WORLD TRADE
ORGANIZATIONRESTRICTED
G/AG/R/38
28 May 2004
(04-2308)
Committee on Agriculture
SUMMARY REPORT OF THE MEETING HELD ON 25 MARCH 2004
Note by the Secretariat1
1. The Committee on Agriculture held its thirty-eighth regular meeting on 25 March 2004 under
the chairmanship of Dr. Magdi Farahat of Egypt. The agenda of the meeting as contained in
WTO/AIR/2269 was adopted.
PART I:THEREVIEW PROCESS
A. M ATTERS RELEVANT TO THE IMPLEMENTATION OF COMMITMENTS UNDER THE REFORM
PROGRAMME :ARTICLE 18.6
(a) Argentina: Hungary – Tariff quota underfill – Article 18.6
2. Argentina reverted to Hungary's deferred response to questions that Argentina had raised
under Article 18.6 of the Agreement at the November 2003 meeting concerning the matter of tariff
quota underfill. At the November meeting, Argentina had observed that the tariff quotas for milk and
cream, corn and poultry and poultry meat during 1995-2001 were not filled and questioned whether
there was any linkage between tariff quota underfill and the use of export subsidies for those products
in same period. Argentina sought clarification as to why, as stated in Hungary's deferred response,
this issue should not have been raised as an implementation matter under the provisions of
Article 18.6 of the Agreement (see G/AG/R/37, paragraph 5 and page 22).
3. Hungary noted that Article 18.6 foresees the discussion of "matters relevant to the
implementation of commitments" of Members, while Article 18.2 provides for the possibility of the
discussion of notifications in general. In its view, this discussion should properly take place under the
agenda item related to Article 18.2 of the Agreement.
4. This said, Hungary responded to Argentina that the quotas in question were opened in
accordance with Hungary's scheduled commitments and were made available to all Members. There
is no obligation to import or to ensure that the quotas are actually filled. By opening the quotas
Hungary had fully met its multilateral commitments, something which Argentina had not questioned.
Furthermore, Hungary had provided export subsidies for a number of products within the budgetary
and quantity limits contained in its Schedule. Again, Argentina had not questioned that Hungary had
met these multilateral commitments.
5. For a number of reasons, Hungary did not believe, as presumed by Argentina, that there was a
linkage between underfill of quotas and the provision of export subsidies to those products. Many of
Hungary's commitments are at 4-digit level, while the traded products where there was quota underfill
and for which export subsidies were provided might be quite different. Furthermore, due to the
1This document has been prepared under the Secretariat's own responsibility and is without prejudice
to the positions of Members or to their rights or obligations under the WTO.G/AG/R/38
Page 2
weather and other conditions, production, exports and imports might fluctuate widely from year to
year. Trade flows are also to a large extent influenced by existing business links and traditional
patterns of exports and imports. Hungary's trade is to a large extent influenced by preferential market
access opportunities and many products can be imported at lower tariffs than under the WTO quotas.
Other factors such as transport costs and its land-locked position can influence the sources of
Hungary's imports. In Hungary's view, there might be many factors influencing trade flows which are
not related to the fulfilment of commitments.
6. In response Argentina noted that this issue had a procedural and a substantive dimension.
From a procedural point of view, Argentina considered Hungary's answer at the last meeting to be
unacceptable because Article 18.6 of the Agreement allows Members to raise any implementation
issue and because Argentina was seeking an explanation for the repeated tariff quota underfill of
subsidized products, which in Argentina's view had not been provided by Hungary. In any event,
Argentina reserved its rights in negotiations under Article XXIV:6 and/or Article XXVIII of the
GATT 1994 to object to import trade statistics of Hungary or other EU member States with tariff
quota underfill.
(b) Argentina: Switzerland – Export subsidies
7. Argentina reverted to the Article 18.6 matter it had raised at the November 2003 meeting
concerning export subsidies provided by Switzerland (G/AG/R/37, paragraphs 7-11). Argentina
sought further clarification regarding the measures for the provision of export subsidies. It also
requested a response to its questions concerning export subsidies provided for incorporated products.
8. Switzerland responded that information concerning export subsidies for the products
concerned (see G/AG/N/CHE/25) is available on the Internet.2As regards incorporated products, the
compensation amounts on a raw material-specific basis are adjusted four times a year.3Switzerland
also provided information regarding the compensation amounts for incorporated products for the year
2000 (see Attachment hereto).
(c) Australia: European Communities – Sugar regime
9. Australia requested the EC to clarify the following matters concerning its sugar regime:
(i) Whether the sugar imports from the ACP countries and India constitute imports under
the WTO tariff quota allocated to certain ACP Members and India. It also requested information
concerning the quantities imported under arrangements, other than the WTO tariff quota. The EC
responded that imports are made under the ACP and India tariff quota, under a second special
preferential sugar tariff quota, the GSP and the Everything-But-Arms arrangements since 2001-2002.
(ii) Whether the data on sugar imports from the ACP countries and India communicated
to the EC are expressed in white sugar equivalent. The EC responded that the data are expressed in
product weight which corresponds to approximately 97 per cent of white sugar equivalent.
(iii) Whether the EC could provide import data from the ACP countries and India for
2002/03 in white sugar equivalent. The EC responded that such data are not available.
(iv) Whether the annual imports from the ACP and India relate to the marketing year.
The EC responded in the affirmative.
2See http://www.bk.admin.ch/ch/f/rs/rs.html. Then search for: Dairy products - order 916.350.21;
cattle for breeding and horses – order 916.310.51; fruits – order 916.131.11; potatoes – order 916.113.11;
processed products - orders 632.111.72 and 632.111.722 and 632.111.723.
3See http://www.seco-admin.ch/themen/aussenwirtschaft/warenverkehr/zollfragen/ index.html?lang=fr.G/AG/R/38
Page 3
(v) Whether the figure of 1.6 million tonnes referred to in the footnote to the EC
Schedule of export subsidy commitments is expressed in white sugar equivalent. The EC responded
in the affirmative.
(vi) How does the EC define "sugar of ACP and Indian origin"? The EC responded that
the definition is determined under the applicable preferential agreement.
(vii) What arrangements are in place to ensure that EC export subsidies on sugar of ACP
and Indian origin, as referred to in the footnote to the EC Schedule, are restricted to such sugar? The
EC responded that it is equivalent sugar which is exported.
(viii) Whether the EC provides export subsidies on sugar of ACP and Indian origin
according to the quantities imported from those countries in (a) the year of import, or (b) the previous
year, or (c) on some other basis. The EC responded that footnote 1 to its Schedule permits the
granting of export subsidies with respect to a quantity of exports equivalent to the imports from the
ACP countries and India during the base period, i.e. 1.6 million tonnes. The EC referred to its
explanation on how it ensures that such quantity is not exceeded in the context of the ongoing Panel
proceeding concerning the EC sugar regime.
(d) United States – Skim milk powder provided as food aid
Questions from Australia
10. Australia stated that so far in 2004 the United States had announced food aid donations of
non-fat dry milk powder (skim milk powder - SMP) to three countries (Indonesia, Viet Nam and
Georgia). In making these announcements the United States had indicated that it expected to donate
60,000 tonnes of US SMP in fiscal year (FY) 2004. Australia sought clarification regarding SMP
food aid in FY 2003, stock levels (a question also raised by the EC) and subsidized exports of SMP.
11. The United States responded that it had donated 70,870 tonnes of SMP in FY 2003 under the
416 program. Information on total FY 2003 SMP donations would be notified. At the end of
December 2003 US stocks of SMP were approximately 500,000 tonnes. In the period July 2002 to
June 2003, the United States had exported 68,201 tonnes of SMP with subsidies which represented
100 per cent of the corresponding export subsidy commitment level. In FY 2003 outlays for SMP
were $14.8 million, 17.9 per cent of the US commitment level.
12. Australia also sought clarification as to how the United States ensured that the SMP food aid
that was monetized or bartered did not adversely affect local commercial market prices. The US
responded that it adheres to the "Principles of Surplus Disposal and Consultative Obligations" as laid
out by the Consultative Subcommittee on Surplus Disposal (CSSD). The primary discipline under the
CSSD is the usual marketing requirement (UMR) which is an average of the preceding five years of
commercial imports for the particular recipient country and commodity in question. The maximum
level of food aid to avoid commercial disruption is the difference between the country's consumption
needs and the UMR plus domestic supplies (production and stocks). The monetization programmes
identified are aimed at filling the gap between local demand and the country's food availability, thus
avoiding disruption of commercial markets.
