By Timothy E. Josling, Stefan Tangermann, T. K. Warley (auth.)
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Additional resources for Agriculture in the GATT
To the exporters, the CAP epitomized the worst features of agricultural protectionism that the Haberler Committee had so recently described. They protested that the Six were creating an autonomous agricultural policy without regard to its external effects. Providing adequate farm incomes through the support of the market price of products would inevitably stimulate production while discouraging consumption. The variable import levy would provide absolute protection to Europe's farmers. Absent supply controls, and there was nothing to prevent the EEC's ceasing to be an importer of the regulated products and becoming an exporter.
At the insistence of the smaller and developing agricultural exporters - which could not themselves afford to use production and export subsidies yet bore the brunt of their use by others - the whole subsidy issue was revisited at the 1954-5 Review Session. It was agreed to strengthen Article XVI by incorporating the intent of the articles on export subsidies that had been in the Havana Charter but which had been omitted from the General Agreement in 1947. This was done by adding Part B, Additional Provisions on Export Subsidies.
These were generally high, and in some countries extraordinarily so. Third, the Committee drew attention to the fact that a number of developing countries were also exporters of the agricultural products that were protected in rich countries, so that poor countries were harmed by the import protection, subsidy, and surplus disposal operations of rich countries. The other major finding of the Committee was that, because of the Agreement's weak hold on agricultural protectionism, the agricultural exporters were not deriving the benefits from the operation of the Agreement that they had the right to expect.