CHAPTER 1:INTRODUCTION

1.1 WORLD TRADE ORGANISATION

There are a number of ways of looking at the World Trade Organization. It is an organization

for trade opening. It is a forum for governments to negotiate trade agreements. It is a place

for them to settle trade disputes. It operates a system of trade rules. Essentially, the WTO is a

place where member governments try to sort out the trade problems they face with each

other.

The WTO was born out of negotiations, and everything the WTO does is the result of

negotiations. The bulk of the WTO’s current work comes from the 1986–94 negotiations

called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs

and Trade (GATT). The WTO is currently the host to new negotiations, under the ‘Doha

Development Agenda’ launched in 2001.

Where countries have faced trade barriers and wanted them lowered, the negotiations have

helped to open markets for trade. But the WTO is not just about opening markets, and in

some circumstances its rules support maintaining trade barriers — for example, to protect

consumers or prevent the spread of disease.

At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s

trading nations. These documents provide the legal ground rules for international commerce.

They are essentially contracts, binding governments to keep their trade policies within agreed

limits. Although negotiated and signed by governments, the goal is to help producers of

goods and services, exporters, and importers conduct their business, while allowing

governments to meet social and environmental objectives.

The system’s overriding purpose is to help trade flow as freely as possible so long as there

are no undesirable side effects because this is important for economic development and well-

being. That partly means removing obstacles. It also means ensuring that individuals,

companies and governments know what the trade rules are around the world, and giving them

the confidence that there will be no sudden changes of policy. In other words, the rules have

to be ‘transparent’ and predictable.

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Trade relations often involve conflicting interests. Agreements, including those painstakingly

negotiated in the WTO system, often need interpreting. The most harmonious way to settle

these differences is through some neutral procedure based on an agreed legal foundation.

That is the purpose behind the dispute settlement process written into the WTO agreements.

1.2 WORK OF WTO

While the WTO is driven by its member states, it could not function without its Secretariat to

coordinate the activities. The Secretariat employs over 600 staff, and its experts — lawyers,

economists, statisticians and communications experts — assist WTO members on a daily

basis to ensure, among other things, that negotiations progress smoothly, and that the rules of

international trade are correctly applied and enforced.

Trade negotiations

The WTO agreements cover goods, services and intellectual property. They spell out the

principles of liberalization, and the permitted exceptions. They include individual countries’

commitments to lower customs tariffs and other trade barriers, and to open and keep open

services markets. They set procedures for settling disputes. These agreements are not static;

they are renegotiated from time to time and new agreements can be added to the package.

Many are now being negotiated under the Doha Development Agenda, launched by WTO

trade ministers in Doha, Qatar, in November 2001.

Implementation and monitoring

WTO agreements require governments to make their trade policies transparent by notifying

the WTO about laws in force and measures adopted. Various WTO councils and committees

seek to ensure that these requirements are being followed and that WTO agreements are

being properly implemented. All WTO members must undergo periodic scrutiny of their

trade policies and practices, each review containing reports by the country concerned and the

WTO Secretariat.

Dispute settlement

The WTO’s procedure for resolving trade quarrels under the Dispute Settlement

Understanding is vital for enforcing the rules and therefore for ensuring that trade flows

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smoothly. Countries bring disputes to the WTO if they think their rights under the agreements

are being infringed. Judgements by specially appointed independent experts are based on

interpretations of the agreements and individual countries’ commitments.

Building trade capacity

WTO agreements contain special provision for developing countries, including longer time

periods to implement agreements and commitments, measures to increase their trading

opportunities, and support to help them build their trade capacity, to handle disputes and to

implement technical standards. The WTO organizes hundreds of technical cooperation

missions to developing countries annually. It also holds numerous courses each year in

Geneva for government officials. Aid for Trade aims to help developing countries develop

the skills and infrastructure needed to expand their trade.

Outreach

The WTO maintains regular dialogue with non-governmental organizations,

parliamentarians, other international organizations, the media and the general public on

various aspects of the WTO and the ongoing Doha negotiations, with the aim of enhancing

cooperation and increasing awareness of WTO activities

1.3 WTO STAND FOR

The WTO agreements are lengthy and complex because they are legal texts covering a wide

range of activities. But a number of simple, fundamental principles run throughout all of

these documents. These principles are the foundation of the multilateral trading system

Non-discrimination

A country should not discriminate between its trading partners and it should not discriminate

between its own and foreign products, services or nationals.

More open

Lowering trade barriers is one of the most obvious ways of encouraging trade; these barriers

include customs duties (or tariffs) and measures such as import bans or quotas that restrict

quantities selectively.

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Predictable and transparent

Foreign companies, investors and governments should be confident that trade barriers should

not be raised arbitrarily. With stability and predictability, investment is encouraged, jobs are

created and consumers can fully enjoy the benefits of competition choice and lower prices.

More competitive

Discouraging ‘unfair’ practices, such as export subsidies and dumping products at below cost

to gain market share; the issues are complex, and the rules try to establish what is fair or

unfair, and how governments can respond, in particular by charging additional import duties

calculated to compensate for damage caused by unfair trade.

More beneficial for less developed countries

Giving them more time to adjust, greater flexibility and special privileges; over three-quarters

of WTO members are developing countries and countries in transition to market economies.

The WTO agreements give them transition periods to adjust to the more unfamiliar and,

perhaps, difficult WTO provisions.

Protect the environment

The WTO’s agreements permit members to take measures to protect not only the

environment but also public health, animal health and plant health. However, these measures

must be applied in the same way to both national and foreign businesses. In other words,

members must not use environmental protection measures as a means of disguising

protectionist policies.

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CHAPTER 2: LITERATURE REVIEW

M. Sankara Reddi, M. Ramesh and M. Chandrayya(2009)

In his opinion WTO is receiving the deepest indulgence of everyone, as it is affecting the

major sectors of Indian economy and agriculture in particular now and more intensively in

the coming years. A major concern growing with the increasing impact of WTO is, as to how

the small and marginal farmers’ who dominate the Indian agriculture, depend heavily on

agriculture for their livelihood, have small marketable surplus and operate under heavy

constraints to be competitive in a subsidized agriculture production and trade regime, could

benefit from WTO. The concern more often swings to the other side that the spreading

tentacle of WTO with reduced tariff regime and increased access to Indian market for the

products from subsidized agriculture could severally damage the agriculture based livelihood

of majority of Indian farmers. The challenge to policy makers is how to protect Indian

agriculture from the impending WTO threat, enhance the competitiveness of Indian farming

and make farming a viable and self sustaining enterprise to improve and ensure livelihood

security of the farmers. A strategy to address this challenge shall necessarily involve re-

orientation and injection of market linked dynamism in Indian agricultural R&D,

strengthening of supportive institutions to serve the resource poor farmers, and steering fast

the change with appropriate policies and trained human ware.

