RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/R/21
12 January 2000
(00-0118)
Committee on Agriculture
SUMMARY REPORT OF THE MEETIN G HELD ON 17 NOVEMBER 1999
Note by the Secretariat
1. The Committee on Agriculture held its twenty-first meeting on 17 November 1999 under the
Chairmanship of Ambassador Nestor Osorio Londoño of Colombia.  The agenda of the meeting as
contained in WTO/AIR/1213 was adopted.
Part I:  The Review process
Matters relevant to the implementation of commitments under the Reform Programme:  Article 18.6
Canada:  Panama – Recent tariff increases and administration of tariff quotas
2. Canada raised concerns about the short notice given for tariff increases that were announced
on Friday 15 October 1999 in the Gaceta Oficial of Panama and implemented on Monday 18 October.
Canada, supported by the United States, considered that this short notice had created uncertainties and
other difficulties for trading partners and exporters.  Canada pointed out that some of the tariff
increases appeared to have resulted in tariff levels substantially above Panama's bindings; for
example, the tariff applied to HS code 2103.20.90 appeared to have increased to 70 per cent,compared to the bound level of 40 per cent.  In addition, HS codes 0207.13.19 and 0207.14.19 were
not listed in Panama's Schedule and were now subject to a 300 per cent duty.  Canada asked whether
the tariffs rates on these new tariff lines were above their corresponding WTO bindings and, if so,
what corrective measures Panama intended to take.
3. Canada asked whether the above changes would affect the established administration
procedures of certain tariff quotas and whether Panama intended to implement tariff quota regimes.
For products such as pork (HS codes 0203.22 and 0203.12) and potatoes (HS 0701.90), the
previously-applied terms of access were based on a tariff-only regime at the bound in-quota rate, i.e.
15 per cent, without quantitative limit.  However, since 18 October, the tariffs for these products had
increased to 83 and 87 per cent respectively.  Canada sought confirmation that access for pork and
potatoes would be maintained for the quantity within quota at the bound in-quota rate.
4. The delegation of Panama explained that HS code 2103.20.90 was inadvertently treated in the
same way as HS codes 2103.20.10 and 2103.20.20, which are both bound at 70 per cent in 1999.  A
new Cabinet Decree will be issued shortly to remedy this situation and establish a new tariff for
HS code 2103.20.90 consistent with Panama's WTO bindings.
5. As regards tariff codes HS 0207.13.19 and 0207.14.19, Panama explained that its Schedule
was established using the 1992 version of the Harmonized System (HS 92).  It was not untilFebruary 1998 that, by Cabinet Decree no. 61 dated 10 October 1997, Panama adopted the new
version (HS 96).  This explains why these two tariff lines are not listed in Schedule CXLI.G/AG/R/21
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6. Concerning the administration of tariff quotas, Panama stated that, on 12 November 1997, a
Cabinet Decree was enacted in order to modify the import tariffs on nearly 3,000 tariff lines.  Around
78 per cent of these lines were reduced to 15 per cent, among them pork and potatoes.  In the first six
months of 1999, approximately 3,410 tonnes of por k and 2,300 tonnes of potatoes were imported
under the tariff lines corresponding to the negotiated tariff quotas.  These import volumes exceeded
Panama's commitments of 600 tonnes for pork and 425.1 tonnes for potatoes for the year 1999.  Forthe next tariff quota period, Panama will open tariff quotas in accordance with its WTO commitments
and the administration procedures described in G/AG/N/PAN/2 and Add.1.
