RESTRICTED
WORLD TRADE G/AG/R/7
26November 1996
ORGANIZATION(96-4895)
Committee onAgriculture
SUMMARY REPORT OFTHE MEETING HELD ON28-29 OCTOBER 1996
Note bytheSecretariat
1. TheCommittee onAgriculture helditsseventh regular meeting on28-29 October 1996. In
theabsence oftheChairman, Ambassador Danai Tulalamba, itwasagreed thatMrs.Apiradi Tantraporn
ofThailand would chair themeeting.
2. Theagenda ofthemeeting, contained inWTO/AIR/469, wasadopted.
PartI:TheReview Process
3. TheCommittee reviewed thefollowing notifications aslisted ontheagenda:
(i) ontheadministration oftariff andother quota commitments (Table MA:1): from
Barbados (G/AG/N/BRB/1), Guatemala (G/AG/N/GTM/1), Israel (G/AG/N/ISR/1),
Nicaragua (G/AG/N/NIC/1) andthePhilippines (G/AG/N/PHL/3);
(ii) relating toimports under tariff andother quota commitments (Table MA:2): from
Guatemala (G/AG/N/GTM/2), Japan (G/AG/N/JPN/10), Korea (G/AG/N/KOR/5),
thePhilippines (G/AG/N/PHL/4) andSouth Africa (G/AG/N/ZAF/3);
(iii) inthecontext ofthespecial safeguard (Tables MA:3 toMA:5): from Barbados
(G/AG/N/BRB/2), Iceland (G/AG/N/ISL/3), Israel (G/AG/N/ISR/2), Japan
(G/AG/N/JPN/11), Korea (G/AG/N/KOR/4 and6)andNicaragua (G/AG/N/NIC/2);
(iv) relating todomestic support commitments (Table DS:1): from Australia
(G/AG/N/AUS/7), Brazil (G/AG/N/BRA/6), Iceland (G/AG/N/ISL/2), NewZealand
(G/AG/N/NZL/7), Norway (G/AG/N/NOR/5) andSingapore (G/AG/N/SGP/1);
(v) inthecontext ofnewormodified support measures exempt from reduction (Table
DS:2): from theUnited States (G/AG/N/USA/5);
(vi) relating toexport subsidy commitments (Tables ES:1 toES:3): from Australia
(G/AG/N/AUS/6), Barbados (G/AG/N/BRB/3), Honduras (G/AG/N/HND/1), Israel
(G/AG/N/ISR/3), New Zealand (G/AG/N/NZL/8), Nicaragua (G/AG/N/NIC/3),
Singapore (G/AG/N/SGP/1) andtheUnited States (G/AG/N/USA/6);
(vii) onexportprohibitionsandrestrictions(TableER:1):fromHungary(G/AG/N/HUN/6).
4. Specific points raised during themeeting withrespect tothenotifications listed inparagraph 3
above aresummarized intheAnnex tothisreport.G/AG/R/7
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5. Anotification from Japan inthecontext ofexport subsidy commitments (G/AG/N/JPN/12)
wassubject topreliminary review andistobereverted toatthenextmeeting inaccordance with
paragraph 9oftheCommittee 'sWorking Procedures.
6. TheCommittee noted thatnocounter-notifications hadbeenreceived under PartIDofthe
agenda.
Matters Relevant totheImplementation ofCommitments under theReform Programme:
Article 18:6
7. Thefollowing matters relating totheimplementation ofcommitments under thereform
programme were raised pursuant toArticle 18:6oftheAgreement onAgriculture:
(a) NewZealand/United States: Clarification ofthespecial milkclasses scheme inCanada
8. Clarification wassought bytherepresentatives ofNewZealand andtheUnited States regarding
theoperation ofCanada 'snewsystem ofspecial milkclasses. Therepresentative ofNewZealand
raised questions regarding thenotification byCanada ofitssubsidised exports foranumber ofdairy
products forthemarketing yearended July1996; therelation between totalexports andcommitment
levels; andtheeffect ofCanada 'snewexport system onexport prices andproducer revenues.
9. Therepresentative ofCanada stated thattheCanadian Dairy Commission 'sspecial classpermit
system allowed further processors andexporters tobuydairy products made from milkcomponents
thatarepriced competitively. These permits areusedbydesignated processors tobuymilkcomponents
fromprovincial milkboards. Thereturns fromthese salesarepooled nationally. Acompetitive price
iscalculated nationally onamonthly basisforthethreespecial classes ofmilkusedbyfurther processors
(forcheese ingredients, confectioneries, andother further processing). These prices apply todairy
ingredients usedinallfurther processing oftheseproducts, whether forthedomestic orexport market.
Forplanned exports andsurplus removal, thetworemaining special classes, prices areadjusted to
theconditions oftheworld market, andtheprices ofthedairy products exported aresetbyexport
market conditions, andarenotrelated todomestic prices.
10. Astothespecific issues raised byNewZealand, therepresentative ofCanada indicated: (i)
thatcomplete andfinalES:1andES:2notifications would besubmitted shortly; (ii)thatCanada had
chosen tomeetitsinternational commitments under theWTO andNAFTA formost dairy products
bychanging thepayments onexports financed byproducer levies, which aredefined asexport subsidies
under theAgreement onAgriculture, toanend-use pricing system which isnotsodefined; and(iii)
thatexport prices were determined byprevailing conditions inworld markets. Therepresentatives
ofNewZealand, Australia, Brazil, theEuropean Communities, Mexico, Switzerland, theUnited States,
andUruguay expressed theirinterest infurther discussing thematter withCanada, including through
informal consultations bytheChairman. Itwasagreed thatsuchinformal consultations should be
organized attheappropriate stage.
(b) Argentina: Implementation ofthespecial agricultural safeguard inthefruit and
vegetables sector oftheEuropean Communities
11. Therepresentative ofArgentina sought information withrespect tothefollowing matters
concerning recent changes intheorganization oftheEuropean Communities 'market forfruits and
vegetables(inEECregulations15/55,56,57;L/193):(i)whenthemeasuresconcernedwouldbenotified
totheCommittee; (ii)theconsistency withArticle 5:4oftheAgreement onAgriculture ofemploying
a1990-1992 reference period forthepurposes ofvolume based special safeguard action inrespect
ofthe1996/97 marketing year, andtheimplications thiscould haveonthemaintenance andexpansionG/AG/R/7
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ofcurrent access; (iii) themonthly calculations oftrigger levels inrelation totheprovisions of
subparagraphs (a),(b)and(c)ofArticle 5:4,including howtheEuropean Communities intended to
avoidanyproblemswiththeMFNclauseinthecontextofimplementingconcessionswhichareimplicitly
seasonal incharacter; and(iv)thecompatibility withtheprovisions oftheAgreement ofpossible
arbitrary resort tospecial safeguard measures thatarebased onanearlier reference period, inasituation
where current domestic supply wasnotsufficient tocover demand ontheinternal market. The
representative ofArgentina saidthatthesequestions would besubmitted totheEuropean Communities
inwriting.
12. Therepresentative oftheEuropean Communities noted thatArgentina 'sdetailed questions had
notbeenreceived inadvance. However, bywayofpreliminary comment, therepresentative stated
thattheregulations inquestion provided abasicframework forimplementing avolume-based safeguard
mechanism andwerefullyinconformity withtheCommunities 'obligations under theAgreement on
Agriculture.Beforeanyadditionaldutyisapplied,afurtheractordecisiononthepartoftheCommission
would berequired, anditwould onlybewhen thatfurther stepwastaken thattheCommunities would
berequired tonotify theCommittee. Accordingly, itwasconsidered thatuntilanyadditional volume-
based safeguard duties hadbeenimposed andnotified, mostofthequestions thathadbeenraised by
Argentina were premature. With regard tothethree-year reference period forcalculating thebase
trigger level, itwasalsoconsidered pertinent tonotethatunder Article 5:4itwasobviously uptoWTO
Members toascertain whatdatawasavailable andforwhatyears. Withregard tothepoint concerning
current access, therepresentative noted thattheEuropean Communities didnothaveanycurrent access
tariff quotas fortheproducts concerned initsSchedule. Insummary therepresentative stated that
theEuropean Communities would abide byitsnotification obligations andthose undertaken withregard
tothesubstance oftheimplementation ofanyvolume-based special safeguard action.
