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International Agricultural Trade Reform and Developing Countries: The Case of the European Community

Published online by Cambridge University Press:  17 January 2008

Joseph A. McMahon
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Extract

We are all aware that agriculture is important to developing countries as a source of income, employment and export earnings. To a far greater extent than in the OECD countries, agriculture it central to the economic performance of developing countries and the livelihood of their inhabitants. Rural societies in developing countries are directly dependent on the agricultural sector and urban dwellers rely on agriculture to provide food security and sustainable economic growth. Furthermore, many developing countries heavily rely on the export earnings or are highly dependent on food imports. Given the fact that the poorest and most threatened communities and countries are typically the most highly dependent, the resolution of pressing global agricultural policy and trade issues is critical to sustainable development and poverty alleviation.

Type
Shorter Articles, Comments and notes
Information
International & Comparative Law Quarterly , Volume 47 , Issue 3 , July 1998 , pp. 632 - 646
Copyright
Copyright © British Institute of International and Comparative Law 1998

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References

1. Emmerij, and Petit, , in Goldin, and Knudsen, (Eds), Agricultural Trade Liberalization: Implications for Developing Countries (1990), p.9.Google Scholar

2. See Kirkpatrick, , “Lomé II” (1980) 14 J.W.T.L. 353.Google Scholar

3. These arrangements covering sugar, bananas, rum and beef and veal will be discussed in greater detail below.

4. For full details of the concessions see Armex XL Lomé IV.

5. Davenport, , Hewitt, and Koning, , Europe's Preferred Partners? The Lomé Countries in World Trade (1995) p.12.Google Scholar

6. Art.11(4), Lomé I. According to the Joint Declaration on this provision: “This examination will cover either new agricultural productions for which there would be real possibilities of export to the EEC, or current products not covered by the provisions for implementing the treatment referred to above, in so far as these exports might assume an important position in the exports of one or more ACP States.”

7. E.g. Annual Report of the ACP-EEC Council of Ministers (1982), pp.6–7, a request for the inclusion of strawberries within the scope of preferential treatment. This latter request would be granted in 1985—see Annex XIII Lomé III which established a reduction in customs duties (60 per cent) during an import period (Nov.-Feb.) and a quota (700 tonnes).Google Scholar

8. Arts.2(2)(b), 4 and 10 respectively. Art.11 was a general consultation provision.

9. Reg.404/93 (1993) O.J. L47/1.Google Scholar

10. Art.18(2). Note that even here there is discrimination between dollar-zone and non-traditional ACP exporters; the latter pay only 750 ECUs per tonne for exceeding the quota. The quota now stands at 2.2 million tonnes: Reg.3290/94 (1994) O.J. L349/105, Annex XV.Google Scholar

11. GATT Focus No.97 (03. 1993), pp.2–3Google Scholar. For later developments see No.98 (04. 1993), pp.5–6Google Scholar; No.100 (07 1993), pp.2–4Google Scholar; No.101 (09. 1993), p.8Google Scholar; No.102 (10 1993), p.5Google Scholar; No.103 (11. 1993), p.6Google Scholar; No.108 (06 1994), pp.5 and 8Google Scholar; Panel reports against the Community remained unadopted, see GATT reports on the import regime for bananas—DS32/R, 1993. See Reg.478/95 (1995) O.J. L49/13 on the implementation of the framework agreement on bananas concluded as part of the Uruguay Round.Google Scholar

12. See report of the WTO Panel and Appellate Body on the EC Regime for the Importation of Bananas, WT/DS/27/R and WT/DS/27/AB/R. For further discussion see McMahon, , “Going Bananas: Dispute Resolution in Agriculture”, in Cameron, and Campbell, (Eds), Dispute Settlement in the WTO: Issues and Practice (1998), pp.128–148.Google Scholar

13. Originally the reduction was set at 90 per cent; the new figure was set by the mid-term review.

14. Protocol 8 Lomé IV; reproduces Protocol 3 to Lomé I.

15. Idem, Art.3. Although only 13 countries are listed in this Art., 18 countries actually benefit from the Protocol.

16. On accession to the EC Portugal offered to buy 0.3 million tormes of ACP sugar under the Protocol. This was opposed by the Commission. See The Courier No.90 (Mar.-Apr.1985) Yellow Pages III and Annex XXVIII of Lomé IV. As for the outcome of the discussions provided for in Annex XXVIII see Decision 95/284 (1995) O.J. L.181/22.Google Scholar

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22. Namely, Argentina, Brazil, Chile, Colombia, Indonesia, Malaysia, the Philippines, Thailand and Uruguay.

23. GATT Focus No.61 (May 1989) and for comment on the agreement see Kelly, and Woolcock, , “GATT: A Mid-term Agreement” (1989) 45 World Today 92.Google Scholar

24. See also Art.5, Special Safeguard Provisions.

25. With respect to “green box” measures, there are general requirements that such measures have minimal/no trade distorting effects; that the support must be provided through a publicly funded government programme not involving transfers from consumers and that they must not have the effect of providing price support to producers. For examples of such measures see Annex 2 to the Agreement.

