Agreement on Agriculture (AoA)

Definition

The Agreement on Agriculture (AoA) is a treaty established during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) negotiations, aimed at reforming international agricultural trade. It sets rules for the trade of agricultural products, with the goal of creating a fair and market-oriented agricultural trading system by reducing trade barriers and subsidies that distort agricultural markets.

5 Must Know Facts For Your Next Test

1. The AoA was implemented in 1995 as part of the WTO agreements and focuses on three main areas: market access, domestic support, and export competition.
2. One of the key provisions of the AoA is the commitment to reduce export subsidies, which helps prevent wealthy countries from flooding the global market with cheap agricultural products.
3. Developed countries are required to cut their domestic support levels more than developing countries, reflecting an attempt to balance trade inequalities.
4. The AoA encourages member countries to provide information regarding their agricultural policies, promoting transparency in international agricultural trade.
5. Despite its intentions, the AoA has faced criticism for not adequately addressing the needs of developing countries, leading to ongoing debates about agricultural fairness in global trade.

Review Questions

• How does the Agreement on Agriculture aim to reduce trade barriers in international agricultural markets?
  • The Agreement on Agriculture seeks to reduce trade barriers by establishing specific rules for market access, domestic support, and export competition. This includes commitments to lower tariffs and eliminate export subsidies that distort market prices. By doing so, the AoA aims to promote a fairer trading environment where agricultural products can be traded more freely between nations, leading to increased competition and better prices for consumers.
• Evaluate the impact of the AoA on developed versus developing countries in terms of agricultural competitiveness.
  • The AoA impacts developed and developing countries differently due to their varying levels of agricultural development and reliance on subsidies. Developed countries are required to reduce their domestic support levels more significantly than developing nations, which can create an uneven playing field. While this framework is designed to enhance competitiveness globally, critics argue that it still favors developed nations due to their ability to adapt quickly, while developing countries may struggle with limited resources and access to technology.
• Assess how the critiques surrounding the AoA influence ongoing discussions about agricultural trade reform within the WTO framework.
  • Critiques of the AoA highlight its shortcomings in addressing the needs of developing countries and ensuring equitable agricultural trade practices. These discussions influence ongoing negotiations within the WTO framework as member countries seek to amend or reform existing agreements to better accommodate diverse agricultural economies. The push for reforms often centers around enhancing support for small-scale farmers in developing nations and addressing issues related to food security and sustainability in global agriculture, reflecting a growing recognition of the complexities of agricultural trade.

Related terms

Subsidies: Financial support provided by governments to their domestic industries, including agriculture, to enhance competitiveness and lower production costs.

Tariffs: Taxes imposed on imported goods, including agricultural products, intended to protect domestic industries from foreign competition.

World Trade Organization (WTO): An intergovernmental organization that regulates international trade, overseeing agreements such as the AoA to ensure trade flows as smoothly and predictably as possible.