Aggregate
Measure of Support (AMS):
An
index that measures the monetary value of the extent of government
support to a sector. The AMS, as defined in the Agreement on
Agriculture, includes both budgetary outlays as well as revenue
transfers from consumers to producers as a result of policies that
distort market prices. The AMS includes actual or calculated amounts of
direct payments to producers (such as deficiency payments), input
subsidies, the estimated value of revenue transferred from consumers to
producers as a result of policies that distort market prices (market
price support) and interest subsidies on commodity loan programs.
Border
Protection:
Any
measure which acts to restrain imports at point of entry.
Common
Agricultural Policy
(CAP):
The
EU’s comprehensive system of production targets and marketing
mechanisms designed to manage agricultural trade within the EU and with
the rest of the world.
Decoupled:
Payments
to farmers that are not linked to current production decisions. When
payments are decoupled, farmers make production decisions based on
expected market returns.
Domestic
Support:
In
Agriculture, any domestic subsidy or other measure which acts to
maintain producer prices at levels above those prevailing in
international trade; direct payments to producers, including deficiency
payments, and input and marketing cost reduction measures available only
for agricultural production.
GATT:
General
Agreement on Tariffs and Trade, which has been superseded as and
international organization by the WTO.
Harmonizing
Formula:
Used
in tariff negotiations for much steeper reductions in higher tariffs
than in lower tariffs, the final rates being “harmonized” i.e.
closer together.
LDC’s:
Least-developed
countries.
Megatariffs:
Extremely
high tariffs which effectively cut off all imports other than the
minimum access amounts granted under the agreement. Some well known
examples of megatariffs resulting from tariffication include the base
tariffs calculated for EU tariffs on grains, sugar, dairy products; US
sugar, peanuts and dairy products; Canadian tariffs on dairy products
and poultry; and Japanese tariffs on wheat, peanuts and dairy products.
Modality:
A
way to proceed. In WTO negotiations, modalities set broad outlines such
as formulas or approaches for tariff reductions, for final commitments.
Negotiating
Groups:
WTO
Members are increasingly negotiating in informal groups to promote their
views and objectives. These groups form around particular issues or
common traits such as economic structure, size or geographic proximity.
Negotiating effectively with all the WTO’s 148 Members at the same
time is clearly impossible, so negotiating groups have been formed to
allow WTO Members to be represented in smaller, more productive
discussions. It remains unclear, however, how these negotiating groups,
most of which do not have formal decision–making structures, will be
able to deal with the detailed negotiations necessary to develop
specific rules and commitments in the next stage of the negotiations.
The
African Union is a group of African countries working together in
support of their interests in the agriculture negotiations. They share
common interests in the areas of cotton, erosion of trade preferences
in agricultural and non–agricultural products, and special and
differential treatment provisions for developing countries.
Association
of Southeast Asian Nations. The seven ASEAN members of the WTO;
Brunei, Indonesia, Malaysia, Myanmar, the Philippines, Singapore and
Thailand often speak in the WTO as one group on general issues. The
other ASEAN members are Laos and Vietnam.
Led
by Australia since it was formed in 1986, the Cairns Group is a
coalition of agricultural exporting countries that are committed to
achieving a fair and market–oriented agricultural trading system. It
has consistently called for an ambitious result in the negotiations.
Members of the Cairns Group include Argentina, Australia, Bolivia,
Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia,
Malaysia, New Zealand, Paraguay, the Philippines, South Africa,
Thailand and Uruguay. Many Members of the Cairns Group are also
members of the G–20.
The
Caribbean Community and Common Market comprises 15 countries.
European
Communities (Official name of the European Union in the WTO)
European
Union: Established by the Treaty of Rome in 1957 and known previously
as the European Economic Community and the Common Market. Originally
composed of 6 European nations, expanded to 15 and most recently to
25. The EU attempts to unify and integrate member economies by
establishing a customs
union and common economic policies, including CAP. The 15 member
nations included Austria, Belgium, Denmark, Germany, Greece, Finland,
France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain,
Sweden, and the United Kingdom. The new ten members as of May 1, 2004
include: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Malta, Poland, Slovakia and Slovenia.
European
Free Trade Association
A
group which emerged during negotiations as the main informal
negotiation group and included Australia, Brazil, EU, India and the
US.
Group
of seven leading industrial countries: Canada, France, Germany, Italy,
Japan, United Kingdom and US.
G-7
plus Russia
A
group of developing countries established Aug. 20, 2003 that joined
together in the Cancun ministerial of the WTO’s Doha Round to
negotiate collectively with the U.S and E.U. especially seeking the
elimination of developed country agricultural subsidies. Membership in
the group has fluctuated, but the name G-20 seems to have stuck. The
group is lead by Brazil.
The G–20 includes Argentina, Bolivia, Chile, China, Cuba, Ecuador,
Egypt, El Salvador, India, Indonesia, Mexico, Nigeria, Pakistan,
Paraguay, Peru, the Philippines, Thailand, South Africa, Tanzania,
Venezuela and Zimbabwe.
The
G–33 calls for additional flexibility in the area of market access
for developing countries through two mechanisms: the ability to
designate a certain number of products as “special” and thus
eligible for more flexible treatment; and the establishment of a
special safeguard mechanism that would allow developing countries to
respond to import price fluctuations or import surges for a specific
set of products. Led by Indonesia, the group’s membership fluctuates
and includes countries from Asia, Africa, the Caribbean and Latin
America.
