RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/NG/R/9
10 January 2002
(02-0129)
Committee on Agriculture
Special Session
SUMMARY REPORT ON THE NINTH MEETING OF THE SPECIAL SESSION
HELD ON 7 DECEMBER 2001
Note by the Secretariat
1. As agreed by the General Council at its meeting of 7-8 February 2000, the negotiations for
continuing the reform process under Article 20 of the Agreement on Agriculture are being conducted
in Special Sessions of the Committee on Agriculture (WT/GC/M/53, paragraph 12 refers).  The ninth
formal meeting took place on 7 December 2001.  The meeting was chaired by Ambassador Apiradi
Tantraporn (Thailand).
2. The agenda as contained in WTO/AIR/1682 was adopted.
ITEM A :WORK PROGRAMME FOR THE SECOND PHASE OF THE NEGOTIATIONS
(i) Report by the Chairperson
3. In accordance with the agreed arrangements for the second phase of the negotiations
(G/AG/NG/7, paragraph 4 refers), the following report was made by the Chairperson on the mainfeatures of the in-depth work carried out thus far in the informal Special Sessions held on 3 and
4 December 2001:
"Under the Work Programme for the second phase of the agriculture negotiations Members
agreed that the Chair would report on the informal Special Sessions (G/AG/NG/7) to the
formal meetings.  The following report covers the discussions that took place earlier this week
on 3 and 4 December 2001.  Once again, I would like to stress that this report, which I submit
on my own responsibility, is not meant to be a comprehensive and exhaustive account of thediscussions but a very brief summary of some of the main points raised in the informal
Special Session.
"At the last informal Special Session work was carried out on environment, trade preferences,
food aid, consumer information and labelling and sectoral initiatives.  The discussions werebased partly on elaborated proposals made by Members.  I will not try to summarize these
submissions.  They have been made available to participants and are the only authoritative
source of the positions of these Members.  This report must therefore be read in conjunction
with the submissions by these Members.
"Environment
"On the environment, submissions were made by the Cairns Group, Japan and Norway.
"It was widely noted that agriculture can have both positive and negative effects on the
environment but some delegations stated that without agriculture there would be no positive
effects and without some level of support and protection there would be no agriculture in theirG/AG/NG/R/9
Page 2
countries.  Furthermore, some of the environmental benefits from agriculture could not be
separated from agricultural production and, th erefore, Green Box measures alone were not
sufficient as these could only have, at most, a minimal trade or production effect.
"Other delegations noted that the environment was affected by a wide range of human activity
and some of these delegations questioned the need to address this issue under the agriculturenegotiations.  They pointed out that there were other Committees in the WTO that dealt
directly with environment.
"It was noted that environmental damage from agriculture appeared to be associated with high
levels of support and protection as these policies resulted in intensive production.  Nor were
these negative effects felt only in the countries that provided high levels of support and
protection because restricted markets and subsidized production and exports harmed othercountries and reduced their resources to address environmental concerns and the incentive for
their farmers to produce in environmentally sustainable ways.  The point was also made that
agriculture in many developing countries was based on small family farms and that this type
of farming was ecologically sustainable and fully compatible with the environment.
"It was proposed that the criteria of the Green Box should be re-examined.  Some Members
proposed that the criteria should be relaxed to enable countries to better address
environmental concerns.  On the other hand, other Members stated that the existing provisions
were sufficient, or should be tightened so that environmental programmes could not be used
to circumvent subsidy commitments.  It was also stated that environmental measures shouldbe targeted, transparent and should not be more than minimally trade distorting.  In this
regard, it was pointed out that in some countries some types of production supports were
contingent on farmers following strict environmental criteria while other payments were
directly related to the specific environmental targets.
"Some transition economies noted that they had to address the environmental damage
resulting from central planning of agriculture, while at the same time their economies were
still adjusting to transition.
"Trade Preferences
"The African Group, the European Communities, Namibia, Paraguay and Swaziland made
submissions on trade preferences.
