The 1947 GATT initially applied to agriculture, but was incomplete, and the signatory states (or “contracting parties”) excluded this sector from the scope of the principles set out in the general agreement. During the period 1947-1994, members were allowed to use export subsidies for primary agricultural products and to impose import restrictions under certain conditions, so that major agricultural raw materials faced trade barriers in unusual proportions in other sectors. The road to a fair, market-oriented agricultural trade system has therefore been difficult and time-consuming; and the negotiations were finally concluded during the Uruguay Round. Agriculture has a special status in WTO agreements and trade agreements (signed in 1994 and entered into force on 1 January 1995), with the sector having a specific agreement, the agriculture agreement, whose provisions prevail. In addition, some provisions of the agreement on the application of plant protection measures (SPS) also concern agricultural production and trade. The same applies to the agreement on trade-related aspects of intellectual property rights (TRIPS) with respect to the protection of geographical denominations. In addition, the provisions of the agreement on agriculture are complemented by the Agreement on Technical Barriers to Trade (OTC) and by technical assistance mechanisms. Export subsidies are the third pillar. The 1995 agricultural agreement required industrialized countries to reduce export subsidies by at least 36% (in value terms) or by 21% (by volume) over a six-year value. For developing countries, the agreement called for reductions of 24% (in value) and 14% (in volume) over ten years. The agreement has been criticized by civil society groups for reducing customs protection for small farmers, an important source of income in developing countries, while allowing rich countries to continue subsidizing agriculture in their own countries. WTO members have taken steps to reform the agricultural sector and address high subsidies and trade barriers that distort agricultural trade. The overall goal is to establish a fairer trading system that improves market access and improves the livelihoods of farmers around the world.
The WTO Agreement on Agriculture, which came into force in 1995, is an important step towards reforming agricultural trade and towards fairer and more competitive development. The Committee on Agriculture is monitoring the implementation of the agreement. The member transparency toolkit contains information on notification formats and a reporting manual, as well as links to members` lists with commitments and other resources to support member transparency in the agricultural sector. In the run-up to the 1986 GATT Ministerial Conference in Punta del Este, Uruguay, agricultural lobbies in industrialized countries have vehemently opposed agricultural trade-offs. In this context, the idea of excluding “trade-neutral” production and subsidies from WTO commitments was first proposed in 1987 by the United States and soon replicated by the EU.  By guaranteeing continued support to farmers, it has also neutralized the opposition. In exchange for the integration of agriculture into WTO disciplines and the obligation to reduce trade-distorting subsidies in the future, developed countries could maintain subsidies that result in “no more than minimal trade distortion” in order to achieve different public policy objectives.  The Haberler Report of 1958 stressed the importance of minimizing the impact of agricultural subsidies on competitiveness and recommended replacing price support with additional non-production-related direct payments and expected discussions to be under way on green box subsidies.