RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/R/15
3 August 1998
(98-3102)
Committee on Agriculture
SUMMARY REPORT OF THE MEET ING HELD ON 25-26 JUNE 1998
Note by the Secretariat
1. The Committee on Agriculture held its fifteenth meeting on 25-26 June 1998 under the
Chairmanship of Ambassador Nestor Osorio Londoño of Colombia.  The agenda of the meeting,
contained in WTO/AIR/864 (with the deletion of the questions raised by Australia regarding
G/AG/N/PRY/ 2 and G/AG/N/PRY/3) was adopted.
Part I:  The Review Process
Matters Relevant to the Implementation of Commitments under the Reform Programme:  Article 18.6
2. As a preliminary matter the representative of the Dominican Republic informed the
Committee that the process of technical rectification of Schedule XXIII of the Dominican Republic
was close to conclusion, and that it was expected that the rectified Schedule would shortly be readyfor circulation to Members.
(a) Argentina/Australia, Brazil, Chile, Malaysia, New Zealand, Paraguay, Philippines, South
Africa, Thailand and Uruguay:  The use of cumulated export subsidies
3. The representative of Australia stated that Australia, along with some other WTO Members,
had on several occasions expressed its serious concern regarding the cumulation of unutilized export
subsidies and regarding the interpretation by some Members that Article 9.2(b) of the Agreement onAgriculture permitted unused export subsidies in previous years to be added to annual commitment
levels.  Regrettably, there had been increasing recourse to this practice by some Members.  The
representative of Australia noted that the commitments contained in the Agreement on Agriculture
were designed to result in substantial progressive reductions in export subsidies, and that the intent of
Article 9.2(b) had not been to allow for higher export subsidies in later years of the implementationperiod just because market conditions in earlier years had been unexpectedly positive. Increased use
of export subsidies, aggravated through carryovers from previous years, displaced exports by non-
subsidizing suppliers, destabilized markets and depressed international prices.  According to the
representative of Australia, boosting subsidies now would make the transition to the end point of
current export subsidy commitments more difficult for subsidizing countries, and impede theirpreparations for the next stage of the reform process.  Moreover, irresponsible actions by a small
number of WTO Members threatened to result in an escalation of the use of subsidies through 'tit-for-
tat' exchanges and in a return to the damaging trade subsidy wars of the 1980s.  The representative of
Australia urged Members to ensure that this did not happen because of the costly and short-sighted
policy of using cumulated unused export subsidies.
4. The representative of South Africa recalled that during the Uruguay Round some developed
countries had been able to negotiate the retention of high levels of export subsidies for agricultural
products, while the use of export subsidies by developing and other countries was generally subject to
constraints under the Agreement as well as in terms of scarce financial resources.  The WTOG/AG/R/15
Page 2
Secretariat's informal paper on export subsidies (A IE/S3) showed that six industrial countries in 1995
were in a position to legitimately utilize more than three quarters of the global value of export
subsidies under the reduction commitments, whereas the share of such subsidies in the case of
approximately 100 developing countries was just over 20 per cent.  According to the representative of
South Africa these figures indicated the unusual position Members negotiated themselves into during
the Uruguay Round, with the right to use subsidie s accruing mainly to large developed economies.
Moreover, given that export subsidies distorted market prices and market flows, this institutionalized
imbalance was exacerbated when annual outlays, where fully utilized, were supplemented by the use
of leftover subsidies not applied in previous years.  South Africa thus wished to express its concern at
the recent announcement of the United States to re-activate its Export Enhancement Program (EEP),
apparently in retaliation against subsidization by the European Communities of exports to the United
States, and to target third-country markets where the European Communities was active.  Such a tit-
for-tat escalation of actions between the United St ates and the European Communities, by using third-
country markets as a battlefield, damaged the trade of countries who did not rely on and could not
afford export subsidies.  The representative of South Africa noted that South Africa had taken bold
steps to eliminate government intervention and government-sponsored export subsidies in its
agriculture and now relied on its natural competitive advantages.  These efforts at liberalization could
only be successful in the long run if farmers could be reassured that they would not be required tocompete against United States or the European Communities taxpayers.  The representative of South
Africa stated that major players had to display leader ship and restraint with regard to export subsidies
if they were to expect further liberalization of developing country markets.  South Africa  challenged
all Members considering the use of unutilized export subsidies to refrain from doing so and to follow
South Africa's example in abolishing export subsidies.
5. The representative of New Zealand stated that New Zealand remained concerned with the
actions taken by certain Members, including Poland, Israel, the European Communities and, recently,
the United States, to roll over unused export subsidies.  Agricultural export subsidy reduction
commitments were a very important part of th e Uruguay Round outcome and New Zealand believed
that these actions were undermining the benefits that non-subsidized exporters expected to receivefrom the Uruguay Round.  The representative of New Zealand pointed out that in a situation of falling
international market prices, the increased use of export subsidies exacerbated the extent of the fall.
According to the representative of New Zealand, rolling over unused export subsidies from years
when international prices were relatively high to allow increased use of export subsidies when
international prices were in decline, had the potential for causing greater distortions in theinternational market place than would have been the case if Members had been limited to their
scheduled commitment levels.  Hence New Zealand wished to reiterate that it had never been the
intention of the Agreement on Agriculture to allow Members to roll over unused export subsidy
entitlements from one year to subsequent years.  In this regard it was noted that, in the final year of
implementation and thereafter, Members would be st rictly limited to the commitment levels set out in
their Schedules. Finally, New Zealand was disappointed that some countries had not answered the call
made at previous Committee meetings for countries considering rolling over unused export subsidiesto show leadership by refraining from such action.
6. The representative of the Philippines, speaking on behalf of ASEAN, reiterated that export
subsidy commitments were a fundamental element of the balanced package of the Uruguay Round
and a particularly important one to developing countries which could not afford export subsidies.  The
Philippines were disappointed that there were as yet no positive responses by Members cumulatingexport subsidies and that Members which had strongly censured the practice of cumulation in the past,
had now decided to roll over unused budgets.  Such action contradicted the underlying spirit of the
Agreement on Agriculture and only intensified the subsidy war and its negative effects on trade
liberalization.  This situation was regrettable, particularly for developing countries which would have
to bear greater adjustments relative to countries which could afford to maintain high levels of exportsubsidies.G/AG/R/15
Page 3
7. The representative of Argentina stressed, wi th regard to respecting commitments, that
Members of the Committee had to keep in mind the results of their actions on the price of the main
commodities and on incentives to produce.  The price of wheat had dropped by 40 per cent, dairy
prices were low and this decline in prices could spread to many other key products.  Using subsidies
in an irresponsible manner could send the wrong signal to producers and provoke future supply
problems, particularly as such practices were one of the worst taxes against food security.  Therepresentative of Argentina noted that during the discussions in the OECD regarding export credits,
proposals had been made to discipline agricultural credits, cumulated export subsidies and the
activities of State Trading Enterprises.  If Members could not agree to limit the use of rolled-over
export subsidies, then the risk was that other coun tries would join in as was currently happening with
some of the major producers and exporters on the international market.  The representative of
Argentina warned Members of the dangers of a subsidy and price war which could lead to a crisis
such as that of 1974.
8. The representative of Canada stated Canada's disappointment at the fact that a number of
Members had either had recourse to the practice of rolling over unused export subsidies or had
announced their intention to do so. According to the representative of Canada, the cumulation and use
of previously unused export subsidies was contrary both to the spirit of the agreed disciplines for
agricultural export subsidies and to good sense for the following reasons:  (i)  an increase in exportsubsidy usage was contrary to the progressive sustained decrease in agricultural support and
protection envisaged by the commitments undertaken by Members;  (ii)  in the short term, roll-over
created and deepened an environment of uncertainty for traders and policy makers;  and (iii) since
roll-over had to stop after the fifth year of implementation, and subsidies granted in the sixth year had
to be within the commitment levels, any roll-over increased the potential subsidy withdrawal shock in
year six and hence increased domestic pressures on subsidizing governments.  Canada accordingly
believed that the practice of rolling over unused export subsidies set an unfortunate example and
urged all Members with export subsidy commitments, whether or not they were using or had merely
indicated an intent to use roll-over, to live within their scheduled annual export subsidy commitments.
The representative of Canada also urged Members to consider how they could in fact move toeliminate such trade-distorting policies and replace them with others that did not shift the burden of
over-production on to producers in other countries.
9. The representative of Brazil, in supporting the positions expressed by previous speakers on
the use of cumulated export subsidies, stressed that the use of cumulated export subsidies, particularly
in a year in which the prices of the main commodities were dropping, represented a backward step,and urged Members to behave in a sensible and responsible manner with respect to the use of
cumulated export subsidies.
10. The representative of the European Communities stated that throughout the discussions in the
Committee on the question of the roll-over of unused export subsides, it was clear that the legal right
of Members regarding such practice was not challenged. As regards the spirit of the Agreement, the
European Communities respected its export subsidy commitments.  According to the representative of
the European Communities, from a policy point of view, the roll-over flexibility that was included inArticle 9 decreased the pressure on politicians to fully utilize annual ceiling level commitments.
Moreover, Commissioner Fischler had recently reiterated that the European Communities was
respecting its commitments on export subsidies and had no interest in a subsidy war.  The European
Communities sought where necessary to bridge the gap between internal prices and world market
prices. As regards the commitment in the Agreement on Agriculture to create disciplines on export
credits, the representative of the European Comm unities stated that the European Communities, like
other WTO Members, had been very disappointed at the lack of progress in the discussions on this
matter in the OECD.G/AG/R/15
Page 4
11. The representative of Norway stated that Norway, as one of the countries using the possibility
to roll over unused export subsidies, supported the views expressed by the European Communities on
the matter.  Norway's recently circulated export subsidy notification showed that Norway had used the
flexibility provided for in Article 9.2(b) for some products, as would probably also be the case in 1998
and 1999.
12. The representative of Japan stated that, while Article 9 of the Agreement on Agriculture
permitted the use of rolled-over export subsidies, Japan, as a major importer of agricultural products,
was concerned by this issue.  The representative of Japan also noted that in previous meetings of the
Committee, the United States had stated that the use of roll-over was contrary to the Agreement on
Agriculture.
13. The representative of India stated that export subsidies were trade-distorting and hence there
was an obligation to gradually reduce them.  India viewed with extreme concern the fact that some
Members carried over unused export subsidies because they had the resources to continue to do so,while other Members which had budgetary constraint s, particularly developing country Members,
could not even fully use the support legally allowed for under the Agreement on Agriculture.  The
selective use of export subsidies linked to world agricultural prices would have an extremely
retrograde effect on the agricultural exports of developing countries.  India joined Australia, South
Africa and other Members in asking that major players show responsibility and restraint and thusrespond to the concerns repeatedly expressed in the Committee.
14. The representative of Thailand stated that the use of export subsidy carry-overs could have a
negative impact on world agricultural markets, particularly on the exports of non-subsidizing
suppliers such as Thailand.  In addition, the roll-over of export subsidies was contrary to the spirit of
the Agreement on Agriculture, as export subsidies had been bound and were subject to progressivereduction commitments.
15. The representative of the United States stated that the United States remained committed to
the elimination of export subsidies and would work towards that goal in the new round of
negotiations.  The representative of the United States noted that the United States had repeatedly
asked the European Communities not to use cumulated unused export subsidies.  However, the lastexport subsidy notification from the European Communities had shown that the European
Communities had used cumulated unused export subsidies in the year 1996/97.  The representative of
the United States stressed that the world market for agricultural products was not perfectly elastic and
that, even if the objective was to bridge the gap between domestic and world market prices, the
resultant higher export-subsidized volumes inevit ably led to lower world market prices.  The
representative of the United States said that the United States was ready to take up South Africa's
challenge to make a firm commitment to cease and desist from using cumulated unused export
subsidies in future years of the Uruguay Round reform process and wondered whether the European
Communities was also willing to make such a co mmitment.  With respect to the negotiations on
export credits the representative of the United States stated that  the United States had made proposals
in the OECD group which went beyond the United States' Uruguay Round export subsidy
commitments.
16. The representative of Argentina recalled that Article XVI:4 of the Marrakesh Agreement
stated that national legislation had to be modified to be in conformity with commitments entered into.
Hence, the United States' proposal for "premia" fees with a spread of not more than one per cent to
any market regardless of the risk, as part of an anti-circumvention understanding on export credits,
was not being faithful to the Marrakesh Agreement.  The representative of Argentina also noted thatthere was a risk in the roll-over context that if the United States continued to provide financial aid,
such as the credits recently granted to Asian c ountries, that the European Communities or other
interested Members could overmatch those credits and possibly lead to the second round of a subsidy
war.G/AG/R/15
Page 5
17. The representative of the European Communities stated that it was clearly not in the European
Communities' interest to make more use of export subsidies than was absolutely necessary.  As
regards the export credit discussions, it was the European Communities' understanding that the
proposals which had been made by the United States in the OECD context had been considered
unacceptable as a basis for progress by all other participants in the OECD discussions.  In fact,
according to the European Commun ities, the ideas presented by the United States fell short of
common commercial practice and did not represent a significant change to its existing practices.
Furthermore, it seemed that the United States sought to link progress in the area of export credits to
commitments on not using the roll-over possibility. The European Communities had found this to be
an unacceptable linkage because there was a clear legal right to roll over unused export subsidies and
there was an equally clear but distinct commitment to seek to achieve disciplines on export credits.
With regard to South Africa's and others' calls to take on a commitment not to use roll-over, the
representative of the European Communities stated that the European Communities was not preparedto enter into any such commitment and would contin ue to apply its export subsidies in a reasonable
manner.
18. The representative of Australia stated that both the European Communities and the United
States should take leadership and show real restraint on export credits and on export subsidies.
Australia supported South Africa's challenge to stop using export subsidies altogether.  Australia wasvery disappointed to see that some parties were st ill not prepared to accept and commit themselves to
the lesser but nevertheless important challenge of not using roll-over.  Finally, the representative of
Australia encouraged the United States to come to the OECD negotiations on export credits with a
proposal that would apply real disciplines on the use of export credits.  Australia did not want to
simply reinforce domestic United States legislation which provided for export credit terms whichwere too generous and greater than what the majority of other countries which provided export credits
were actually utilizing.
19. The representative of Poland disagreed with the view that countries actually using export
subsidies had the intention of starting a price or an export subsidies war.  Furthermore, the right to use
export subsidies was granted within the framework of the Agreement on Agriculture and thus all callsfor change were rather a standpoint  for future negotiations on the Agreement on Agriculture. The
representative of Poland also pointed out that Poland along with the European Communities, the
United States, Norway and Israel, when using export subsidies, did so in a responsible manner as a
means of off-setting the difference between their domestic prices and world market prices.
(b) Canada:  Recent export subsidy announcement by the United States
20. The representative of Canada sought information on the operation of the United States Dairy
Export Incentive Program (DEIP) and on the method used by the United States for measuring outlays
and expenditures in relation to its export subsidy commitments.  The representative of Canada also
asked for an explanation as to how the United States intended to undertake the announced reallocation
of 30,000 additional tonnes under the DEIP.
21. The representative of the United States first explained that the United States reported its
export subsidy performance on the basis of awards made to exporters for subsidy payments because
shipping data would not be timely.  Awards did not necessarily reflect actual subsidized exports,
because a portion of these sales were not ultimately shipped due to changing market conditions and
other unforeseen commercial events.  Reporting on an award basis could and did result, however, in
cases where notifications overstated the actual amount of subsidized exports.  In the case of non-fatdry milk (NFDM), subsequently cancelled contract  awards for the 1995/96 and 1996/97 periods had
resulted in the United States' export subsidy notifications overstating the level of subsidized exports
by 26,258 tonnes.  In May, the United States had de cided that these foregone export subsidies could
be made available to United States' dairy exporters for use in subsequent years.  Of this 26,258 tonnes,
the representative of the United States noted that only 660 tonnes in awards had been made inG/AG/R/15
Page 6
1997/98, bringing total sales of NFDM under the DEIP to 92,876 tonnes in the 1997/98 period against
the 1997/98 export subsidy commitment of 92,217 tonnes.  The excess of 659 tonnes was less than
1 per cent of the United States 1997/98 commitment and therefore well below the 1.75 per cent
provided for in Article 9.2(b). The representativ e of the United States expressed the view that
Members would have to judge for themselves whether they thought this was a roll-over matter.
22. The representative of the United States further explained that the DEIP process began with an
announcement of a quantity eligible for bidding by United States' exporters.  The exporters negotiated
a sale and then submitted a bid for a subsidy which was either rejected or accepted.  Once an exporter
furnished USDA with evidence that the specif ied commodity had been exported to the target
destination under the terms of the agreement, the exporter could then request payment of the bonus.
The representative of the United States noted that the Commodity Credit Corporation calculated
outlays and expenditures based on awards in a manner consistent with that used in establishing the
United States export subsidy commitments.  In fact, the representative of the United States noted thattonnage and budgetary outlays notified to the WTO as  being awarded were significantly higher than
the actual shipments of subsidized exports due to cancellations in sales.  The re-announced
26,258 tonnes reflected the previously notified but unshipped tonnage.  Bids for this tonnage,
available for shipments to Mexico and the Caribbean, would be accepted on the basis of current
procedures for making DEIP awards.
23. The representative of Canada asked whether the United States considered that this matter
constituted roll-over as provided for by the Agreement on Agriculture.  In particular, was there any
domestic constraint, in relation to DEIP, to continually make such awarded but not exported quantities
available in any future year without any time or quantitative constraint.  The representative of the
United States responded that the United States position on the issue of roll-over had been stated inprevious discussions and that the United States advocated that the discipline on export subsidies
needed to be addressed.
24. The representative of the European Communities noted that Canada had actually asked
whether the United States considered that it was making use of roll-over.  The representative of the
European Communities also wondered whether the United States was going to change the basis for itsreporting requirements, from certificates awarded to actual shipments or a combination thereof.  The
representative of the European Communities noted that it appeared that the United States was making
use of a roll-over possibility and would leave this possibility of roll-over open for itself until or
beyond the final year of implementation.
25. The representative of Australia noted that the Committee did not know the level of unused
export subsidies by the United States in previous years, hence Members had no basis on which to
judge whether or not the United States was meeting its reduction commitments, particularly given that
the United Sates had decided to roll-over some of the unused export subsidies from previous years.
The representative of Australia stated that Australia would look with great interest at whether or not
the United States actually claimed roll-over under Article 9.2(b), or whether it claimed some other
mechanism to utilize unused export subsidies from previous years.  The representative of Australia
asked the United States, if it was using roll-over under Article 9.2(b), to keep to the figures mentionedin Article 9.2(b), namely, 1.75 per cent and 3 per cent.
26. The representative of the United States noted that the pre-announced tonnage mentioned
above represented a portion of the quantities that had been previously reported to the WTO but had
not been shipped because of cancelled sales.  According to the United States representative, the total
quantity of unallocated, unshipped subsidy awards by the United States since the beginning of theimplementation period was 76,377 tonnes for non-fat dried milk and 15,733 tonnes for whole milk
powder, not including large levels for grains.  Hence the announcement of only 26,000 tonnes of
unshipped product represented considerable restraint on the part of the United States.G/AG/R/15
Page 7
27. The representative of New Zealand noted that the view expressed by the United States, that it
was up to other Members to judge whether what had been done in respect of the dairy export
incentive programme was or was not a roll-over matter, merited closer examination.  The
representative of Thailand supported the views expressed by Australia, New Zealand and Canada.
The representative of the European Communities stat ed that in the interests of transparency, and as
required under the notification requirements, WTO Members who were making use of the roll-overpossibilities should so indicate in their notifications, as the European Community and other countries
who were using roll-over had done.