13. Therepresentative ofIsrael along withtherepresentatives ofAustralia, Chile, Mexico, South
Africa, Switzerland, theUnited States andUruguay expressed theirconcern thatthenewvolume-based
safeguard system totrack imports added further complexity totheEuropean Communities 'market
forfruitandvegetables, andthatthesystem wasfarmore thanasurveillance system andwasaburden
ontrade. Many ofthese representatives supported Israel'sviewthatbecause ofalackofcompliance
bysome member States withtheCommunities 'regulations, traders arefacing increased administrative
andfinancial burdens, including inobtaining automatic licences inoneday,andinpaying afeefor
anychanges toalicence. Therepresentatives ofCanada andNewZealand expressed theview that
anonline reporting system would belessrestrictive andburdensome thanlicensing requirements.
(c) United States: Update onthestatus ofimplementation oftariff quotas inthePhilippines,
especially withrespect topork andpoultry
14. Therepresentative oftheUnited States indicated thatsincethedelegation fromthePhilippines
hadalready responded tothematter raised under thisiteminthecontext ofthereview ofthePhilippines '
notification ontariffquota imports (G/AG/N/PHL/4), hedidnotwishtogooverthesameissueagain,
butlooked forward toreceiving thewritten response from thePhilippines.
(d) United States: Establishment oftariff quotas under thenewtariff regime andnewmeasures
restricting beefimports inTunisia
15. Therepresentative oftheUnited States informed theCommittee thatpreliminary answers to
thequestions regarding theestablishment oftariff quotas inthenewTunisian tariff regime hadbeen
received andthathelooked forward toTunisia 'sofficial notification onthemeasures adopted to
implement itsmarket access, internal support andexport subsidies commitments. Therepresentative
oftheUnited States asked whether Tunisia could report ifthere were anycurrent ornewimport
restrictions onbeef,andwhether anybeefhadbeenimported sinceApril ofthisyear. TherepresentativeG/AG/R/7
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ofTunisia confirmed thatTunisia hasopened uptariff quotas inaccordance withitsSchedule andthe
Agreement onAgriculture, andthatnotifications wereready. Healsoinformed theCommittee that
Tunisia hasnotintroduced newmeasures orrestrictions onimports ofbeefinApril andthatimports
continue, withimports forOctober reaching 500tons. However, imports ofredmeatgenerally had
dropped overthese pastyears because ofincreased national sanitary protection andprogrammes for
animal health protection andfattening.
(e) NewZealand: Dairy import regulations intheUnited States
16. Therepresentative ofNewZealand informed theCommittee thattheUSDA hadreleased its
finalruleondairy tariff rateimport quota licensing, which penalises alicensee thatfailsinaquota
yeartoenteratleast85percent ofthelicensed quantity. Therepresentative ofNewZealand specifically
expressedconcernregardinganexceptionfromthis85percentrule,whereacountrymaintainsorpermits
anexport monopoly, andthelicensee petitions forawaiver. Inhisviewthisseemed tobeanapriori
anddiscriminatory judgment onanexport monopoly. Clarification wassought fromtheUnited States
astothereasoning fortheprovision related toexport monopolies, andonthepotential suchameasure
might haveforimpairment ornullification oftheUnited States 'Uruguay Round obligations through
discrimination against entities sanctioned under Article XVII oftheGATT. Therepresentative ofNew
Zealand alsowondered, intheevent thattheUSDA ispetitioned byanimporter nottoreallocate quota
onthegrounds thattheimporter wasdealing withanexport monopoly, whether theUSDA would
automatically grant thepetition, orwhether itwould firsthavetorequest andreview theevidence.
17. Therepresentative oftheUnited States replied thatthe85percent ruleapplied toanimporter,
alicence holder, andwasdesigned toensure thatimporters made every good faitheffort tousetheir
licences. Inanormal market thelicence holder hasseveral potential suppliers withwhom tonegotiate.
However, inasituation where therewasanexport monopoly, thisprovision, recognizing thatthemarket
isrestricted andthere arequota rents, merely levels theplaying fieldsoastoencourage negotiations
andensure thatthequota isfilled. Inviewofitsadditional concessions under theUruguay Round,
theUnited States didnotseeanypotential fornullification orimpairment fromtheprovision. Inresponse
tothelastquestion byNewZealand, therepresentative oftheUnited States saidthattherequirement
forproving discrimination intheearlier regulation hadbeenremoved. Rather thanitbeing aquestion
ofreallocation oflicences, itwasnowmerely aquestion ofwhether ornottheimporter would beallowed
toreceive thelicences inthenextquota year.
(f) European Communities: Canada tariff quota imports forbeef
18. Information wassought andpoints raised bytherepresentative oftheEuropean Communities
concerning Canada 'stariff quota forbeef, including country allocations made inrespect ofthattariff
quota, inparticular forAustralia andNew Zealand, which donotappear inCanada 'sschedule.
Specifically, therepresentative oftheEuropean Communities sought precision asregards thebasis
forthetonnages allocated inthiscase,andthepossible reallocation byCanada ofunfilled country shares
sothatother exporters could benefit fromthetariff quota fortheyearinquestion. Therepresentative
ofCanada stated that,asthismatter hadbeenraised atshort notice, shewould only takenoteofthe
European Communities 'andother delegations 'comments atthisstage.
19. TherepresentativeofNewZealandstatedthatintheUruguayRoundNewZealandhadnegotiated
withCanada forsuchacountry allocation because, although there were norestrictions onimports
beforehand, Canada wasputting inplace aregime thatmirrored thatoftheUnited States. However,
Canada wasnotprepared toaccept thescheduling ofthose quantities which infactaccurately reflected
thelevelofimports inthe1986-88 baseperiod. Inthisconnection therepresentative oftheEuropean
Communities noted thatasthere wasnocountry allocation inCanada 'sSchedule itassumed thatif
Canada proposed toproceed toacountry allocation itwould havetodosounder Article XIIIoftheG/AG/R/7
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GATT onthebasis ofaprevious representative period. Therepresentative ofAustralia noted that
Australia would notmeet itsallocated quantity andwasdiscussing thisissue withCanada. The
representative ofUruguay indicated theirinterest inanyinformation pertaining totheadministration
oftheCanadian beeftariff quota.
Other Matters Relating totheReview Process
20. Nomatters relating tothereview process were raised under ItemFoftheagenda.
PartII:Other Matters within thePurview oftheCommittee
MarrakeshMinisterialDecisiononMeasuresConcerningthePossibleNegativeEffectsoftheReform
Programme onLeast-Developed andNetFood-Importing Developing Countries
21. TheActing Chairperson noted thatinaccordance withtheCommittee 'sWorking Procedures
thenextmonitoring exercise inrespect oftheMarrakesh Ministerial Decision onthenetfood-importing
developing countries istotakeplace attheregular meeting oftheCommittee thatisscheduled for28-
29November 1996. Thismonitoring process istobeconducted onthebasis, inter alia,ofthe
notifications which donor Members, inparticular developed country Members, aretosubmit inrespect
ofactions taken within theframework oftheMinisterial Decision asprescribed intheCommittee 's
Notification Requirements (G/AG/2) atpages 33and34. SofarfourMembers hadsubmitted
notifications intheNFseries (Australia, Brazil, NewZealand andUruguay). Members which had
yettosubmit theirNFnotifications were invited todosoassoonaspossible and,inanyevent, as
farinadvance oftheNovember 1996 meeting aspossible. TheActing Chairperson alsoinvited the
observer international intergovernmental organizations tocontribute totheCommittee 'smonitoring
exercise inrespect oftheMarrakesh Ministerial Decision.