Questions from Canada
13. Canada expressed concern about the US food aid donations of 3,500 tonnes of SMP to Viet
Nam and 4,000 tonnes of SMP to Indonesia in February 2004. Both donations were made to Land
O'Lakes, an American dairy cooperative under USDA's Section 416(b) program administered by the
Foreign Agricultural Service. In both instances the SMP was not used for direct feeding. LandG/AG/R/38
Page 4
O'Lakes monetized SMP to be used in various projects including improving dairy markets in these
countries. Land O'Lakes is a significant dairy exporter and its international development projects
serve to generate international market opportunities.
14. Canada noted that USDA Section 416(b) states that "priority will be given to programs that
use the non-fat dry milk in direct feeding operations. Large monetization programmes that support
development projects are the least likely to be approved". In light of these stated priorities, Canada
sought clarification as to how these transactions met US program objectives and the food needs in
these countries, and as to why Land O'Lakes had been chosen for these donations.
15. The United States responded that the monetization proceeds were indeed used for
humanitarian objectives. While monetization projects were not given the top priority in the selection
of Section 416(b) programs, USDA objectives of the programme state that "Programs that use the
monetization proceeds for humanitarian objectives (HIV/AIDS, health, nutrition, and similar projects)
will be favoured." The programmes being carried out by Land O'Lakes in Viet Nam and Indonesia
were clearly cases where the monetization proceeds were used for humanitarian objectives, objectives
that the United States considered worthwhile.
16. The objectives of the Section 416(b) SMP program in Viet Nam are to address immediate
child malnutrition and health concerns through the Mekong Delta Child Feeding Project and to
promote longer term food security through the Dairy Link Pilot Project. Of the 3,500 tonnes of SMP
to be provided, 1,400 tonnes are to be bartered for fortified UHT milk. The remaining 2,100 tonnes
are to be monetized. Using both bartered goods and monetized proceeds, the Mekong Delta Child
Feeding Project will provide a 200-ml package of UHT milk and a fortified biscuit to 167,000 school
children and teachers every school day. The project is targeted at several rural and remote districts
with a high percentage of malnourished children in families with low income levels.
17. The Dairy Link Project is an effort to partner the private and public sectors to develop the
dairy sector in Southern Viet Nam and increase the nutrition of children in that district. Land O'Lakes
will work with a local dairy organization willing to improve operations, especially in food safety, and
develop nutritious products to combat malnutrition. The project will be linked to a school feeding
programme and the local partner must agree to provide fresh milk to local schools in exchange for
equipment, technical assistance and training. Approximately 2,000 children will benefit.
18. The objectives of the Section 416(b) SMP program in Indonesia are to improve child nutrition
for Indonesian school children; provide supplemental rations for HIV/AIDS patients; provide
technical assistance on food safety to local businesses; and increase health awareness in schools. Of
the 4,000 tonnes of SMP to be provided, 1,500 are to be bartered for fortified UHT milk. The
remaining 2,500 tonnes are to be monetized. Using both bartered goods and monetized proceeds,
353,000 school children and their teachers in economically disadvantaged areas of Java, Lombok,
Bali, and South Sulawesi will receive UHT milk for 29 weeks during the school year. 51,000 children
will receive fortified biscuits for 29 weeks. Proceeds from the monetization will also be used to
provide a highly fortified food product to low-income HIV/AIDS patients in Jakarta.
19. The SMP food aid was provided by United States to the Land O' Lakes International Division,
which is a separate unit from the commercial unit. The International Division is registered as a
Cooperative Development Organization with the US Agency for International Development. This
unit implements the food aid programmes at cost. The commercial and humanitarian units of
Land O'Lakes have distinct employees and Land O'Lakes has clear rules to ensure that the employees
are independent of one another. Land O'Lakes is not a major exporter in the areas where the
cooperative implements food aid programmes. Commercial operations are mostly completed with
one US processor for sale in Latin American countries.G/AG/R/38
Page 5
20. When reviewing proposed programmes for approval, USDA examines the past food aid and
development activities of the proposing organization, its experience within the country where the
programme is proposed, and any other relevant information to demonstrate its capability to implement
the programme. Land O'Lakes has extensive background worldwide in managing programmes to
combat malnutrition. This organization also has experience partnering with government and non-
governmental organizations to carry out projects similar to those in Indonesia and Viet Nam. Given
its extensive experience, USDA considers Land O' Lakes an appropriate choice in carrying out US
food aid and humanitarian objectives.
21. Furthermore, with respect to Canada's question as to why these transactions should not be
considered as export subsidies under Article 9.1(a) of the Agreement, the United States responded that
it considered that, to the extent international food aid transactions were in conformity with the
requirements of Article 10.4, they did not constitute export subsidies under the Agreement on
Agriculture, any export subsidies described in Article 9.1(a), or the anti-circumvention provisions of
Article 10.1 of the Agreement.
Questions from the European Communities
22. The EC requested an update of the situation concerning the provision of 200,000 tonnes of
international food aid announced in 2002 and expressed concern about awards to the National Dairy
Authority (see also G/AG/R/35, paragraphs 4-6). In light of the build-up of SMP stocks in excess of
one billion lbs. by the end of 2002, the EC sought clarification from the US regarding its disposal
strategy for these government stocks, including food aid.
23. The United States responded that it had announced in October 2002 that 200,000 tonnes of
SMP were available for food aid under the 416(b) program. Actual FY 2003 programming of 416(b)
food aid totalled 70,870 tonnes. The US intends to use the SMP stocks by increasing the use of SMP
in domestic school lunch programmes and as donations to domestic aid organizations. US food aid is
used to provide famine relief, assist food insecure countries, and support critical development
programmes, with stocks at the disposal of the US government.4
Questions from New Zealand
24. New Zealand stated that the US had announced in December 2002 its intention to donate over
24,000 tonnes of SMP from its non-commercial stockpile as food aid to Central and South America,
with assurances to the Committee that this food aid would not displace normal commercial
transactions, including both SMP imports and domestic production in those markets. However, in
light of information of donations of SMP being monetized in Guatemala (December 2003) and
El Salvador (January 2004) by private companies, which appears to have resulted in lost commercial
sales, New Zealand sought clarification from the US regarding the consistency of these donations with
Article 10.4 of the Agreement.
25. The United States responded that the private voluntary organization Food for the Poor had
been selected to carry out the donations referred to by New Zealand, which were destined for 14 Latin
American countries. Under this programme, El Salvador and Guatemala received 1,000 tonnes and
5,800 tonnes of SMP, respectively. Donations under this programme were being used to feed
approximately 1.5 million children and adults in hospitals, orphanages, schools, homes for the elderly,
and homeless people; none of this food aid was monetized. In addition, USDA provided 1,000 tonnes
of SMP to a private voluntary organization Project Concern International (PCI) for a FY 2003
programme in Guatemala. This quantity was monetized in December 2003 and January 2004. None
of the SMP provided to El Salvador in FY 2003 was monetized.
4For further information, see www.fas.usda.gov/excredits/FoodAid/FFP/eligibleCountries.html.G/AG/R/38
Page 6
26. In following the guidelines of the CSSD, the United States had calculated the UMR for
Guatemala prior to approving this programme and determined that up to 1,000 tonnes of SMP could
be monetized without disrupting commercial imports. Therefore, this programme was in line with the
FAO "Principles of Surplus Disposal".
27. A number of Members had follow-up questions or made comments.
28. Canada sought clarification from the United States if it considered that whenever a company
in the commercial export business establishes a non-profit division, the food aid provided to that
company for sale in export markets is not covered by Article 9.1 of the Agreement; or whether this
has to be judged on a case-by-case basis. It also requested the US to provide information on the
origin and the suppliers of the food and beverages in the context of the monetization process referred
to above.
29. Australia observed that this issue involved a situation where a Member had reached the limit
in terms of allowable export subsidies and was faced with a domestic surplus, some of which was
disposed on the world market. The Australian dairy industry had raised a question as to how the
WTO rules apply in this case. How can one be sure that this is genuine food aid? While Australia
was very supportive of helping to improve the general humanitarian conditions in developing
countries, in its view the same objective could be achieved more directly by providing aid funds rather
than selling the product into those markets (monetization).