Review of Notifications
7. The Committee reviewed the following notifications as listed in the agenda:
(i) on the administration of tariff and other quota commitments (Table MA:1): from
Japan (G/AG/N/JPN/42);
(ii) relating to imports under tariff and other quota commitments (Table MA:2): from
Brazil (G/AG/N/BRA/16), European Communities (G/AG/N/EEC/19), Indonesia
(G/AG/N/IDN/14), Japan (G/AG/N/JPN/43), South Africa (G/AG/N/ZAF/26) and
Thailand (G/AG/N/THA/35);
(iii) in the context of the special safeguard (Tables MA:3 to MA:5): from the European
Communities (G/AG/N/EEC/18) and New Zealand (G/AG/N/NZL/20);
(iv) relating to domestic support commitments (Table DS:1): from Argentina
(G/AG/N/ARG/9), Cuba (G/AG/N/CUB/8), the European Communities
(G/AG/N/EEC/12/Rev .1 and EEC/16/Rev.1), Jamai ca (G/AG/N/JAM/4), Kyrgyz
Republic (G/AG/N/KGZ/1), Paragu ay (G/AG/N/PRY/4), Thailand
(G/AG/N/THA/37) and Uruguay (G/AG/N/URY/15/Rev.1);
(v) relating to new or modified domestic support measures exempt from reduction
(Table DS:2): from Canada (G/AG/N/CAN/29), and the European Communities
(G/AG/N/EEC/17);
(vi) relating to export subsidy commitments (Tables ES:1 to ES:3):  from Brazil
(G/AG/N/BRA/15), Canada (G/AG/N/CAN/30), Haiti (G/AG/N/HTI/1), Honduras
(G/AG/N/HND/7/Rev.1 and HND/8), Indonesia (G/AG/N/IDN/15), Jamaica
(G/AG/N/JAM/3), Paraguay (G/AG/N/PRY/ 5) and South Afri ca (G/AG/N/ZAF/27).
8. Specific points raised in relation to notifications listed in paragraph 7 above are summarized
in Part I of the Annex to this report.
9. The following notifications were subject to prelim inary review and are to be reverted to at the
next meeting in accordance with paragraph 9 of the Committee's Working Procedures:
(i) on special safeguard (Tables MA:3 to MA:5):  from Japan (G/AG/N/JPN/44);
(ii) on domestic support commitments (Tables DS:1 and DS:2):  from Costa Rica
(G/AG/N/CRI/6), Cyprus (G/AG/N/CYP/9) , Czech Republic (G /AG/N/CZE/23) and
the United States (G/AG/N/USA/28);
(iii) on export subsidy commitments (Tables ES:1 to ES:3):  from the European
Communities (G/AG/N/EEC/20) and Norway (G/AG/N/NOR/23).G/AG/R/21
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10. The Committee took note that no counter-notifications had been received under Article 18.7
of the Agreement.
Other matters relating to the Review Process
(a) Deferred replies to questions raised under the review process
11. Canada, supported by the European Communities and the United States, sought clarification
from Venezuela on the terms of access applying to imports of pork, a matter already raised at the
June 1999 meeting of the Committee on Agriculture (G /AG/R/19, paragraph 16 refers).  Clarification
was sought on whether import permits, other than those necessary for sanitary reasons, were required.
Venezuela assured the Committee that government au thorities were considering this matter seriously
and that the delegation was awaiting a definite answer.
(b) Overdue notifications
12. As had been agreed at the March 1997 meeting of the Committee on Agriculture (G/AG/R/10,
paragraph 10, refers) the Secretariat made available a Room Document dated 17 November 1999,
showing the current status of compliance with the notification obligations.
Part II:  Other Matters within the Purview of the Committee
Annual monitoring exercise by the Committee of the follow-up to the Ministerial Decision on
Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed
and Net Food-Importing Developing Countries
13. The Chairman noted that under Article 16.2 of  the Agreement, the Committee was required to
monitor, as appropriate, the follow-up to the Marrakesh Ministerial Decision on Measures Concerning
the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing
Developing Countries. Under the Committee's Working Procedures (G/AG/1, paragraph 18), the
monitoring exercise is undertaken at the regular November meetings of the Committee.
14. In order to assist the monitoring exercise the Chairman drew the Committee's attention to the
updated version of the Secretariat's paper on the implementation of the Decision which was circulated
on 4 October 1999 (G/AG/W/42/Rev.2) for the purpose of  consideration of this item.  He went on to
ask the observer international organizations to inform the Committee of the activities they have
undertaken in respect of least-developed and net food-importing developing countries.  In response,the representatives of the FAO, the OECD, the World Bank and the IMF made statements which have
been reproduced in document G/AG/GEN/40.