Other Business
22. Itwasnoted thatinaccordance withtheCommittee 'sWorking Procedures, Members would
undertake attheNovember meeting theannual consultation provided forunder Article 18:5ofthe
Agreement ontheirparticipation inthenormal growth ofworld trade inagricultural products within
theframework ofthecommitments onexport subsidies. Inresponse toapoint raised bythe
representative oftheEuropean Communities onpreparations forthese consultations, theSecretariat
indicated thattheexport subsidy notifications would provide animportant basis fortheArticle 18:5
consultations andthatanysuggestions thatmight bemade foraSecretariat background paper could
asappropriate belooked into.
Date ofNext Meeting
23. ThenextregularmeetingoftheCommitteeonAgriculturewillbeheldon28-29November1996.
Theairgram convening thismeeting andthedraftagenda willbeissued onFriday, 15November 1996.G/AG/R/7
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ANNEX
Review ofNotifications bytheCommittee onAgriculture atitsMeeting on28-29 October 1996
Summary ofSpecific Points Raised andResponses Thereto
Table MA:1 Notifications
Barbados G/AG/N/BRB/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
United States -Noted thatBarbados hadnot
implemented itstariff quotas. Could Barbados
provide information ontheapplied tariff rates and
level oftrade forproducts subject totariff quota
commitments?Intheabsence ofthedelegation ofBarbados, the
question willbeconveyed toBarbados bythe
Secretariat.
Guatemala G/AG/N/GTM/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
New Zealand -Sought clarification concerning the
concept ofallocation ona"first-come-first-served
prorata" basis. How does thissystem work? Are
licences approved uptotheceiling setforeach
application? Arethere ceilings forlicence
applicants based onhistorical performance?Guatemala operates asystem based on
proportional allocation ofquantities inrelation to
requests forlicences. Request have tobemade to
theUnidad deAdministración deContingentes
(UAC) oftheMinistry ofEconomy. Ifthetotal
quantity oflicenses requested ishigher thanthe
tariff quota quantity, aprorataallocation ismade.
New Zealand -Why wasthetariff quota forwheat
divided intoquarterly allocations of"uneven"
quantities? Areunused quantities inonequarter
available insubsequent quarters?Thedivision ofthetariff quota forwheat and
wheat flour reflects national supply anddemand
conditions forthatproduct. Thetariff quota
quantity ofwheat notimported iscarried forward
tothenexttrimester. Anyquota quantity
remaining attheendoftheyearisnotcarried
forward. Forwheat flour, however, theunfilled
quota quantity, 45days before theendofthe
fourth trimester, willbeadded, inwheat
equivalent, tothewheat tariff quota inthesame
period.
New Zealand -Aretheapplied tariff rates for
products listed asnotbeing subject toany
quantitative restrictions equal to,orlower than,
thebound in-quota tariffs?
United States -Could Guatemala explain whyno
tariff quotas areinplace for20outof26
commodities covered bytariff quotas? Why did
Guatemala notimplement thetariff quotas for
fresh/chilled/frozen bovine meat, dried legumes,
grain sorghum, soybean flour, oilseed flour/meal
andsugar?Theadvalorem duties, theonlyimport restrictions
imposed byGuatemala, arelower thanthebound
in-quota tariffs listed inSchedule LXXXVIII -
Guatemala. Inthecaseofunopened tariff quotas
theCentral American tariff system applies withno
tariff greater than20percent.G/AG/R/7
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Guatemala G/AG/N/GTM/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
United States -Why canonlyalimited amount of
product pershipment beimported forthe
following commodities: poultry, durum wheat,
other wheat, corn, riceandwheat flour? Did
these limitations contribute tothefactthatsome of
thetariff quotas were notfilled?
Noted thatthearrangements fortariff quota
implementation apply since September 1996. Are
thetariff quotas implemented onacalendar year
basis?Thetariff quota regime establishes amaximum
quantity thatmayberequested byeach importer.
These maximum quantities arelinked, among
other things, tothevalue oftheshipment, the
number ofimporters andthelevel ofcompetition
intheindustry. Thisallows anefficient allocation
ofthetariff quota, andisnotanimpedement to
trade.
Israel G/AG/N/ISR/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
New Zealand -Sought clarification concerning the
basis onwhich theallocation forthetwocheese
tariff quotas is"first made toimports covered by
overlapping freetrade areaagreements" andnoted
thatsome Members hadraised concerns about
such practices. How arethequantities forthefree
trade agreements specified andhowdotheyaffect
thescheduled MFN commitments? Arethe
applied tariff rates forimports under freetrade
agreements thesame astheMFN in-quota tariffs,
theconcern being thatotherwise theimport system
might betrade-diverting?
Australia -Expressed concern that thetariff
quotas inquestion appear tobeMFN tariff quotas
intheSchedule whereas inpractice theyarenot
applied insuch away. Reiterated Australia 's
position thatpreferential imports cannot becounted
against MFN tariff quotas.While Israel isaware oftheconcerns raised by
certain Members regarding theallocation to
preferential suppliers, itisequally aware that
several Members usethispractice andhave
defended itwitharguments which Israel shares.
Israel considers thattheallocation maybejustified
because thefreetrade agreement (FTA) existed
before theUruguay Round commitments. Israel
isalsoproviding significant newmarket access to
bothFTA partners andthird country suppliers.
Theallocation isnotsubstantially different from
theonethatwould have resulted hadIsrael
allocated thetariff quota onthebasis ofpast
performance.
Cheese isconsidered avery sensitive item. A
substantial partofthetariff quota for"other
cheeses", after allocations toFTA partners,
remains open toother Members. TheECFTA
quota (200 tons) isan"overlapping quota" which
covers fivetariff positions forcheese, fortwoof
which there areWTO tariff quota commitments.
Asaresult, theallocation between FTA partners
andthird countries isdetermined byimporters.
Imports from third countries tendtoincrease the
overall level oftariff quota imports, while imports
from FTA partners reduces totaltariff quota
imports. Theapplied rateofdutyforin-quota
imports is50percent, while theapplied rate
under theECFTA iscurrently thelower ofNIS13
perkg.or50percent.G/AG/R/7
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Israel G/AG/N/ISR/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
Australia -Sought clarification regarding thetariff
quotas forwheat. Noted thatimport licences for
non-feed wheat areissued onlytoimporters
meeting domestic purchase requirements, the
concern being thatthissystem isnotconsistent
withWTO obligations. Considered thatnon-tariff
measures which were tariffied intheUruguay
Round butsubsequently maintained were
inconsistent withtheAgreement onAgriculture.
Argentina -Noted thatthepredominant perception
intheongoing consultations ontheissue of
domestic purchase requirements appeared tobe
thatsuch measures were inconsistent withWTO
obligations.
Switzerland -Considered thatdomestic purchase
requirements were notassuch incompatible with
WTO obligations, butitdepended onthewayin
which such schemes were applied.There aretwoways ofimporting wheat atzero
dutyunder thelicensing procedures (asindicated
inthenotification) andathird oneat50percent
dutywithout import licences. Asregards feed
wheat, theMinistry ofAgriculture issues import
licences toallimporters upon request without
quantitative limit. Asaresult ofthisprocedure
alone thecurrent access tariff quota quantity is
filled. Inaddition, theMinistry ofIndustry and
Trade issues import licences atzerodutyfornon-
feedwheat toallimporters whomeet domestic
purchase requirements. Alternatively, anytypeof
wheat canbeimported without licence atthe
50percentduty, which inpractice isnot
commercially attractive.
Nicaragua G/AG/N/NIC/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response provided byNotifying Member
following themeeting
United States -Noted thatNicaragua hadnot
implemented many ofitstariff quotas because the
applied rates ofdutyarelower thanthebound in-
quota tariffs. Could Nicaragua provide
information ontheapplied tariff rates andlevel of
imports forproducts subject totariff quota
commitments?