26. The list of countries benefiting from this decision includes all those classified as least developed, plus the following developing countries: Barbados, Botswana, Dominican Republic, Egypt, Honduras, Ivory Coast, Jamaica, Kenya, Mauritius, Morocco, Pakistan, Peru, Saint Lucia, Senegal, Sri Lanka, Trinidad and Tobago, Tunisia and Venezuela. Committee on Agriculture Doc.G/AG/5/Rev.2.

27. See Art.10(4) of the Agreement on Agriculture on international food aid as part of a number of measures designed to prevent the circumvention of the export subsidy reduction commitments.

28. News of the Uruguay Round No.65 (09. 1993), p.9.Google Scholar

29. See Francois, McDonald and Nordström, A User's Guide to Uruguay Round Assessments (WTO Staff Working Paper RD-96–003). See also Hertel, “Agricultural Trade Liberalization and the Developing Countries: A Survey of the Models”, in Coldin and Knudsen, op. cit. supra n.1, at pp.19–35.Google Scholar

30. Developing Countries and the Uruguay Round: An Overview (1994), Table 6: Developed economy imports and tariff reductions on agricultural products.

31. A similar conclusion is reached in the Nov. 1994 GATT Study: The Results of the Uruguay Round on Multilateral Trade Negotiations: Market Access for Goods and Services: Overview of the Results. See also OECD, National Policies and Agricultural Trade (1987) and Moreddu, et al. , “Agricultural Policies in Developing Countries and Agricultural Trade”, in Goklin and Knudsen, op. cit. supra n.1, at pp.115–158 and other studies in this publication.Google Scholar

32. World Trade Reform: Do Developing Countries Gain or Lose? (1995), p.33.Google Scholar

33. Moreover, there is nothing in the decision which would prevent the imposition of conditions on the developing countries for the receipt of such aid.

34. The scope for such justification is limited by Art.10(4) of the Agreement on Agriculture.

35. Report of the Committee on Agriculture on the Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Countries. G/L/125 (adopted 24 10 1996), p.2.Google Scholar

36. Idem, pp.3 and 5.

37. Idem, pp.4–5. It was recommended that WTO members, in their individual capacity, should take appropriate steps to encourage further consideration of this issue within the IMF and World Bank.

38. World Trade Reform, supra n.32, at p.39.Google Scholar

39. Davenport, , Hewitt, and Koning, , op. cit. supra n.5, at p.44Google Scholar and Table A9 (pp.93–94).Google Scholar

40. Idem, Table 4.1 (p.41)Google Scholar and Table A7 (pp.89–91).Google Scholar

41. Idem, p.41.

42. Idem, Table A7 (pp.89–91).Google Scholar

43. Page, and Davenport, , World Trade Reform, supra n.32, at pp.61–62.Google Scholar

44. Annex XXIX Lomé IV.

45. Annex XXVII Lomé IV.

46. Supra n.4. The new concessions, e.g., involve increases in existing tariff quotas for a range of products from sheep meat, poultry meat and milk products.

47. News of the Uruguay Round No.81 (12. 1993), p.2.Google Scholar

48. Thomson, , “The CAP and the WTO after the Uruguay Round Agreement on Agriculture” (1996) 1 E.F.A. Rev. 169Google Scholar. On the implementation of the reform package by the EC see Reg.3290/94 (1994) O.J. L349/105 (the various annexes list products for which Art.5 measures may be taken) and the various notifications of the Community to the Committee on Agriculture, G/AG/N/EEC/1–6.Google Scholar

49. See Scott, , “Tragic Triumph: Agricultural Trade, the Common Agricultural Policy and the Uruguay Round”, in Emiliou, and O'Keefe, (Eds), The European Union and Worid Trade Law: After the GATT Uruguay Round (1996), pp.165–180, who discusses the impact of the Agreement on the cereals sector.Google Scholar

50. Thomson, , op. cit. supra n.48, at p.183.Google Scholar

51. Green Paper on Relations between the European Union and the ACP Countries in the Eve of the 21st Century: Challenges and Options for a New Partnership, p.35, notes: “future co-operation between the EU and the ACP countries must be seen against a radically changed international backdrop”.Google Scholar

52. Idem, pp.63–68.

53. Idem, Box 5: Discussion of the trade options.

54. A similar conclusion emerges with respect to the new trading regime being discussed for the next most generous concessions offered by the Community, that is, to the Mediterranean countries. See the Barcelona Declaration Bull. EC 11/95, pt.23.1. See McMahon, , “The Euro-Mediterranean Partnership: Making the Same Mistakes Again” [1998] I.J.E.L. 3.Google Scholar

55. This is in keeping with the objectives set for development co-operation by Art.130u of the Treaty.

56. See COM(97)537, p.24.Google Scholar

57. Panel report, supra n.12, at pp.320–325, 346–349 and 357Google Scholar; in the Appellate Body report pp.73–82.Google Scholar

58. “Farm Commissioner Warns of Huge Food Mountains” Financial Times, 23 04. 1997, p.2. See also the Agenda 2000 document (COM(97)2000, Part 1, chap.3). It is worth noting that the factors identified as necessitating reform of the CAP are forthcoming international trade negotiations and the eastern enlargement of the EC. No reference is made in this chapter or in diap.4 of the same document on the role of the Union in the world, to Art.130v, which requires the Community to take account of the objectives of Art.130u in “the policies that it implements which are likely to affect developing countries”.Google Scholar