P. Arunachalam(2009)

He starts his articles by calling readers, if you gone through last 17 years of economic dailies

and economic magazines, business dailies and business magazines, even vernacular dailies

and books written and also edited by different authors in Indian and abroad, you could see

that around forty percent of the research articles and papers, editorials, reviews related World

Trade Organization (WTO) and WTO related issues only particularly about agriculture. Why

this particular area attracted this much attention from politicians, bureaucrats, academicians,

business persons, critics in India and abroad? The simple reason is, this is the only

organization at the world level where you could see a clear cut differences exist between

developing countries and developed countries. He argues that the root cause of distortion of

international trade in agriculture has been the massive domestic subsidies given by the

industrialized countries to their agricultural sector over many years. This in turn led to

excessive production and it’s dumping in international markets as well as import restrictions

to keep out developing countries agricultural products from their domestic markets. Hence,

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the starting point for the establishment of a fair agricultural trade regime has to be the

reduction of domestic production subsidies given by industrialized countries, reduction in the

volume of subsidized exports and minimum market access opportunities for agricultural

produces worldwide. . He suggests that India has a uniquely important contribution to make

at this point to restart the Round. This is to show some further flexibility on agriculture. Not

to the extent of opening India’s huge agricultural subsistence economy to global competition.

But by moving where you can to allow other limited but real market access, including in

some difficult commodity areas.

V.Balasubramanian

Discusses the negative and positive benefits of India as WTO member through his paper

“WTO and Indian Agriculture Insight, Implication and imperatives”. He notices some

problems of Indian farmers. Firstly the governments of developed countries spend huge

amounts on agricultural subsidies. This has resulted in the decline of prices of agricultural

commodities in the world market. The policies of the Indian Government have compelled the

farmers of the country to compete with cheaper foreign agricultural commodities when they

have to spend more and more for ever increasing cost of agricultural inputs such as seeds,

fertilizers, pesticides, electricity, etc. Increasing cost of inputs, decline in growth rates and

lower prices of outputs have adversely affected the farmers and it has accelerated the

indebtedness, desperation, destitution and starvation to a vast majority of rural people

particularly the small and marginal farmers and tenant cultivators in India. He says two major

factors are responsible for the present downfall of Indian agriculture. First, the government

has substantially reduced the development expenditure in agriculture sector owing to its

eagerness to reduce the fiscal deficit. Secondly, import liberalization has contributed in a big

way for the reduction in prices of agricultural products. Having failed to get remunerative

prices for their products, many farmers have curtailed their farm operations which in turn

have increased unemployment among the agricultural workers. Thus import liberalization is a

major cause for the existing plight of poor farmers. He analyzing that the crop uncertainties

due to vagaries of nature and perishability of most of the agricultural

commodities make the supply erratic. Hence the alternating shortage and surplus resulting

from bad and good harvests destabilise the prices and earnings for the producers. This has

made our export earnings uncertain and instable. Export earning instability will have an

impact on domestic instability and reduce the efficiency. Hence India’s opening up of

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agriculture to the world trade and increased emphasis on production for exports is therefore

likely to bring economic instability within the country and consequently, instability in the

earnings of producers and their patterns of investment.

Kaliappa Kalirjan and Kanhaiya Singh (2006)

Discussing about issues related to the WTO’s Agreement on Agriculture from India’s point

of view through their paper “India and the WTO's Agreement on Agriculture (A-oA)” . Why

India should work towards the success of the Doha Round is also discussed. They opine that,

India does not have to worry about its subsidy, as it is already below the required line and it

also does not have any domestic support to reckon with. Moreover, the ongoing negotiations

are likely to yield enough flexibility in product choice and tariff selection. Therefore, India

should work towards the success of the Doha round and in the mean time make use of the

opportunity to reform its domestic market to bring in more efficiency. With favorable bound

rates for agriculture onboard, the negotiating framework of India must be different from that

of other developing countries. The situation is highly tenacious for India, particularly in view

of the fact that the developed countries have managed to link agriculture subsidy with the

market access in services and industry.

Anwarul Hoda and Ashok Gulati (2007)

Described about Indian agriculture in Doha Round of WTO point of view, through their book

entitled by “WTO Negotiations on Agriculture and Developing Countries Book Description”.

The World Trade Organization's Doha Round of trade talks has been plagued by a lack of

concrete progress toward establishing a fair and harmonious agricultural trading system.

Because the results of the Doha Round could have far-reaching implications for the trade and

economic prospects of developing countries in the twenty-first century, it is critical for these

countries to fully understand the issues involved in the negotiations agriculture. However,

there has been no authoritative analysis of the rules and modalities on which governments of

developing countries can rely. This book, coauthored by an insider to the trade talks that led

to the establishment of the WTO, fills this gap. It examines the implementation experience

of key members of the WTO, and then traces the developments in the negotiations up to the

recent impasse. In light of these considerations, and on the basis of a case study of India, the

authors propose various elements of a negotiating position and strategy for developing

countries. The authors offer tough but realistic recommendations regarding tariffs, market

access, treatment of sensitive or special products, and other aspects of international trade.

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Joseph A Mc Mahon (2007)

The book entitled “The WTO Agreement on Agriculture” provides an indepth examination of

the substantive provisions and the disputes that have arisen in each of these three areas. The

WTO Agreement on Agriculture subjected agriculture to a set of international rules for the

first time in the history of international trade. Ever since its negotiation, the Agreement has

been at the forefront of the controversy surrounding the purpose and impact of the WTO

itself. The commentary is structured around the three areas of reform initiated by the

Agreement - market access, domestic support and export competition.

In addition, the book situates these provisions against their background in pre-WTO

regulation. It analyzes the operation of the 'Peace clause' and assesses the impact of the

clause's expiration. The commentary concludes by assessing the Agreement's accommodation

of and impact on developing economies, and examining the process of reforming domestic

farm subsidies, one of the dominant issues currently confronting thw WTO.

