Historically, the agricultural sector was originally backed up by the General Agreement on Tariffs and Trade (GATT) which came into force in 1948 but this agreement failed to eliminate the governmental intervention due to which, most agricultural tariffs were not bounded and exemptions can be easily implied. Hence, the agriculture sector escaped numerous regulations such as high import duties, import bans, etc., and it resulted in an unseen trade barrier in the rest of the merchandise trade.

This exemption created a huge subsidies gap between the countries. GATT was mainly focused on the open market system and it became a major issue because no provision may obstruct the uncertainty of the agriculture sector. Therefore, in 1986, the Uruguay Round negations were initiated to reform and improve this sector.

All affecting measures such as trading barriers to domestic price, income support, and export subsidies were scrutinized. Furtherly, the agreement incorporated the rules for the regulation of sanitary and phytosanitary[1] (food safety and animal and plant health).

Balance is the key to rule-making deals in the WTO. The balance that emerged from the Uruguay Round in the Agriculture Agreement is between agricultural trade liberalization and governments' rights to pursue legitimate policy goals in the sector. Those goals include 'non-trade concerns' such as food security, rural development, and environmental protection. The two agreements on Agriculture and Sanitary and Phytosanitary Measures were negotiated in parallel [2].

On the 1st day of January 1995, the WTO Agreement on Agriculture came into force along with the existence of the World Trade Organization. The main purpose of this agreement was to reform the global trading system of agriculture so that it is closer to the competitive condition of the market. Initially, the restrictions over tariffs and subsidies were imposed for 10 years to reform the agricultural system.

Therefore, developed countries cut their tariffs and subsidies over six years i.e., 1995 to 2000, whereas, both least developed and developing countries were exempted for the period of 10 years, i.e., 1995 to 2004[3]. As a result, now the tariffs, domestic support, and export subsidies promote uniformity and have a capacity limitation unlike the provision of GATT 1947. The term 'Agricultural products' in the agreement includes processed food and drinks but it excludes forest cultivation and fisheries products.

The prime objective of the preamble of AoA is to provide a reasonable and market-oriented trading system for the agricultural sector. The reformation program includes concrete efforts to reduce support and protection in the areas of domestic assistance, export subsidies, and market access, and to introduce stricter and further operational effective GATT rules and persuasions.

It also addresses non-trade concerns, including the need for food security and environmental protection, and develops developing countries, including improved access opportunities and conditions for agricultural products of particular interest to these member countries. Provides special and discriminatory treatment too.

An agriculture committee was formulated under this agreement and it is responsible to administers the implementation of the Agreement on Agriculture. Also, the members had the opportunity to discuss and resolve matters related to the implementation of commitments. For this purpose, the committee usually meets four times a year. Special meetings may be held as needed.

Background Of Agreement On Agriculture (AOA)

The agricultural sector remains an integral part of many countries for providing a solid pillar to support the economy because it requires a constant source of production and employment. But, with the never-ending intervention of the government Since the 1980s, trade for processed and other high-value products is expanding more rapidly than the basic raw food products. Therefore, the sphere of global agriculture exports has been expanding over decades.

However, the growth rate has distorted the share of agriculture in the graphical arrangement which signifies the world trade merchandise and the reason behind such drawback is the minimized growth of the manufacturers engaged in the respective area[4].

Originally, the agricultural trade is backed by the GATT 1947. It allows the countries to use export subsidies over agricultural primary products, provided that, such export subsidies must not be more than the equitable share and the subsidies on industrial products were prohibited under GATT. It also allowed countries to have import restrictions but with the condition of imposing protective measures for domestic production.

Eventually, the farm products were expensive in the domestic market and such high prices generated a surplus of food, to dump that surplus on international markets by using export subsidies[5]. Therefore, the restriction on imports was applied without any limitation or minimum import access, and as result, many agriculture commodities faced barriers during trading on an uncommon scale.

The incompetency of GATT guidelines gave rise to multilateral trade negotiations. Therefore, the agreement was signed in Marrakesh, Morocco on the 15th day of April in 1994 at the end of the Uruguay Round, 1986-94. This is a product of multilateral trade negotiations which expanded the scope of GATT 1994 by including several services and intellectual property. "The Agriculture Agreement was also new, and a result of the negotiations.

A separate booklet, Sanitary, and Phytosanitary Measures deals with a related agreement on regulations on food safety and animal and plant health". The publication of the agreement was a necessary stage and the WTO Secretariat was authorized to publish this agreement to give an overview of the agriculture agreement to the public.

