introduction to the agreement on agriculture and to the ... subsidies and trade 210 378 166 21 0 100...

Introduction to the Agreement Introduction to the Agreement

on Agriculture and to the on Agriculture and to the

Negotiating ProcessNegotiating Process

2

Agriculture Subsidies and TradeAgriculture Subsidies and TradeAgriculture Subsidies and TradeAgriculture Subsidies and TradeAgriculture Subsidies and TradeAgriculture Subsidies and TradeAgriculture Subsidies and TradeAgriculture Subsidies and Trade

210

378

166

21

0

100

200

300

400

500

600

Total subsidies Total exports

US

$ B

illio

n

Developed countries Developing countries

3

Average TariffsAverage TariffsAverage TariffsAverage TariffsAverage TariffsAverage TariffsAverage TariffsAverage Tariffs

62

17

9

29

0

10

20

30

40

50

60

70

MFN Bound MFN Applied

Agriculture Industrial

%

4

Why the Agreement on Agriculture?Why the Agreement on Agriculture?Why the Agreement on Agriculture?Why the Agreement on Agriculture?Why the Agreement on Agriculture?Why the Agreement on Agriculture?Why the Agreement on Agriculture?Why the Agreement on Agriculture?

Agriculture in GATT but...

exemptions for agricultural products (import restrictions,

domestic support, export subsidies allowed)

market access difficult

Research - inefficiency of policiesTrade tensions and disputes

Punta del Este

Declaration

(1986)

Uruguay Round

Negotiations

(7.5 years)

Agreement on

Agriculture

5

Legal FrameworkLegal FrameworkLegal FrameworkLegal FrameworkLegal FrameworkLegal FrameworkLegal FrameworkLegal Framework

Agreement on Agriculture

Modalities+

Supporting Tables

Schedules of Commitments

Other WTO Agreements Protocol of Accession

Legally Binding Commitments

ACC/4

6

Structure of the AgreementStructure of the AgreementStructure of the AgreementStructure of the AgreementStructure of the AgreementStructure of the AgreementStructure of the AgreementStructure of the Agreement

Tariffs

Tariff Quotas

Special Safeguard

Green Box

Blue Box

Article 6.2 Development Programmes

Amber Box

Export subsidies

Anti-circumvention

Export prohibitions and restrictions

Market access Domestic support Export competition

Other rules: S&D, Peace Clause, commitment to reform, NFIDC DecisionAgreement on the Application of Sanitary and Phytosanitary Measures

7

Uruguay Round Reduction Uruguay Round Reduction Uruguay Round Reduction Uruguay Round Reduction Uruguay Round Reduction Uruguay Round Reduction Uruguay Round Reduction Uruguay Round Reduction

CommitmentsCommitmentsCommitmentsCommitmentsCommitmentsCommitmentsCommitmentsCommitments

24% value, 14% volume

Article 9.4 (transport and marketing subsidies)

36% value, 21% volume

Export competition

Export subsidy reduction

S&D exemption

13.3%

10%

Article 6.2 (investment, input and diversification subsidies)

20%

5%

Domestic support

Total AMS reduction

De minimis

S&D exemption

24% average, 10% minimum36% average, 15% minimum

Market access

Tariff reduction

10 years6 yearsTime period

DevelopingDeveloped

No reduction commitments for least-developed countries

8

LongLongLongLongLongLongLongLong--------term Objectiveterm Objectiveterm Objectiveterm Objectiveterm Objectiveterm Objectiveterm Objectiveterm Objective

Uruguay Round reform programme

Major achievements but also some unfinished business

Mandate for further reform - Article 20

... establish a fair and market-oriented agricultural trading system ...

Committee on Agriculture

role to monitor implementation of UR commitments

- matters raised under Article 18.6

- review of notifications

preparatory work analysis/exchange of information

mandated negotiations - Special Sessions (since 2000)

9

The Doha Ministerial DeclarationThe Doha Ministerial DeclarationThe Doha Ministerial DeclarationThe Doha Ministerial DeclarationThe Doha Ministerial DeclarationThe Doha Ministerial DeclarationThe Doha Ministerial DeclarationThe Doha Ministerial Declaration

Comprehensive negotiations aimed at:

substantial improvements in market access

reductions of, with a view to phasing out, all forms of export subsidies

substantial reductions in trade-distorting domestic support

S&D - integral to negotiations and outcome

Non-trade concerns to be taken into account

Deadlines

March 2003 modalities

5th Ministerial Conference - draft Schedules

1 January 2005 - conclusion

Framework modalities -July 2004

10

Market accessMarket accessMarket accessMarket accessMarket accessMarket accessMarket accessMarket access

substantial improvements in

market access

ObjectiveObjectiveObjectiveObjectiveObjectiveObjectiveObjectiveObjective

11

Sample MFN tariffs (%)Sample MFN tariffs (%)Sample MFN tariffs (%)Sample MFN tariffs (%)Sample MFN tariffs (%)Sample MFN tariffs (%)Sample MFN tariffs (%)Sample MFN tariffs (%)

Source: World Trade Report 2004, WTO

0.671.019.20.065.015.8China

0.640.08.50.6550.0102.8Myanmar

0.045.014.80.0250.0114.6Saint Lucia

4.930.02.127.4168.012.2Malaysia

0.7170.08.20.4210.047.0Indonesia

8.5243.033.00.0223.0111.2Barbados

0.1100.020.10.0100.0100.0Kenya

0.055.011.70.055.035.5Brazil

20.1238.03.126.0238.03.5Canada

22.650.07.322.762.06.9Japan

1.4350.05.149.6350.06.9United States

39.975.05.940.875.05.8European Communities

Share of non-ad valoremtariff lines

Maximum ad valorem

Simple average applied

tariff

Share of non-ad valorem tariff

linesMaximum

ad valorem

Simple average boundtariff

12

Export competitionExport competitionExport competitionExport competitionExport competitionExport competitionExport competitionExport competition

reductions of, with a view to

phasing out, all forms of export

subsidies


13

Export Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy Expenditures

20002000200020002000200020002000

2,509

550 17

189

45 00

500

1,000

1,500

2,000

2,500

3,000

EC US Japan Korea Switz-Liech. Norway Brazil

US

$ M

illion

14

Domestic supportDomestic supportDomestic supportDomestic supportDomestic supportDomestic supportDomestic supportDomestic support

substantial reductions in

trade-distorting domestic

support


15

0

70

140

210

280

NOR, CAN, CHE, BRA 17.7 12.1

Korea 8.3 6.5

Japan 69.6 26.7

United States 60.9 72.1

EC 116.5 75.6

1995 2001

Globally

Bil

lio

n U

S$

Data for Korea are for the year 2000.