Munisamy Gopinath (2008),

Wrote a paper about Domestic support in India’s point of view entitled “India: Shadow WTO

Agricultural Domestic Support Notifications”. In this study, he broadly outlined India’s

domestic support (DS) policies and our understanding of their classification and measurement

for the purposes of official notifications. First of all he is describing about Indian agriculture

at the beginning of WTO in 1995. India’s official notifications began in 1995 with green box

support of nearly US$2 billion and limited use of special and differential treatment. The

productspecific aggregate measure of support (AMS) was negative because external reference

prices were larger than minimum support prices. Non-productspecific AMS, by way of

fertilizer, electricity, irrigation, credit, and seed subsidies, accounted for about 7 percent of

the value of agricultural production in 1995. In subsequent notifications, for 1996 and 1997,

several key changes were observed. The first was the transfer of 80 percent of fertilizer,

irrigation, and electricity subsidies from non-product-specific Aggregate Measurement of

Support to special and differential treatment of low-income and resource-poor farmers.

Shadow notifications, based on our understanding of the underlying methods, showed that

green box support had grown to nearly US$8.0 billion in 2005. Non product-specific AMS

accounted for about 1 percent of the annual value of agricultural production for 1998-2005.

With India’s general elections expected in early 2009, the immediate future includes popular

policies such as credit subsidies and significant growth in minimum support prices.

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Nevertheless, non product- specific AMS would not likely exceed the limits proposed in the

Doha Round (that is, 10 percent of value of production) even with popular policies. However,

product-specific AMS would turn positive, especially in cereals, with high growth in support

prices and the appreciation of Rupee as seen in recent years. There is a declining importance

of agriculture as a source of India’s exports since 1995. Except for meat products, none of the

major agricultural exports shows a clear upward or downward trend.

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CHAPTER 3 : AGREEMENT ON AGRICULTURE: MARKET ACCESS

Market access is one of the three main pillars of the AoA – the other two being domestic

support measures and export competition. It deals with rules and commitments related to

import of goods. Its purpose is to expand trade by preventing various non-tariff barriers and

by binding and reducing tariffs. Besides tariffs, other trade policy instruments covered by the

market access pillar include Tariff Rate Quotas (TRQs) and Special Safeguard (SSG) as a

trade remedy measure. In the WTO context, “market access” is about both obligations and

rights14. Nepal’s obligation as a WTO member is to provide market access to other Members

in return for her “right” of access to others’ markets for Nepalese goods on multilaterally

agreed terms. Thus, a balanced analysis of market access provisions would cover both

obligations and rights. The focus of this chapter is on the “obligation” side of this equation,

i.e. on the likely implications of the market access provisions of the AoA on Nepal's

agricultural trade policies and on the Nepalese agriculture. As Nepal does not have any TRQ

commitments, and does not have access to the SSG, the most important instrument for

managing imports is applied tariffs, within the limit set by Nepal's WTO bound rates. Given

that these bound rates are already agreed upon, the key question to be asked is: what would

be the most appropriate structure of the applied tariffs in order to safeguard the interest of the

Nepalese agriculture?

The chapter, organized in four sections, introduces the AoA provisions on market access;

discusses some theoretical and conceptual issues on border protection and tariffs to

understand why and how the WTO membership matters in this area; analyses Nepal’s applied

tariffs on selected major commodity groups drawing upon the experience for recent years and

in relation to the corresponding bound rates; and draws some conclusions.

3.1 AGRICULTURE: MARKET ACCESS

Under the reform programme, members have converted their non-tariff measures to

equivalent bound tariffs. Some additional market access is provided through tariff rate quotas,

and the tariffs are being reduced. Contingency protection is provided through special

safeguards, and transparency works through notifications.

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The conceptual framework  

On the market access side, the Uruguay Round resulted in a key systemic change: the switch

from a situation where a myriad of non-tariff measures impeded agricultural trade flows to a

regime of bound tariff-only protection plus reduction commitments. The key aspects of this

fundamental change have been to stimulate investment, production and trade in agriculture by

(i) Making agricultural market access conditions more transparent, predictable and

competitive,

(ii) Establishing or strengthening the link between national and international agricultural

markets, and thus

(iii) Relying more prominently on the market for guiding scarce resources into their most

productive uses both within the agricultural sector and economy-wide.

In many cases, tariffs were the only form of protection for agricultural products before the

Uruguay Round — the Round led to the “binding” in the WTO of a maximum level for these

tariffs. For many other products, however, market access restrictions involved non-tariff

barriers. This was frequently, though not only, the case for major temperate zone agricultural

products. The Uruguay Round negotiations aimed to remove such barriers. For this purpose, a

“tariffication” package was agreed which, amongst other things, provided for the replacement

of agriculture-specific non-tariff measures with a tariff which afforded an equivalent level of

protection. The tariffs resulting from the tariffication process account, on average of the

developed country Members, for around one fifth of the total number of agricultural tariff

lines. For the developing country Members, this share is considerably smaller. Following the

entry into force of the Agreement on Agriculture, there is now a prohibition on agriculture-

specific non-tariff measures, and the tariffs on virtually all agricultural products traded

internationally are bound in the WTO.

Schedule of tariff concessions

Each WTO Member has a “schedule” of tariff concessions covering all agricultural products.

These concessions are an integral part of the results of the Uruguay Round, are formally

annexed to the Marrakesh Protocol [cross-reference] and have become an integral part of the

GATT 1994 [cross-reference]. The schedule sets out for each individual agricultural product,

or, in some cases agricultural products defined more generally, the maximum tariff that can

be applied on imports into the territory of the Member concerned. The tariffs in the schedules

include those that resulted from the tariffication process, which, in many cases, are

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considerably higher than industrial tariffs, reflecting the incidence of agriculture-specific

non-tariff measures prior to the WTO. Many developing countries have bound their

previously unbound tariffs at “ceiling” levels, i.e. at levels higher than the applied rates prior

to the WTO.

Developed country Members have agreed to reduce, over a six-year period beginning in

1995, their tariffs by 36 per cent on average of all agricultural products, with a minimum cut

of 15 per cent for any product. For developing countries, the cuts are 24 and 10 per cent,

respectively, to be implemented over ten years. Those developing country Members which

bound tariffs at ceiling levels did not, in many cases, undertake reduction commitments.

Least-developed country Members were required to bind all agricultural tariffs, but not to

undertake tariff reductions

Tariff quota commitments  

As part of the tariffication package, WTO Members were required to maintain, for tariffied

products, current import access opportunities at levels corresponding to those existing during

the 1986-88 base period. Where such “current” access had been less than 5 per cent of

domestic consumption of the product in question in the base period, an (additional) minimum

access opportunity had to be opened on a most-favoured-nation basis. This was to ensure that

in 1995, current and minimum access opportunities combined represented at least 3 per cent

of base-period consumption and are progressively expanded to reach 5 per cent of that

consumption in the year 2000 (developed country Members) or 2004 (developing country

Members), respectively.