Rules And Commitments

• AoA incorporated several general rules for the controlling actions of governments that are affecting trade regulations. These rules majorly work in the following areas -
• Market access for application of measures for imports
• Domestic support for farmers
• Export competition (export subsidies and related policies)
• Many countries treated these rules as their commitment and its outcome improved market access and reduced subsidies which distorted trade by affecting prices and production.
• "The commitments specifically vary to each country and they are known as "specific" commitments. Officially they are called individual countries' "schedules of commitments", "documents listing the new commitments and when the new limits will be met (plus some exceptions). They are legally binding and are an integral part of the umbrella treaty covering all trade in goods, the General Agreement on Tariffs and Trade (GATT)"[6]."

The Safeguard Measures
Before the Uruguay Round, safeguard provisions were not even considered for agricultural products because it was easy to escape GATT disciplines. Therefore, the Agreement on Agriculture (AoA) provides for special safeguard measures for agricultural trade. Therefore, knowing these measures is necessary for any country.

For instance, if the country is facing a sudden increase in imports or an abnormal decline in its importing price it may cause impairment to the domestic import competition sector, in such circumstances these special safeguard measures can be applied. Concerning some additional tariffs or import restrictions. More specifically, safeguard rules within the WTO's legal framework allow importing countries to temporarily suspend WTO obligations in the above circumstances.

AoA formulated safeguard measures for agricultural trade for limited products and countries only and these provisions are valid only for the duration of the yet-to-be-defined "reform process"[7]. However, the General GATT safeguards are available for all countries and all products, including agricultural products. Also, the general GATT safeguard provisions allow temporary suspension and permanent suspension as well.

Following is the list of GATT/WTO Safeguards[8]:

1. Anti-dumping - GATT Article VI and Agreement on Implementation of Article VI of GATT 1994
2. Countervailing Duties - GATT Articles VI and XVI and Agreement on Subsidies and Countervailing Measures
3. Emergency Protection - Article XIX
4. Special Safeguard Provision - Article V of AoA
5. Balance of Payment - Article XII
6. Infant Industries - Articles XVIII (a) and XVIII (c)
7. General Waivers - Article XXV and WTO Agreement
8. Provisions allowing for permanent exceptions from the obligations
9. General Exceptions - Article XX

The Special Safeguard Provision Of The Agreement On Agriculture, Article 5

When the country changes the limit Tariffs faced by manufacturers have been raised in Competition with imported products. Uruguay Round The negotiator temporarily agreed with some in extreme cases, that protection was needed. To do so as the third element of the tariff package, Members have the right to collect import duties Temporary consignment of tariff products To deal with the surge in imports and the decline of the world price.

This is called a special backup (SSG) Providing an agricultural agreement (Article 5). Can only be used if it is correct and Reserved. Next to that, you need "SSG". Affected products on the member list of Commitment (their "schedule"). 33 Members - both development and evolution - Reserved this right (including EU)

As an individual member), a limited number of Products anyway. Special security regulations for Agriculture are different from normal safeguards Under another security contract. For agriculture, the government There is no need to prove that increased imports or falling prices are causing serious damage to domestic producers. Obligation increases Can be triggered automatically in the following cases Import volume increased above a certain level (Volume trigger) or when the price drops below it Fixed reference price shipping Mail (price trigger.

When the special fuse Higher obligations apply to volume increase Until the end of the year. When triggered by If the price goes down, you can only pay one extra charge It is levied on each cargo. No additional tariffs can be imposed on imported goods Within the tariff quota. Special security from 1995 to 2015 At least one-third used of the claiming members - 11 out of 33 - volume or the price will change.

GATT Safeguard Provisions

• Anti-dumping Provision
• Dumping is the process where products of a private firm are being exported to the international market at a lower price than the usual price of the same product in its domestic market. Article VI of GATT 1994 deals with anti-dumping.
• Furtherly, the AD Agreement[9] deals with the basic principles and conducting a detailed investigation, determination, and application of the AD duties and its main aim to provide fair competition. Following are the conditions for the application of AD duties:
• Occurrence of dumping - estimation of dumping margin and price difference.
• Suffrage of domestic market.
• Causation of injury by such dumping.
• Furtherly, the AD Agreement does not provide any specifications of rules for developing countries and their import treatment. However, the agreement provides that the developed countries should consider such situations and provide remedial support to the developing countries within the scope of AD duties.
   
• Subsidies and Countervailing Duties
• The GATT, Article XVI deals with subsidies and Article VI deals with anti-dumping and countervailing duties which give remedial support.
• Countervailing measures being a unilateral remedy can be applied only after appropriate investigation by the members and after satisfying the norms of the SCM Agreement.
• Before availing of this measure, the members must clear all related investigations i.e., there should be a connection between subsidized imports and domestic injury. "In-depth procedural requirements regulate the conduct of countervailing investigations and the imposition and maintenance of countervailing measures. A failure to respect either the substantive or procedural requirements can be taken to dispute settlement and may be the basis for invalidating the measure."[10]
• In the case of agriculture, the amber box falls under the countervailing action only when the threat is established as per the SCM agreement, whereas, the CV is prohibited for the green box[11].
   
