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The EU Agricultural Policy and Developing Countries: Lessons from the Past and Future irections

Vanessa Constant Laforce

There are inherent tensions and contradictions between the highly protectionist approach of the EU's Common Agricultural Policy (CAP) and the EU's stated intention behind its relationship with developing countries (DCs). This has been exacerbated since the coming into force of the World Trade Organisation (WTO) Agreement on Agriculture, in 1994, by which the EU is bound. This conflict has been at the forefront of the debate since the establishment of the CAP in the 1960s focusing on increasing domestic agricultural production, through direct support to farmers, and through intervention. Since 1994, the EU's CAP has had to be restructured to meet WTO legal requirements on domestic support measures. Domestic subsidies still form a large part of the post 2003 mid-term review approach to agriculture that is still creating distortions in world trade agricultural commodity markets. This affects in particular DCs' market access to the EU for agricultural food products. The CAP "Health Check" agreed in 2008, aimed at simplifying and modernising the CAP, provides for further market orientation improvements. This paper analyses, from a legal perspective, the extent to which the current market support instruments and direct aid system under both of the CAP's pillars, alter trade distortions in agricultural commodities. The analysis will demonstrate the consequences for DCs' access to the EU market.



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