RESTRICTEDWORLD TRADE
ORGANIZATIONTN/AG/R/3
1 October 2002
(02-5255)
Committee on Agriculture
Special Session
SUMMARY REPORT ON THE THIRTEENTH MEETING
OF THE COMMITTEE ON AGRICULTURE SPECIAL SESSION
HELD ON 6 SEPTEMBER 2002
Note by the Secretariat1
1. As agreed by the Trade Negotiations Committee (TN/C/M/1) the Special Session of the
Committee on Agriculture, which was established by the General Council (WT/GC/M/53), is
pursuing negotiations under paragraphs 13, 14 and other relevant provisions of the Doha Ministerial
Declaration and held its thirteenth meeting on 6 September 2002.  Mr Stuart Harbinson of HongKong, China chaired the meeting.
2. The agenda as contained in WTO/AIR/1875 was adopted.
I
TEM A(i):  REPORT BY THE CHAIRPERSON ON THE MAIN FEATURES OF THE DISCUSSIONS CONCERNING
TECHNICAL ELABORATION OF DETAILED POSSIBLE MODALITIES , INCLUDING RULES -RELATED
ELEMENTS IN THE AREA OF MARKET ACCESS
3. The Chairman read out a summary report of the main features of the discussions concerning
market access which is attached in Annex 1.
ITEM A(ii):  S TATEMENTS BY MEMBERS
Statements on the Chairman's Report
4. Several delegations commented on the Chairman's summary report of the discussions on
market access.  The representative of Japan made a number of observations.  He stated that under thediscussions on tariffs and tariff quotas Japan had stressed the importance of flexibility to address
non-trade concerns, that the choice of a tariff reduction formula should take into account the
negotiating history of the Uruguay Round and that a number of delegations had opposed the idea of a
down payment.  In addition, it had mentioned specific concerns a number of times, such as the
importance of food security for both developed and developing countries, that had to be taken intoaccount in the reform process.  Poland also stated that non-trade concerns should have been more
fully reflected in the report and gave as an example its suggestion that some non-trade concerns could
be addressed though a prolonged implementation period.
5. Lithuania, supported by Croatia, pointed out that paragraph 9 of the Doha Ministerial
Declaration had noted the extensive market-access commitments made by recently acceded Membersand stated that it had referred to this paragraph a number of times during the discussions on market
access and, therefore, this should have been reflect ed in the summary report.  Lithuania also stated
that recently acceded countries had undertaken tariffication, had removed non-tariff barriers and had
                                                     
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice
to the positions of Members or to their rights or obligations under the WTO.TN/AG/R/3
Page 2
opened tariff quotas but had not been able to negotiate access to the special safeguard.  In contrast,
those countries that had undertaken this process in the Uruguay Round had been able to get the right
to use the special safeguard.  With their low tariff rates and the continuation of reform, recently
acceded countries needed access to this measure, particularly if they were to consider further
reductions.
6. Bulgaria and Hungary pointed out that the discussions on market access had included a debate
on the inconsistencies in the classifications of developed and developing countries.  They noted that
some countries that were classified as developed had lower standards of living than other countries
that were classified as developing, especially some transition economies.  Some of these "developing"
countries, which had significant comparative advantages in agriculture production and would benefit
from reform, had put forward very ambitious proposals.  However, they had also sought flexibility
and exemptions for themselves.  Hungary stated that it had consistently raised this issue during the
discussions on market access.  Bulgaria pointed out that this issues was not necessarily divisivebecause, if clarified, it would assist the development of special and differential treatment provisions.
7. A number of countries endorsed the concluding remarks by the Chairman in his report
including Malaysia, Brazil, Bolivia, Uruguay, and the United States.  Malaysia and Uruguay stressed
the need for meaningful modalities in all areas a nd expressed their disappoin tment with the slow pace
and lack of specificity in some areas on the part of some Members.
8. Brazil, supported by Bolivia, also noted the Chairman's statement that greater specificity was
needed from participants in the negotiations.  In this regard, Brazil was concerned by the suggestion
that the approach taken in the Uruguay Round should be used again.  It pointed out that this approach
to tariff reductions would not address problems relating to tariff peaks and tariff escalation;  indeed it
could make such problems worse.  It stated th at the "Swiss" formula, supplemented by a down
payment, could deliver the results required to meet the objective for market access in the Doha
Ministerial Declaration.  Brazil was concerned by the references some developed countries had made
to flexibility for developing countries.  It stated that flexibility under market access for developing
countries was not unreasonable because tariff protection was the only tool available to them to deal
with specific problems.  Furthermore, some developing countries needed flexibility as long as othercountries could use very high levels of export subsidies and trade distorting domestic supports.
9. The United States noted the difference between its proposal, which suggested specific
modalities, and the general nature of the discussion that had been reflected in the Chairman's report.
To meet the deadlines and objectives of the Doha Ministerial Declaration would require more
intensive work and specific credible proposals rather than general criticisms of those proposals putforward by other delegations.
10. Poland also noted the conclusion of the Chairman's report and suggested that ambitious
proposals should balanced by an understanding of the different views and positions of other
participants.
