INTRODUCTION

Challenges of Uruguay Round implementation and further negotiations

The results of the GATT Uruguay Round (UR) of multilateral trade negotiations, which were concluded in December 1993 and adopted in April 1994, mark a milestone in the development of rules and institutions to govern international trade relations. The significance of these results lies in their scope as well as in the "built-in" commitment to review various agreements and to launch further negotiations in a number of areas. In addition to further liberalization of trade in manufactured goods, including the phased integration of textiles and clothing into the GATT, the new multilateral rules and disciplines now govern trade in agriculture and services as well as intellectual property rights. The agreements reached require in many instances important changes in domestic policies and institutions. Adjustments are required to bring these into line with the new rules and to develop the capacity to take advantage of the new trading opportunities. Given the mandated ongoing process of reviews and further negotiation, it is important for developing countries, if they are to participate effectively in the process, to assess the workings of the agreements from their perspective and to have their interests reflected in any further changes to the rules.

With regard to agriculture specifically, the UR brought this sector under a new set of multilateral rules and disciplines covering market access, domestic support and export subsidies. It also launched a reform process with the long-term objective of achieving a substantial progressive reduction in support and protection in this sector and of establishing a fair and market-oriented agricultural trading system. To benefit fully from the UR Agreements, developing countries, especially least developed countries, need to strengthen their understanding of the implications of the Agreements for their economies (and, in particular, the agricultural sector). It is also necessary that they be adequately prepared for, as well as participate effectively in, further multilateral trade negotiations for the continuation of the reform process in agriculture.

FAO has a mandate, laid down by the November 1996 World Food Summit and its other governing bodies, to continue assisting developing countries on agricultural trade issues and, in particular, "in preparing for future multilateral trade negotiations in agriculture, fisheries and forestry inter alia through studies, analysis and training". The objective is to "ensure that developing countries are well informed and equal partners in the (negotiating) process". This Resource Manual has been produced as part of a range of FAO initiatives to follow up this mandate.

1. FAO INITIATIVES ON URUGUAY ROUND FOLLOW UP AND FURTHER MULTILATERAL NEGOTIATIONS ON AGRICULTURE

Scope of FAO activities

In the context of the WTO Agreements and future negotiations, FAO's activities are focussed on those Agreements that most directly affect international agricultural trade and food security, notably the Agreements on Agriculture, the Application of Sanitary and Phytosanitary Standards (SPS), Technical Barriers to Trade (TBT) and Trade-Related Aspects of Intellectual Property Rights (TRIPS) as well as the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on the Least-Developed and Net Food-Importing Developing Countries. In this regard, FAO's activities fall into three main areas:

First, FAO conducts analytical studies on agricultural trade and food security. Second, FAO provides inter-governmental fora for member countries to establish standards for agricultural trade and relevant international instruments. Such bodies include, for example, the Codex Alimentarius Commission (jointly with WHO) for food quality and safety standards and the Commission of the International Plant Protection Convention for phytosanitary standards. Moreover, the FAO Commission on Genetic Resources for Food and Agriculture is currently negotiating the revision of the International Undertaking on Plant Genetic Resources which is expected to regulate access to plant genetic resources for food and agriculture and benefit-sharing. Another international agreement which is relevant for the relationship between trade and natural resource management, is the Code of Conduct on Responsible Fisheries.

Third, FAO provides technical advice and assistance to its member countries in preparing for WTO membership and adjusting their national food and agricultural policies. It also assists them in establishing national regulatory systems that comply with the SPS and TBT Agreements. Legal advice is also provided on TRIPS. Many of FAO's other technical assistance activities in agriculture, fisheries and forestry aim at raising food and agricultural production and productivity and at increasing competitiveness in these sectors. Attention is also given to improving market efficiency with emphasis on private sector involvement.

FAO Umbrella Programme on Multilateral Trade Negotiations in Agriculture

FAO has already produced a training manual on the implications of the UR Agreement on Agriculture for developing countries¹ and it carries out capacity- building activities in a wide range of areas. As a further response to the World Food Summit mandate, and with the assistance of several donors, FAO is mounting a world-wide programme of workshops to assist developing countries to:

• understand fully the existing WTO Agreements with respect to food and agriculture, their rights and obligations under those Agreements, the workings in practice of those Agreements, and particular problems that have arisen in their implementation that may require further negotiations;
• analyse new issues that are likely to arise in the negotiating process and the implications of the various proposals for international agreements on their economies; and
• identify and analyse special issues of regional or sub-regional concern.

