RESTRICTED
WORLD TRADE G/TRIMS/W/5
23December 1996
ORGANIZATION(96-5433)
Original: Spanish Committee onTrade-Related Investment Measures
REPLIES TOQUESTIONS ONCOLOMBIA 'SNOTIFICATION
(G/TRIMS/N/1/COL/2)
Reproduced below areanswers provided bythedelegation ofColombia atthemeeting of
30September 1996 toquestions raised byseveral delegations onthemeasures notified byColombia
indocument G/TRIMS/N/1/COL/2.
_______________
I. CHRONOLOGY OFTHE TRIM (New Zealand, Japan, United States)
In1988, Law81established thepolicy ofabsorption ofdomestic production asarequirement
fortheauthorization ofimports. Thiswastaken upbyDecree 501of1989andsubsequently byLaw101
ofDecember 1993 andDecree 1279 ofJune1994. Thelatter twotextsconstitute thecurrent legal
basis fortheapplication oftheagricultural production absorption policy. Itisimportant tonotethat
onpage1,point 2,ofdocument G/TRIMS/N/1/COL/2, thereference to"Law 101of1994" should
read"Law 101of1993", asindicated intheother references tothatlaw.
II. TRIM VS. TARIFFICATION FOR AGRICULTURAL PRODUCTS (United States,
NewZealand, Argentina)
Colombia 'sabsorption policy forcertain agricultural products isamechanism weuseasan
alternative tothetariff ceilings bound intheUruguay Round. AsmaybeseeninAnnex 1,thetariffs
actually applied aresignificantly lower thanthebound ones, which reflect thetariffication process.
Thisclearly shows thatColombia isbynomeans making useoftwoprerogatives.
TheNational Government opted fortheabsorption policy onthegrounds thatitismoreeffective
forachieving national objectives andatthesame timelessrestrictive forinternational trade thanthe
application ofthebound ceilings. Itssmall impact oninternational tradewasdemonstrated bytheimport
flows in1995, which show thatinmostcases themarket access commitments were amply fulfilled.
TheNational Government willmake fulluseofthetime-periods established fordeveloping
countries. Itisstudying thepossibility oftransforming theabsorption policy intoSectoral
Competitiveness Agreements.
Thepossibility ofusing these instruments asalternatives stems bothfrom theAgreement on
Agriculture andfrom theTRIMs Agreement, forthefollowing reasons:
- Theabsorption ofdomestic harvests isamechanism bymeans ofwhich theimportation
ofcertain products isdependent onthepurchase ofproducts ofdomestic origin, and
insome cases, depending onthepurchase price oftheproduct, theimporter becomes
entitled toatariff reduction ontheimported product. Thismechanism corresponds
todefinition 1(a)oftheIllustrative Listannexed totheTRIMs Agreement;G/TRIMS/W/5
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- Article 5.1oftheTRIMs Agreement allows developing countries aperiod offiveyears
fordismantling these measures; and
- Article 4.2oftheAgreement onAgriculture, while prohibiting members from
maintaining orintroducing some types ofmeasure, permits themtoadopt ormaintain
measures under general provisions notspecifically relating toagriculture, stemming
from theGATT orMultilateral Trade Agreements, ofwhich theTRIMs Agreement
isone.
III. ADMINISTRATION OFTHE TRIM (United States, Japan)
Thismeasure isadministered bymeans oftheissuance ofanauthorization (vistobueno )granted
bytheMinistry ofAgriculture toanynatural orlegal person absorbing domestic production.
Consequently, theauthorization granted bytheMinistry isaprerequisite forimporting theproducts
covered bythispolicy regardless ofthevolume tobeimported. Likewise, theapplicable tariffisuniform
regardless ofthevolume tobeimported, andhence inallcases theactual tariff issignificantly below
thebound tariff. Areduction isapplied totheuniform tariff when theprice paidbytheprocessor
tothedomestic producer ishigher thantheinternational price atwhich hewould havehadtoimport
intheabsence ofdomestic production.
Asstated inthenotification, thispolicy doesnotinclude anyexport requirement.
Implementation ofthispolicy ismonitored bysworn declarations relating tocompliance with
absorption andaselective external audit ofconsumption byindustry.
IV. COVERAGE (Japan)
Theabsorption policy isdesigned toensure thepurchase ofdomestic products anddoesnot
always involve theadoption ofanagreement between producers andprocessors. Agreements have
beensigned onlyforgrain sorghum, maize, barley, wheat andoilseeds.
