H. Guyomard et al., Impact of the 1996 USFAIR Act on the Common Agricultural Policy in the World Trade Organisation context: the decoupling issue, FOOD POLICY, 25(1), 2000, pp. 17-34
The United States (US) Federal Agriculture Improvement and Reform (FAIR) Ac
t of 1996 represents a watershed, not only from a domestic point of view bu
t also from the perspective of the next round of international agricultural
negotiations. In particular, it will force the European Union (EU) to refo
rm its agricultural policy so that compensatory payments for support price
cuts are included in the green box or, at least, are much more decoupled th
an at present. US exports of several agricultural products, including maize
, pork and poultry meat, barring a prolonged global economic downturn, shou
ld increase substantially over the 7-year period of the Act and beyond. Acc
ordingly, the US will certainly attempt to ensure that trade barriers with
the EU and subsidised competition from the EU in third markets are kept to
a minimum. Though the 1999 EU proposals for a new reform of the Common Agri
cultural Policy (CAP) represent a courageous step in the right direction, t
hey are likely to be insufficient to comply with future World Trade Organis
ation (WTO) commitments, in particular with regard to the decoupling of dir
ect aid payments. We have made a number of proposals for an internal suppor
t policy which explicitly recognises that European farmers have several fun
ctions that require specific forms of public intervention and which should
comply with future WTO requirements. (C) 2000 Elsevier Science Ltd. All rig
hts reserved.