WORLD TRADE
ORGANIZATIONG/AG/NG/W/98
9 January 2001
(01-0122)
Committee on Agriculture
Special SessionOriginal:  English
PROPOSAL FOR WTO NEGOTIATIONS ON AGRICULTURE
Submitted by the Republic of Korea
Introduction
1. The agricultural sector, which had received an exceptional treatment in the GATT system due
to its specific characteristics, was integrated into  the multilateral trading system through the Uruguay
Round.
2. During this process, net food-importing countries and developing countries suffered a great
deal. According to the FAO, while the balance of pa yments in the agricultural trade of food exporting
countries and developed countries improved in general since the conclusion of the Uruguay Round,
net food-importing countries and developing countries experienced a worsening of their balance of
payments and a shrinking of their agricultural sector.
Such findings strongly indicate that the Uruguay Round was not successful in reflecting in a balanced
manner the interests of both developed and developing countries, as well as exporting and importingcountries.
Furthermore, the food security situation of developing countries is still unstable due to, for example, a
continued decrease in food aid even after the Uruguay Round. Korea, as one of the net food-importing
countries, has experienced substantially deteriorated terms of trade for farm households and widened
income gap between urban and rural areas, largely due to the sharp increase in agricultural import.
3. Korea notes that the reform is an ongoing process as stated in the Agreement on Agriculture
(AoA).  Article 20 of the Agreement stipulates that, in the negotiations for continuing the reform, the
effect of the reduction commitments on world trade in agriculture and experiences of implementing
the reduction commitments should be taken into account.  Most importantly, Korea notes that the
Preamble and Article 20 (c) stipulate that the non-trade concerns, including food security and
environmental protection as well as special and differential treatment to developing countries, shouldalso be taken into consideration.
4. By and large, the provisions of the Agreement regarding non-trade concerns did not fully take
into account the diverse situations that each country faces.  They are also too abstract in nature and
therefore ineffective.  Further, developing countries with insufficient financial resources have trouble
addressing non-trade concerns effectively.
5. Based on the spirit of the AoA, especially in the Preamble and Article 20, and the experiences
of implementing the UR commitments, Korea, as a food-importing developing country, would like to
introduce the following ideas.G/AG/NG/W/98
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A.  Guidelines for the Negotiations
The negotiations on agriculture should be pursued  as a part of a New Round with a substantially
broad-based agenda under a single undertaking so as to reflect equitably the interests of all
Member countries.
6. This is warranted by the fact that it will be difficult to reflect in an equitable way the interests
of all WTO Member countries with different industrial conditions and structures if the negotiations
are limited to only a few sectors and negotiations for each sector are conducted separately.
For every Member country to accept the outcome of the negotiations and to participate in the
reform process, a flexible and gradual approach is needed.
7. Because the rules and disciplines of the current Agreement do not fully reflect the
characteristics of agriculture nor recognize the individual situation of agriculture in each country,
some Member countries are facing difficulties in implementing the commitments.  In order to carry
out an effective reform, it is important to secure the participation of every Member country.
8. A flexible and gradual approach is especially crucial for issues concerning tariff reduction and
tariff rate quotas (TRQs), reduction of aggregate measurement of support (AMS) and the criteria and
scope of the Green Box.
Provisions regarding non-trade concerns, includ ing the multifunctionality of agriculture, and
special and differential treatment for developing countries need to be revisited.
9. The AoA lacks due consideration of non-trade concerns and developing countries that depend
on small-scale subsistence farming.  Consequently, it is not successful in balancing the interests of
exporting and importing countries, as well as developed and developing countries.  In order to carry
out a sustainable reform where diverse forms of agriculture co-exist, the varying interests and
concerns of Member countries need to be reflected in an equitable way.
10. In this regard, the following points should be taken into account:
- more specific provisions with adequate level of government intervention to secure
multifunctionality of agriculture that provides public goods such as food security,
environmental protection and rural development;
- more practical and operational provisions for special and differential treatment for
developing countries;  and
- more effective disciplines on export-related measures, such as export subsidy, export
credit, export restrictions, export tax and export state trading enterprises.
New issues in agricultural trade, which have arisen from changing situations after the Uruguay
Round, should be properly addressed.
11. Since the conclusion of the Uruguay Round, there has been growing consumers' concern over
agri-food-related issues, such as food safety, health, environment and biotechnology.  Such changes
mainly come from rapid growth of the commercializa tion and trade of genetically modified organisms
(GMOs), which need to be properly addressed.G/AG/NG/W/98
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B.  Proposal
(a) Market Access
12. The framework of tariffication adopted at the Uruguay Round should be maintained in order
to facilitate a consistent reform process.  In addition, market access commitments should be made in
accordance with what each Member country can accommodate, taking into consideration non-trade
concerns and each Member country's different situation.  To this end, a flexible and gradual approach
is needed.
13. Taking into account non-trade concerns including food security, special consideration should
be given to the key staple crops in market access commitments.
14. Tariff reduction should be based on the final bound rates of the Uruguay Round commitments
so as not to penalize Member countries that have voluntarily reduced tariffs.