Annual consultations under Article 18.5 with respect to Members' participa tion in the normal growth
of world trade in agricultural products within th e framework of the commitments on export subsidies
15. The Chairman noted that Article 18.5 of the Agreement provided for Members to consult
annually in the Committee with respect to their part icipation in the normal growth of world trade in
agricultural products within the framework of the commitments on export subsidies under theAgreement.  The Committee's Working Procedures stipulated that this annual consultation was to be
undertaken at the regular November meetings of the Committee (G/AG/1, paragraph 17).  As
requested at the last Committee meeting, the Secretariat had prepared a revision of background note
G/AG/W/32 for the purpose of this  consultation (G/AG/W/32/Rev.2).
16. The EC noted that since the conclusion of the Uruguay Round of negotiations trade in
agricultural products had developed considerably.  Some countries, notably Australia and Argentina,
had increased their market share while others, notably the EC, had lost market share.  AustraliaG/AG/R/21
Page 4
pointed out that conclusions were difficult as many factors influenced world trade and there was
considerable variation in the data from one year to the next.  It was also noted that the EC had
managed to increase its share of trade in "Other Agricultural Products".  Mexico felt that there was
little change in the overall trade patterns and queried why data on importers had been included in the
revised paper although noting that this had been done at the request of other Members.
Other Business
17. The representative of Japan made a statement on the tariffication of rice.  He noted that four
countries had initially made reservations concerning their tariffication but only one country
maintained these reservations.  Uruguay stated that  they were still assessing the results of Japan's
tariffication of rice and that they hoped their negoti ations would reach a successful conclusion in the
near future.
Date of Next Meeting
18. The next regular meeting of the Committee on Agriculture will be held on 23–
24 March 2000.  The airgram convening the meeting and containing the draft agenda will be issued on
Friday 10 March 2000.G/AG/R/21
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ANNEX – Part I
Review of Notifications by the Comm ittee on Agriculture on  17-18 November 1999
Summary of Specific Points Ra ised and Responses Thereto
Table MA:1 Notifications
Japan   G/AG/N/JPN/42     Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Uruguay: Rice  – Procedures in force to administer the
minimum access quota (MAQ);A Basic Plan for the supply and demand for rice is published
each year in March in the Government Official Gazette and
in a press release.  It includes the expected volume ofimports and other information on the MAQ in thesubsequent financial year.  Rice under the MAQ is imported
by the Food Agency (FA) under two import systems,
namely, the Ordinary Import System (OIS) and theSimultaneous Buy and Sell (SBS) import system describedbelow.  As for the OIS, the level of imports by type of crop
and by country is determined monthly based on domestic
demand, the export capacity of supplying countries,international market prices, etc.  Imports are conductedthrough tendering (competitive bid system).  Every year, the
FA announces the eligibility requirements to be met by
importers in order to participate in the tender (e.g. businessexperience in grain trade, business capital, etc.).  Furtherdetails can be obtained from the Trade Division of the FA.
Domestic buyers normally take into account the production
areas and the quality of rice to be purchased, whether fromdomestic or international sources.  This is why, as explainedbelow, the producing/supplying countries are sometimes
specified.  Tender announcements are in principle made to
"designated importers" but the FA also provides informationto embassies of rice exporting countries, includingUruguay's, for their convenience.  Tender results arereleased to press and announced in the Web site.
Methods and modalities of access; Two import systems apply, the OIS and the SBS.  In either
case, the selling price to domestic users is set in conformitywith the mark-up and is within the limits described inJapan's Schedule.
1. OIS: (Article 60, Staple Food Law) The supplying
countries are determined once the demand for rice from such
countries is established.  In order to ensure opportunities for
new supplying countries, a certain amount of imports is
conducted under "non-country specific tender" where onlythe type/quality of rice is specified.  Given the large volumesinvolved under the OIS, the FA issues the announcement to
"designated importers" 3 to 7 days in advance of the tender
in order to avoid influencing the world markets.  The FAthen purchases imported rice from the "designatedimporters" and sells it to the dom estic users at a fixed price
based on the Government Sales Price (set by the Rice Price
Council after adjustments are made to take into account
factors such as quality and market situation).  As the FApurchases large amounts of rice under the OIS, relatively
large unit quantities are required for commercial
considerations in order to save transportation costs.Consequently, imports of the brands that are produced andexported only in small quantities would not be suitable for
G/AG/R/21
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Japan   G/AG/N/JPN/42     Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
the OIS.
