. /.WORLD TRADE
ORGANIZATIONG/AG/NG/W/11
16 June 2000
(00-2435)
Committee on Agriculture
Special SessionOriginal:  English
WTO Negotiations on Agriculture
Cairns Group Negotiating Proposal
Export Competition
Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Fiji, Guatemala,
Indonesia, Malaysia, New Zealand, Paraguay, Phil ippines, South Africa, Thailand and Uruguay
submit the following first Cairns Group proposal which deals with export competition issues in the
WTO negotiations.
INTRODUCTION
Export subsidies are the most trade-distorting agricultural policies and damage both developed and
developing  countries.  By depressing and destabilising international market prices, the use of export
subsidies by a small number of countries lowers farm incomes in other exporting countries and harmslocal production in food-importing countries.  They undermine environmentally sustainable
production methods by farmers in developing countries.  Moreover, many developing countries have
large, even vast, rural populations making their living off working the land.  Export subsidies force
them to compete with the richest treasuries, contributing to increased rural poverty, the swelling of
overcrowded cities and the promotion of social unrest.
There is no justification for export subsidies to continue in agriculture.  Export subsidies for industrial
products were prohibited by the GATT more than 40 years ago.  Price and quality are the only fair
means of export competition and it is unfair to support exports through subsidised prices or subsidised
terms of payment.  Only 25 of the current 137 WTO Members have agricultural export subsidyentitlements in their Schedules.
Consistent with the WTO commitment to fundamental reform, resulting in correcting and preventing
restrictions and distortions in world agricultural markets, the Cairns Group seeks the complete
elimination of all forms of agricultural export subsidies.
PROPOSAL
Taking into account that from 2004, agricultural export subsidies will no longer be exempt from
actions based on Article XVI of GATT 1994 or Articles 3, 5 and 6 of the Subsidies Agreement, the
Cairns Group proposes that:
- WTO Members agree to the elimination and prohibition of all forms of export subsidies for
all agricultural products.
- The date for elimination of the remaining export subsidies will be agreed in the negotiations.G/AG/NG/W/11
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- Elimination will be achieved through a substantial downpayment in terms of reduction (eg.
not less than 50%) of outlays and volumes of export subsidies during the first year of the
implementation period.  This first instalment shall be followed by an accelerated process of
reduction leading to zero of the residual subsidies.
- The starting point for the downpayment and reduction process will be the bound export
subsidy ceilings at the end of 2000 for developed countries and 2004 for developing
countries.
- Additional or strengthened rules and disciplines shall be developed to prevent the
circumvention of the elimination and prohibition of  all forms of export subsidies.  This would
include eliminating any subsidy elements of other forms of unfair export competitionmeasures including, but not limited to, export credits, export credit guarantees or insurance
programs and non-commercial transactions.
Continuation Of The Reform Process
In order to ensure that the reform process continues during the course of the WTO negotiations,
countries entitled to use export subsidies should  show maximum restraint and reduce the extent to
which they utilise them.
Special and Differential Treatment
Consistent with the need to take fully into accoun t the particular needs and conditions of developing
countries, the Cairns Group proposes that commitments on export subsidies include concrete special
and differential treatment provisions.  The final provisions will need to be developed taking into
account the outcome of the negotiations on export subsidies and will aim to provide developing
countries with useful and effective tools to cushion the impact of the reform process and help them toadapt to change.  These could include:
- A longer implementation timeframe for developing countries; and- Extension of existing special and differential treatment for developing countries under
Article 9.4 of the Agreement on Agriculture until the elimination and prohibition of export
subsidies are completed.
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