15. Various types of tariffs for agricultural products should be maintained to ensure flexibility.
16. Tariff reduction commitments should be set in a way that recognizes the individual situation
of each Member country, and thereby enables every Member country to participate in the reform
process.  Most of import restrictions have been eliminated since the Uruguay Round, leaving tariffs asthe main border protection measure, and the level of tariffs has been lowered substantially.  As such,
further substantial tariff reduction may bring about tremendous disruptions in the agricultural sector in
a number of countries.  Therefore, gradual as well as minimal tariff reduction is appropriate.  A
sectoral approach in tariff reduction is not the way to attract the participation of every country since it
is difficult to reflect each country's interest in a balanced manner.
17. The main purpose of tariff rate quota (TRQ) administration is to cope with the risks of market
disturbance that may occur in a two-tiered tariff system.  It varies in forms based on each Member
country's market conditions and characteristics of each product. As such, TRQs need to be
administered in a flexible manner reflecting each country's individual situation. Transparency also
needs to be enhanced to be in compliance with relevant rules and disciplines of WTO.
18. As for perishable or seasonal products, special criteria and procedures for applying safeguard
measures should be established to effectively and prom ptly cope with situations where, for example, a
sharp increase in import occurs.
19. Special safeguard (SSG), an integral element of tariffication, should be maintained, as it is
one of the devices that facilitate smooth reform process.  Due to the strict criteria for imposing special
safeguard, SSGs have been invoked only for a limited number of products among eligible products.
Therefore, it is not appropriate to strengthen these already strict criteria.
(b) Domestic Support
20. Agricultural reform is a long-term process and each Member country, based on the spirit of
the Uruguay Round agreement, has been converting domestic support measures that have effects on
production or trade to non- or minimally distortive Green Box measures.  In order to ensure that suchreform is carried out consistently, the framewor k of Amber Box, Blue Box and Green Box should be
kept.  Furthermore, the scope and criteria of Green Box should be adjusted to be more flexible so that
the multifunctionality of agriculture can be properly reflected.
21. Given different developmental stages and conditions across Member countries, each Member
country should be able to implement agricultural policies that fit its domestic situation.  To this end,G/AG/NG/W/98
Page 4
each Member country should be able to provide a certain level of support, even if it influences
production and trade.  In this sense, the level of domestic support subject to reduction commitments
should be gradually reduced on an aggregated basis within a scope that each country can accept. It is
also important to reflect the impact of infla tion in the reduction commitments.  As for the de minimis
level, it should at least be maintained at the current level.
22. The Blue Box should be maintained since it can be useful in converting trade-distorting
support to less trade-distorting support.
23. In addition to the measures already exempt from reduction commitment under the current
AoA, the following measures should also be exempt from reduction commitment.
Compensatory supports for multifunctionality of agriculture
- Supports such as direct payment for public goods generated in the process of
agricultural production including food security, environmental protection, rural
viability and cultural heritage.
- In particular, supports for maintaining domestic production capacity of staple crops,
based on food security purposes, such as direct payment for farm households and for
farmland conservation.
Supports for enhancing income safety net
- Extension of the scope for income safety net programmes and enhancement of the
flexibility of their criteria to reduce income risks increased by, inter alia,  market
liberalization, weather anomalies and price fluctuations.
- Need to take into account the scarcity of financial resources of developing countries
in setting the criteria for income safety net programmes.
Supports for small-scale family farm households
- Supports for continued existence and productivity enhancement of small-scale family
farms that are the basis for maintaining agricultural production in the rural
communities of many countries.
Supports for agricultural and rural development in developing countries
- Supports for improving competitiveness and expanding domestic production capacity
of developing countries.
- In particular, supports for investment aid for infrastructure and structural adjustment
which take into account the disadvantaged agricultural conditions of many
developing countries.
(c) Export Competition
24. Rules and disciplines on export competition, which have the most direct impact on
agricultural trade, should be transparent and, above all, contribute to the overall balance of rights andobligations between exporting countries and importing countries.
25. In this regard, in addition to establishing provisions on export subsidy reduction and export
credit, disciplines with the following objectives are needed:G/AG/NG/W/98
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- to prohibit exporting countries from imposing export restrictions and prohibitions
arbitrarily;
- to prohibit the use of export tax for the purpose of export restriction;
- to secure transparency in the operation of state trading enterprises and to prevent their
circumventing of reduction commitment in export subsidy.
(d) Special and Differential Treatment for Developing Countries
26. Specific measures of special and differential treatment for developing countries are needed in
market access, domestic support and export competition.
Market Access:   Special consideration for key staple crop, and greater flexibility in reducing
border protection measures, such as alleviation of tariff reduction commitments, especially on
products related to non-trade concerns.
Domestic Support:  Alleviation of reduction commitment, additional flexibility to Green Box
(especially for measures to improve food security and rural employment even if they have
possible impact on trade), and specific criteria that can reflect the scarcity of financial
resources in developing countries.
Export Competition:   Expansion of export subsidies exempt from reduction commitments for
developing countries, alleviation of export subsidy reduction commitments, establishment of
rules and disciplines on export-related measures for developing countries so that they may be
able to compete in the global market.
Others:   Increase of food aid, financial and technical assistance.
(e) New Issues
27. Member countries have the right to take measures necessary for the protection of human life
and health. Appropriate measures should be taken within the WTO regarding consumers' concern on
food safety and quality, and potential risks of GMOs on human health and the environment.  The need
for precautionary measures to cover such issues as well as consumers' increasing demand forinformed choice should be dealt with in the negotiations.
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