28. The representative of Argentina stressed that concentrating allocations of monetary resources
in a particular period of time could cause strong economic damage regardless of legal entitlements.
The representative of Argentina also pointed out that export subsidies and export credits were not
separate issues but rather were part of the same package, since, under the Agreement on Agriculture,
Article 10.2 on export credits was part of Articl e 10 on the Prevention of Circumvention of Export
Subsidy Commitments.
(c) Canada:  Impact of delays in submitting deferred replies
29. The representative of Canada expressed Canada's continuing concern over the failure of some
Members to reply to questions raised at meetings of the Committee. The ability of the Committee toreview progress in the implementation of comm itments was largely founded on the review of
notifications which led to questions of clarification.  However, the representative of Canada noted that
it had become quite common for questions to be placed on the Agenda or raised at meetings with no
replies of any kind being given at the meeting, nor in writing afterwards within 30 days or at
subsequent meetings.  This was a serious impediment to the efficiency of the Committee's reviewprocess.  The representative of Canada stated that a period of several months to answer factual
questions regarding notifications was excessive.  For the sake of transparency and in the interests of a
thorough and effective review of commitments, the representative of Canada urged all Members to
respond promptly and in writing to questions raised in the Committee.  Moreover, Geneva-based
representatives had a particular responsibility, when transmitting questions to their capitals, to remindthem that answers were expected to be made avai lable within the 30-day period, and that if this was
not feasible, to inform promptly the questioning country that an answer would be forthcoming.
30. The Chairman noted that Canada had raised a very important issue concerning the
implementation of the Agreement and the work entr usted to the Committee.  The Chairman invited
Members to take careful note of what had been said and invited those Members with pending deferredreplies to submit them as promptly as possible.
(d) New Zealand:  Mexico - Import arrangements for milk powder
31. The representative of Mexico stated that the three questions by New Zealand concerning
recent changes in the administration of Mexico's tariff quota in relation to whole milk powder had
been received recently and had been conveyed to his capital for answers.  The representative of New
Zealand stated that it looked forward to receivin g those answers as soon as possible and to the early
submission of an MA:2 notification detailing the changes in the administration of the tariff quota.
(e) New Zealand:  Mexico - Cheese import regime
32. New Zealand noted that questions relating to this issue had been raised at the June 1997
meeting of the Committee but as yet replies had not been received.  Specific details had beenrequested on how the tariff quota had been implemented and on import licences for imports of cheese.G/AG/R/15
Page 8
33. The representative of Mexico responded that for in-quota cheese imports, under subheadings
0406.10.01, 0406.30.1, 0406.30.99, 0406.90.03, 0406.90.05 and 0406.90.99, a quota certificate was
required along with the payment of tariffs.  For imports outside of the quota a tariff of 125 per cent
was applied for the subheadings mentioned above. The quota certificate did not prevent or restrict
imports but simply gave access to the tariff applied for the in-quota volume.  Such certificates were
allocated on a first-come, first-served basis. The representative of Mexico further explained thatwithin the quota available on an MFN basis (2,405 tonnes), a tariff rate of 40 per cent was
autonomously applied for tariff subheadings 0406.10.01 and 0406.90.99 instead of the 50 per cent
bound tariff in Mexico's Schedule.  For the other tariff subheadings (0406.30.01, 0406.30.99 and
0406.90.05) a tariff rate of 20 per cent was applied autonomously instead of the 50 per cent bound
tariff.  The representative of Mexico noted that the trade figures for the period notified had been
provided in Mexico's reply of 13 March 1997.
34. The representative of New Zealand thanked the delegate of Mexico for the answers provided
and indicated that he looked forward to receiving these answers in writing for closer study and any
follow-up questions.
(f) New Zealand:  United States - Dairy export incentive program
35. The representative of New Zealand indicated that its questions concerning the recent United
States sale of about 30,000 additional tonnes und er the Dairy Export Incentive Program (DEIP) and
about the use by the United States of previous year entitlements had been adequately covered for the
meantime by the earlier discussion on this matter (paragraphs 20 to 27 refer).
(g) Thailand:  Hungary - Export subsidies
36. The representative of Thailand referred to Hungary's 1998 export subsidy scheme and
inquired about products under HS headings 1602.90.51 and 2104.10 and about other prepared or
preserved meats.  Thailand also enquired whether Hungary was able to provide a list of the export
markets for the products concerned.
37. The representative of Hungary replied that in April 1998, tenders had been accepted for the
export subsidization of the following meat products:
1602.20.90.00
1602.32.19.00
1602.90.51.00
2104.10.90.001,500t
1,500t
3,000t
1,500t45 Ft/kg
45 Ft/kg
45 Ft/kg
30 Ft/kg
In addition, for the year 1998 1.33 billion Ft had been allocated for the export subsidization of the
meat products listed below (with subsidy rates varying between 20 and 40 Ft/kg):
0203.11.10.00
0203.19.15.00
0203.29.11.000210.19.81.00
1602.49.19.000203.12.11.00
0203.19.55.00
0203.29.13.001601.00.91.000203.12.19.00
0203.21.10.00
0203.29.15.001601.00.99.000203.19.11.00
0203.22.11.00
0203.29.55.001602.41.10.000203.19.13.00
0203.22.19.00
0203.29.59.001602.42.10.00
(h) United States:  Kenya - Domestic production requirements for maize seed
38. The representative of the United States requested information regarding Kenyan restrictions
on imports of maize seed and related domestic production requirement.  The United States questioned
whether such measures were consistent with GATT Articles III and XI, as well as under Article 4.2 of
the Agreement on Agriculture.G/AG/R/15
Page 9
39. The representative of Kenya replied that in view of the high risk of disease and insect pest,
maize seed continued to be a quarantine crop under Cap.324 of the Laws of Kenya.  The higher the
volume of imported seed, the higher the risk of introducing exotic pest and disease.  If maize seed
importation is inevitable (as when there is a sh ortage of locally-produced seed) then a specific
protocol had to be followed.  This involved:
(a) establishing the magnitude of the deficit and the eco-zones affected;
(b) importing the quantities and types specific to the eco-zones in deficit;
(c) the exporting country had to have a competent and reputable certifying agency that
could issue OECD labels and sealed seed containers, as well as issue international
orange ISTA certificates with the specific minimum laboratory standard for maize as
specified in the Gazetted Seed Regulations (1991).  The certifying export agency also
had to provide a declaration that no plant in the maize seed field had been observed as
having maize head smut (Spacelotheca reiliana);
(d) an importer had to have two certificates (Seed Import Permit and Plant Import
Permit) before any imports could be undertaken.
40. The representative of Kenya indicated that plans were in place to review this system and to
remove any administrative bottlenecks.  The minimum specified standards in the gazetted seed
regulation were in line with those of the Federation of International Seed Trade (FIST).  There wereno restrictions on importing seed but any importation had to be in conformity with the regulation
requirements outlined above.  For example, one company imported 1,700 tonnes of maize seed into
Kenya without following the set regulations.  As a result the seed turned out to be of poor quality as
there was only 40 per cent germination when it is  supposed to be over 95 per cent.  This caused
unbearable losses to the farmers.  The Government cannot sit back and allow its food securityobjectives to be compromised in this way. The representative of Kenya also pointed out that locally-
produced seed is also subject to the same stringent quality control and certification procedures which
are required for imported seed.
41. The representative outlined the requirements with regard to National Performance Trials for
the full release of new varieties, under which, if a variety had full release status there should be norestrictions on quantities imported provided all relevant regulations were complied with.  All varieties,
imported and locally-produced, were treated similarly under the regulations in respect of quality
control and adaptability.  Furthermore phytosanitary restrictions applied by Kenya were in no way
inconsistent with international commitments and were based on sound scientific principles.  Stricter
examination of materials from specific countries was necessary because of particular diseaseproblems existing in those countries.  It was Kenya's right to protect its agriculture while facilitating
international trade.  No country whose economy relied on agriculture allowed free importation of
agricultural materials without phytosanitary controls.
(i) United States:  Turkey - Subsidization  of sugar exports
42. The representative of the United States enquired how Turkey justified subsidized exports of
sugar given that Turkey's Schedule did not provide for the use of export subsidies for sugar.
43. The representative of Turkey replied that the Turkish government had not provided export
subsidies for sugar in 1997 and that Turkey was shortly going to submit its export subsidy notification
to the Committee.G/AG/R/15
Page 10
(j) United States:  Venezuela - Increase in applied tariffs
44. The representative of the United States, which had requested information on the increase of
applied tariffs by Venezuela on a number of agricultural products above bound rates, informed the
Committee that the issue had been resolved and that  the United States appreciated the co-operation
and information provided by Venezuela in clarifying the matter.
(k) Brazil:  Recent announcement by the United States on the re-activation of the Export
Enhancement Program (EEP) for the poultry sector
45. The representative of Brazil expressed concern regarding information that the United States
had reactivated its EEP for poultry and sought additional details regarding export subsidies for
poultry.
46. The representative of the United States confirmed that the United States had announced
invitations to bid on 20,000 tonnes of poultry for selected destinations in the Middle East in May 1998
under the 1997/98 EEP.  The 1997/98 EEP expired on 30 June 1998 and no poultry bids had as yetbeen approved under the 1997/98 programme.  The representative of the United States noted that the
1998/99 EEP would be announced shortly.  In reply to a related question by Argentina on reporting
periods for United States export subsidy notifications, the representative of the United States indicated
that the EEP program and related budgetary expenditures were in accordance with its WTO
commitments.
(l) United States:  The European Communities - Subsidization of sugar
47. The representative of the United States recalled that it was the understanding of the United
States during the Uruguay Round that C Class sugar would be subject to export subsidization, and
enquired as to whether the EC's notification included subsidies granted to C Class sugar.  The
representative of the European Communities replied that C Class sugar was not subsidized.
(m) United States:  Thailand - Imports of corn from China
48. The representative of the United States stated that it was the United States' understanding that
the government of Thailand was in the process of taking a decision to allow corn imports from China
subject to MFN tariff rate quotas comparable to those applicable to imports from WTO Members.
The representative noted that this policy contradicted Thailand's previous policy which provided thatimports of corn from non-WTO Members should be subject to a higher import tariff.  The
representative of the United States sought an explanation from Thailand as to why it was proposing to
change its policy regarding imports from a non-WTO Member country and inquired whether this new
policy, if implemented, would contradict Thailand's WTO tariff rate quota commitments.
49. The representative of Thailand took note of the concern raised for the first time by the United
States and asked whether the question could be provided in writing in order to facilitate consideration
of the matter in Bangkok and a reply thereto as appropriate.
Review of Notifications
50. The Committee reviewed the following notifications as listed on the agenda:
(i) on the administration of tariff and other quota commitments (Table MA:1):  from
Canada (G/AG/N/CAN/19), Hungary (G/AG/N/HUN/13), the Philippines
(G/AG/N/PHL/13),  South Africa (G/AG/N/ZAF/14) and the United States(G/AG/N/USA/15);G/AG/R/15
Page 11
(ii) relating to imports under tariff and other quota commitments (Table MA:2):  from
Canada (G/AG/N/CAN/21), Costa Rica (G/AG/N/CRI/3), Czech Republic
(G/AG/N/CZE/15), Hungary (G/AG/N/HUN/12), Israel (G/AG/N/ISR/7), New
Zealand (G/AG/N/NZ L/14), Slovak Republic (G/ AG/N/SVK/11) and the United
States (G/AG/N/USA/16);
(iii) in the context of the special safeguard (Tables MA:3 to MA:5): Canada
(G/AG/N/CAN/20), European Communities (G/AG/N/EEC/10), Israel
(G/AG/N/ISR/6), Japan (G/AG/N/JPN/28), New Zealand (G/AG/N/NZL/15),
Norway (G/AG/N/NOR/16), Slovak Re public (G/AG/N/SVK/12) and Uruguay
(G/AG/N/URY/12);
(iv) relating to domestic support commitments (Table DS:1): from Bolivia
(G/AG/N/BOL/2), Brazil (G/AG/N/BRA/10), Chile (G/AG/N/CHL/8), Cuba
(G/AG/N/CUB/6/Corr.1 a nd CUB/7), Cyprus (G/ AG/N/CYP/3/Re v.1), Czech
Republic (G/AG/N/CZE/17), European Communities (G/AG/N/EEC/12 and
EEC/12/Corr.1), Fiji (G/AG/N/FJI/6), Hungary (G/AG/N/HUN/10 and
HUN/10/Corr.1), Jamaica (G/AG/N/JAM/2), Kenya (G/AG/N/KEN/4 and KEN/5),
Korea (G/AG/N/KOR/14), Macau (G/AG/N/MAC/2), Pakistan (G/AG/N/PAK/5),
Paraguay (G/AG/N/PRY/2 and PRY/ 3) and Turkey (G/AG/N/TUR/6);
(v) relating to new or modified domestic support measures exempt from reduction
(Table DS:2):  from Australia (G/AG/N/ AUS/18) and Cyprus (G/AG/N/CYP/4);  and
(vi) relating to export subsidy commitments (Tables ES:1 to ES:3): Bolivia
(G/AG/N/BOL/1) , Costa Rica (G/AG/N/CRI/ 4 and CRI/5), Czech Republic
(G/AG/N/CZE/16), European Communities (G/AG/N/EEC/11), Fiji (G/AG/N/FJI/4),Hungary (G/AG/N/HUN/14 and HUN/15), Iceland (G/AG/N/ISL/10), Israel
(G/AG/N/ISR/5), Jamaica (G/AG/N/JAM/1), Japan (G/AG/N/JPN/29), Macau
(G/AG/N/MAC/3), Paraguay (G/AG/N/PRY/1), Poland (G/AG/N/POL/19), Qatar
(G/AG/N/QAT/1), Slovak  Republic (G/AG/N/SVK/13), South Africa
(G/AG/N/ZAF/15), the United States (G/AG/N/USA/12/Add.1 and USA/14) and
Uruguay (G/AG/N/URY/11).
51. Specific points raised with respect to the notifications listed above and the responses thereto
are summarized in Part I of the Annex to this report.
52. The following notifications were subject to prelim inary review and are to be reverted to at the
next meeting in accordance with paragraph 9 of the Committee's Working Procedures:
(i) relating to the administration of tariff and other quota commitments (Table MA:1):
from Ecuador (G/AG/N/ECU/5) a nd Thailand (G/AG/N/THA/26);
(ii) relating to imports under tariff and other quota commitments (Table MA:2):  from
Colombia (G/AG/N/COL/10), Norway (G/AG/N/NOR/17), Switzerland
(G/AG/N/CHE/14) and Thailand (G/AG/N/THA/27);
(iii) in the context of the special safeguard (Tables MA:3 to MA:5): from Colombia
(G/AG/N/COL/9) and Japan (G/AG/N/JPN/30);G/AG/R/15
Page 12
(iv) relating to domestic support commitments (Table DS:1):  from Colombia
(G/AG/N/COL/8), Ecuador (G/AG/N/ECU/ 4), Iceland (G/AG/ N/ISL/11), India
(G/AG/N/IND/ 1), Slovak Republic (G /AG/N/SVK/ 14), Slovenia (G /AG/N/SVN/8),
Switzerland (G/AG/N/CHE/15 a nd CHE/16), United States (G/AG/N/USA/17) and
Uruguay (G/AG/N/URY/13);  and
(v) relating to export subsidy commitments (Tables ES:1 to ES:3):  from Norway
(G/AG/N/NOR/18), Switzerland (G /AG/N/CHE/17) and Uruguay
(G/AG/N/URY/14).
53. Preliminary points raised with respect to Thailand's notification G/AG/N/THA/26 are
summarized in Part I of the Annex to this report.
54. The Committee took note that no counter-notifications had been received under Article 18.7
of the Agreement.
Other Matters Relating to the Review Process
(a) Deferred replies to questions raised under the reform process
55. The deferred replies to questions raised at previous meetings in respect of the following
notifications are summarized in Part II of the Annex to this report:  Malaysia's notifications on tariffquota administration (G/AG/N/MYS/10) and tariff  quota fill (G/AG/N/MY S/11), Venezuela's
notification on tariff quota fill (G/AG/N/VEN/10), Cuba's domestic support notification
(G/AG/N/CUB/ 6), Malaysia's domestic support notification (G/AG/N/MYS/7), Mexico's domestic
support notification (G/AG/N/MEX/5), Cyprus' e xport subsidy notifications (G/AG/N/CYP/5 and
CYP/6) and Venzuela's export subsidy notification (G/AG/N/VEN/9).
(b) Overdue notifications
56. With regard to the question of overdue notifications, the Committee took note that, as
requested at the March 1997 meeting, the Secretariat had made available a Room Document dated
25 June 1998 showing compliance with the Committee's notification requirements.  In the light of theconsiderable number of outstanding notifications, the Chairman urged Members concerned to comply
as soon as possible with their notification obligations.  It was noted that the Room Document
erroneously indicated outstanding Table DS:1, ES:1 and ES:2 notifications by New Zealand for the
implementation year 1996/97 and that this would be corrected in the next edition of the Room
Document.
(c) Compliance with notification obligations:  Discussion paper by the United States
(G/AG/W/33)
57. The representative of the United States stated that the fact that notifications were often
delayed and a significant number of notifications was outstanding threatened to undermine Members'
ability to effectively monitor compliance with co mmitments in a timely manner and hindered the
ability of the Committee to periodically review progress of the implementation of commitments.  TheUnited States hoped that the views expressed in its paper (G/AG/W/33) would stimulate a discussion
with regard to ways to improve the timely submission of notifications.
58. The representative of Switzerland expressed the view that the fact that some notifications
were submitted in due time, whereas others were not, put at risk the principle of fairness and equal
treatment of Members during the review process and requested that the Committee address thissituation.  The representative of New Zealand noted  that timely submission of notifications was
essential both for the Committee's review process, as well as the AIE Process, given that many of theG/AG/R/15
Page 13
Secretariat's background AIE notes were dependent on notifications. The representative of
South Africa noted that some national reporting systems did not, in spite of the best intentions, deliver
the required data in time.  The representative of Canada suggested that an effort be made in
collaboration with the Secretariat to clear up the backlog of overdue notifications for the 1995
implementation year, the expectation being that subsequent notifications would thereby be facilitated.
The proposal was made in this regard that the Members concerned approach the Secretariat in order tosolve any technical problems encountered in preparing their outstanding notifications.
(d) Domestic support implementation issues - Discussion paper by New Zealand (G/AG/W/34)
59. The representative of New Zealand, in in troducing G/AG/W/34, suggested that the points
raised in its discussion paper might be taken up as generic issues through informal consultations under
the auspices of the Chairman.
60. With regard to the issue of modification of external reference prices in domestic support
calculations (paragraph 1 of G/AG/W/34), the representative of Iceland expressed the view that the
Agreement did not seem to specifically allow for adjustments to the 1986-88 external reference prices
but did not specifically prohibit such adjustment either.  In the view of Iceland the only directly
relevant provision would seem to be Article 18.4 of  the Agreement.  In the case of Iceland which had
an accumulated rate of inflation of 252 per cent from 1986 to 1996, the Current Total AMS would besubstantially higher, albeit within the commitment leve l, if the external reference prices in Iceland's
AGST document had not been adjusted by way of conversion to Special Drawing Rights.  In the view
of Iceland, such increase was not acceptable if it was due to factors other than rising domestic support
in real terms.  The representative of India noted that the main reasons for modifications of external
reference prices were inflation and currency depreciation which could have the effect of distorting theentire domestic support picture, particularly in countries currently undertaking structural adjustment
programmes.  The representative of Hungary endorsed Iceland's view that the Agreement, in
particular Article 1(h) and paragraph 9 of Annex 3 thereof,  did not specifically prohibit modifications
of external reference prices.  The representative of South Africa stated that South Africa could not
agree with the view that the conversion of external reference prices into another currency as suchconstituted a modification of those prices.
