Further WTO negotiations on Agriculture

- Article 20 of the Agreement on Agriculture

Note by the Norwegian Ministry of Agriculture

Further WTO negotiations on agriculture are mandated by Article 20 of the Agreement on Agriculture. This note presents some reflections on the implications of this Article.
Article 20 reads as follows:

Through Article 20, WTO Members are all committed to initiate negotiations for continuing the reform process that begun in Punta del Este in 1986. As referred to in the Article, the Preamble of the Agreement states that substantial progressive reductions in support and protection resulting in fundamental reform is the long-term objective of the reform process. However, Article 20 spells out several conditions that must be taken into account in the reform process, including so-called non-trade concerns, explained in the Preamble of the Agreement as, inter alia, food security and the need to protect the environment.

Three important comments can be made regarding Article 20. First, with respect to the long-term objective, the actual size of the reductions is not quantified and will therefore be subject to negotiations and contingent upon the conditions spelled out in the Article and mentioned above. The term substantial is far from precise; according to The New Shorter Oxford Dictionary, substantial could mean fairly large or sizeable. It also has the meaning having solid worth or value, of real significance, i.e. a real reduction that is not fictive, without prejudging the size of the reduction. Anyway, it is clear that a substantial reduction signifies by no means an elimination of agricultural subsidies.

Second, according to the Article, the upcoming negotiations are expected to continue and not necessarily finalise the reform process. The realisation of the long-term objective may thus go far beyond the upcoming negotiations for which only a first step may be taken, depending on various factors and conditions.

Third, the non-trade concerns are crucial elements of the agricultural sector in several countries and include also the viability of rural areas. During the Uruguay Round, Norway stressed specifically in a separate statement the importance attached to non-trade concerns. These concerns "are central elements in our agricultural policies and extend not only to food security, but comprise also elements such as environment, regional policies and social aspects. Within a broader context they are vital to us." Norway's continued participation in the Uruguay Round was based on this statement.

Norway fully endorses the March 1998 Communiqué of the OECD Agriculture Ministers which, with respect to Article 20, recommended that the long-term objective of substantial reductions should be "in conformity with the conditions of Article 20 of the UR Agreement on Agriculture, and including all the elements contained therein" (our underlining). Non-trade concerns are one of these elements.

Through the concept of multifunctionality, recent OECD meetings have paid ample attention to non-trade concerns. Moreover, the Rome Declaration of the World Food Summit stressed the importance of food production also in low potential areas, and it goes without saying that such production in some countries will depend on considerable levels of support and protection.

As a conclusion, the challenge in the upcoming negotiations will consist of taking the non-trade concerns fully into account in the multilateral reform process, while maintaining a fair trading system and safeguarding the interests of developing countries. Whereas the aim would be to take another step in the direction of reduced levels of global support, the reform process cannot jeopardise vital non-trade concerns as food security, environmental protection and rural and social concerns related to the multifunctional agriculture.