The early GATT cases regarding agricultural export subsidies predominately concerned how to define the meaning and scope of “equitable share.” In response to this definitional difficulty, the 1979 Tokyo Round negotiations, under the significant influence of the U.S. and the EC, clarified the meaning of the “equitable share” by adding Article 10 of the Agreement on Interpretation and Application of Article VI, XVI, and XXII of the General Agreement on Tariffs and Trade (Subsidies Code)(21). In particular, Article 10(2)(a) elaborated on the phrase “more than an equitable share of world export trade” and provided that “[it] shall include any case in which the effect of an export subsidy granted by a signatory is to displace the exports of another signatory bearing in mind the developments on world markets.(22)”

       In addition to this marginal clarification, Article 10(2)(a)’s “displacement” standard proved to be impracticable(23). Consequently, the logic of GATT decisions interpreting the law of agricultural export subsidies remained unsteady, and many perceived the law as ineffective(24) and unable to actually cease the powerful countries’ protective measures.

        Debate about what constituted an “equitable share” plagued later decisions on sugar export subsidies. Australia filed against the EC in 1979(25) and Brazil also filed against the EC in 1980(26). They complained that the EC refunds on sugar were inconsistent with Article XVI:3 of GATT because they exceeded the EC’s “equitable share.” Due to the vague language of the provision, the Panels had great difficulty interpreting the provision’s vague language and rendering a decision reasonably meeting both parties’ needs. The EC actually won both cases because it was not obvious that the EC had more than its “equitable share.” Hence, these decisions enabled the EC to continue to heavily subsidize its exported sugar from 1979 onward.

The Uruguay Round negotiations (1986-1993) renewed conflict over export subsidies in agriculture. Countries supporting free trade, especially the Cairns Group, desired a new agreement on agriculture. Joining the Cairns Group, the U.S., which increasingly suffered from the EC export competition in third markets, proposed an unambiguously liberal trade approach from the commencement of the negotiations(27). This proposal barred all measures distorting trade, including export subsidies, and submitted a full phase-out over a ten-year period of all agricultural subsidies that directly or indirectly affected trade(28). As expected, the EC opposed the U.S.’s proposal and contended that this proposal went far beyond what the new agreement could be(29). Ultimately, the U.S. and the EC reached a compromise in the Agreement on Agriculture (AoA) in November 1992(30).