61. With regard to the issue of negative support in the calculation of the AMS (paragraph 2 of
G/AG/W/34), the representative of India noted that there was no specific provision in the Agreement
which stipulated that in circumstances where the administered price was lower than the external
reference price, the domestic support should be deemed to be zero.  The AMS was, by definition, theaggregate measurement of support and hence the sum of all subsidies and taxes.  In the view of India,
a negative AMS indicating an implicit tax on farmers should therefore be reflected as such.
62. With regard to the issue of the quantity of  production eligible to receive an applied
administered price (paragraph 3 of G/AG/W/34), a number of delegations noted that they did not
share New Zealand's interpretation that the eligible production should be deemed to be equal to total
production of the product concerned rather than the quantity purchased by governments, especially
where programmes clearly specified or limited the eligible production.
63. With regard to the issue of provision of information to support de minimis  claims
(paragraph 4 of G/AG/W/34), the representative of Brazil supported the proposal that this information
should routinely be provided in notifications.   The representative of Canada made the point that the
provision of this type of information would not appear to be an additional burden for governments
since they had to have the information available in order to justify the de minimis  claims that were
made.G/AG/R/15
Page 14
64. With regard to the issue of improved transparency in notifications (paragraph 4 and 5 of
G/AG/W/34), the delegations of Japan and European Communities expressed the view that due
account should be given to balancing transparency requirements and the workload of governments
and to the fact that additional information could be requested on a bilateral basis.
65. In light of the interest expressed by some Me mbers in further exploring the issues raised in
G/AG/W/34 on an informal basis, as well as the divergent views expressed regarding the scope of theissues that might be discussed informally, the Chai rman indicated that he would be consulting with
Members concerned as appropriate.
Part II:  Other Matters within the Purview of the Committee
Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-
Developed and Net Food-Impor ting Developing Countries
66. In the context of the Committee's follow-up to the Singapore Ministerial recommendations
with regard to food aid matters (G/L/125, paragraph 18(i) refers),  the Committee took note that the
Food Aid Committee of the Food Aid Convention had confirmed its intention at a recent meeting to
bring a new Food Aid Convention in effect on 1 July 1999 and had requested the Working Group
which was undertaking the re-negotiation of the curr ent Food Aid Convention to aim to conclude the
substantive negotiations by the end of this year.   The negotiations were focusing, inter alia , on
increasing the effectiveness of food aid, due account being taken of the decisions and
recommendations of the WTO Singapore Ministeria l Conference and of the FAO World Food Summit
with respect to least-developed and net food-importing developing countries.  The Food Aid
Committee also envisaged holding a further dialogue meeting, possibly in October, but this remained
to be decided, with potential new donors as well as with net food-importing countries and other food
aid recipients.
67. The Committee also took note that a statement submitted by the representative of the FAO
would be circulated to Members of the Committee (G/AG/GEN/25 refers).
Chairman's Report on the Process of Analysis  and Information Exchange (AIE process)
68. The Committee took note of the following report by the Chairman on the meeting of the AIE
process held on 24 June 1998:
"(i) In line with paragraph 36 of G/AG/R/10, the following is my summary report as
Chairman on the meeting of the AIE process held on 24 June 1998.
"(ii) The first theme considered at this meeting was special and differential treatment.
Members had the benefit of a new informal paper submitted by India on Issues of Interest to
Developing Countries (AIE/30).  In addition, the Secretariat had provided three new
background notes concerning Actions taken Within the Framework of the Net-Food Importer
Decision as Notified by Members (AIE/S8), concerning the Agricultural Trade Performance
of Developing Countries (AIE/S10) and co ncerning Uruguay Round Agricultural Tariff
Reductions for Selected WTO Members According to Stage of Processing (AIE/S11).
Moreover, there was an opportunity to revert to the related informal papers by Pakistan, Peru
and the Dominican Republic (AIE/6) and Cuba (AIE/12) as well as the Secretariat
Background notes AIE/S6 and AIE/S7.
"(iii) The further discussion on issues of interest to developing countries and on special and
differential treatment was useful in helping to  bring a clearer focus to bear on the main areas
where detailed analysis and exchange of information needs to be undertaken in a systematic
way.  Thus it will be appropriate to develop a checklist of issues in the five principal areas of:G/AG/R/15
Page 15
market access;  food security with particular reference to net food-importing and least-
developed developing countries;  domestic support;  export subsidies;  and notification
requirements and technical assistance.
"(iv) In this regard it was stressed that, given the wide range of situations and interests
involved, it was important for the work in this area that developing countries submit countrypapers on their own experience with regard to implementation of the Uruguay Round
Agreement on Agriculture, identifying both positive elements and any problems or obstacles
encountered in taking advantage of the opportunities created by the Uruguay Round.  To this
end short concise papers would suffice since these often attract more attention in capitals than
longer convoluted papers.  The Secretariat woul d of course be willing to assist developing
countries as appropriate so that they can more effectively organize their experiences in the
form of country papers for submission to the AIE Process.  The Secretariat in its further workon the trade performance of developing countries will also provide additional data on the
trade performance of least developed countries in the context of a revision of the background
note AIE/S10.
"(v) I will of course be continuing my informal consultations on these matters (as I did
between the previous meeting and this one), including on the checklist of issues and on the
arrangements for a proposed ad hoc informal meeting, to which relevant international
organizations could be invited in order to present updated assessments of the impact of the
implementation of the results of the Uruguay Round, with particular focus on the impact of
the implementation of the Agreement on Agriculture for developing countries.
"(vi) The discussion on the informal paper encompassed a number of key issues regarding
the role of this mechanism, including its prev entive role in relation to import surges and
significant price declines and in facilitating adjustment to further reform.  It was pointed out
that the special agricultural safeguard represented a major exception relative to the WTO rulesapplicable to trade in goods generally.   It was also emphasised that the SSG was an integral
element of the Agreement on Agriculture and would remain in force for the duration of the
reform process as determined under Article 20. A specific suggestion for further analysis in
this area concerned the use of the special agricultural safeguard in circumstances where the
volume of imports was insignificant or declining.  Further discussion of the issues relating tothe SSG provisions will be taken up in detail when the Secretariat background note on the
special agricultural safeguard, currently under preparation, becomes available.
"(vii) A wide range of views were expres sed on Canada's paper on Sectoral Trade
Liberalization (AIE/21).  It was noted that any liberalization initiatives for selected sectors
within agriculture should not focus solely on market access but should seek to eliminate a
much wider range of existing trade distortions, including those arising from domestic support,export subsidies and export taxes.  It was also noted that sectoral liberalization initiatives ran
the risk of leading to unbalanced results between  sectors and that preference should be given
to a comprehensive approach for further liberalization of trade in agriculture.  On the whole it
was my general assessment of the discussion that sectoral initiatives should be regarded as a
possible complementary technique and not in any way as a substitute for a comprehensiveapproach.
"(viii) With regard to domestic support issues, the United States' informal paper on
Domestic Support Policy Reform (AIE/19) describing its experience under the FAIR Act of
1996 was the first subject of discussion.  Several Members expressed the view that the shifttowards Green Box measures constituted a positive step worthy of being extended to other
sectors which had been left out from the reforms.  However, it was also noted that certain
doubts could possibly be raised with the regard to the green status of the direct payments
under the FAIR Act.G/AG/R/15
Page 16
"(ix) Canada's informal paper on Annex 2:  Domestic Support Measures Exempt from
Reduction Commitments (AIE/23) and the Secretariat's related background note on Green
Box Measures (AIE/S9) provided the basis for a general discussion of the Green Box.  On the
issue of whether the Green Box criteria were cast too broadly or too narrowly, diverse views
were expressed.  Among many other comments, the point was made that the past positiveexperience did not justify a tightening of the criteria and that narrowing the scope of the
Green Box might discourage further policy shifts towards minimally trade-distorting policies.
It was also suggested that any revision or fi ne-tuning of the Green Box criteria should give
consideration to the question of whether the Green Box was sufficiently developed to
accommodate certain domestic policies. The adequacy of the existing review procedures for
the purpose of examining the green status of notified Green Box measures was also
addressed.
"(x) Australia's informal paper on Reforming Domestic Support for Agriculture (AIE/27)
prompted a debate on many of the principal elements of domestic support.   It was observed
that the aggregate nature of the AMS provided a number of advantages, such as added
flexibility.  It was also indicated that this feature of the AMS gave rise to a number ofconcerns, such as lack of transparency and the possibility of increased support levels for
particular products or sectors.
"(xi) The recently circulated informal paper by the European Communities, on Domestic
Support Policy Reform:  The Role of Article 6.5 Direct Payments (AIE/29), was subject to ageneral presentation and is for substantive discussion of the next AIE meeting.
"(xii) A first discussion of the issue of non-trade concerns was held on the basis of informal
papers by Norway on Non-Trade Concerns in a Multifunctional Agriculture (AIE/22) and by
Japan on Non-Trade Concerns in Agriculture (AIE/ 25).   In this general context reference was
made to the fundamental importance of account being taken in further negotiations of such
concerns as food security and environmental and rural development objectives.  However, it
was also noted that, while acknowledging that non-trade objectives were legitimate policy
objectives, any policies pursuing such objectives needed to take into account societies' other
preferences, trade concerns, as well as the notion of policy failure, and in any event should bespecifically targeted to the various specific non-trade objectives.  In this respect it was
underlined that non-trade concerns could and should be accommodated through recourse to
Green Box policies and measures.  The view was also expressed that account had to be taken
of these concerns in the context of the other areas for further negotiation, such as market
access.  It was also noted that the concept of multifunctionality should be developed on the
basis of examples and that useful experience might be gained through concrete illustrations of
Members' approaches to addressing non-trade concerns in a targeted fashion.
"(xiii) The discussion of non-trade concerns is to be continued at the September AIE
meeting, on which occasion there will also be an opportunity to discuss the related New
Zealand paper on the Side Effects of Agricultur al Policies and Production (AIE/28).  In my
view this week's discussions on non-trade concerns was a useful start to detailed analysis of a
subject which involves a wide range of sometimes complex and overlapping issues.  Many of
the non-trade concerns that have been highlighted are concerns which many, if not most,
Members share to one degree or another, and what has to be explored in the future analysis
and exchange of information, in my view, is how legitimate concerns can be accommodated
without prejudicing further agricultural trade liberalization and the equally shared objective ofachieving fair and market-oriented trade in agriculture.
"(xiv) Subject to confirmation the next AIE meeting will take place on 28 and
29 September 1998.G/AG/R/15
Page 17
Requests for Observer Status by International Intergovernmental Organizations
69. The Committee noted that there were outstanding requests for observer status in the
Committee from three regional international organizations, i.e., the ACP Secretariat, the Inter-
American Development Bank and the Inter-American Institute for Agricultural Cooperation(G/AG/W/29/Rev.1).  The Committee noted that a fi nal decision would be taken at the September
meeting of the Committee.
Other Business
70. The representative of Chile noted that Chile was grateful to the European Communities for
having organized an information meeting concerning  its support to canned peaches and pears, which
had been held with Chile and 13 other Members on 23 June 1998 (paragraph 10 of G/AG/R/14refers).  Chile also appreciated the fact that the European Communities had provided relevant
statistics at that meeting.   However, Chile wa s disappointed that the European Communities, rather
than giving a detailed response, had preferred to elaborate in general terms on the issues raised in the
46 written questions which had been submitted well in advance of the meeting.
71. Chile nonetheless welcomed the European Communities' willingness to continue the dialogue
on this matter, together with interested Members, and hoped that the European Communities would
convene a further information meeting in Geneva close to the September meeting of the Committee so
as to allow technical experts from capitals to participate in the discussions.  The issue of the EC
subsidies for the fruit sector continued to be of great importance to Chile due to its adverse impact on
Chile's fruit and vegetable canning industry, as well as its social impact on some 600,000 peopleemployed in the industry.
72. The representative of the United States stated that the bilateral US-EC Canned Fruit Accord
had not eliminated distortions in the canned fruit market, nor had it resolved the problems generated
by the excessive use of EC subsidies and fraudulent practices.  As a result, the United States was
facing growing concern and pressure from its canned fruit industry and in the US Congress.  TheUnited States expressed its support for Chile's request for another meeting with the European
Communities and interested parties in Geneva in Se ptember to further explore the issues involved on
the basis of the questions that the parties had put to each other.   Furthermore, the United States
continued to be interested in discussing the possibil ity of accelerating reform of the EC processed fruit
and vegetable regime that would encourage a more competitive global environment.
73. The representative of South Africa stated the EC support regime for its canned fruit industry,
in particular the fraudulent misuse of the system, continued to have an adverse impact on South
Africa's canned fruit exports.   South Africa supported a further information meeting to receive further
clarification with regard to the questions that had been raised by the parties involved.  The
representative of New Zealand stated that its canning industry had been negatively affected by the EC
subsidization policy but that New Zealand had been able to address the injury caused by the EC
products through the imposition of countervailing duties.  New Zealand remained nonethelessconcerned about the high level of the EC subsidies and the apparent fraud in the canned fruit sector
and their distorting effects on the world markets.
74. The representatives of Argentina, Australia, Brazil, Canada, the Philippines, Thailand and
Uruguay took the floor to express their governments' wish to continue the information process with
the European Communities on this matter.   A numbe r of the Members involved in this matter also
noted that, in a spirit of transparency, they w ould provide responses to the questions which the
European Communities had raised at the information meeting.G/AG/R/15
Page 18
75. The representative of the European Communities responded that the EC policies in the canned
fruit sector, and their implementation, were carried out in complete confor mity with the European
Communities' WTO commitments.  Moreover, as th e European Communities had pointed out at the
information meeting, EC exports of canned peaches had decreased significantly last year.  The
European Communities had organized its presentation at the information meeting according to the
themes addressed in the questions raised by the Members involved.  It had itself requested furtherclarification from participants as the European Co mmunities had yet to receive any concrete evidence
of Members' alleged difficulties.  The representative of the European Communities noted that the
European Communities maintained an internal syst em for investigating any alleged matter of fraud
and expressed the view that this aspect had been greatly exaggerated.  With regard to the call for
reform in this sector, the representative of the European Communities emphasized that the European
Communities considered itself to be engaged in an information process and that the notion of
accelerating reforms was therefore not an issue, in particular since the European Communities hadonly recently decided on a package of significant reforms in the canned fruit sector.  The
representative of the European Communities stated that given the interest to continue the dialogue, the
European Communities was considering the question of appropriate arrangements for pursuing the
discussions.
76. The representative of Chile responded that the implementation of commitments should be
carried out in a transparent manner in order to ensure the credibility of commitments.
Date of Next Meeting
77. The next regular meeting of the Committee on Agriculture will be held on Wednesday,
30 September and Thursday, 1 October 1998, and the airgram convening the meeting and containingthe draft agenda will be issued on Friday, 18 September 1998.G/AG/R/15
Page 19
ANNEX
Page
Part I Summary of specific points raised on notifications and responses thereto
(25-26 June 1998 meeting)20
(i) on the administration of tariff and other quota commitments (Table MA:1) :
Canada (CAN/19), Hungar y (HUN/13), the Philippi nes (PHL/13), South
Africa (ZAF/14), Thailand (THA/26 ) and United States (USA/15);20
(ii) relating to imports under tariff and other quota commitments (Table MA:2) :
Canada (CAN/21), Costa Rica (CRI/3),  Czech Republic (CZE/15), Hungary
(HUN/12), Slovak Republic (SVK/11) and United States (USA/16);27
(iii) relating to the use of the specia l safeguard (Table MA:3 to MA:5) :
European Communities (EEC/10) and Japan (JPN/28);33
(iv) relating to domestic support commitm ents (Table DS:1) :  Brazil (BRA/10),
Cuba (CUB/7), Cyprus (CYP/3/Rev.1), European Communities (EEC/12 and
Corr.1), Hungary (HUN/10 and Corr.1), Kenya (KEN/4 and KEN/5), Korea
(KOR/14), Pakistan (PAK/5) and Turkey (TUR/6);34
(v) relating to new or modified domestic support measures exempt from
reduction (Table DS:2) :  Australi a (AUS/18) and Cyprus (CYP/4);54
(vi) relating to export subsidy commitments  (Tables ES:1 to ES:3) :  Costa Rica
(CRI/4 and CRI/5), Czech Republic (CZE/16), European Communities
(EEC/11), Israel (ISR/5), Slovak Re public (SVK/13), South Africa (ZAF/15)
and United States (USA /12/Add.1 and USA/14).57
Part II Deferred replies to questions on notifications raised at previous meetings 71
(i) on the administration of tariff and other quota commitments (Table MA:1) :
Malaysia (MYS/10);71
(ii) relating to imports under tariff and other quota commitments (Table MA:2) :
Malaysia (MYS/11) and Venezuela (VEN/10);72
(iii) relating to domestic support commitm ents (Table DS:1) :  Cuba (CUB/6),
Malaysia (MYS/7) and Mexico (MEX/5);74
(iv) relating to export subsidy commitme nts (Tables ES:1 to ES:3) :  Cyprus
(CYP/5 and CYP/6) and Venezuela (VEN/9).77G/AG/R/15
Page 20
ANNEX – Part I
Review of Notifications by the Committee on Agriculture at its Meeting on 25-26 June 1998
Summary of Specific Points Ra ised and Responses Thereto
Table MA:1 Notifications
Canada   G/AG/N/CAN/19   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Brazil/EC/Japan  - What is the method/criterion used
to allocate the tariff rate quota for bovine meat?  Ascountry allocations are not specified in its Schedule,has Canada made agreements with all other Membercountries which have a substantial interest in
supplying the products in accordance with GATT
Article XIII:2(d)?Of the total tariff quota of 76,409 tonnes,
29,600 tonnes are allocated to New Zealand and35,000 tonnes to Australia.  Such quantities werereserved for Australia and New Zealand which havebeen traditional suppliers and, consistently with
Article XIII, reflect historical market shares.  The
remainder (11,809 tonnes, or 15.4 per cent of thetotal tariff quota) is available to all suppliers on afirst-come, first-served basis and takes into accountthe interests of new potential suppliers.  In 1997,supplementary import permits accounting for
13,281 tonnes were also issued and included in the
tariff quota fill.
Colombia/EC/Japan  - In accordance with GATT
Article XIII:2(d), what was the representative period
used to establish historical shares?All country allocations, including that of New
Zealand, were based on the Uruguay Round baseperiod, 1986-88.  The Australian allocation wasoriginally based on 1986-88 but a "previous three-
year base period" had been lately taken into account,
which led to a downward adjustment of theallocation made to Australia.
Follow-up remarks – Colombia:  expressed concern that different representative periods and allocation criteria
had been applied according to the co untry considered, which seemed to  be in contradiction with the
interpretation of the application of Article XIII, as a dopted  in the Banana Panel and Appellate Body reports.
EC:  GATT text refers "a [single] recent" represen tative period. The 1986-88 period was a reference period
used to draw up country Schedules.  Since these allocations are not mentioned in Canada's Schedule, they
should be made in accordance with Article XIII. Australia:  expressed disagreement over the reduction of their
allocation from 42,000 to 35,000 tonnes.  Canada:  Article XIII is not sufficiently clear as to how to
accommodate the evolving pattern of trade, particularly dynamic in the area of beef and veal (emergence of
Latin American countries as potential suppliers, SPS issues, etc.)
