26 Bali Negotiations The WTO has agreed to allow countries to subsidise basic foodstuffs without penalties for the supplement. The 159-member World Trade Organization (WTO) has reached a landmark agreement that will boost world trade by $1 trillion. The agreement allows countries such as India to set a minimum support price (MSP) for agricultural products and to sell basic foodstuffs to the poor at subsidized prices. In addition, countries can store grain to meet the requirements of unforeseen events. WTO members have taken steps to reform the agricultural sector and address high subsidies and trade barriers that distort agricultural trade. The overall goal is to establish a fairer trading system that improves market access and improves the livelihoods of farmers around the world. The WTO Agreement on Agriculture, which came into force in 1995, is an important step towards reforming agricultural trade and towards fairer and more competitive development. The Committee on Agriculture is monitoring the implementation of the agreement. In the 1980s, public payments to agricultural producers in industrialized countries generated large crop surpluses, which were unloaded by export subsidies on the world market, causing food prices to fall. Tax pressure on safeguards has increased, due to both lower import duty revenues and increased domestic spending. Meanwhile, the global economy has entered a cycle of recession and the perception that market opening could improve economic conditions has led to calls for a new round of multilateral trade negotiations.  The cycle would open up markets for high-tech services and goods and ultimately generate much-needed efficiency gains.
To engage developing countries, many of which were new international disciplines, agriculture, textiles and clothing were added to the big deal.  Export subsidies are the third pillar. The 1995 agricultural agreement required industrialized countries to reduce export subsidies by at least 36% (in value terms) or by 21% (by volume) over a six-year value. For developing countries, the agreement called for reductions of 24% (in value) and 14% (in volume) over ten years. 6 Domestic support for agriculture should also be significantly reduced in countries where the total amount of aid was greater than that set out in the membership plan.