Group
of weakest developing countries. The
G–90 is made up of ACP countries, members of the African Union and
the LDCs. The G–90 puts forward a common position on a range of
issues across the Doha Development Agenda negotiations and stresses
the importance of offering special and differential treatment to
developing countries in the WTO agriculture negotiations.
Argentina,
Brazil, Paraguay and Uruguay.
North
America Free Trade Agreement of Canada, Mexico and the US.
Canada,
EC, Japan and US.
Non-Product-
Specific Support:
Government
support to agriculture that is not linked to specific commodities or
production activities.
Non-tariff
barrier (NTB):
A
border measure, regulation, or other government action other than a
tariff used by governments to restrict imports from, and exports to,
other countries. Examples: embargos, import quotas, quantitative
restrictions (quotas), licensing, domestic support programs, labeling
and health standards and technical barriers to trade.
Notifications:
The
annual process by which member countries report to the WTO information
on commitments, changes in policy, and other related matters as required
by the various agreements.
Product-Specific
Cap:
A
proposal to cap product-specific AMS support at some historical level by
a methodology to be agreed in the current phase of the WTO negotiations.
S
& D:
“Special
and differential treatment” provisions for developing countries.
Safeguard
Measures:
Action
taken to protect a specific industry from an unexpected build-up of
imports, generally governed by Article 19 of GATT. In agriculture the
safeguard is called “special safeguards”.
Schedule:
In
general, a WTO member’s list of commitments on market access (bound
tariff rates, access to services markets). Goods schedules can include
commitments on agricultural subsidies and domestic support.
Subsidy:
There
are two general types of subsidies: export and domestic. An export
subsidy is a benefit conferred on a firm by the government that is
contingent on exports. A domestic subsidy is a benefit not directly
linked to exports.
Tariff
Binding:
Commitment
not to increase a rate of duty beyond an agreed level. Once a rate of
duty is bound, it may not be raised without compensating the affected
parties.
Tariff
Escalation:
Higher
import duties on semi-processed products than on raw materials, and
higher still on finished products. This practice protects domestic
processing industries and discourages the development of processing
activities in the countries where raw material originate.
Tariff
Peaks:
Relatively
high tariffs, usually on “sensitive products,” amidst generally low
tariff peaks. For industrialized countries tariffs of 15% and above are
generally recognized as “tariff peaks”.
Tariffication:
The
process of converting non-tariff trade barriers to bound tariffs. This
is done under the UR agreement in order to improve the transparency of
existing agricultural trade barriers and facilitate their proposed
reduction. In the future, countries will not be able to use non-tariff
measures to restrict trade.
Tariffs:
Custom
duties on merchandise imports. Levied either on an ad valorum basis
(percentage of value) or on a specific basis (eg. $7 per 100 kg).
Tariffs give price advantage to similar locally produced goods and raise
revenues for the government.
Tariff
rates incorporated as part of a country’s schedule of concessions.
If a WTO contracting party raises a tariff above the bound rate, the
affected countries have the right to retaliate against an equivalent
value of the offending countries exports or receive compensation,
usually in the form of reduced tariffs on other products they export
to the offending country.
The
tariff actually levied on an imported good, generally lower than the
bound tariff. May also refer to a means of administrating a
tariff-rate quota (TRQ) in which the importing country chooses not to
charge the over-quota tariff on imports in excess of the quota volume.
All imports are charged the lower in-quota tariff. Thus the TRQ is
administered as if it were a tariff at the lower, in-quota rather than
as a two part tariff-rate quota.
In
cases where an existing tariff was not already bound, developing
countries were allowed to establish ceiling bindings. These ceiling
bindings could result in tariffs that were higher than the existing
applied rate. The ceiling bindings took effect on the first day of
implementation of the Agreement.
The
tariff applied on imports in excess of the quota volume. The
over-quota tariff is greater than the in-quota tariff.
The
tariff applied on imports within the quota. The in-quota tariff is
less than the over-quota tariff.
Tariff
that is so low that it costs the government more to collect it than
the revenue it generates.
Tariff-Rate
Quota (TRQ):
A
two-leveled tariff where the tariff rate charged depends on the volume
of imports. A lower (in-quota) tariff is charged on imports within the
quota volume. A higher (over-quota) tariff is charged on imports in
excess of the quota volume.
Trade
Facilitation:
Removing
obstacles to the movement of goods across borders.
Transparency:
Degree
to which trade policies and practices, and the process by which they are
established, are open and predictable.
Uruguay
Round:
Multilateral
trade negotiations launched at Punta del Este, Uruguay in September 1986
and concluded in Geneva in December 1993. Signed by Ministers in
Marrakesh Morocco, in April 1994.
World
Trade Organization (WTO):
Established
on January 1, 1995 to replace the Secretariat of the GATT, the WTO is
the cornerstone of the world trading system. It provides the principal
contractual obligation determining how governments’ frame and
implement trade legislation and regulations. It is also the multilateral
platform on which trade relations among countries evolve through
collective debate, negotiation and adjudication. The WTO also resolves
trade disputes among it’s members through dispute settlement panels
and the Appellate Body.
Sources:
WTO website
AAFRD
OECD website |