30. The EC commented that the position of the United States in justifying its food aid
programmes – conformity with usual marketing requirements obligations, provision of notifications –
was contradicted by information from various commercial sources that these operations displaced
commercial sales, in particular in the Dominican Republic. In the view of the EC, it might be
preferable if food aid operations are undertaken by specialized agencies with more experience in this
area than governments. It requested clarification of whether in the case of Viet Nam the US had
carried out an impact assessment of the food aid on the Vietnamese dairy industry and local
production and whether the possibility of local purchases or triangular operations had been examined.
The concern is that the US food aid operations may be stunting the growth prospects for dairy
production in Viet Nam, whereby food aid displaces commercial and domestic production.
31. Argentina said that it does not question the humanitarian objectives of the United States but
the means to achieve them. Argentina also sought clarification as to whether these donations have
been notified to the CSSD of the FAO.
32. The United States responded that the US commercial dairy industry is paying close attention
to the government's food aid donations and certainly does not want to be displaced, nor hindered in its
efforts to expand international markets. In response to Argentina, the US said that it had to verify
whether FAO had been notified about the food aid operations but in any case the US had submitted its
Table NF:1 notifications for 2001 and 2002. The United States did not expect its food aid operations
will undermine the growth prospects in the dairy market of Viet Nam. Its dairy exports to Viet Nam
amounted to 30,000 tonnes of US milk powder, whey, lactose, WPC34 and WPC80 in the period
2001 to 2004, a total value of approximately US$14 million. The United States reassured the
Committee that its commercial export interests were also at stake.
33. Australia noted in response that the US dairy industry had not only an international focus but
also domestic interests. As a large dairy stockpile reduces the returns in the domestic market for US
dairy producers, there is a question of whether the US dairy industry does not on balance gain from
the US food aid operations.G/AG/R/38
Page 7
(e) European Communities: United States– Domestic processing requirement linked to orange
juice purchase
34. The EC stated that on 15 January 2004 USDA had published news release No. 0020.04 in
which Secretary Veneman announced the purchase of up to US$50 million of orange juice. The
release contained the following sentence: "The purchase offer will be open to those processing
100 per cent domestic orange juice". The EC sought clarification from the United States concerning
the compatibility of the stated condition for participation in the purchase with the Agreement on
Agriculture and how this measure would be notified.
35. The US responded that this purchase of orange juice was made as part of the US school lunch
programmes which are notified as Green Box measures under domestic food aid - child nutrition
programmes. Commodities for the programme were purchased at market prices based on open bids
which are then donated to the schools for subsidized or free school lunches.
36. With regard to the question of compatibility with the Agreement on Agriculture, the US stated
that the longstanding general rule of Article III of the GATT is to prohibit the treatment of domestic
goods more favourably in commerce than imported goods. Article III of the GATT has an explicit
exception to this general rule, however, for the payment of certain domestic subsidies. Article III:8(b)
allows the payment of subsidies exclusively to domestic producers. Consequently, domestic support
paid exclusively to domestic producers of agricultural goods is permissible.
(f) Mexico: Panama – Tariffs applied on dairy products
37. Mexico expressed concern about Panama's tariff of 65 per cent applied in respect of milk
products classified under subheading 1901.10.19, which appears to be higher than Panama's
corresponding binding. Mexico sought clarification regarding this information and steps taken by
Panama to rectify this measure. Argentina, Colombia, Costa Rica and the EC supported the statement
made by Mexico.
38. As Panama was not in the room when this point was raised, the Chair requested Mexico to
provide its questions in writing to Panama.
B. R EVIEW OF NOTIFICATIONS
(a) Notifications in respect of which questions have been raised in advance of the issuance of the
convening airgram
39. The Committee reviewed the following notifications as listed in the agenda:
(i) on the administration of tariff and other quota commitments (Table MA:1): from
El Salvador (SLV/21);
(ii) relating to imports under tariff and other quota commitments (Table MA:2): from
European Communities (EEC/48), South Africa (ZAF/51) and Thailand (THA/48 and
THA/49);
(iii) in the context of the special safeguard (Tables MA:3 to MA:5): from Japan (JPN/84
and JPN/88) and United States (USA/49);
(iv) relating to domestic support commitments (Table DS:1): from Australia (AUS/52),
Czech Republic (CZE/52), Morocco (MAR/28), Poland (POL/60), Romania
(ROM/20 and Corr.1) and Slovak Republic (SVK/42); andG/AG/R/38
Page 8
(v) relating to new or modified domestic support measures exempt from reduction
(Table DS:2): from Australia (AUS/53) and Czech Republic (CZE/53).
40. Specific points raised with respect to the notifications listed above and the responses thereto
are summarized in Part I of the Annex to this report.
(b) Notifications subject to review in respect of which no questions have been raised in advance
of the issuance of the convening airgram
41. The Committee took note of the following notifications, which had been circulated in advance
of the date on which the notice convening the present meeting was issued but in respect of which no
questions had been raised by that date under the Committee's Working Procedures:
(i) on the administration of tariff and other quota commitments (Table MA:1): from
Japan (JPN/91) and the United States (USA/50);
(ii) relating to imports under tariff and other quota commitments (Table MA:2): from
Guatemala (GTM/28), Japan (JPN/92), Morocco (MAR/26), Nicaragua
(NIC/14/Corr.1), Panama (PAN/8), Slovenia (SVN/26) and Thailand
(THA/48/Corr.1);
(iii) in the context of the special safeguard (Tables MA:3 to MA:5): from Barbados
(BRB/13 and BRB/14), Guatemala (GTM/29), Japan (JPN/89 and JPN/93), Morocco
(MAR/27), Panama (PAN/7), Poland (POL/59 and POL/61), Slovak Republic
(SVK/41), Chinese Taipei (TPKM/12), and Thailand (THA/46);
(iv) in the context of domestic support commitments (Table DS:1): from Chile (CHL/14),
Hong Kong, China (HKG/16), Singapore (SGP/10) and the United States (USA/51);
(v) in the context of new or modified domestic support measures exempt from reduction
(Table DS:2): from Chile (CHL/15);
(vi) on export subsidy commitments (Tables ES:1 to ES:3): from Armenia (ARM/1),
Barbados (BRB/12), Czech Republic (CZE/51), Guyana (GUY/11), Hong Kong,
China (HKG/17), Hungary (HUN/32), Japan (JPN/90), Morocco (MAR/29), Namibia
(NAM/15), Oman (OMN/2), Saint Lucia (LCA/1), Singapore (SGP/11), Thailand
(THA/47) and Zambia (ZMB/5);
(vii) on export prohibitions and restrictions (Table ER:1): from the Former Yugoslav
Republic of Macedonia (MKD/1).
42. Specific points raised with respect to Table DS:1 notification from the United States
(G/AG/N/USA/51) and the response thereto are summarized in Part I of the Annex to this report (see
page 25).
(c) Notifications circulated or made available after the notice convening the meeting was issued
43. The following notifications were subject to preliminary review and are to be reverted to at the
next meeting for substantive review in accordance with paragraph 9 of the Committee's Working
Procedures (G/AG/1):
(i) relating to imports under tariff and other quota commitments (Table MA:2): from
El Salvador (SLV/22) and Latvia (LVA/9);G/AG/R/38
Page 9
(ii) in the context of the special safeguard (Tables MA:3 to MA:5): from Japan (JPN/94);
(iii) on export subsidy commitments (Tables ES:1 to ES:3): from Argentina (ARG/23)
and Chile (CHL/16).
(d) Points concerning notifications raised at previous meetings
44. There was no discussion under this agenda item.
(e) Counter notifications under Article 18.7 of the Agreement
45. The Committee took note that no counter-notifications had been received under Article 18.7
of the Agreement.
(f) Deferred replies to questions raised under the Review Process
46. The deferred reply from India regarding the Article 18.6 matter raised by Canada at the
November 2003 meeting concerning India's tariff quota for refined colza oil (see G/AG/R/37,
paragraphs 19-20) is summarized in Part II of the Annex to this report.