"The need for trade preferences was highlighted by a range of delegations that stated that the
Enabling Clause permitted these exemptions from the most-favoured-nation principle so as to
compensate for unequal development between countries.  It was noted that MFN tariffreductions would erode preference margins.  In the view of some delegations, this could
require a transition period to allow adjustment.
"Greater predictability and stability was needed for preference schemes and it was proposed
that they should be bound in Members' Schedules of Commitments.  In the mean time, thereshould be a "standstill" arrangement to preserve the value of existing preference schemes.  In
addition, some Members pointed out that technical and financial support was needed to
overcome supply side constraints and to meet technical standards and other requirements.  In
this regard, it was proposed that rules-of-origin should be simplified.  It was also suggested
that preferences could be extended beyond tariffs to include other areas such as technicalbarriers or sanitary and phytosanitary measures.
"It was proposed that the conditions defining access to preference schemes needed to be
examined to make sure they were based on objective criteria such as economic vulnerabilityG/AG/NG/R/9
Page 3
and dependence on trade.  In this way the specific concerns of specific groups of countries,
such as least-developed, small island or landlocked developing countries could be taken into
account.
"It was noted that many small developing countries had very small market shares and
preferences to these countries should not distor t international trade to any significant extent.
However, there were different views concerning preferences that discriminated between
groups of developing countries.  In this regard, it was suggested that no developing country
should be disadvantaged by any change to preference schemes.  Some other Members noted
that discrimination in existing schemes should also be taken into account and all schemes
should conform to the Enabling Clause by being generalized, non-discriminatory and non-
reciprocal.
"There were different views expressed concerning the success of preference schemes,
although the concerns of single commodity exporters were recognized.  However, it was
noted that the market share of countries benefiting from preferences had not increased
significantly and it was suggested that preferences might be less efficient than other measures
such as technical and financial assistance.  Some Members noted that the value of preferencesand existing assistance levels was much less than the value of export subsidies and trade
distorting support provided by some other Members.  Reducing these subsidies and supports
and improving market access, including reducing tariff peaks and escalation, should be the
main objective of the negotiations.
"Food Aid
"Submissions on food aid were made by the European Communities, Japan, Mercosur,
Namibia, Norway and a group of developing countries that included Cuba, Egypt, Grenada,
Mauritius, Nigeria, Sri Lanka and Uganda.
"It was noted that food aid was an effective way to alleviate hunger and improve food
security.  However, data on food aid showed that the volumes tended to rise when prices were
low and to fall when prices were high.  This exacerbated the problems that had been
recognized in the Uruguay Round and that had resulted in the Marrakesh Decision onLeast-Developed and Net Food-Importing Developing Countries.
"The issue of food aid was associated with export subsidies.  It was pointed out that in some
cases food aid was used to enhance exports and had the effect of undermining domestic
production in the recipient country or displace imports from other, often developing,
countries.  In order to avoid these adverse effects, while continuing to ensure food aid was
available when needed, it was necessary to strengthen the disciplines in Article 10 of theAgreement on Agriculture.  These strengthened disciplines could ensure:
− that food aid responded to evaluations of the need for aid;
− that aid was targeted, demand driven and respected the needs of the recipient country;
− that it was given in fully-grant form;  and
− that it was not tied to commercial transactions.
"Notifications were needed to ensure that fo od aid complied with international commitments.
"Some Members pointed out that the longer term objective should be to improve the capacity
of food insecure countries to produce food and to finance imports.  However, emergency aid
would remain essential to deal with situations like war and natural and economic disasters.G/AG/NG/R/9
Page 4
Limiting food aid to grant form only might restrict the ability to respond to such situations
and food aid on concessional terms in certain cases would continue to be needed.
"There was an elaboration of the proposal that there should be an international stockholding
to be used by existing intern ational inter-governmental and non-governmental organizations
in emergency situations.  In this case, appropriate criteria could be developed by the relevantinternational organizations to prevent adverse affects on trade and domestic producers in
recipient countries.  These criteria could be taken into account in the WTO and the WTO
should also work more closely with the organizations involved.
