Instruments compatible with the WTO

Français English EU DOCUMENT


(Solagral – April 1999)

A liberalisation process that isn’t
Despite the announcement of reductions in production and marketing support, the Agriculture Agreement in fact provides for only minimal and gradual liberalisation of trade in temperate agricultural products, while trade in tropical products has already been largely liberalised. In world markets, substantial volumes of temperate product exports will continue to be subsidised in 2000 (more than 36 million tonnes of wheat, i.e. more than a third of world exports). The tariff reduction commitments for developed countries are 37% as an average across all agricultural products (26% for grain products) and 43% on tropical products (35% for coffee, cocoa and tea; 40% for oilseeds, fats and oils). But, while customs duties on manufactured goods are now extremely low (falling from 6.3% to 3.8% on average), they are still around 40% on agricultural products, and exceptionally high (with peak tariff levels of up to 300%) on some temperate-zone products.

The most radical change brought by the Agriculture Agreement is the decoupling of agricultural support. Price and production support is being replaced (gradually) by direct income support, known as "decoupled" support. This system suits rich countries, which can afford to support farmers’ incomes directly. Domestic prices are thus being brought gradually into line with world market prices, but support goes directly to farmers. In Europe, this type of support accounts for more than half the income of some farmers. With decoupling, export subsidies are no longer needed for domestic producers to be competitive in the world market.





--------------------------------------------------
Note added at 2003-01-03 15:22:27 (GMT)
--------------------------------------------------

FINAL: no peak tariffs

absence= NO