Agricultural Trade Policies During The European Union

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Agriculture has been one of the flagship areas of European collaboration since the early days of the European Community (EC). Agricultural trade policies in the European Union (EU) can be divided into roughly two parts: production support via the Common Agricultural Policy (CAP) and External Trade Barriers via tariffs and quotas set against non-member states. When the principles of the “Common Market” were decided in late 50s, France insisted on a system of agricultural subsidies as its price for agreeing to free trade in industrial goods. The CAP began operating in 1962, with the EC intervening to buy farm output when the market price fell below an agreed target level. This helped reduce Europe 's reliance on imported food but led to…show more content…
CAP From the production side, the cornerstone policy of European agricultural is the CAP. This policy was born in the late 1950s when the founding members of the EC had emerged from over a decade of severe food shortages during and after World War II. At the time of the Treaty of Rome, signed in 1957 which established the Common Market, the then six member states strongly intervened in their own agricultural sectors. These individual agricultural polices posed an obstacle to free trade detailed within the rules of the Common Market. France in particular, along with a number farming professional organisations wanted to maintain strong state intervention in agriculture. This could therefore only be achieved if policies were harmonised and transferred to the EC level. By 1962, three major principles had been established to guide the CAP: market unity, community preference and financial solidarity. Since then, the CAP has been a central element in the European institutional system and idea. The formation of the CAP is often explained as the result of a political compromise between France and Germany. Germany as the largest net contributor to the EU budget has therefore subsidised French Agriculture in return for un-hindered access for its Industrial goods via the Common Market. This observation has become less true overtime, as the EU has expanded and taken on a vast array of different markets. By 2005,
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