Why wastheentire tariff quota forpoultry meat
allocated toasingle traditional importer? Noted
thatNicaragua intends toestablish atariff quota
allocation system, inparticular forpoultry
imports, through commodity exchange
transactions. Could Nicaragua explain what the
commodity exchange transactions are?Nicaragua applies forallproducts included inthe
listoftariff quotas, other thanpoultry, anapplied
rateofdutywhich islower thanthebound in-
quota tariff. Nicaragua allocates theamount of
thetariff quota forpoultry cuts(0207, 3910,
02007, 3990, 0207, 4110, 0207, 4190) toasingle
traditional importer, butduetointernational
prices, only48,852.68 kgofpoultry cutswere
imported ata60percentdutyin1995. The
Ministry ofEconomy andDevelopment has
decided that, asofnextyear, tariff quotas willbe
administered through commodity exchange
transactions, butnoregulations tothiseffect exist
atpresent.G/AG/R/7
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Philippines G/AG/N/PHL/3 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
New Zealand -Sought clarification onhowthe
National Food Authority (NFA), asthesole
importer ofrice, allocates imports todomestic
consumers. Could thePhilippines explain therole
oftheNFA asan"import consolidator" for
imports ofmaize?TheNFA does notdirectly allocate itsricestocks,
whether imported orlocally sourced, todomestic
consumers. TheNFA, inpursuit ofprice and
supply stabilization objectives, places itsrice
stocks instrategic areas, particularly ingrain
deficit areas andinareas where calamities/natural
disasters occur. Access toNFA riceisopen to
NFA accredited andlicensed grain retailers
located nationwide whosellthericetoconsumers
atthegovernment-set price.
TheNFA actsasanimport consolidator formaize
onlyupon request ofsmall andmedium-sized
livestock andpoultry producers. Asanimport
consolidator, theNFA effects thefollowing
services: bidding /negotiation and
preparation/signing ofcontracts; preparation of
pre-arrival documentation andcoordination with
concerned agencies; preparation ofimport
documentation; monitoring of(un)loading
operations andmanagement ofdistribution to
consignees.
Table MA:2 Notifications
Guatemala G/AG/N/GTM/2 Tariff Quota Fill(Table MA:2)
Points raised byother Members Response byNotifying Member
United States -Why were thethetariff quotas for
thefollowing products notfilled: bovine meat,
poultry cuts, dried legumes, other wheat, grain
sorghum, wheat flour, soybean flour, flours and
meals ofoilseeds andsugar? Onthe
understanding thatGuatemala onlyimplemented
thetariff quota forricein1995, what were the
import conditions fortariff quota products other
thanrice?Thefactthatforthenineproducts refered to,
import volumes reported for1995 arelower than
thebound in-quota tariff volumes issolely linked
totheinternal demand. Forproducts such as
0201, 0202 and1701, demand issatisfied by
internal production atcompetitive prices. Inother
cases, recorded imports surpass thelevel ofthe
bound tariff quota. In1995, there were no
products subject toimport quotas. Fortheimport
ofbasic grains (rice, maize, wheat andsorghum),
theprice band system wasapplied. Thissystem is
currently being replaced with atariff quota
system.G/AG/R/7
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Japan G/AG/N/JPN/10 Tariff andother Quota Fill(Table MA:2)
Points raised byother Members Response byNotifying Member
United States -Why were thetariff quotas forthe
following products notfilled: skimmed milk
powder forother purposes, evaporated milk;
whey andmodified whey forfeeding purposes;
prepared whey forinfant formula; butter and
butter oil;andmineral concentrated whey? Are
these tariff quotas controlled bystate trading
enterprises?
New Zealand -Took issue withJapan 'sstatement
thatdemand wasinsufficient tofillcertain tariff
quotas fordairy products, anexplanation given in
theprevious meeting regarding underutilization of
tariff quotas (G/AG/R/6, p.23refers). Noted
that, totheextent thatagiven tariff quota quantity
waslessthandomestic consumption, thedecisive
factor fortariff quota fillwastheprice relationship
between foreign anddomestic products. New
Zealand considered thatinmost cases inthedairy
sector imports would behighly competitive. Ifthe
tariff quotas were allocated inawaywhich would
helpsatisfy domestic demand, there should notbe
anyquestion ofunderfilled tariff quotas. Sought
information withrespect to:(i)thesizeofthe
tariff quotas relative todomestic consumption and
(ii)relative prices offoreign anddomestic
products.
Australia -Noted thatsome tariff quotas were
underutilized, buttoJapan 'scredit recognized that
thetariff quota for"dairy products forgeneral
use"wasoverfilled.Asregards tariff quotas fordairy products, only
thetariff quota for"designated dairy products for
general use"issubject tostate trading. Thistariff
quota wasoverfilled in1995. Skimmed milk
powder forother purposes ismostly forfeeding
purposes. Thistariff quota, aswellasthetariff
quota forwhey andmodified whey forfeeding
purposes, were notfilled dueto:thedecrease in
thenumber oflivestock, especially pigs; adecline
indemand; andariseoftheimport price. As
regards evaporated milk, Japanese users arenot
veryfamiliar withthisproduct. Asnewcomers
areeligible fortariff quota shares asfrom 1995,
more imports areexpected inthefuture. For
prepared whey forinfant formula, the
underutilization ofthetariff quota wasduetoa
decrease inthenumber ofinfants andatrend
towards breastfeeding. Thetariff quota forbutter
andbutter oilissubdivided intothree parts as
indicated intheSchedule: domestic use(581 tons),
re-export foroutward processing trade
(1,263 tons) andconsumption inthecruise of
international maritime vessels andinternational
airlines (29tons). Asregards domestic use,in-
quota imports reached approximately 90percent
ofthetariff quota quantity allocated fordomestic
use;fortheremainder, trade statistics arenot
available asthere isnocustoms clearance. As
regards mineral concentrated whey, themain use
ofwhich isconfectionary materials andwhey
drinks, there isnotmuch demand forsuch
products atpresent.
Uruguay -Which were thesupplying countries of
imports under thequota forrice? Considered that
tariff andother quota opportunities especially those
etablished under Annex 5should bereserved for
Members only. Noted thattheSimultaneous-Buy-
andSell(SBS) system lacked transparency and
mere participation inthesystem costUruguayan
exporters some US$15,000. These concerns will
befollowed upbilaterally.Took noteofthequestion andcomments. Noted
thatJapan 'sposition regarding theallocation of
tariff andother quota access tonon-Members was
asstated atthelastmeeting (G/AG/R/6,
paragraph 26refers).G/AG/R/7
Page11
Korea G/AG/N/KOR/5 Tariff Quota Fill(Table MA:2)
Points raised byother Members Response byNotifying Member
United States -Why were thetariff quotas for
poultry, eggs andpotatoes notfilled? Noted that
lackofimports wasofparticular concern because
these tariff quotas arecontrolled byproducer
groups. Raised concerns regarding theorganization
ofthetariff quota auction forpoultry andnoted
thatthere wasinsufficient timeforthepreparation
ofbids.
New Zealand -Commended Korea fortheswitch
toafirst-come-first-served system forpotato
imports. Noted that, ingeneral, auseful
demonstration andassurance forMembers of
insufficient import demand wastoallow all
importers toimport onafirst-come-first-served
basis. Itwould beauseful practice ifunderfilled
tariff quotas were henceforth allocated onfirst-
come-first-served basis, aview endorsed bythe
United States.Korea considers thatishasfaithfully implemented
itstariff quota commitments. Those few
exceptions ofunderutilized tariff quotas arelargely
attributable toshifts inconsumer preferences, a
decrease indomestic prices andanincrease in
import demand forsubstitute products. Asregards
poultry, thetariff quota administration agency
organized bidding onseveral occasions butfailed
tofillthetariff quota quantity duetoabandoned
import rights astheresult ofabnormally low
domestic prices. Asof10September 1996, 84
percentofthetariff quota forpoultry wasalready
filled -ahigher quota fillthanin1995. As
regards thepotato tariff quota, itsadministration is
operated onafirst-come-first-served basis andnot
through state-trading asindicated intheSchedule.
Underutilization isduetolackofdemand for
imports duetovarious commercial factors,
including international market conditions and
transportation difficulties. Themain reason for
underutilization oftheeggtariff quota isalso
related tomarket conditions. Theclaim that
underutilization ofthethree tariff quotas isrelated
totheir administration byproducer groups is
therefore unwarranted.