The current and minimum access opportunities are generally implemented in the form of

tariff quotas. In case of minimum access, the applicable duty was required to be low or

minimal, low that is either in absolute terms or, at least, in relation to the “normal” ordinary

customs duty that applies to any imports outside the tariff quota. These tariff quotas,

including the applicable tariff rates and any other conditions related to the tariff quotas, are

specified in the schedules of the WTO Members concerned.

While the vast majority of tariff quotas in agriculture have their origin in the Uruguay Round

negotiations, a number of such commitments were the result of accessions to the WTO.

Currently (July 1999), 37 Members have tariff quotas specified in their schedules. In total,

there are 1374 individual tariff quotas. These tariff quotas constitute binding commitments as

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opposed to autonomous tariff quotas which Members may establish at any time, for example,

in order to stabilize the domestic price after a poor harvest.

 

The prohibition of non-tariff border measures 

Article 4.2 of the Agreement on Agriculture prohibits the use of agriculture-specific non-

tariff measures. Such measures include quantitative import restrictions, variable import

levies, minimum import prices, discretionary import licensing procedures, voluntary export

restraint agreements and non-tariff measures maintained through state-trading enterprises. All

similar border measures other than “normal customs duties” are also no longer permitted.

Although Article XI:2(c) of the GATT [cross-reference] continues to permit non-tariff import

restrictions on fisheries products, it is now inoperative as regards agricultural products

because it is superseded by the Agreement on Agriculture.

However, Article 4.2 of the Agreement on Agriculture does not prevent the use of non-tariff

import restrictions consistent with the provisions of the GATT or other WTO agreements

which are applicable to traded goods generally (industrial or agricultural). Such measures

include those maintained under balance-of-payments provisions (Articles XII and XVIII of

GATT), general safeguard provisions (Article XIX of GATT and the related WTO

agreement), general exceptions (Article XX of GATT), the Agreement on the Application of

Sanitary and Phytosanitary Measures, the Agreement on Technical Barriers to Trade or other

general, non-agriculture-specific WTO provisions.

 

Special treatment  

The Agreement on Agriculture contains a “special treatment” clause (Annex 5), under which

four countries were permitted, subject to strictly circumscribed conditions, to maintain non-

tariff border measures on certain products during the period of tariff reductions (with the

possibility of extending the special treatment, subject to further negotiations). As one of the

conditions, market access in the form of progressively increasing import quotas has to be

provided for the products concerned. The products and countries concerned are: rice in the

case of Japan, Korea and the Philippines; and cheese and sheepmeat in the case of Israel. As

of 1 April 1999, Japan has ceased to apply special treatment.

The special safeguard provisions  

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As a third element of the tariffication package, Members have the right to invoke for tariffied

products the special safeguard provisions of the Agreement on Agriculture (Article 5),

provided that a reservation to this effect (“SSG”) appears beside the products concerned in

the relevant Member’s schedule. The right to make use of the special safeguard provisions

has been reserved by 38 Members, and for a limited number of products in each case.

The special safeguard provisions allow the imposition of an additional tariff where certain

criteria are met. The criteria involve either a specified surge in imports (volume trigger), or,

on a shipment by shipment basis, a fall of the import price below a specified reference price

(price trigger). In case of the volume trigger, the higher duties only apply until the end of the

year in question. In case of the price trigger, any additional duty can only be imposed on the

shipment concerned. The additional duties cannot be applied to imports taking place within

tariff quotas.

Notification obligations   

The bound agricultural tariffs and the tariff quota commitments are contained in Members’

schedules. There is no requirement for Members to notify their tariffs to the Committee on

Agriculture. Applied tariffs are, however, to be submitted to other bodies of the WTO,

including the Committee on Market Access and in the context of the Trade Policy Review

mechanism.

Members with tariff quotas and the right to use the special safeguard provisions are required

to make both ad hoc and annual notifications to the Committee on Agriculture. At the

beginning of the implementation period, an “up-front” notification was due, setting out how

each tariff quota is to be administered. Such notifications disclose, for example, if imports are

permitted on a “first-come-first-served” basis or if import licences are used — and in the

latter case, an indication of who is able to obtain a licence and how they are allocated. An ad

hoc notification is required if the method of allocation under any tariff quota changes. At the

end of each year, a notification of the quantity of imports entering under each tariff quota is

required (tariff quota fill).

Members with the right to use the special safeguard provisions must notify its first use in

order to allow its trading partners to establish the parameters of the special safeguard action,

such as the volume or price used to trigger the special safeguard action. In the case of the

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price trigger, an upfront notification of the relevant reference prices has also been possible. In

addition, an annual summary notification of the use of the special safeguard is required.

3.2 THE AOA PROVISIONS ON MARKET ACCESS

Prohibition of quantitative restrictions on imports One significant achievement of the AoA

was prohibition of border measures other than “ordinary customs duty”. A WTO Member is

no longer allowed to limit trade through import bans or quantitative restrictions, or other

similar measures, except under such specified situations as safeguards, food safety and

adverse balance of payment situation. The only border instrument permitted is “ordinary”

customs tariff, which includes ad valorem and specific duties. Article 4.2 of the AoA spells in

detail the measures that are prohibited, e.g. quantitative trade restrictions, variable import

levies, minimum import prices, discretionary import licensing, nontariff measures maintained

by state trading enterprises, voluntary export restraints and similar border measures other

than ordinary customs duty. Table 1 shows the main market access provisions of the AoA.

Table 1: Main provisions of the AoA on market access

Instrument General provisions

AoA Article 4.1 & Schedules First bindings, and then reductions of the bound tariffs,

plus other market access commitments as in the

Schedules

AoA Article 4.2 Prohibition of quantitative restriction on imports; only

ordinary tariffs to apply on imports

AoA Article 5 Special safeguard (SSG) provision against import surges

(quantity and depressed prices) relative to established

triggers

Schedules Implementation of current and minimum access

commitments with tariff rate quotas (TRQs)

Schedules Tariff reduction schedule – reduction of the bound rates

over the implementation period Reduction rates for

bound tariffs Developed countries: 36% on average

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(minimum 15% for all tariff lines) over 6 years

Developing countries: 24% average (minimum 10% for

all tariff lines) over 10 years Least developed countries:

No reduction required

Tariff binding and reduction

During the UR negotiations, modalities were developed to convert existing non-tariff barriers

to “equivalent tariffs”, which would be the new bound rates (see Sharma 2000a for these

modalities). Countries that had non-tariff barriers were required to compute tariff equivalents

based on the gap between domestic and world prices. The developing countries could also

choose this tariffication process. They also had the option to “offer” what is called as “ceiling

binding” of tariffs. That is, they could offer ceiling rates as they chose. If not objected by

other WTO Members that would be the WTO bound rates. Most developing countries chose

this method to establish the bound rates. They included all South Asian WTO members. In

the case of Nepal this choice was not available. Like other newly acceding countries Nepal

bound its tariffs through negotiations.