2. SBS (Article 62, Staple Food Law): The purpose of
this system is to collect information on domestic demand for
rice produced in various countries and to respond to specificneeds for relatively small quantities of rice.  The FA doesnot carry the burden of risk involved with domestic sales.
No specifications regarding the producing country nor the
type/quality of rice are imposed.  Small import volumes (i.e.one container, 17 tonnes) are concerned.  The announcementof the tender is made 3 weeks in advance.  Since this
competitive bidding system is only based on mark-up values
which are offered to the FA by pairs of designated importersand domestic users (who jointly participate in the tender).The imported rice is immediately delivered to the specificdomestic users.
Criteria used to determine country-specific levels of access;details on allocation system;None of the above import systems sets country allocations.
Both are open to any country subject to the existence ofrelated domestic demand by distributors and processors.
Similar to the distribution of domestic rice which takes place
according to each production area and type of rice, mostusers' demand for imported rice relates to specific producingcountries.  However, as explained above, a "non-country
specific tender" offers market access opportunities to new
producing/supplying countries.  Under SBS, the share ofeach c ountry is identified only after the tender process is
completed.  The import volume by country varies in eachtender.
Compatibility of the system with Article 4.2. Since rice was "tariffied" on 1 April 1999, the import
licensing system was abolished.  Rice may now be importedat the out-of-quota tariff rate.  No other border measures areimposed apart from ordinary custom duties.  Concerning the
administration of the MAQ by the FA (a state trading entity
which was duly notified to the WTO), it is conducted inaccordance with commercial considerations and the mark-upcollected by the FA is within the limits described in theSchedule of Japan.
Additional comments:  The Delegation of Japan  indicated that detailed information on the Basic Plan for the supply and
demand for rice is available in Japanese in the Web s ite http://www.shokuryo.maff.go.jp/archives/data/jkb03331.htm .
Uruguay remained unconvinced of the transparency of the MAQ administration system due to the complex nature of various
key elements, e.g. assignments of volumes based on the assumed export capacity of exporters; specification of origin ofimports; allocations contingent on the generation of "adequate" demand which discriminates against countries which do notalready have access to the Japanese market; definition of ma rk-up ranges by FA to supplying countries and non-availability
of related price information (SBS); short notice at which tenders are announced and tying of allocations to one-country-one
shipment-one-vessel under the Ordinary system, both features effectively discouraging distant suppliers from submitting
bids; managing of the entire system by one single entity.G/AG/R/21
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Table MA:2 Notifications
Indonesia   G/AG/N/IDN/14     Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Canada/New Zealand: Milk and cream  – Reason for
missing information on imports during the period 1995-98;submission of related ou tstanding notifications.Period 1995-97:  Indonesia is making its upmost efforts to
finalize these notifications as soon as possible. 1998: A new
Joint Ministerial Decree (22.1.98) has revoked a previous
Decree on the business development for the promotion
manufacturing and marketing of domestic milk products.
Within the framework of the new deregulation policy,effective as of 2 February 1998, changes were introduced inthe import regime of milk and cream.
Japan   G/AG/N/JPN/43     Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
New Zealand/United States:  Dairy  – Reasons for consistent
underfill for dairy products in general.This is due to low demand for these products caused by the
decline in the number of new-born babies and schoolchildren and increased interest in breast-feeding (e.g.
skimmed milk powder (SMP) for school lunch, prepared
whey for infant formula); a decline in the number of
livestock to be fed (e.g. SMP for other purposes, whey and
modified whey for feeding purposes); limited progress in
creating new alternative uses for processed dairy products
(e.g. evaporated milk, mineral concentrated whey ).  As
regards butter and butteroil, imports declined because
domestic production fulfilled domestic demand.
Australia/New Zealand: Dairy products for general use  –
Reasons behind falling import volumes in 1998 compared to1997.A rather cool summer as well as a depressed economic
situation caused demand for dairy beverages to decline.However, Japan imported 137,022 tonnes of designated
dairy products in 1998, representing 99.9 per cent of the
tariff quota volume.
