The trade of agricultural products is increasing a lot all over the world. In many countries (mainly the poorest ones), agriculture is the dominant sector of the economy and plays a very important role. To control the trade of agricultural products and to limit unfair practices, international negotiations have been set up for years. After the creation of the World Trade Organisation, the Agreement on Agriculture had been firmed, setting many rules on that market. The main objective of that agreement is to limit domestic support, export subsidies and to give a better access to market. In 2002, European Union was accused by Brazil (followed by Australia and Thailand) of not following these rules on the sugar market. Indeed, European Union promotes its own products thanks to subsidies, which distorts the market. The WTO concludes that European Union is in violation with the Agreement on Agriculture and has to stop those practices before 2007. If not, sanctions will be taken against European Union.
[...] Uruguay Round participants agreed that developed countries would cut the tariffs (the higher out-of-quota rates in the case of tariff-quotas) by an average of in equal steps over six years. Developing countries would make 24% cuts over 10 years. Several developing countries also used the option of offering ceiling tariff rates in cases where duties were not “bound i.e. committed under GATT or WTO regulations) before the Uruguay Round. Least-developed countries do not have to cut their tariffs. For products whose non-tariff restrictions have been converted to tariffs, governments are allowed to take special emergency actions (“special safeguards”) in order to prevent swiftly falling prices or surges in imports from hurting their farmers. [...]
[...] Also permitted, are certain direct payments to farmers where the farmers are required to limit production (sometimes called “blue measures), certain government assistance programmes to encourage agricultural and rural development in developing countries, and other support on a small scale minimis”) when compared with the total value of the product or products supported or less in the case of developed countries and 10% or less for developing countries). Export subsidies The Agriculture Agreement prohibits export subsidies on agricultural products unless the subsidies are specified in a member's lists of commitments. [...]
[...] The panel disagreed with the European Union, reasoning that the "fact that a Member does not complain about a measure at a given point in time, cannot by itself deprive that Member of its right to initiate a dispute at some later point in time". After those accusations, and the conclusions of the WTO, European tried to react to save its interests on the sugar industry. Furthermore, ACP countries will also suffer from the WTO regulation. c. Consequences For the European Union, exports of sugar do not have exports subsidies. [...]
[...] The European Union must end illegal government handouts to sugar producers by May at which point "the reasonable period of time will therefore expire," a WTO arbitrator ruled. In April, an appellate body upheld a 2004 decision that European Union subsidies were bringing down sugar prices on the world market and making it impossible for producers in other countries to compete. If the European Union fails to meet the deadline, major sugar producers Brazil, Australia and Thailand can initiate procedures for retaliatory sanctions against the 25-nation bloc. [...]
[...] Consequently, there were many obstacles to the trade of agricultural products, notably ban on imports, contingent limiting the level of importations, variable taxes on imports, minimum prices on imports and no tariffs measures maintained by State owned companies. Those obstacles, very different of those in other sectors of the trade of goods, hindered the trade of other agricultural products of which meat, milk, sugar and various fruits and vegetables. That protection of the national markets is in part attributable to the measures taken after the fall of basic products prices after the depression of the 1930's. [...]
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