WORLD TRADE
ORGANIZATIONG/AG/NG/W/77
28 November 2000
(00-5098)
Committee on Agriculture
Special SessionOriginal:  English
FOURTH SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
15-17 NOVEMBER 2000
Statements by Norway
A. Submissions outstanding from the Third Special Session
Note on non-trade concerns (G/AG/NG/W/36/Rev.1)
Presentation of chapeau paper
The note, which we have submitted on NTCs, is sponsored by a total of 27 countries, and it
reads as follows:
Article 20 of the Agreement on Agriculture provides that the continuation of the reform
process should take into account non-trade concerns, special and differential treatment to developing
countries and the possible negative effects of the implementation of the reform programme on least-developed and net food-importing developing countries .  In this context, a Conference on Non-Trade
Concerns in Agriculture attended by 40 countries and economies was held in Ullensvang, Norway, on
1-4 July 2000.  The European Commission and the governments of Japan, Mauritius, Norway, the
Republic of Korea and Switzerland organised the conference, which was attended by another
34 developing countries including least-developed countries and small island developing states,
economies in transition, and developed countries.
The broad objective of the conference was to provide a forum for discussion among
developing and developed countries on non-trade concerns (NTCs).  Subjects treated covered the
specific and multifunctional characteristics of agriculture, agriculture's contribution to rural
development, food security, environment and cultural  diversity, and the need for flexibility in national
policy design to address non-trade concerns, bo th from developed and developing country
perspectives.  Each of the organisers contributed to the discussion with papers covering a vast array of
issues and concerns common to developing and developed countries alike.  The papers highlighted the
wide diversity and specificity of agricultural systems worldwide.  The six papers are attached.
It was recognised that every country has the right, in accordance with mutually agreed rules,
to address non-trade concerns, such as strengthening the socio-economic viability and development of
rural areas, food security and environmental protection, and promoting the co-existence of various
types of agriculture.  In this context, special and differential treatment to developing and least-
developed countries must also be ensured. It was al so recognised that market forces alone could not
address these non-trade concerns.
We believe that this is a useful contribution to the work within the framework of
paragraph (c) of Article 20 by the Special Session of the Committee on Agriculture, and we look
forward to a fruitful discussion in this Committee.
This note has been sponsored by the following countries: Barbados, Burundi, Cyprus, Czech
Republic, Dominica, Estonia, the European Communities, Fiji, Iceland, Israel, Japan, Korea, Latvia,G/AG/NG/W/77
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Liechtenstein, Madagascar, Malta, Mauritania, Mauritius, Mongolia, Norway, Poland, Romania, Saint
Lucia, Slovak Republic, Slovenia, Switzerland and Trinidad and Tobago.
Before concluding I would like to invite others  to join us in our future cooperation on non-
trade concerns.  I now end by inviting the six organisers of the conference to briefly present theirpapers.
Presentation of attachment 6 regarding the need for flexibility in national policy design to address
non-trade concerns
The sixth and last paper examines the flexibility in national policy design that would be
required to sustain domestic production necessary to address non-trade concerns.  While the WTO
agricultural negotiation mandate laid down in Article 20 of the Agreement on Agriculture recognises
the “ long-term objective of substantial progressive reductions in support and protection ”, it also lays
down that further negotiations shall take into account, inter alia,  experience gained from
implementing the existing agreement, non-trade concerns and special and differential treatment.  In
order to achieve the objective to establish a fair and market-oriented agricultural trading system
referred to in Article 20, there is a need to acknowledge, inter alia,  the future coexistence of various
forms of agriculture based on each country's production conditions and potentials and historical and
cultural background.  Also, it must be ensured that the WTO policy reform is consistent with othermultilateral commitments, such as for instance the right to food.
Agriculture is facing a considerable diversity of production conditions worldwide.  At the
demand side , for a number of reasons related to for instance cultural, economic, or historical
backgrounds, countries are demanding different goods or services from their agriculture, thus givingdifferent weight and priority to different NTCs.  Supply side variations , across and within countries
and regions, are often due to physical and natural conditions, social and cultural backgrounds and
institutional and economic conditions.