Bound versus applied tariffs

In the WTO terminology, bound tariffs are the rates that a country commits not to exceed at

any point in time (except in some specified situations). By contrast, “applied rates” refer to

tariffs that are actually applied at any given point in time. The basic rule is: applied rates may

be lower but must not exceed the bound rates. Hence bound rates have special significance as

they limit the ability of a country to vary tariffs. In the GATT, and now the WTO, tariff

negotiations amounted to reducing the bound rates. The experience of the past 10 years

shows that applied tariffs of most developing countries are far below the bound rates, while

they are closer in the case of the developed countries.

Tariff Rate Quota

Quotas in the ordinary sense of the term were common trade policy instrument for a long

time prior to the UR. In the UR, as countries tariffied non-tariff barriers, there was a concern

that the resulting ordinary tariffs could turn out to be too high for any trade to take place.

Moreover, there were many products that were little traded for various reasons, e.g.

prohibitively high tariffs, binding quotas or import restrictions. As a result, it was agreed that

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there should be “minimum market access” commitment, e.g. 5% of total domestic

consumption. This gave rise to the concept of the TRQ to facilitate minimum trade. A TRQ is

a two-tired tariff instrument under which imports up to the quota level face low or no tariff

while all imports above the quota level face the usual MFN tariff. In the UR, 36 countries

made TRQ commitments on agricultural products for a total of 1,370 tariff lines. Although 19

of these are developing countries, the developed countries account for 67% of the TRQs. In

the post-1995 period, the (unsatisfactory) administration of TRQs, and the issue of less than

100% quota fill rate, has attracted a great deal of discussion in the WTO.

Special Safeguard Measures

This is another innovation of the AoA (Article 5). It is specific to agricultural products only.

The general WTO trade remedy measures like anti-dumping apply to all products, including

agricultural products (for details, see the chapter on import surges by Gautam et al in this

volume). The SSG is a temporary measure that permits an importing country to charge duties

higher than the WTO bound rate when faced with import surges. The SSGs are available only

to those products that were “tariffied” and for which the right to resort to the SSG was

reserved by placing the label “SSG” in country Schedules. There are two types of surges that

trigger the SSG:

(i) when import volumes surge beyond some defined threshold and

(ii) When import prices fall below a previously defined threshold. The extra duty

applicable depends on the extent of the surge, relative to the defined thresholds. In

the UR, 38 WTO Members reserved right to the SSG measure for selected

products. As the majority of the developing countries did not tariffy, and offered

“ceiling bindings”, very few of them have access to the SSG.

In the case, as shown in the last column of Table 1, the provision prohibiting all non-tariff

measures applies. As a LDC, however, Nepal would not be required to reduce bound tariffs

once the transition phase of the WTO accession process is complete. But applied rates cannot

exceed the bound duties. Nepal does not have access to the SSG while there was no need for

opening TRQs, which Nepal did not. There is a provision in the WTO rules called “initial

negotiating rights” (INR). In Nepal’s tariff Schedule, some countries have been designated as

17

INR holders for some products. This means that in future if Nepal wants to revise bound

tariffs upwards, this must be first negotiated with the INR holder.

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CHAPTER 4: INDIA & WORLD TRADE ORGANIZATION (WTO)

INTRODUCTION

After over 7 years of negotiations the Uruguay Round multilateral trade negotiations were

concluded on December 15, 1993 and were formally ratified in April 1994 at Marrakesh,

Morrocco. The WTO Agreement on Agriculture was one of the many agreements which were

negotiated during the Uruguay Round.

The implementation of the Agreement on Agriculture started with effect from 1.1.1995. As

per the provisions of the Agreement, the developed countries would complete their reduction

commitments within 6 years, i.e., by the year 2000, whereas the commitments of the

developing countries would be completed within 10 years, i.e., by the year 2004. The least

developed countries are not required to make any reductions.

The products which are included within the purview of this agreement are what are normally

considered as part of agriculture except that it excludes fishery and forestry products as well

as rubber, jute, sisal, abaca and coir. The exact product coverage can be accessed in the legal

text of the agreement from the web site www.wto.org.

4.1 SALIENT FEATURES

The WTO Agreement on Agriculture contains provisions in 3 broad areas of agriculture and

trade policy: market access, domestic support and export subsidies.

Market Access

This includes tariffication, tariff reduction and access opportunities. Tariffication means that

all non-tariff barriers such as quotas, variable levies, minimum import prices, discretionary

licensing, state trading measures, voluntary restraint agreements etc. need to be abolished and

converted into an equivalent tariff. Ordinary tariffs including those resulting from their

tariffication are to be reduced by an average of 36% with minimum rate of reduction of 15%

for each tariff item over a 6 year period. Developing countries are required to reduce tariffs

by 24% in 10 years. Developing countries as were maintaining Quantitative Restrictions due

to balance of payment problems were allowed to offer ceiling bindings instead of tariffication

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Special safeguard provision allows the imposition of additional duties when there are either

import surges above a particular level or particularly low import prices as compared to 1986-

88 levels.

It has also been stipulated that minimum access equal to 3% of domestic consumption in

1986-88 will have to be established for the year 1995 rising to 5% at the end of the

implementation period.

Domestic Support

For domestic support policies, subject to reduction commitments, the total support given in

1986-88, measured by the Total Aggregate Measure of Support (total AMS), should be

reduced by 20% in developed countries (13.3% in developing countries). Reduction

commitments refer to total levels of support and not to individual commodities. Policies

which amount to domestic support both under the product specific and non product specific

categories at less than 5% of the value of production for developed countries and less than

10% for developing countries are also excluded from any reduction commitments. Policies

which have no or at most minimal, trade distorting effects on production are excluded from

any reduction commitments (‘Green Box’-Annex 2 of the Agreement on Agriculture

www.wto.org. The list of exempted green box policies includes such policies which provide

services or benefits to agriculture or the rural community, public stock-holding for food

security purposes, domestic food aid and certain de-coupled payments to producers including

direct payments to production limiting programmes, provided certain conditions are met.

Special and Differential Treatment

provisions are also available for developing country members. These include purchases for

and sales from food security stocks at administered prices provided that the subsidy to

producers is included in calculation of AMS. Developing countries are permitted untargeted

subsidised food distribution to meet requirements of the urban and rural poor. Also excluded

for developing countries are investment subsidies that are generally available to agriculture

and agricultural input subsidies generally available to low income and resource poor farmers

in these countries.