An initial series of fourteen sub-regional Workshops is being organized in different regions of the world: four in Africa, three in Asia, two in the Near East, two in Europe and three in Latin America and the Caribbean.

This Manual has been prepared as a background resource for participants in these Workshops and for others who have responsibility in the implementation of the WTO Agreements or who will be involved in any further negotiations. It covers in detail the Agreement on Agriculture (AoA) and its implications for agricultural trade and sectoral policies, the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), the Agreement on Technical Barriers to Trade (TBT) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

2. OVERVIEW OF THE WTO AGREEMENT

These WTO Agreements are to be found in the publication The Results of the Uruguay Round of Multilateral Trade Negotiations published in 1994 by the GATT Secretariat (now the WTO Secretariat). The Marrakesh Agreement Establishing the World Trade Organization (referred to in the Final Act concluding the Uruguay Round negotiations as the WTO Agreement) itself is quite short, consisting of sixteen articles which set out the constitution of the WTO - functions, structure, decision-making and so on. It is the instruments attached in the form of annexes to this Agreement which contain the WTO trade rules. The list of annexes is set out in Box 1.

Annex 1A to the WTO Agreement comprises multilateral agreements on trade in goods. The core instrument in this Annex is the GATT 1994 Agreement which re-enacts the provisions of the GATT 1947 as modified by certain instruments which came into force under the GATT 1947 before the entry into force of the WTO. The effect of this is that rights and obligations built up under the earlier GATT 1947 are carried over into the new GATT 1994. The Agreement adds a number of Understandings which provide interpretations of a number of articles in GATT 1947. It further contains the Marrakesh Protocol to the GATT 1994 which provides that the Schedules of Concessions submitted by each Member shall become a part of GATT 1994. There then follow a series of twelve further Agreements on trade in goods which set down rules governing particular aspects of trade policy (e.g. the use of subsidies) or rules governing trade in particular categories of goods (e.g. agriculture, textiles and clothing).

Box 1. List of annexes to the WTO Agreement

Annexes 1B and 1C refer to the agreements on services and the trade-related aspects of intellectual property rights, respectively. Annex 2 sets out the new dispute settlement procedures and Annex 3 the Trade Policy Review Mechanism.

Annex 4 sets out the four Plurilateral Trade Agreements, so called because they are binding only on those countries which ratify them. Finally, part of the Results are a series of Ministerial Decisions and Declarations adopted by the Trade Negotiations Committee. They include the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries discussed in Module II.9 in this Manual.

3. FROM MARRAKESH TO SEATTLE - THE NEXT ROUND OF NEGOTIATIONS

The built-in agenda

Several of the Uruguay Round Agreements (agriculture, services and TRIPS) contain commitments to launch further negotiations by specific dates. This is referred to as the WTO built-in agenda for further negotiations. For example, Article 20 of the Agreement on Agriculture states that new negotiations to continue the process of achieving substantial progressive reductions in support and protection will begin one year before the end of the implementation period, i.e. before the end of 1999. Under the TRIPS Agreement, a review of patentability of plants and animals other than micro-organisms was scheduled for 1999 (Article 27:3(b)), while a full review of the implementation of the TRIPS Agreement is foreseen in 2000 (Article 71:1).

Under the services agreement GATS, a number of matters were left for further negotiations and a framework was provided for this purpose. More important, Article 19 of the GATS also calls for successive rounds of negotiations to begin not later than 2000 with a view to achieving a progressively higher level of liberalization.

In addition to this built-in agenda, reviews and other work were mandated under the agreements or understandings on Anti-Dumping, Customs Valuation, Dispute Settlement Understanding, Import Licensing, Preshipment Inspection, Rules of Origin, Sanitary and Phytosanitary Measures, Safeguards, Subsidies and Countervailing Measures, Technical Barriers to Trade, Textiles and Clothing, Trade Policy Review Mechanism, Trade-Related Aspects of Intellectual Property Rights and Trade-Related Investment Measures. These reviews might or might not lead to suggestions for negotiations of amendments to these Agreements.

Single undertaking?

An issue that has arisen in relation to the built-in agenda is whether these reviews and mandated negotiations should be conducted simultaneously, using the approach of previous GATT rounds where the results would be adopted as a single undertaking, or whether they should proceed under their own timetables and independently of progress, or lack of it, in other areas. An additional issue has been whether the obligation to initiate negotiations in the mandated areas should be used as an occasion to launch negotiations in new areas.