The agricultural policy environment is continuously changing, and the possibility of changes
in for instance societal priorities, production costs or economic situation, call for a long-term
perspective in multilateral trade policy reform and national policy design.  It is important to ensure
that the developing countries’ requests for better market access are properly addressed.  Furthermore,
the flexibility in national policy design and long-term room for manoeuvre for developing countries
and economies in transition should not be reduced unduly even though many countries may not, fordifferent reasons, be able to take advantage of this flexibility at present.
The need for flexibility must be subject to mutually agreed rules and should not be a carte
blanche  in national policy design.  For instance, it seems difficult to justify export competition
measures as part of a long-term strategy to ensure NTCs. However, given the considerable differences
in production conditions between WTO Members, low-potential countries with unfavourable and
disadvantaged production conditions are unlikely to be able to sustain production required to addressNTCs by applying Green Box measures only, without having any impact on trade.  Also, specific
proposals relating to the special situation of developing countries should be carefully considered in
the continuation of the reform process.
To conclude, all Members, both developing and developed, must be given sufficient
flexibility and room for manoeuvre in national agricultural policy design to ensure a viable domestic
agricultural sector with domestic production required to properly address NTCs.  In doing so, the
specific situation of each country, including national priorities and differences in production
conditions, must be duly taken into account.G/AG/NG/W/77
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Concluding remarks
I would like to thank all participants in this ve ry stimulating debate over the last two days.  To
us, even though the importance of NTCs has been recognized before, as evidenced in the preamble
and Article 20, this debate represents a watershed.  From now on it will be very difficult to deny thatNTCs are an integral part of our negotiations, which have to be adequately addressed in the
continuation of the reform process.
Our debate has amply demonstrated that NTCs are of crucial importance to a large number of
WTO members.  Twenty-seven countries, counting  the EU as one, co-sponsored the NTC-note.  In
addition a large number of countries have made interventions in this debate, stressing the need to
safeguard NTCs.  And, I am happy to say these countries represent a wide variety of interests andcountry situations, ranging from large trading partners from the industrialized world to small island
developing states as well as economies in transition.
While there seems to be a broad agreement on the need to address NTCs, opinions are varying
regarding the concrete instruments that are needed in this respect.  We would therefore like to drawthe attention, once again, to the situation of low-potential countries with disadvantaged and
unfavourable production conditions.  In case of these countries, domestic agricultural production
necessary to address NTCs such as for instance food security and rural development, are unlikely to
be sustained by applying Green Box measures  only, without having any impact on trade.
This leads me to another comment made by some delegations that while NTC policy
objectives should be recognised, pursuing such objectives should by no means cause trade concerns in
other countries.  In other words, a low-potential country should only be allowed to pursue legitimate
policy objectives if it has no spillover effects on the high-potential exporting countries.  However, we
have to realise that international spillover effects go in both directions. In order to maximize welfareboth NTCs and trade concerns should be adequately addressed.  I think we have to be honest and
acknowledge that there may in certain cases be a conflict between NTCs and TCs, and that this is one
of the themes in these negotiations.  And these negotiations will only succeed if we find a balance
between the various conflicting interests, in a way that low-potential countries with disadvantaged and
unfavourable production conditions feel they have reasonable flexibility to pursue non-trade concerns
and, of course, in a way that high-potential countries feel that they have a deal that is taking
reasonably account of their interests.
The co-sponsors of our note are not trying to divide and rule as one delegation tried to
indicate yesterday.  What we are doing is to demonstrate the commonality of interests among a wide
range of member countries.  It goes without saying that developing countries have special needs that
we have to find solutions to in the negotiations.  In parallel with special and differential treatment ofdeveloping countries, our task is to address the legitimate concerns of all member countries.  A one-
size-fits-all approach would not suffice as widely demonstrated by the many interventions in this
debate underlining the importance different countries attach to various NTCs.  The general rules of
the agricultural trading system should thus be refined in ways that meet the long-term needs of
developing countries and enable all countries to properly address their concerns, including thoserelating to NTCs.G/AG/NG/W/77
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B. Presentation and consideration of negotiating proposals for continuing the reform process
under Article 20 of the Agreement on Agriculture
Cairns Group: Market Access (G/AG/NG/W/54)
Regarding the Cairns proposal on market access, I must confess that we have serious
difficulties with some of these ideas.  In our view, the proposal goes far beyond Article 20. It fails to
recognize that agricultural production conditions are varying considerably among WTO Members.