EC - Who was able to supply under the supplementary
import permits system? Did suppliers include
Australia and New Zealand?This remained a matter of choice for the importer.G/AG/R/15
Page 21
Canada   G/AG/N/CAN/19   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
EC - As regards the tariff quota for beef and veal,
importers must now import 90 per cent (in 1997 it was
98 per cent) of their import allocation in order that
their allocation is not reduced proportionately in thesuccessive year.  Why has Canada lowered this importlevel?The objective was to bring the administration of the
beef and veal tariff quota in line with the
administration of most other tariff quotas with
regard to the level at which under-utilizationpenalties could be applied.  Experience has shownthat setting the level at which penalties may beapplied too high can introduce distortions.  Firmsthat cannot fully utilize their allocation are
encouraged to return any amount not utilized and are
not penalized in the subsequent year's allocation.Conversely, quota holders who use less than thepenalty level and do not return amounts not utilizedwill see their allocation reduced in the subsequent
year to reflect actual usage in the given year.
EC - In the case of under-utilization will all or any of
the 10 per cent be re-allocated?Under-utilized quantities are not reallocated within
the year since the supplementary permit systemallows for additional imports to take place, withoutrestriction as to the origin of the product.
Switzerland - Are shipments of beef and veal undercountry reserves (Australia, New Zealand) admitted at
the same tariff rates as for third countries?Confirmed. The in-quota tariff is free for all
suppliers.
Switzerland - All allocations under this tariff quota are
made either (a) to processors and retailer-processors
or (b) to distributors, on the basis of the amount
processed in a previous 12-month period.  Does"amount processed " refer to domestic or importedproducts, or both?The "amount processed" refers to the amount of
imported beef (from countries other than the United
States, Mexico and Chile) that is processed by
processors or by retailer-processors in their ownfacilities.
Switzerland - Is this requirement in any way linked to
a local purchase undertaking or practice of these
processors?  If not, why are other importers andtraders not eligible for this tariff quota? Arerestaurants eligible to import (ready-for-consumption)
beef?No, it relates to imported, not domestic, beef.  Other
importers and traders are eligible for allocations of
this tariff quota as far as they are covered by thedefinition of "distributors".  Eligibility criteria forretailer-processors and distributors as set out innotices to importers are likely to exclude restaurantsand hotels as potential importers.  The actual retail
level does not generally have direct access to the
quota.
Switzerland - Are there provisions for new entrants? T here are no explicit provisions for new entrants,
since the eligibility criteria automatically allow fornew entrants (e.g. the relevant processing activity isthe processing of beef imported from countries other
than the United States, Mexico and Chile, even if
imported under another firm's permit).
Switzerland - Could such reservations and restrictionslead to quota underfill?No.  These conditions are designed to ensure that
permits are allocated to active industry participants,so they are more likely to be used.  In fact, the tariffquota was overfilled in 1995 and 1997.  In 1996, the
tariff quota was slightly underfilled due to market
conditions (i.e. domestic price of beef).  The tariffquota is also expected to be completely filled this
year.G/AG/R/15
Page 22
Hungary   G/AG/N/HUN/13   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Australia/New Zealand/Canada  – Raised concerns
regarding the application of quantity limits and the
impact these can have on tariff rate quota underfill.
There have been some significant reductions in 1998in the size of import licences granted at one time,relative to previous years.  These include edible offal
of swine, which was reduced from 10 per cent of thetariff quota (or 65.1 tonnes) in 1997 to 25 tonnes in
1998.  H ungary has set new absolute limits on the
application quantity limit which are, for a range ofproducts, substantially lower than the previouslypermitted quantities. Rationale for reducing theapplication quantity limits to small amounts forproducts which have consistently exhibited high levels
of quota fill?The replacement of the application quantity limits,
previously set as a percentage of the tariff quota
quantity, and now replaced by absolute limits
allocated at one time, reflects the changes introducedin the Hungarian tariff quota allocation mechanism.In the case of the pro rata  method, application limits
were mainly applied in order to prevent thefragmentation of the quota.  Since this problem does
not emerge anymore with the presently used first-
come, first-served allocation method, the objectiveof the new method is to ensure that both exportingcountries as well as importers can benefit from fairand continuous access to the tariff quotas.  Absolutequantity limits are determined on the basis of the
usual shipment sizes of various products, thus, by
definition, representing commercially viablequantities. Those changes were also designed inresponse to requests made by importers, who werefacing under-utilization penalties.  The limit of 25
tonnes matches the usual commercial quantity, that
is a truckload of edible offal.
Australia  – Notwithstanding the increases in the
application quantity limits for cereals in 1998,Australia believes that the low rates of tariff quota fillfor wheat, rye, barley and maize, are related to the
small application quantity limits.The sole reason for the low rates of tariff quota fill is
Hungary's production and export competitiveness inthis product category, the latter being reflected in thewell-known fact that Hungary has been acompetitive and, for its size, a major producer and
exporter of cereals for a long time.  In addition,
Hungary's allocation mechanism works towards thefilling of the tariff quotas by penalizing importerswho do not utilize their quota shares up to the 80 percent level, thus working towards higher tariff quota
fill rates.
Australia - The Australia Dairy Industry is of the viewthat the quality of access is such that only small
amounts of cross-border trade are possible and longdistance on-going commercial arrangements are notfeasible.  Has Hungary given consideration toexpanding the application quantity limits applying to
dairy products, particularly 0403 and 0405?As to butter (0405) the tariff quota fill rate reached
84 per cent and overall imports were twice as high
as the preferential access quantities, including thetariff quota provided under the WTO.  Thus the lackof competitiveness and attractiveness of the offermade by the Australian Dairy Industry might be the
problem.  The low fill rate for yoghurt (0403) could
be due to the product characteristics which are notfavouring long-distance trade, as well as preferentialmarket access opportunities.
Thailand  - What is the method of allocation of import
quota for rice?The import quota for rice is allocated on a first-
come, first-served basis.  Individual importers may
submit an application for up to 500 tonnes at a time.
Further applications may be made by an importer if80 per cent of the allocated volume is fully utilized.Access to the quota is conditional upon the lodging
of a reimbursable deposit.G/AG/R/15
Page 23
Hungary   G/AG/N/HUN/13   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Thailand - What is the reason for setting a ceiling of
500 tonnes of rice per application?This limit of 500 tonnes was set in accordance with
the current quota administration system on the basis
of the usual shipment sizes of this product.  The size
of a typical Asian rice shipment does not exceed200 tonnes.  Thai exporters should not have realproblems.
Philippines   G/AG/N/PHL/13   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Brazil/EC - In the case of poultry and swine meat,
coffee and sugar, is the Minimum Access VolumeManagement Committee (MMC) composed of
representatives from the Government or from the
private sector?The Chairperson and the members of the Minimum
Access Volume Management Committee are from
the government sector.
Brazil/EC - What are the requisites for becoming a
"qualified entrant" for such quotas?For the initial year of tariff quota implementation, an
applicant which has been in the business as animporter of a regularly or significantly importedtariff quota product during the representative period
is eligible for tariff quota licenses for such products.
An applicant which has been a user or a seller of anirregularly or scarcely imported tariff quota productduring the representative period is eligible for tariffquota licenses for such products.  In the subsequentyears of tariff quota implementation, for products
whose tariff quotas are fully subscribed, only
persons, firms or any other legal entities which haveoperated a business involving the product concernedat the start of the prior tariff quota year and whichhave imported the minimum import volume for thatproduct at any time during  the preceding tariff quota
year are eligible.  In the case of under-subscribed
products, once the requirements of the qualifiedapplicants have been met, even unqualifiedapplicants can be eligible for allocations.
EC - What is the situation of importers who were
"new entrants" in the previous year?New entrants in the previous tariff quota year who
apply again for quotas in the following year shall
already be considered as regular licensees.G/AG/R/15
Page 24
Philippines   G/AG/N/PHL/13   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Canada - The “Notification of Mutually-Agreed
Solution” between the Philippines and the United
States (WT/DS74/5) provides for a periodic review of
the utilization of the Philippines pork and poultrytariff quotas.  Canada expressed the view that such areview should be open to all countries exporting theseproducts to the Philippines.  Canada would beinterested in participating in such a review.
Canada - What method of allocation will be used to
give priority access to the Beginning Year Pool (BYP)and the Mid-Year Pool (MYP) ?The BYP and the MYP are allocated, first through a
systematic distribution procedure (SDP) and then, if
necessary, through a first-come, first-served
distribution scheme. SDP is a rank order lottery.Priority access shall be given to entities which havebeen able to prove their importation of the productsconcerned.  In the case of the BYP, the followinghave priority access in the SDP:  (a) licensees which
did not surrender any of their respective allocations
and were able to import at least 80 per cent of theirallocations in the previous year as of 15 December,and (b) entrants which were able to import at leastone-half of the economic size lot for the specificproduct.  The MYP is allocated, first through an
SDP, and then if necessary through a first-come,
first-served distribution procedure.  The SDP toallocate the MYP is open to all licensees, includingnew entrants to the BYP, which (a) have notsurrendered all or part of their respective licenses;
and (b) have utilized at least 30 per cent of their
respective net allocation as of the last working dayof May.  Any balance remaining in the MYP afterthe SDP has been conducted shall be allocated on afirst-come, first-served basis to any interestedapplicant, except licensees which have not fully
utilized their allocations.
Canada - Has the allocation process noted for the
MYP been implemented this year?As of 29 May 1998, a total of 15,043 tonnes of pork
quotas, 7,775 tonnes of poultry meat quotas and 0.92tonnes of soluble coffee quotas were surrendered.On 7 June 1998, the MMC announced theavailability of these volumes in two newspapers andcalled for submission of applicants for MYP
licenses.  The application period for the MYP was
set for 8-16 June 1998 and the SDP was conductedon 18 June 1998.  The target date for issuance of the
special licenses is on the first working day of July.
Canada - Will licensees who have utilized less than80% of their net allocation in 1998 have their
allocation reduced in 1999?Licensees who have utilized less than 80 per cent of
their net allocations in 1998 will have their 1999
allocations reduced by the amount equivalent to 50per cent of the unused volumes out of theunsurrendered quota.
EC - Are quota quantities available for the MYP
published?The quota quantities for the Mid-year Pool are
published in a daily newspaper of national
circulation.
EC - With the Administrative Order No. 1, Series of
1998 (A.O.) the level of imports that must be fulfilledin order not to be subject to progressive penalties hasincreased from 50 per cent to 80 per cent.  As a resultfrom this, has there been a shift from the allocation
from producers to traders and processors?Since the Philippine laws prohibit the retroactive
application of rules on penalties, the provision ofA.O. cannot be implemented for licenses issuedbefore its date of entry into force (6 March 1998).However, as of May 1998, 15,043 tonnes of porkquotas and 7,775 tonnes of poultry meat quotas were
surrendered.  Of the volumes surrendered for pork
and poultry meat, 90 per cent came from producerswhile the rest was from processors and traders.G/AG/R/15
Page 25
Philippines   G/AG/N/PHL/13   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Follow-up reply by Philippines - In compliance with WTO notification obligations the Philippines will notify
any changes it its tariff quota administration rules and regulations. Before undertaking such changes, public
consultations will be held, the results of which shall be published in a national newspaper.  Any interested
party, including WTO Members, are therefore provided opportunities to present their views before anychanges are implemented.  As provided for in the MOU with the United States, the Philippines shall formallynotify the United States when undertaking procedures to modify tariff quota rules.  Notification to otherinterested countries of the Philippines' intent to institute changes in its tariff quota administration rules andregulations shall be made through the publication of notices for public consultation. Any agreement resulting
from additional bilateral consultations between the United States and the Philippines that may lead to changes
to the Philippines' tariff quota rules will only be implemented after consultation with sectors that may beaffected by such changes.  Principal suppliers of pork and poultry to the Philippines market will be providedopportunity to present their views regarding such changes during the consultations.
South Africa   G/AG/N/ZAF/14   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Australia  - Clarification sought regarding changes
made to the method of licence allocation to importers
of meat and bovine animals and sheep?The changes introduced in no way limit import
opportunities.  Import licences in terms of the tariff
quota for meat of bovine animals and sheep continue
to be fully subscribed and utilized under the newsystem.
Australia - Why have the eligibility requirements forimport licences been changed from no limitations to
historical importers only?The reason for such changes was to facilitate a more
equitable and fair allocation of the tariff quota.
Australia - Why has the issue of permits been changed
from first-come-first-served to allocation on a pro-rata
basis based on proven actual imports during thepreceding two years?The manner in which the first-come, first-served
mechanism was applied was to limit each tranche of
allocation to a single full container to each applicant,
successively allocating tranches until either theapplicant's request has been fulfilled or the quota hasbeen exhausted.  This system was manipulated bysome potential importers by presenting multiple
applications, which resulted in some traditional
importers not even receiving a share of the tariffquota, thus creating problems for the Department ofAgriculture and the importers themselves.
Australia - Given that these changes would appear to
have the effect of limiting opportunities for new
importers, what arrangements are in place for allowingnew entrants?In administering the quotas, 10 per cent has been
reserved for new entrants who become historical
importers as they build up an import record.  Themost recent, or preceeding, two-year period is usedas a benchmark.  This allows new entrants toacquire, quite rapidly, the status of historicalimporters The change has established a more reliable
basis for the allocation of the quota and has been
well accepted by the trade.
Canada - Does South Africa allocate a portion of theirtariff quota for meat of bovine animals to newsuppliers?  If so, how much is reserved for new, non-
traditional suppliers?South Africa does not specifically allocate a portion
of its tariff quota to new suppliers.  For the portionof the tariff quota not allocated to members withsubstantial trade in the past, no restriction is placed
on the supplying country.G/AG/R/15
Page 26
Thailand   G/AG/N/THA/26   Tariff Quota Administration (Table MA:1)
(Questions received after deadline in respect of  which Thailand undertook to provide answers)
Switzerland – Clarification sought regarding the purpos es of certain restrictions  placed on access to tariff
quotas for a number of product categories; their compatibility with GATT Article II and Article 4 of the
Agreement on Agriculture; the impact on tariff quota fill; their status vis-à-vis  Thailand's WTO Schedule.
The affected product categories are as follows:
Onions:  allocated to the Onion Gr owers' Cooperative Federation of Thailand. Is the resulting price a producer
subsidy?
Garlic:  allocated to the Public Warehouse Organization.  Is this a matter involving state trading?
Coconut and coconut oil:  allocated to factory operators as an input for their production with/without historical
imports.  Are such operators required to make local purchases or can they produce on the basis of imports
only?
Raw silk:  the sub-quota is allocated to "any juristic person having production plans on silk fabric or raw silk
import arrangement" – Is the production plan subject to government approval?  Does it imply local purchases?
What is the meaning of "import arrangement"?
Soya bean oil:  allocated to "any juristic person whic h is a member of Thai Food Processors' Association" -
What are the conditions for membership, e.g., is local purchasing a condition screened by the Government?
Are all members entitled to equal shares, on a first-come, first-served basis?
United States   G/AG/N/USA/15   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
EC - The allocation of refined sugar to Mexico does
not include NAFTA access for 25,000 tonnes refinedsugar while for the allocation to Canada no suchindication is made.  Does the allocation to Canada
include access of refined sugar under NAFTA?Canada does not have NAFTA access for refined
sugar.  Hence, Canada's entire allocation isapportioned from the 25,000 metric tonnes m.f.n.
access.
EC - What then is the criterion used for the allocation,
taking into consideration th e fact that there is no
allocation for Canada included in the US Schedule?Undertook to provide an answer.G/AG/R/15
Page 27
Table MA:2 Notifications
Canada   G/AG/N/CAN/21   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
EC - In several cases the in-quota imports exceed the
quota quantities.  Where imports under preferentialarrangements have been included, could Canadaprovide data for in-quota imports excluding
preferential imports?All but five of Canada's 21 tariff quotas are allocated
on a global basis. The exceptions are powderedbuttermilk (exclusively allocated to New Zealand),concentrated and condensed milk (exclusivelyallocated to Australia) and beef and veal, butter andcheese, which are partially allocated to supplying
countries.  Supplementary permits, which do not
carry a supplying country restriction, may also begranted.  As a result, New Zealand supplied the bulkof imports of powdered buttermilk, with a smallamount sourced from the United States.  In the caseof imports of concentrated and condensed milk,
imports from MFN suppliers amounted to 2.35
tonnes, while other imports were from the UnitedStates and Australia.
Imports within all of Canada's tariff quotas are
subject to the applicable tariff treatment depending
on the origin of imports.  These may be MFN ratesor the rates applicable to the United States, Mexico,Australia, New Zealand, Chile, Israel or to certaindeveloping country suppliers under Canada'sGeneral Preferential Tariff (GPT).
Out of the 14 tariff quotas notified for the calendar
year 1997, ten were overfilled.  In 1997, all importsunder the tariff quotas for broiler hatching eggs andchicks, chicken, turkey, eggs and egg products andthe basket category known as "other dairy"
(allocated on a global basis) were from the United
States, at the tariff applicable under NAFTA.Imports under the tariff quota for ice-cream fromMFN suppliers amounted to 8.8 tonnes while otherimports were from the United States and countries
receiving GPT treatment. Imports of beef and veal
under the tariff quota were duty free from allsuppliers. The tariff quota for cheese isallocated 66 per cent to the EU-15, and 34 per centto other suppliers on a global basis.  The bulk ofimports (16,918.614 tonnes) were from suppliers at
MFN rates. The remainder was imported from
Australia, New Zealand and the United States.
Follow-up question from EC/Switzerland: Thecounting of preferential imports against bound WTOmarket access opportunities is debatable and remainsan open question, especially if no mention is made inthe country's Schedule .  In addition, since New
Zealand and Australia are not in a free trade or custom
union with Canada, what is the basis for applyingpreferential rates to imports originating in thesecountries?Annex A relating to paragraph 2 (a) of Article I of
the GATT 1994 provides for the continuation ofcertain preferences between the territories listed,
among them, Canada, Australia and New Zealand.G/AG/R/15
Page 28
Canada   G/AG/N/CAN/21   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
EC/Japan - No information is provided on in-quota
imports as regards fluid milk, whereas in last year's
notification, (G/AG/N/CAN/14) concrete numbers
were mentioned (64,500 tonnes).  According tofootnote 2 imports of fluid milk by consumers are notcounted.  On which basis have imports under this
quota been established?Canada administers this quota so as to provide
unrestricted access for fluid milk, subject to the
terms and conditions existing in the base period and
noted in its Schedule V. G/AG/N/CAN/1 providesfurther information on these.  Since these terms andconditions provide the same opportunities as existedbefore, and imports are neither restricted norcounted, Canada believes it is more appropriate to
report imports as N.A. rather than giving a specific
number.
Japan - The quantity of in-quota imports of margarinehas been extremely small compared to the tariff quotaquantity. Could Canada explain the reason for the low
quota fill?There is very little demand for import permits, since
the Canadian industry is very competitive.  Permitsare issued on a first-come, first-served basis, and all
requests for permits have been met.
Costa Rica   G/AG/N/CRI/3   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Canada/EC/New Zealand  - Does Costa Rica consider
that its method of tariff quota administration has
contributed materially to the low rates of fill?  If so,has Costa Rica considered changing that method?Costa Rica does not consider that its method of tariff
quota administration has contributed to the low fill
rates. The method applied is transparent, flexible andeffective.  The low volume of imports merelyreflects the lack of commercial interest shown by theprivate sector in importing the products concerned.Therefore, Costa Rica has not considered changing
nor revising the currently applied system, which
provides ample opportunities to any natural or legalperson wishing to import tariff quota products.
Canada/New Zealand - Could Costa Rica share itsexperience with the Committee as to how the
administrative method has worked in practice?No major problem has been encountered with the
practical operation of the tariff quota administrationsystem.  The low level of tariff quota utilization forsome products resulted from other factors or
circumstances that are not inherent to the system per
se (G/LIC/N/3/CRI/2 refers).
