THE AMS IN AGRICULTURAL TRADE NEGOTIATIONS - A REVIEW

This article reviews the role of the Aggregate Measure of Support (AMS ) in the agricultural trade negotiations of the Uruguay Round. Contrar y to expectations at the start of these negotiations, the AMS only occ upies a subsidiary position in the final agreement, In order to explai n this, first an economic analysis is presented of the Producer Subsid y Equivalent (PSE), the basic AMS concept in the GATT discussions. Sec ondly, the political AMS debate is described and analysed, using infor mation from unpublished GATT documents. Although the PSE concept is ba sed on simple assumptions, its measurement already meets a number of d ifficult problems (policy coverage, product coverage, external referen ce prices, currency). Once these are solved, the concept may offer a b rief insight into actual governmental support in agriculture, However, the calculations do not provide a sound measure of the trade distorti ons caused by agricultural policies. Mainly for that reason, the idea of a pure aggregated approach-based on the AMS-proved unsuccessful in the negotiations, Instead, the Contracting Parties accepted the framew ork of making binding agreements on three separate areas: internal sup port, market access and export support, While important and very speci fic commitments were made in the areas of agricultural imports and exp orts, the AMS has only found application in the internal support area. Copyright (C) 1996 Elsevier Science Ltd