The different levels of support and protection reflect the heterogeneity and diversity of country
situations.  As far as we can see, the proposal ignores important constraints such as the difficult
production conditions that many low-potential countries are facing and the narrow product range that
many countries, inter alia  for climatic reasons, are relying on when non-trade concerns, such as
domestic food security, are addressed.  Safeguarding such concerns requires an appropriate
combination of policy measures in order to compensate for disadvantaged and unfavourable
production conditions.
ASEAN: Special and differential treatment for deve loping countries in world agricultural trade
(G/AG/NG/W/55)
Norway would like to thank the ASEAN group fo r their proposal on special and differential
treatment (S&D) to developing countries.  S&D is an integral part of the Agreement and is
particularly important for least-developed countries.  We therefore need to ensure that S&D isproperly addressed in the agricultural negotiations in the areas of market access, domestic support,
export competition and technical assistance.
We recognize that developing countries have special needs and that we need to find solutions,
which properly address these needs and afford developing countries the opportunity to adopt reformsin a differential manner and on a more gradual basis.  The modalities on how best to address the
concerns of developing countries will be a key area in our further negotiations.
The need to treat developing countries differe ntly relates to their individual development,
financial and trade needs as specified in the enabling clause.  It may thus relate to a number of
aspects, which are interrelated.  For instance, in terms of policy objectives, developing countries are
facing several challenges in their development process that are specific for their stage of development(in particular poverty alleviation as well as acute food insecurity and large shares of their populations
engaged in agricultural production).  Also, many de veloping countries are facing special problems due
to limited budgetary or administrative capacity.  Some problems may also relate to the individual
history of support and protection of each countr y, on which existing commitment levels are based.
Having said this, we see S&D as a complement to, not a substitute for, the more general rules
of the multilateral trading system.  Given that the development situation and the agricultural policy
environment are continuously changing, S&D measures may not be sufficient to meet the future needs
of developing countries.  Therefore, in the continuation of the reform process it should be ensured that
the general rules of the agricultural trading system are refined in ways that meet the long-term needsof developing countries and enable all countries to properly address their concerns, including those
relating to non-trade objectives.
We agree with ASEAN that developing countries are facing special challenges and require
S&D.  However, the ASEAN proposal does not seem to recognise that other countries thandeveloping countries also have legitimate policy objectives, which they are pursuing in their
agricultural policies.  The note on non-trade concerns (/36) presented yesterday and cosponsored by
27 developing and developed countries underlined that every WTO Member has the right, in
accordance with mutually agreed rules, to address NTCs, such as strengthening the socio-economic
viability and development of rural areas, food security and environmental protection, and to promoteG/AG/NG/W/77
Page 5
the coexistence of various types of agriculture.  Legitimate concerns of all member countries have to
be addressed in the negotiations in parallel with the special and differential treatment of developing
countries.
Albania, Bulgaria, Croatia, the Czech Republic, Georgia, Hungary, the Kyrgyz Republic,
Latvia, Lithuania, Mongolia, Slovak Republic and Slovenia: Domestic support – additional
flexibility for transition economies (G/AG/NG/W/56)
I would like to make some very preliminary comments on the proposal on domestic support
by transition economies.  Norway welcomes the paper by the economies in transition.  We recognize
their special problems, and that we need to take the specificity of country situations into account.  A
one-size-fits-all approach will not suffice, and we have to take this into account in the negotiations.
C: Work within the framework of paragraphs (a), (b), (c) and (d) of Article 20 of the Agreement
on Agriculture: Presentation and consideration of technical papers, as well as submissions,
contributed by participants, taking into account, as appropriate, secretariat background papers
Norway would like to thank the Secretariat for the various background papers prepared for
this Fourth Special Session.  In view of the stimulating discussion we already had on NTCs, I have
revised my intervention and will just make a few points regarding the  background paper on non-
trade concerns (G/AG/NG/S/17).