Canada - Some discrepancies seem to appear between
the information contained in the MA:2 notification
and Costa Rica’s Schedule.Costa Rica has not found discrepancies, other than
those required by the transposition to the 1996Harmonized System.  Costa Rica offered to pursuethis matter on a bilateral basis should more details be
sought.
Canada - Request concerning import data for all of the
products for which Costa Rica has tariff rate quotacommitments, and not only for those where the tariffrate quota has been implemented.See Attachment 1 hereto which contains a statistical
table indicating the level of imports in 1997 undereach specific tariff line; in- and out-of-quota valuesand volumes; and exporting country.  Data covering
the years 1995 and 1996 is expected to be available.
EC - Could Costa Rica provide the level of  dutiesapplied to those tariff headings which were not
notified because the quotas were not opened (i.e.  forthose products  subject to an import tariff which wasequal to or lower than the bound in-quota tariff)?See Attachment 2 hereto.G/AG/R/15
Page 29
Costa Rica   G/AG/N/CRI/3   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
EC - The WTO  Schedule of Costa Rica lists three
separate quotas for different products under heading
0402, namely evaporated milk (0402 91 10),
condensed milk (0402 99 10) and other products ofheading 0402.  The notification shows only one quotafor products of heading 0402.  Does this quota also
include evaporated and condensed milk?No, these are not included, since the applied rate is
below the bound in-quota tariff rates.
New Zealand  - Why are imports under many of the
tariff quotas zero?  Is the "Commodity Exchange"
tariff quota allocation system, notified by Costa Rica
in its MA:1 notification, still operational, and whateffect is it having on imports?No major impact has been observed so far, for those
product categories that are subject to tariff quotas.
Domestic producers were able to satisfy market
needs which explains why no recourse was made toimportation.
United States - Clarification sought regarding (a) lowfill rates registered for certain dairy products and (b)lack of imports for poultry and "other dairy products"
category.
United States - When does Costa Rica intend to open
tariff quotas for those tariff headings which were not
included in Table MA:2?Reference is made to the Committee meeting held in
September 1997, which puts on record the answerprovided by Costa Rica to the United States,
regarding the dates on which tariff quotas were
opened.  These are open to any interested importer.At the beginning of each year, the opening of thetariff quotas is notified through a national journal ofbroad circulation, thus allowing any interested partyto participate. The applied rates for those tariff
headings which were not included in Table MA:2
are lower than the bound in-quota tariffs, whichrenders the implementation of tariff quotas for theconcerned products pointless.  These tariffs are not
expected to increase in the next few years.
Czech Republic   G/AG/N/CZE/15   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Argentina - Which tariff treatment did out-of quota
imports receive?All imports over the tariff-quota in 1997 were
imported at a preferential rate, except imports of ice-
cream and meat of poultry which were imported at
MFN rates.
Australia - Has the Czech Republic considered a lowerin-quota tariff rate or simply an applied tariff rate forproducts where there have been low fill rates (e.g. liveanimals, milk and cream, starches, rapeseed and oil,
and margarine)?The Czech Republic is not of the opinion that a
lowering of in-quota tariffs would contribute to animprovement in quota fill due to conditionsprevailing on the domestic market.  Thus, the Czech
Republic has not considered to apply lower in-quota
rates.G/AG/R/15
Page 30
Czech Republic   G/AG/N/CZE/15   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Canada/New Zealand  - Please explain why fill rates
for some tariff quota products, such as swine and
pork, and potatoes, decreased substantially in 1997
compared to the previous year, and why a significantnumber of tariff quotas have not been filled (inparticular, for milk and cream products, live bovine
animals, bovine meat and  butter)?No restrictive measures which might constitute trade
barriers against in-quota imports are applied.
Reasons for under-filling are related to market
conditions and other factors, including budgetaryrestrictions adopted by the Czech Government lastyear.  Among the depressing factors, wages andsalaries in the public sector were frozen, causing adecrease in internal demand. During the same period
Czech companies became increasingly competitive.
A phytosanitary measure was adopted, aimed atprotecting the domestic production of potatoesagainst quarantine diseases ( Clavibacter
michiganensis  and Ralstonia solanacearum ). This
measure has recently been addressed in the
framework of the SPS Committee.
Hungary   G/AG/N/HUN/12   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia/Brazil/Canada/New Zealand - Low rates of
tariff quota fill were again reported on many productssuch as milk and cream, yoghurt and kephir, cheese,butter, tomatoes, citrus fruits, grapes, jams, fruits andjellies, frozen vegetables and other preserved fruits,
mineral water, vermouth, poultry meat, sugar ("other
sugars and sugar confectionery"), beer, wine andchampagne, non-manufactured tobacco, driedleguminous vegetables and maize.  There has been apersistent decline over the last three years.  What are
the underlying reasons?Hungary expressed its surprise concerning the fact
that most of the questions received in connectionwith the low quota fill rates and their assumed linkwith the perceived shortcomings of the tariff quotaadministration system seemed to ignore the facts.
Some of the answers could have been easily found in
the Hungarian Schedule and others were obviousgiven the natural endowments conferring Hungary aclear competitive edge in producing a wide range of
temperate-zone agricultural products.
Fill rates of 75 per cent for apples and pears and 84per cent for butter are far from being low.  Equally,
fill rates for frozen vegetables, other preserved fruitsand dried leguminous vegetables were not lowduring the last three consecutive years (93, 72, 59,92, 93, 62, 61, 68, and 31 per cent). For at least six
products, the differences between the MFN tariff
rates and the in-quota rates are minor, which mayalso be another reason for the low in-quota fill rates.In fact, the applied MFN tariff rates for a wide rangeof agricultural products allow out-of-quota importsto take place in considerable quantities, competing
directly with domestic production. The simple
average of applied agricultural tariffs is about 37 percent, which, by international comparison, is not abad record.
Product In-quota rate % MFN rate %
Honey 30 34
Citrus fruit 35 30
Eggs 35 41.7
Sugar beet 30 32.3
Mineral water 15 20
Sugar confectionery 70 74G/AG/R/15
Page 31
Hungary   G/AG/N/HUN/12   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
For most of the tariff lines falling under the sugar
confectionery quota, the MFN tariff rates were set
last year at 65.6 pert cent, below the in-quota rate of
70 per cent. For beer, citrus fruits, sour cream andyoghurt, vermouth, grapes, other sugars, andunmanufactured tobacco the quantity of preferentialaccess under the terms of our free trade agreementsequals or significantly exceeds the tariff quota
quantities. Cereals (wheat, maize), fresh and
processed fruits and vegetables, poultry meat, honey,and wine are internationally competitive and majorimports of such products are not expected.Compared to 1996, there was a drop in the overallimports of grapes, jams, vermouth, cheese, eggs,
honey, fruits provisionally preserved, wheat, barley,
maize, sugar beet, beer, wine and tobacco.  It isworth remembering that the tariff quotas for dairyproducts were established as minimum accessquotas, which points to the fact that, in the base
period, no significant imports were taking place,
which does not necessarily mean that the importrégime was to be blamed.  Minimum access is anopportunity, conceived to allow imports which wereprevented from taking place previously by theimport régime and not by the competitiveness of
domestic producers.
Follow-up question from Australia/New Zealand:  If
traders, who are by definition seeking to pay thelowest possible amount of duty, are willing to foregothe difference, albeit a small one, between the appliedin- and out-of-quota rates, the opportunity costimposed by the tariff quota administration system
currently in place must be indeed even higher.  In light
of this, is Hungary prep ared to reconsider its
administration system or, alternatively, move to a
tariff-only régime?In light of the above detailed explanations,  Hungary
could not agree with Australia that low rates of tariffquota fill on many products, registered over the lastthree years, have been a problem in terms of eitherthe letter or spirit of the Agreement on Agriculture.Consequently, Hungary does not intend to eliminate
the concerned tariff quotas or reconsider its tariff
quota administration system.  As to the smalldifferences between the applied in- and out-of-quotarates, from the perspective of an actual importer inthe Hungarian context, when deciding at which tariff
rate to import, the basic question is whether the
profit rates to be realized are significantly affectedby the size of such tariff differences or not.
Canada - Will Hungary provide import data for all ofthe products for which it has tariff rate quotacommitments, and not only for those where the tariff
rate quota has been implemented?In 1997 H ungary imported 1,290 tonnes of cereal
grains; 16,714 tonnes of animal or vegetable fats and
oils; and 1,626 tonnes of pepper.G/AG/R/15
Page 32
Slovak Republic   G/AG/N/SVK/11   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia  - Has the Slovak Republic considered
applying a lower in-quota tariff rate or simply having
an applied tariff rate for tariff quota products where
there have been low fill rates?Having regard of seasonal production of some
agricultural products which are subject to tariff
quota, the Slovak Republic is not proposing to
reduce in-quota tariff rates in this period.
Australia - What was the reason for the large drop inquota fill for potatoes in 1997?This was mainly due to the surplus of potatoes from
domestic production accompanied by a decrease inprices.  More stringent phytosanitary regulations onimport of potatoes were also applied, but followingdiscussions with the main trade partners, these
measures have been abolished.
New Zealand - Could the Slovak Republic please
explain why there have been low volumes of importsof products under tariff quotas?  For example, thepercentage fill rate for meat of bovine animals was 32
per cent, for milk and cream 15 per cent, for butter 44
per cent, and for margarine 28 per cent.Low volumes of imports of these items correspond
to production surpluses for the respectivecommodities.  Prices also declined, andconsequently had a negative impact on potential
imports.  These domestic commodities were
exported.  Concerning in-quota figures on above-mentioned items, the imports reported under thetariff quota do not include imports from the CzechRepublic within the Customs Union.  Imports fromthe Czech Republic exceeded even the annual tariff
quota, e.g. in margarine by four times and in milk
powder by almost three times.
United States   G/AG/N/USA/16   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Canada - There is a discrepancy between the tariff
quota amount contained in Schedule XX of the UnitedStates and that indicated in Column 3 for butter
oil/substitutes.The figure (5,420,500 kg.) reported in the
notification G/AG/N/USA/16 as being the tariffquantity for butter oil/substitutes is incorrect andshould be changed to read:  4,520.500 kg. A
corrigendum will be submitted to the Committee.
EC/New Zealand - Could the US explain the underutilisation of the quotas for lowfat chocolate crumb,
ice cream and cheese? What steps is the US taking toensure that these tariff quotas are fully utilised?Market access opportunities for low fat chocolate
crumb, ice-cream and cheese were opened.  Since
there are no restrictive measures in place preventingimports, market conditions such as increasedavailability and low prices may have discouragedforeign suppliers, hence the underfill in the
respective tariff quotas.
EC - Why are in-quota imports from Israel listed in
the addendum to the Notification?  Under whichregime are they imported and what is their relationshipwith the WTO commitments undertaken by the United
States?Implementation of the tariff rate quotas under the
US/Israel Agreement on trade in AgriculturalProducts became effective on 4 December 1996.The tariff quotas established under the Agreementare in addition to the US Uruguay Round tariff ratequota commitments.  The US notified imports under
this Agreement in a spirit of transparency.G/AG/R/15
Page 33
Tables MA:3 to MA:5 Notifications
European Communities    G/AG/N/EEC/10   Volume-Based Special Safeguard (Table MA:3)
Points raised by other Member s Response by Notifying Member
Australia - Could the EC clarify whether any products
paid additional duty under the price-based specialsafeguard that was made operational for a range ofproducts in 1996/97?A price-based SSG is in operation in the sugar and
poultry sectors. Additional duties have beencollected in the poultry sector.  Communitylegislation provides that additional duties may becollected in accordance with Article 5 of the
Agreement on Agriculture.
Japan/New Zealand  - With respect to price and
volume-based SSG, what does the phrase "has been
made operational" mean?This means that for certain products, the additional
amounts of duty are effectively collected if the price
of the consignment presented for import so justifiesthat collection.
New Zealand - Details sought with regard to the levelof imports affected by the special safeguard, togetherwith information about the extent to which the import
price was below the trigger price and how much
additional duty was levied?No details are available as regards import prices and
additional duties collected.
Japan    G/AG/N/JPN/28   Volume-Based Special Safeguard (Table MA:3)
Points raised by other Member s Response by Notifying Member
New Zealand - What is the total volume on which the
volume-based SSG has been applied for each of theproducts identified in the notification?After the volume-based SSG was invoked, the
volume of imports subject to SSG is as follows:
Inuline, and milk and cream: zero
Condensed milk: 1.35 tonnesG/AG/R/15
Page 34
Table DS:1 Notifications
Brazil   G/AG/N/BRA/10   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada - What is the reporting period?  It is indicated
that the notification is for the crop year 1995-96.However, Supporting Tables DS:5, DS:7 and DS:9indicate a marketing and/or calendar year.The reference period used in the calculation of the
AMS is the crop year (which begins with theplanting of the crop and ends when thecommercialization of the product is completed). Theonly exception is with regard to Supporting TableDS:1, where the calendar year is used since data
from the Federal Budget is on that basis.  In
Supporting Tables 5, 7 and 9, the reference period istherefore also the crop year, and not the marketingand/or calendar year as appears incorrectly under the
respective headings.
Canada - What is the nature of the EGF equalizationpayments for cotton, maize, rice, soyabeans and wheat
that at one time were shown in G/AG/N/BRA/6 butare not shown in G/AG/N/BRA/10?As already explained to Canada during the
November 1997 meeting, the objective of the EGF
equalization payments is to provide for the return tothe market of products that benefitted from the EGFwith guarantee of purchase by the Government. Thisexpenditure does not favour the producer in anyway.  The benefit to the producer occurs when the
EGF is contracted by the minimum price, the
corresponding volume of which is included inSupporting Table DS:5.
Canada - How is the value to producers of financing
through the EGF at interest rates below market rates
accounted for in AMS (e.g., is this type of support
included in the item production and marketing credit
in Supporting Table DS:7)?The difference between interest rates in credits to
production and to commercialization (EGFs) not
object of equalization is accounted for in column 5
(other product specific support).
Canada - The PEP programme appears to provide
support for wheat (Supporting Table DS:7). What is
the purpose of this programme and how does it
operate?  Are other commodities eligible for support
under this programme?The PEP has an objective similar to that of the
minimum price programme and was implemented as
an alternative to this programme in order to reduce
state interference in the commercialization phase.
The Government encourages producers to use
market mechanisms, instead of selling directly to the
Government (AFG) by offering, through public
auctions, a bonus to those interested in purchasing a
pre-set quantity of products directly from the
producers. This bonus is roughly calculated by the
difference between the minimum price of the
product and the internal market price. The situation
in which the Government presents to the producers
the best alternative for selling their products for the
minimum price is thus avoided.  Producers and
buyers are also allowed a greater flexibility in their
negotiations.  PEP involves less cost for the
Government in relation to the traditional operations
of acquisition (AFG), and formation of stocks.  The
programme also allows for a lesser degree of
intervention on the market, because the product is
commercialized as it is harvested.  In 1996, only
wheat benefited from this programme.
Canada/New Zealand  - Request for substantiation of
the de minimis  claim.See Attachment 3 hereto.G/AG/R/15
Page 35
Brazil   G/AG/N/BRA/10   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States - How do the following programmes
listed in Supporting Table DS:1 (Vegetal and animal
production) operate: (1) productivity and quality
programmes (2) improved seed production and
marketing, and (3) social assistance to farm labour.
How do these measures meet the specific criteria of
para 2 of Annex 2?The objectives of the mentioned programmes are
productivity and quality improvement of agricultural
products, putting them in line with current standards
of classification.  The bulk of the expenditures refer
to government inspection and classification of seeds.
Genetic renovation is also sought through the
dissemination of improved genetic material among
small producers. The funds are also used to finance
conferences, training courses for growers; training of
experts in the private sector responsible for seed
production; training of government officials, at
federal and state level, in matters of technology
applied to seeds and to their genetic improvement.
"Social assistance to farm labour" relates to one of
the technical assistance activities pursued by sub-
federal organs, in order to assist vegetal and animal
production.  Since the technical assistance activities
to rural development provided by such organs
include support for social and economic
development to producers and their organizations –
and since the budget for this specific activity cannot
be singled out – this activity had to be included
under the mentioned item (ii).
United States - How does the programme
“mechanization services to low income farmers” meet
the criteria of para 2(d) of Annex 2.Although not specifically falling under para 2(d) of
Annex 2, these activities are compatible with the
general criteria established in the mentioned
paragraph, since the rental contract is on a
commercial basis.  These activities are carried out
through the transfer of funds to municipalities for
the acquisition of farming machinery, which  is
rented to small producers or to communities of small
producers.  This is meant to meet the needs of
producers whose scale of production is incompatible
with investment in machinery.
United States - Could Brazil provide more information
about the operation of the storage and silage system
for distributing agricultural products listed under 1
(vi)?The objective of the programme is to finance the
construction of storehouses and public markets in
rural communities, which in turn are rented to small
producers so that they can store and sell theirproduction directly to consumers.  Public marketsusually benefit the producers of fresh fruits andvegetables, animal products and products processed
by the producers themselves.
United States - What kind of programmes are included
under “social welfare of rural workers,” listed under 1(vii)?  How do these programmes meet the criteriacontained in para 2(g), Annex 2?The item "social welfare of rural workers", has a
more general meaning, for it seeks to provideinfrastructure – such as rural and basic sanitation,housing, electricity reticulation and roads - to therural workers communities.  It is not, in this case,
the more typical "social welfare" programme.G/AG/R/15
Page 36
Brazil   G/AG/N/BRA/10   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States - Based on the description of
programmes listed under 1 (viii), some of these
measures appear to involve direct payments and as
such, would be better classified under structuraladjustment through investment aids (para 11).Although it may have economic effects, the
programme for land reform is at the moment more
concerned with the social implications of land
distribution.  The emphasis given to social aspectsdue to the situation of the "landless" justifies itsclassification under "General Services".  Once thisphase is concluded, its emphasis may become moreeconomic oriented.  When and if this happens, the
programme would be re-classified under another
item, such as "structural adjustment throughinvestment aid", as suggested by the United States.The Federal Government had established as a goalfor its four-year period (which ends this year), the
settlement of 280,000 families.
United States - Which products are purchased under
public stockholding for food security purposes.  Ifprice support is provided for these products, is itaccounted for in the AMS as specified in footnote 5 to
para 3 of Annex 2?Public stocks for food security purposes and for the
distribution of food to the poor are constitutedthrough the Minimum Price Guarantee Policy(MPGP).  As required in footnote 5 of para 3 ofAnnex 2, the purchasing of these stocks is includedin Supporting Table DS:5.  The main objective of
this price support programme is to ensure food
supply. It therefore includes primarily basic foodstaples. The level of these public stocks as at 31 May1996 was 3,066,978.4 tonnes, composed mainly by1,726,601.9 tonnes of rice; 1,083,692.1 of corn;117,750.6 tonnes of manioc product; 89,566.5
tonnes of beans; 38,035.2 tonnes of wheat. These
basic staples corresponded to 99.76 per cent of totalpublic stocks.  The other 7,332.1 tonnes – that is0.24 per cent – were composed of other productssupported by the MPGP. Basic food basketsdistributed by the Official Programme for Food
Distribution (PRODEA) are composed of the
following staples:  10 kg. of rice, 5 kg. of beans, 5kg. of corn meal, 3 kg. of noodles and 2 kg. ofmanioc flour.  There are some regional variations tothis composition.  In 1996, 7,593,875 basic food
baskets were distributed.
United States - Did price support exist for coffee in
1995/96?There was no price support for coffee in 1995/1996.