Philippines G/AG/N/PHL/4 Tariff Quota Fill(Table MA:2)
Points raised byother Members Response byNotifying Member
European Communities/United States/Canada -
Why were thetariff quotas forlivesheep, poultry,
poultry meat, sheep orgoatmeat, pigmeat and
potatoes underutilized? How were these tariff
quotas allocated among eligible groups of
importers, such ashotels, restaurants, processors,
traders andproducers. Were thetariff quotas
opened attheHSfour-digit level orwere there
sub-allocations? When were thetariff quotas
opened in1995?Atthisstage, unable toprovide information on
allocation toeligible groups ofimporters.
Allocations oftariff quotas areattheHSfour-digit
level without anyfurther sub-allocation. The
decision withregard tothechoice ofproduct is
lefttoimporters.
Astothereasons foroverutilization oftariff
quotas, such asthose forpigmeat, cattle, live
horses andother commodities, thePhilippines
failed tosettheout-of-quota tariffs intime and
andinthese cases allimports were subject tolow
tariffs. Asregards rice, thePhilippines hada
poor harvest.G/AG/R/7
Page12
Philippines G/AG/N/PHL/4 Tariff Quota Fill(Table MA:2)
Points raised byother Members Response byNotifying Member
United States -Whether import licences aretobe
extended toaccount fordelays inimplementation?
Allocation oftariff quota import licences forpork
toproducers. What isthequantity ofpork that
canreasonably beimported bytheendof1996?
Canada -Flagged itsinterest intheresults ofthe
consultations withthedomestic industry regarding
thepossible extension ofthevalidity period of
import licences since thisstepmayhelptofillthe
tariff quotas.
New Zealand -Welcomed thefactthatfrozen
beef, though notascheduled product, was
included inthenotification. While acknowledging
thatnotification ofunscheduled tariff quotas was
within thediscretion ofMembers, New Zealand
would appreciate anysuch notification forreasons
oftransparency.Inresponse totheUnited States, thePhilippines
noted that, withrespect totheissue oftariff quota
implementation andthevalidity ofimport licences,
theadministrative procedures contain a"catching
up"provision toimplement thebacklog oftariff
quota commitments. Fullimplementation of
commitments began on1July1996 including the
backlog (particularly forpigmeat andpoultry
meat) where nodefacto compliance hadbeen
possible. Licences covering theshortfall were
issued inJune 1996 andarevalid until 31
December 1996, adecision which wasmade in
consultation withtherelevant private sector
entities. Inlight oftheconcerns raised by
Members, thegovernment willconsult again on
thepossibility ofextending thevalidity period of
these licences ifnecessary.
With regard tothegovernment 'sintention to
allocate most oftheimport licences forpigmeat to
producers, thePhilippines noted thatthere aretwo
ways bywhich import licences areallocated. For
products where there were previous imports,
licences areallocated based onhistorical market
shares. Forproducts, such aspigmeat, where
there were quantitative restrictions inplace and
therefore norecord ofregular importation, atwo-
tierallocation system wasestablished. Inthefirst
tier,licences areallocated togroups, including
producers, processors, traders andtocommercial
food service providers, such ashotels and
restaurants. Theshares areinitially determined on
thebasis ofhowmuch oflocal production (since
there were noregular imports) hadbeen
historically allocated toprocessing andcommercial
food service providers. Theresidual isprovided
toproducers andtraders. Thetraders normally
service small processors andcommercial food
service providers thatinview oftheir sizedonot
even apply forminimum access licences.
Theadministrative procedures provide for
penaltiles fornon-utilization ofimport licences and
thepossibility ofre-distributing unused licences.
AstotheUnited States question ofwhat quantity
ofpigmeat canreasonably beimported bytheend
of1996, thePhilippines noted thatthere are
inadequate infrastructure and(freezing) facilities to
accommodate additional volumes sourced from
imports. With regard topoultry meat, themarket
iscurrently oversupplied.G/AG/R/7
Page13
South Africa G/AG/N/ZAF/3 Tariff Quota Fill(Table MA:2)
Points raised byother Members Response byNotifying Member
New Zealand -DidSouth Africa import any
cheddar orgouda (andproducts) in1995?
European Communities -Ischeddar eligible for
imports under thecheese tariff quota?
New Zealand -Noted thatthecommitment isat
thefour-digit level. Inlight ofSouth Africa 's
evolving import policy, cangouda andcheddar be
imported under thetariff quota in1996?Inorder toensure compatibility withSouth
Africa 'sMA:1 notification forcheese, imports of
cheddar andgouda should nothave been included
inthisnotification. Thecorrect figure for
imports incalendar year1995 excluding cheddar
andgouda is3,247 tons. Imports ofcheddar and
gouda were 76and101tonsrespectively. A
corrigendum willbeforthcoming.
Thetariff quota wasnotopened forcheddar and
gouda (G/AG/N/ZAF/1/Rev.1 andG/AG/R/5, p.
15refer). There isnointention atpresent to
include these types ofcheese inthetariff quota but
South Africa islooking atthemanagement ofthe
tariff quota system andwould bewilling toconsult
ontheissue, ifnecessary.
United States -Why were thetariff quotas not
filled forthefollowing products: fresh milk and
cream, eggs, potatoes, dried peas, barley, grain
sorghum, sunflower seed, lucerne seed, malt
extracts, tapioca andcorngluten feed?Imports entered duty-free during 1995 for6outof
13items (shell eggs, chickpeas, barley, lucerne
seed, tapioca, andcorngluten feed). Import
statistics over thelast5years show formost of
these products considerable variability, partly due
todrought-related import surges, butnoother
abnormal patterns oftrade areevident. AsSouth
Africa 'simplementation ofminimum access
commitments tookplace overaperiod, itsreal
effect willbecome evident onlyin1996. A
review ofimports inthefirstquarter of1996 for
theother products mentioned bytheUSshow
increases inimports ofsome products while
imports ofother products aredown.
Tables MA:3 toMA:5 Notifications
Korea G/AG/N/KOR/6 Trigger Prices (Table MA:4)
Points raised byother Members Response byNotifying Member
European Communities -Sought clarification on
thereference period used toestablish trigger
prices. Noted thattheAgreement onAgriculture
does notallow flexibility tochoose adifferent
period. Willpursue thematter bilaterally.Recalled thattheCommittee hadreviewed this
matter intheMarch meeting (G/AG/R/5, p.20
refers). Inthepreparation ofitsUruguay Round
Schedule, Korea used the1988-90 period forthe
tariffication exercise duetotechnical difficulties in
transferring totheHarmonized System in1988.
Forreasons ofconsistency andalsofortechnical
reasons, Korea hasused thesame period forthe
purpose ofestablishing trigger prices.G/AG/R/7
Page14
Table DS:1 Notifications
Australia G/AG/N/AUS/7 Domestic Support (Table DS:1)
Points raised byother Members Response byNotifying Member
European Communities/Switzerland -What arethe
criteria forpayments under theAusIndustry-
Agribusiness Programme? Istheassistance
provided directly tofarmers? Aretransportation
costs included?TheAusIndustry-Agribusiness Programme aims at
enhancing international competitiveness of
Australia 'sagricultural andrelated industries
through thefunding ofprojects which foster the
development ofbusiness andmarketing
approaches. Support isgranted toindividuals,
partnerships, companies, industry associations or
groups ofrural producers whoareassociated with
agribusiness activities andmayormaynotbe
farmers. Itcovers funding foractivities such as
conferences, workshops, research andmarketing
skills development. Transport assistance isnot
partoftheprogramme.
European Communities -InSupporting Table
DS:1 Australia indicates thatpayments aregranted
"forfarmers whose farm business incomes have
been adversely affected byexceptional
circumstances" (rural adjustment scheme, page 6,
refers). What does exceptional circumstances
mean?Thesupport isprovided forexceptional drought,
primarily inQueensland andNew South Wales. It
isintended toprovide short term targeted support
inorder toassist longterm profitable farm
businesses tocope withadverse impacts ofdrought
events. Drought exceptional circumstances are
defined bysixcorecriteria: meteorological
conditions, agronomic andstock conditions,
environmental conditions, water supplies, netfarm
income andscale oftheevent.