47. Following the March meeting, the Secretariat received deferred replies from Romania
regarding its Table DS:1 notification (G/AG/N/ROM/20) and from the Slovak Republic concerning
its Table DS:1 notification (G/AG/N/SVK/42). These replies are included in Part I of the Annex to
this report.
(g) Overdue notifications
48. The Committee took note of the room document, dated 24 March 2004, made available by the
Secretariat showing the current status of compliance with the notification obligations.
(h) Addenda to Table MA:1 notifications
49. The Committee took note that the following Members administering tariff quotas had
submitted the requisite Table MA:1 Addenda in accordance with the General Council Decision of
December 2000 (paragraph 1.1 of WT/L/384 refers): Australia, Canada, the Czech Republic, the EC,
Hungary, Japan, Latvia, New Zealand, Norway, Slovenia, Switzerland, Thailand, and the
United States. The Chairman urged those Members administering tariff quotas which had not yet
done so to provide Addenda to their Table MA:1 notifications in accordance with the General Council
Decision in WT/L/384.
PART II:OTHER MATTERS WITHIN THE PURVIEW OF THE COMMITTEE
A. I MPLEMENTATION OF ARTICLE 10.2 OF THE AGREEMENT ON AGRICULTURE ,ON THE
DEVELOPMENT OF INTERNATIONALLY AGREED DISCIPLINES TO GOVERN THE PROVISION OF
EXPORT CREDITS ,EXPORT CREDIT GUARANTEES OR INSURANCE PROGRAMMES (G/AG/16,
SECTION A)
50. Argentina recalled the statement it had made under this agenda item at the September meeting
of the Committee (G/AG/R/36, paragraph 35).G/AG/R/38
Page 10
B. MARRAKESH NFIDC DECISION –PROPOSAL BY THE AFRICAN GROUP IN THE CONTEXT OF
THE REVIEW OF ALL SPECIAL AND DIFFERENTIAL TREATMENT PROVISIONS BY THE
COMMITTEE ON TRADE AND DEVELOPMENT IN SPECIAL SESSION
51. The Committee took note that this agenda item concerned a proposal by the African Group
(TN/CTD/W/3/Rev.2, paragraph 52) that had been referred to the Committee in the context of the
review of all special and differential treatment provisions by the Committee on Trade and
Development meeting in Special Session (see report by the Chairman of the Committee to the General
Council on the discussion held at the June 2003 meeting, G/AG/17 and Corr.1). The Chairman of the
General Council who had been undertaking consultations on this matter had invited the Committee,
through its Chairman, to further consider this matter.
52. There was no discussion under this agenda item and the Committee agreed to revert to this
matter at a future meeting.
C. WTO LIST OF NETFOOD-IMPORTING DEVELOPING COUNTRIES :APPLICATION BY GABON
53. The Committee noted that paragraph 3 of the Committee's November 1995 decision on the
establishment of a WTO List of Net Food-Importing Developing Countries for the purposes of the
Marrakesh NFIDC Decision provided that the list shall be reviewed by the Committee at its regular
March meetings (G/AG/3, refers). In this regard, an application had been received from Gabon. The
relevant statistical data, submitted by Gabon in line with paragraph 2 of the Committee's decision on
the establishment of the list, was available for consultation in the Agriculture and Commodities
Division. The Committee agreed to include Gabon in the WTO List of Net Food-Importing
Developing Countries (G/AG/5/Rev.7).
D. E LECTION OF CHAIRPERSON
54. The Committee took note that the Chairman of the Council for Trade in Goods had carried
out informal consultations on a slate of names for appointment as chairpersons to the subsidiary
bodies of the Council for Trade in Goods in accordance with the established Guidelines for
Appointment of Officers to WTO bodies (contained in document WT/L/31). In light of the fact that
these consultations had not yet reached a conclusion, the Committee postponed the election of the
Chairperson of the Committee until its next meeting.
E. M ATTERS RAISED UNDER "OTHER BUSINESS "
55. The Philippines informed the Committee under "Other Business" that it intended to engage in
negotiations on the question of continuation of Special Treatment – Annex 5 of the Agreement. A
notification concerning this matter was submitted after the meeting (G/AG/W/63 – G/L/677 dated
29 March 2004).
Date of Next Meeting
56. The next regular meeting of the Committee on Agriculture will be held on Thursday,
17 June 2004. The airgram convening the meeting and containing the draft agenda will be issued on
Monday, 7 June 2004.G/AG/R/38
Page 11
ANNEX
Page
Part I Review of notifications by the Committee on Agriculture on 25 March 2004
(i) administration of tariff and other quota commitments (Table MA:1):
El Salvador (SLV/21);12
(ii) imports under tariff and other quota commitments (Table MA:2): European
Communities (EEC/48), South Africa (ZAF/51), Thailand (THA/48 and
THA/49);13
(iii) use of the special safeguard (Tables MA:3-MA:5): Japan (JPN/84 and JPN/88)
and United States (USA/49);15
(iv) domestic support commitments (Table DS:1): Australia (AUS/52), Czech
Republic (CZE/52), Morocco (MAR/28), Poland (POL/60), Romania
(ROM/20 and Corr.1), Slovak Republic (SVK/42) and United States (USA/51);
and18
(v) new or modified domestic support measures exempt from reduction
(Table DS:2): Australia (AUS/53) and Czech Republic (CZE/53).26
Part II Deferred replies to questions raised under the Review Process at previous
meetings
Reply provided by India under Article 18.6 of the Agreement concerning the
matter of Canada – India: Tariff quota for refined colza oil (see G/AG/R/37,
paragraphs 19-20)29
Attachment
Information provided by Switzerland under Article 18.6 of the Agreement
concerning the matter of Argentina: Switzerland – Export subsidies30G/AG/R/38
Page 12
ANNEX – PART I
Review of notifications by the Committee on Agriculture on 25 March 2004
Summary of specific points raised and responses thereto
Table MA:1 Notifications
El Salvador G/AG/N/SLV/21 Tariff Quota Administration (Table MA:1)
Points raised by other Members Response by Notifying Member
New Zealand – Sought clarification as to how El
Salvador justifies the government collecting revenue
in excess of the in-quota tariff rate for cheese, as is
likely to occur under the public auctioning system
used to allocate quotas.
Clarification sought as to what efforts are being made
to remove the domestic purchasing requirements in
the allocation of the cheese quota, i.e. the
requirement that those receiving quota must purchase
at least 10,000 bottles a day of the national milk
supply.
Follow-up comment by Argentina – In Argentina's
view, the auctioning system is not in compliance with
the WTO provisions.The Government of El Salvador, consistent with its
rights and obligations under the WTO Agreements,
uses auctioning as an internal measure for allocating
tariff quotas, pursuant to the legal instrument
"Regulations on the Opening and Administration of
Quotas", which was duly notified to the relevant
WTO Committee.
These regulations serve as the basis for the allocation
of tariff quotas through the issue of import licences
free of charge. El Salvador makes the quotas
available in order to guarantee the level of market
access undertaken with regard to imports of certain
products, in keeping with the national policy of
promoting the strengthening of production chains, in
particular the production and trade of micro, small
and medium agricultural producers.G/AG/R/38
Page 13
Table MA:2 Notifications
European Communities G/AG/N/EEC/48 Tariff Quota Fill (Table MA:2)
Points raised by other Members Response by Notifying Member
New Zealand – Reasons for underfill of a number of
TQs in 2002/2003, in particular cheese for processing
(HS 0406.90.01)There was sufficient supply at competitive prices on
the internal market.
South Africa G/AG/N/ZAF/51 Tariff Quota Fill (Table MA:2)
Points raised by other Members Response by Notifying Member
New Zealand – Explanation sought for the declining
fill rates for the butter and cheese TQs in recent
years.Currency fluctuations and the local market conditions
were the main reasons for the low utilization of the
butter and cheese TQs in recent years.
Thailand G/AG/N/THA/48 and THA/49 Tariff Quota Fill (Table MA:2)
Points raised by other Members Response by Notifying Member
EC – Noted significant underfill of several TQs in
2001 and 2002. Requested reasons for the underfill
of TQs for "not concentrated milk and cream
(0401.2202.90)" and "cane or beet sugar (1701)".