United States - How was market price support for
cotton calculated in Supporting Table DS:5?As mentioned in the note to that table, the prices for
cotton are presented in US cents per pound, ascommonly used in the stock exchange for cotton
prices.  Since one pound represents 0.45359237 kg.,
the prices mentioned (70.49 US /lb and 56.95US c/lb) are, respectively, US$1,55404/kg. andUS$1,25553/kg. The difference of US$0.29851/kg.or US$298.51/tonne is what should be multiplied bythe eligible production of 136.9 tonnes, which
results in the amount of US$40.9 thousand.G/AG/R/15
Page 37
Brazil   G/AG/N/BRA/10   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States - Does the amount of eligible production
given in column 6, Supporting Table DS:5, represent
total production or the amount that was actually
purchased?The amount of eligible production in column 6
represents only eligible production subject to price
support policy and not the total Brazilian production.
Cuba   G/AG/N/CUB/7   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia - Which criteria under Annex 2 would apply
to "rural promotion and extension services" inSupporting Table DS:1?
Australia - Details sought on "farm mechanization
services": are individual producers the recipients of
the such services?This programme is designed to assist farmers who
are located in rural settlements and mountainregions.  The funds involved are used by theMinistry of Agriculture to create exhibition centresand fair premises in order to promote the genetic
improvement of breeds and high quality seeds, by
bringing together the entrepreneurial sector, farmers'cooperatives and individual agricultural producers.Such funds are also destined to the programmecomponent entitled "mechanization services", which
consists in offering training courses and technical
consultancy services to individual agriculturalproducers as well as to cooperative farmers,consistently with paras 2, (d), (f) and (g) of Annex 2.G/AG/R/15
Page 38
Cyprus   G/AG/N/CYP/3/Rev.1   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United  States - In Supporting Table DS:1, how do the
expenditures listed under "veterinary services (vi)"
differ from those under “pest and disease control
services (ii)"?The expenditures for veterinary services refer only
to animals and sanitary conditions in livestock,
while the expenditures on pest and disease control
services refer only to crops.
United States - Details sought regarding the capitalexpenses for rural development, land consolidationworks, development of livestock areas and zones, and
other infrastructural works for livestock?Details of such expenditures are provided in
Attachment 4 hereto.
United States - How do the programmes for relief
from natural disasters operate?
United States - Eligibility requirements?United States - Conformity with criteria of para 8 of
Annex 2?(a) The crop insurance scheme is a contributory
scheme. The Crop Insurance Organization (CIO),
which operates under the Ministry of Agriculture,Natural Resources and Environment, providesinsurance to farmers for major crops, againstspecific natural calamities.  The CIO conducts
surveys to determine the specific areas affected by
the calamity (in accordance with para 8(a), Annex 2)and assesses the losses incurred on a plot- by-plotbasis.  Farmers are eligible for compensation, in thecase of drought, when their loss in more than 45 percent of the expected production (for other calamities
this percentage differs). They must submit a
production statement for the coming marketing yearand pay their contribution to the scheme.  Thecompensation is paid in order to cover part offarmers' lost income.  It is always below 64 per centof that income according to the criteria set out in
paras 8(b), 8(c), 8(d) and 8(e).
(b) Losses due to natural calamities not covered by
the CIO.  This scheme operates under the
Department of Agriculture. As soon as a natural
disaster occurs, the District Agriculture Officers ofthe Department of Agriculture estimate by personal
inspection, the damages on production, and on the
agricultural structures of the farms affected.Farmers whose losses are higher than 50 per cent ofthe expected production are eligible for assistance.Low interest loans with a grace period of two years
are provided to farmers.  Livestock keepers are
eligible to participate in the scheme when lossesoccur.
United States - Clarification sought regarding thepackage of measures to limit/stabilize dairy and beefproduction (G/AG/N/CYP/2 refers). The payments for
the slaughter of livestock appear to meet Annex 2,
para 10 criteria.  However, it is unclear how recurrentassistance to local edam cheese manufacturers fits intothe domestic support notification, since cheese is aprocessed product.   Do primary dairy producers
benefit from these payments?The criteria in para.10 of Annex 2 refer to the
package as a whole.  However, Cyprus will includerecurrent assistance to local edam cheese
manufactures under AMS as from 1998.  The
measure benefits dairy producers by making surethat there will be no additional need for further cutsin guaranteed quotas.G/AG/R/15
Page 39
Cyprus   G/AG/N/CYP/3/Rev.1   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States - Concerning the wine grapes subsidy
listed under regional assistance programmes, is the per
hectare subsidy payment rate based on a fixed period?
Do producers have to produce wine grapes to receivethe payment?The per hectare subsidy payment rate is determined
on an annual basis.  Wine grapes in Cyprus are
grown in hilly and semi-hilly areas, which are
considered as disadvantageous because of low soilproductivity, resulting in very low farm incomes.Without this type of support, farmers would haveabandoned agriculture and their villages, whosepopulations are already dwindling.  The subsidy has
no effect on the level of production because only
existing vineyards are eligible to receive the subsidy.The vines should be cultivated in order to be eligiblefor the subsidy (new vineyards in Cyprus need
planting authorization).
Cyprus   G/AG/N/CYP/3/Rev. 1   Domestic Support (Table DS:1)
Points raised by other Members at the March 1998
meetingResponse by Notifying Member
Australia  - Clarification sought regarding the
operation of the citrus area subsidy.This was an emergency ad hoc  measure, designed to
compensate citrus growers for income losses due tobad production results during the previous year. It
was terminated on 1 January 1998.
Australia - Conformity with Annex 2 criteria. The subsidy was on a per hectare basis and did not
affect production levels nor international trade
patterns.  The factors taken into consideration to
grant the subsidy include: bad marketing resultsduring the previous year; high production costs;drought and other adverse conditions; diseaseoutbreaks; abandonment of the crops; etc.  Farm
revenues did not cover production costs.
New Zealand - Clarification sought regarding the
footnote in Supporting Table DS:4.This only refers to poultry meat and eggs, both of
which were included in the commitments undertakenby Cyprus, under the product specific equivalentmeasurements of support category.
New Zealand - Additional details sought concerning:"institutional prices", "fixed prices" and "effective
administered price" (market price or equivalent
support may need to be calculated)?Poultry meat and egg market prices are fixed and are
considered to represent th e administered price. The
EU institutional price is used as an external
reference price.  No import prices are availablebecause no imports of these products are realized.The note in Supporting Table DS:8 implies that afixed market price for poultry meat and eggs existedin 1996, but that the EU  institutional price was
abolished.  The 1994/95 EU institutional price was
therefore used as a reference in order to calculate thelevel of support.G/AG/R/15
Page 40
European Communities    G/AG/N/EEC/12 (and Corr.1)   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
General
Canada - The EC notification refers to commitments
in Schedule CXL for the EU-15.  The commitments
for Sweden, Finland and Austria were previously
separate and expressed in their local currencies.Could the EC provide exchange rates and other detailson how the base commitments for the enlarged EC
were arrived at?Following the conclusions of negotiations under
Article XXIV:6, the EC aggregated the base total
AMS from Austria, Finland and Sweden with that of
the EC-12. The average annual exchange rate in the1991-93 period was used.
Canada - Do reported expenditures refer to thoseincurred by the European Commission only or do they
also include those incurred by member State
governments that are not totally or partially funded bythe EC?  If reported support is only that of the EC, canthe EC confirm that there is no expenditure on the partof any member State government that counts as
“domestic support measures in favour of agricultural
producers” (Article 6, para 1)?The notification covers expenditures of both the EC
and its member States.
Follow-up question from Venezuela  - would
appreciate if the terminology used by the EC in their
notification could be clarified, in particular with
regard to such definitions as "price support"; "guide
price", "minimum price", etc.Definitions will be provided in writing.
EEC/12:  Supporting Table DS:4
Brazil - Confirmation sought that no domestic support
was provided for poultry meat during the 1995/96period.No AMS support was available for the poultry sector
during that period.
Canada - Confirmation sought that market pricesupport was no longer provided in 1995-96 to thesheepmeat sector (a change from what was reported
for 1986-88).  What change in policy accounts for
this?The reform of the sheepmeat sector in 1989 ended
the use of intervention buying as a market supportmechanism. Support to farmers now takes the form
of a premium paid per ewe within the limits of
individual quotas, calculated on the basis of thedifference between the market price and the basicprice which has been fixed by the Council.
Australia/Canada/New Zealand - The EC has countedthe negative support for durum wheat as “0”.  If this is
the case, why is the figure for product-specific support
for durum wheat not also listed as "0" in SupportingTable DS:5?The current total AMS was not reduced by the
inclusion of negative support figures and only
includes the figures that are above the de minimis
level.  The support price for durum wheat thereforecounts as "0".
Canada/New Zealand - What are the total productionfigures for “common wheat, maize, barley, rye,triticale, grain sorghum”; and “pigmeat”, both of
which are claimed as de minimis ?In 1995, the EC-15 production value for cereals is
18.688 Mio ECU; for pigmeat, it is 23.291 MioECU.
Apart from that, Portuguese producers can apply for
direct aid for each ton of cereals sold on the market.It has not been possible to provide more informationon this.  It might be more appropriate, in futurenotifications, to include this type of aid under non-
product specific support (Supporting Table DS: 9).G/AG/R/15
Page 41
European Communities    G/AG/N/EEC/12 (and Corr.1)   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Japan - Non-product-specific AMS is 776.68 million
ECU according to Supporting Table DS:9, but
according to Supporting Table DS:4 the figure is 57.5
million ECU.  Please explain this discrepancy.The non-product-specific AMS shown in Supporting
Table DS:4, page. 11, should read: 776.68 Mio
ECU.  A corrigendum will be issued shortly.
EEC/12:  Supporting Table DS:6
Brazil  - What is the difference between the measures
"premium" and "conversion premium" used fortobacco?Since the 1993 harvest, premiums have been paid to
help raise growers' incomes and at the same timegear production to market requirements and permitdisposal of the tobacco grown in the EC.  A specialconversion premium is granted in the framework of
a three-year programme, in particular for conversion
to certain varieties.
Brazil - Total AMS for sugar adds up to almost 6billion ECU, provided basically through price supportsystems.  There were, however, direct payments ofabout 217.2 million ECU under "national aid".  How
does this programme work?The EC basic regulation for sugar foresees the
possibility for a few member States facingparticularly difficult conditions for the cultivation ofsugar, or other specific problems, to grant national
aid within specified limits.
EEC/12:  Supporting Table DS:8
Brazil - Footnote 6 explains that Greece had a reduced
guide price as a result of the maximum guaranteedquantity (MGQ) having been exceeded.  What methodused for the calculation of this quantity and does itvary according to the member State concerned and/or
according to the year?The cotton régime includes a guide price and a
production aid per ton for raw cotton.  Before eachmarketing year, the Commission lays down a MGQ.If the MGQ is exceeded, the guide price will bereduced, meaning that there can be a differentiation
between member States.  In 1995/96, the
Commission reduced the guide price for Greece as ithad exceeded its MGQ.  The guide price for theother producing countries was not adjusted.
Japan - Why are the support figures for courgettes andfigs for processing shown as "n.a.".  Will these figures
be provided in the near future?These figures will be provided in the near future.
EEC/12:  Supporting Table DS:9
Canada - What are the sources and references for the
estimation of support under each of the listed
measures (i.e., fertilizer subsidies, insurance subsidies,interest concessions?The data compiled in this table was communicated
by member States in relation to national aids under
the EEC Treaty.G/AG/R/15
Page 42
European Communities    G/AG/N/EEC/12 (and Corr.1)   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
EEC/12:  Green Box
Canada - Are all EAGGF - Guidance expenditures
(notified in G/SCM/N/16/EEC) under Council
Regulations 2081/93, 2082/93, and 2085/93 included
under the Green Box category?All EAGGF expenditures are included in the green
box category.
Canada - There has been a significant increase in
Green Box support between 1986-88 EC-12 and
1995/96 EU-15.  Please explain how much of the
increase results from the accession process; from
increases in support levels under existing
programmes; from the introduction of new
programmes.The total green measures increased from 10 billion
ECU in 1988 to 18.7 billion ECU in 1995.  During
that time, the EC was enlarged by three new member
states.  The green aid in those countries in 1995 was
3.6 billion ECU.  The investment aid programme is
part of the EC structural funds.  Payments under the
structural fund increased from 14.8 billion ECU in
1994 to 21.2 billion ECU in  1995.  It should be
noted, however, that structural funds also cover aid
granted to activities outside the agricultural sector.
General Services
Switzerland  - The EC notifies an amount of 132,9 Mio
ECU for expenses related to "livestock inspectionservices;  quality control;  remunerating and trainingof inspectors".  Please identify and describe the types
of inspection and quality control services included.The expenses consists of normal costs for on-farm
pest disease control (e.g., animal vaccination); andcosts incurred by public institutions for the controlof quality and safety of food and agricultural inputs.Costs relating to environmental quality control (e.g.,
new disposal regulations) are also covered.
Switzerland - Are all expenses relating to the sanitarycontrol of livestock covered by the present
notification, including those mandated and performedby national or regional authorities?The notification covers expenditures mandated and
performed by national or regional authorities.
New Zealand - “Aid to encourage establishment of
producer groups and ease administrative overheads”:How does support in this area meet green box criteria
(in particular, that  the measures have “no, or at most
minimal, trade-distorting effects on production” andthat they not be “expenditures for unspecifiedpurposes that could be used by sellers to reduce their
selling price” (Annex 2, paragraph 2(f))?The aids in question may be granted for a limited
period of time to encourage the formation ofproducer groups and facilitate their administrative
operation.  This aid is limited to a certain percentage
of the actual formation and operation expenses ofthe producer groups.
No further details are available at this time regarding
the expenditures under this heading.
New Zealand - “protection of geographical
indications”:  How much money has been spent onthis assistance? How does support in this area meetthe Green Box criteria?This programme consists in a global communication
campaign designed to promote the protection ofdesignations of origin and certain geographicalindications.G/AG/R/15
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European Communities    G/AG/N/EEC/12 (and Corr.1)   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Brazil/New Zealand/United States - The EC has
claimed “other farm services” as Green Box measures.
Please describe these measures.The support measures are provided through public
governmental programmes and are designed to
create incentives for the setting up of three kinds of
services:  (a) creation of farmers' groups; (b)creation of farm relief services (which foreseereplacements of farmers in case of disease, death,etc., and do not involve direct payments); and (c)creation and stepping up of farm management
services (individual technical, economic, financial or
administrative assistance to farmers).  These serviceswill contribute to a more rational production mainlythrough the joint use of agricultural means ofproduction, and improve the living conditions offarmers (principally through the operation of group
holdings).
Brazil/New Zealand/United States - Do these
measures involve direct payments?For all the three types of services described above,
the support is only given as a contribution to the
operating costs in the setting up period of the
service. No price support to producers or processors
is involved.
Brazil/New Zealand/United States - Eligibility criteria
and conformity with Annex 2 criteriaEligible farmers' groups must have as their objective
mutual aid between holdings, including:  the joint
use of new technologies; projects for safeguarding
the environment and preserving the countryside; and
the introduction of alternative farming practices.
Domestic food aid
New Zealand/United States - Are commoditiesdistributed under the listed programmes purchased at
market prices as required by para 4 of Annex 2?Indications on this type of aid were provided under
this heading simply for transparency purposes. In
fact, the related expenditures are already capturedunder EC's reporting on its AMS commitments.
Decoupled income support
United States - Information sought regarding theprogrammes listed as Transitional aid to agriculturalincome.
United States - How do they meet the criteria of
para 6, Annex 2?
United States - Do the agricultural producers have to
engage in production in order to be eligible to receive
such payments?These transitional aids relate to payments, granted
over a period of 5 years (ending in 1999) toproducers in the three new member States to offset
the price and support differences existing with other
EC member States. The amount of the aid iscalculated taking into consideration price supportmeasures as well as the aid granted in relation tosurface areas, and to the quantities produced in abase period, or to the production unit.  These
payments are granted in the form of headage or area
payments and are degressive.  They are not linked toa particular type of production.G/AG/R/15
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European Communities    G/AG/N/EEC/12 (and Corr.1)   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada/Switzerland/Thailand/United States - How
does the Agri-Monetary aid programme operate?Article 8 of Council Regulation 3813/92 provides
that member States may for three years grant
farmers compensatory aid when the average
agricultural conversion rate (ACR) over the previous12 months is lower than the average ACR over the12 months preceding that period.  The Councilestablishes the maximum amounts which can begranted for each instalment of the aid.  The
provisions of this Regulation were extended by
another Council Regulation in 1995. For cases ofsignificant reduction in the ACRs between June1995 and January 1996, according to theseprovisions some member States were authorized togrant an aid in three successive parts lasting 12
months each.
Canada/Switzerland/Thailand/United States -
Eligibility criteria. How does the programme alsomeet the policy-specific criteria of para 6, Annex 2,including that in para (a) relating to a defined andfixed base period? In particular, does Council
Regulation 3813/92 s uggest a rolling, not fixed, base
period?Aid is to be granted only to farmers.  It cannot
exceed a specified amount for the member Statesconcerned.  The aid should be reduced by at least athird for each 12 month period.  The aid must not belinked to production made after the introduction of
the aid, nor can it favour any particular type of
production or be dependent on productionsubsequent to its introduction.
Canada - Can the EC provide a breakdown of support
allocated under this programme?The EC has listed in Supporting Table DS:1 that
Decoupled Income Support amounted to 225 MioECU, paid under Council Regulation 3813/92 as
agri-monetary aid.
Payment for relief from natural disasters
Brazil - Does this programme include only olive grove
planters or does it include other crops?Other crops are included.  The payments of the olive
oil sector were just given as an example.
Structural adjustment assistance through resource retirement programmes
Brazil  - Do these programmes have environmental
purposes?  What criteria are used for the definition ofsuch purposes and what are the products involved?These programmes are applied to set-aside of
agricultural land.  Another set-aside scheme isestablished to assist sectors to adjust to marketrequirements.  In general, "green planting" is
allowed to protect the land against erosion (arable
crops are not permitted).
Canada - Annex 2, para 10 (b) states that payments areconditional upon the retirement of land for a minimumof three years.  What are the retirement time-frame
requirements that are being applied?The minimum set-aside period foreseen under this
programme is 5 years.  The long-term set-aside ismade for environment-related reasons, such as the
establishment of biotope reserves or national parks.
Structural adjustment assistance through investment aids
Australia/Brazil/Canada/United States - More than
one-third of EC Green Box payments in 1995-96 fall
under this heading, even though base period data in
G/AG/AGST/EEC seems to indicate nil supportprovided under this category (the measure is listed butno support amount is shown).   What accounts for thehuge increase in such support?  What is the amount of
support provided under each of the measures listed?Base period data does not indicate a nil support.
Expenditures on investment aid were not specified
during the base period but were included in the total
amount indicated for green expenditures.G/AG/R/15
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European Communities    G/AG/N/EEC/12 (and Corr.1)   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia/Brazil/Canada/United States - Structure of
investment aid programmesThere are currently two types of investment aids to
adjust agricultural structures:
-aids to improve processing and marketing of
agricultural products, (Type A). These are usuallystructured according to production sectors (meat,cereals, fruit and vegetables);  and
-aids to adjust agricultural holdings (Type B).
Information on this type of programme is not readilyavailable at the moment because its implementationvaries widely between, and within, EC member
States.
Australia/Brazil/Canada/United States - Eligibilitycriteria.  In particular, how do subsidies and interest
concessions granted for farm modernizationprogrammes meet the criteria of Annex 2, para 11(eligibility criteria applied to individual producers)?Type A: details will be provided at a later stage.