16

The Doha Round negotiationsThe Doha Round negotiationsThe Doha Round negotiationsThe Doha Round negotiationsThe Doha Round negotiationsThe Doha Round negotiationsThe Doha Round negotiationsThe Doha Round negotiations Many proposals but deadline for modalities missed in March 2003 Alliances (G-20, G-90, G-33, G-10, C-4) Framework approach explored but Cancn Ministerial ends in deadlock Signs of flexibility & momentum for a framework text in mid-2004 General Council Decision adopted on 1 August 2004 to guide progress in the negotiations and the work programme WT/L/579 Work towards first approximation by July 2005 but no result New proposals to move negotiations forward in fall of 2005 Hong Kong Ministerial Declaration puts the Round back on trackbut a new deadline to establish modalities in April 2006 is missed Despite intensive efforts to narrow the differences, negotiations suspended at the end of July 2006 February 2007 back to full negotiating modeJuly 2007 circulation of possible draft modalities by the Chair Job(07)/128; 17 July 2007; later revised as TN/AG/W/4; 1 August 2007, TN/AG/W/4/Rev.1; 8 February 2008, TN/AG/W/4/Rev.2; 19 May 2008 February

Market AccessMarket Access

18

Market Access Market Access Market Access Market Access Market Access Market Access Market Access Market Access -------- OutlineOutlineOutlineOutlineOutlineOutlineOutlineOutline

Current disciplines

Tariffs and tariffication

Tariff quotas

Special safeguard

The Framework and the negotiations

19

Tariffs and TarifficationTariffs and TarifficationTariffs and TarifficationTariffs and TarifficationTariffs and TarifficationTariffs and TarifficationTariffs and TarifficationTariffs and Tariffication

Tariffs bindings, reduction

Non-tariff measures converted to tariffs

Tariff only regimes

20

TariffsTariffsTariffsTariffsTariffsTariffsTariffsTariffs

DEVELOPED DEVELOPING

Implementation period

6 years 1995-2000

10 years 1995-2004

Average cut -36% -24%

Minimum cut -15% -10%

No reduction commitments for LDCs

21

Tariffication FormulaTariffication FormulaTariffication FormulaTariffication FormulaTariffication FormulaTariffication FormulaTariffication FormulaTariffication Formula

E = Tariff equivalent

Pi = Internal price (representative wholesale)

Pe = External price (c.i.f. unit values)

Base period average: 1986-88

Ceiling bindings for developing country Members

E = (Pi - Pe) / Pe * 100

22

Tariff Only Regimes

Quantitative restrictions

Variable levies

Minimum import prices

Discretionary import licensing

NTMs maintained through STEs

Voluntary export restraints

Similar border measures [...]

Prohibition to maintain, resort or revert to:

BUT ... Special Treatment (Annex 5) for Japan, Korea, BUT ... Special Treatment (Annex 5) for Japan, Korea, Philippines, Israel and Chinese TaipeiPhilippines, Israel and Chinese Taipei

23

Tariffs only but ...Tariffs only but ...Tariffs only but ...Tariffs only but ...Tariffs only but ...Tariffs only but ...Tariffs only but ...Tariffs only but ...

Peaks

Morocco: Minimum tariff 0% Maximum tariff 289%

Canada: Minimum tariff 0% Maximum tariff 238%

Escalation

Chinese Taipei: Tomatoes, fresh 10% Tomato juice 30%

EC: Cocoa beans 0% Cocoa paste 9.6% Chocolate 18.7%+

Various Forms

Ad valorem (15%)

Non-ad valorem: Specific (2$ per kg), Compound (10% plus 2$ per kg), Mixed (10% or 2$ per kg, whichever is higher),

Technical (9% plus EA MAX 18.7% plus ADS/Z)

24

Tariffs only butTariffs only butTariffs only butTariffs only butTariffs only butTariffs only butTariffs only butTariffs only but

Source: World Trade Report 2004, WTO

MFN Tariffs (%)

0.020.014.50.0100.061.8Benin

0.3182.036.90.3300.0114.5India

0.025.018.80.0125.0123.3Zambia

0.3150.053.90.0150.0150.0Nigeria

0.0100.020.10.0100.0100.0Guyana

0.175.015.90.3100.097.4Jamaica

43.650.023.50.020.019.9Suriname

3.365.029.045.5226.035.5Thailand

3.0897.042.14.8887.052.9Korea, Republic of

20.1238.03.126.0238.03.5Canada

22.650.07.322.762.06.9Japan

1.4350.05.149.6350.06.9United States

39.975.05.940.875.05.8European Communities

Share of non-ad valorem

tariff linesMaximum

ad valorem

Simple average applied

tariff

Share of non-ad valorem tariff

linesMaximum

ad valorem

Simple average boundtariff

25

Tariff QuotasTariff QuotasTariff QuotasTariff QuotasTariff QuotasTariff QuotasTariff QuotasTariff Quotas

Current and Minimum Access Opportunities3% - 5% of domestic consumption

Low tariff for limited volumes

20%20%

60%60%

Quota volumeQuota volume Imports (MT)Imports (MT)

OutOut--ofof--quota dutyquota duty

InIn--quota dutyquota duty

Tariff rateTariff rate

26

Tariff Quotas but ...Tariff Quotas but ...Tariff Quotas but ...Tariff Quotas but ...Tariff Quotas but ...Tariff Quotas but ...Tariff Quotas but ...Tariff Quotas but ...

0

20

40

60

80

100

Domestic

consumption

Tariff quota TQ fill

%

Minimum / CurrentAccess Fill rate - 60%

27

TQ AdministrationTQ AdministrationTQ AdministrationTQ AdministrationTQ AdministrationTQ AdministrationTQ AdministrationTQ Administration

The rules

The methods Applied tariffs

First-come, first-served

Licence on demand

Historical importers

Producer groups

Imports by STEs

Auctioning

Other

Possible causes for TQ underfill?

28

Special SafeguardSpecial SafeguardSpecial SafeguardSpecial SafeguardSpecial SafeguardSpecial SafeguardSpecial SafeguardSpecial Safeguard

Volume-based SSG

Trigger: import surges

Extra duty: 1/3 of applied rate

Price-based SSG

Trigger: price falls

Extra duty depends on price

Additional import duty on over-quota imports, temporarily, if:

Tariffication

SSG in Schedule

Volume or price triggers (notification)

29

NegotiationsNegotiationsNegotiationsNegotiationsNegotiationsNegotiationsNegotiationsNegotiations

substantial improvements in market access


Tariffs

Tariff quotas

TQ administration

Importing STEs

Other market access issues

Technical elaboration of modalities for further commitments

30

Tariff reductions Average and minimum cut UR formula

Harmonizing formula Swiss formula a*t/(a+t)

Tariff band approach

Other methods: request and offer, zero-for-zero

Tariff peaks and escalation, forms of tariffs

S&D: Special Products (objective criteria or self-designation;

tariff reductions)

Trade preferences Preference erosion

Tropical and diversification products Fullest liberalization of trade

Tariffs Tariffs Tariffs Tariffs Tariffs Tariffs Tariffs Tariffs Main issuesMain issuesMain issuesMain issuesMain issuesMain issuesMain issuesMain issues

31

UR Formula vs. Swiss FormulaUR Formula vs. Swiss FormulaUR Formula vs. Swiss FormulaUR Formula vs. Swiss FormulaUR Formula vs. Swiss FormulaUR Formula vs. Swiss FormulaUR Formula vs. Swiss FormulaUR Formula vs. Swiss Formula

