WORLD TRADE
ORGANIZATIONG/AG/NG/W/109
27 February 2001
(01-0961)
Committee on Agriculture
Special SessionOriginal:  English
FIFTH SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
5-7 FEBRUARY 2001
Statements by Australia
G/AG/NG/W/90  (Proposal by the EC)
Australia welcomes the EC proposal as a genuine attempt to engage in the negotiations.  It
contains some thought provoking ideas and, encouragingly, it even contains some elements we can
endorse without reservation.
Unfortunately, at the same time we have to say the proposal lacks the ambition necessary to
achieve fundamental or even substantial reform of agriculture.
It is a fact that world agricultural markets are still severely distorted by huge subsidies and
prohibitive levels of protection.  It is a fact also that we have made very  limited progress towards
reform and we urgently need to redouble our efforts if we are to approach the objective of Article 20
of "substantial and progressive reductions in support and protection".
However, some elements of the EC's proposal focus on justifying and retaining aspects of the
AoA that allow the continuation of trade- and production-distorting policies.  These include;
• the flaws inherent in the approach to tariff reductions in the Uruguay Round which has
allowed the continuation of tariff peaks and escalation
• the need for a substantial expansion in tariff quota levels, given the often prohibitive out-of-
quota tariffs being used
• the role of the Special Agricultural Safeguard as a transitional mechanism linked to
tariffication - a process that is now complete
• the significant trade-distorting effect of blue box policies
Australia is also concerned that the EC, in its efforts to link further reductions in export
subsidies to disciplines on what it calls "hidden export subsidies" is simply stalling.  There is broad
agreement that the use of export subsidies cannot be justified and they should be abolished.  That said,we agree that reduction commitments should not be circumvented, and this was noted in the Cairns
Group proposal on export competition.
In relation to export credits, we agree with the EC that disciplines need to be developed to
move officially supported export credits on agriculture towards usual commercial practice.  Thenegotiation of such disciplines should be taken up in the context of the WTO agriculture negotiations.
Australia also supports efforts to ensure that delivery of food aid is appropriate and
responsive to the genuine needs of developing countries and not used to get around WTO
commitments and obligations on export subsidies.G/AG/NG/W/109
Page 2
Non-trade concerns
Australia has repeatedly emphasised its agreement with the EC and others that there are
legitimate domestic concerns relating to environmental sustainability, food security, rural
development, food safety and animal welfare.  The challenge is to pursue these objectives in ways thatare compatible with the ongoing process of trade liberalisation.
This proposal takes up this challenge as it recognises that environmental and rural non-trade
concerns should be addressed in ways that are transparent, targeted and minimally trade distorting.
We are encouraged that the EU has taken a constructive step towards a dialogue on this issue.
Food safety, labelling, and intellectual property issues are important issues for many
countries.  At the same time, we are concerned to see that they are handled in ways that do not
unnecessarily restrict trade.  We recognise also that these issues are being dealt with through other
agreements or in other forums.  We do not accept the  linkage of these issues to the outcome in the
agricultural negotiations.
Special & Differential Treatment
We support the EU's recognition that developing countries have special needs relevant to
these negotiations.  The outcome of these negotiations must ensure the international trading system
promotes the greater integration of developing countries through accounting for their particularadjustment difficulties and the high priority they place on food security and rural development.
In light of this, the Cairns Group proposals support greater improvements in market access for
products of interest to developing countries.  We also support greater policy flexibility for developing
countries including revisiting the green box in order to achieve this.
To sum up, Australia believes that the EU proposal contains some constructive elements on
which we can open a constructive dialogue.  However, we urge the EU to strengthen its commitment
to integrating agriculture into the multilateral tr ading system.  And we support any moves to address
legitimate domestic policy interests in ways that are effective and minimise distortions to production
and trade.
G/AG/NG/W/91  (Proposal by Japan)
Australia notes  Japan's negotiating proposal.  We observe the emphasis it places on the
experience of implementation to date and so-called "multifunctionality" as the basic elements to beconsidered in the negotiations.
However, in doing so,  the proposal fails to address the long-term objective of the process of
reform, which is:
"to provide for substantial progressive reductions in agricultural support and
protection sustained over an agreed period of time, resulting in correcting and
preventing restrictions and distortions in world agricultural markets".
