The Agreement on Agriculture (AoA) is a landmark agreement developed by the World Trade Organization (WTO) in 1995. The AoA aims to liberalize global agricultural trade and eliminate agricultural trade barriers, thereby increasing the trade and food security around the world.
Under the AoA, WTO member countries have agreed to provide increased market access for agricultural goods from other countries. They have also agreed to reduce or eliminate trade-distorting subsidies, export subsidies, and other types of support that give domestic producers an unfair advantage over their foreign counterparts.
The AoA is composed of three main pillars: market access, domestic support, and export subsidies. In each of these areas, the AoA establishes rules for the actions that WTO member countries can take to support their agricultural sectors.
The market access pillar of the AoA requires member countries to provide fair and equitable access to their markets for agricultural imports from other member countries. This is achieved by reducing trade barriers such as tariffs and quotas that limit the entry of foreign goods into domestic markets.
Under the AoA, member countries have made commitments to reduce import tariffs and eliminate non-tariff barriers to trade. These commitments have been implemented through various agreements, including the General Agreement on Tariffs and Trade (GATT), which establishes the rules for the international trade of goods.
The domestic support pillar of the AoA regulates the types and levels of support that member countries can provide to their agricultural sectors. The goal is to reduce the level of support that distorts trade and to ensure that support is targeted to achieve legitimate policy objectives.
To achieve this goal, the AoA places disciplines on the types of support that can be provided, such as the types of programs that can give price support to farmers. It also places limits on the level of support that can be provided, such as the amount of money that can be spent on subsidies.
The export subsidies pillar of the AoA aims to eliminate subsidies that are provided to domestic producers to support their exports. These subsidies can distort trade by artificially lowering the prices of exported goods, making them more competitive in international markets.
Under the AoA, member countries have agreed to gradually reduce and eliminate export subsidies. This has been achieved through various agreements, including the Agreement on Subsidies and Countervailing Measures (ASCM), which establishes the rules for the provision of subsidies.
The Agreement on Agriculture is an important piece of international trade law that aims to liberalize global agricultural trade and increase food security. Through its three pillars of market access, domestic support, and export subsidies, the AoA has helped to reduce trade barriers and distortions that have hindered the growth of the agricultural sector.
Over the years, the AoA has undergone several rounds of negotiations to address emerging challenges and ensure its relevance in the changing global trade landscape. As such, it remains a critical component of the global trade system, and its implementation will continue to play a vital role in promoting agricultural development and reducing poverty around the world.