32

Tariff quota expansion Expand by x% (e.g. 20%)

Current TQ = 100 t

New TQ = 120 t

Expand by y% (e.g. 6%) of domestic consumption

Current TQ = 100 t, Domestic consumption = 2000 t

New TQ = 100 t + 120 t

Expand to z% (e.g. 15%) of domestic consumption

Current TQ = 100 t, Domestic consumption = 2000 t

New TQ = 2000*15% = 300 t

In-quota tariff reduction

S&D: Duty-free access for key products; Special Products no TQ expansion

TQ administration

Tariff Quotas Tariff Quotas Tariff Quotas Tariff Quotas Tariff Quotas Tariff Quotas Tariff Quotas Tariff Quotas Main issuesMain issuesMain issuesMain issuesMain issuesMain issuesMain issuesMain issues

33

Special Safeguard Special Safeguard Special Safeguard Special Safeguard Special Safeguard Special Safeguard Special Safeguard Special Safeguard

Main issuesMain issuesMain issuesMain issuesMain issuesMain issuesMain issuesMain issues

Current SSG Retain

Abolish and when

Special Safeguard for developing country Members:

What products

What measures (price-based, volume-based)

What about other developing country Members

34

Principles

Tariff reductions from bound rates

All Members, except LDCs, to contribute

Deeper cuts for higher tariffs; flexibilities for sensitive

products; substantial improvements in market access for all

products

Framework modalitiesFramework modalitiesFramework modalitiesFramework modalitiesFramework modalitiesFramework modalitiesFramework modalitiesFramework modalities

Tariff reduction Tariff reduction Tariff reduction Tariff reduction ---- Tiered formulaTiered formulaTiered formulaTiered formula

3

Thresholds and type of tariff reductions to be negotiated

1

2

Tariff cap? 4 bands for tariff cuts -agreed at Hong Kong

35

Average reduction: 54%.

Flexibilities in the band A of between 20-45%

More flexibility in each band: some tariff could be cut more deeply to allow others to be reduced less in the same band

Average reduction: 36%

Other

85-90%60+75%75+60%90+45%70+42%80+D

75-85%40-6065%50-7550%60-9037%50-7035%50-80C

65-75%20-4055%20-5045%30-6031%20-5030%20-50B

55-65%0-2045%0-2035%0-3027%0-2023%0-20A

cutsLevelscutsLevelscutsLevelscutsLevelscutsLevels

USG-20ECG-10ACPBands

Tariff Reductions Proposals:Tariff Reductions Proposals:

Developed Country MembersDeveloped Country Members

36

Maximum average cut: 36%.

Maximum average cut: 24%

Low ceiling bindings

Other

60+40%130+40%130+100+30%150+4

40-6035%80-13035%80-13070-10025%100-1503

20-4030%30-8030%30-8030-7020%50-1002

slightly less than cuts for developed countries

0-2025%0-3025%0-300-3015%0-501

cutsLevelscutsLevelscutsLevelscutsLevelscutsLevels

USG-20ECG-10ACPBands

Tariff Reductions Proposals:Tariff Reductions Proposals:

Developing Country MembersDeveloping Country Members

37

Sensitive productsSensitive productsSensitive productsSensitive productsSensitive productsSensitive productsSensitive productsSensitive products

Number of sensitive tariff lines - to be negotiated

Substantial improvement will apply to each

product

1

2

3

Base for tariff quota expansion criteria to be

developed4

Tariff quota commitment + tariff reduction

38

Tariff Quota Fill Tariff Quota Fill Tariff Quota Fill Tariff Quota Fill Tariff Quota Fill Tariff Quota Fill Tariff Quota Fill Tariff Quota Fill -------- 20022002200220022002200220022002

Data for Barbados are for 2000.

0102030405060708090

100

EC US

Japa

n

Thail

and

Barb

ados

Mor

occo

Colo

mbi

a

91 54 20 23 36 67 67

Numer of tariff quotas

Av

era

ge

fill ra

te (

%)

39

Special Products and SSMSpecial Products and SSMSpecial Products and SSMSpecial Products and SSMSpecial Products and SSMSpecial Products and SSMSpecial Products and SSMSpecial Products and SSM

Special Products

Selection: appropriate number

Treatment: more flexible treatment

Special Safeguard Mechanism

Selection

Trigger

Remedy

Duration

40

LDCs:

Access to all S&D provisions

No reduction commitments

Developed Members, and developing country Members in a position to do

so, should provide duty-free and quota-free access for LDCs

Concerns of recently acceded Members - to be addressed

Other flexibilitiesOther flexibilitiesOther flexibilitiesOther flexibilitiesOther flexibilitiesOther flexibilitiesOther flexibilitiesOther flexibilities

Duty-free quota-free access for at least 97% of products

from LDCs - agreed at Hong Kong

41

Preferential Schemes Preferential Schemes Preferential Schemes Preferential Schemes Preferential Schemes Preferential Schemes Preferential Schemes Preferential Schemes

Para. 16 of TN/AG/W/1/Rev.1Para. 16 of TN/AG/W/1/Rev.1Para. 16 of TN/AG/W/1/Rev.1Para. 16 of TN/AG/W/1/Rev.1Para. 16 of TN/AG/W/1/Rev.1Para. 16 of TN/AG/W/1/Rev.1Para. 16 of TN/AG/W/1/Rev.1Para. 16 of TN/AG/W/1/Rev.1

Maintain, to the maximum extent technically feasible, the nominal margins of tariff preferences

Exception to the tariff reduction modality:

- Longer implementation (by the preference-granting Members) of tariff reductions affecting long-standing preferences in respect of products which are of vital export importance for developing country beneficiaries

- First instalment of the reduction deferred to year [3] of implementation

Products concerned - to account for at least [20] per cent of the total merchandise exports of any beneficiary

Interested beneficiaries to notify the Committee on Agriculture, Special Session and submit relevant statistics

In-quota duties for these products - to be eliminated

Preference-providing Members to undertake targeted technical assistance to support preference-receiving countries in efforts to diversify their economies and exports

42

Other elementsOther elementsOther elementsOther elementsOther elementsOther elementsOther elementsOther elements

Reduction/elimination of in-quota tariffs

Improvements in TQ administration

Tariff escalation to be addressed

Tariff simplification, special agricultural safeguard

(SSG) remain under negotiation

43

S&DS&DS&DS&DS&DS&DS&DS&D

Lesser tariff reduction or TQ expansion commitments

Flexibility to designate Special Products to address food security, livelihood security & rural development needs

Special Products eligible for more flexible treatment

1

2

3

Special Safeguard Mechanism (SSM)4

5Fullest liberalization of trade in tropical and diversification

products to be addressed

Erosion of trade preferences - to be addressed (reference -paragraph 16 of TN/AG/W/1/Rev.1)

6

44

44-48.7%130+66-73%75+4

42.7%80-13064%50-753

38%30-8057%20-502

33.3%0-3050%0-201

cutsLevelscutsLevels

Developing cuts in 8 instalments

(Average cut 36%)

Developed cuts in 5 instalments (Average cut - 54%)

Bands

Tariff Reduction Proposal: Chairman Crawford Tariff Reduction Proposal: Chairman Crawford

TN/AG/W/4/Rev.2; 19 May 2008TN/AG/W/4/Rev.2; 19 May 2008

45

Other Market Access Issues Other Market Access Issues

ChairChairs Draft Modalitiess Draft Modalities

Sensitive Products

Number: [4] [6] per cent of [dutiable] tariff lines or [6]

[8] per cent where over 30 per cent of the developed-

country tariff lines are in the top band or where tariff

concessions have been scheduled at the 6 digit level

Developing countries can designate one-third more of

tariff lines as sensitive

Treatment: , or deviation from envisaged normal

cuts. Thus if developed countries have to reduce their

tariffs by 66%, the resulting cuts would be 44%, 33%

and 22%, respectively.