Proposals
11. A number of delegations presented their proposals for market access to the formal Special
Session.  On behalf of the Cairns Group
2, Australia introduced a proposal on market access.  In doing
so it was supported by a number of members of the Group, including Chile, Paraguay, Brazil,
Uruguay, Argentina and Philippines.  Under the proposal, developed countries would reduce tariffs
using the "Swiss" formula with a coefficient of 25 or less, the special safeguard would be abolished,
                                                     
2 Argentina, Australia, Bolivia, Brazil, Chile, Colombia, Costa Rica, Guatemala, New Zealand,
Paraguay, Philippines, Thailand, Uruguay and South Africa.   Canada's proposal to improve market access for all
agricultural and food products is set out in G/AG/NG/W/12 of 19 June 2000 and subsequent presentations.TN/AG/R/3
Page 3
tariff quota administration would be improved and tariff quotas would be expanded by adding an
amount equal to 20 per cent of domestic consumption.  Under special and differential treatment
developing countries would reduce tariffs by a differentiated formula – tariffs of up to 50 per cent
would be reduced using the "Swiss" formula with a coefficient of 50, tariffs between 50 and 250 per
cent would be reduced by 50 per cent and tariffs over 250 per cent would be cut to a final tariff rate of
125 per cent.  In addition developing countries would expand tariff quotas by a lesser amount over alonger period and they would have access to a new safeguard mechanism that would operate under
circumstances to be agreed.  Australia, supported by Argentina, suggested that the broad range of
countries that made up the Cairns Group represented the different situations facing the general WTO
Membership.  Given its broad Membership and support the proposal represented, a fair and balanced
contribution which should be acceptable to others.
12. Canada pointed out that the proposal presented by Australia was from some members of the
Cairns Group and not from the entire group.  In response Argentina stated that the proposal was from14 of the 17 member countries of the Cairns Gro up and, therefore, broadly represented the Group's
views.
13. Bangladesh stressed the importance of agriculture to its economy, to employment and to rural
development.  It proposed that developed countries should:  make substantial reductions in tariffs on
products exported, or likely to be exported, by developing countries; reduce tariffs;  eliminate tariffescalation;  develop clear provisions for SPS measures that were tantamount to non-tariff barriers and
prevented developing countries from exporting.  It also suggested that least-developed countries
should be able to use a form of special safeguard against imports where there was a threat of damage
to local production and that minimum market access opportunities should be increased annually by
0.4 per cent for non-staple commodities.  Concerning preferences under GSP schemes, Bangladeshstated that the GSP principles should be elaborated and developed countries should make a
commitment to conform to the principles of non-discrimination and non-reciprocity.
14. The representative of the Slovak Republic outlined a proposal on behalf of Bulgaria, Croatia,
the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Romania and the Slovak Republic.  He
stated that these countries supported the Uruguay Round type formulae being used in market access,with specific provisions on flexibility for transition economies.  Also, this group of countries should
have access to a special safeguard.  Although they were prepared to consider increases in tariff quotas
they were opposed to reducing in-quota tariff rates to zero.  The importance of non-trade concerns
was stressed.  Concerning special and differential treatment he stated that this group of countries
supported special and differential treatment for those developing countries that required suchtreatment but all Members had to participate in reform together, based on their general level of
development.
15. On behalf of the Commonwealth of Dominica, St  Kitts & Nevis, St Lucia and St Vincent &
the Grenadines, and supported by Mauritius, the representative of St Lucia stressed the importance of
trade preferences for this group of countries.  He pointed out that there were few alternatives to
agriculture in these countries but their small size, narrow resource base and susceptibility to natural
disasters meant that they would continue to need pr eferences if they were to have access to the export
markets.  He stated that it was misleading to claim that preferences were discriminating and pointed
out that the Enabling Clause stated that preferences to developing countries should be designed and
modified to respond to the needs of developing countries.  Nor did he accept that trade preferences to
these countries distorted trade to any significant extent because the very small size of the countries
meant that their impact on international markets was minimal.  He stated that the preferences shouldenable participation in international trade and assist the development of small island developing
states, least-developed countries and small developing economies.  In this regard it was proposed for
market access that:TN/AG/R/3
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- preferences to these countries should be accepted as legitimate instruments to assist
their development;
- all Members, developed and developing, should be able to offer non-reciprocal
preferences to least-developed and small island developing states;
- in areas where small island developing states, least-developed countries and small
developing countries benefitted from preferences, tariff reductions should be gradual,
give adequate time for adjustment and compensation should be provided to these
countries for any erosion of preferences;  and
- where a tariff quota existed for a product that was also subject to preferences for small
island developing states and least-develope d countries, a minimum share of the tariff
quotas should be reserved for these countries.
16. Malaysia stated that tariffs should be in ad valorem  form only and reduced using a formula
that would result in significant cuts and be supplemented by request and offer procedures.  The
implementation period for reductions would be longer for developing countries, at between nine and
ten years.  In addition tariff quotas would be expanded and in-quota tariffs reduced to low levels alongwith strict disciplines on tariff quota administration.  On the special safeguard, Malaysia proposed that
it be eliminated for developed countries and extended in its current form, or in a new form to be
developed, to all developing countries.  In both cases, strict conditions should be established
governing the use of the special safeguard.  In response to the discussions on trade preferences
Malaysia stressed that it was not proposing that preferences be dismantled but emphasized the needfor trade liberalization on a multilateral basis.  It  also suggested that capacity building and technical
assistance were more appropriate than preserving the total value of preferences by slowing down
liberalization.
17. Indonesia stressed the importance of food security.  Whatever formula for tariff reductions
was used it should not damage food security, and therefore the economy and stability, of developingcountries.  For these reasons, Indonesia supported the proposals to exclude staple food products from
tariff reductions and tariff quota increases.
18. The representative of Ecuador stated that the first objective of reform should be the most
complete liberalization possible for tropical products and should also result in complete liberalization
for trade in agriculture products arising from diversification from the cultivation of illicit narcoticproducts.  He also stated that market access should be through tariff only regimes, with the
elimination of tariff escalation on products of export interest to developing countries and with tariff
peaks of 15 per cent.  The only exceptions to a tariff only regime should be for some sensitive
products for some developing countries or though the mutual consent of all Members.  The remaining
tariff quotas of developed countries should increase by 20 per cent over five years.  In addition tariff
quota administration should be open and transparent and 20 per cent should be allocated to non-
traditional suppliers.  Under special and differential treatment he pointed out that the Enabling Clausestated that developing countries did not have to make reciprocal commitments incompatible with their
development needs.
