RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/NG/W/15
23 June 2000
(00-2758)
Committee on Agriculture
Special SessionOriginal:  English
PROPOSAL FOR COMPREHENSIVE
LONG-TERM AGRICULTURAL TRADE REFORM
SUBMISSION FROM THE UNITED STATES
In accordance with the long term objective of establishing a fairer, more market-oriented
agricultural trading system and procedures agreed at the March meeting of the Committee on
Agriculture, the United States hereby submits a comprehensive agricultural reform proposal for
correcting and preventing restrictions and distortions in world agricultural markets.
By defining, quantifying, and reducing trade- distorting market access, export competition,
and domestic support measures, the Agreement on Agriculture established the necessary conditions
for long term reform.  The major challenge facing members in this negotiation is to build upon that
foundation by accelerating the process of reducing trade distortions while preserving the appropriaterole for governments to address agricultural concerns in a non-trade-distorting fashion.
Several factors add urgency to this challenge, including internal pressures on members to
conduct serious reform, efforts to reduce budgetary expenditures on agriculture, the development of
new technologies, the challenge of promoting sustainable development, and the increasing challenge
to the world’s farmers and ranchers to feed an expanding population on a shrinking resource base.
Coupled with the built-in time schedule in the Agreement on Agriculture, the United States proposesthat members reach an overall agreement by the end of 2002 and reach agreement on basic modalities
at the midterm of the negotiations in 2001.
The specific elements of the United States’ approach entail reforms across all measures that
distort agricultural trade and that once adopted will reduce levels of protection, close loopholes thatallow for trade-distorting practices, clarify and strengthen rules governing implementation of
commitments, foster growth and promote global food security and sustainable development.
The United States believes there are compelling arguments for further reform.  Too often and
in too many countries, the production and marketing decisions farmers make are still driven bygovernment programs and protections from market access barriers, rather than market conditions.  As
a result, competitive farmers, ranchers, and processors are denied sufficient access to markets and face
subsidized products and the trade-distorting policies of foreign governments, leaving the world with
an agricultural market still far from the WTO objective of a fair and market oriented system.
There are many costs associated with trade distortions.  Distorting subsidy schemes are a
wasteful drain on budgets; along with import restrictions, they misallocate limited resources.  Rigid
government programs and unscientific regulatory restrictions discourage innovation in production and
marketing, threaten the future viability of agriculture, and undermine producers’ ability to meet
growing food and fiber needs.  Barriers to trade foreclose consumer choices and can reduce consumer
access to adequate food.  Distorting subsidies frequently lead to environmentally destructive practices,
threatening as well farmers’ and ranchers’ ability to develop efficiently and in a sustainable manner.G/AG/NG/W/15
Page 2
All of these distortions are especially burdensome for developing countries, and particularly least
developed countries, many of whom depend on agri culture for income and employment and who look
to trade opportunities to generate economic growth  and who depend on the free flow of agricultural
products for food security.
While the United States is committed to wo rking through the WTO to eliminate trade-
distorting measures, the United States is likewise committed to and supports policies that address non-
trade concerns, including food security, resource conservation, rural development, and environmental
protection.  The United States maintains that these objectives are best met through non-trade-
distorting means, with programs targeted to th e particular concern without creating new economic
distortions, thus avoiding passing the cost of achieving these objectives to other countries by closing
markets, or introducing unfair competition, or both.  The United States recognizes that trade measures
may be used to address legitimate health and safety concerns and does not support opening the
Agreement on Sanitary and Phytosanitary Measures to negotiation. The United States also recognizes
the special circumstances in and challenges developing countries face and thus will supply proposals
to help better integrate them into the world trading system.