United States – Considered that the low fill rates of
certain TQs was partially due to the manner in which
Thailand administers its TQs. Requested reasons for
the low or zero fill rate of the milk and cream, garlic,
maize, and soybean oil TQs in 2001 and 2002.Milk and cream
The zero fill rate of the TQ for milk and cream
(0401.2202.90) in 2001 and 2002 was due to a lack
of domestic demand, some of which might have
shifted to milk and cream in powder form under
another tariff line (0402.10.0007). In both 2001 and
2002, Thailand allowed in-quota importation of milk
and cream in powder form at considerably higher
levels than bound commitments.
Sugar
Thailand is one of the world's major sugar exporters
due to its comparative advantage in both price and
quality. It is therefore reasonable for most of
domestic consumption of sugar to be satisfied by
domestically-produced sugar. Exceptions exist only
for some specialty sugar which cannot be produced
domestically and where imports are needed.
Garlic
Due to good agricultural conditions for garlic
cultivation in 2001 and 2002 which resulted in
adequate domestic supply, there was no demand for
imports of garlic. According to the statistics,
Thailand even exported certain amounts of garlic
during the period in question.
Maize
Similar to garlic, there were adequate supplies of
domestically produced maize as a result of increased
cultivation. Therefore, there was no demand for
imports of maize.G/AG/R/38
Page 14
Thailand G/AG/N/THA/48 and THA/49 Tariff Quota Fill (Table MA:2)
Points raised by other Members Response by Notifying Member
United States (cont'd) Soybean oil
The demand for imports of soybean oil in 2001 and
2002 was low due to unlimited duty-free access for
imports of soybeans. Thailand imported more than
1.3 and 1.4 million tonnes of soybeans in 2001 and
2002 respectively, some of which was used to
produce soybean oil. Therefore, there was no
demand for imports of soybean oil.G/AG/R/38
Page 15
Tables MA:3 to MA:5 Notifications
Japan G/AG/N/JPN/84 Volume-Based Special Safeguard (Table MA:3)
Points raised by other Members Response by Notifying Member
United States – Clarification sought concerning the
data used for calculating the trigger level for tariff
items 1901.20 and 1901.90. Noted that Japan had
used the three-year average imports at 7,604 tonnes
while Japan Customs reported imports over the same
three-year period for products imported under HS
codes 1901.20 and 1901.90 at nearly 400,000 tonnes.Under HS codes 1901.20 and 1901.90, imports in
excess of the trigger volume relate to the six tariff
lines with the highest starch content by weight in
their rice-, wheat-, barley- or starch-based
components, in other words HS lines 1901.20-156,
1901.20-157, 1901.20-159, 1901.90-176,
1901.90-177, and 1901.90-179. The volume of
"nearly 400,000 tonnes" probably refers to the
average volume of imports for the last three years of
all of the products listed under HS codes 1901.20 and
1901.90 when in fact, these codes include products
other than the six mentioned tariff lines.
The trigger level of the volume-based SSG applied to
"food preparations of flour, meal or starch" as from
1 October was calculated on the basis of the average
import volume of the six above-mentioned tariff lines
over the past three years, i.e. 7,604 tonnes.G/AG/R/38
Page 16
Japan G/AG/N/JPN/88 Volume-Based Special Safeguard (Table MA:3)
Points raised by other Members Response by Notifying Member
New Zealand – With respect to the SSG on imports
of butter and other fats and oils derived from milk,
requested information concerning the level of imports
affected by the SSG and the additional rate of duty.From April to the end of November 2003, imports of
butter and other fats and oils derived from milk, and
dairy spreads, exceeded the trigger level of the
volume-based SSG. That is why duties were raised
on 1 January 2004: from 29.8% + 985 yen/kg. to
39.7% + 1,313.33 yen/kg. for products with a fat
content lower than 85% and dairy spreads ; and from
29.8% + 1,159 yen/kg. to 39.7% + 1,545.33 yen/kg.
for other products.
Since the trade statistics (confirmed figures) for the
period following the triggering of this SSG have not
yet been published, the import volume subject to the
application of additional duties after the increase, is
not known.
The volume-based SSG is automatically triggered for
products if the volume of imports from April
onwards exceeds the trigger level determined in
accordance with the method of calculation under
Article 5.4 of the Agreement. The procedure is not
linked to full utilization of the tariff quota including
those products.
This volume-based SSG measure does not apply to
imports covered by the tariff quota.
Follow-up comment by New Zealand – Considered
that in line with the Agreement on Agriculture, when
applying a safeguard to a product that has a tariff
quota, the quota must first be filled before a
safeguard measure can be applied to out-of-quota
imports.
Follow-up comment by Argentina – Supported New
Zealand's intervention and considered that the level
of protection appeared highly distortive, hence there
is a question as to whether it was the appropriate
means for protection.With regard to the relationship between the trigger
level of the volume-based SSG and the tariff quota,
this SSG measure does not apply to imports covered
by the tariff quota. To determine whether the trigger
level has been exceeded, Japan calculated imports
within the TQ as from April 2003. The above meets
the requirements set out in Article 5.2 of the
Agreement.
Furthermore, under the Agreement on Agriculture
Members are entitled to increase the rate of duty by
one third when the cumulative volume of imports
since the beginning of the financial year, including
in-quota import volumes, exceeds the trigger level.
Japan considers that the purpose of this notification
review mechanism is to discuss the compliance of
measures adopted by Members with the rules of the
existing Agreement on Agriculture, which is the case.G/AG/R/38
Page 17
United States G/AG/N/USA/49
Annual Summary of Special Safeguard Actions (Table MA:5)
Points raised by other Members Response by Notifying Member
New Zealand – Explanation sought as regards the
need to impose SSG duties on products with small
affected quantities (e.g. quantities under 100 kg.).
Follow-up comment by New Zealand – Questioned
the value of the safeguard when it is applied to such
small quantities. Expressed hope that safeguards
would be removed as a result of the ongoing
negotiations, hence the unnecessary administrative
procedures would no longer be required.Price-based safeguards are invoked automatically on
a shipment-by-shipment basis. Importers declare a
pre-established price range for their product. If there
is a safeguard duty associated with that price range,
the additional charge is assessed.
The US replied that in the Special Session it had
proposed the elimination of the special safeguard
which would alleviate the problem identified by New
Zealand. In the meantime, there is a computer-
generated system in place, which appears to be the
most efficient way of operating a safeguard.G/AG/R/38
Page 18
Table DS:1 Notifications
Australia G/AG/N/AUS/52 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Green Box
EC – Farm Management Deposits Scheme
Noted a significant increase in expenditure under this
programme since Australia's previous notification.
Information sought as regards the current
methodology for estimating revenue foregone and
compliance of the scheme with Annex 2, para. 7
criteria.Producers use the Farm Management Deposit (FMD)
as a risk and cash management tool. Surplus pre-tax
primary production income in profitable years can be
placed in FMDs and withdrawn in later years of low
income and therefore low tax. Deposits are fully tax
deductible in the year of deposit and interest is earned
on deposits at market interest rates.
The Australian Treasury calculates the cost of the
FMD scheme as the cost to revenue. Revenue is
foregone when a primary producer's tax deductible
FMD deposits exceed their taxable FMD
withdrawals. The estimated cost of the scheme is the
difference between the estimated revenue that would
have been collected in the absence of the FMD
scheme and the estimated revenue that would be
collected if the scheme were to continue. In other
words, it is the difference between the two marginal
tax rates that would have applied as a way of
covering income losses.
Despite an indication that the revision of the
methodology for calculating the revenue foregone
was among the reasons for the increase in
expenditure under the scheme, Australia ascertains
that the methodology has not changed. To reflect
this, a corrigendum will be issued shortly. The
reason for the increase therefore is due to the fact that
the notification covers the period when there was a
widespread drought in Australia and farmers used the
money that they had put away and took it out of the
scheme at that stage.
This scheme meets the criteria of Annex 2, para. 7
because of the way it is structured. In terms of the
amount of payment and the notified increase, it is
useful to consider that in the drought period 2002/03,
the gross value of farm production declined by
$A 9.21 billion. This payment of about $A 400
million represents about 5% of the production loss. It
is a very small amount compared to the amount of
loss that farmers suffered during the drought.G/AG/R/38
Page 19
Australia G/AG/N/AUS/52 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Green Box
EC – Exceptional Circumstances Relief Payment
Information sought as to the areas affected by
exceptional circumstances.