South Africa   G/AG/N/ZAF/26     Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia/Japan/New Zealand/United States: Reasons behind
the persisting low rates, or declines, of tariff quota fill for:
Dairy : fresh milk and cream; milk powder; butter; Fresh milk and cream: Applied tariff is zero.  Low fill rate is
due to supply and demand factors. Milk powder: Drop in fill
rate is attributed to oversupply of milk. Butter:  Drop in fill
rate is due to a good production year for milk that led to
large stocks of butter (approximately 8,000 tonnes).
Eggs (HS 0407; 0408) HS 0407: Applied tariff is zero. HS 0408 : A limited number
of applications were received for which the in-quota tariff
rate is below 4 per cent.
Grain sorghum The applied rate is lower than the in-quota tariff rate.
Grapes, dried The tariff quota quantity was under-subscribed.  The applied
in quota rate is below 5 per cent.
Fruit, dried The tariff quota quantity was under-subscribed.  Total
G/AG/R/21
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South Africa   G/AG/N/ZAF/26     Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
imports, at 379 tonnes, exceeded the in-quota commitment.
Maize During the reporting period, the applied tariff was below the
in-quota tariff rate.  It was thus not necessary to provideadditional market access in the form of a tariff quota.
Malt extracts The tariff quota quantity was under-subscribed.  The applied
tariff rate is only marginally above the in-quota tariff rate.Total imports amounted to 2,350 tonnes against in-quotaimports of 425 tonnes.
Peas, dried  (HS 0713.20; HS 0713.90) HS 0713.20:  Applied tariff is zero. HS 0713.90 : Import
permits issued were not fully utilized.  Total imports for
these tariff lines have, however, increased from 1997 levels.
Potatoes The applied tariff is lower than the in-quota tariff rate.  It
was thus not necessary to provide additional market accessin the form of a tariff quota.
Rapeseed Limited imports are due to the local supply and demand
situation.
Rye Applied tariff is zero. It was thus not necessary to provide
additional market access in the form of a tariff quota.
Tapioca Applied tariff is zero.  It was thus not necessary to provide
additional market access in the form of a tariff quota.
Vegetables, frozen The tariff quota was opened but not fully utilized. Total
imports were however approximately tenfold the in-quota
commitment.
Canada: Whey; wine and spirits  – Status of these unopened
tariff quotas; whether reallocation to 1999 was made.Due to administrative problems, these tariff quotas were not
opened in 1998.  The 1998 quantities will be made available
ex post  to enable importers to take advantage of lower in-
quota tariffs.
Thailand   G/AG/N/THA/35     Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Japan/New Zealand: Reasons be hind persisting low fill rates
or lack of imports :
Coconut, Coconut oil and its fractions, Coffee (instant),
Copra, Garlic, Longans, Milk and cream ( whether a tariff
only regime has been considered), Pepper, Rice, Silk (raw),
Soya bean oil and its fractions, Sugar (cane or beet), Tea.Thailand is a major producer and exporter for these
products, in particular rice, sugar, longans and many others.Demand for these products therefore depends largely on
domestic conditions.  For example, 147.71 tonnes of
Japonica rice were imported to accommodate demand by
restaurants and foreigners.  At times, when domestic demandis not met by Thai production, either in terms of quantity or
quality, then imports take place. But the need to import such
products remains minimal. Finally, since Thai imports donot always originate in WTO Member countries, thequantities imported are not reported.  The import system
applied to all tariff quotas is administered in a transparent
manner.  For the time being, Thailand has not consideredmoving to alternative methods of administration.G/AG/R/21
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Tables MA:3 to MA:5 Notifications
European Communities   G/AG/N/EEC/18     Price-Based Special Safeguard (Table MA:4)
Points raised by other Member s Response by Notifying Member
United States: Clarification of products for which SSG
duties were collected in marketing year 1997/98.The price-based SSG is operational in the sugar and poultry
sectors. Additional duties were collected in the poultrysector. The expression "has been made operational" meansthat for certain products the amounts are effectively
collected if the price of the consignment presented for
import so justifies.
