WORLD TRADE
ORGANIZATIONTN/AG/12
30 July 2003
(03-4000)
Committee on Agriculture
Special Session
TWENTIETH SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
Report by the Chairman, Stuart Harbinson, to the Trade Negotiations Committee
I. STATUS OF WORK
1. The Special Session of the Committee on Agriculture, which is conducting negotiations under
paragraphs 13, 14 and other relevant provisions of the Doha Ministerial Declaration (TN/C/M/1
refers), held its twentieth formal meeting on 18 July 2003 on the basis of the agenda set out in
WTO/AIR/2143.  This meeting was preceded by an informal Special Session on 16 July.
2. At the informal Special Session on 16 July participants undertook a more broadly based
discussion on possible modalities in respect of expo rt subsidies, domestic support and market access,
with a number of the key questions raised in the Ch airman's recent report to the TNC serving to focus
the debate (TN/AG/10, dated 7 July, refers).  As indicated in the attached outline of this discussion, as
presented by the Chairman to the formal Special Session, it is to be hoped that the focussed way inwhich delegations worked at the informal Special Session is a positive indication that participants are
indeed now prepared to identify solutions.  Numer ous statements were made in the formal meeting
regarding the stage reached in the negotiations, regard ing the urgent need to further intensify efforts to
establish the main elements of modalities for fu rther reform in advance of the Fifth Ministerial
Conference, regarding the need for balance in the process of bridging divergent positions and levels of
ambition, and regarding the need for the modalities to take into account, inter alia, the special
situations and concerns of developing country participants.  These statements and contributions willbe reflected in the Secretariat summary report on the meeting (to be issued as TN/AG/R/10).
3. In the discussion on the sectoral poverty reduction initiative on cotton, as jointly proposed by
Benin, Burkina Faso, Chad and Ma li (TN/AG/GEN/4 refers), a number of developed and developing
participants expressed support for the initiative and it s further exploration.  This initiative is to be
followed up in the further negotiations on agriculture.
4. The special and differential treatment proposals referred to the Special Session by the
Chairman of the General Council on 28 May were the subject of further detailed discussion and a
separate report on this subject is being made to the General Council on my responsibility as Chairman
(to be issued as TN/AG/11).
II. OUTSTANDING ISSUES
5. Only limited progress has been made in getting to grips with the many inter-related issues in
respect to which solutions consistent with the Doha Ministerial objectives are needed.  As I have
repeatedly stated in recent weeks, a major intensification in negotiating efforts between participants
and across groupings is urgently needed if we are to live up to commitments on agriculture
undertaken by Ministers at Doha.TN/AG/12
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III. FURTHER WORK
6. As indicated at the conclusion of the meeting, the twentieth Special Session held on 18 July
was the last formal Special Session meeting prior to the Fifth Ministerial Conference.  In the weeks
ahead I will continue to remain full y at the disposition of participants to assist them as appropriate in
their efforts to achieve necessary compromises in the context of the General Council's preparations forthe Ministerial Conference.TN/AG/12
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Attachment
Twentieth Special Session of the Committee on Agriculture
Summary outline by the Chairman of the discussions undertaken at the informal Special
Session held on 16 July 2003
This is my report on the informal Special Session held on 16 July.  As always, this report is
made on my own  responsibility and it does not attempt to provide details but to give an outline of the
discussions that took place.
On Wednesday the agenda covered three areas:  export subsidies;  domestic support;  and
market access.  As I stressed at the start of the in formal meeting this agenda was not meant to suggest
any order of priority or that any other aspect of the negotiations had been agreed.
Our work was organized around the questions and issues highlighted in the relevant parts of
the Chair's recent report to the TNC (TN/AG/10 refers).
Export subsidies
In introducing the subject of export subsidies I indicated that this had been included in the
agenda because we had held extensive consultations on other aspects of export competition.  On someof these issues there had been useful progress at the technical level - particularly on export credits and
international food aid although less so on state trading export enterprises.  It was therefore appropriate
that there should now be an opportunity to revert to the question of possible modalities on export
subsidies as such.  Despite this introduction, a number of delegations reiterated that all aspects of
export competition had to be addressed and the subsidy element of all other means of supportingexports had to be treated in a similar way to direct export subsidies.  These delegations felt that more
work was needed to achieve this objective.