46



Tariff Quota Expansion

Where deviation is used, the TQ shall result in new access

opportunities equivalent to no less than [4] [6] per cent of domestic

consumption

Where or deviation is used, the TQ shall result in new access

opportunities equivalent to no less than [3.5][5.5] and [3][5] per cent

of domestic consumption, respectively

Members can choose to designate more sensitive products (by 2

percentage points 6% or 8%). In that event, additional access of

0.5% of domestic consumption has to be granted

Where a Member has more than 4% of its tariff lines in excess of

100%, it shall, for all its sensitive products, apply a further expansion

of [0.5%] of domestic consumption

Tariff Simplification Bound in-quota tariffs and TQ administration

strengthened disciplines

47



Special Products

Minimum entitlement of 8 per cent of tariff lines / a maximum

entitlement of 20 per cent

If maximum entitlement is 20%, then 8% would be minimum

and not subjected to the agreed indicators food security,

livelihood security and rural development

Eligibility for no cuts two options 40% of the designated

products (8% out of the maximum 20%) or no exemption at all

Treatment for remaining tariff lines

A minimum cut of 12% and a maximum cut of 20% of each

tariff line

Overall average cut should be 15%

SVEs and RAMs Flexible treatment

48



Special Agricultural Safeguard (SSG)

Developed-country Members not to have the right to use

SSG

Reduction to 1.5% of scheduled tariff lines the number

of tariff lines eligible for SSG

Developing countries - to be reduced to no more than 3

per cent

Terms and conditions of the SSG to remain unchanged

from the URAA terms and conditions. However, tariff

rates to be updated to reflect Doha outcome

49



Special Safeguard Mechanism (SSM): To be available

for all products in principle. However, not to be invoked

for more than [3][8] products in any given 12-month period

TRIGGERS: Both price and volume-based SSM will be

available. The two may not be imposed at the same time.

Neither can any one of them be imposed in respect of a

product which is the subject of a safeguard measure,

including under Art 5 of the AoA, an anti-dumping or

countervailing measure

Detailed rules on volume and price triggers and their

remedies

50

TROPICAL PRODUCTS TROPICAL PRODUCTS Annex GAnnex G

Deeper tariff cuts

[Where the scheduled tariff is less or equal to 25% ad valorem, it

shall be reduced to zero

[Where the scheduled tariff is greater than 25% ad valorem, the applicable tariff cut shall be 85%]

[Where the scheduled tariff is greater than or equal to 10%, theapplicable tariff cut shall be [66][73]%], except for tariffs in the top band, which shall be reduced by the tariff escalation tariff cut for that band increased by 2%

[Where the scheduled tariff is less than 10%, it shall be reduced to zero]

[Tropical products shall not be designated as sensitive]

[Implementation by developed-country members in 4 equal

instalments]

Developing countries in a position to do encouraged to do more

51

PREFERENCE EROSION PREFERENCE EROSION Annex HAnnex H

[No tariff cuts on the items listed in Annex for 10 years

Tariff cuts to be implemented thereafter over 5 years in equal

instalments]

[Where a product is listed in the Annex and the ff conditions are

met, the implementation period will be 10 years (8+2)

[the pre-Doha MFN tariff is greater than 10% ad valorem]

[the total value of trade over a 3 year representative period is

greater than $50,000 or constitutes [3]% of the long standing

preference-receiving countrys total agricultural trade to the market

concerned]

[there is unlimited long-standing preference eligibility in the market concerned]

Provisions to prevail where there is overlap with provisions on

tariff escalation / tropical products

Targeted technical assistance

52

TARIFF ESCALATIONTARIFF ESCALATION

[Tariffs on processed products to be reduced more steeply. Instead of

taking the cut that would otherwise apply to final bound tariffs in the band

to which the processed product belongs (with the exception of the top

band), the processed product shall take the cut applicable to tariffs that

fall in the next highest band

[Products falling in the top band to be reduced by a cut that would

otherwise have been applicable according to the tiered formula

increased by 6 ad valorem points]

Supplementary cuts to be moderated in two situations: First, where the

absolute difference between the processed and primary product after the

application of the normal tariff formula would be 5 ad valorem

percentage points or less in any given tier except the bottom tier no

additional tariff escalation adjustment to be required

Second, the application of adjustment formula should not lead to a

higher tariff on the primary product than the processed product

53

COMMODITIESCOMMODITIES

Where problems persist after the application of the formula,

including the tariff escalation adjustment formula, Members

are to engage with commodity-dependent producing

countries to ensure satisfactory solutions

Identification of products for the purpose of applying the tariff

escalation formula specific targets; non-ad valorem duties

to be converted and bound

Elimination of NTBs

Joint action intergovernmental commodity agreements etc

54

LDCSLDCS

LDCs: No reduction commitments

DFQF 100% : By 2008 or the start of the

implementation period; where there are

difficulties, 97% at the beginning to be

increased gradually to 100%

Developing countries in a position to do so

encouraged to grant DFQF phase in of

commitments

Cotton Market Access: DFQF for LDCs

55

SVEsSVEs

The term SVEs to apply to Members with economies that, in the period 1999 to 2004, had an average share of: World merchandise trade of no more than 0.16% or less

World trade in non-agricultural products of no more than 0.1%

World trade in agricultural products of no more than 0.4%

SVEs could moderate the two-thirds cut by developing countries by a further 10 ad-valorem points in each band

Flexibility in the designation of special products SVEscan deviate from the tiered formula cut for as many tariff lines as they choose to designate as SPs provided they meet the overall average cut of 24%

Products designated as SPs need not be subject to a minimum tariff cut nor designation be guided by the indicators

56

RAMsRAMs

Entitled to moderate tariff cuts in the top 2 bands by 10 ad-valorempercentage points and by 5 ad valorem percentage points in the bottom two bands

Saudi Arabia, Macedonia, Vietnam and Tonga exempted from undertaking cuts

For other RAMs, where there is an overlap between accession commitments and commitments associated with modalities, the start of the IP shall be one year after the end of the accessioncommitment

