The Cairns Group plan called for freezing production and export subsidies by the end of 1988, rolling them back, and then eliminating them by the end of the century.
In April 1989, the GATT Negotiating Group on Agriculture finally achieved a breakthrough when the U.S. and EC (and other GATT members) reached a compromise agreement. It involved an immediate freeze on government support for agriculture and a progressive reduction in such support over the long term. While this appeared to be the compromise agreement the Cairns Group was seeking, the accord was in fact loosely worded to fit the requirements of the U.S. and EC. 54 For example, it did not call for the elimination of farm subsidies since the EC would not accept such wording, and the U.S. Export Enhancement Program was largely unaffected. Thus, in the Spring of 1989 it was still uncertain that the Big Three (the U.S., EC, and Japan) would reach an eventual agreement on export subsidies--and on pricing--at the Uruguay Round.
From the 1950s to the 1980s there were close linkages between wheat-pricing arrangements and Canadian-American relations, and some further conclusions can be drawn regarding the independent and dependent variables. Since grain surpluses have been far more common than shortages in the major exporting states, international arrangements are needed to ensure that grain is exported at remunerative and stable prices. However, this chapter has shown that an agricultural trade regime with explicit multilateral principles and rules is lacking and that U.S. and Canadian pricing objectives could only be achieved through some sort of "surrogate" arrangement. The Canada-U.S. duopoly performed this function in the 1950s and 1960s, in part through its support for the international wheat agreements. Nevertheless, the duopoly required sacrifices on the part of the United States and Canada--such as stockholding--that they were increasingly unwilling (and unable) to make. When the duopoly broke down in the late 1960s, no other group or organization assumed its functions of controlling surpluses and stabilizing prices. In the late 1970s, a number of American and Canadian senators and producer advisers pressured for an exporters' pricing agreement, but there is evidence that it would have been unsuccessful even if the U.S. administration had approved it. Clearly, the lack of principles and regulations in the agricultural trade regime was detrimental to both U.S. and Canadian pricing objectives, and after the 1960s increased competition precluded the development of another surrogate arrangement such as the duopoly.