CAP reform has important implications for relations with countries outside the Commity. As a result of reform, the EC has found it possible to negociate new rules on agricultural trade in the Uruguay Round of GATT negotiations. The MacSharry compensation payments are sufficiently decoupled to fit into an "allowable" category of domestic policies, protected from challenge by trade partners. Tying compensation payments to hectares used, rather than output, should decrease yields. Breaking the link between farm output and income support brings the Community into line with a number of other countries.
