreed to reduce, over a six-year period beginning in 1995, their tariffs by on average 36 per cent of all agricultural products, with a minimum reduction of 15 per cent for any product. For DCs, the reductions are 24 and 10 per cent, respectively, to be implemented over ten years. Those DC members which bound tariffs at ceiling levels did not, in many cases, undertake reduction commitments. LDC members were required to bind all agricultural tariffs, but not to undertake tariff reductions.
C. Prohibition of non-tariff border measures
Article 4.2 of the Agreement prohibits the use of agriculture-specific NTBs. Such measures include quantitative import restrictions, variable import levies, minimum import prices, discretionary import licensing procedures, voluntary export restraint agreements and NTBs maintained through state- trading enterprises. All similar border measures other than ‘normal customs duties’ are also no longer permitted. However, Article 4.2 of the Agreement does not prevent the use of non- tariff import restrictions consistent with the provisions of the GATT or other WTO agreements applicable to traded goods generally.
D. Special safeguard provisions
As a third element of the tariffication package, members have the right to invoke for tariffed products the ‘special safeguard’ provisions of the Agreement (Article 5) (hereinafter the ‘SSG’), provided that a reservation to this effect appears beside the products concerned in the relevant member’s schedule. The right to make use of the SSG provisions has been reserved by 38 members, and for a limited number of products in each case. The SSG allow the imposition of an additional tariff where certain criteria are met.
These involve either a specified surge in imports, or on a shipment-by- shipment basis, a fall in the import price below a specified reference price. In the case of the volume trigger, the higher duties apply only until the end of the year in question. In the case of the price trigger, any additional duty may be imposed taking place within tariff quotas.

6. 2. Domestic Support
The WTO classifies domestic support or subsidies into three categories:
Amber Box: all domestic subsidies – such as market price support – considered to distort production and trade. Subsidies in this category are expressed in terms of a ‘Total Aggregate Measurement of Support’ (‘Total AMS’), which includes all supports in one single figure. Amber Box subsidies are subject to WTO reduction commitments.
Blue Box: subsidy payments directly linked to acreage or animal numbers, but under schemes that also limit production by imposing production quotas or requiring farmers to set aside part of their land. These are deemed by WTO rules to be ‘partially decoupled’ from production and are not subject to WTO reduction commitments. In the EU, they are commonly known as direct payments.
Green Box: subsidies deemed not to distort trade, or at most cause minimal distortion, and are not subject to WTO reduction commitments. For the EU and the US, one of the most important allowable subsidies in this category is decoupled support paid directly to producers. Such support should not relate to current production levels or prices. It may also be given on condition that no production shall be required in order to receive such payments.
3. Export Subsidies
Under the Agreement, the right to use export subsidies is limited to four
situations: i . Export subsidies subject to product-specific reduction commitments within the limits specified in the schedule of the WTO member concerned;
ii. Any excess of budgetary outlays for export subsidies or subsidized export volume over the limits specified in the schedule as covered by the ‘downstream flexibility’ provision of Article 9.2(b) of the Agreement;
iii. Export subsidies consistent with the special and differential treatment provision for DC members (Article 9.4 of the Agreement); and
iv. Export subsidies other than those subject to reduction commitments provided that they are in conformity with the anti-circumvention disciplines of Article 10 of the Agreement on Agriculture. In all other cases, the use of export subsidies for agricultural products is prohibited (Articles 3.3, 8 and 10 of the Agreement).