Oilseeds

Oilseeds in Global Commerce Policy

In this regard, a definition of this issue is as follows: this was a long drawn-out dispute originally brought by the United States against the European Economic Community (EEC) in 1989. The entries on trade policy are here. It is an example of the application of the GATT rule on non-violation. The first panel report on this case, adopted in 1990, found that the EEC regulations authorizing payments to seed processors, on condition that the oilseeds originated in the EEC, were inconsistent with the GATT national- treatment obligation. The panel also found that the subsidy scheme for oilseeds operated by the EEC isolated EEC producers completely from the movement of prices on international markets. Therefore, tariff concessions in the form of zero bindings made by the EEC could not have any impact on the competitiveness of imported oilseeds. The entries on trade policy are here. In December 1991 the panel was reconvened at the request of the United States to determine whether the changes made by the EEC as a result of the earlier panel would eliminate the difficulties. The facts in the follow-up case were that the new support system involved direct per-hectare payments to producers of soya beans, rapeseed, colza and sunflowerseed regardless of the quantity produced. The system now consisted of two elements. The first was the price received from the sale of oilseeds in the EEC market which now was determined partly by import prices. Second, there was a direct per- hectare payment depending on average past yields for the region in which the producer was located. The panel noted that the changes made by the EEC were intended to fix the national-treatment problem. Concerning the claim of nullification and impairment of tariff concessions, the panel recalled its original findings (a) that the benefits available to the United States under the applicable tariff concession by the EEC included an expectation that the conditions prevailing in 1962 would be preserved, (b) that the production subsidy schemes of the EEC protected its producers completely from imports and therefore ensured that its lowered tariffs had no effect whatever, (c) that the United States could be assumed not to have anticipated the introduction of these subsidies, (d) that it must reasonably have expected the transformation of earlier national producer support measures into an EEC support scheme, but one that would preserve its benefits, and (e) that the subsidies concerned had impaired the rights of the United States because they upset the competitive relationship between domestic and imported oilseeds, not because of any effect on trade flows. The panel found that the revised support scheme still rendered the level of EEC production substantially insensitive to the movement of world market prices. The entries on trade policy are here. It therefore continued to impair the benefits the United States could expect to accrue to it under the relevant tariff concessions. The panel also found that the EEC related the support for oilseeds under the new system with the support for the production of alternative crops protected by variable levies which completely insulated EEC producers from world market prices. The entries on trade policy are here. It therefore found that this would appear to be difficult to reconcile with the expectations of the United States at the time the zero- tariff bindings were negotiated. Hence the rights of the United States under Article II (Schedules of Concessions) remained impaired. The panel then recalled that over two years had passed since the original report had been adopted, and it recommended that the EEC should act expeditiously to eliminate the impairment of tariff concessions. The entries on trade policy are here. In other words, the EEC’s right to institute subsidies on certain products and the level of these subsidies was not at issue and not inconsistent with GATT rules. However, the use of subsidies as they affected oilseed producers impaired and nullified the rights of other GATT. This is the basis of the non-violation argument in this case. The panel decision was not the end of the matter. The entries on trade policy are here. It remained an irritant in European Community-United States trade relations for the remainder of the Uruguay Round. The entries on trade policy are here. It was resolved as part of the Blair House Accord in November 1992 when the European Community agreed to set acreage limits for oilseeds production.[1]

Oilseedsin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Oilseeds” entry (OAS)

See Also