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    Agricultural subsidies

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    "Time" magazine, Canadian edition, has recently published an article on U.S. agricultural subsidies titled "Why our Farm Policy is Failing", November 2nd, 2007.

    (a) Examine the GATT/WTO regulations concerning agricultural subsidies (origins, implementation, existing subsidy values).
    (b) Discuss why the US farm policy is failing.
    (c) Why were the WTO 2005-6 meetings a failure? What were the main issues and reasons?

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    (a) Examine the GATT/WTO regulations concerning agricultural subsidies (origins, implementation, existing subsidy values).
    The Agreement on Agriculture of the Uruguay round is the most substantial trade liberalization agreement. The agreement sought to increase market access for agricultural products, reduce domestic support by reducing subsidies and quotas, and eliminate export subsidies on agricultural products.
    In particular, quotas, variable levies, voluntary export restraints and other barriers against food imports with a tariff only system. The domestic supports to farmers were classified according to their impact on production. Finally, The Agreement on Agriculture imposed severe restriction on the quantities subsidies and the amounts of money spend on these subsidies.
    This material is taken from the website http://www.ers.usda.govs: "In the Doha Ministerial Declaration, members committed to negotiations aimed at producing "substantial improvements in market access for all products." WTO members have agreed that tariff reductions will be made through a tiered tariff-cutting formula that takes into account their different tariff structures. Each country's tariffs will be structured into four tiers based on the height of each tariff, with each tier subject to a different percentage reduction. The overall objective of the tiered formula is to achieve a degree of harmonization of tariff structures across countries and products. This will be achieved through progressively deeper cuts on those tiers containing higher tariffs, with flexibilities for members to designate a limited number of Sensitive Products. Sensitive Products will be subject to lower reduction commitments, but with some additional TRQ commitments required to assure that substantial improvements in market access will be achieved for all products The AoA exempted three types of domestic ...

    Solution Summary

    This solution discusses Agricultural subsidies in detail.