United States -Information requested regarding the
"sugar industry infrastructure program" referred to
inSupporting Table DS:1 (page 5,refers). Does
itinclude theprovision ofon-farm facilities?Theprogramme aims toimprove infrastructure for
transport (provision ofroads andother access) and
covers alsoirrigation anddrainage. Total
payments areAS2.16 million.
Switzerland -Noted thatstate andterritory
Governments spent A$136.17 million on
environmental programs. Could Australia provide
more information onthese programs?
-When willAustralia submit thenotification for
theremaining State programmes, i.e.those of
Queensland, Western Australia andtheAustralian
Capital Territory?Australia indicated thatthefinal notification (since
issued asG/AG/N/AUS/7/Rev.1) would provide
more detail onState andother environmental
programmes, aswellastherevised AMS figure.
New Zealand -Technical clarification sought
regarding thetotal AMS fordairy which amounted
toA$151.717 million inSupporting Table DS:4,
butisshown asA$152.275 million inDS:1.G/AG/R/7
Page15
Australia G/AG/N/AUS/7 Domestic Support (Table DS:1)
Points raised byother Members Response byNotifying Member
South Africa -What reference prices didAustralia
usetocalculate theAMS forwheat, maize and
sugar?Australia hasnever applied anadministered price
formaize. Thus maize isnotincluded inthe
calculation ofAMS. With regard tosugar, the
applied administered price wasremoved from 1
July1989. Similarly forwheat, nodirect payments
have been made since 1986. Theexternal
reference price used tocalculate theAMS for
sugar isacontemporaneous price based on
average gross export returns tomillers andfor
wheat thereference price used reflects thef.o.b.
unitvalue ofexports.
United States -Understood thatfresh milk
production andmarketing istheresponsibility ofa
state level organisation which alsosetsminimum
prices atfarm level and,insome states, wholesale
andretail levels. Asaresult thefresh milk price
isapproximately double themanufactured milk
price. States usually have apooling arrangement
sothateach farmer getssome benefit from higher
fresh milk prices. Could Australia explain whythe
benefits from thestate runsystem arenotincluded
inthecalculation oftheAMS formilk?Tocalculate theAMS fordairy, Australia used the
same method inthenotification asindocument
G/AG/AGST/AUS. While nospecific calculation
isprovided forfresh milk arrangements, totalmilk
support isreflected inthecalculation through a
derived level ofsupport. Theperunitlevel of
support formanufacturing milk ismultiplied by
totalmilk production (including market milk) to
derive total support level formilk (including
marketing milk). Asitwasimpossible tofindan
acceptable reference price forfresh milk during
thebaseperiod, Australia, likemany other
countries, followed theabove method.
Brazil G/AG/N/BRA/6 Domestic Support (Table DS:1)
Points raised byother Members Response byNotifying Member
United States/Australia -Brazil calculated product-
specific support foranumber ofproducts
(Supporting Table DS:7, page 9,refers) which is
notincluded intheTotal AMS calculation
(Supporting Table DS:4, page 7,refers). Isthe
support forthose products within thedeminimis
level? Ifso,could Brazil addastatement tothis
effect inSupporting Table DS:4?Support provided fortheproducts which arenot
included inSupporting Table DS:4 iswithin thede
minimis level. Achange toSupporting
Table DS:4 would facilitate theprovision ofsuch
information.
Switzerland -Arethere anyincentives forBrazil 's
industry toproduce alcohol forfuel? Ifso,how
does Brazil ensure thatsuch provisions benefit
onlyproducers offuelalcohol andnotsuppliers of
sugar forexport?Brazil didnotgrant anyincentives toindustries
producing alcohol forfuel. Therefore there could
notbeanypossible riskofincentives spilling over
intosugar production forexport.G/AG/R/7
Page16
Brazil G/AG/N/BRA/6 Domestic Support (Table DS:1)
Points raised byother Members Response byNotifying Member
Australia -Noted thattwonewgreen box
measures areadded inSupporting Table
DS:1 compared tothose included in
G/AG/AGST/BRA, public stockholding
forfood security purposes anddomestic
food aid(items 2and3,page 5,refer).
WillBrazil notify these measures asnew
ormodified policies under Table DS:2?Themeasures inquestion were adopted after theendofthe
Uruguay Round negotiations butprior totheestablishment
oftheWTO. Brazil understood thatnewgreen boxpolicies
taken during thatintermediate period donotnecessarily
have tobenotified inTable DS:2. They willbe
automatically reflected inSupporting Table DS:1. Only
exempt policies adopted after theentry intoforce ofthe
WTO must benotified under Table DS:2.
United States -Noted thatother product-
specific support wasprovided through
"production andmarketing credit" and
"EGF Equalization" (Supporting Table
DS:7, pages 9-11, refer). How dothese
policies work andwhat arethe
differences?Production credit, marketing credit andEGF equalization
arethree different product-specific support programmes.
Production andmarketing credit areloans given to
producers atcontrolled interest rates, tohelpfinance pre
andpostharvest expenses respectively. Thefinancial
support provided consists ofthedifference between the
interest ratethattheproducer effectively pays andtheone
thathewould have paidincasethatprogramme didnot
exist. "Plano Real" andthestabilization ofBrazil 's
financial andmonetary markets arecontributing toreducing
thegapbetween thetwointerest rates.
"EGF Equalization" wasintroduced following the
accumulation ofhuge federal stocks ofagricultural products
duetoarange ofmacro-economic andother factors.
Under theEGF Equalization programme thefederal
government pays producers thedifference between the
amount thegrower would receive atafreeauction andthe
amount necessary torepay theloan contracted togrow the
product. Themeasure isaspecial mechanism toovercome
aspecific situation andonce present circumstances are
solved, EGF Equalization should bediscontinued. The
products aresoldunder anentirely freeauction system.
Timing andquantity ofgoods tobeauctioned arechosen so
thattheydonotinterfere withcurrent market prices and
practices. Inconclusion, inspite ofthebenefit being
bestowed toproducers, market prices arenotdistorted.G/AG/R/7
Page17
Iceland G/AG/N/ISL/2 Domestic Support (Table DS:1)
Points raised byother Members Response byNotifying Member
New Zealand -Noted thatIceland
provided support foraccumulation and
holding ofstocks ofsheepmeat between
slaughter periods (page 4,refers). Could
Iceland confirm thatthisregulation isstill
inforce? Why didIceland include the
payment under "other domestic support"
rather than"public stockholding"
(respectively items landbofSupporting
Table DS:1)?Themeasure isinlinewithgreen boxmeasures included in
G/AG/AGST/ISL (Supporting Table DS:4). Theslaughter
period inIceland isshort andthere isaneed tomaintain
support measures toguarantee supply until thenext
slaughter period. In1995, payments tothestorage scheme
amounted tooverISK267 million. Thegovernment has
decided toreduce these payments uptoyear2000 when
ISK225 million aretobeallocated tothescheme. Given
thatthemeasures donotaffect production orprices to
farmers, theyareconsidered tobefully consistent withthe
provisions setoutinAnnex 2totheAgreement on
Agriculture. Thesystem could beadapted inlight of
imports insufficient quantities. However, there isastrong
argument tobemade infavour ofmaintaining acertain
level ofself-sufficiency, especially when factors, such as
geographical location andtheprevailing sanitary situation
aretaken intoaccount. Given thenatural constraints
imposed onsheep farming, thescheme mayneed tobe
maintained atacertain level inthefuture, regardless ofthe
level ofimports.
Thescheme wasnotified under item "other exempt
domestic support" inSupporting Table DS:1 forthesimple
reason thatitwasincluded under thesame item in
G/AG/AGST/ISL. Iceland willexamine thematter and
submit acorrigendum, asappropriate.G/AG/R/7
Page18
Iceland G/AG/N/ISL/2 Domestic Support (Table DS:1)
Points raised byother Members Response byNotifying Member
New Zealand -Noted thatIceland 's
sanitary regulations prohibit imports of
fresh andfrozen meat (G/AG/AGST/ISL,
page 4,refers). Could Iceland confirm
thattheregulation isstillineffect? Does
Iceland claim thatthese requirements are
inconformity with theSPSAgreement?Sanitary regulations stillprohibit theimportation offresh
andfrozen meat intoIceland. Iceland 'sgeographical
remoteness andhistorical isolation hasprotected its
livestock from many contagious diseases thatarecommon
elsewhere. However, toaccommodate Iceland 'sobligations
under theWTO Agreement, awindow ofopportunity has
been opened toallow imports thatfulfill Iceland 'ssanitary
criteria. TheMinister ofAgriculture isthusauthorized to
permit theimportation ofgenerally prohibited products
upon recommendation bythechief veterinary officer.