Implementation period shall be 10 years (8+2)

Flexibility in the designation of special products one tenth greater than the amount to be designated by developing countries. Relevant cust for the designated tariff lines may be further reduced by 2 ad-valorem points

Domestic Domestic

SupportSupport

58

Domestic Support Domestic Support Domestic Support Domestic Support Domestic Support Domestic Support Domestic Support Domestic Support -------- OutlineOutlineOutlineOutlineOutlineOutlineOutlineOutline

Current disciplines

Green Box

Blue Box

Article 6.2 Development Programmes

Amber Box


59

The BoxesThe BoxesThe BoxesThe BoxesThe BoxesThe BoxesThe BoxesThe Boxes

Green Box Annex 2

No more than minimally trade or production distorting

Blue Box Article 6.5

Production-limiting programmes

Article 6.2 Measures

Development programmes: investment, input, diversification

Amber Box

Subject to reduction commitments

De minimis allowance

60

How much domestic support?How much domestic support?How much domestic support?How much domestic support?How much domestic support?How much domestic support?How much domestic support?How much domestic support?

0

50

100

150

200

250

300U

S$

Bil

lio

n

Canada 3.0 3.0

Norway 3.3 2.5

Brazil 5.5 2.8

Switzerland-Liecht. 5.9 3.8

Korea 8.3 6.5

Japan 69.6 26.7

US 60.8 72.1

EC 116.9 75.6

1995 2001


61

0

15,000

30,000

45,000

60,000

75,000

90,000

Current Total AMS 35,151 14,413 5,328 1,495 1,632 0 1,187 1,791

De minimis 773 7,045 257 463 - 976 - 164

Blue Box 21,231 - 728 - - - 813 -

Article 6.2 - - - 45 - 332 - -

Green Box 18,489 50,672 20,355 4,469 2,190 1,462 480 1,088

EC US JPN KOR CHE BRA NOR CAN

Categories of support - 2001M

illio

n U

S$


62

Green BoxGreen BoxGreen BoxGreen BoxGreen BoxGreen BoxGreen BoxGreen Box

No, or at most minimal, trade-distorting effects or effects on production

Assistance:

- Provided through publicly funded government programme

- Not involving transfers from consumers

- Not resulting in price support to producers

Basic criteria

63

Green Box Green Box Green Box Green Box Green Box Green Box Green Box Green Box ScopeScopeScopeScopeScopeScopeScopeScope

General services, including:

research

pest and disease control

training

extension/advisory services

inspection

marketing and promotion

infrastructural services

Public stockholding for food security purposes

Domestic food aid

Direct payments, including:

decoupled income support

income insurance and income safety-net

relief from natural disasters

structural adjustment assistance

producer retirement

resource retirement

investment aids

environmental programmes

regional assistance programmes

64

Policy-specific decoupling

Amount of payments

X

X

Type of production

Volume of production

Domestic prices

International prices

Factors of production

In any year after the

base period

65

Blue BoxBlue BoxBlue BoxBlue BoxBlue BoxBlue BoxBlue BoxBlue Box

based on fixed area and yields; or

made on 85% of base level of production; or

livestock payments are made on a fixed number of head

Direct payments under

production-limiting programmes exempt from reduction if:

66

Article 6.2Article 6.2Article 6.2Article 6.2Article 6.2Article 6.2Article 6.2Article 6.2

Development programmes exempt from reduction:

investment subsidies generally available to agriculture

input subsidies generally available to low-income or resource poor producers

support to encourage diversification from growing illicit narcotic crops

67

Amber BoxAmber BoxAmber BoxAmber BoxAmber BoxAmber BoxAmber BoxAmber BoxSample Scheduled Reduction Commitment

Schedule LXXIX - THAILAND

PART IV - AGRICULTURAL PRODUCTS: COMMITMENTS LIMITING SUBSIDIZATION

(Article 3 of the Agreement on Agriculture)

SECTION I - Domestic Support: Total AMS Commitments

BASE TOTAL AMS Years of implementation Annual and final bound Relevant Supporting Tables and

(million Baht) 1995 - 2004 commitment levels document reference

(million Baht)

1 2 3

22,126.18 1 21,816.41 AGST/THA

2 21,506.64 Supporting Tables 4, 5, 8 and 9

3 21,196.87

4 20,887.10

5 20,577.33

6 20,267.56

7 19,957.79

8 19,648.02

9 19,338.25

10 19,028.48

What if there is no commitment? - Article 7

68

AMS Reduction CommitmentAMS Reduction CommitmentAMS Reduction CommitmentAMS Reduction CommitmentAMS Reduction CommitmentAMS Reduction CommitmentAMS Reduction CommitmentAMS Reduction Commitment



6 years 1995-2000

10 years 1995-2004

Cut in Total AMS -20% -13.3%

De minimis allowance

5% 10%

% cut in aggregate terms


69

EC and the CAP ReformEC and the CAP ReformEC and the CAP ReformEC and the CAP ReformEC and the CAP ReformEC and the CAP ReformEC and the CAP ReformEC and the CAP Reform

0

20

40

60

80

Green 18.8 22.1 18.2 19.2 21.9 21.8 20.7 20.4 22.1

Blue 20.8 21.5 20.4 20.5 19.8 22.2 23.7 24.7 24.8

Amber 50.0 51.0 50.2 46.7 47.9 43.7 39.3 28.5 30.9

WTO limit 78.7 76.4 74.1 71.8 69.5 67.2 67.2 67.2 67.2

1995 1996 1997 1998 1999 2000 2001 2002 2003*

Eu

ros

Bil

lio

n

* This notification covers support to the European Union after enlargement on 1 May 2004. Price gap calculations are performed on EU25 production levels for a 12 month period and include direct payments to 25 member States. Total AMS commitment level for 2003 (67,159 million) is without prejudice to the EC25 commitment to be presented in the new EC25 schedule after enlargement.

70

US and the Farm BillUS and the Farm BillUS and the Farm BillUS and the Farm BillUS and the Farm BillUS and the Farm BillUS and the Farm BillUS and the Farm Bill

0

10

20

30

40

50

60

Green 46 51.8 51.3 49.8 49.7 50 50.1

Blue 7 0 0 0 0 0 0

De minimis 1.6 1.2 0.8 4.8 7.4 7.3 7

Amber 6.2 5.9 6.2 10.4 16.9 16.8 14.4

WTO limit 23.1 22.3 21.5 20.7 19.9 19.1 19.1

1995 1996 1997 1998 1999 2000 2001

US

$ B

illi

on

71

Calculating the Current Total AMSCalculating the Current Total AMSCalculating the Current Total AMSCalculating the Current Total AMSCalculating the Current Total AMSCalculating the Current Total AMSCalculating the Current Total AMSCalculating the Current Total AMS

Non-product-specific support

Market price supportNon-exempt direct payments(e.g. loan deficiency payments, grants, compensatory payments)Other non-exempt measuresAll product-specific EMS

Water subsidiesFertilizer subsidiesCrop insuranceSubsidized credits

Product-specific support

+

Current Total AMSCurrent Total AMS

De minimis

allowance

72


substantial reductions in trade-distorting domestic support



The Boxes

S&D elements

73

Green Box

Cap/reduce or maintain without limits

Tighten or relax criteria

Expand scope to address: NTCs, developing country concerns

Blue Box should it stay or should it go?