Some delegations stated that they interpreted the Doha Ministerial Declaration as meaning
that this round of negotiations should not necessarily result in the elimination of export subsidies.However, they confirmed that they were prepared to make substantial contributions in this area,
provided all forms of export support, including expo rt credits, abuse of food aid and exporting state
trading enterprises, were treated on equal footing.
Others interpreted the Doha Ministerial Declaration differently.  They stated that export
subsidies were the most trade-distorting form of all kinds of support. In their view the issue was not
whether export subsidies were to be phased out but within what timeframe.  They felt that the
timeframe foreseen in the Revised First Draft of Modalities was too long.  Several of these
participants confirmed that they were seeking similar disciplines on other forms of export
subsidization.  Furthermore, the linkage between modalities on export subsidies, on the one hand, and
domestic support and market access was also stressed by a number of participants.
Domestic Support
The recent decision by the European Communities on CAP Reform was welcomed by a
number of participants as a move in the right direction, although they reserved their final judgment
until they saw how this reform would translate in  the EC's negotiating position.  The EC confirmed
that the Reform would enable them to make substantial reductions in trade-distorting domestic
support because the reform shifted support towards direct payments decoupled from production.
Therefore, there was now room for manoeuvre in respect to Blue Box payments.  However, the BlueTN/AG/12
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Box could not be treated in the same way as the Amber Box because subsidies in this category
distorted trade to a lesser extent.  Movements on the Blue Box would also depend on other matters
such as the elimination of the de minimis  provisions for developed countries, special disciplines with
regard to deficiency payments and the preservation of the Green Box.  Other delegations also
indicated their willingness to make reductions in trade-distorting support but they stressed that thecurrent structure of the Green, Blue and Amber Boxes had to be preserved.
A number of other participants stated that they wanted to see much greater reductions or the
elimination of all forms of trade-distorting support.   For some of these delegations this meant some
types of direct payments to farmers currently covered by the specific criteria of the Green Box would
also have to be reduced or eliminated.  Several participants also stated that the magnitude of subsidies
given by some Members under the Green Box meant they distorted trade and, therefore, an overalllimit should be placed on subsidies in this category of support.  However, it was noted by others that
the Doha Ministerial Declaration referred to substantial reductions in trade-distorting domestic
support, and that, by definition, the Green Box only covered subsidies that had, at most, a minimal
effect on trade or production.
There were also a number of comments made on special and differential treatment under the
Amber Box and the de minimis provisions, Article 6.2, and the Green Box.  Although there was some
support for the direction suggested in the revised First Draft of Modalities some delegations stated
that any amendment to the Green Box should not permit trade-distorting subsidies and that there
should not be any overlap between the Article 6.2 exemptions for developing countries and specialand differential treatment provisions in the Green Box.
Market Access
In the discussion on market access there was little sign of movement. The proponents of the
Uruguay Round formula for tariff cuts, on the one hand, and those of the Swiss formula, on the other
hand, did not show a willingness to compromise.  On most other aspects of market access views were
similarly polarised although there was some support for some of the special and differential treatment
provisions in the Revised First Draft of Modalities.
In addition, participants concerned about the erosion of preferences maintained their position
while indicating that the approach in the revised First Draft of Modalities was moving along the rightlines.
There were some interesting ideas put forwar d that might become the basis for possible
compromises in some areas.  Indeed, it was a more diverse discussion and there were some signs that
participants were beginning to search for solutions that would lead to achieving substantialimprovements in market access.  Having said this, however, overall there was no concrete progress on
which to report.
Conclusion
The Cancún Ministerial Conference is only a few weeks away but there is still a lot more
work needed on agriculture.  On the basis of the discussion at the informal Special Session it is clear
that significant movement is needed in order to fi nd solutions acceptable to all.  There is an urgent
requirement for intense negotiations among participants.  It is to be hoped that the focussed way in
which delegations worked at the informal meeting of the Special Session is a positive indication thatparticipants are indeed now prepared to identify solutions.  Time is short and compromises by all
participants simply must be made in this critical area of the Doha negotiations as a whole.
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