GLOSSARY[325]
African, Caribbean and Pacific (ACP)
Group of 71 African, Caribbean and Pacific
countries whose partnership with the EU has been defined in a
series of agreements, the latest being the Cotonou Agreement.
Amber box
Domestic agricultural support measures - income support and
production subsidies - which distort production and trade (with
a few exceptions) fall into the "amber box". These subsidies
are subject to reduction commitments under the WTO's Agreement
on Agriculture.
Blue box
Domestic agricultural support measures regarded as exceptions
to the general rule that all subsidies linked to production must
be reduced or kept within defined minimal levels. Covers payments
directly linked to land size or livestock as long as the activity
being supported limits production.
Cairns Group
Comprises 18 developing and industrial agricultural exporting
countries which lobby for agricultural trade liberalisation.
Formed in 1986 in Cairns, Australia, it includes: Argentina, Australia,
Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Fiji, Guatemala,
Indonesia, Malaysia, New Zealand, Paraguay, Philippines, South
Africa, Thailand and Uruguay.
Common Agricultural Policy (CAP)
The CAP is the EU's system of domestic support, export subsidies
and tariffs which was designed to support and protect European
agriculture. It is now supposed to provide landscape amenity and
environmental benefits too.
Compulsory licensing
Authorization by a government for a government or company
to make and sell a product (such as a drug) without the permission
of the patent holder. Compulsory licenses are generally issued
on the basis of public interest, such as for reasons of public
health or defence.
Confederation of British Industry (CBI)
Decoupling
The severing or weakening of the link between agricultural
support and production. The purpose of decoupling is to enable
farmers to be supported in ways which do not distort production
or trade, and which are WTO-compliant. May include degressive
modulation (see below).
Degressive modulation
A way of decoupling (see above) which
reduces support provided to the largest (degressive) farms and
instead uses these funds to encourage small farmers to undertake
rural development and environmental measures (modulation).
Department for International Development (DFID)
Department of Trade and Industry (DTI)
Development box
Measures proposed to give developing countries the flexibility
needed to enhance domestic agricultural production for home consumption
and to take other measures needed to ensure food security, protect
farmer livelihoods and reduce poverty.
Dumping
Occurs when goods are exported, with the help of explicit
or implicit subsidies, at a price less than their market value,
generally meaning that they are exported to a given market for
less than the price at which they are sold in the home market
or third-country markets, or at less than production cost. Dumping
of Northern produced agricultural surpluses on world markets and
directly into Southern countries (for example through food aid),
depresses prices and reduces the incentive for Southern farmers
to produce and export.
Everything But Arms Agreement
The name given by the EU to the package it offered to the
Least Developed Countries in 2001. From 2002, it eliminated tariffs
and quotas on all of their exports - except arms, sugar, rice
and bananas. From 2009, it will be everything but arms.
General Agreement on Tariffs and Trade (GATT)
A multilateral forum for trade discussion and negotiation
aimed at encouraging trade among its members through the reduction
of trade barriers. It led to a series of trade agreements, the
first of which was in 1947. The Uruguay Round, completed
in 1994, created the World Trade Organization which superseded
the GATT in 1995.
General Agreement on Trade in Services (GATS)
WTO agreement concluded at the end of the Uruguay Round. It
provides a legal framework for trade in services and the negotiated,
progressive liberalization of regulations that impede this. It
covers areas such as transport, investment, education, communications,
financial services, energy and water services and the movement
of persons.
Green box
Domestic agricultural support measures that are expected to
cause little or no trade distortion. The subsidies have to be
funded by governments but must not involve price support. Environmental
protection subsidies are included. No limits or reductions are
required by the WTO for such measures.
Intellectual Property Rights (IPRs)
These secure ownership and control over the use of knowledge.
They attempt on the one hand to maintain incentives for technological
invention by protecting the profits of the rights holders and
on the other hand to promote innovation by facilitating the transfer
and use of new inventions.
International Financial Institutions (IFIs)
The International Monetary Fund and the World Bank.
Least Developed Countries (LDCs)
Forty-nine countries that have been identified by the UN and
recognised by the WTO as 'least developed' in terms of their low
GDP per capita, their weak human assets and their high degree
of economic vulnerability.
Liberalisation (of trade)
The process of reducing tariffs and other restrictions on
international trade (see also National Treatment). Multilateral
liberalisation is that which is achieved by many countries through
negotiation and cooperation (see also Most-Favoured-Nation).
Millennium Development Goals (MDGs)
At the UN General Assembly in 2000, governments committed
to achieving the following goals by 2015: eradicating extreme
poverty and hunger, achieving universal primary education, promoting
gender equality and empowering women, reducing child mortality,
improving maternal health, combating HIV/AIDS, malaria, and other
diseases, ensuring environmental sustainability and developing
a global partnership for development.
Modalities
An agreed framework upon which trade negotiations can be based.
May include targets, including numerical targets for achieving
the objectives of the negotiations as well as issues relating
to rules.
Mode 4
One of four modes of supply identified under GATS to classify
transactions based on the territorial presence of the supplier
and the consumer at the time of the transaction. Mode 4 refers
to the provision of services by a national of one member state
while present in the territory of any other member.