Article 6.2 further flexibilities to pursue targeted development needs

Amber Box

Reduce or eliminate AMS

Maintain, reduce or increase de minimis

Establish specific flexibilities (S&D, economies in transition, recently acceded Members)

The Boxes The Boxes The Boxes The Boxes The Boxes The Boxes The Boxes The Boxes Main issuesMain issuesMain issuesMain issuesMain issuesMain issuesMain issuesMain issues

Key issue - Size of cuts

74

Framework modalities Framework modalities Framework modalities Framework modalities Framework modalities Framework modalities Framework modalities Framework modalities --------

Overall tradeOverall tradeOverall tradeOverall tradeOverall tradeOverall tradeOverall tradeOverall trade--------distorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic support

Final Bound Total AMS

+

Permitted de minimis (half product specific and other half non-product specific)

+

Agreed Blue Box level

Tiered formula, withTiered formula, with 20% 20% downpaymentdownpayment

inin the the firstfirst year of year of implementationimplementation

Overall reduction Base level

Deeper cuts for higher levels of support

75

OTDS OTDS OTDS OTDS OTDS OTDS OTDS OTDS -------- Proposals and main issuesProposals and main issuesProposals and main issuesProposals and main issuesProposals and main issuesProposals and main issuesProposals and main issuesProposals and main issues

45%65%75%G10

70%75%80%G20

31%53%75%US

50%60%70%EC

Tier 3 (Other Members with

Total AMS)

Tier 2 (Japan and US)

Tier 1 (EC)Membersproposals

Main issue - Size of cuts

Developing country Members (all in tier 3) to make lesser reductions over a longer implementation period.

76

Framework modalities Framework modalities Framework modalities Framework modalities Framework modalities Framework modalities Framework modalities Framework modalities

TradeTradeTradeTradeTradeTradeTradeTrade--------distorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic support

Final Bound Total AMS tiered formula

Product-specific AMS caps

- average level to be agreed

- base period to be agreed

Reduction in de minimis

Capping of the Blue Box

Individual elements

77

Final Bound Total AMS Final Bound Total AMS Final Bound Total AMS Final Bound Total AMS Final Bound Total AMS Final Bound Total AMS Final Bound Total AMS Final Bound Total AMS

Proposals and main issuesProposals and main issuesProposals and main issuesProposals and main issuesProposals and main issuesProposals and main issuesProposals and main issuesProposals and main issues

40%60%70%G10

60%70%80%G20

37%60%83%US

50%60%70%EC

Tier 3 (Other Members)

Tier 2 (Japan and US)

Tier 1 (EC)Membersproposals

Main issues:- Size of cuts in Final Bound Total AMS- Base period for product-specific AMS caps (1999-2001 or 1995-2000)

Developing country Members (all in tier 3) to make lesser reductions over a longer implementation period.

78

Hong Kong Ministerial DeclarationHong Kong Ministerial DeclarationHong Kong Ministerial DeclarationHong Kong Ministerial DeclarationHong Kong Ministerial DeclarationHong Kong Ministerial DeclarationHong Kong Ministerial DeclarationHong Kong Ministerial Declaration

TradeTradeTradeTradeTradeTradeTradeTrade--------distorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic supportdistorting domestic support

Developed country Members in lower bands with high relative level of

Final Bound Total AMS to make an additional effort

Developing country Members with no AMS commitments exempt from

reductions in de minimis and the overall cut

Bands for reductionsMember withhighest level ofsupport

Members with2nd and 3rdhighest levels ofsupport

Other Members

Higher linear cuts in higher bands

79

De minimisDe minimisDe minimisDe minimisDe minimisDe minimisDe minimisDe minimis

Reduction in de minimis (by 50% or 80% or such reduction as to adjust

to the rate of cut in OTDS)

S&D: Developing countries that allocate almost all de minimis support

for subsistence and resource-poor farmers will be exempt from reduction


Use of de minimis - 2001

0.0

1.0

2.0

3.0

4.0

EC US JPN KOR CHE BRA NOR

% o

f valu

e o

f agricultura

l

pro

duction

Product-specific Non-product-specific

80

Blue BoxBlue BoxBlue BoxBlue BoxBlue BoxBlue BoxBlue BoxBlue Box

Direct payments under:

- production-limiting programmes or

- no requirement to produce

- additional criteria to be negotiated

Blue Box not to exceed 5% of a Members average total value of agricultural

production during an historical period

21,231 mln $

813 mln $

728 mln $

Blue Box - 2001

0

5

10

15

20

25

30

35

40

EC US JPN NOR

% o

f valu

e o

f ag

ricu

ltu

ral

pro

du

cti

on

0 mln $5% cap

81

Blue BoxBlue BoxBlue BoxBlue BoxBlue BoxBlue BoxBlue BoxBlue Box -------- PPPPPPPProposals and main issuesroposals and main issuesroposals and main issuesroposals and main issuesroposals and main issuesroposals and main issuesroposals and main issuesroposals and main issues

Main issues:- how to ensure less trade-distortion- how to design effective disciplines on old and new Blue Box

Lower the Blue Box cap 2.5% of VOP (or less)

Develop additional criteria:

- non-concentration via double trigger

- offsetting mechanism

- other?

82

Green BoxGreen BoxGreen BoxGreen BoxGreen BoxGreen BoxGreen BoxGreen Box

Review and clarify criteria

Ensure basic concepts, principles and effectiveness remain; take

due account of non-trade concerns

Strengthen monitoring and surveillance

Data for Korea for the year 2000.

Green Box expenditure - 2001

0

10,000

20,000

30,000

40,000

50,000

60,000

EC US JPN KOR CHE BRA NOR CAN

US$ m

illion

Main issue: what amendments should be made, if any

83


CottonCottonCottonCottonCottonCottonCottonCotton

All forms of export subsidies to be eliminated by developed countries in 2006

Developed countries to give duty and quota free access for cotton exports from LDCs

from the start of implementation period

Trade-distorting domestic subsidies to be reduced more ambitiously and implemented

over a shorter period of time than generally applicable

Development assistance aspects:

- Consultative Framework process (bilateral donors, multilateral and regional institutions)

- explore a possibility of establishing a mechanism to address income declines in the

cotton sector

- Director General to furnish a third Period Report at the next Ministerial Conference

Follow-up and monitoring Director General to set up an appropriate mechanism

High-Level Session of the Director-Generals Consultative Framework

Mechanism on Cotton to take place on 15-16 March 2007 in Geneva

84


1

Lower reduction coefficients for all types of trade-distorting support

Longer implementation period

Access to Article 6.2 Development programmes

2

3

4De minimis support for subsistence and resource-poor farmers exempt from reduction

