Agreement on Agriculture

Definition

The Agreement on Agriculture (AoA) is a global trade agreement established under the World Trade Organization (WTO) that aims to reform international agricultural trade by reducing barriers and subsidies. It seeks to create a fair and market-oriented trading system, impacting food policy and governance by addressing issues such as tariffs, export subsidies, and domestic support measures for agriculture.

5 Must Know Facts For Your Next Test

1. The Agreement on Agriculture was established during the Uruguay Round of trade negotiations in 1994 as part of the WTO framework.
2. One of the main goals of the AoA is to reduce export subsidies that distort agricultural trade, especially from developed countries.
3. The agreement categorizes agricultural products into three types: 'amber box' for products with significant government support, 'blue box' for products with limits on support, and 'green box' for products that have no or minimal impact on trade.
4. Developing countries are given special provisions under the AoA to address their unique challenges in agricultural trade and enhance food security.
5. The AoA is often critiqued for favoring developed nations while putting pressure on developing countries to open their markets without sufficient support.

Review Questions

• How does the Agreement on Agriculture aim to address international agricultural trade imbalances?
  • The Agreement on Agriculture seeks to create a more equitable international agricultural trading system by reducing tariffs, export subsidies, and domestic support measures. By lowering these barriers, the AoA promotes fair competition among member countries and aims to enhance market access for developing nations. This approach encourages an environment where all countries can participate more equally in global agricultural markets.
• Evaluate the impact of the Agreement on Agriculture on food policy and governance in developing countries.
  • The Agreement on Agriculture has had significant implications for food policy and governance in developing countries by requiring them to open their markets while providing them with special provisions for their unique needs. While the AoA promotes fair trade, many developing nations struggle with the pressure to compete against heavily subsidized agricultural exports from developed countries. This situation can lead to challenges in achieving food security and sustainable agricultural development, as local farmers may find it difficult to compete in an open market.
• Discuss the potential long-term consequences of the Agreement on Agriculture for global food security and trade dynamics.
  • The long-term consequences of the Agreement on Agriculture for global food security and trade dynamics are complex. On one hand, by promoting free trade and reducing barriers, it could lead to increased efficiency in agricultural production and distribution. However, if not managed carefully, it may exacerbate inequalities between developed and developing nations, potentially undermining food security for vulnerable populations. As market access increases for certain countries, there could be shifts in agricultural production patterns that might destabilize local economies and disrupt food systems globally.

Related terms

World Trade Organization:

An intergovernmental organization that regulates international trade and provides a framework for negotiating trade agreements among member countries.

Tariffs: Taxes imposed by governments on imported goods, which can affect prices and trade flows in agriculture.

Subsidies: Financial assistance provided by governments to support farmers, which can distort market prices and influence agricultural production.