Overview
On January 1, 1995, the World Trade Organization
(WTO) was established. It is home to a series of trade
accords that include agreements on services, agriculture,
intellectual property rights, and other issues never before
included in international trade rules. The organization
was established with a commitment to raise standards of
living and ensure full employment in the context of expanding
trade.
The AoA can be divided into three areas:
Market Access, which deals with tariff
barriers and import quotas; Domestic Support Programs,
such as price support payments to farmers; and Export
Subsidies. In each area, the agreement lays out
rules to dismantle barriers to trade by reducing tariffs
and public expenditures on agriculture. The proponents
of the agreement, including the U.S. and many developing
countries, argued that food security would be enhanced
if developed countries stopped stimulating production
through price supports and export subsidies. Food security
depends on an adequate supply, distribution, and access
to culturally appropriate food for every individual. It
depends on intricate social, cultural, economic, and political
relationships that differ enormously from place to place
and over time.
The AoA makes concessions to developing
and least-developed countries’ (LDCs) special needs,
including a longer implementation period (ten rather than
six years) and lower reduction commitments for programs
that support agricultural production and trade.
The principle of special and differential
(S&D) treatment was used to provide developing countries
with these more favorable terms. LDCs are exempt from
tariff reductions (although they must bind them to a maximum
level) and cuts to domestic support programs (although
they are subject to a spending ceiling). LDCs are also
exempt from export subsidy reduction requirements.
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