Support to farm families in New South Wales and the
Farm Business Support Grants in Victoria
Information sought as to the forms of support.
Explanation sought whether the three above-
mentioned support programmes comply with
Annex 2, para. 8 criteria.In 2002/03, approximately 90% of New South Wales
and approximately 30% of Victoria was drought
declared. A total of 30 regions in Australia were
declared to be in exceptional circumstances. Of those
regions, 15 were within the State of New South
Wales and four within Victoria. To be classified as
"exceptional circumstances", the drought has to be
considered a rare and severe event that occurs once in
every 20 to 25 years and other criteria have to be met.
Support to New South Wales farm families and farm
businesses took the form of counselling, grants and
interest subsidies aimed at mitigating the effects of
drought. The Farm Business Support Grants in
Victoria, also aimed at mitigating the effects of
drought, took the form of cash grants for business
support, including preparation of business advice and
business plans of up to $A 20,000 and counselling.
Detailed responses were previously provided to the
Committee at the June 2000 and September 2001
meetings as to how the Exceptional Circumstances
Relief Payments program operates. Very stringent
criteria need to be met, including that the natural
disaster is unpredictable and occurs once in every 20
to 25 years. In addition, assistance is only provided
for events that are not foreseeable and could not be
managed through normal and reasonable risk
management practices. The Exceptional
Circumstances support is not intended to underwrite
producer's income and declines in farm income
caused by normal changes in commodity prices.
The 2002/03 drought was particularly severe. As
mentioned earlier, the gross value of farm production
declined by $A 9.211 billion. Total payments
provided amounted to $A 233 million or 2.5% of the
production loss. During that period, average farm
cash incomes declined from $A 112,800 to
$A 31,000 and farm business profit declined from
$A 60,800 to minus $A 49,700.G/AG/R/38
Page 20
Australia G/AG/N/AUS/52 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Green Box
Follow-up comment by the EC: Noted the
seriousness of the drought in Australia and the
targeted approach used in setting up the disaster relief
programme. Pointed out that Australia's Green Box
support had doubled over the last few years to reach
$A 2 billion (partly due to the disaster relief
programmes) which in per capita terms has put
Australia on an equal footing with the EC as regards
utilization of the Green Box. Hence, the EC counted
on Australia's support when the Green Box is
discussed in the Special Session, especially as
regards the need to avoid capping of the Green Box
since payments can vary considerably from one year
to another, as evidenced by Australia's experience.Australia noted that 2002/03 was an unusual year
because of the widespread drought, hence there was a
significa nt increase in disaster relief payments.
Australia stated that it was prepared to review the
Green Box but recognized its public goods aspects.
The Cairns Group proposal was focused on specific
aspects of the Green Box and whether capping would
be appropriate was an issue for discussion in another
forum.
Czech Republic G/AG/N/CZE/52 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Green Box
Australia – General Services – Silt removal and
renewal of pond functions
Explanation sought as to which of the sub-criteria of
paragraph 2 are met by the programme.
Conformation sought that the payments are not
intended to support on-farm works.
Domestic food aid – School milk (donation of milk
for basic schools)
Explanation sought for the near by six-fold increase
in payments under this programme from K č10.6
million in 2001 to K č62.5 million in 2002.
Other – Support for suckler cow farming and sheep
farming
Explanation sought as to the classification of this
programme under the "Other" category while the
Table DS:2 notification (G/AG/N/CZE/35) listed the
programme as meeting Annex 2, para. 11 criteria.
Considered that the payment provided product-
specific support linked to production and requested
that it be notified as part of the Total AMS.This scheme meets sub-criterion 2(g) of Annex 2 of
the Agreement on Agriculture. The objective of this
programme is to support proper pond management, to
increase the capacity of the landscape to accumulate
water and to support anti-flood measures. This is one
of the programmes aimed to support the activities
involved in landscape maintenance. The Czech
Republic confirms that this programme is not
intended to support on-farm works.
The increase was due to an increase in the number of
schools eligible for payment and an increased number
of pupils within those schools.
The purpose of this scheme is not to support
production but to reduce it by means of extensive
cow and sheep farming. The main objective of this
programme is to support farming of ruminants in
areas with lower soil fertility and with a higher share
of permanent grassland. The preservation of
ruminants in these areas is important for landscape
maintenance. As such, the programme should be
listed under "Other" of Annex 2 of the Agreement .
Regarding its classification in document
G/AG/N/CZE/35, a corrigendum will be submitted.G/AG/R/38
Page 21
Czech Republic G/AG/N/CZE/52 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Amber Box
Australia – Non-product-specific AMS – Support for
cattle breeding
Explanation sought as to how this measure can be
considered non-product-specific. Suggested that it
should be re-notified as product-specific AMS.The Czech Republic is considering Australia's
suggestion to notify payments under this programme
as product-specific AMS.
Australia – Non-product-specific AMS
Information sought concerning the nature of
payments under certain programmes which have been
classified as non-product-specific support.All of these payments are non-product-specific. Each
of the programmes in question consists of several
schemes and sub-schemes. The main objectives of
the individual programmes are as follows:
Maintenance and improvement of livestock, fish and
seed genetic potential
Maintenance and improvement of livestock, fish and
seed genetic potential through support of
insemination and natural breeding, support of
introduction (loading) and administration of breeding
books, support of development of embryo transfer
from selected donors, support of cultivation of seed
varieties and testing of original Czech varieties in
foreign countries.
Support and Guarantee Farmer and Forestry Fund
Creation of pre-conditions for the development of
prospective farmers involved in basic production and
facilitation of investment for the regeneration of
forests through support of purchase of machinery,
purchase of intangible investment (licenses, software,
etc.), construction investments, manufacturing of
farming products, construction of field roads,
investment in agro-tourism, etc.
Genetic Sources
Maintenance and utilization of livestock and seed
genetic sources, conservation an d utilization of
microorganism genetic resources.
Infection Fund
Support of activities aimed to avoid a spread of
harmful diseases of livestock.
Support to forest and water management
Conservation, regeneration and sustainable
management of forest and water sources damaged by
air and water pollution.G/AG/R/38
Page 22
Morocco G/AG/N/MAR/28 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Green Box
Australia – Infrastructural services – Structure and
infrastructure: General construction and equipping of
central and external administrative services
Confirmation sought as regards compliance with
Annex 2, para. 2(g) criteria, i.e. whether expenditure
for infrastructure services is directed to the provision
of publicly accessible capital works only, and does
not constitute the subsidized provision of on-farm
facilities. Examples requested of publicly accessible
capital works programmes.
Other – Pilot programme for the recycling of waste
water, environmental management programme
Suggested that Morocco re-notify this programme
under Annex 2, para. 12 – Payments under
environmental programmes, and submit a Table DS:2
notification to reflect any modification.Structure- and infrastructure-type measures do not
consist in the subsidized provision of on-farm
facilities, and concern only public expenditure,
including the construction and equipping of
administrative buildings and the construction and
equipping of central, external and regional services of
the Ministry of Agriculture .
The pilot project for the recycling of waste water and
the environmental management programme were
classified under "other" rather than under "payments
under environmental programmes" because they are
not in the spirit of the latter measure type, which
links payments to supplementary costs or income
losses in connection with the implementation of the
programme.
Amber Box
Australia – Supporting Table DS:7: Other Product-
Specific Support and Total Product-Specific AMS
Noted that support for sunflowers had been
reintroduced (last notified for 1995 in Supporting
Table DS:5) and sought details concerning the
current support arrangements.Since 1996, the oilseeds sub-sector in Morocco has
undergone policy reforms which led to the
liberalization of imports and non-intervention in the
fixing of prices, with the exception of consumer
prices. However, since 2000, consumer prices have
been liberalized and the flat rate consumer price
subsidy has been abolished. A subsidy is currently
granted for the production of sunflower seeds for
pressing.
In order to protect the income of sunflower seed
producers, the State currently guarantees the purchase
of their crop by granting the Compensation Fund a
subsidy which is paid to the Moroccan Agricultural
Products Marketing Company. The latter is then
responsible for collecting the sunflower seed and
paying the farmers, applying a profit margin.
Poland G/AG/N/POL/60 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Australia – Noted that in 2000 and 2001, Poland had
provided market price support for butter.
