The purpose of Agriculture on Agreement (AoA) establishment is to promote liberalization of trade and reduce market distortions in agriculture. But agriculture remains one of the most highly protected areas of international trade. The cost of such protection falls particularly hard on developing countries, where agriculture typically accounts for a much higher share of economic output, exports, and employment than in developed countries(Beierle, 2002).
Although the 1994 Uruguay Round of trade talks succeeded in bringing agriculture into the rules-based trading system, it did little to actually reduce agricultural trade protection. In addition, AoA is imbalanced in many ways. It has been fashioned in such a way as to enable developed countries to continue high levels of protection, whilst many developing countries have liberalized and their farmers are facing severe and often damaging competition, often from imports artificially cheapened through subsidies(Khor).
Therefore, AoA does damage the agricultural development in developing countries, especially the agricultural export in developing coutries. It is effective for developing countries to negotiate with developing countries when having a fully understanding of AoA.
This paper starts with a brief introduction the importance of agriculture for developing countries. And then a summary of the main features of the commitments made by members in AoA will be described in section3. In section4, it then outlines some of the imbalances and biases in the AoA that disadvantage the developing countries. Conclusion will be drawn in section 5.
2. The importance of agriculture in developing countries.
Agriculture plays a fundamentally important role in the economic growth and development prospects of the vast majority of developing countries. The situation in the industrialized countries utterly pales by comparison. Agriculture for some developing countries is a vital for combating hunger and reducing poverty. In addition, agricultural products like sugar, tea, rice, spices, coffee etc. constitute the major items of exports of countries that rely on agriculture. Meanwhile, governments use trade barriers-such as import tariffs- to build up agricultural products competitiveness. If implemented in accordance with commitments in AoA, state support is reduced prematurely and tariffs are significantly cut resulting with low-cost imports may flood in. the impact threatens to destroy the livelihoods of millions of farming families. For example,
Haiti was forced to cut its rice tariff from 35 percent to 3 percent, with the result three out of every four plates of rice eater in Haiti come from the USA. It has devastated farmers in Haiti, where rice-growing areas now have some of the highest levels of malnutrition and poverty. Since rural consumers typically
earn their cash as farmers, they could end up worse off if imports cause the prices of local crops to fall.
Therefore, a stable agricultural sector ensures a nation of food security.
3. Main features of AoA
The AoA contains three main categories of commitments:
3.1 market access.
All members countries have to abolish quantitative restrictions and non-tariff barriers and replace these with tariffs. Members also have to reduce their tariff levels: by 36 per cent over six years 1995-2000 for developed countries, and by 24 percent over 10 years 1995-2004 for developing countries. Least developed countries (LDCs) do not have to reduce their tariffs, but also commit not to raise their bound rates. 3.2 Domestic support.
Domestic support measures are categorized under three types: (a) the Amber Box, or measures that are taken to be trade-distorting and have effect on production, such as input subsidies and price support; (b) the Green Box, or measures that are assumed not to have effects on production, such as support for…