General Statements
19. Several delegations took the opportunity to respond to the proposals made at the formal and
informal Special Sessions.
20. Chile, Paraguay, Brazil, Bolivia and Uruguay stressed the need for a down payment in terms
of new commitments.  Implementation of Uruguay Round commitments by developed countries had
stopped in 2000 and implementation of new commitments under the Doha Development AgendaTN/AG/R/3
Page 5
would not begin until 2006.  Therefore, a down payment was needed by them to make up for the
pause in reform.  These delegations also stated that the proposals by some Members to repeat the
Uruguay Round formulae for reducing support and protection would not result in any significant
improvement in market access.  Therefore, they did not comply with the objective set by the Doha
Ministerial Declaration of substantial improvements in market access and could not be used as a basis
to set up the modalities for negotiations.
21. Bolivia also pointed out that the Doha Development Agenda was particularly aimed at results
that would benefit developing countries and this would be best achieved by eliminating measures in
wealthy countries that distorted trade and maintained poverty in poor countries.
22. Uruguay also stated that specific proposals were needed from some delegations offering
meaningful modalities that also provided special a nd differential treatment for developing countries.
It added that, while non-trade concerns were to be taken into account in the negotiations, it could not
consider certain non-trade concerns that were not the subject of the agriculture negotiations or thatMinisters in Doha had decided were not the subject of negotiations under the Doha Development
Agenda.  Furthermore, those raising relevant no n-trade concerns should show how they could be
reflected in modalities rather than making general vague references to them.
23. Argentina pointed out that the negotiating mandate agreed by Ministers at the Doha
Ministerial Conference was to establish a fair and market-oriented agricultural trading system and thatthis would require fundamental reform.  This did not imply small changes or any reversal of reform.
Furthermore, Argentina was surprised by suggestions  that such reform would benefit only those with
a comparative advantage when the basis of trade was comparative advantage.
24. Chile, Brazil, Uruguay, China and Djibouti stressed that a successful outcome for agriculture
was crucial for the wider negotiations and the results here would determine the outcome in otherareas.  Uruguay also pointed out that the agriculture negotiations had been mandated by the Uruguay
Round Agreements.  The broad round that had been launched at Doha had been accepted on the
understanding that it would yield ambitious results in agriculture.
25. Norway said that, in order to address many non-trade concerns, agriculture should be allowed
to continue in low-potential areas.  That mean t only small reductions in general tariff rates and
cautious increases in tariff quotas could be considered for key agricultural products.  Therefore, the
"Swiss" formula for tariff reductions was not acceptable.
26. In response to the proposal from the Cairns Group (paragraphs 11 and 12 above refer), the
European Communities and Switzerland stated that the suggestions for tariff reductions, tariff quota
increases or on the special safeguard were unrealistic and would not help the negotiations.  The ECwent on to point out that over the past few years agriculture exports from some countries (for
example, Chile and Brazil) had expanded greatly, but these countries continued to claim that the
Uruguay Round had not resulted in significant impr ovements in market access.  Switzerland pointed
out that it had made a number of specific proposals, that also addressed non-trade concerns, on market
access.  For Switzerland, an ambitious result required that the negotiations had to take into account
non-trade concerns.
27. China stressed the importance of a successful outcome to the agriculture negotiations.  It
hoped that the result would be improved market access, reduced trade-distorting domestic support and
the elimination of export subsidies.  At the same time, developing country Members should be able to
have the flexibility to support agriculture development.  China also underlined the contribution it had
already made through its WTO accession commitments .  Implementation of, and adjustment to, these
commitments needed time.  Therefore, China required an exemption from further modalities formarket access.  In considering the proposals heard during the discussion on market access it opposed
repeating the Uruguay Round approach for tariff re ductions because it would not eliminate tariffTN/AG/R/3
Page 6
peaks and would do little to reduce protection.  In this regard, China noted the advantages of using a
"Swiss" formula for tariff reductions but also noted that for some sensitive products it might be
reasonable to provide market access through tariff quotas and to maintain the out-of-quota tariff rate.
28. Like other small island developing states, Mauritius stressed the small size and market share
of these countries and the physical constraints they faced on expanding production.  In response to the
proposal presented by Australia on behalf of the Ca irns Group, it stated that it would only result in
Mauritius, and other small island developing states, losing their preferences for the few commodities
they exported to the few countries that gave them preferences.
29. Uganda and Kenya also stressed the importance of trade preferences.  Uganda added that
least-developed countries would judge the success of the negotiations in terms of the improvements in
market access it delivered for them.  Kenya emphasised the role of agriculture in food security and
development.  It suggested that the proposals under the Development Box by some developing
countries should be considered and the existing preferential access should be maintained.
ITEM B:  O THER BUSINESS
30. The Chairman noted that the next informal Special Session, which is to be held on
23-25 September and is to be followed by a formal Special Session on 27 September, would take up
the technical elaboration of detailed possible modalities, including rules-related elements, in the area
of  domestic support.
ITEM C:  C HAIRMAN 'S REPORT TO THE TRADE NEGOTIATIONS COMMITTEE
31. The Chairman outlined his report to the Trade Negotiations Committee (a copy of TN/AG/3
is attached in Annex 2).TN/AG/R/3
Page 7
Annex 1
JOB(02)107
Report by the Chairman of the Special Session, Committee on Agriculture
Negotiations on Market Access
6 September 2002
Under the programme adopted by the Special Session of the Committee on Agriculture on
24 March, the Chairman is required to report to the formal Special Sessions on the work undertaken in
the informal Special Sessions (TN/AG/1 refers).  This is my summary of the discussions on market
access at the informal Special Session held on 2-3 September.  It also covers points made at theinter-sessional informal consultations on 29-30 July.