Confirmation sought whether such support had been
discontinued in 2002.In the year 2002, the only form of support for butter
was support for private storage which amounted to
130,000 PLN and was duly notified in document
G/AG/N/POL/60.G/AG/R/38
Page 23
Romania G/AG/N/ROM/20 and Corr.1 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Green Box
Australia – Infrastructural services – Structural and
infrastructural services: Expenditures for land
reclamation; maintenance of irrigation and drainage
system; expenditures to provide electric power
Confirmation sought regarding compliance with
Annex 2, para. 2(g) criteria, i.e. whether expenditure
for infrastructure services is directed to the provision
of publicly accessible public works only, and that
payments do not constitute the subsidized provision
of on-farm facilities.Romania confirms that the expenditure for
infrastructure services does not constitute subsidized
provision of on-farm facilities. These payments were
provided mainly for the re-establishment of the
national irrigation system.
Canada – Budgetary allocations in order to stimulate
the increasing of livestock
Noted that the title of this programme appeared to
contradict the fundamental requirement of Annex 2 to
have "no, or at most minimal, trade-distorting effects
or effects on production". Information sought as to
which paragraph of Annex 2 was applicable.
Explanation sought as to how the measure meets each
and every criterion of that paragraph.
Follow-up question by Canada – In light of the
reference to paragraphs 5 and 6, inquired about how
the measure confirmed to the criteria within the
paragraphs, e.g. what is the base period, whether no
livestock production is required to obtain support,
whether support is independent of any production or
prices in any year since the base period.The "Budgetary allocations in order to stimulate the
increasing of livestock" as a "Direct payment to
producers" represent Green Box measures according
to Part IV of the Romanian Schedule.
These measures are part of the national programmes
for maintaining and improving the biological material
of animal and vegetal origin, which is in full
conformity with paragraphs 1, 5 and 6 of Annex 2.
Deferred reply: The explanations required have been
addressed bilaterally.
Amber Box
Australia – Calculation of the Current Total AMS
Requested data concerning the total value of
agricultural production and the value of production
for individual products listed within the AMS so as to
demonstrate whether product-specific and non-
product-specific support meet the de minimis criteria.All data requested can be found in the Supporting
Table DS:4 in Romania's corrigendum
(G/AG/N/ROM/20/Corr.1). For the year 2000, the
value of production for each product-specific support
is provided in column 5 and the total value of
agricultural production is specified in the same
column for the non-product-specific support.
For the year 2000, the Current Total AMS as a
percentage of the total value of production is 3.3%,
which is much under the de minims level. Similarly,
the figures for 2001 and 2002 are 2.3% and 0.7%,
respectively.
New Zealand – AMS calculation
Requested supporting calculations for the AMS such
as the applied administered prices, external reference
prices and eligible production.As regards the request to provide the applied
administered prices, external reference prices and
eligible production, all these elements were
unavailable for Romania during the Uruguay Round,
therefore Romania does not have commitments to
reduce AMS but is committed to the de minimis rule.G/AG/R/38
Page 24
Slovak Republic G/AG/N/SVK/42 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Green Box
Australia/Canada - Several programmes previously
notified as AMS support are now claimed as Green
Box measures. Requested a Table DS:2 notification
for programmes not previously claimed as a Green
Box measure.Concerning the reclassification of several support
measures, it should be noted that the Slovak Republic
did not reach the total amount of the AMS
commitment level in 2002. The total package of
domestic support payments was reduced in 2002 as
compared to 2001 by US$40 million.
The payments for the measures in question represent
small amounts. They are intended to preserve the
environmental character of the sector and agricultural
production in less favoured areas as well as to
contribute to the overall reform process in the sector.
A Table DS:2 notification has been submitted (see
G/AG/N/SVK/43 dated 27 May 2004).
Australia – Structural adjustment assistance provided
through resource retirement – Permanent grassing
Explanation sought as to how this programme meets
the specific criteria of para. 10 of Annex 2.
Requested a Table DS:2 notification.Deferred reply: The programme complies with
para.10 of Annex 2 in terms of the abandonment of
crop production and subsequent establishing of
grassed areas.
Australia/Canada – Structural adjustment assistance
provided through investment aids – Reconstruction
and modernization
Explanation sought as to how this programme meets
the specific criteria of para. 11 of Annex 2.
Requested a Table DS:2 notification.Financial support for this measure is granted to a
farming entity in order to revive, for example,
orchards, greenhouses and unused buildings for
mushroom growing.
Australia – Environmental programmes – Bee
breeding
Explanation sought as to how this programme meets
Annex 2, para. 12 criteria, including clearly defined
government environmental or conservation
programme objectives. Requested a Table DS:2
notification.This measure has an environmental character as it is
not oriented toward production purposes but toward
preservation of bee colonies for pollination. In light
of this, the measure was reclassified from the
category "Other" to "Environmental programmes".
Canada – Environmental programmes – Conservation
of genetic resources
Explanation sought as to how this programme meets
all of the criteria of para. 12 of Annex 2.The main aim of the programme is to maintain basic
and new genetic varieties in both plant and animal
production to preserve the country's eco-system.
Paragraph 12 of Annex 2 encompasses in its wording
a conservation programme. Based on this, the Slovak
Republic classified the programme as an
environmental programme.
Australia/Canada – Regional assistance programmes
– Worse natural conditions
Explanation sought as to how this programme meets
the specific criteria of para. 13 of Annex 2.
Requested a Table DS:2 notification.Support is granted for farming especially in
mountainous areas and other less favoured areas.
Support is granted under regional assistance
programme regardless of the type of production or
prices. The usual type of production is breeding of
cows, sheep and goats.G/AG/R/38
Page 25
Slovak Republic G/AG/N/SVK/42 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Blue Box
Australia/Canada – Countervailing payments in crops
production
Explanation sought as to how this programme meets
the criteria of Article 6.5. As it appears to be an
input subsidy (i.e. payments are related to input costs
such as seedlings, seeds, etc), it should be notified as
part of the Total AMS.Deferred reply: Ten specific crops (mentioned
earlier) are grown on limited areas of fields or
plantations. The total amount of US$14 million
divided among the ten crops represents only a small
amount for each commodity.
Australia/Canada – Cows without market milk
production
Explanation sought as to how this programme meets
the criteria of Article 6.5 which requires payments to
be under production- limiting programmes.
According to Table DS:2 notification
G/AG/N/SVK/31, support is provided to ensure that
production does not decline compared with the
previous year hence it should be notified as part of
the Total AMS.This programme concerns a limited number of herds
kept in mountainous regions. The payment is a
compensation to maintain production in remote areas.
Australia – Set aside programme
Confirmation sought whether the previously notified
Blue Box programme entitled "Set aside program"
had been terminated or modified as another
programme.Deferred reply: Previously notified permanent
grassing programme as set aside was reclassified as
Green Box support.
Amber Box
Australia – Supporting Table DS:4: De minimis claim
Data requested concerning the total value of
agricultural production and value of production for
individual products listed within the AMS, including
for potatoes and sugar beets, so as to demonstrate
whether product-specific and non-product-specific
support meet the de minimis criteria.The total value of agricultural production amounts to
US$1.9 billion. Specific data are not available for all
agricultural products. As regards potatoes and sugar
beets, the value of production amounts to
US$100 million and US$40 million, respectively.
United States G/AG/N/USA/51 Domestic Support (Table DS:1)
Points raised by other Members Response by Notifying Member
Japan – Japan stated that the current AMS had
remained high at US$14.4 billion for the marketing
year 2001. Japan considered that as the AMS had
increased when prices had fallen, allowing the United
States to maintain export competitiveness, a system
similar to export subsidies had been an integral part
of the US domestic support system. Japan also noted
that there was not enough time to examine the
notification as it was circulated only recently, and
flagged its intentions to revert to it, if necessary, in
future meetings.The United States urged Japan to take more time to
study the notification because Japan would then see
that the document correctly identifies the subsidies as
domestic support.G/AG/R/38
Page 26
Table DS:2 Notifications
Australia G/AG/N/AUS/53 New or Modified Domestic Support (Table DS:2)
Points raised by other Members Response by Notifying Member
EC – Reduction in Australian Quarantine Inspection
Service (AQIS) fees and charges
Noted that for a limited time charges for inspection
services under this programme are fully recovered.