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Export Subsidies

The Agreement contains provisions regarding members commitment to reduce Export

Subsidies. Developed countries are required to reduce their export subsidy expenditure by

36% and volume by 21% in 6 years, in equal installment (from 1986 –1990 levels). For

developing countries the percentage cuts are 24% and 14% respectively in equal annual

installment over 10 years. The Agreement also specifies that for products not subject to

export subsidy reduction commitments, no such subsidies can be granted in the future.

4.2 INDIA'S COMMITMENTS

Market Access

As India was maintaining Quantitative Restrictions due to balance of payments

reasons(which is a GATT consistent measure), it did not have to undertake any commitments

in regard to market access. The only commitment India has undertaken is to bind its primary

agricultural products at 100%; processed foods at 150% and edible oils at 300%. Of course,

for some agricultural products like skimmed milk powder, maize, rice, spelt wheat, millets

etc. which had been bound at zero or at low bound rates, negotiations under Article XXVIII

of GATT were successfully completed in December, 1999, and the bound rates have been

raised substantially.

Domestic Support

India does not provide any product specific support other than market price support. During

the reference period (1986-88 ), India had market price support programmes for 22 products,

out of which 19 are included in our list of commitments filed under GATT. The products are

- rice, wheat, bajra, jawar, maize, barley, gram, groundnut, rapeseed, toria, cotton, Soyabean

(yellow), Soyabean (black), urad, moong, tur, tobacco, jute, and sugarcane. The total product

specific AMS was (-) Rs.24,442 crores during the base period. The negative figure arises

from the fact that during the base period, except for tobacco and sugarcane, international

prices of all products was higher than domestic prices, and the product specific AMS is to be

calculated by subtracting the domestic price from the international price and then multiplying

the resultant figure by the quantity of production.

Non-product specific subsidy is calculated by taking into account subsidies given for

fertilizers, water, seeds, credit and electricity. During the reference period, the total non-

product specific AMS was Rs.4581 crores. Taking both product specific and non-product

21

specific AMS into account, the total AMS was (-) Rs.19,869 crores i.e. about (-) 18% of the

value of total agricultural output.

Since our total AMS is negative and that too by a huge magnitude, the question of our

undertaking reduction commitments did not arise. As such, we have not undertaken

any commitment in our schedule filed under GATT. The calculations for the marketing

year 1995-96 show the product specific AMS figure as (-) 38.47% and non-product specific

AMS as 7.52% of the total value of production. We can further deduct from these

calculations the domestic support extended to low income and resource poor farmers

provided under Article 6 of the Agreement on Agriculture. This still keeps our aggregate

AMS below the de minimis level of 10%.

Export Subsidies

In India, exporters of agricultural commodities do not get any direct subsidy. The only

subsidies available to them are in the form of

(a) Exemption of export profit from income tax under section 80-HHC of the Income Tax Act

and this is also not one of the listed subsidies as the entire income from Agriculture is exempt

from Income Tax per se.

(b) Subsidies on cost of freight on export shipments of certain products like fruits, vegetables

and floricultural products. We have in fact indicated in our schedule of commitments that

India reserves the right to take recourse to subsidies (such as, cash compensatory support)

during the implementation period.

4.3 MANDATED NEGOTIATIONS

Article 20 of the Agreement on Agriculture (AoA)  (www.wto.org) mandates that

negotiations for continuing the reform process in agriculture will be initiated one year before

the end of the implementation period. As the implementation period for developed countries

culminated at the end of the year 2000, the negotiations on the Agreement on Agriculture

have begun in January 2000.

These negotiations are being conducted in special sessions of the WTO Committee on

Agriculture (COA) at Geneva. The following are the broad parameters for carrying out

negotiations:

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Experience of member countries in implementation of reduction commitments till date;

The effects of reduction commitments on World Trade in Agriculture;

Non trade concerns, special and differential treatment to developing country members and the

objective of establishing a fair and market oriented agricultural trading system; and

Identifying further commitments necessary to achieve the long-term objectives of the

Agreement.

During extensive deliberations in the WTO Committee on Agriculture and in the General

Council, member countries had agreed to broadly adhere to the mandate of Article 20 of the

Agreement. In pursuance of the same, in the first phase of the negotiations, members have

submitted 47 negotiating proposals, which were discussed in Seven Special Sessions of the

CoA. With the approval of the Cabinet Committee on WTO Matters, India also submitted its

negotiating proposals to the WTO on 15th January 2001, in the areas of market access,

domestic support, export competition and food security. These proposals were drawn up and

drafted based on inputs received from wide ranging consultations with various stakeholders

and keeping in view India’s objectives in the negotiations, which are to protect its food and

livelihood security concerns and to protect all domestic policy measures taken for poverty

alleviation, rural development and rural employment as also to create opportunities for

expansion of agricultural exports by securing meaningful market access in developed

countries. India also co-sponsored two papers, one on "Market Access" along with 11 other

developing countries and another on "Export Credits for Agricultural Products" along with 9

other countries/group of countries.

Agricultural trade

While the volume of world agricultural exports has substantially increased over recent

decades, its rate of growth has lagged behind that of manufactures, resulting in a steady

decline in agriculture’s share in world merchandise trade. In 1998, agricultural trade

accounted for 10.5 per cent of total merchandise trade — when trade in services is taken into

account, agriculture’s share in global exports drops to 8.5 per cent. However, with respect to

world trade agriculture is still ahead of sectors such as mining products, automotive products,

chemicals, textiles and clothing or iron and steel. Among the agricultural goods traded

internationally, food products make up almost 80 per cent of the total. The other main

23

category of agricultural products is raw materials. Since the mid-1980s, trade in processed

and other high value agricultural products has been expanding much faster than trade in the

basic primary products such as cereals.

Agricultural trade remains in many countries an important part of overall economic activity

and continues to play a major role in domestic agricultural production and employment. The

trading system plays also a fundamentally important role in global food security, for example

by ensuring that temporary or protracted food deficits arising from adverse climatic and other

conditions can be met from world markets.

Trade policies prior to the WTO

Although agriculture has always been covered by the GATT, prior to the WTO there were

several important differences with respect to the rules that applied to agricultural primary

products as opposed to industrial products. The GATT 1947 allowed countries to use export

subsidies on agricultural primary products whereas export subsidies on industrial products

were prohibited. The only conditions were that agricultural export subsidies should not be

used to capture more than an “equitable share” of world exports of the product concerned

(Article XVI:3 of GATT). The GATT rules also allowed countries to resort to import

restrictions (e.g. import quotas) under certain conditions, notably when these restrictions were

necessary to enforce measures to effectively limit domestic production (Article XI:2(c) of

GATT). This exception was also conditional on the maintenance of a minimum proportion of

imports relative to domestic production.