As with my last report, this summary is not an attempt to draw conclusions from the work
carried out.  Rather than providing a comprehensive coverage of exactly what was said or by who, it
is a brief summary of my understanding of the main points made during four days of discussions onmarket access.
General
As during the discussions on export competition, a number of delegations pointed to the
interlinkages between all areas of the negotiations.  Several participants stated that the only trade
instruments available to most developing countries were tariffs.  Therefore, any improvement in
market access by them would require substantial reductions or elimination of trade-distorting
domestic supports and all forms of export subsidies by others.  Non-tariff barriers in the form of SPS
and TBT measures were also raised by some participants as a matter of concern.
The importance of non-trade concerns in the negotiations was once again underlined by a
number of participants.  They indicated that their ability to move on market access as well as on
export competition and domestic support depended on the way their non-trade concerns would be
addressed in the negotiations.  Other delegations insisted that what was to be negotiated weresubstantial improvements in market access, reductions, with a view to phasing out, all forms of export
subsidies and substantial reductions in trade-dist orting domestic support.  Non-trade concerns would
have to be taken into account.  Some participants also noted that the language of the Doha Ministerial
Declaration made it clear that special and differential treatment was an integral part of all elements of
the negotiations and had a higher priority than non-trade concerns.  Special and differential treatment
for developing countries was needed to help them  to address their specific needs, such as food
security, poverty alleviation, the needs of small farmers and rural development.  Others however didnot see such a hierarchy.
Several participants emphasized the need to maintain trade preferences for developing
countries.  One participant noted that some preferential schemes effectively discriminated against
other developing countries, including land-locked countries.  In taking up this point, another delegatestated that the different situations in different coun tries meant that a single approach to trade rules was
not appropriate.  Each Member needed to be able to address its specific situation, including the
conditions facing small island developing states.  Similarly, several newly acceded and several
transition economies reiterated their need for flexibility in line with their specific proposals.TN/AG/R/3
Page 8
Tariffs
General
A number of delegations stated that substantial improvements in market access should be
achieved through significant reductions in tariffs.  However, it was also stated that all elements under
market access, including those relating to tariff quotas, had to be addressed in an integrated manner toachieve this objective.  The point was also made that the ultimate goal of reform should be to have
tariff only import regimes in all countries.
In response to a suggestion that developing countries should be allowed to exempt some
products from reduction commitments, a number of delegations stressed the need for all Members to
participate in reform for all products.  While special and differential treatment was essential it should
not mean standstill or going backwards, not least because of the importance of agricultural tradebetween developing countries.  Some of those participants that sought exemptions from reductions
noted that Annex 5 of the Agreement on Agricult ure already provided for exemptions from some
market access commitments for certain products and suggested that this could be a model for further
exemptions for developing countries.
On this issue of full participation in reform a number of recently acceded Members stated that
their accession negotiations had resulted in much greater levels of liberalization than had been
achieved by the Uruguay Round.  Their specific situation should be reflected in the modalities in line
with the specific suggestions they made and with the Doha Ministerial Declaration.
Product coverage
The general view was that the product coverage set out in Annex 1 of the Agreement on
Agriculture was appropriate.  However, some deve loping countries stated that under special and
differential treatment developing countries should be able to draw up a positive list of the productsthat would be subject to tariff reduction commitments.
Base rates
One participant proposed that, in order to achieve real improvements in market access, tariff
reductions should start from the applied rates that were in force on 1 January 2000.  However, the
other delegations that addressed this issue stated that, for legal, practical and historic reasons, the
starting-point should be the final bound rates as specified in Members' Schedules.  The differences
between applied and bound rates in many countries was noted and the suggestion made that these
should be brought much closer together.  A group of developing countries proposed that developing
countries should be allowed to adjust any existing low bindings for food security and staple crops.
Reduction method and target
One approach to reduce tariffs which attracted wide support was that taken during the
Uruguay Round.  The supporters of this approach stated that it would give some flexibility to
Members in applying tariff reductions to address their specific concerns, including non-trade concernssuch as food security, the environment and rural development.  One delegation added that it could
also be used to address the issue of relatively low tariff bindings of recently acceded Members.  Other
participants stated that this approach would not result in significant improvements in market access
nor would it address problems of tariff peaks, escalation and dispersion.
Another approach to reform that attracted wide support was the concept of a harmonising
formula.  While several alternatives were proposed, they shared the general objective to substantially
improve market access and to address tariff peaks, tariff escalation and other problems associated with
current tariff structures.  Various versions of th e "Swiss" formula were suggested or with otherTN/AG/R/3
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methods for different levels of tariffs.  There were also suggestions to combine methods, such as to
apply staged reductions by first reducing all tariffs above a specific level to that level over a number
of years, and then using the "Swiss" or another formula to further reduce tariffs in a second stage.
It was suggested by one delegation that, while a harmonising formula was preferable, it might
not be a realistic approach for all products.  Therefore, in certain cases, other options could beconsidered, such as providing a specified quantity of duty-free in-quota access for all Members.
Opponents of the "Swiss" formula stated that it w ould result in very large tariff cuts for some
Members and could even mean greater tariff reductions for some developing countries compared with
some developed countries.  Such a result, they stated, was neither equitable nor progressive as
required by the Agreement on Agriculture.  In response it was pointed out that it was inevitable that
those that had higher tariffs would need to undertake greater reductions.
The ideas of supplementing general formula-based tariff reductions with a request and offer
process or by sectoral initiatives for specific products or markets was also raised.
