TERMS: AGRICULTURE AND TRADE

Biotechnology

The use of microorganisms, live plant or animal cells, or their parts to create new products or to carry out biological processes aimed at genetic improvement.

Blue Box

Direct payments that are not subject to the commitment in the Uruguay Round Agreement on Agriculture (URAA) to reduce domestic support.

Border Protection

Any measure that acts to restrain imports at point of entry.

Codex Alimentarius Commission

A joint commission of the United Nations Food and Agriculture Organization (FAO) and the World Health Organization (WHO), comprised of some 146 member countries, created in 1962 to ensure consumer food safety, establish fair practices in food trade, and promote the development of international food standards. The nonbinding standards are published in the Codex Alimentarius.

Commodity Credit Corporation (CCC)

A U.S. government-owned and operated corporation responsible for financing major U.S. agricultural support programs.

Common Agricultural Policy (CAP)

The European Commission's comprehensive system of production targets and marketing mechanisms designed to manage agricultural trade within the EC and with the rest of the world. It is designed to increase farm productivity, stabilize markets, ensure a fair standard of living for farmers, guarantee regular supplies, and ensure reasonable prices for consumers.

Deficiency Payment

Direct payments by governments to producers of certain commodities based on the difference between a target price and the domestic market price or loan rate, whichever is less.

Dispute Settlement Body (DSB)

A body of the WTO General Council that creates panels of experts to examine and issue recommendations on trade disputes between nations. The DSB has the authority to accept or reject reports of panels and appellate bodies.

Dumping

Exporting goods at a price less than their normal value, generally meaning they are exported for less than they are sold for in the domestic market or third-country markets, or at less than production cost.

Export Enhancement Program (EEP)

A program of U.S. export subsidies given generally to compete with subsidized agricultural exports from the EC in certain export markets.

General Agreement on Tariffs and Trade (GATT)

Once both an institution located in Geneva and an agreement governing world trade, the GATT has been superseded as an international organization by the World Trade Organization (WTO). Originally signed in 1947, the GATT was updated in 1994 and is now incorporated into the WTO's rules on trade in goods.

Generalized System of Preferences (GSP)

Programs by developed and industrialized countries granting preferential tariffs to certain imports from designated developing countries that are largely duty free.

Green Box

Domestic or trade policies that are deemed to be minimally trade distorting and that are excluded from reduction commitments in the Uruguay Round Agreement on Agriculture.

Import Quota

A trade barrier that sets the maximum quantity or value of a commodity allowed to enter a country during a specified time period. The URAA requires the conversion of import quotas to tariff-rate quotas or bound tariff rates.

Internal Support

Measures that act to maintain producer prices at levels above those prevailing in international trade, such as direct payments to producers, including deficiency payments, and input and marketing cost reduction measures available only for agricultural production.

International Office of Epizootics

A body that develops international standards concerning animal health.

Most-Favored-Nation (MFN) treatment

A fundamental principle incorporated into all WTO accords that a country will extend to another country the same custom and tariff treatment it applies to any third country.

National Treatment

The principle of giving others the same treatment as one's own nationals; that imports be treated no less favorably than domestically produced goods once they have passed customs.

Nontariff Barriers (NTBs)

Any restriction, charge, or policy other than a tariff, that limits access of imported goods, such as quotas, import licensing systems, sanitary regulations, prohibitions.

Quantitative Restrictions (QRs)

Specific limits on the quantity or value of goods that can be imported (or exported) during a specific time period, the most familiar of the nontariff barriers.

Reference Price

The minimum import price for certain farm products under the EU's CAP.

Rules of Origin

Laws, regulations, and administrative procedures that determine a product's country of origin.

Safeguard Measures

Action taken to protect a specific industry from an unexpected surge of imports.

Sanitary and Phytosanitary (SPS) Measures and Agreements

Government standards to protect human, animal and plant life and health, to help ensure that food is safe for consumption. The agreement applies to all sanitary (relating to animals) and phytosanitary (relating to plants) SPS measures that may have a direct or indirect impact on international trade.

Schedule of Concessions

List of bound tariff rates.

Section 22

A provision of permanent U.S. agricultural law that allows the president to impose import fees or import quotas to prevent imports from non-WTO member countries from undermining the price support and supply control objectives of domestic farm programs.

State Trading Enterprises (STEs)

Enterprises authorized to engage in trade (exporting or importing) that are owned, sanctioned, or otherwise supported by the government.

Subsidy

A direct or indirect benefit granted by a government for the production or distribution of a good or to supplement other services. Generally, subsidies are thought to be production and trade distorting, resulting in an inefficient use of resources. There are two general types of subsidies: export and domestic. An export subsidy is a benefit conferred on a firm by the government that is contingent on exports. A domestic subsidy is a benefit not directly linked to exports.

Tariff Binding

Commitment not to increase a rate of duty beyond an agreed level. Once a rate of duty is bound, it may not be raised without compensating the affected parties.

Tariff-Rate Quota (TRQ)

A trade policy tool used to protect a domestically produced commodity or product from competitive imports. A TRQ applies a lower tariff to imports below a certain quantitative limit (quota) and permits a higher tariff on imported goods after the quota has been reached.

Tariffication

The process of converting all nontariff agricultural trade barriers to tariffs and reducing the tariffs over time.

Transparency

Degree to which trade policies and practices, and the process by which they are established, are open and predictable.

Variable Tariff

An import tax that varies in order to assure that an import price, after payment of the levy, will equal a predetermined minimum import price.

Voluntary Restraint Arrangements (VRAs), Voluntary Export Restraints (VERs), Orderly Marketing Arrangements (OMAs)

Bilateral arrangements whereby an exporting country (government or industry) agrees to reduce or restrict exports without the importing country having to make use of quotas, tariffs, or other import controls.

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Sources: The World Trade Organization, U.S. Department of Agriculture, U.S. Department of Commerce, and the Congressional Research Service.

Economic Perspectives
USIA Electronic Journal, Vol. 4, No. 2, May 1999