New Zealand: Volume of imports affected; extent to which
the import price was below the trigger price; additional dutylevied.No further details are available on import prices and
additional duties.
New Zealand: Chemically pure maltose  (HS 1702.90) –
Confirmation that the SSG has not been applied on productlines for which there is no scheduled right to do so.Confirmed.G/AG/R/21
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Table DS:1 Notifications
Argentina   G/AG/N/ARG/9      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Green Box
Japan:  "Special Fund for Tobacco" – Reasons for listing this
programme under various Green Box categories of support;
submission of related Table DS:2 notifications
Australia/Japan:  "Special Fund for Tobacco" Annex 2, para.
2 (a)– Confirmation that payments are not paid directly toindividual producers.
Australia: "Agricultural social programme to smallholders"
– Consistency with Annex 2 para 6 (e).
Australia/Japan/United States: "Special Fund for Tobacco" –
Annex 2, para. 11 including para. 11 (e) – Confirmation thatpayments are limited to the extent necessary to compensatefor structural adjustment costs.
Australia/Japan: "Introduction of tob acco-growing
technology" – Consistency with policy-specific criteria
contained in Annex 2, para. 11 (e).
Australia: "Pre-financing of sh earing for producers with less
than 1,000 sheep" – Consistency with Annex 2, para. 13;
explanation of degressive nature of payments; criteria used
to define disadvantaged regions; whether Patagonia belongsto this latter category.
Australia: "Credits to sheep producers owning between
1,000 and 6,000 head" – Compliance with policy-specific
criteria of Annex 2, para. 13, regarding linkage of support to
the type/volume of production.
New Zealand:  AMS - Confirmation that support is reported
without inflation adjustment.The Delegation of Argentina undertook to provide answers
within the next few weeks.
Cuba   G/AG/N/CUB/8      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Japan: "Natural disaster relief" – Reason for increase in
expenditure in 1998.In 1998, a severe drought provoked huge losses in the
agricultural and cattle rearing sectors, affecting most
provinces, particularly in the Eastern part of the country.Given the strategic importance of food production in Cuba'sfood security objectives, as established by the national
legislation, the government extended its assistance to
producers, both in cooperatives and in the private sector.This support measure is of a temporary nature.G/AG/R/21
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European Communities   G/AG/N/EEC/12/Rev.1      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
New Zealand:  Confirmation of support amount listed in
ST/DS:9, in view of G/AG/N/EEC/12/Corr.2.Confirmed.  A corrigendum will be submitted to amend
ST/DS:4.
European Communities   G/AG/N/EEC/16/Rev.1      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Green Box
United States: "Marketing and promotion services" –
Whether expenditures cover all operational funds described
in Regulation 2200/96 granted to producer organizationswhich are recognized under Regulations 412/97 or 1035/72.Out of 604 million ECU, 6.4 million ECU were allocated to
the operational funds for producer organizations. Higheramounts are expected since the programme only started in1997.  Withdrawal payments are not included in this figure.
Such payments represent less than 293 million ECU, part of
which was included in ST/DS:6.  These amounts will befurther disaggregated in future notifications.
United States:  "Transitional aids" – Description of method
of payment; explanation of de-coupling from production inview of the replies given in G/AG/R/20.These payments have been phased out.
United States : "Payments for natural disasters" – Details on
the nature of the programmes (loss thresholds, operational
details, etc.).Article 87.2 of the EU Treaty covers aid granted by member
states under this sub-title. The Commission authorizes
100 per cent compensation for damages caused by anearthquake. However, in case of damages caused by climaticevents (frost, rain, drought), financial compensation is
allowed if the production loss exceeds 30 per cent of the
average production in the pr eceeding 3 years.
AMS
New Zealand:  Olive oil  - Confirmation that the price gap
approach (ST/DS:7), rather than price support (ST/DS:5),
was applied to derive the level of aid; implementation
details.Support in ST/DS:7 should be categorized as price support
like in ST/DS:5.
United States:  ST/DS:9 – Reason for removing the "other"
category; whether expenditures are accounted for in theGreen Box under "marketing and promotion services".The "other" category was removed from ST/DS:9. The
corresponding amount was inadvertently omitted from the"marketing and promotion services".  The figure shouldread:  612.3 million ECU.