On special and differential treatment, in addition to the proposal of the positive list approach
already noted, there was a suggestion that developing countries should be free to choose the tariff
reduction formula they considered appropriate.  Other participants said that special and differential
treatment should take the form of longer periods for implementing lower reductions in tariffs.  In this
respect, developing countries could use a different co-efficient in the "Swiss" formula or the same co-
efficient but apply lower levels of reductions, such as two-thirds or one-half of those that would apply
to developed countries.
Other points that were raised relating to developing countries included the importance of tariff
preferences and improved access to developed country markets for products of export interest to
developing countries, particularly tropical products and products arising from diversification fromproduction of illicit narcotic products.  It was also pointed out that general tariff reductions would
erode the value of preferences.  To the extent possible, preference margins should be maintained and
they should be bound in Members' Schedules.  One delegation added that additional preferences for
least-developed countries could also be bound in Schedules.
Other commitments
There was a debate on the question of converting all non- ad valorem tariffs into their ad
valorem  equivalents.  If the "Swiss" formula was used to reduce tariffs this would be a necessary step
before the formula could be applied, but it was stated that it would also have several other advantages,
such as improved transparency and reduced trade distortion.  It was also noted that, with agriculture
prices following a general downward trend, specific  duties effectively provided increased protection
as prices fell.
Others disagreed.  They stated that there were many practical difficulties associated with
accurate conversion to ad valorem  equivalents, and this was an additional argument against the use of
the "Swiss" formula.  Furthermore, specific duties could be simple, predictable and transparent and, ifprices increased, the level of protection declined.  It was stated that the World Customs Organisation
was the appropriate body for considering conversion but other participants pointed out that tariff
bindings were negotiated in the WTO and listed in WTO Members' Schedules.
Some delegations suggested that simple ad valorem  or specific duties should be the only
forms of tariffs allowed.
The issue of Initial Negotiating Rights was raised by one delegation, noting that this was a
horizontal issue covering all products.  With some support from other participants, it proposed thatTN/AG/R/3
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reduction formulae involving negotiations between Members should result in registration of mutual
INRs in the schedules.  In addition, there should be a clause providing for review of INRs.
The issue of geographical indications was also raised under the heading of " Tariffs: Other
commitments ".  One delegation proposed, with some support, that Members should be able to submit
limited lists of products whose names were related to specific geographic origins and neededprotection.  It stated that this was necessary because market access was effectively denied in some
countries by the use of names that suggested geographic origins elsewhere and where those names
implied certain characteristics, such as quality or production methods.  It alleged that in these cases
the names were being usurped in some other countries and needed protection.  Technical cooperation
could be provided to developing countries to assist them in preparing their lists.
In response, another delegation pointed out that there was no basis to the claim that a product
name was being "usurped".  Such a term implied th e existence of an international law that was being
contravened but this was not the case.  This particip ant, along with others, stated that the appropriate
place for a discussion on geographical indications was in the TRIPS Council.  However, other
delegations noted the lack of progress on this issue under TRIPS and, therefore, they supported the
proposal.
Implementation period and staging of commitments
Several specific suggestions were made concerning the implementation period.  Many
delegations suggested that, under special and differential treatment, a longer time-period was neededto implement lower reductions.  There was also a suggestion that implementation by developing
countries should not begin until developed countries had made substantial reductions in domestic
support and eliminated export subsidies.  One delegation suggested a prolonged implementation
period to enable non-trade concerns to be addressed.
A number of participants considered that implementation in equal steps was appropriate.
Other participants called for a down payment at the start of the implementation period.  They noted
that the implementation period for Uruguay Round commitments for developed countries had ended
in 2000 and no further improvements would be made by them until implementation of new
commitments began.  Progressive reform was required by the Agreement on Agriculture and the DohaMinisterial Declaration, and, therefore, a down payment was needed to make up for this pause in
reform.
Tariff Quotas
General – tariff quotas
Some participants stated that tariff quotas were transitional mechanisms that had been
intended to preserve existing market access opportunities and create new ones in cases where
tariffication had resulted in prohibitive tariffs.  These delegations suggested that market access should
be improved through tariff reductions to the point where real access was possible, although in the
short-term expansion of tariff quotas was needed.  In this regard, it was suggested that tariff quotascould be phased out in cases where they were over-filled by a certain amount, provided that a further
commitment with regard to tariffs was made.
Other participants did not agree that tariff quotas were temporary measures.  It was also stated
that the rules relating to tariff quota administration had to be clarified before expansion could beconsidered.TN/AG/R/3
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Base for further commitments, Tariff quota volu me, Implementation period and Staging of further
commitments
The final bound commitments relating to market access opportunities were widely considered
to be the appropriate base for further commitmen ts.  One participant suggested that commitments
relating to current and minimum access should be treated separately, with current access volumesmaintained and minimum access volumes updated to reflect more recent levels of domestic
consumption.  It added that the situation of Members that had delayed tariffication under the special
treatment under Article 4.2 of the Agreement on Agriculture should be addressed because these
countries now had tariff quotas larger than would have been the case if they had tariffied earlier.
Several participants disagreed and stated that whatever modalities for tariff quotas were
adopted, no quota should be reduced.  A variety of specific proposals for the expansion of tariffquotas were made, including pro-rata expansion of existing tariff quotas or expansion by or to a
certain percentage of domestic consumption.
The proposal that tariff quotas should be established on a product specific basis, and not for
groups of products, was supported by a number of participants.  One delegation went on to suggestthat product specific tariff quotas should be expanded to a common minimum point, for example,
5 per cent of domestic consumption in a recent period.  However, this should not result in any
reduction in existing access opportunities.
On special and differential treatment a number of suggestions for modalities were made.
These suggestions included exempting developing countries from increasing tariff quotas, or if they
did expand, a ten year implementation period starting from the point where developed countries
eliminated export subsidies and made substantial reductions in export subsidies.  One participant
stated that, in some countries, a significant part of production was consumed by producers' families.