A number of lessons can be drawn: NTCs represent vital concerns for both developing and
developed countries.  NTCs encompass a number of essential issues ranging from food security, the
viability of rural areas and the preservation of a country’s cultural heritage to several environmental
concerns such as bio-diversity, landscaping and the preservation of a good plant, animal and publichealth.  For a number of reasons related to for instance their cultural, economic, or historical
backgrounds, countries are demanding different goods or services from their agriculture, thus giving
different weight and priority to different NTCs of a multifunctional agriculture.
There seems to be a common recognition among a considerable number of WTO Members
that market forces alone cannot address non-trade concerns. It is clear to us that the NTCs cannot be
disassociated from the agricultural production activity itself.  The safeguarding of these concernsdepends on an ongoing agricultural production.
With this point of departure, a critical question in our negotiations turns out to be the
following:  What kind of policy instruments are ne eded to sustain sufficient domestic production to
safeguard NTCs, also in countries with unfavourable and disadvantaged production conditions?  Thiswill be an important part of our future negotiations.
This leads me to some comments on the background paper on the operation of the Green Box
(G/AG/NG/S/18) .  It seems to us that some clarifications may be needed with respect to the Green Box
and its relationship to other measures as well as to policy objectives related to NTCs.
First, from different Members' contributions one may sometimes get the impression that
Green Box measures are more legitimate than other measures.  This is of course not the case.  Any
measure that conforms with the Agreement on Agriculture and a Member’s Schedule is fully WTO
legitimate and compatible.
Second, while Annex 2 occasionally refers to policy objectives such as food security,
environmental programs and regional assistance, th e Agreement nowhere claims that such support is
sufficient  to meet such policy objectives.  On the contrary, many countries have repeatedly stated that
Green Box measures may not be sufficient to address NTCs.  For instance, the Green Box may not beG/AG/NG/W/77
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sufficiently adapted to the specific situation of de veloping countries.  Furthermore, as a result of
differences in production conditions between and within countries and in order to be able to sustain
domestic production required to properly address NTCs, countries with a comparative disadvantage
need to be allowed to have recourse to a policy measure combination that includes, to a large extent,
use of production-related policy measures.
As I said earlier, domestic production will be required to safeguard NTCs such as for instance
food security and the viability of rural areas.  I think we all agree that in the long run, domestic
agricultural production will only take place if it is profitable, i.e. if production revenues are covering
production costs.  In the case of Norway as presented in AIE/68, in a world market only scenario,
production revenues would cover only 30-41 per cent of production costs.
To conclude on this issue, agricultural production conditions are varying considerably among
WTO Members.  Due consideration must be given to the heterogeneity and diversity of country
situations in order to ensure sufficient flexibility and room for manoeuvre to safeguard NTCs of all
WTO Members.
Finally, let me add a couple of comments to the background paper on inflation and exchange
rate movements (G/AG/NG/S/19) .  As the background paper spells out, one of the obvious
consequences of inflation is that it has the effect of eroding the nominal value of AMS commitments
where they are specified in domestic currency .  Obviously, this problem is proportionate to the level
of inflation.  However, such erosion is substantial also in cases of low inflation.  For instance,between 1988 (October) and 2000 (October), average inflation in Norway amounted to 2,6 per cent
annually.  This inflation rate has deflated our AMS commitment level by around 27 per cent since
1988.  This erosion comes in addition to the 20 per ce nt reduction in nominal values that was agreed
during the UR.  In real value our year 2000 AMS commitment has decreased by more than 40 per cent
compared to the AMS of the base years 86-88.  For countries with higher inflation rates, thereductions have been even bigger.  The background paper evidences that market price support subject
to a de minimis commitment faces the same problems.  The erosion of domestic support commitments
due to inflation reduces the predictability of the multilateral trading system and increases the burden
on countries that in many cases are already facing constraints in their nominal domestic support
commitments.  This is an important issue, which needs to be addressed in the ongoing negotiations.
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