./.WORLD TRADE
ORGANIZATIONWT/GC/W/156
24 March 1999
(99-1182)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
Communication from Australia
The following communication, dated 23 March 1999, has been received from the Permanent
Mission of Australia.
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The following is a proposal for consideration in the second phase of the preparatory process
which sets out Cairns Group objectives for the mandated agriculture negotiations:
1. The Cairns Group of agricultural fair traders reaffirms its commitment to achieving a fair and
market-oriented agricultural trading system as sought by the Agreement on Agriculture.  To this end
the Cairns Group is united in its resolve to ensure that the next WTO agriculture negotiations achievefundamental reform which will put trade in agricultural goods on the same basis as trade in other
goods.  All trade distorting subsidies must be e liminated and market access must be substantially
improved so that agricultural trade can proceed on the basis of market forces.
2. The Uruguay Round provided a rules-based framework for agricultural trade and took an
important first step in reducing agricultural support and protection.  Levels of support in OECD
countries, however, remain at very high levels, with US$280 billion in total transfers to agriculture
in 1997.  Also, for many products major impediments continue to constrain market accessopportunities.  The negotiations, to commence in 1999, must deliver major improvements to the rules,
the elimination of subsidies that distort prices, production and trade, and substantial cuts to protection
levels.
3. Completing the task of liberalizing agricultural trade will bring important benefits in terms of
economic growth, improved welfare, food security and sustainable development.
4. Food security will be enhanced through more diversified and reliable sources of supply, as
more farmers, including poorer farmers in developing countries, are able to respond to market forces
and new income generating opportunities, without the burden of competition from heavily subsidized
products.  Export restrictions must not be allowed to disrupt the supply of food to world markets, in
particular to net-food importing countries.
5. In many cases agricultural subsidies and access restrictions have stimulated farm practices
that are harmful to the environment.  Reform of these policies can contribute to the development of
environmentally sustainable agriculture.
6. The principle of special and differential treatm ent for developing countries, including least-
developed countries and small states, must also remain an integral part of the next WTO agriculturenegotiations.  The framework for liberalization must continue to support the economic development
needs, including technical assistance requirements, of these WTO Members.WT/GC/W/156
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7. As preparations for the agriculture negotiations intensify, the Cairns Group will push for a
comprehensive framework which addresses all areas affecting agricultural trade.  A central part of this
will be further, far reaching, and specific commitments in each of the three reform areas.
Export Subsidies8. There is no justification for maintaining export subsidies.  It is essential that the 1999
negotiations ensure the early, total elimination and prohibition of all forms of these distortive and
inequitable policies.  There must be clear rules to prevent all forms of circumvention of export
subsidy commitments.  Also agricultural export credits must be brought under effective international
discipline with a view to ending government subsidization of such credits.
Market Access9. Access opportunities for agricultural products should be on the same conditions as those
applying to other goods and should be commercially viable.  Tariffs must be the only form of
protection, tariff escalation must be removed and tariff peaks curtailed.  The 1999 negotiations must
result in deep cuts to all tariffs, tariff peaks and tariff escalation.  They must provide a major
expansion of market access opportunities for agricultural products, including value-added products.The removal of non-tariff barriers must be completed without exception.  Trade volumes under tariff
rate quotas must be increased substantially.  The administration of tariff rate quotas must not diminish
the size and value of market access opportunities, particularly in products of special interest to
developing countries.
Domestic Support
10. Overall levels of domestic support for agriculture remain far in excess of subsidies available
to other industries.  The 1999 negotiations must result in major reductions in domestic support for all
agricultural products.  All trade distorting domestic subsidies must be eliminated with only non-
distorting forms of support permitted.  Close attention will be paid to compensation for the shift awayfrom price support and the Cairns Group will work to ensure that income aids or other domestic
support measures are targeted, transparent and fully decoupled so that they do not distort production
and trade.
11. The WTO agriculture negotiations are mandated to begin before the end of 1999.  The Cairns
Group will work to ensure that the necessary preparations have been undertaken so that the
negotiations begin on time, and are completed as soon as possible.   The reform process must continue
unabated and the outcome must put trade in agricultural goods on an equal footing with trade in othergoods.
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