However, in practice many non-tariff border restrictions were applied to imports without any

effective counterpart limitations on domestic production and without maintaining minimum

import access. In some cases this was achieved through the use of measures not specifically

provided for under Article XI. In other cases it reflected exceptions and country-specific

derogations such as grandfather clauses, waivers and protocols of accession. In still other

cases non-tariff import restrictions were maintained without any apparent justification.

The result of all this was a proliferation of impediments to agricultural trade, including by

means of import bans, quotas setting the maximum level of imports, variable import levies,

minimum import prices and non-tariff measures maintained by state trading enterprises.

Major agricultural products such as cereals, meat, dairy products, sugar and a range of fruits

24

and vegetables have faced barriers to trade on a scale uncommon in other merchandise

sectors.

In part, this insulation of domestic markets was the result of measures originally introduced

following the collapse of commodity prices in the 1930s Depression. Furthermore, in the

aftermath of the Second World War many governments were concerned primarily with

increasing domestic agricultural production so as to feed their growing populations. With this

objective in mind and in order to maintain a certain balance between the development of rural

and urban incomes, many countries, particularly in the developed world, resorted to market

price support farm prices were administratively raised. Import access barriers ensured that

domestic production could continue to be sold. In response to these measures and as a result

of productivity gains, self-sufficiency rates rapidly increased. In a number of cases,

expanding domestic production of certain agricultural products not only replaced imports

completely but resulted in structural surpluses. Export subsidies were increasingly used to

dump surpluses onto the world market, thus depressing world market prices. On the other

hand, this factor, plus the effects of overvalued exchange rates, low food price policies in

favour of urban consumers and certain other domestic measures, reduced in a number of

developing countries the incentive for farmers to increase or even maintain their agricultural

production levels.

4.4 RUGUAY ROUND AGRICULTURAL NEGOTIATIONS  

In the lead-up to the Uruguay Round negotiations, it became increasingly evident that the

causes of disarray in world agriculture went beyond import access problems which had been

the traditional focus of GATT negotiations. To get to the roots of the problems, disciplines

with regard to all measures affecting trade in agriculture, including domestic agricultural

policies and the subsidization of agricultural exports, were considered to be essential. Clearer

rules for sanitary and phytosanitary measures were also considered to be required, both in

their own right and to prevent circumvention of stricter rules on import access through

unjustified, protectionist use of food safety as well as animal and plant health measures.

The agricultural negotiations in the Uruguay Round were by no means easy — the broad

scope of the negotiations and their political sensitivity necessarily required much time in

order to reach an agreement on the new rules, and much technical work was required in order

to establish sound means to formalise commitments in policy areas beyond the scope of prior

25

GATT practice. The Agreement on Agriculture and the Agreement on the Application of

Sanitary and Phytosanitary Measures were negotiated in parallel, and a Decision on Measures

Concerning the Possible Negative Effects of the Reform Programme on Least-developed and

Net Food-importing Developing Countries also formed part of the overall outcome.

Introduction to the Agreement on Agriculture 

The Agreement on Agriculture, (the “Agreement”), came into force on 1 January 1995. The

preamble to the Agreement recognizes that the agreed long-term objective of the reform

process initiated by the Uruguay Round reform programme is to establish a fair and market-

oriented agricultural trading system. The reform programme comprises specific commitments

to reduce support and protection in the areas of domestic support, export subsidies and

market access, and through the establishment of strengthened and more operationally

effective GATT rules and disciplines. The Agreement also takes into account non-trade

concerns, including food security and the need to protect the environment, and provides

special and differential treatment for developing countries, including an improvement in the

opportunities and terms of access for agricultural products of particular export interest to

these Members.

Relationship with other WTO Agreements 

In principle, all WTO agreements and understandings on trade in goods apply to agriculture,

including the GATT 1994 and WTO agreements on such matters as customs valuation,

import licensing procedures, pre-shipment inspection, emergency safeguard measures,

subsidies and technical barriers to trade. However, where there is any conflict between these

agreements and the Agreement on Agriculture, the provisions of the Agreement on

Agriculture prevail. The WTO Agreements on Trade in Services and on Trade-Related

Aspects of Intellectual Property rights are also applicable to agriculture.

Product coverage 

The Agreement defines in its Annex 1 agricultural products by reference to the harmonised

system of product classification the definition covers not only basic agricultural products

such as wheat, milk and live animals, but the products derived from them such as bread,

butter and meat, as well as all processed agricultural products such as chocolate and sausages.

The coverage also includes wines, spirits and tobacco products, fibres such as cotton, wool

26

and silk, and raw animal skins destined for leather production. Fish and fish products are not

included, nor are forestry products.

Rules and commitments  

The Agreement on Agriculture establishes a number of generally applicable rules with regard

to trade-related agricultural measures, primarily in the areas of market access, domestic

support and export competition. These rules relate to country-specific commitments to

improve market access and reduce trade-distorting subsidies which are contained in the

individual country schedules of the WTO Members and constitute an integral part of the

GATT.

Implementation period  

The implementation period for the country-specific commitments is the six-year period

commencing in 1995. However, developing countries have the flexibility to implement their

reduction and other specific commitments over a period of up to 10 years. Members had the

choice of implementing their concessions and commitments on the basis of calendar,

marketing (crop) or fiscal years. A WTO Member’s implementation year for tariff reductions

may thus differ from the one applied to export subsidy reductions. For the purpose of the

peace clause, the implementation period is the nine-year period commencing in 1995.

Committee on Agriculture  

The Agreement established a Committee on Agriculture. The Committee oversees the

implementation of the Agreement on Agriculture and affords Members the opportunity of

consulting on any matter relating to the implementation of commitments, including rule-

based commitments. For this purpose, the Committee usually meets four times per year.

Special meetings can be convened if necessary.

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CHAPTER 5: SUGGESTIONS FOR PROMOTING EXPORTS

Infrastructure Development:

A major impediment to promoting exports is the lack of adequate infrastructure, particularly

cold storage facilities and transportation. There is a need to encourage public-private

partnership in building such facilities and ensuring their proper maintenance. There is no

dearth of financial assistance as there are several incentives being provided by Government

of India under its capital investment subsidy scheme as well as those available under the

schemes envisaged by APEDA. Concerted efforts need to be made in this direction in

collaboration with commercial banks.

