Upto December 1994 international trade in merchandise was guided by the rules and provisions of the general agreement on trade and tariff (GATT). The GATT rules, however, did not work effectively to absorb the complexities of world trade which had been growing steadily both in terms of commodity coverage and the nature of regulators. Moreover, the GATT did not cover trade in services which was assuming extreme significance to number of countries, because of transnationalisation of finance and capital and the expanding volume of merchandise. Agriculture too was outside the GATT purview.
Until 1994 agriculture was outside of the GATT purview. The original GATT applied to trade in agriculture also, but it allowed various exceptions to the rules on non-tariff measures and subsidies on industrial products. The GATT rules also allowed countries to resort to import restrictions in the agriculture sector under certain conditions to enforce measures to effectively limit domestic production. This resulted in proliferation of impediments to world agriculture trade. In this authors have discussed challenges posed by the WTO and ways to overcome these challenges in India.