Thailand   G/AG/N/THA/37      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Japan:  "Agriculture training services" – Reason for increase
in expenditure.Due to a prolonged financial crisis, there was a movement of
industrial labour to the agricultural sector.  Training serviceswere thus provided, which explains the increase in budgetexpenditure.
New Zealand: ST/DS:4 – Status of product-specific support
compared to 1997.Support amounts to garlic (30 million Baht), shallots
(52 million Baht) and onions (60 million Baht) were withinthe de minimis  levels in 1998. The total values of production
(in million Baht) were respectively: 2,593; 3,523; 642.Tapioca and coffee seed did not receive support.
Japan:  "Soft loan measure" (ST/DS:7) – Reason for increase
in expenditure while support to "paddy pledging" decreased
during the same period.Following the migration of industrial labour to rural areas as
a result of the financial crisis, soft loans were provided to
new farmers.  Due to limited funding, expenditure on theG/AG/R/21
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Thailand   G/AG/N/THA/37      Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
paddy pledging scheme declined.
United States: "Market price intervention" (ST/DS:7) –
Duration of the programme; prices set for rice and jute in
1998; reporting period, i.e. calendar vs. crop year;  reasonfor not using the price gap methodology as per Annex 3para. 8.
Additional comments: New Zealand
 noted that jute was not
covered by Annex 1 of the Agreement on Agriculture.This programme began after the harvest seasons when prices
are especially low and was implemented by the governmenton a temporary basis.  Price indicators vary since theydepend on the quality of the product, e.g. humidity content,
product variety, etc.  In 1998, prices were around
6,000 Baht/ton for rice and 6,800 Baht/ton for jute.Measures are applied on a crop-year basis.  The programmewas operated on the basis of budgetary outlays in accordance
with Annex 3 para. 10.  Although product-specific support to
rice is granted through market price intervention, it is notoperated on a permanent basis throughout the crop year butonly when local prices are very low and on a temporary
basis only. This intervention system is entirely different
from a guaranteed-price system.G/AG/R/21
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Table DS:2 Notifications
Canada    G/AG/N/CAN/29             New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Australia:  Clarification regarding the exclusion of certain
expenses from the calculation of programme margins underthe Agricultural Disaster Insurance Programme (ADIP);
consistency of this method with Annex 2 para. 7 requiring
that such calculations be income based.Annex 2 para. 7(a) requires that eligibility be determined by
an income loss which exceeds 30 per cent of the averagegross income or the equivalent in net income terms.  The
ADIP in Prince Edward Island is based on income from
primary agriculture net of certain expenses.  This ensuresthat the programme does not influence farm production andpurchase decisions.
New Zealand:  Date of submission of Table DS:1
notifications for 1996-1998.
Additional comments: New Zealand  found difficulty in
reviewing this notification in a proper context and indicated
its intention to revert to it once the Table DS:1 notificationsare submitted.The process of preparing, and then finalizing, annual
domestic support notifications requires a number of stepssince support is provided by two levels of government,individually- or jointly-operated programmes. Canada isworking to ensure that outstanding notifications are
submitted to the Committee as soon as possible.  The 1996
notification will be submitted shortly, and the 1997notification, on which work is well advanced, will besubmitted as soon as possible after that.  The notification for
marketing year 1998 (1 October 1998-30 September 1999) is
due in early 2000.
United States: Procedures in place to ensure that funding toassociation groups for research/marketing and promotionactivities is not being used for unspecified purposes.There is a formal approval process under the various
research and development programmes to ensure thatprojects funded meet the objectives of the programme.  Forexample, under the Canada-Alberta Beef Industry
Development Fund, a committee composed of federal,
provincial and producer representatives evaluates projectsbased on their relationship to the research priorities, theirscientific merit, and the usefulness of the results. Emphasis
is placed on multi-disciplinary, multi-year projects that are
broad in scope and have a probability of producing results.