In these cases tariff quotas should be based on marketed volumes, that is national consumption lessproduction consumed by farmers and their families.
Other points raised in the discussion on tariff quotas were the need to take non-trade concerns
into account, the specific situation of recently acceded Members and the question of which developing
country Members should be eligible for special and differential treatment (a point also raised in thecontext of the discussions on tariffs).
In-quota tariff
It was proposed by a number of participants that in-quota tariffs should be reduced to zero or
reduced by the same method as out-of-quota tariffs.  In reply to the suggestion that this would
increase quota rents or make it more difficult to phase out tariff quotas, it was pointed out that thiswould depend on the level of reductions in out-of-quota tariffs.  Furthermore, to achieve substantial
improvements in market access, as required by the Doha Ministerial Declaration, reductions in in-
quota tariffs were needed.  Some other participants did not agree and stated that in-quota tariffs
needed to be low enough to create market access opportunities and did not have to lowered further.
Some other participants stated that while they were prepared to consider reductions they were notprepared to reduce them to zero.
As special and differential treatment for developing countries a proposal was made by several
developing countries that processed tropical products and other products of export interest to them
should get tariff free access to tariff quotas.  Other proposals included suggestions concerning tariffand quota free access for products from least-developed countries.TN/AG/R/3
Page 12
Tariff Quota Administration
Principles
There was a general view that disciplines should be established for the administration of tariff
quotas.  The basic principles of non-discrimination, predictability and transparency were widelyaccepted.  Some participants went on to add other principles such as ensuring business decisions were
based on commercial considerations, that administration should not restrict access, that tariff quotas
should facilitate access and that administration should not result in the importing Member government
receiving more than its scheduled entitlements.
Administration methods
Several delegations noted WTO rules relating to tariff quota administration and quota
allocation already existed.  These rules included Article XIII of GATT on allocation to supplying
countries and Article 3 of the Agreement on Import Licensing Procedures which covered issues
related to import licenses such as the validity period and economic quantities of import licenses.
These delegations suggested that these rules should not be duplicated or affected by any newdisciplines in the agriculture negotiations.
Many delegations noted that different tariff quota administration methods suited different
products in different markets and each method had its own merits and problems.  Therefore, no
specific method should be excluded and each Member should be able to apply appropriate allocationmethods and systems of administration that suited the specific market of the product concerned.
There was a debate on the pros and cons of drawing up positive lists of acceptable, and
negative lists of prohibited, administration methods as well as some discussion on the use of
auctioning as a method of licence allocation.  One participant suggested that auctioning should beconsidered in the context of the positive list of acceptable administration methods.  Others supported
the use of auctioning claiming that it had several advantages, such as transparency and simplicity, that
outweighed any disadvantages it might have.  However, a number of other participants stated that they
did not consider auctioning to be an appropriate method of allocation and that they doubted its
compatibility with existing WTO rules.
Several participants stated that they were prepared to discuss the positive list approach but
that such a list should be indicative and not exhaustive.  Some other delegations noted that such a list
should not imply that using an administration method in the positive list automatically meant it was
compatible with WTO rules.  The way the method was implemented could prevent full access or it
might be unsuitable for the product or market compared to other methods of administration.
Terms and conditions of access – import license criteria
Several delegations addressed issues relating to  import licenses and suggested specific rules.
The suggestions included minimum validity period for licenses, that licenses should be for
commercial quantities, that license holders should have the right to return unused licenses withoutpenalties and that unused licenses should be redistributed in a timely manner.  It was also suggested
that certain conditions should be prohibited such as deposits to be paid for import licenses, end-use
criteria, domestic purchase requirements, imports for re-export and limiting imports to unattractive
sub-categories of products.  In addition it was suggested that license allocations to certain groups
should be prohibited such as allocations to producer groups because such groups rarely had muchincentive to import.
A number of participants did not agree with some of the specific suggestions made.  For
example, it was noted that deposits or guarantees for licenses could encourage imports within tariffTN/AG/R/3
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quotas and the definition of a "commercial quantity" varied from country to country.  Some Members
had small markets which meant small, and for some exporters uncommercial, tariff quotas.  Some
delegations also expressed concern about the definition of commercial quantities and noted that, being
small suppliers, for them a commercial quantity was much less than for other supplying countries.
Terms and conditions of access – supplying countries
A number of other issues were raised such as allocations to new entrants, reallocation of
unused country allocations and allocation of increases in tariff quotas.  Several delegations stated that
increases in tariff quotas should be allocated on an m.f.n. basis.  One participant went further and
suggested that all existing country-specific allocations should be phased out.  A number of other
participants disagreed pointing out that existing tariff quotas and their allocation had been negotiated
and "paid for" in the Uruguay Round.  It was also pointed out that some small and vulnerablesupplying countries relied on specific country allocations and would be unable to get access to global
quotas where they would be in competition with large suppliers.
It was also stated that tariff quota allocations to non-Members of the WTO or imports under
market access agreements negotiated under bilateral or plurilateral trade agreements should not becounted in meeting scheduled tariff quota commitments.
Under-fill
The point was made that, although there was no single appropriate administration method,
administration was often to blame for low fill rates, particularly where there was a big difference
between domestic and world market prices and between in- and out-of-quota tariffs.  In this respect,
several of the suggestions that had been made, concerning methods of administering tariff quotas and
the specific proposals relating to import licenses,  could help to improve fill-rates, including
suggestions for carry-over or reallocation of unused portions of a tariff quota.  In cases of persistentlylow fill-rates it was suggested that the tariff quota should be eliminated and in-quota tariff rates
applied to all imports.  This would require im proved review mechanisms and other changes.