Singapore Ministerial

The First WTO Ministerial Conference which took place in Singapore in December 1996 agreed to a process of analysis and exchange of information on the built-in agenda, to allow Members to better understand the issues involved and to identify their interests before undertaking the agreed negotiations and reviews. It also added to the WTO negotiating agenda work in a number of areas: trade and investment; trade and competition policy; transparency in government procurement practices; and trade facilitation.

Geneva Ministerial

The Second Ministerial Conference held in Geneva, May 1998, in addition to initiating work on the new area of electronic commerce, also mandated the WTO General Council to prepare for the Third Ministerial Conference, which was expected to launch new negotiations. In particular, it authorized the WTO General Council to meet in special session in September 1998 and periodically thereafter to formulate recommendations concerning:

• the issues, including those brought forward by Members, relating to implementation of existing agreements and decisions;
• the mandated negotiations in the URAs, to ensure that such negotiations begin on schedule;
• future work already provided for under other existing agreements and decisions taken at Marrakesh;
• other possible future work on the basis of the work programme initiated at Singapore;
• the follow-up to the High-Level Meeting on Least-Developed Countries; and
• matters arising from consideration of other matters proposed and agreed to by Members concerning their multilateral trade relations.

In preparation for the Third Ministerial Conference, which took place in Seattle, United States, from 30 November to 3 December 1999, a wide range of proposals were submitted by Members in 1998 and 1999 regarding the above issues. In October 1999, the Chairman of the General Council submitted a draft of a Ministerial Declaration on his own responsibility in an effort to facilitate the emergence of a consensus on the scope of the negotiations. This draft recognized the existence of continued divergences of view on many issues which the following two months of preparations failed to narrow substantially.

Seattle Ministerial

Thus considerable work on agreeing the scope and timetable of new negotiations remained to be done when the Third WTO Ministerial Council convened in Seattle at the end of November 1999. In the end, the differences remained too great to be bridged at that meeting and it ended without agreement on a Ministerial Declaration. The WTO General Council, meeting on 17 December 1999, decided to postpone until early 2000 a decision on how to proceed with issues outstanding from the Seattle Ministerial Conference.

4. STRUCTURE OF THE RESOURCE MANUAL

The purpose of this Manual is to provide resource material to assist government officials involved in implementing the WTO Agreements of relevance to agriculture, fisheries and forestry as well as those involved in further negotiations in these sectors.

Part I presents information on the background to international trade in agriculture, on the economic rationale for continued trade liberalization, on the previous treatment of agricultural trade by the GATT and on the dispute settlement mechanism established by the WTO Agreement. Issues related to the environment and international trade are also summarized in this Part.

Part II covers the UR Agreement on Agriculture. The purpose of these modules is two fold: (a) to examine the implementation of the disciplines affecting agriculture from the perspective of developing countries; and (b) to identify issues of major concern to developing countries in the next round of negotiations. Issues surrounding domestic support measures, export subsidies and market access are discussed, as well as the role of separate and differential treatment, safeguard measures and trade and food security. A separate module in this part covers the rules affecting trade in fish and fish products.

Part III covers the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) and the Agreement on Technical Barriers to Trade (TBT). The SPS Agreement confirms the right of the WTO to apply measures to protect human, animal and plant life and health. The TBT Agreement recognizes the right of WTO Members to introduce standards to prevent fraud and ensure the safety and environmental compatibility of products imported into their territories, but at the same time lays down certain conditions which Members must meet in implementing these standards and guidelines for their formulation. The SPS Agreement, for example, stresses the importance of science-based standards and both Agreements strongly encourage the use of international standards where they exist. The modules in this Part describe the rights and obligations of Members under these Agreements, outline the work of international standards bodies relevant to trade in plants, animals, fish and food, explain the way in which international standards are formulated, and discuss the implications of the Agreements and the work of the international standards bodies for the structure and functioning of national agencies concerned with plant, animal and food health and safety.

Part IV of the Manual covers the Agreement on Trade-Related Aspects of Intellectual Property Rights, particularly those aspects which have implications for agriculture. Under this Agreement, WTO Members are obliged to have systems in place to protect the intellectual property rights of firms and individuals located in other Members. The protection of innovations in living organisms was a highly contentious issue in negotiating this Agreement, and it is not surprising that the relevant provisions are complex and demanding. The modules in this part describe the rights and obligations of WTO Members under the Agreement and discuss the options for national legislation and institutions to implement these obligations.

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¹ FAO. 1998. The Implications of the Uruguay Round Agreement on Agriculture for Developing Countries: A Training Manual, by S. Healy, R. Pearce & M. Stockbridge. Training Materials for Agricultural Planning No. 41. Rome.