Type B: Minimum eligibility conditions for
applicants to the scheme are established at the EClevel.  These apply to full time farmers (at least 25per cent of income must come from farming and 50per cent must be derived from farming and other
related activities) who have adequate occupational
skills and competence.  Applicants must submit a"Material Improvement Plan" (MIP), showing that:the investments are justified with regard to thesituation of the holding and its economic position;the implementation of the plan will bring about a
lasting improvement of that situation.  There are
strict provisions relating to: the need to keepsimplified accounts; income, which must besignificantly lower than reference income that is setfor the member State in question.  Payments relatedto the purchase of animals (pigs, poultry, calves,
etc.) are excluded, although they are available in the
case of a first acquisition.
Australia/Brazil/Canada/United States - Structuraldisadvantage being addressed and how compensation
is calculated (Annex 2, para 11 (f)) ?Details will be provided at a later stage.
Australia/Brazil/Canada/United States - Time period
foreseen for the realization of the investment (Annex2, para 11(d))Programming for the objective of adaptation of
agricultural structure is at present done for a periodof five years (1994-1999).   However, this does notmean that there is a continuous flow of investmentsupport to an individual farmer.  In a time-period ofsix years, only three MIPs may be submitted by an
individual farmer.G/AG/R/15
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European Communities    G/AG/N/EEC/12 (and Corr.1)   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Brazil - Why is "aid for young farmers" singled out?
Is a time-limit foreseen for the programme?In the case of young farmers, two support schemes
have to be differentiated: (a) setting-up aid for
young farmers who become head of a holding for the
first time to facilitate their installation in the form ofa single premium and/or interest subsidy; (b)additional aid for investments for young farmers,which follows the general rules for investment aidbut foresees a higher aid intensity than usual (up to
25 per cent) to facilitate the structural adjustment of
the holding also after the installation.
Environmental programmes
Canada - How does the EC ensure that:  (a) paymentsprovided for the “support and protection of organicproduction by creating conditions of fair competition”are “limited to the extra costs or loss of income
involved in complying with the government
programme”Provisions relating to support and protection of
organic production in the EC are laid down in aCouncil Regulation setting up a framework for thelabelling, production and control of agricultural
products bearing or intend ed to bear indications
referring to organic production methods.  To ensurefair competition, the regulation lays down minimumrequirements which must be complied with byfarmers in order to be authorized to use a labelindicating production according to organic methods.
Under this Regulation, no payment is foreseen to
compensate farmers for turning to organic farmingproduction .  Payments for organic farming are in
fact made as aid for environmental purposes andrelated provisions are laid down in EC RegulationNo. 2078/92.  The objective of the Regulation is the
promotion of agricultural production methods
compatible with environmental protection objectivesand the maintenance of the countryside andlandscape (upkeep of habitats or upkeep of
traditional orchards, riverbanks, etc.)
Canada - Are the specific conditions imposed under
the government environmental or conservation
programmes fulfilled as required in Annex 2, para 12?The environmental schemes drawn up by member
States are subject to approval by the Commission
and their implementation is monitored by the
competent authorities in the member States and bythe Commission services.G/AG/R/15
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European Communities    G/AG/N/EEC/12 (and Corr.1)   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Canada - Eligibility criteria Member States have to draw up specific schemes for
zones with at least a five-year programme which
must contain a definition of geographical areas, a
description of the proposed objectives, and ajustification, including an indication of theCommunity environment legislation, the conditionsfor the grant of aid, and the amount of aid (and lossof income) on the basis of which the undertaking by
the beneficiary will be made.  These schemes
provide aid for farmers who undertake:  to reducesubstantially the use of fertilizers and/or other plantprotection products; or to maintain reductionsalready made; or to introduce or continue organicfarming; or to change to more extensive forms of
crops, including forage production;  or to maintain
extensive production methods;  or to convert arableland into grassland; or to use other farming practicescompatible with the requirements of environmentalprotection; or to set-aside farmland for 20 years and
use it for environment-related purposes (national
parks, biotope reserves, leisure activities, etc.)
Argentina - Follow-up remark:  Expressed the view that  measures under this heading are not "green". Even
though organic production lessens the demands placed on the environment, these measures still promote
agricultural production levels.  In this sense, the EC environmental programme does not match the general
requirements of Annex 2.  This issue could be pursued within the framework of the AIE process.
Regional assistance programmes
Canada - What are the “specific measures” being
referred to?These programmes relate to remote or island regions
of the Community.   There are some possibilities of
aid being granted for locally produced products.
Canada - Descriptions of the measures listed in the
notificationIt is not possible to provide information on support
for each individual measure.
Canada - Breakdown of the total support allocated"for the benefit of Less Favoured Areas"It is not possible to provide information on support
for each individual measure.
Canada - How do “compensatory allowances in Less
Favoured Areas, paid per hectare or per livestock
unit” meet the requirement that payments not berelated to the volume of production since CouncilRegulation 2328/91, Art. 19, stipulates that paymentsmust not be less than a certain amount per livestockunit and, for livestock farms, “shall be calculated in
relation to livestock numbers?The support can be made either in relation to the
headage payments in the case of cattle, sheep, goats
or equine animals, or else as per hectare payments.A number of provisions relate to the different typesof payments (compensatory allowances based onstocking density, on availability of co-financing,etc.), the limit of such payments,  the degressive
approach of support, etc.G/AG/R/15
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European Communities    G/AG/N/EEC/12 (and Corr.1)   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
EEC/12:  Blue box
Canada/Switzerland - With regard to “Payments based
on fixed area and yield”, what is the fixed area for
each of the measures reported in Column 2, page 7.
Please provide details with regard to the type andnature of these payments.The new CAP arable crop policy is based on the
following general principles.  The farmers can apply
for hectare aid for cereals, oilseeds, and protein
crops, or set-aside.  This aid is regionalized andfixed per hectare based on past average yields.  Thisaid is fixed to a "base" area, surface for whichfarmers can apply for hectare aid.  In the case ofcommercial producers, there is an obligation to set-
aside a certain percentage of the land, for which the
farmer will get a special compensation.  The basearea for the EC-15  (53.6 Mio hectares - of which3.1 Mio hectares were used as a separate maize basearea) divided in 15 base areas for all EC member
States. For oilseeds, a special commitment in the EC
Schedule sets out a maximum area. Member Statesmay use part of their national base area only formaize.
Japan/Switzerland - Do compensatory payments toproducers cover both the planted area and the set-asidearea?  If this is correct, please explain whether
compensatory payments for set-aside requirements
have been granted to products other than cereals?(According to the notification, compensatorypayments for set-aside requirements have been
granted only to cereals.)Compensatory payments are granted to producers of
cereals, oilseeds and proteins cover both planted and
set-aside areas.
Hungary    G/AG/N/HUN/10 and Corr.1   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States - Based on Hungary’s answer to
questions posed by Canada and New Zealand at the
last Committee meeting, we consider that the
amelioration support programme may fit underenvironmental payments (para. 12) or as a general
service infrastructural programme (para. 2(g)).Hungary believes that this programme fits most
appropriately under the payment type indicated in
the notification.  The general service infrastructural
programme category does not seem to be relevantsince the programme involves direct payments toproducers.  As to the environmental paymentcategory, this option wa s under consideration.
However, not all of the criteria contained in para 12
are met, e.g. every farmer is entitled to benefit fromsuch payments if he carries out the conservationactivities listed in the relevant regulation.  Althoughthis programme meets the basic requirements set outin Annex 2, para 1, the policy-specific criteria
prevent it from being qualified as a green
environmental support programme.  In this context,the issue of adequacy of the green box criteria,raised within the framework of the AIE-process, is
most appropriate.G/AG/R/15
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Hungary    G/AG/N/HUN/10 and Corr.1   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States - Clarification sought concerning market
price support (thro ugh intervention, procurement, or
guaranteed prices) for grains. A 1986-88 average fixed
external reference price should be used in calculatingmarket price support if an applied administered pricewas set for the 1995/96 marketing year.In 1995 a guaranteed price of 9,600 Ft per tonne was
set for maize for feeding purposes and 8,800 Ft per
tonne for wheat for human consumption.  The
maximum quantities that could benefit fromintervention buying were 3.2 tonnes and 2.4 tonnesper hectare respectively.  As stated at the lastmeeting this support programme did not becomeoperational in 1995. US view on the calculation of
market price support noted.
United States - What measures are included under
sowing support to grains in Supporting Table DS:7?Sowing support for grains is provided in the form of
direct payments which cover the cost of purchasingofficially tested seeds, fertilizers, pesticides andgasoline but which may not exceed 2,000 Ft per
hectare.
United States - Please provide the value of production
for each product-specific AMS and the value of totalagricultural production to support the de minimis
claim.All the information requested can be found in
Supporting Table DS:4 of the notification.
Kenya    G/AG/N/KEN/4 and G/AG/N/KEN/5   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia/United States - Details sought on
programmes for the purchase and maintenance of
machinery and equipment and the construction of
livestock handling facilities, dips and crushes; theirconformity with Annex 2 criteria;  and on whetherindividual producers are the recipients of the servicesunder these programmes.  Further details sought on
the nature of the contracted professional services.Since most farmers are small holders, the approach
to agricultural support taken by the Government has
been through the provision of extension services,
pest and disease control, establishment ofinformation networks, enforcement of quarantine,licensing and certification. The Government is in theprocess of commercializing and privatizing livestockhandling facilities. Dips were handed over to Dip
Committees in the respective areas, though some
support was provided to rehabilitate buildings.Users pay a fee at every dipping, the collection fromwhich is used as a revolving fund to sustain futureoperations.
The Government does not purchase and maintain
machinery and equipment except in the case of theKenya Meat Commission (KMC), where thecanning line to process meat was purchased to helpfarmers to market their livestock.  The KMC has
since been targeted for privatization.  Since 1992,
most of the equipment used in processing milk hasbeen taken over by the private sector.  The crushesare used by rural farming communities for generaldisease control and for the provision of artificialinsemination services.  The holding grounds and
available facilities are used for quarantine purposes.
These facilities have now been handed over to userassociations in the respective areas.G/AG/R/15
Page 50
Korea   G/AG/N/KOR/14   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States - Clarifications sought regarding the
nature of two pigmeat support programmes used as an
incentive to increase the slaughter weight of
domestically produced swine, and as a gradingincentive system.The programme in question is entitled "Pigmeat
quality improvement programme".  It was
introduced in 1995 and is still effective.  This
programme has a dual purpose:  improving the levelof quality control (through castration and toxicresidue management);  and standardizing slaughterweights by encouraging farmers to sell their swineas soon as they reach a certain weight.  The
recipients of this programme are required to sign a
contract with pigmeat processing companies and arepaid between 5,000 to 7,000 won per head if targetcriteria are met.
United States - How has this programme impacted on
domestic pork production and exports?Although a systematic analysis of the results of this
programme was not carried out, the proportion of
high quality brand meat in the market was increased.
However, we do not believe that there have beennoticeable effects on the quantity of production andexport, because these were largely affected by otherfactors such as changes in price, production costsand level of demand.  The amount of support under
this programme is less than US$7 or 8 per head,
which is considered to be very small.
United States - Clarification sought regarding thenotification of this programme to the Committee.Total support for pigmeat, including support under
this programme, was classified as being de minimis,
and the  product-specific AMS for pigmeat wasalready notified in the form of other product-specific
support in Korea's notification (Supporting Tables
DS:4 and DS:7).  The amount of support under theprogramme in question is included in the AMS.  Adetailed breakdown of support measures for pigmeatwill be provided in future, in order to avoid
unnecessary confusion.
Pakistan   G/AG/N/PAK/5   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States - What was the rate of inflation in
Pakistan in 1996/97 (July/June)?The inflation rate in 1996-97 (July/June) was 11.80
per cent.
United States - Do the expenditures underinfrastructural services or water supply facilitiesinclude irrigation water subsidies?  Are these
subsidies captured in the AMS calculation?These expenses do not include irrigation water
subsidies and  there is no budgetary provision forsuch subsidies. Water charges do not fully cover theoperation and maintenance costs of irrigation
systems and as such the Government has to forego
certain revenues on that account.   The Governmentof Pakistan, as part of a structural adjustmentprogramme with the World Bank/IMF, has alreadystarted taking measures to enhance the water chargesso as to bring them at par with the operational and
maintenance costs.G/AG/R/15
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Pakistan   G/AG/N/PAK/5   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Follow-up remarks:  United States:  According to Annex 3, revenue foregone is a subsidy that should be
included in the calculation of the AMS:  Switzerland:  The issue of cross- subsidization, from consumers to
agricultural producers, should be considered by the Committee, as far as water and irrigation subsidies are
concerned.
United States - Could Pakistan explain why pricesupport for canola was not included in SupportingTable DS:5?Canola is a new crop introduced recently in
Pakistan.  The farmers are being motivated tocultivate canola and try to adjust it into croppingsystems.  Its acreage and production statistics havenot yet come into regular crop estimates by crop
reporting services.  It will be brought into the
Supporting Table DS:5 in the near future.
United States - Clarification requested on the volumeof eligible production for all of the commodities(except wheat) for which the volume is shown as zero.Procurement or support prices fixed by the
Government are in fact the minimum guaranteedprices and are effective during the post-harvestseasons of the respective crops.  The sale of
marketable surplus at the fixed prices by the
producers is voluntary, as they are under nocompulsion to sell their produce at the support price.The producers only sell their produce to theprocurement agency when the market price fallsbelow the support price level.  Strictly speaking,
support prices are not administered prices.  Hence
the quantity procured by the Government at supportprice is the eligible production for Column 6 ofSupporting Table DS:5. Since there was noprocurement operation during 1996-97 except forwheat crops and sunflower, eligible production was
shown as zero.
United States - Could Pakistan provide the source for
this data and explain how the data was obtained?Data was obtained from the Ministry of Commerce
and the Pakistan Agricultural Services and SupplyCorporation, an autonomous corporation dealing
with procurement.
United States - In Supporting Table DS:9, Pakistanindicates that there were no expenditures for fertilizer
subsidies and agricultural credit subsidies.  Yet reportsindicate that Pakistan provided both of these subsidies
in 1996 and/or 1997.Pakistan has phased out the budgetary subsidy on
fertilizer.  Furthermore, agricultural credit at
concessional rates has also been stopped.  Therefore,the reports referred by the United States are not
based on facts.
United States - Clarification sought on the nature andcalculation of the electricity subsidy in Supporting
Table DS:9.The tariff for electricity provided to agriculture
tubewells is low as compared to electricity provided
to other sectors of the economy, viz. commercial andindustrial sectors.  Weighted average rates of all thefour major sectors of the economy were computed.The difference between the weighted average rateand the rate applied to agriculture tubewells is taken
as a sort of subsidy per kwh. It is then multiplied by
the total consumption of electricity by agriculturetubewells to obtain the final subsidy figure.G/AG/R/15
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Pakistan   G/AG/N/PAK/5   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Argentina/United States - Concern raised with
Pakistan’s decision to subtract a negative wheat AMS
from the total AMS in Supporting Table DS:4.   Does
Pakistan intend to correct its methodology (i.e.exclude negative numbers) in a future AMSnotification to the Committee?The negative value of wheat AMS represents an
implicit tax on wheat producers on the account of
price support.  Hence Pakistan believes it should be
excluded from the Current Total AMS.
Follow-up remark by Argentina: Negative support does not entitle countries to rebalance their entire domestic
support package. This practice could result in  distortions being introduced into the domestic support
disciplines.
Turkey    G/AG/N/TUR/6   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia/United States - Turkey continues to notify
domestic support in US dollars rather than its national
currency. Could Turkey confirm that US dollarscontinue to be used due to high inflation and exchangedevaluation rates, as communicated to the Committeeat its meeting in March 1997?  How was the exchange
rate calculated?Turkey confirmed that inflation was still a problem,
and that this was the reason for using the US$.  The
calculations were made by the Statistics Institute.The exchange rate used was calculated by theCentral Bank.  In this specific case, the exchange
rate was the one calculated for October 1997.
Australia - Could Turkey classify the product-specific
support levels for rye and maize in Supporting TableDS:4?  It appears that there may be a transpositionerror from Supporting Table DS:5.Undertook to submit the required technical
correction.
Australia/Canada/New Zealand - Turkey has notsubmitted a Supporting Table DS:1 on "Green Box"support.  Could Turkey inform the Committee of its
intentions concerning the provision of detailed
information on Green Box programmes?Turkey is currently considering the applicability of
the criteria set out for notification of Green Box
measures in the case of Turkey.
Brazil/Canada/New Zealand/United States - The
domestic support given to beet sugar is shown asbeing above the de minimis  level. Why was sugar not
included in Supporting Table DS:8 and in the overallcalculation of AMS? Would the inclusion of support
to sugar beets in the Current Total AMS raise it above
Turkey’s commitment level?  What steps are foreseento remedy this situation?  What is the meaning of "no
private buyer" in the case of sugar?The only buyer of sugar beet in Turkey is the state-
owned "Turkish Sugar Company" (Türkiye SekerFabrikalari A.S.) which purchases all sugar beet, anddominates sugar refining activities.  In order tocalculate the EMS for sugar beet, a sugar equivalent
was calculated, which raised the value to 55.3 per
cent.  The reason why sugar beet was not included inthe notification is related to the structure of sugarbeet industry in Turkey.  However, for the sake oftransparency, the value calculated on the basis of the
EMS was placed in the "Detailed Calculations
Table".
Brazil/Canada/New Zealand/United States -Clarification sought regarding price support for sugar,sunflower seeds, and hazelnuts in 1997 and the non-inclusion of these commodities in the Current Total
AMS calculations.These products were not purchased at administered
prices.  Since the economic crisis of 1994, in linewith Government decisions, only the production ofcereals, sugar beet and tobacco has been subsidized.The other products have been purchased by
"producers unions" whose prices cannot be called
"administered prices", since price decisions aretaken independently.G/AG/R/15
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Turkey    G/AG/N/TUR/6   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Brazil/United States - Clarification sought regarding
the actual level of budgetary outlays by the state
owned tobacco monopoly, TEKEL, for the purchase
of tobacco at applied administered prices in 1997.The administered price for 1997 was below the
administered price of the base period.  Therefore, the
market price was negative.  The negative value was
shown as positive in the notification simply to showthat certain budget expenditures existed for tobaccopurchased in 1997.  The state tobacco enterprise,Tekel, has a statutory obligation to buy tobacco atsupport prices (Turkey's notification of state trading
enterprises refers) which it did in 1997. The level of
support was as indicated in our notification.However, Tekel also buys tobacco for its own use,and not for supporting the sector.  The totalproduction was not eligible to receive the applied
administered price of tobacco.
Brazil/United States - Could Turkey confirm the
budgetary outlays cited in Supporting Table DS:8?Confirmed.
New Zealand/United States - Turkey reports that its
Current Total AMS is below the de minimis  level.
However, the supporting tables are calculated on thebasis of the EMS, in spite of the fact that the
calculation of AMS seems to be "practicable".Due to the lack of necessary information, the EMS
calculation method was used instead of the AMS.Turkey does not have a "fixed external price", in themeaning of the method to be used in AMS
calculations, as is clear from Turkey's Uruguay
Round Schedule.
New Zealand/United States - Could Turkey explainhow it calculates the figures for “production eligible toreceive the administered price”?  Are governmentsupport programmes limited to this quantity, or is all
production eligible to recei ve the administered price?The State institutions responsible for support
programmes for various products determine thelevels of production eligib le to receive administered
prices on yearly basis.  These total levels arecovered by their balance sheets.  Turkey confirmed
that for each product shown in the notification, not
all production was eligible  to receive the applied
administered  prices.