One delegation suggested that tariff quota fill should be mandatory, that is, if a tariff quota
was not filled the in-quota tariff would be reduced to zero and unused portions carried over to thefollowing year.  Other delegations pointed out that tariff quotas were market access opportunities and
not obligations to import.  In some cases demand for the particular product was low and, therefore,
under-fill resulted.  By addressing administration issues tariff quota fill rates should improve and
specific rules for under-fill were not needed.
Other matters
As for persistent under-fill a number of other suggestions were made, including temporary
elimination of the tariff quota and associated administration and licensing requirements.  If, as a result
of this change, an import surge resulted the tariff quota could be re-imposed.
It was also proposed that consideration should be given to a mechanism to be established to
enable Members to move to a tariff-only regime.  This could include an appropriate special and
differential treatment provision.
Transparency/notifications
One delegation proposed a number of measures relating to transparency, including annual
notifications to the Committee on Agriculture of administration systems for tariff quotas and
notification within 30 days of changes to administration systems.  These notifications could include
details relating to the application process, such as allocation dates, license validity periods andTN/AG/R/3
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application processing periods and details relating to eligible applicants.  In addition Members should
undertake to reply within 30 days to queries relating to tariff quota administration.
Another delegation proposed that transparency requirements should be developed relating to
quota allocation methods, conditions to be met by license applicants and a list of competent national
authorities.  In addition details relating to license ho lders, such as names and contact details, should be
disclosed.
Special Safeguard Measures
Article 5 of the Agreement on Agriculture
A number of participants wanted to maintain the existing provision, with the proposal also
being made to extend access to the SSG to all developing countries or even more generally.  On the
other hand, other participants want it abolished, with some calling for abolition for all Members and
others calling for abolition for developed country Members only.
Various arguments were used by the two sides to justify their positions.  Those that wanted
the SSG abolished stated that it had been introduced as a transitional measure to accompany
tariffication and that it had been used relatively little and, therefore, it was not needed.  Others
disagreed with this legal and practical analysis and stated that the SSG was still needed to address
concerns about sudden surges in imports or falls in import prices.  If it were to be removed it would
make it difficult to consider significant tariff reductions.
There was also some discussion about whether Article 5.9 meant that the SSG could no longer
be used by developed countries.  Views differed.
Other measures
A number of developing countries stated that a special safeguard mechanism was needed for
developing countries.  Some justified this on the grounds that reductions in tariffs by developing
countries would make them more vulnerable to import surges, especially while other countries had the
right to use export subsidies or trade distorting domestic supports.  Others stated that it was needed toprotect the livelihoods of low income and resource poor farmers from surges in imports or sudden
falls in import prices.
To protect farmers in developing countries from competition from products subsidised in
production or in export, the establishment of a special countervailing duty measure was proposed.
Developing countries would be able to apply this duty to imports from developed countries that
benefited from export subsidies, Blue or Amber Box subsidies or subsidies under paragraphs 5, 6 or 7of Annex 2 of the Agreement on Agriculture.  This  provision would require proof of the subsidy and
its benefit to the exported product.  However, it would not require proof of injury, or threat thereof, in
the importing country nor of the causal link between  subsidy and injury.  If no notification existed
showing the amount by which the product benefited from subsidies then the burden of proof would be
on the exporting country to show that the level of countervailing duty was excessive.
In response, one delegation supported the general approach but suggested that it should apply
to all imports and that the causal link should be established between imports and injury, or threat
thereof.  However, the proof of this causal link should be simplified.
Some developing countries stated that their concerns were not only with imports whose
production or export had been subsidised but with protecting the livelihoods of low income and
resource poor farmers.  For some countries, the risk of significant damage to domestic production
from sudden surges in imports required a much simpler and quicker response to one requiring anTN/AG/R/3
Page 15
investigation.  Therefore, these countries proposed that a special safeguard should be introduced that
would allow higher tariffs to be applied or quant itative restrictions introduced when import volumes
exceeded a specific trigger volume or prices fell below a trigger price.  The measure would be
available either for food security and staple crops or for all agriculture products.
Another delegation suggested, with some support, that the existing special safeguard should
be extended to cover seasonal and perishable products not listed in Members' Schedules as having the
right to have the SSG applied.  This was needed because of the short shelf-life of such products meant
that significant damage could be done to domestic producers before the requirements of the general
safeguard could be met.  In response, it was pointed out that such a measure would hurt developing
countries in particular as many of them were producers of fresh or seasonal products and the
justification made for the proposal could equally apply to exporters of these products and their need
for stable market access without threat of safeguards .  In addition, it was pointed out that this proposal
was not consistent with the objective of substantially improving market access.
Importing State Trading Enterprises
Scope of entities to which additional/improved disciplines would be applicable
Some participants stated that disciplines should concentrate on the activities of entities rather
than on their legal status.
It was stated that the existing definition of STEs as entities with special rights or privileges as
in Article XVII of GATT and the Understanding on the Interpretation of Article XVII of GATT was
sufficient, although not everyone agreed.
Specific disciplines and notification requirements
A number of participants stated that the existing disciplines of Article XVII, including the
Understanding, and the relevant provisions of the Agreement on Agriculture and other WTO
agreements were sufficient.  One delegation stated that issues relating to STEs should be addressed
under Article XVII and not the Agreement on Agriculture.  Other delegations stated that although
they were prepared to discuss current disciplines the same approach should be used for all STEs in allsectors.
It was stated by one participant that STEs in developing countries were needed to counter the
power of large international corporations which, it claimed, could distort trade to a greater extent than
STEs.  Furthermore, this issue needed to be addressed generally to prevent the benefits of trade
reform being captured by these corporations.  Along with some other countries, it added that state
trading enterprises could play an important role in  food security and rural development in developing
countries.  Some groups of developing countries, such as small island developing states, also used
STEs to achieve economies of scale with would not otherwise be achievable.