85

ChairmanChairmans Draft Modalitiess Draft Modalities--

TN/AG/W/4/Rev.2TN/AG/W/4/Rev.2

Base overall trade-distorting domestic support (OTDS) shall be the sum of:

(i) final bound total AMS;

(ii) 10% of value of production in the 1995-2000 base period representing 5% for product-specific support and 5% for non-product specific support; for developing countries 10% each: base period either 1995-2000 or

1995-2004

(iii) the higher of average Blue Box payments or 5% of the average total value of production (1995-2000)

Thus for some developed countries, the base level would be Amber box commitment plus 15% of production

86

ChairChairs Proposed Draft s Proposed Draft

Modalities Modalities -- OTDSOTDS

[50] [60] % $10 billion3 Others Developed and Developing

[66] [73] %$10 billion and 60 billion

2 US and Japan

[75] [85] % $60 billion1 - EC

Proposed CutsRangeBands

87

DOMESTIC SUPPORTDOMESTIC SUPPORTChairChairs Draft Modalitiess Draft Modalities

Under the Chairmans proposal, US OTDS will be reduced from $48.2 billion to between $13 and $16.4 billion. Under its own proposal, it will be reduced to $22.5 billion

According to the recent notification by the US, its payments on OTDS amounted to $ 16.3 billion in 2002, $10.2 billion in 2003, $18.1 billion in 2004 and $18.9 billion in 2005

Estimated that because of high commodity prices last year, the US payments on OTDS amounted to $11 billion. Figure not confirmed by the US

88


The ECs current ceiling is estimated at 110.3 billion ($152 billion). Cut will bring the ceiling down to 27.6 billion or 16.5 billion

Japan expected to do more, as its overall support is more than 40 per cent of the total value of its agricultural production a cut halfway between the cuts of the top and the second tiers

89


Implementation period and staging: Developed countries: six steps over 5 years. For the EC, US and

Japan, the base OTDS will be reduced by one-third on the first day of implementation and the remainder to be reduced in five equal instalments

For developed Members in the third tier, the base OTDS will be reduced by 25 per cent on the first day of implementation and the remainder to be reduced in five equal instalments

Developing countries with no Final Bound Total AMS commitments exempted from undertaking reduction commitments with respect to their base OTDS. Those with AMS commitments will undertake two-thirds of the reduction made by developed countries

Reductions by developing countries shall be implemented in nine steps over 8 years. The base OTDS shall be reduced by 20 per cent on the first day of implementation and the remainder in eight equal instalments

RAMs which recently acceded exempted, so also are small low-income RAMs with economies-in-transition. For other RAMs, treatment comparable to that of other developing countries two-thirds cut and a transitional period of 8 years

90

ChairChairs Proposed Draft s Proposed Draft

Modalities Modalities -- AMSAMS

[45] %$15 billion3

[60] %$15 billion and 40 billion

2

[70] % $40 billion1

Proposed CutsRangeBands

91

Domestic SupportDomestic SupportChairmanChairmans proposalss proposals

Under the Chairmans proposal, the amber box limit of the EC will be reduced from 67.1 billion ($92.5 billion) to 20.1 billion

The amber box limit of the US will be reduced from $19.1 billion to $7.6 billion

Developed countries whose Amber Box support is more than 40% of the value of their agricultural production to make a bigger cut, i.e. a cut halfway between the cut of their tier and the tier above

According to figures provided by the US, AMS payments for 2002, 2003, 2004 and 2005 were $9.6 billion, $6.9 billion, $11.6 billion and 12.9 billion, respectively.

Brazil and Canada are alleging in the dispute settlement proceedings that the US exceeded its WTO limits for most of these years, a claim the US denies.

92

Domestic SupportDomestic SupportChairmanChairmans proposalss proposals

Implementation period and staging:

The EC, US and Japan to cut 25% from the start. All other cuts to be made over 5 years in 5 equal instalments

For other developed countries, reductions to be implemented in six equal instalments over 5 years, commencing on the 1st day of implementation

Developing countries expected to reduce their support by two-thirds of the formula cut. Implementation in nine equal instalments over 8 years, commencing on the 1st

day of implementation

RAMs which recently acceded exempted from cuts, so also are small low-income RAMs with economies-in-transition. Some allowed to exclude investment subsidies from Amber Box calculations. Other RAMs to make two-thirds of the normal cut

93

Domestic SupportDomestic Support

PRODUCT-SPECIFIC AMS CAPS average applied during the UR implementation period (1995-2000)

For the US average between 1995-2004 and 1995-2000

S&D for developing countries base period (1995-2000 or

1995-2004)

DE MINIMIS: to be reduced by [50] [60] per cent by developed

countries i.e. cap at 2.5 or 2 per cent of the value of

production

S&D for developing countries: some exempted, others to make

two-thirds of the cuts of developed countries

BLUE BOX: maximum permitted value not to exceed 2.5 per

cent of the average total value of agricultural production

Lesser cut if over 40% of Members support placed in the blue

box

Deeper cut in AMS support for cotton

Export Competition and Export Competition and

the Marrakesh NFIDC the Marrakesh NFIDC

DecisionDecision

95

Export Competition Export Competition Export Competition Export Competition Export Competition Export Competition Export Competition Export Competition -------- OutlineOutlineOutlineOutlineOutlineOutlineOutlineOutline

Current disciplines

Export subsidies

Anti-circumvention

Export prohibitions and restrictions


The Marrakesh NFIDC Decision

96

Export SubsidiesExport SubsidiesExport SubsidiesExport SubsidiesExport SubsidiesExport SubsidiesExport SubsidiesExport Subsidies

Article 1(e): Subsidies contingent upon export performance, including

the export subsidies listed in Article 9

Definition

Legal Framework

Export subsidies allowed only if listed in the Schedule and subject to

reduction commitments (volume and budgetary outlays)

Roll-over provisions (now expired)

S&D: subsidies for marketing and internal transport (during the

implementation period)

Anti-circumvention provisions

97

Policy Coverage Policy Coverage Policy Coverage Policy Coverage Policy Coverage Policy Coverage Policy Coverage Policy Coverage -------- Article 9.1Article 9.1Article 9.1Article 9.1Article 9.1Article 9.1Article 9.1Article 9.1

Direct subsidies contingent on export performance

Sale or disposal for export by governments or their agencies of non-commercial stocks at prices below domestic market price

Payments on exports financed by government action (including producer financed subsidies)

Subsidies to reduce cost of marketing, including handling, upgrading, international transport and freight

Favourable internal transport and freight charges on export shipments

Subsidies on agricultural products contingent on their incorporation in exported products

98

Export SubsidiesExport SubsidiesExport SubsidiesExport SubsidiesExport SubsidiesExport SubsidiesExport SubsidiesExport Subsidies




6 years 1995-2000

10 years 1995-2004

Cut in budgetary outlays

-36% -24%

Cut in subsidized quantities

-21% -14%

99

Members with Scheduled Reduction Members with Scheduled Reduction Members with Scheduled Reduction Members with Scheduled Reduction Members with Scheduled Reduction Members with Scheduled Reduction Members with Scheduled Reduction Members with Scheduled Reduction

CommitmentsCommitmentsCommitmentsCommitmentsCommitmentsCommitmentsCommitmentsCommitments

Number of products

Australia (5)

Bolivarian Republic

of Venezuela (72)

Brazil (16)

Bulgaria (44)

Canada (11)

Colombia (18)

Cyprus (9)

Czech Rep. (16)

EC (20)

Hungary (16)

Iceland (2)

Indonesia (1)

Israel (6)

Mexico (5)

New Zealand (1)

Norway (11)

Panama (1)

Poland (17)

Romania (13)

Slovak Rep. (17)

South Africa (62)

Switzerl-Liecht. (5)

Turkey (44)

United States (13)

Uruguay (3)

100

Export Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy ExpendituresExport Subsidy Expenditures

20002000200020002000200020002000

But what about the Panels?