Details sought as to why the title mentions
"reduction" whereas the charges are fully recovered,
and the beneficiaries of this recovery. Whether the
full amount of $A 50 million has been used since
Table DS:1 notification G/AG/N/AUS/52 indicates
$A 20.4 million for the year 2002/2003.There was a typographical error in the notification
and Australia will submit a corrigendum to reflect the
fact that not all the costs are fully recovered.
The Government formerly recovered 100% of the
fees and charges for inspection and has now agreed,
for a limited period of time, to recover 60% of
charges. The beneficiaries of this scheme are
agricultural producers including meat, grain, dairy,
live animals, fish, horticulture and organic foods.
The cost of the measure has been notified in Table
DS:2 notification as up to $A 109.3 million over 4
years, of which $A 20.4 million was expended in
2002/03.
Japan – National Food Industry Strategy
Inquired whether the funding includes direct
payments to processors of food. Noted that
according to the website of the Australian
Department of Agriculture, Fisheries and Forestry
funding is targeted at initiatives concerning "export"
along with "innovation" and "business environment".
In Japan's view the programme has an export-
enhancing element and it is inappropriate to classify
it as a Green Box measure.Grants under the National Food Industry Strategy
(NFIS) are targeted to the activity, are needs based,
generally one-off and unrelated to production levels
or prices and therefore meet the Green Box
fundamental criteria of being non- or minimally
production and trade-distorting. The measure meets
the conditions of General services, including
elements of training – para. 2(c), research –
para. 2(a), marketing and promotion – para. 2(f).
However, payments have been aggregated into a
single notified amount within Annex 2, para. 2(c).
This is considered to be the best-fit for the
programme which has an overarching goal of
changing the mind-set of the industry to better
identify and meet emerging customer demands.
For example, the Halal Food online directory
demonstration project in Victoria was developed in
partnership with the Islamic Coordinating Council,
the Australian Federation of Islamic Councils and the
Halal Certification Authority of Australia. The
online site is a "one stop shop" through which
Australian and overseas food buyers can contact the
growing number of Australian companies producing
Halal certified food.
A major goal of the NFIS program is to build food
industry skills, capability and knowledge in a range
of food related areas. Importantly, initiatives under
the NFIS program are not linked to export
performance or to sales. Therefore, it is appropriate
to notify this programme in the Green Box under
paragraph 2 – General services.G/AG/R/38
Page 27
Australia G/AG/N/AUS/53 New or Modified Domestic Support (Table DS:2)
Points raised by other Members Response by Notifying Member
Japan/Korea – Farm Business Support Grant –
2002/03 drought and South Australian Government
Drought Assistance Program
Explanation sought as to how these programmes meet
the Annex 2, para. 8 criteria, and especially the
requirements stipulated under 8(b), (c) and (e).Details concerning the Farm Business Support Grant
– 2002/03 drought programme were provided earlier
(see page 19 above). The South Australian
Government Drought Assistance Program is another
example of a state government support provided in
response to the 2002/03 drought.
Both programmes are short-term drought assistance
programmes. To receive support, applicants were
required to meet strict eligibility criteria and must
have been located in a Government drought declared
areas.
Details of the scale of the drought in terms of the
criteria relating to natural disasters were provided
earlier (see page 19 above).
Korea – Post bushfire assistance
Explanation sought as to how this programme meets
the Annex 2, para. 8 criteria.The Australian Capital Territory (ACT) post bushfire
assistance package was a one-off grant programme in
direct response to the emergency situation declared
by the ACT Government following the 2003
bushfires. Funds were provided for the purpose of
clearing away or repairing fire damaged structures
and for short-term assistance for transport of fodder
to animals in fire-afflicted areas.G/AG/R/38
Page 28
Czech Republic G/AG/N/CZE/53 New or Modified Domestic Support (Table DS:2)
Points raised by other Members Response by Notifying Member
Canada/Korea – Aid to alleviate damage caused in
agriculture by the floods
Explanation sought as to how this programme
complies with the criteria in para. 8 of Annex 2,
especially the eligibility requirement in para. 8(a)
relating to a 30% production loss.
Follow-up comment by Canada – Complimented the
Czech Republic for the detailed response which could
serve as an example of a detailed explanation of how
programmes meet the criteria of Annex 2.This programme is fully consistent with para. 8 of
Annex 2 of the Agreement on Agriculture.
The purpose of this programme was to provide
financing and partly compensate the losses caused to
farmers by floods in August 2002. The Government
of the Czech Republic, in its Decree No. 1018 of
14 October 2002, recognized the occurrence of a
national disaster. In order to determine the eligibility
for the payments, three-year average production was
established based on the preceding five-year period,
excluding the highest and the lowest entry. The
payments made were granted only to agricultural
producers whose production loss exceeded 30% of
the average of production in the above-mentioned
period. Payments were applied only in respect of
losses of income and only partly compensated losses
from the floods. In addition, the payments were
differentiated according to the rate of loss. The
payments did not require or specify the type or
quantity of future production and the producers did
not receive any payment under Annex 2, para. 7 in
the same year .G/AG/R/38
Page 29
ANNEX – PART II
Deferred replies to questions raised under the Review Process at previous meetings
Reply provided by India under Article 18.6 of the Agreement concerning the matter of
Canada – India: Tariff quota for refined colza oil (see G/AG/R/37, paragraphs 19-20)
At the November 2003 meeting of the Committee on Agriculture, Canada stated that, in
accordance with India's modifications to its Schedule XII effective 3 February 2003 (WT/Let/440),
India had established a tariff quota of 150,000 tonnes of refined colza oil (HS 1514.90). Canada
requested that India provide information as to how it had administered the tariff quota in 2003
(including information concerning the government agency or body that granted licences or access to
the tariff quota, eligibility of applicants, how licences or access were allocated, whether there were
any limitations on the period of validity or use of the licences granted, whether the tariff quota was
applied on a calendar or marketing year). Canada also sought clarification as to when India intended
to submit a Table MA:1 notification relevant to this tariff quota.
At the March 2004 meeting, India responded that for the allocation of the tariff rate quota for
refined rape, colza or mustard oil, other (1514.19 or 1514.99), the eligible entities are:
(1) National Dairy Development Board (NDDB)
(2) State Trading Corporation (STC)
(3) National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED)
(4) Spices Trading Corporation Limited (STCL)
(5) Central Warehousing Corporation (CWC)
(6) State Cooperative Marketing Federations / Civil Supplies Corporations
(7) Project and Equipment Corporation of India Ltd. (PEC)
The eligible entities desiring to avail themselves of the quota were allowed to make an
application by 29 August 2003 to the Exim Facilitation Committee (EFC) in the office of Directorate
General of Foreign Trade (DGFT), New Delhi. Imports have to be completed before 31 March 2004.
The allocation of quota among the applicants is made by the Exim Facilitation Committee headed by
the Director General of Foreign Trade. Other members of the Committee are representatives from the
Department of Revenue, Department of Animal Husbandry and Dairying and Edible Oil
Commissioner.
India also indicated that it would be seeking advice from the Secretariat as to whether India is
required to make Table MA:1 notification, given the "not applicable" status reflected against India’s
one-off Table MA:1 notification obligation in the Secretariat’s room document entitled "Compliance
with Notification Obligations" dated 24 March 2004.G/AG/R/38
Page 30
Attachment
Information provided by Switzerland under Article 18.6 of the Agreement concerning the
matter of Argentina: Switzerland – Export subsidies
Raw materialCompensation
amounts 1)Expenditures in 2000
CHF/100 kg Mio. CHF
Milk, fresh (3,8 %) 28.70 78 Dairy
Skimmed milk, fresh 15.60
Cream, fresh (35 %) 252.10
Whole milk powder (26 %) 347.50
Skimmed milk powder 275.10
Cream powder (53 %) 590.20
Milk concentrated (9 %) 120.30
Butter (82 %) 21.00 2)
Butter (100 %) 25.61 2)
Flour of wheat, rye, spelt, meslin 111.70 31 Cereal
Eggs yolks, dried 215.15 2) 3 Other
Eggs dried 156.73 2)
Egg yolks, otherwise preserved 82.95 2)
Eggs, otherwise preserved 43.23 2)
Sugar and molasses from 10.50 2)
to 53.55 2) Total 112
1)Valid from Oct – Dec 2000
2)Inward-processing, restitution of import duties
_______________