A number of specific disciplines were proposed.  One delegation stated that there should be
no restriction on the right to import, or buy for import, agricultural products.  Another participantsuggested that importing STEs should have only commercial functions and should not be involved in
official functions, such as, administration of ta riff quotas or setting SPS or technical standards.
Concerning allocations of tariff quotas to state trading enterprises one participant proposed
allocating 30 per cent of the quota to non-STEs from the start of implementation of commitments andincreasing this to 50 per cent over five years or increasing the share of the quota to non-STEs by
20 per cent over five years, whichever gave the greater share to non-STEs.  Some other participants
pointed out that STEs in general had high fill-rates for the tariff quotas they operated and there were
other merits associated with administration by STEs such as stability and predictability.TN/AG/R/3
Page 16
On notification requirements it was suggested that Members with importing STEs should
undertake to respond within thirty days to requests for information such as transaction specific data.
However, other delegations stated that Article XVII of GATT did not require disclosure of
confidential information that could prejudice the legitimate commercial interests of particular
enterprises.
Other Market Access Issues
A number of specific issues were raised under "Other Market Access Issues" including food
safety, product labelling and geographical indications.  The discussion on geographical indications
was along similar lines to those which I mentioned earlier.
Food safety
Food safety was one specific issue raised and a proposal was made that a clear understanding
should be developed on the interpretation of the SPS Agreement and how it related to the concept of
the precautionary principle.  This understanding would take into account dispute settlement cases inthis area.  It was suggested that measures take n under this principle would have to comply with
certain requirements that were set out in the SPS Agreement and that had been developed in dispute
settlement cases.  These included measures taken under the precautionary principle being provisional,
with re-evaluation as new information became available, and a requirement to base measures on
scientific opinion, although not necessarily the majority opinion.  A number of delegations supportedthis proposal noting the importance of food safety and the need to avoid unjustified barriers to trade.
However, a wide range of participants objected, with several of them stating that food safety
should be discussed in the SPS Committee and not under the agriculture negotiations.  Furthermore, it
was pointed out that the idea of negotiations on the precautionary principle had been considered and
rejected by Ministers at Doha.  A number of developing countries stated that in their experience SPS
measures were excluding their exports to many developed countries where standards were higher than
international ones.  These high standards, along with the constraints of production in developing
countries, meant access was effectively denied.  If the SPS Agreement was to be re-opened then the
actions of developed countries in this area should be examined with a view to providing developing
countries with the means to achieve market access.
Labelling
Mandatory labelling of agricultural products was another issue raised under "Other Market
Access Issues".  One delegation, with some support, proposed that a clear understanding should be
developed on the criteria and guidelines for mandatory labelling.  Consumers wanted moreinformation about the products they bought, such as information relating to content, production
methods and so on.  WTO Members should be able to require that this information be provided.
Others went on to suggest that mandatory labelling could cover food safety, quality and
environmental aspects as well.  Another participant also added that traceability was needed in order to
facilitate action in the case of health risks associated with certain products.
Other participants stated that issues relating to labelling should be addressed by other fora,
including the TBT Committee, and not in the agriculture negotiations.  Others noted the range of
issues that the proposal on labelling was supposed to address and suggested that this could gradually
be extended to cover more issues, such as compliance with labour conventions.  The result could bethat it effectively restricted market access.TN/AG/R/3
Page 17
Conclusion
That concludes my summary of the discussions we had on market access.  It was clear during
our discussions, and I hope even more clear from my summary, that a lot of work was done.  Many
specific proposals were made and we had a very useful debate on the pros and cons.
In this regard as I consider the possible shape of the overview paper which I must produce in
the not too distant future, I have to say I am concerned about the lack of specificity in some areas.
It is clear that in the coming weeks and months we need to intensify our efforts here in
Geneva, in capitals and also directly between participants.  I would wish to discourage you, at this late
stage, from working in isolation.  By now all of us should be able to understand the positions of others
and begin working towards refining our positions and narrowing our differences.TN/AG/R/3
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Annex 2
TN/AG/3
THIRTEENTH SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
Report by the Chairman, Stuart Harbinson, to the Trade Negotiations Committee
1. The Special Session of the Committee on Agriculture, which was established by the General
Council (WT/GC/M/53) and which is pursuing negotiations under paragraphs 13, 14 and other
relevant provisions of the Doha Ministerial Declaration as agreed by the Trade Negotiations
Committee (TN/C/M/1), held its thirteenth meeting on 6 September 2002.
2. The agenda as set out in WTO/AIR/1875 was adopted.
3. The  Chairman presented an oral report on his own responsibility concerning the main
features of the informal technical work undertaken, in accordance with the programme adopted at the
eleventh Special Session (TN/AG/1 refers), on the elaboration of detailed possible modalities,
including rules-related elements, in the area of mark et access.  This report will be included in the
Secretariat summary report on the thirteenth Special Session (to be issued as TN/AG/R/3).
4. A number of statements were made by participants regarding the work undertaken thus far on
market access.  In addition, further specific inputs were made.  Participants' statements and
contributions in this regard will be reflected in the Secretariat summary report on the meeting.
5. In accordance with the programme adopted at the eleventh Special Session (TN/AG/1, refers),
work was initiated, at inter-sessional informal consultations held on 4-5 September, on the technical
elaboration of detailed possible modalities, including rules-related elements, in the area of domestic
support.  As agreed at the twelfth Special Session in June, informal summary notes by the Secretariat
on these inter-sessional consultations will be made available shortly in order to facilitate the
participation of non-resident and smaller delegations.  The technical work on domestic support is tobe pursued at an informal Special Session on 23-25 Se ptember.  This meeting will be followed by a
formal Special Session on 27 September.
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