The U.S. proposal will increase the market-orientation of world agriculture, providing
producers in all countries more opportunities to compet e in world markets, on fairer terms, with more
access to expanding markets.  Not only will domestic policies structured in conformity with the U.S.
proposal remove a major source of trade distortion, they will release producers from restrictive
government policies that prescribe what and how mu ch to produce, freeing farmers to follow their
judgement and the natural carrying capacity of their land.  Such an environment will result in
expanding economic opportunities for farmers and ranchers and putting farm economies on a more
sound basis. At the same time, members adherence to the reforms will alleviate food security concerns
by providing greater access to food and enhanced purchasing power.  Consumers will benefit from
wider choice, access to new products with new benefits, and more competitive prices.
U.S. Proposal: Market Access
The U.S. objective for these WTO negotiations on agricultural market access is to maximize
market access opportunities for all countries and to make more uniform the level and structure of
tariff bindings for all countries in all products.
The United States proposes:
Tariffs
• to reduce substantially or eliminate disparities in tariff levels among countries, to
reduce substantially or eliminate tariff escalation, and ensure effective market access
opportunities for all products in all markets;
• to reduce substantially, or eliminate, all tariffs, including in-quota duties, by reducing
them from applied rates through progressive implementation of annual reduction
commitments over a fixed period;
• to denominate bindings and applied rates on a specific or ad valorem  basis, without
the use of complex tariffs or combinations of tariffs;
• to eliminate the transitional special agricultural safeguard as defined in Article 5 of
the Agreement on Agriculture;G/AG/NG/W/15
Page 3
Tariff-Rate Quotas
• to subject all tariff-rate quotas to substantial increases through progressive
implementation of annual commitments over a fixed period;
• to establish disciplines to improve functioning of tariff-rate quotas, including specific
mechanisms that trigger when tariff rate quota fill remains below a fixed level;
Import State Trading Enterprises
• to end exclusive import rights to ensure private sector competition in markets
controlled by single desk importers;
• to establish WTO requirements that increase transparency in the operation of single
desk importers, including their decisions on quality and source of imports; and
Products of New Technologies
• to focus disciplines to ensure that processes covering trade in products developed
through new technologies are transparent, predictable, and timely.
U.S. Proposal:  Export Competition
The U.S. objective for these WTO negotiations on agricultural export competition is to
eliminate export subsidies and variable export taxes and to discipline export state trading enterprises.
The United States proposes:
Export Subsidies
• to reduce to zero the levels of scheduled budgetary outlays and quantity commitments
through progressive implementation of annual reduction commitments over a fixed
period;
Export State Trading Enterprises
• to end exclusive export rights to ensure private sector competition in markets
controlled by single desk exporters;
• to establish WTO requirements for notifying acquisition costs, export pricing, and
other sales information for single desk exporters;
• to eliminate the use of government funds or guarantees to support or ensure the
financial viability of single desk exporters;
Export Taxes
• to prohibit the use of export taxes , including differential export taxes,  for competitive
advantage or supply management purposes; andG/AG/NG/W/15
Page 4
Export Credit Programs
• to conduct negotiations for export credit programs in the Organization for Economic
Cooperation and Development in fulfilment of Article 10.2 of the Agreement on
Agriculture, and apply disciplines to all users.
U.S. Proposal:  Domestic Support
The U.S. objective for these WTO negotiations on agricultural domestic support is to reduce
substantially trade-distorting domestic support in a manner that corrects the disproportionate levels of
support members use, while simplifying the way in which domestic support is disciplined.
The United States proposes building on the key elements of the Agreement on Agriculture,
including the de minimis  principle, and making progress through a fairer and simpler approach to
capping, binding, and reducing trade-distorting support.  This approach recognizes the legitimate role
of government in agriculture.  In particular, the U.S. proposal allows for support that is delivered in amanner that is, at most, minimally trade distorting.  This could include, among others, income safety-
net and risk management tools, domestic food aid, environmental and natural resource protection,
rural development, new technologies, and stru ctural adjustment which promote economically
sustainable agricultural and rural communities.
