RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/W/37
12 November 1998
(98-4519)
Committee on Agriculture Original:  English
ISSUES REGARDING EXPORT SUBSIDY NOTIFICATIONS
Discussion Paper by Australia
1. The purpose of this paper is to examine possible ways to improve the process for reviewing
export subsidy notifications.  Simple improvements could avoid many of the questions which
repeatedly arise in the review of notifications undertaken in the Committee and would make the
notification and review processes less burdensome for Members.
2. The current paper examines possible ways that the information included in the notification
tables for export subsidies (Tables ES:1, ES:2 and ES:3 and Supporting Tables ES:1 and ES:2 as setout in G/AG/2) could be improved, taking into account the importance of transparent and readily
comparable data in verifying that Members are adhering to their commitments for the reduction of
export subsidies.  The suggestions are not intended to be exhaustive - there may be others that
Members wish to discuss.  Nor are the suggestions intended to involve any issues of interpretation of
the WTO Agreement on Agriculture or Members' schedules of commitments.
Comprehensive product coverage
3. A question that has arisen in the review process is whether the notification tables should
report information for all products for which Members have base and annual commitment levels, or
just for products which actually benefited from export subsidies.  The notification requirements for
Table ES:2 suggest that total exports should be  reported for all products for which there are
commitments (in addition to reporting requirements for significant exporters of specified products).
To improve transparency, it may be useful for the notification requirements to make clear that allexport subsidy notification tables should include the required information for all products for which
Members have base or annual commitment levels, including products for which no export subsidies
were granted during the reporting period.
Disaggregation of information
4. The methodology used in the Uruguay Round of negotiations resulted in export subsidy
commitments being taken on the basis of product groups which aggregated a number of products.
However, the degree of aggregation differs.  Examples of broad product groups include coarse grains,other milk products, and fruit and vegetables.  Given the number of products and tariff lines that can
be captured in product groups, it may be useful if the tariff lines that actually benefited from export
subsidies and , if possible, the volume and value of export subsidies involved were identified in
notifications.G/AG/W/37
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Reporting on exports in excess of commitment levels
5. A commonly asked question in the review of export subsidies is whether exports in excess of
commitment levels were subsidised or not.  To obv iate the need for this repeated questioning, if
appropriate, a simple statement could be included on Table ES:2 notifications to the effect that where
exports have occurred in excess of commitment levels, these exports have not benefited from export
subsidies whether the export subsidies are listed in Article 9 of the WTO Agreement on Agriculture or
not.
Reporting of exchange rates
6. To improve transparency, it may be useful if Members whose export subsidy outlay
commitments are expressed in currencies other than their national currencies, notify the source and
basis for the calculation of the exchange rates.
Consistency in reporting periods
7. The notification tables for export subsidies require Members to specify the reporting period -
calendar year, marketing year, etc.  In making their notifications, some Members have used different
reporting periods for a single product group within and between tables.  For example, in Table ES:1,
there are notifications where quantity and outlay commitments for the same product group werereported for different periods.  In other cases, total exports for a product group in Table ES:2 were
notified for different reporting periods to the budgetary outlay and quantity reduction commitments
for the same product group in Table ES:1.  While it is recognised that the flexibility to use different
time periods was permitted under Uruguay Round modalities, it would greatly improve the
transparency and verifiability of export subsidy notifications if, for each product, the same reporting
period was used within and across all tables.
Timeliness of notifications
8. Some Members have used different reporting periods for each of the products on which they
have export subsidy reduction commitments.  As a result, some of these Members are delaying theirexport subsidy notifications until the latest reporting period has ended.  The notification requirements
specify that an export subsidy notification should be made within 60 days following the end of the
calendar (or, marketing, fiscal, etc. year) in question (or 120 days if a provisional notification is made
within 60 days).  To avoid unnecessary delays in reviewing the implementation of reduction
commitments, Members with different reporting periods for different products should submit separatenotifications.
Consistency in measurement units
9. A number of notifications have employed differing units of measurement in their export
subsidy notifications.  For example, a notification used carcass equivalent weight and product weight
measurement units for reporting subsidised and actual volumes of beef exports respectively.  It would
greatly improve the transparency and verifiability of export subsidy notifications, if the same
measurement units were used for each product within and across all tables.
Reporting of actual versus approved export subsidies
10.  A number of notifications have reported subsidised exports in Table ES:1 on the basis of
approvals or awards given to exporters.  A major draw back with this practice is that the actual level of
export subsidies used in a reporting period cannot be determined.  This stems from the fact that award
levels could be different to actual levels if, for ex ample, actual shipments occur after the end of the
reporting period in which the award was made;  awarded entitlements are not utilised due to changesG/AG/W/37
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in market conditions or other factors;  or previously unused entitlements are reallocated and used but
the reallocated award is not notified as belonging to the later period.  Without information on actual
subsidised exports, it is very difficult to determine whether a Member is meeting its reduction
commitments.
11. Members have defended reporting on an awards basis on the grounds that data on actual
subsidised shipments are not timely.  To overcome this problem, it may be preferable to allow
Members to submit a provisional notification using data on awards and a final notification, within an
appropriate period of time, using data on actual subsidised shipments.
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