Theproducts listed inAnnex 2comprise theproducts which mayonlybeimported subject
toauthorization granted inaccordance withtheproper implementation oftheabsorption policy. The
above-mentioned Annex alsoindicates theproducts forwhich absorption agreements havebeensigned.
V. VOLUME AND PRICE (Japan)
Theprice atwhich domestic production must beabsorbed iscalculated onthebasis of
international prices forthatproduct situated inColombia. Iftheabsorption priceofthedomestic product
ishigher thantheworld price, specific tariffdiscounts aregranted forimports equivalent tothedomestic
production absorbed.
Inthecaseoftheagreements, theprices aredetermined atthebeginning ofeachagricultural
half-year.
Toestablish thevolume ofthedomestic harvest, anestimate ismade atthestartofthe
agricultural half-year taking intoaccount theneeds ofdomestic industry, apparent domestic consumption
andprevious domestic production. Attheendofthehalfyear, theamount purchased bytheindustry
concerned isevaluated bymeans ofadetailed analysis ofthevarious agricultural regions.G/TRIMS/W/5
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ANNEX 1
COLOMBIA
Bound andApplied Tariffs forProducts Covered bytheDomestic Production Absorption Policy
Heading
No.1Product description Absorption
requirementAbsorption
agreementRateofduty Applied tariff
Basic Bound 1995 19962
% % % %
1 2 3 4 5 6
0207 Meat andedible offalofthepoultry of
Heading 0105, fresh, chilled orfrozen X 126 113 32 29
1001 Wheat andmeslin X X 138 124 9 3
1003 Barley X X 160 144 9 4
1005 Maize X X 277 194 17 5
1006 Rice X 210 189 27 12
1007 Grain sorghum X 147 132 14 4
1101 Wheat ormeslin flour X X 130 117 14 7
1102 Cereal flours other thanofwheat ormeslin X 186 158 22 17
1103 Cereal groats, meal andpellets X X 217 195 20 18
1107 Malt, whether ornotroasted X 143 129 13 2
1108 Starches, inulin X X 113 102 20 14
1109 Wheat gluten, whether ornotdried X X 100 90 20 20
1201 Soya beans, whether ornotbroken X X 139 125 12 4
1205 Rape orcolza seeds, whether ornotbroken X X 204 143 12 4
1206 Sunflower seeds, whether ornotbroken X X 204 153 12 4
1207 Other oilseeds andoleaginous fruits, whether ornot
broken X X 189 142 11 9
1208 Flours andmeals ofoilseeds andoleaginous fruits,
other thanthose ofmustard X X 98 88 20 3
1502 Fatsofbovine animals, sheep andgoats, other than
those ofHeading 1503 X X 115 104 4 9
1503 Lard stearin, lardoil,oleostearin, oleo-oil and
tallow oil,notemulsified ormixed orotherwise
prepared X X 115 104 6 9
1506 Other animal fatsandoilsandtheirfractions,
whether ornotrefined, butnotchemically modified X X 115 104 4 9
1507 Soya-bean oilanditsfractions, whether ornot
refined, butnotchemically modified X X 83 75 6 15
1511 Palm oilanditsfractions, whether ornotrefined,
butnotchemically modified X X 332 199 7 13
1512 Sunflower-seed, safflower orcotton-seed oiland
fractions thereof, whether ornotrefined, butnot
chemically modified X X 307 169 7 17
1513 Coconut (copra), palm kernel orbabassu oiland
fractions thereof, whether ornotrefined, butnot
chemically modified X X 200 160 9 15
1514 Rape, colza ormustard oilandfractions thereof,
whether ornotrefined, butnotchemically modified X X 103 93 7 17
1515 Other fixed vegetable fatsandoils(including jojoba
oil),andfractions thereof, whether ornotrefined,
butnotchemically modified X X 132 119 12 18
1516 Animal orvegetable fatsoroilsandtheirfractions,
partly orwholly hydrogenated, inter-esterified, re-
esterified orelaidinized, whether ornotrefined, but
notfurther prepared X X 252 227 14 17
2309 Preparations ofakindusedinanimal feeding X 121 97 12 5
38233Industrial monocarboxylic fattyacids; fattyoils
from refining; industrial fattyalcohols X X 225 180 4 8
1Thetariffs applied eachyear(columns 5and6)correspond tothearithmetic average ofthe10-digit subheadings included in
theheading.
2January-November.
3Corresponds intheformer NANDINA nomenclature toHeading 1519 andsubheadings 1519110000 and1519209000.