The United States proposes:
• to simplify the domestic support disciplines into two categories:
exempt support, as defined by criteria-based measures that have no, or at
most, minimal trade distorting effects or effects on production; and
non-exempt support, which would be subject to a reduction commitment;
• all members with a final bound Aggregate Measurement of Support in their schedules
commit to reduce the level of non-exempt support as follows:
reductions start from the final bound Aggregate Measurement of Support,
the Aggregate Measurement of Support is to be reduced to a final bound level
equal to a fixed percentage of the members’ value of total agricultural
production in a fixed base period, the fixed percentage will be the same for
all members, and reductions would be implemented through progressiveannual reduction commitments over a fixed period;
• to enhance further, by building on experience, the criteria for exempt support
measures while ensuring all exempt measures are targeted, transparent, and, at most,
minimally trade-distorting;
• to give special consideration for exempt support measures essential to the
development objectives of developing countries as noted under the section on Special
and Differential Treatment.G/AG/NG/W/15
Page 5
U.S. Proposal: Special and Differential Treatment
The U.S. objective for these negotiations is that developing countries be better integrated into
the WTO system through technical assistance, by improving market access opportunities, in particular
for least developed countries, and by affording flexibility for exempt support measures essential todevelopment objectives.
The United States recognizes the need for capacity building in developing countries to
enhance their integration into and their ability to benefit from the international trading system.  In this
regard, the United States will work with developing  countries to take advantage of the broad range of
programs offered by international organizations, bilateral aid agencies, and other entities including
programs under the Integrated Framework for least-developed countries.  In addition, the UnitedStates encourages all members to build upon and expand current activities and improve technical
assistance coordination.
The United States proposes:
Market Access
• all WTO members consider products of interest to developing countries, in particular
least-developed countries, when making tariff reductions;
• to give special consideration to least developed countries when they implement tariff
reduction commitments;
Domestic Support
• to create additional criteria for exempt support measures deemed essential to the
development and food security objectives of developing countries to facilitate the
development of targeted programs to increase investment and improve infrastructure,
enhance domestic marketing systems, help farmers manage risk, provide access to
new technologies promoting sustainability and resource conservation and increase
productivity of subsistence producers;  and
Technical Assistance
• that WTO members intensify ongoing technical assistance through governmental and
non-governmental entities in parallel with these negotiations.
U.S. Proposal: Food Security
The U.S. proposal is a food security proposal.  The United States believes,  in addition to the
non-trade distorting domestic support measures countries take to enhance their food security, furtherliberalization of trade in agricultural products and promoting legitimate assistance programs are
important elements in strengthening food security.  Trade liberalization will enhance important efforts
on food security underway in several venues, including the Food Aid Convention, the United Nations
Food and Agriculture Organization, and the World Food Program.  In addition to specific disciplines
which expand sources of supply and encourage efficiencies in agricultural production, trade reformwill result in economic growth and spur innovation, expanding global food security.     It is important
to recognize that liberalization alone will not address food security needs in all developed and least
developing countries.  As a consequence, the nego tiations need to take into account the continuing
role of international food aid and credit programs in providing for food import needs.G/AG/NG/W/15
Page 6
The United States proposes:
• to renew the commitment to food aid as expressed in the Uruguay Round’s “Decision
on Measures Concerning the Possible Negative Effects of the Reform Program onLeast Developed and Net Food-Im porting Developing Countries”;
• to continue the WTO disciplines on food aid contained in Article 10.4 of the Uruguay
Round Agreement on Agriculture, which have proven to be appropriate;
• the disciplines to be developed at the Organization of Economic Cooperation and
Development for agricultural export credits and credit guarantees should not preventWTO members from using such programs to improve the food security status of other
members;
• to establish export reporting systems in all members to increase information on the
level and direction of international grain and oilseed transactions;  and
• to strengthen substantially WTO disciplines on export restrictions to increase the
reliability of global food supply.
Proposal: Sectoral Initiatives
The United States proposes that WTO members engage in sector specific negotiations to
agree on reform commitments beyond those generally applicable in the areas of market access, export
competition, and domestic support,  including, but not limited to, zero-for-zero and harmonization
initiatives.
__________