Countries. However, while this Decision contained many exhortatory and ‘best endeavour’
commitments, no real action has followed from it to date.
Developing countries were asked to take on reduction commitments two-thirds those of
developed countries with respect to cuts in tariffs, domestic and export subsidies. In the case
of market access, they could opt to use ceiling bindings to establish their initial tariff levels in
the case of products where tariff levels were not bound. Few developing countries had bound
their agricultural tariffs, and they were allowed to choose whatever initial level of tariffs they
wanted from which to make reductions for these products. The tariff reductions for
developing countries were 24 per cent over a ten year period beginning in 1995, compared to
the 36 per cent average over six years for developed countries beginning in the same year.
Least-developed countries were not required to undertake any reduction commitments, though
they were expected to bind tariff and domestic support levels. Developing countries could
also make use of a time-limited special treatment provision to exempt their staple food crop
from the tariffication requirement, provided they provided some minimum level of market
access (set at 4 per cent of domestic consumption in the base year by the end of the tenth year
of implementation). Continuation of this exemption beyond the tenth year would have to be
negotiated and accompanied by additional and acceptable concessions as determined in that
negotiation.
With respect to domestic support, developing countries are permitted a number of areas of
greater policy flexibility under the Agreement. They are allowed higher de minimis
percentages for Amber Box support measures of 10 per cent of the value of output (as against
5 per cent for developed countries) for both product-specific and non-product-specific
domestic support. This means that even developing countries with a zero Total AMS
commitment could, in theory, provide up to 20 per cent of the value of their agricultural
output as support to their farmers.1 The constraint here is available budget resources rather
than their WTO commitments (Matthews, 2003). Green Box measures for developing
countries (those measures where there are no restrictions on how much countries may spend)
are expanded to include government stockholding programmes for food security purposes
assuming their operation meets certain criteria, as well as domestic food aid and subsidy
programmes. Other measures exempted from reduction commitments under the Agreement
include investment subsidies which are generally available to agriculture as well as
agricultural input subsidies which are targeted at low-income or resource-poor producers, and
support to encourage diversification from the growing of illicit narcotic crops. Certain export
subsidies are also excluded from reduction commitments, for example, subsidies to reduce the
costs of marketing agricultural exports and those provisions which make internal transport
charges on export shipments more favourable than those for domestic shipment. A starting
point in considering an expansion of S&D in the Agriculture Agreement is to ask what is the
value of the existing provisions and what use has been made of them.
Tariffs
A major achievement of the AoA was tariff binding. Developed and developing country WTO
members bound almost 100% of all agricultural tariff lines. Most developing countries opted
to use ceiling bindings rather than tariffication, and bound rates were set at high levels,
though not for all countries. Egypt, Sri Lanka and several Latin American countries are
countries with relatively low bound rates. Newly-acceding countries to the WTO (which are
nearly all developing countries) are also required to offer low bound rates.
1 One of the inequities of the Uruguay Round AoA is that developing countries without any history of
providing domestic support must cap their trade-distorting support under de minimis rules on a product-
by-product basis (in the case of product-specific support), whereas developed countries who may have
built up significant levels of Amber Box trade-distorting support are not constrained in this way.