Imports have taken place under thisprovision forthefirst
time infiftyyears. Therecommendation maybegranted
once ithasbeen determined thattheproducts inquestion
arepest-free ordisease-free. Thisprocedure issubject to
theprovisions oftheSPSAgreement. Iceland follows
closely thework done ininternational fora, including the
SPSCommittee oftheWTO, regarding thedevelopment
andapplication ofsanitary inspection regulations. Inthis
context, Iceland 'ssanitary regulations arecontinuously
under review.
United States -Clarification sought with
respect tomeasures shown inSupporting
Table DS:3 asmeeting thecriterion that
85percentorlessofdometic production
isaffected.Tobereverted to.G/AG/R/7
Page19
New Zealand G/AG/N/NZL/7 Domestic Support (Table DS:1)
Points raised byother Members Response byNotifying Member
Korea -Clarification sought regarding the
expenditure on"community irrigation
schemes". Does New Zealand claim that
themeasure isinconformity with
provisions inparagraph 2(g)oftheAnnex
2totheAgreement onAgriculture?In1995/96, expenditures forcommunity irrigation schemes
amounted toNZ$2.9 million (Supporting Table DS:1, page
4,refers). Over 99percentofthese expenditures related
tocapital expenditures. New Zealand hadbegun over
recent years apolicy ofselling government irrigation
schemes totheprivate sector. Capital expenditures
involved twoelements, onerelating topayments tonew
owners andtheother relating toassistance foron-farm
irrigation development. Thiswasterminated inJune 1996.
Theremaining expenditures (approximately 0.5percent)
involved expenditures forthemaintenance ofirrigation
systems stillowned bythegovernment.
Norway G/AG/N/NOR/5 Domestic Support (Table DS:1)
Points raised byother Members Response byNotifying Member
Australia/New Zealand -Noted thattheSupporting
Tables inthenotification contain differences to
those included inG/AG/AGST/NOR: bluebox
measures areadded inSupporting Table DS:3 of
thenotification; newpolicies areadded inthe
calculation ofnon-product-specific AMS in
Supporting Table DS:9.
Reminded Norway thatthelevel ofsupport granted
toaspecific commodity must notexceed thelevel
ofsupport decided during the1992 marketing
year.
Suggested thatMembers claiming blueboxpolicies
indicate support level fortheyear1992.Blue boxpolicies included inthenotification were
alsolisted inNorway 'sAGST notification butas
non-exempt measures. With regard tothelevel of
domestic support in1992, Norway recalled that
thematter wasraised during theJune 1995
meeting. Noconclusions were drawn. If
Members consider thatclarification isnecessary
thematter should befurther discussed inthe
Committee.
New Zealand -Clarification sought regarding
"interest concessions" provided under green box
measures. Could Norway confirm thatthe
programme meet thecriteria setoutinparagraph
11ofAnnex 2totheAgreement onAgriculture?Interest rateconcessions relate tointerest rates on
loans provided bytheState Bank forAgriculture.
They reflect thetechnical differences between
interests paidbythecustomers oftheState Bank
ofAgriculture andinterest paidbytheBank on
their capital. Thesupport isnotlinked to
production volume orprices andtherefore meets
thecriteria ofAnnex 2totheAgreement on
Agriculture. Loans foragricultural purposes,
accorded generally toareas withstructural
disadvantages, areprovided within theframework
ofinvestment aidprogrammes, inparticular to
maintain existing agricultural buildings, promote
diversified economic activities inrural areas,
environmental-promoting investments andtothe
reindeer husbandry sector.G/AG/R/7
Page20
Norway G/AG/N/NOR/5 Domestic Support (Table DS:1)
Points raised byother Members Response byNotifying Member
United States -Thenotification reports grain price
support asameasure exempt from reduction
commitments (section 3ofSupporting Table DS:1,
page 3,refers). Does Norway claim thatthis
measure isinconformity withthecriteria setout
inparagraph 3ofAnnex 2totheAgreement on
Agriculture?Grain price support aims atmaintaining thegap
between administered andexternal prices and
includes buying andstorage costs. Thesupport is
indirectly included inthenotification through
product-specific AMS calculation. However, grain
price support isaseparate budgetary item ofthe
Ministry ofAgriculture. Forreasons of
transparency, budgetary expenditures formarket
price support were included inthegreen boxof
Norway 'sAGST document.
United States -Thenotification indicates that
subsidies tosummer dairy operations in
mountainous regions andtoproduction onsteep
areas asmeasures exempt from reduction
commitments under environmental programmes
(Section 12ofSupporting Table DS:1, page 4,
refers). Could Norway explain howthemeasures
meet thecriteria inparagraph 12ofAnnex 2tothe
Agreement onAgriculture?Support tosummer dairy operations in
mountainous regions aims atencouraging theup-
keep oftraditional milk production andallows the
conservation oftheagricultural landscape inthe
mountainous regions bygrazing ofcows andcattle
andusing agricultural buildings. Support to
production onsteep areas aims atsecuring the
cultural landscape through theencouragement of
farming activities inremote areas. Itreflects extra
costs duetodifficult topographical situations in
steep areas.
Under these twoprogrammes, applicants have to
fulfil general conditions laiddown forall
agricultural support. Inaddition, certain health
andquality requirements have tobefulfilled under
thesummer dairy operation scheme. The
allowance forsummer dairy operations ispaidin
theform ofalump sumperyearwhich amounts
toNOK9,500 (maximum). Support toproduction
onsteep areas isprovided according toarateper
hectare withamaximum amount perfarm of
NOK10,000).
United States -Could Norway explain whytaxes
onfertilizers andpesticides arededucted from the
non-product-specific AMS calculation (Supporting
Table DS:9, page 11,refers)?These taxes were alsoincluded inNorway 's
AGST document anddeducted from non-product-
specific AMS calculation. During theUruguay
Round negotiations, theinitial product-specific
approach fortheAMS calculation wasreplaced by
anaggregated approach. However, Norway
maintained theproduct-specific approach inits
background tables butswitched toanaggregated
approach inthenotification. Asaresult, these
taxes areincluded inSupporting Table DS:9. The
differences between Norway 'sbaseperiod
information andthenotification areofapurely
technical nature. Thenetresult isthesame.G/AG/R/7
Page21
Table DS:2 Notifications
United States G/AG/N/USA/5 New orModified Support Measures Exempt from Reduction (DS:2)
Points raised byother Members Response byNotifying Member
New Zealand -Expressed theview thatthe
notification describes ameasure withfar-reaching
implications ontheprocess ofagricultural reform.
Could theUnited States provide more detailed
information onthemeasure? How isthismeasure
compatible withthecriteria fordecoupled income
support setoutinparagraph 6ofAnnex 2tothe
Agreement onAgriculture, i.e.there shall notbe
anylinkage between thepayments andproduction,
prices orfactors ofproduction after thebase
period.
European Communities -What does "flexibility
production contract" mean?
Switzerland -Noted thatpayments under theFAIR
Actarenotrelated toaproduction condition, but
thatthetrigger payment isproduct-related.Theprogramme isfully consistent withthe
provisions ofparagraph 6ofAnnex 2tothe
Agreement onAgriculture. Payments provided are
purely based onhistorical records andarenot
based onproduction, prices orfactors of
production inanyyearafter therelevant base
period.
Annual payments canvary from yeartoyeardue
tothefactthatthequantity oflandenrolled inthe
program maychange from yeartoyear. Land that
hasbeen withdrawn from theConservation
Reserve Program orforwhich thecontract has
expired maybeentered intoacontract. Inthecase
ofadditional landcoming intotheprogramme, the
totalamount ofmoney available fortheyearin
question hastobespread over alarger amount of
landandthepayment perunitwould decline.