Marketing Strategy:

In the new scenario where all the quantitative restrictions have now been removed and there

is increased opportunity for the developing countries to have access to global markets, it is

imperative that a marketing strategy is worked out, focusing on major items of import by

countries and to concentrate on such products using the comparative advantage. The

countries in the European Union, African countries and the CIS countries need to be given

greater attention.

Contract Farming:

Contract farming needs to be encouraged not only to provide a broad base for raw materials

for processing but also for the supply of the right type of inputs and other linkages necessary

for the acceptability of the quality standards for competitive exports

Market Access and Information:

There is a need to provide continuous updating of data on market information, market access,

procedures and processes etc

Biotechnology:

India has been recognized as one of the five top biotechnology leaders in the Asia-Pacific

region. In terms of number of patents filing, India ranks third in Asia. Biotechnology leads to

28

reduction in cost and improvement in productivity. Given the low-cost but high-calibre work

force, there is a need for optimal utilization of intellectual and biological resources with a

view to bringing cost effectiveness in production.

Trade Related Intellectual Property Rights:

India should launch genetic and legal literacy movements immediately to sensitize

panchayats and rural families on the implications of the protection of plant varieties and

Farmers’ Rights Act 2001 and Biodiversity Act 2002, since they contain provisions for

recognizing and rewarding the contributions of the primary conservers of biodiversity and

holders of traditional knowledge.

Credit Facilities:

The EXIM Bank, in consultation with APEDA and the Ministry of Agriculture, may set up

Farm Export Promotion Cells in each AEZ and provide necessary technical support and

guidance to the exporters. It can also open offices in each state in order to promote Agri-

export and also establish overseas branches in countries where Indian exports are favourite

destinations.

Economies of scale:

Economies of scale and brand-banding can only happen when large and big companies enter

the sector. In this respect, contract farming and corporate farming should be extended credit

facilities with liberal terms and making storage, movement, processing, marketing and trade

of farm commodities free from regulations and controls. It is necessary to consider

streamlining the procedure for export financing of agricultural products which are perishable

in nature and making it entrepreneur-friendly. Likewise, the procedure for obtaining export

credit guarantee cover should be streamlined and made exporter-friendly and in this respect a

comprehensive insurance cover, right from the stage of production to export, can also be

considered.

Policy Challenges

The following policy options should receive our attention at the earliest with a view to

preparing ourselves meeting the full impact of WTO

Increased flow of institutional credit to facilitate agricultural exports

29

Diversification from cereals to high-value crops such as fruits and vegetables,

floriculture, spices, animal husbandry, fisheries, medicinal & herbal crops etc.

Promoting and encouraging public-private partnership to facilitate investment in

infrastructure such as in irrigation, agriculture research, electricity, roads, rural markets,

cold storage and transportation etc., in an endeavour to reduce transportations costs .

Organizing farmers into associations that would jointly produce and process commodities

for international markets at both the regional and global levels including formation of

SHGs and motivating them for cultivation, processing, marketing, nurseries, seeds

production etc., and linking such initiatives through contract farming and corporate

farming.

Increased investment on developing viable and cost effective seeds industry.

Increased investment in agriculture.

Developing institutions and providing support to them for the vertical integration of

production, processing, packaging and marketing of agricultural produce with public-

private partnership.

Policy framework for the contract and corporate farming should be streamlined.

Improving sanitary and phyto sanitary measures as wells as adoption of codex

alimentarius standards of food safety and simultaneously evolving SPS standards for our

domestic products as well as imports, including strengthening the capacity of the state

government institutions for educating the farmers with regard to SPS requirements

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CONCLUSION

In conclusion, let us remember the quote from our eminent agricultural scientist, Dr M .S

Swaminathan, “India should ensure that all boxes in the WTO must be abolished, and trade

distortion, and unfair practices must be spelt out clearly and factors governing sustainable

livelihood should be recognised so that resource-poor, developing countries should be able to

place restrictions on imports.”

The Agreement on Agriculture (AoA) was to bring about discipline in one of most distorted

sectors of trade by inter alia disciplining the unrestricted use of production and export

subsidies, as well as by reducing import barriers, including non-tariff barriers.Thus, the AoA

sought to limit the extent of support granted by individual countries and attempted to ensure

that countries adopt a more liberal policy as for as agricultural trade was concerned.At the

same time, as indicated in the preamble, the AoA recognized non-trade concerns (NTCs) of

countries.These NTCs amongst others, included food security and the need to protect the

environment

However, this fine balance between trade and non-trade concerns, as mandated in the

preamble does not appear to have been fully reflected in the provisions of the Agreement and

consequently in its implementation. The major thrust of the Agreement appears to be based

on the hypothesis that liberalisation is the panacea of all ills in the agricultural sector. While

this may be tenable from a conventional economic view point, such reasoning doesnot take

into account the problems faced by a number of developing countries, which because of

certain underlying constraints, have to necessarily take into account non-trade concerns such

as food security, while formulating their domestic policies. This is particularly true of

developing countries where a significant percentage of the population is not only dependent

on the agricultural sector for its livelihood, but is also surviving just around the ‘poverty

line’. In such countries a purely market oriented approach may not be appropriate. Instead,

for some countries, it may be necessary to adopt, what we would like to term a ‘market plus’

approach, in which non-trade concerns such as maintenance of the livelihood of the agrarian

peasantry and the production of sufficient food to meet domestic needs are taken into

consideration.

We, therefore, feel that at this juncture it is important to closely examine this aspect of the

AoA, so as to ensure that the reform process in the agriculture sector takes into consideration

the food security and other non-trade concerns of countries like India

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BIBLIOGRAPHY

Websites

https://www.wto.org/english/tratop_e/agric_e/ag_intro02_access_e.htm

www.scribd.com

https://www.wto.org/english/tratop_e/agric_e/ag_intro07_summary_e.htm#domestic_support

Reports

1) WTO Agreement on Agriculture and its Implications –A monthly newsletter of the

ministry of commerce

2) Agreement on Agriculture: Market Access

Krishna P. Pant, Yogendra K. Karki, Pradyumna R. Pandey

Others:

Sharma, Ramesh (2000), “Safeguard Measures”, Module 6, Agreement on Agriculture, FAO

Resource Manual on Multilateral Trade Negotiations on Agriculture, FAO Rome. Available

at: www.fao.org/trade.

Sharma, Ramesh (2002), Developing Country Experience with the WTO Agreement on

Agriculture and Negotiating Issues, Paper presented at International Agricultural Trade

Research Consortium (IATRC) summer symposium on The Developing Countries,

Agricultural Trade and the WTO, Vancouver, Canada, June 2002

32