Agricultural Negotiations in the World Trade Organization (WTO) and Their Links to the Free Trade Area of the Americas (FTAA)

This paper was developed for the Regional Policy Dialogue on Trade and Integration Network in August of 2002. This paper is an in-depth discussion of how agriculture occupied a sideline position during the negotiations for the formation of the FTAA and WTO. Main topics in regards to the negotiation rounds include a discussion of export subsidies, export credits, food aid, state trading enterprises, and export restrictions and taxes. In addition, this paper reflects on the relationship between both negotiations and their differences as compared to Latin American countries' priorities in the sphere of negotiation. While tariffs on industrial and high technology products were significantly liberalized over this period, and rules and disciplines were defined for international trade, agricultural protectionism proliferated among the industrialized countries and an entire arsenal of agricultural production and trade-distorting measures and barriers were put into place. The Uruguay Round, by adopting the Agreement on Agriculture, took a positive step toward integrating agriculture into the multilateral trading system. As a result, an initial level of access was attained to what had until that time been highly protected markets. The different types of domestic support for agricultural production were defined and classified, limits were set and certain reductions were agreed upon within specific timeframes. Limits were also set on export subsidies and certain reductions were established. The results of the Uruguay Round, however, were bitterly disappointing to efficient agricultural producer countries. By the conclusion of the implementation period for those results, in 2000, tariff protection for agricultural products was ten times higher on average than for industrial goods. Tariff peaks of 200% and 300% ad valorem were commonplace and continuing tariff escalation impeded the access of more processed products.