Most-favoured-nation (MFN)
A commitment that a country will extend to another country
the lowest tariff rates it applies to any other country. All WTO
contracting parties undertake to apply such treatment to one another
under article I of the GATT (see Special and Differential Treatment).
Multifunctionality
A term indicating that agriculture plays non-commodity roles
in addition to providing food and fibre, including the provision
of landscape and open space amenities, rural economic viability,
cultural heritage, domestic food security, prevention of natural
hazards and preservation of biodiversity. When used in negotiations,
it assumes that agriculture not only can play such a role, but
is an efficient way of achieving the results, and therefore requires
special treatment.
National treatment
Commitment to treat foreign and domestic producers, sellers,
investors etc. in the same way.
Necessity test
Procedure to determine whether a policy restricting trade
is necessary to achieve its intended objective.
Net Food Importing Developing Countries (NFIDCs)
A group of 23 countries including: Barbados, Egypt, Jamaica,
Kenya, Morocco, Pakistan and Venezuela. These countries depend
on food imports rather than producing food domestically.
Organisation for Economic Cooperation and Development (OECD)
Group of industrial countries that 'provides governments a
setting in which to discuss, develop and perfect economic and
social policy'. It aims to foster international trade and contribute
to global economic development. In July 2002 it had 30 members.
Peace Clause
A provision in article 13 of the WTO's Agreement on Agriculture
designed to reduce the threat of trade disputes during the period
of agricultural trade reform, especially in industrial countries.
It stipulates that agricultural subsidies permitted by the agreement
cannot be challenged under other WTO agreements. Expires at the
end of 2003. Unless renewed, its expiry will subject agricultural
subsidies to the same disciplines as industrial subsidies.
Poverty Reduction Strategy Paper
Initiated by the boards of the World Bank and International
Monetary Fund, this is a document describing a country's macroeconomic,
structural and social policies and programmes to promote growth
and reduce poverty, as well as associated external financing needs.
PRSPs are expected to be prepared by governments through a participatory
process involving civil society and development partners, including
the World Bank and IMF, and are required for countries seeking
to obtain concessional lending and debt relief under the enhanced
Heavily Indebted Poor Countries (HIPC) initiative.
Preference erosion
Takes place when countries which enjoy preferential market
access see the value of these preferences reduced as other countries
gain enhanced market access through Most Favoured Nation liberalisation
or through other preferences. As a result, the initial preference
holders, depending upon how competitive their export industries
are without the preferences, will lose markets for their exports.
Preferential access
Granting by developed (and some developing) countries of access
to developing countries on terms more favourable than the Most-Favoured
Nation terms agreed in the WTO. It is allowed under Special and
Differential Treatment.
Sanitary and Phytosanitary Standards (SPS)
A World Trade Organization agreement on how governments can
apply food safety and animal and plant health measures.
Singapore Issues (also called 'New Issues')
The four issues on which it was agreed at the 1996 WTO Singapore
Ministerial Conference to form working groups: trade and investment,
competition policy, transparency in government procurement and
trade facilitation.
Single Undertaking
Provision that requires countries to accept all the agreements
reached during a round of WTO negotiations as a single package,
rather than on a case-by-case basis. Nothing is agreed until
everything is agreed.
Special and Differential Treatment (SDT)
The principle in the WTO that developing countries be accorded
special privileges, either exempting them from some WTO rules
or granting them preferential treatment in the application of
WTO rules. It specifically allows developed countries to offer
preferential access as an exemption from the Most Favoured Nation
principle.
Special Safeguard Mechanism
An instrument which allows countries to erect temporary barriers
to protect themselves from sudden influxes of imports of particular
products which threaten domestic production.
Strategic/ Special products
Products which are crucial for food security, rural development
or livelihood concerns, in relation to which tariff cuts required
by the WTO would be much smaller than for other goods.
Tariff
A government-imposed tax on imports.
Tariff escalation
An increase in tariffs as a good becomes more processed.
For example, low duties on fresh tomatoes, higher duties on canned
tomatoes and higher still on tomato ketchup. Tariff escalation
protects domestic processing industries and discourages the development
of processing activity in countries where raw materials originate.
Trade-Related aspects of Intellectual Property Rights (TRIPS)
Agreement
WTO agreement aimed at establishing minimum standards of intellectual
property rights protection for all products and services, covering
copyrights, trademarks, geographical indications, industrial designs,
integrated circuits, patents and trade secrets.
Trade-Related Investment Measures (TRIMS) Agreement
WTO agreement aimed at eliminating the trade-distorting effects
of investment measures taken by members.
Uruguay Round
The last round under the GATT, which began in Uruguay in 1986
and was completed in 1994 after nearly eight years of negotiations.
Included agreements in trade-related intellectual property rights
and services for the first time, in addition to agreements in
traditional trade areas such as agriculture and textiles and clothing.
Its conclusion led to the creation of the World Trade Organization.
World Trade Organization (WTO)
The World Trade Organization exists to ensure that trade between
nations flows as smoothly, predictably and freely as possible.
To achieve this the World Trade Organization provides and regulates
the legal framework which governs world trade. Decisions in the
World Trade Organization are typically taken by consensus among
the 146 member countries and are ratified as international treaties.
325 This glossary has been constructed using a range
of sources including: Making global trade work for people; DFID's
Departmental Report for 2003; the report of the Commission on
Intellectual Property Rights; and the WTO's web-site. Back
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