Without any reference to the long-term objective of the reform process, Japan's  proposal fails
to contribute in a balanced way to the mandated terms of reference for the negotiations .  Japan's
approach is so lacking in balance that it raises questions as to whether Japan is prepared to engage
seriously  in discussion on the agreed long term objective of  reform of agricultural trade.  To that
extent we have to question seriously whether this proposal is consistent with Japan's commitment to a
new round of trade negotiations.G/AG/NG/W/109
Page 3
We cannot help but observe that Japan's approach to agricultural reform contrasts strikingly
with its approach to other elements of trade re form.  Japan has benefited enormously from the
implementation of WTO agreements where it has a comparative advantage.  And yet it seeks to block
reform in the area where real liberalisation would bring global benefits and sustained improvements inhuman welfare.  In some areas, Japan  intends to reverse  reforms it undertook during the Uruguay
Round and in so doing, ignoring its Uruguay  Round undertaking to continue the process of
fundamental reform, as set down in Article 20 of the Agreement on Agriculture.
We do not expect Japan to be a leader in calling for reform.  But we do expect Japan to take a
consistent  leadership role in the WTO and the world trade system.  Instead we see Japan leading other
countries to oppose reform.
We have been waiting for a long time for a proposal from Japan.   Indeed we have been
waiting a long time to hear anything at all from Japan.  We did not expect ambitious negotiating
proposals  from Japan.  But we did expect that , that having delayed so long in tabling a proposal, these
important trading countries would at least be prepared now  to engage in negotiations.  On the basis of
these proposals we wonder  how they intend to participate in negotiations.  Others, with less interest in
reform than the Cairns Group, have come to these meetings with constructive proposals, recognising
that, while agricultural trade reform may be politically difficult, it  is of such importance to so many
other WTO Members that progress is essential and inevitable.  Moreover, continuation of the reform
process is a legal obligation.  Japan's proposal  represents a disappointing response to the legitimate
calls for reform.
G/AG/NG/W/94  (Proposal by Switzerland)
Switzerland's proposal is disappointing.  It advances reasons - from a Swiss perspective - as to
why reform cannot happen and suggests a wide range of modalities to limit reform.
Switzerland suggests for example that the negotiations should first design rules for non-trade
concerns before looking at the question of reduction commitments under the three pillars.  This is notacceptable to us.
The negotiations should be about the reform of agricultural trade - not preserving the current
unacceptable situation.  Consistent with the language of Article 20 we should face the challenge of
achieving fundamental reform of agriculture while of course, accounting appropriately for non-trade
concerns.  Switzerland's proposal would turn Article 20 "back to front" and we cannot see how it
would add momentum to the reform process.
We are more encouraged by Switzerland's recognition that there are a number of transparent,
specific and targeted instruments that can be used to address non-trade concerns and that disciplinesshould ensure that measures taken for these concerns do not harm the interests of other countries.  We
would emphasise to Switzerland that non or minimally distorting policies are effective both in
achieving a range of non-trade goals and in minimising negative implications for other countries.
In relation to other issues raised by Switzerland such as geographical indications,
environmental costs, and "problems relating to prod uction methods", we would simply note that those
of us who have been awaiting reform of this most  distorted sector of world trade for 50 years are
sceptical that "reform" agendas listing such issues  risk frustrating reform rather than enhancing it.
Switzerland's caution about real reform is reflected in its suggestion on market access - that
these negotiations should be based primarily on an application/offer procedure.  We believe that thisG/AG/NG/W/109
Page 4
methodology would be laborious and time-consuming wh ile still enabling countries to avoid cutting
protection for sensitive products.  The average percentage cut suggested as a target is unsatisfactory.
It would allow protectionist Members to load reduc tions on a small number of tariff lines while not
changing the tariff lines that would make a real difference to market access.
Lastly, we are also concerned about Switzerland's suggestion of allowing an unlimited range
of tariff quota allocation methods.  Our experience over the implementation period, particularly with
the large incidence of tariff quotas with low rates of fill calls suggests need to find better disciplines
on tariff quota administration.
__________