2,509

550 17

189

45 00

500

1,000

1,500

2,000

2,500

3,000

EC US Japan Korea Switz-Liech. Norway Brazil

US

$ M

illion

101

Export Subsidies

Other forms of export subsidies

Export credits, insurance and guarantees

Develop internationally agreed disciplines

But ... negotiations with no result - OECD Arrangement on Officially Supported Export Credits does not cover agriculture

Food aid Specific criteria, Food Aid Convention, FAO

But ... is it always genuine aid or dumping?

Other ways to evade commitments?- Taxes, production quotas- Domestic support

- Other

Article 10 to prevent circumvention of export

subsidy commitments

102

Export Prohibitions and RestrictionsExport Prohibitions and RestrictionsExport Prohibitions and RestrictionsExport Prohibitions and RestrictionsExport Prohibitions and RestrictionsExport Prohibitions and RestrictionsExport Prohibitions and RestrictionsExport Prohibitions and Restrictions

Article XI.1(a) of GATT provision for the temporary application of an export prohibition or restriction

Article 12 of the AoA when applying GATT Article XI.2(a):

Give due consideration to impacts on importing Members food security

Advance written notice, consultations on request

Not applicable to developing countries which are not net exporters of the specific foodstuff concerned

103


reductions of, with a view to phasing out, all forms of export subsidies



Export subsidies

Export credits, insurance and guarantees

Food aid

Exporting STEs

Export restrictions and taxes

104

Reduce/eliminate export subsidies

Parallel elimination of all forms of export subsidies:

Export credits, insurance and guarantees- Reduction commitments vs. rules-based approach; Disciplines in favour

of LDCs and NFIDCs

Food aid- Genuine aid vs. surplus dumping; Need declaration vs. response to an

appeal; Concessional vs. grant form

State trading enterprises- Tackle the enterprises or specific measures

Export restrictions and taxes- Reduce/eliminate export restrictions; Export taxes not for negotiation?

Key issue End export subsidies at a date certain

Main issuesMain issuesMain issuesMain issuesMain issuesMain issuesMain issuesMain issues

105

Export subsidies

Credible eCredible eCredible eCredible eCredible eCredible eCredible eCredible end date nd date nd date nd date nd date nd date nd date nd date

Parallel elimination of:Parallel elimination of:Parallel elimination of:Parallel elimination of:Parallel elimination of:Parallel elimination of:Parallel elimination of:Parallel elimination of:

Export credits, guarantees & insurance with repayment periods > 180 days

Export credits, guarantees & insurance with repayment periods 180 days which are not in accordance with disciplines to be agreed

Trade-distorting elements of export STEs Food aid that is not in conformity with operationally

effective disciplines to be agreed

Framework modalitiesFramework modalitiesFramework modalitiesFramework modalitiesFramework modalitiesFramework modalitiesFramework modalitiesFramework modalities

Implementation - Annual instalments

106


1

Access to Article 9.4 (marketing & transportation subsidies)

Longer implementation periods

Disciplines on export credits, guarantees or insurance programmes - provision for differential treatment in favour of LDCs and NFIDCs

2

3

4STEs - Special consideration for maintaining monopoly status

107

Parallel elimination of all forms of export subsidies 2013

Substantial part to be eliminated by the end of the first half of the implementation period

Disciplines:

Export credits, insurance and guarantees 180 days- Should be self-financing, reflecting market consistency and of sufficiently

short duration so as not to effectively circumvent real commercially-oriented discipline

Food aid- Safe box for bona fide food aid in emergency situations

- Eliminate commercial displacement via effective disciplines on in-kind food aid, monetization and re-exports

State trading enterprises- Disciplines to also cover future use of monopoly power

Access to Article 9.4 for developing country Members for five years after the end-date for elimination of all forms of export subsidies


108

Elimination of all forms of export subsidies by 2013.

Budgetary outlays- 50% reduction by 2010 and the

rest in equal instalments

Reduction commitments also on quantity of exported

products

S&D for developing countries - 2016

Developing countries to benefit from the provisions of

Article 9.4 until 5 yrs after the end of the

implementation period

Proposed strengthened disciplines on agricultural

exporting STEs and international food aid

Elimination of all forms of export subsidies for cotton

...

Export Competition Chairs Draft ModalitiesTN/AG/W/4/rev1

109

The Marrakesh NFIDC DecisionThe Marrakesh NFIDC DecisionThe Marrakesh NFIDC DecisionThe Marrakesh NFIDC DecisionThe Marrakesh NFIDC DecisionThe Marrakesh NFIDC DecisionThe Marrakesh NFIDC DecisionThe Marrakesh NFIDC Decision

Recognize possible negative effects of reform programme:

availability of adequate food supplies from external sources, on reasonable terms

short-term difficulties in financing normal levels of commercial imports

WTO list of NFIDCs:

Least-developed countries (UN list) plus

Barbados, Bolivarian Republic of Venezuela, Botswana, Cte d'Ivoire, Cuba, Dominica, Dominican Republic, Egypt, Gabon, Honduras, Jamaica, Jordan, Kenya, Mauritius, Mongolia, Morocco, Namibia, Pakistan, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Senegal, Sri Lanka, Trinidad and Tobago, Tunisia

110


Food aid:

review by the Committee on Agriculture

new Food Aid Convention 1999 extended to 30 June 2007

notifications (quantity and concessionality)

Consideration given to requests for assistance to improve agricultural productivity and infrastructure

Export credits (negotiations ongoing)

Short-term difficulties in financing commercial imports of basic foodstuffs - access to resources of international financial institutions, e.g. IMF and the World Bank

111


Inter-agency Panel of finance and commodity experts from IMF, World Bank, FAO, IGC, WTO

explore ways for improving access to multilateral programs and facilities to assist with short-term difficulties in financing normal levels of commercial imports of basic foodstuffs

Discussions in the Committee on Agriculture

concept and feasibility of proposal to establish an ex-ante financing mechanism

May 2003 - Round-table of experts to:

explore the need for a safety net

identify appropriate mechanisms

Recommendations for the IFIs and the Committee on Agriculture

introduction to the agreement on agriculture and to the ... subsidies and trade 210 378 166 21 0 100...

Documents