USTR - Fact Sheet on Framework Agreement at the World Trade Organization: A Win for Farmers and Ranchers
Office of the United States Trade Representative

 

Fact Sheet on Framework Agreement at the World Trade Organization: A Win for Farmers and Ranchers
08/06/2004

 

The General Council of the World Trade Organization (WTO), meeting in Geneva, has agreed on a framework for the final phase of the Doha Development Agenda of global trade negotiations.  The decision in Geneva sets the WTO on course to achieve historic reform of global agricultural trade:

 

o   In a key accomplishment for U.S. farmers and ranchers, the framework calls for an ambitious and balanced result through reform of trade-distorting agricultural subsidies, elimination of agricultural export subsidies, and a substantial improvement in market access for all farm products. 

 

o    In cutting farm tariffs, all countries other than the least-developed will make a contribution, and there will be deeper cuts in higher tariffs. 

 

o    Tariffs will be cut using a tiered (“banded”) formula that will lead to greater harmonization in tariff levels across countries. In addition, a tariff cap will be evaluated as part of the negotiations.

 

o    Substantial improvement in market access will apply to all agricultural products, even “sensitive” products.  Countries may designate a specific number of sensitive products that will be handled through a combination of tariff quota expansion and tariff reductions to expand market access. 

 

o    Developing countries, while part of the reform process, will be subject to lesser tariff reduction commitments in each band of the tiered approach.  The vulnerability of poor subsistence farmers is recognized in the text for further discussion.

 

o    In a historic achievement that has been a goal of the U.S. and others for decades, the framework calls for the elimination of agricultural export subsidies.  These are the most trade-distorting type of agricultural subsidies.  

 

o    The framework also disciplines export credits and export guarantee programs, eliminating over time their trade-distorting elements.

 

o    Another key U.S. objective reflected in the framework is the elimination of trade-distorting practices in the sales of State Trading Enterprises (STEs).  The framework calls, for the first time, for specific disciplines and greater transparency on STEs, and offers the possibility to negotiate the elimination of the monopoly powers of such entities. 

 

o    Those countries with higher allowed levels of domestic support will be subject to deeper cuts.  This harmonization of domestic support levels has long been a key U.S. objective. 

 

o    Trade-distorting forms of domestic support for agriculture will be cut substantially, with caps on support levels for specific commodities and cuts in the overall level of trade-distorting support. 

 

o    In the first year of implementation, each Member’s total trade-distorting support will be cut by 20% from currently allowed levels, an amount equal to the cut of these subsidies during the entire Uruguay Round. 

 

o    The framework text also maintains the viability of food aid programs for humanitarian and development needs.

 

o    Cotton:  countries have agreed that cotton is a vital issue that will be addressed within the agriculture negotiations.  As the G-8 Leaders recently affirmed, cotton is a matter of primary concern to African countries.  Work on cotton will include all trade-distorting policies in the sector, including market access, domestic support, and export competition. 

Key Opportunities For U.S. Farmers and Ranchers

· Major cuts in foreign tariffs on U.S. farm exports.
· Expanded market access for all U.S. farm products through tariff cuts and quota expansion.
· Elimination of agricultural export subsidies, most of which are used by overseas competitors.
· New disciplines on state trading enterprises such as the Canadian Wheat Board.
· Harmonization of trade-distorting farm support programs, with Europe and Japan subject to deeper cuts because of their higher levels of support.
· The Doha framework would cut allowed domestic support for agriculture more in the first year than during the entire Uruguay Round.


Quote of Support

“We applaud the hard work of our U.S. trade team to provide a framework for future negotiations… [the framework] will lead to expanded market access for U.S. farmers and ranchers.”


--American Farm Bureau Federation

 
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