United States: Confirmation that Alberta producers
participating in the "Arable Acres Supplementary Payment
Programme" (AASPP) did not receive any benefits from theWGTPP.WGTPP payments were made to eligible land owners in
Alberta and other parts of western Canada.  Land eligible for
those payments was cultivated acreage producing cropseligible for the Western Grain Transportation Act (WGTA)subsidy, which had been eliminated on 1 August 1995.  Theelimination of that subsidy contributed to a decline in the
value of all cultivated acreage, whether used for WGTA-
eligible crops or other crops. AASPP payments compensatedlandowners in Alberta for a decline in value of acreage thatwas not compensated under WGTPP in Alberta.  An
example of such acreage would be land that had earlier been
used to produce sugar beets, a crop not eligible for WGTAsubsidies.G/AG/R/21
Page 14
European Communities    G/AG/N/EEC/17   New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
New Zealand: Rural development policy – Whether
information on compliance with policy-specific criteria will
be provided once programme details are finalized.The existing measures were slightly modified by
Agenda 2000. Details on compliance of existing measureswere already provided when reviewing Table DS:1notifications.
"Farm investments/young farmers/early retirement" –Introduction of minimum standards requirements;compliance with Annex 2 paras. 11 and 12; relationshipwith eligibility criteria under para. 11(a).Financial and physical restructuring of operations: In
addition to existing requirem ents, aid recipients must
comply with minimum standards (environmental, hygieneand animal welfare).
Australia/New Zealand:  Regional assistance –
   Conformity with Annex 2 para. 1 since payments will be
granted on a per hectare basis of areas used for agriculture.
Confirmation that payments are limited to the extra costs
or loss of income involved and related surveillancemechanism;Article 15 of Council Regulation 1257/99 states that
compensation to less favoured areas shall be fixed to levelswhich (a) are sufficient to make an effective contribution to
compensation for existing handicaps, and (b) avoid over-
compensation. The level of compensation shall be fixed perhectare and shall take into account the economic,environmental situation, and development objectives of
specific regions, the severity of handicaps affecting farming
activities, and the type of production. The system will aim atpromoting low input farming systems which play animportant role in maintaining landscapes and naturalresources.
Definition of a disadvantaged region. It is given in Articles 17 to 20 of EC Council
Regulation 1257/99.
New Zealand:  Whether the slaughter premium for beef
which is to be implemented in 2000 will be notified underAMS support.This price reduction will be partly compensated by existing
premiums and the introduction of a new premium, theslaughter premium. Farmers keeping adult bovine animals
and cows on a holding may apply for the premium.  A
ceiling will be established for both categories based on thenumber of animals slaughtered in 1995. When, in a givenMember state, the total number of animals for which an
application has been made exceeds the ceiling the aid shall
be reduced.  In order to avoid double applications, thepremium will be granted subject to the slaughtering of theanimal.
United States: Whether crop specific oilseed payments willbe eliminated by 2002/3 as suggested in the notification.The current system of differentiated hectare payments for
oilseeds and cereals will disappear in two years.  Frommarketing year 2002/3 onwards, the hectare payments foroilseeds, cereals and set-aside land will be the same. They
will be based on the average cereals yields of the region
concerned multiplied by 63 EUR.
United States:  Future plans to go beyond the programmesnotified and fully decouple payments from production.
Additional comments:   The United States
 expressed some
disappointment that the EC has not fully delinked
compensatory payments from production,  moving them intothe Green Box rather than continuing the Blue Box
approach. Even with the most optimistic global pricing
scenarios, under Agenda 2000, some sectors such as dairy,will continue to be subject to production and price distortingpolicies that will almost certainly ensure dependence onexport subsidies.Agenda 2000 continues the approach of the 1992 reforms.
The EC is aware that the US Fair Act is more ambitious as
regards decoupling.  However, the EC is not convinced that
such approach will be successful as US policies appear tohave been reversed during the last two years.  In this context,the US notifications of recently-a dopted relief packages
were expected by the EC.G/AG/R/21
Page 15
Tables ES:1 to ES:3  Notifications
Canada    G/AG/N/CAN/30           Export Subsidies (Table ES:1 and ES:3)
Points raised by other Member s Response by Notifying Member
Australia:  Revision of notifications to reflect the findings of
the Appellate Body report on special milk classes.Canada will take the matter under consideration and will
report back to the Committee at a later date.
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