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World Trade Organization (WTO)
Multilateral Trade Negotiations
The World Trade Organization (WTO), which was established on January 1,
1995, replaced the General Agreement on Trade and Tariffs. The WTO is
the multilateral institution charged with administering agreed-upon rules
for trade among member countries. The United States and other countries
participating in the Uruguay Round of Multilateral Trade Negotiations
(1986-1994) called for the formation of the WTO to embody the new trade
disciplines adopted during those negotiations. Basically, the WTO is responsible
for promoting and ensuring that trade flows as smoothly, predictably and
freely as possible. The Agreement on Agriculture was adopted at the conclusion
of the Uruguay Round of multilateral trade talks on April 15, 1994. This
agreement established new rules for agriculture. It introduced tarrification,
which converted all non-tariff trade barriers (including quotas, import
restrictions due to licensing and state trading enterprises, variable
import levies and voluntary export restraints. It also reduced export
and domestic subsidies by 20 to 36 percent over a period of six years
(1995-2000). Article 20 of the Agreement on Agriculture states:
Recognizing that the long-term objective of substantial progressive reductions in support and protection resulting in fundamental reform is an ongoing process, Members agree that negotiations for continuing the process will be initiated one year before the end of the implementation period, taking into account:
(a) the experience to that date from implementing the reduction commitments;
(b) the effects of the reduction commitments on world trade in agriculture;
(c) non-trade concerns, special and differential treatment to developing country Members, and the objective to establish a fair and market-oriented agricultural trading system, and the other objectives and concerns mentioned in the preamble to this Agreement; and
(d) what further commitments are necessary to achieve the above mentioned long-term objectives.
The implementation period is 1995 to 2000, therefore, Article 20 required negotiations to begin again in 1999. The new round was launched at the WTO Ministerial meeting in Seattle November 30-December 3. The agenda at that meeting covered many of the same issues that countries discussed during the Uruguay Round. These issues included market access, export competition, and domestic support. There is some concern that the success of the next round is heavily dependent on agriculture. Countries are afraid that certain countries will object to any agreement that does not include a comprehensive agreement on agriculture. The situation is somewhat complicated for the upcoming round, since agriculture is only one of two main areas where continue negotiations are mandated. Despite the problems that arose during the Seattle Round of the WTO talks, negotiations will continue on agricultural trade in the coming year.
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