"Consumer Information and Labelling
"Submissions on consumer information and labelling were made by the European
Communities and Switzerland.
"It was noted that consumers in many countries were demanding more information on the
food they bought and voluntary or mandatory labelling could provide this information and
address non-trade concerns, such as animal welfare or information on GMOs.  Labelling neednot create any non-tariff barriers, in fact, it could assist market access by giving consumers
the information they were seeking.
"It was stated that the issue of consumer inform ation and labelling should be dealt with in the
Committee on Technical Barriers to Trade and, in relevant cases, the SPS Committee or otherinternational organizations, particularly the Codex Alimentarius.  Although some Members
stated that progress on these issues in the relevant Committees was needed to ensure progress
in the agriculture negotiations other Members stated that this linkage of issues was not
appropriate.
"It was pointed out that labelling often required expensive verification procedures and
systems that were beyond the limited resources available to many developing countries.  In
this regard, the proposal that technical assistance should be given to developing countries to
help them to comply with labelling schemes was noted.  It was also suggested that products
that did not comply with the conditions of a particular label could still be imported andconsumers given the choice of which product they wished to buy.
"Specifically on animal welfare it was proposed that this non-trade concern could be
addressed by a combination of mandatory or voluntary labelling and the Green Box criteria
could be examined to permit subsidies to compensate for increased costs or lost production
resulting from complying with we lfare standards.  The objective of the proposal was to ensure
that liberalization did not undermine efforts to improve animal welfare in importing countries.However, it was suggested that from the perspective of trade what was more important than
the specific non-trade concern was the measures taken to address it.  Other delegations
suggested that animal welfare was a concern mainly in wealthy countries that protected and
supported their agriculture sectors and they pointed out that production conditions in other
countries that did not use subsidies were often more welfare friendly than in those countriesthat expressed concerns about animal welfare.
"Sectoral Initiatives
"A submission was made by Canada on sectoral initiatives.
"In the discussion of this issue it was suggested that sectoral initiatives could be a useful
complement to general trade liberalization.  These initiatives should be open to all interested
Members, should cover as wide a range of products as possible and need not necessarily beG/AG/NG/R/9
Page 5
restricted to tariff reductions but could also extend to other measures such as export taxes and
domestic supports.  These initiatives could also take account of tariff peaks and escalation.
"However, some Members suggested that, while they would not object to interested countries
pursuing sectoral initiatives, they would not be taking part and these initiatives should not be
part of the general modalities.  Other Members stated that sectoral initiatives would benefitonly a small number of countries and could undermine comprehensive reform called for by
the Doha Ministerial Declaration."
(ii) Statement by Members
4. No Member took the floor.
ITEM B :OTHER BUSINESS INCLUDING DATES FOR THE NEXT FORMAL AND INFORMAL SPECIAL
SESSIONS
5. It was noted that the Secretariat background notes on domestic support commitments
(G/AG/NG/S/1) a nd on Members' usage of domestic support categories, export subsidies and export
credits (G/AG/NG/S/12/Rev.1) would be  updated taking into account suggestions made in this regard,
and that a request for a background paper on commercial and non-commercial transactions would be
clarified in consultation with the Secretariat.
6. The Chairperson indicated that the following trade or non-trade issues are to be taken up at
the next informal Special Session meeting on 4-6 February 2002:  development box;  single
commodity producers;  small island developing countries;  and special and differential treatment.
Provision would be made in the annotated agenda for additional issues to be addressed at this informal
Special Session.
7. The next formal Special Session was scheduled to be held on 7 February 2002 and would
provide an opportunity for participants to review progress made in the negotiations and to conclude
the work of the second phase.
ITEM C :CHAIRPERSON 'S OUTLINE OF HER REPORT TO THE GENERAL COUNCIL
8. The Chairperson outlined the general content of the report she would be making to the
General Council (G/AG/NG/9 refers).
__________