• Emergency Safeguards
• Article XIX of GATT deals with emergency safeguards.
• The guiding principles of the SG Agreement[12] are:
• Measure must be temporary.
• It can impose only when the imports caused or threaten to cause injury to the domestic market.
• Majorly applied on a non-selective basis.
• Have liberalized effect.
• The compensation should be paid to the member whose trade has been affected by the imposing member.
• This safeguard works upon a prediction of market suffrage which needs to be protected from external shocks.
• The emergency safeguard provisions can be implemented easily.
• It provides a cap on imports.
   

Criticism

• Developing Country Disadvantage:
  One of the main criticisms of the AoA is that it disproportionately favors developed countries over developing countries. Critics argue that the agreement places greater obligations on developing countries to liberalize their agricultural sectors while allowing developed countries to continue providing substantial subsidies to their farmers, leading to an imbalance in global agricultural trade.
   
• Subsidies and Market Access:
  Critics argue that the AoA does not adequately address the issue of agricultural subsidies, particularly in developed countries. Subsidies can distort global agricultural markets, making it difficult for farmers in developing countries to compete on a level playing field. Additionally, some developing countries have expressed concerns about limited market access to developed countries, hindering their ability to export agricultural products.
   
• Impact on Small-Scale Farmers:
  The AoA's provisions have been criticized for potentially harming small-scale farmers in developing countries. The reduction or elimination of import barriers and subsidies in these countries can make it challenging for small-scale farmers to compete with heavily subsidized agricultural products from developed countries. This can lead to increased vulnerability and livelihood challenges for these farmers.
   
• Food Security:
  Some critics argue that the AoA's focus on market-oriented agricultural trade may undermine food security in developing countries. The emphasis on export-oriented agriculture, driven by the liberalization of markets, may divert resources away from domestic food production, potentially affecting the availability and affordability of food for vulnerable populations.
   
• Environmental Concerns:
  Critics have raised concerns about the environmental impact of certain agricultural practices encouraged by the AoA. The focus on increased productivity and export-oriented agriculture can lead to unsustainable farming practices, including excessive use of agrochemicals, deforestation, and water depletion, which can have negative consequences for ecosystems and biodiversity.

It's important to note that these criticisms represent perspectives from various stakeholders, and there are also counterarguments and different interpretations of the effects of the AoA. The debate surrounding the AoA and its safety provisions remains complex, with ongoing discussions within international trade forums and negotiations to address these concerns and find more balanced approaches to agricultural trade.

Bibliography

• Ø Agreement on Agriculture available at 14-AG.PDF (wto.org)
• Ø WTO Agreement Series is available at agric_agreement_series_3_e.pdf (wto.org)
• Ø IMPORT SURGES AND SAFEGUARD PROVISIONS WITH A PARTICULAR FOCUS ON ANTIDUMPING MEASURES available at a1477e03.pdf (fao.org)
• Ø Multilateral Trade Negotiations on Agriculture: A Resource Manual II. Agreement on Agriculture -s Safeguard Measures (fao.org)
• Ø WTO | Understanding the Sanitary and Phytosanitary Measures Agreement
• Ø 7598_et_17_ET.pdf (inflibnet.ac.in)

End-Notes:

1. WTO | Understanding the Sanitary and Phytosanitary Measures Agreement (last visited on June 12, 2023).
2. The WTO Agreement Series Agriculture, Third Edition, pg. no. 9
3. Agreement on Agriculture WTO, WTO Agreement on Agriculture Subsidies, UPSC Notes (byjus.com) (last visited on June 13, 2023)
4. Referring to 1998 agricultural trade accounts where after considering the services in trade, the total merchandise trade of exports dropped to 8.5 percent from 10.5 percent.
5. The Uruguay Round (saylordotorg.github.io) (last visited on June 14, 2023).
6. The WTO Agreement Series Agriculture, Third Edition, pg. no. 13
7. Multilateral Trade Negotiations on Agriculture: A Resource Manual II. Agreement on Agriculture -s Safeguard Measures (fao.org) (last visited on June 4, 2023).
8. Hoekman and Kostecki (1996), Chapter 7 - Safeguards.
9. The Agreement on Implementation of Article VI of GATT 1994.
10. Supra Note 7.
11. Article 13 of the Agreement on Agriculture
12. Uruguay Round Agreement on Safeguards ("SG Agreement") was negotiated "to re-establish multilateral control over safeguards and eliminate measures that escape such control".

Written By:

1. Garvita Garg - Law Student at Delhi Metropolitan Education, 4th Year
2. Pratiksha Gupta - Law Student at Delhi Metropolitan Education, 4th Year