	Significant Agricultural Market Openings Generally Achieved in Both Uruguay Round and NAFTA

The Uruguay Round and NAFTA included significant provisions to liberalize agricultural trade. Challenges in Implementing WTO and NAFTA Provisions on SPS Measures and STEs

While forecasters have estimated that increases in agricultural trade would account for a sizable portion of the Uruguay Round and NAFTA accords’ projected benefits to the United States, challenges exist for ensuring their full implementation. WTO and NAFTA SPS Provisions

The WTO Agreement on the Application of Sanitary and Phytosanitary Measures, and chapter 7 of NAFTA, established guidelines regarding the appropriate use of SPS measures in relation to trade. Strategy to Address Foreign SPS Measures

Although USTR has identified some foreign SPS measures as key barriers to U.S agricultural exports, our recent report to Congress found several weaknesses in the federal government’s approach to identifying and addressing such measures. Because of these weaknesses, the federal government cannot be assured that it is adequately monitoring other countries’ compliance with the WTO or NAFTA SPS provisions and effectively protecting the interests of U.S. agricultural exporters. USTR and USDA have primary responsibility for addressing agricultural trade issues, and they receive technical support from the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), and the Department of State. USDA Agencies’ Balancing of Regulatory and Trade Facilitation Roles

Absent a coordinated approach for addressing foreign SPS measures, the specific role of USDA regulatory and research agencies in resolving SPS has not been clearly defined. Potential Benefits of Long-Term SPS Objectives Versus Immediate Resolution of Disputes Over SPS Measures

WTO and USTR officials suggest that member countries appear to have focused on implementing provisions of the SPS agreement that enable them to resolve SPS disputes as they arise, such as the requirement that SPS measures be based on scientific evidence, but have paid less attention to other key provisions. WTO Provisions on STEs

The agricultural and SPS agreements of the Uruguay Round were intended to move member nations toward establishing a market-oriented agricultural trading system by minimizing government involvement in regulating agricultural markets. As a result of the Uruguay Round, the WTO officially defined STEs and addressed procedural weaknesses of GATT’s article XVII by improving the process for obtaining and reviewing information. Lack of Transparency in STE Pricing Practices

In the absence of complete and transparent information on the activities of STEs, member countries are hindered in determining whether STEs operate in accordance with GATT disciplines and whether STEs have a trade-distorting effect on the global market. U.S. Efforts to Address STEs

U.S. agricultural interests have expressed concern regarding the potential of STEs to distort trade, and USDA officials have said that a focused U.S. effort to address STEs is vitally important.
Why GAO Did This Study

GAO discussed the implementation of certain agricultural provisions of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) and North American Free Trade Agreement (NAFTA), focusing on: (1) the impact of measures to protect human, animal or plant life or health--referred to as sanitary and phytosantiary (SPS) measures; and (2) state trading enterprises (STEs).

What GAO Found

GAO noted that: (1) the Uruguay Round and NAFTA included significant provisions to liberalize agricultural trade; (2) while forecasters have estimated that increases in agricultural trade would account for a sizeable portion of the Uruguay Round and NAFTA agreements' projected benefits to the United States, challenges exist for ensuring their full implementation; (3) the World Trade Organization's (WTO) agreement on the application of sanitary and phytosanitiary measures, and chapter 7 of NAFTA, established guidelines regarding the appropriate use of SPS measures in relation to trade; (4) although the United States Trade Representative (USTR) has identified some foreign SPS measures as key barriers to U.S. agricultural exports, GAO's recent report to Congress found several weaknesses in the federal government's approach to identifying and addressing such measures; (5) because of these weaknesses, the federal government cannot be assured that it is adequately monitoring other countries' compliance with the WTO or NAFTA SPS provisions and effectively protecting the interests of U.S. agricultural exporters; (6) USTR and the Department of Agriculture (USDA) have primary responsibility for addressing agricultural trade issues, and they receive technical support from the Food and Drug Administration (FDA), the Environmental Protection Agency and the Department of State; (7) absent a coordinated approach for addressing foreign SPS measures, the specific role of USDA regulatory and research agencies in resolving SPS has not been clearly defined; (8) WTO and USTR officials suggest that member countries appear to have focused on implementing provisions of the SPS agreement that enable them to resolve SPS disputes as they arise; (9) the agricultural and SPS agreements of the Uruguay Round were intended to move member nations toward establishing a market-oriented agricultural trading system by minimizing government involvement in regulating agricultural markets; (10) as a result of the Uruguay Round, the WTO officially defined STEs and addressed procedural weaknesses of article XVII by improving the process for obtaining and reviewing information; (11) in the absence of complete and transparent information on the activities of STEs, member countries are hindered in determining whether STEs operate in accordance with GATT disciplines and whether they have a trade-distorting effect on the global market; and (12) U.S. agriculture interests have expressed concern regarding the potential of STEs to distort trade, and USDA officials have said that a focused U.S. effort to address STEs is vitally important.