Therefore there isaprovision foradjustment each
year.
European Communities -Clarification sought
regarding theconservation requirements which the
farmers must comply with?TheLawrequires producers whoenter into
production flexibility contracts tocomply with
landconservation andwetland restrictions
regarding production ofagricultural commodities
onlanddetermined tobehighly erodible, planting
ofanagricultural commodity onaconverted
wetland andconservation ofwetland. Tobe
eligible forbenefits under theprogramme,
producers arerequired tocomply withthese
restrictions onalloftheir land, including landnot
enrolled under aproduction flexibility contract.
New Zealand -Could theUnited States provide a
breakdown ofthepayments allocated toindividual
commodities?Afixed budgetary amount isallocated each year.
Thepercentage share oftotalannual payment is
fixed foreach commodity asfollows (inpercent):
wheat 26.3, corn46.2, grain sorghum 5.1,barley
2.2,oats0.15, upland cotton 11.6 andrice8.5.G/AG/R/7
Page22
United States G/AG/N/USA/5 New orModified Support Measures Exempt from Reduction (DS:2)
Points raised byother Members Response byNotifying Member
European Communities -Noted thatthe"payment
quantity foragiven contract commodity isequal to
85percent ofthefarm'scontract acreage times its
fixed program yield". How isthefixed program
yield defined?Fixed payment yields foreach contract have been
established according toahistorical baseperiod on
afarm byfarm basis. They aresetaccording to
each farm'sdeficiency payment programme yields
thatwere determined under theterms ofthe1995
production adjustment/deficiency payment
programme. Afixed programme payment yield in
1995 wasthehigher of90percent ofthe1985
programme payment yield ortheaverage ofthe
programme payment yield associated withthe
1981 through 1985 programme years. Thus the
yield iscalculated onanhistorical basis which
goes back tothemid1980s.
Switzerland/European Communities/ Canada and
Mexico -Noted thatthesupport under theFAIR
Actisgranted onthecondition thatthebenefiting
acreage isnotused forvegetable orfruit
production. Does theUnited States claim thatthis
requirement isinconformity withAnnex 2ofthe
Agreement onAgriculture?Fruits andvegetables were noteligible for
payments under anygovernment programme inthe
past. Some concerns were expressed when the
programme wasbeing developed thatproducers of
fruits andvegetables could have tocompete with
newproducers receiving additional payments from
thegovernment.
Canada -Does theFAIR Actinclude other support
measures exempted from reduction commitment
under Table DS:2?Preliminary response: Noother measures willbe
notified under Table DS:2.
Tables ES:1 toES:3 Notifications
Israel G/AG/N/ISR/3 Export Subsidies (Table ES:1)
Points raised byother Members Response byNotifying Member
Australia -Clarification sought regarding "fruits
(notcitrus)". Does thenotification cover tariff
lines HS0801 andHS0802?Tariff lines HS0801 andHS0802 should nothave
been included inthenotification.
Outlays should have been indicated inthousand
US$andquantities inthousand tons.
Mexico -Could Israel provide abreakdown,
commodity bycommodity, ofthetariff lineHS
0804?Israel reminded thatthecommitments apply fora
group ofproducts. Nevertheless, itundertook to
provide therequested data.G/AG/R/7
Page23
Nicaragua G/AG/N/NIC/3 Export Subsidies (Tables ES:1)
Points raised byother Members Response provided byNotifying Member
following themeeting
United States -Thenotification reports thatit
applies exports subsidies through taxcredit
certificates which donotapply toagricultural
products. Canitbeassumed thatthetaxcredit
export subsidy programme wasnotoperated in
1995?Article 8,Chapter IIoftheLawforthePromotion
ofExports ofNicaragua provides thatexporters of
non-traditional products which subscribe toan
export contract willbenefit from ataxcertificate
equal toapercentage ofthef.o.b. value ofthe
goods exported, thepercentage for1995 was
10percent. Nicaragua does notapply anyother
export subsidy foragricultural products.
Nicaragua understands thatasadeveloping
country andinaccordance withAnnex VIIofthe
Agreement onSubsidies andCountervailing
Measures, itisallowed toapply these subsidies
until theyear2003.
United States G/AG/N/USA/6 Export Subsidies (Tables ES:1)
Points raised byother Members Response byNotifying Member
New Zealand -Noted thatexport volumes in1995
formost agricultural products arebelow the
commitments levels andthecombined subsidized
export volumes andfood aidisalsobelow the
commitment level withtheexception ofother milk
products. Does theUnited States claim thatfood
aidprovided intheform ofother milk products is
inconformity withtheprovisions ofArticle 10:4
oftheAgreement onAgriculture andwiththe
principles established bytheFAO'sSurplus
Disposal Committee?TheUnited States isfully incompliance withthe
provisions setoutinArticle 10oftheAgreement
onAgriculture. Food aidisgiven according to
principles established bytheFAO Consultative
Sub-committee onSurplus Disposal (CSSD) andis
nottiedtoprocurement.
New Zealand G/AG/N/NZL/8 Export Subsidies (Table ES:1 toES:3)
Points raised byother Members Response byNotifying Member
European Communities -Confirmation requested
whether New Zealand provided anyfood aidin
1995 or1996.New Zealand didnotprovide anyfood aidin1995
and1996.
European Communities -Clarification sought
regarding footnote 1(page 2,refers) stating that
New Zealand didnotmake anyexport subsidy
quantity reduction commitments, except forthe
year2000 when theexport subsidy quantity
commitment isnil.Thisfootnote wasdiscussed during the
Committee 'smeeting inSeptember 1995 and
relates toNew Zealand 'sscheduled commitment.G/AG/R/7
Page24
Brazil G/AG/N/BRA/5 Export Subsidies (Table ES:1 andES:2)
Points raised byother Members Response byNotifying Member
Question raised bytheUnited States atthe
September 1996 meeting withrespect to
possible newsubsidies being granted to
agricultural exports (G/AG/R/6, page 36,
refers).BEFIEX (Programas Especiais deExporta ção),as
notified totheSubsidies Committee inMarch 1996
(G/SCM/N/3/BRA), wasanincentive programme
specifically designed toassist theindustrial sector, with
noconnection withtheagricultural sector. Thebenefits
bestowed totheprivate sector consisted ofanexemption
from some taxes aiming atfacilitating imports of
industrial equipment (capital goods) which were tobe
incorporated inthecompany 'sfixed assets. Theoverall
objective ofBEFIEX wastoserve asameans of
improving technical capabilities andefficiency of
Brazil 'sindustrial sector. Therefore, thebenefits of
BEFIEX were notdirected totheagricultural sector but
tothecapitalization oftheindustrial sector which may
have included thefood industry. TheUnited States
suggested thatthetitleoffirstcolumn ofthetables
which appear onpages 6,7and8ofnotification
G/SCM/N/3/BRA "product" would bebetter understood
asmeaning "industrial sector". Brazil reiterated thatthe
benefits involved inBEFIEX didnotcorrespond toany
ofthedefinitions ofagricultural subsidies included in
Article 9oftheAgreement onAgriculture. BEFIEX
wasterminated in1990 andthefewresidual
commitments stillexisting aretobephased outin1999.
Table ER:1 Notifications
Hungary G/AG/N/HUN/6 Export Prohibitions andRestrictions (Table ER:1)
Points raised byother Members Response byNotifying Member
United States -Areexport restrictions still in
force?Hungary confirmed thatexport restrictions arestill
ineffect.
Japan -Reiterated itsconcerns withrespect to
exports restrictions. Thepresent notification
extends export restrictions toawide range of
products such asbarley, cereal flours and
preparations used inanimal feeding. Noted that
themeasure wasnotified after thestartofthe
restriction. Theseries ofmeasures taken by
Hungary could worsen thesituation ofinternational
supply anddemand forgrains which isalready
tight. Japan, whose grain supply isheavily
dependant onimports, hasserious concerns
regarding thismeasure. Japan isstillwaiting for
thewritten response toquestions raised during the
previous meeting. Japan willseekclarification on
thismatter bilaterally.Hungary undertook torespond inwriting.