United States - Clarification sought regarding:  theexchange rate used to calculate the appliedadministered prices for wheat and barley; market price
support outlays for grains as calculated in Supporting
Table DS:8 relative to actual 1997 expenditures madeby the Turkish Grains Board (TMO) for wheat, barley,and corn;  and the extent to which production of theseproducts was eligible for the applied administered
price in 1997.The fact that "all wheat, barley and corn production
received the applied administered price in 1997" isnot correct, as can be seen in the "detailed
calculation sheet", i.e. the values for total production
and the values for production eligible to receive theapplied administered price are different.  TMOusually completes its purchases in September.  InOctober, the market prices become stable.  On this
basis, the authorities used the exchange rate for
October 1997.G/AG/R/15
Page 54
Table DS:2 Notifications
Australia   G/AG/N/AUS/18   New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
New Zealand - Explanation sought regarding the
nature and scope of the measure entitled “FarmFamily Restart Scheme” (FFRS).The FFRS consists of an income support payment
designed to provide welfare assistance to farmfamilies for a maximum of twelve months, who areunable to secure commercial finance from a bank,and a Restart Re-establishment Grant (RRG) isprovided to farmers if they decide to leave the
farming industry.  Payments to families as income
support prior to the sale of their farm is deductedfrom the total (RRG) that a farmer leaving theindustry would be eligible for (up to A$45,000).  Inaddition professional advice provided to farmers willassist them in considering their options for the future
and in determining their commercial viability and
employment opportunities, should they decide toleave the industry.  The first professionalconsultation is mandatory for farmers claimingincome support or farmers who have not sold their
property within the first three months of applying for
a RRG.
New Zealand - In particular, how does the measureconform with para 9(b) of Annex 2?In the present notification, FFRS is consistent with
the criteria of paragraph 9 of Annex 2 – structuraladjustment assistance provided through resourceretirement programmes.  Since this notification wasissued, however, further details on how this
programme will be administered have been
developed.  Although the overall intent of the FFRSis to encourage and provide structural adjustmentassistance for farmers, only payments made under aRRG fall under paragraph 9.  Different componentsor sub-programmes of the FFRS fall under different
Annex 2 criteria.
The income support component of FFRS is a welfare
payment similar to Family Allowance benefitsgenerally available in Australia.  This payment to
farmers is based on clearly-defined eligibility
criteria including income, status as a farmer, assetsand inability to obtain commercial finance.  Thepayment is consistent with Annex 2, paragraph 6criteria.
The provision of professional advice to farmers up
to a value of AS$3,000 is the only aspect of theFFRS which does not fall under Annex 2.  Thiselement of the programme will be notified as non-
product specific domestic support.G/AG/R/15
Page 55
Australia   G/AG/N/AUS/18   New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
United States - Information sought concerning the
programme eligibility and payment criteria for the
"Farm Management Deposit Scheme".The Farm Management Deposit Scheme (FMDS) is
designed to assist farmers to better manage risks
inherent in agriculture, such as economic downturns
and climatic conditions.  FMD schemes are availablefrom commercial financial institutions which meetthe Government's prudential requirements andencourage farmers to save money by making theinterest earned on the entirety of the funds in any
given financial year held in an FMD account, non-
taxable.  Tax will only be collected whenwithdrawals are made which is likely to be duringlow income years.  The programme encouragesfarmers to set aside income in good years toestablish cash reserves to help meet costs in low
income years.  Farmers with funds in an FMD facing
severe financial difficulties may be eligible for aDeduction  Exemption Certificate which would notrequire institutions to deduct tax following a
withdrawal.
United States - Information sought concerning theprogramme eligibility and payment criteria for
"Exceptional Circumstances Relief Payments(ECRP)".The ECRP provides targeted, short-term income
support to financially viable farmers who face
economic hardship due to natural disasters andsevere economic conditions. Eligibility criteriainclude the type, scope and scale of the event, itseffect on income and other forms of supportavailable at the Commonwealth and/or State level.
Since its inclusion into "Agriculture – Advancing
Australia", ECRPs have only been made twice, inresponse to severe drought conditions in EastGippsland, Victoria, and Eden-Monaro in NewSouth Wales consistently with the criteria ofparagraph 8 of Annex 2 - "Payments for relief from
natural disasters".  However, there is scope for relief
payments to be made as a result of circumstanceswhich severely impact on farmers incomes.  Thecriteria for other relief payments with income as thekey criterion are still being developed and will be in
compliance with Annex 2, paragraph 7, criteria -
"Government financial participation in incomeinsurance and income safety-net programmes".
Australia will be supplying a revised DS:2
notification on the above two programmes when
final details are available.G/AG/R/15
Page 56
Cyprus   G/AG/N/CYP/4   New or Modified Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
Australia/Canada/New Zealand/United States –
Clarification sought as to whether the “Support to
carob tree growers programme”, which appears to be aproduct-specific subsidy, should be included in theAMS calculation.The carob tree is famous for its tolerance to drought
conditions and to marginal fertility of soils.  The
area under carob trees is gradually diminishing.  Thebasic objective of the measure is the conservation ofthe areas under carob trees, thus conserving theenvironment and the countryside.  Therefore themeasure was considered as being in accordance with
paragraph 12 of Annex 2 (Environmental Protection
Programmes). Nevertheless, considering that thesubsidy is paid on a per tonne basis, Cyprus iswilling to include it under the AMS and will do soas from 1998, which is the first year of
implementation for this scheme.
Australia/Canada/New Zealand/United States – How
could a payment per tonne of fruit be classified as anexempt payment since: (I) it does not meet thefundamental requirement of paragraph 1(b) of Annex2 that it will not have the effect of providing pricesupport to producers; and (ii) it does not meet the
criteria of Annex 2, paragraph 12 as a payment under
environmental programmes?This is a typical agro-environmental scheme.  Carob
is the only tree that grows in very dry areas wherevegetation is otherwise very scarce.  In the very longpast it played an important role in the economy ofCyprus but after independence it lost importance andmost of the trees were gradually abandoned by their
owners.  In 1990 there were still around 8,000
hectares under carobs and this area went down to2,500 hectares in 1996.  Considering that a carobtree may take up to 100 years to grow to full sizeand that this tree is associated with the traditionallandscape of certain parts of Cyprus, Government,
environmentalists and the general public are in full
agreement that every effort should be made topreserve it.  As a first step Parliament passedregulations prohibiting the cutting down of carobtrees to be used for wood and the Department ofAgriculture implements an extensive project to
prevent damage of the trees by rodents.  The subsidy
on production looks, at first view, as being incontradiction with Green Box criteria but no othermethod could be found to achieve the basic goals ofthe scheme : (a) to keep the trees alive and (b) to
apply basic agricultural practices for the trees to
remain in a satisfactory physical condition.  Giventhe very low returns of carob production, othermethods of payment were considered ineffective andcostly.  It should be noted that the carobs tree
subsidy has not yet been paid to farmers.G/AG/R/15
Page 57
Tables ES:1 to ES:3 Notifications
Costa Rica   G/AG/N/CRI/4   Export subsidies (Table ES:1 and ES:3)
Points raised by other Member s Response by Notifying Member
New Zealand - Why did export subsidies under the
Tax Credit Certificate (CAT) scheme increase to $114million in 1996?  Can Cost a Rica explain how this
level of expenditure is consistent with its reduction
commitments?CAT is a percentage of the value of non-traditional
exports.  Accordingly, an increase in exports maymean an increase in the State outlay under the CAT
programme.
New Zealand - What schemes is Costa Rica planningto eliminate by 30 September 1999?  Is the CAT
scheme included?The CAT incentive scheme is consistent with Costa
Rica's reduction commitments.  In the Uruguay
Round negotiations, Costa Rica undertook toeliminate the CAT system totally by 30 September1999 at the latest.  This commitment goes beyondthe scope of any other similar commitment
negotiated at Round level.
United States - Could Costa Rica submit its export
subsidy notifications using the standard notificationformats for Tables ES:1 and ES:3?Costa Rica's subsidy system makes it difficult to
present the relevant information using either of thesetables.  Since the Uruguay Round negotiations,Costa Rica has used the same notification format.Most countries use the model mentioned since their
subsidies are administered  in accordance with the
national budget established for that purpose.  In thecase of Costa Rica, the CAT export subsidyprogramme is not based on ordinary government
budgets but depends on the level of exports.
United States - Clarification sought regarding the
statement that “it is not feasible to establish a
reduction commitment for Government outlays under
this heading”.Costa Rica has already established a programme for
the total elimination of these incentives.  In a first
stage, the incentives were partially eliminated in
September 1996.  The second stage will involve thetotal elimination of the subsidies on 30 September1999.  There is no obligation to set up a reductionprogramme.  Costa Rica is complying fully with itscommitments and objectives under the Uruguay
Round.
Costa Rica   G/AG/N/CRI/5   Export Subsidies (Table ES:2)
Points raised by other Member s Response by Notifying Member
Japan – Clarification sought as to whether export
subsidies (CAT) have been applied to commodities
other than fruit.The question leads us to believe that Japan interprets
Costa Rica's notification in Table ES:2 as anotification of export subsidies for fruit.  Costa Ricais a significant exporter of fruit (its share of total
world exports exceeds 5 per cent) and is required to
notify the total volume of fruit exports using TableES:2, as per G/AG/2.  This in no way signifies thatCosta Rica is applying another export subsidysystem to the exportation of fruit.  Without prejudiceto the above, it should be pointed out that the CAT
system is applied to non-traditional exports.G/AG/R/15
Page 58
Czech Republic   G/AG/N/CZE/16   Export Subsidies (Tables ES:1 and ES:3)
Points raised by other Member s Response by Notifying Member
Japan – Explanation sought as to why export subsidies
have been granted to potato starch (110813) even
though there is no commitment specified in the
Schedule for potato starch.An addendum to the Schedule (which now includes
potato starch) was circulat ed by the Secretariat
during the verification procedure in 1994.
European Communities   G/AG/N/EEC/11   Export Subsidies (Tables ES:1 to ES:3)
Points raised by other Member s Response by Notifying Member
Australia/Brazil/Canada/Japan/New Zealand –
Confirmation sought  that for the products referencedin footnote 11, the outlays and quantities shown to bein breach of the annual commitment levels, fall underthe provisions of Article 9:2(b).  Information sought
regarding whether the EC intends to continue this
practice and regarding the products which are likely tobe affected in the future.The EC has used export subsidies in full conformity
with the commitments shown in its Schedule and infull accordance with the Agreement on Agriculture,including Article 9 thereof. The use of exportsubsidies is determined by market conditions for the
relevant products.  Information on export subsidies
for future years will be provided in the relevantnotifications.
Canada/New Zealand - Clarification sought regardingthe circumstances that led the EC to use unused exportsubsidies from previous years, in the selected product
categories (e.g. beef, etc)For 1996/97, the quantities of subsidized beef
exports amounted to 1.18 million tonnes.  Data ontotal exports shown represent EC export statistics.
These actual exports covering July 1996/June 1997
are expressed in product weight.  Figures onsubsidized exports are in carcass equivalent weightand based on export certificates issued during themarketing year in question, irrespective of the actual
date of export.
Brazil - Clarification sought as to why the quantity ofsubsidized beef (2.227 Mio tonnes) is superior to the
exported amount (1.081 Mio tonnes).
Follow-up remark - New Zealand: Commended the EC for clearly indicating on the notification the products
to which the roll-over provisions had been applied. This allowed the Committee to differentiate from thosecases which entailed a breach of export subsidy  commitment.
Australia/Brazil/Canada - Unused export subsidiesconcerned 5,000 tonnes for olive oil in 1995/96.   Theprevious EC notification (G/AG/N/EEC/5) for1995/96 indicated subsidized exports of 136,200
tonnes against a commitment of 140,500 tonnes,
representing unused export subsidies of 4,300 tonnes.Could the EC clarify the actual unused level in
1995/96?The unused quantity for olive oil for the marketing
year 1995/96 was 5,000 tonnes.  This updatedinformation has been made available inG/AG/N/EEC/5/Rev.1 where the quantity of
subsidized olive oil was co rrected to read 135,500
tonnes.
Australia/Brazil/Canada/New Zealand - Clarificationsought regarding the nature of adjustments that weremade to the 1995/96 subsidized volumes and
budgetary outlays for olive oil, dairy products and
wine (as reported in G/AG/N/EEC/5/Rev.1), takinginto account the fact that such adjustments couldimpact upon the notification for marketing year1996/97.  Why where subsidized volumes and outlays
for certain products adjusted upward  (e.g. butter and
butter oil, skim milk powder, cheese, other milkproducts) and others adjusted downward (e.g. oliveoil)?A rectification of the notification was submitted to
the Committee. The minor adjustments are the result
of the revised information received.G/AG/R/15
Page 59
European Communities   G/AG/N/EEC/11   Export Subsidies (Tables ES:1 to ES:3)
Points raised by other Member s Response by Notifying Member
Brazil - Which types of alcohol tariff lines benefitted
from export subsidies?  What are the rules that govern
the matter?HS 2207.10  and HS 2207.20 -  The alcohol in
question is obtained by the distillation of wine.  It is
mainly exported for use as fuel.  Sales for export
take place normally under tender procedures.
Canada - Could the EC detail any changes to theirexport subsidy programmes that are responsible forthe substantial increase in export subsidization ascompared to 1995 levels, of rice, sugar, butter &butteroil, skim milk powder, wine, alcohol, and
incorporated products?No changes in export subsidy programmes had taken
place in 1996/97 in comparison with the previousyear.
Canada/New Zealand - To what extent, both involume and budgetary terms, have export subsidiesbeen used for dairy products, other than cheese, tomanufacture processed cheese that is subsequentlyexported?
Canada/New Zealand - Does Table ES:1 include any
amounts of skim milk powder and butter which reflectactivities under the inward processing relief (IPR)
scheme?  Could the EC please provide the figures?The inward processing régime is reflected in the
export subsidy figures for EC dairy products usedunder the system. The EC has reported the relevantinformation in accordance with the notification
requirements for the products in question.
Canada/New Zealand - Clarification requested on
whether cheese exported under the IPR scheme is
included in total cheese exports.
Canada/New Zealand - Clarification requested on
whether figures reported for export subsidies oncheese include any exports of subsidized processed
cheese.The total export figures for cheese do not include
cheese obtained under the IPR scheme.
HS 0406.30, processed cheese, is included in EC's
Schedule and eligible to export refunds which are in
effect during the year in question.
New Zealand - Information requested on the
additional exports of 90,100 tonnes of cheese and theirdestinations; confirmation sought that no exportsubsidies have been granted on those exports.Export subsidies have been granted only for the
quantities listed in Table ES:1 of the notification.For certain cheeses and destinations, no exportsubsidies were applied.  Details are regularly
published in relevant Community legislation.
Australia/Switzerland  - Footnote (5) to Table ES:1
states that the notified export subsidies for sugar do
not include exports of sugar of ACP and Indian origin.Can the EC confirm that sugar is imported into the ECfrom ACP countries and India and re-exported withthe benefit of EC export subsidies?  What are thevalues and quantities of any such subsidized exports
of sugar of ACP and Indian origin?Exports of ACP and Indian sugar are eligible to
receive export refunds. As mentioned in EC's
Schedule, no reduction commitment is made on thiscategory of sugar.
Switzerland - Whether sugar of ACP and Indian originis exported at the same price as EU sugar?  Is suchsugar also exported to Switzerland?  When processedin the Community, is such sugar still considered of EU
origin?The EC export statistics do not distinguish between
refined sugar obtained from ACP and Indian sugarand other sugar.  It is therefore not possible toprovide information on prices and destinations ofthis type of sugar. Processed sugar obtained fromACP and Indian sugar is covered by footnote (1) of
the table on export subsidies contained in Part IV,
Section II, of the EC Schedule CXL.G/AG/R/15
Page 60
European Communities   G/AG/N/EEC/11   Export Subsidies (Tables ES:1 to ES:3)
Points raised by other Member s Response by Notifying Member
United States - It was our understanding during the
Uruguay Round negotiations that EC Class C sugar
would be subject to export subsidization. Could the
EC indicate whether its notification cover subsidiesgranted to Class C sugar?Exports of C sugar are not subsidized and therefore
not included in the notification on export subsidies.
Egypt - Information requested on how the EC sugar
subsidization programme operates.This information will be provided in writing.
Switzerland - Out of total wine exports of 10,713,900
hl, 3,034,900 hl benefitted from export subsidies ofnearly 60 Mio ECU.  Who were the eligible
beneficiaries in the Community? What were the
principal destinations of subsidized exports?These subsidies are paid to all exporters and applied
to table wines, concentrated grape juice and grapemust. As laid down in the relevant Community
legislation, certain destinations are not eligible to
receive export subsidies.
Israel   G/AG/N/ISR/5   Export Subsidies (Tables ES:1 and ES:2)
Points raised by other Member s Response by Notifying Member
Switzerland - How does the producer-financed export
subsidy scheme operate?Undertook to provide a written answer.
Slovak Republic    G/AG/N/SVK/13   Export Subsidies (Tables ES:1 to ES:3)
Points raised by other Member s Response by Notifying Member
New Zealand - Confirmation sought that, where total
exports of other dairy products and sugar exceed theannual commitment levels, these quantities were not
subsidised.Subsidized exports of sugar and other dairy products
did not exceed the annual commitment levels forsubsidies.  The exported amounts exceeding these
limits were not subsidized.G/AG/R/15
Page 61
South Africa   G/AG/N/ZAF/15   Export Subsidies (Table ES:1)
Points raised by other Member s Response by Notifying Member
Canada – Clarification sought regarding calculation
details for Table ES:1, and apparent discrepancies
with Supporting Table ES:1 (preparations of meat,
other sugars, and wine products).An erroneous draft ES:1 table was included. Both
outlays and quantity figures should be altered in
Table ES:1 as follows:
Preparations of meat should be zero (not 60,674 and245 respectively). Other sugars should be zero (not13,018 and 193 respectively). For wine products thequantity should be 37,140 (not 99,253).  Undertook
to submit corrections.
Canada - A substantial volume of wine was providedwith export subsidies in 1997, even through the
General Export Incentive Scheme (GEIS) was inoperation for only just over six months in 1997,relative to the volume of subsidized wine exports inall of 1996.  With the end of the GEIS, can we expect
that no wine exports will be subsidized in 1998?No exports of wine will be subsidized in 1998.
Canada - At the March 1998 meeting, South Africa
informed the Committee that the GEIS was beingdiscontinued and would be replaced by supply sideassistance.  Although GEIS was terminated, has itprovided any residual export subsidies to products
through a transition period as the programme is wound
down?  If so, what is the nature of these payments andwhen will they end? Was the GEIS replaced by anyother assistance?Claims for exports prior to 11 July 1997 were
entertained until the end of the financial year, 31March 1998.  All the payments will, however, bereflected in the final notification for 1997. SouthAfrica has informed the WTO that any replacement
measures in agriculture to compensate for the
removal of GEIS will be of a non-trade distortingand Green Box nature.  While there are processeslooking into revised agricultural policy and thecompetitiveness of specific industries, these have notled to the design or implementation of any such new
measures.
Canada/EC/New Zealand - Since the termination of
the GEIS, are any other export subsidy programmesstill in effect; for which products?A producer financed export subsidy for sugar
remains in force after 11 July 1997.  The amountnotified represents a rebate to the canning industryto provide sugar at import parity.  South Africa isuncertain as to whether this, which is a result of an
agreement on a maximum price between producers,
millers and the canning industry, should beconsidered conclusively an export subsidy in termsof the WTO Agreement.  However, in the interest oftransparency, South Africa has chosen to notify it as
a subsidy while clarity is sought.  A review of the
legislation related to sugar is also at present beingundertaken.G/AG/R/15
Page 62
United States   G/AG/N/USA/12/Add.1   Export Subsidies (Tables ES:1 and ES:3)
Points raised by other Member s Response by Notifying Member
Brazil – Additional information sought on export
subsidies for poultry.Information already provided within the context of
18.6 previous discussions (EEP announcement).
Canada – Can an explanation be provided as to whythere has been a substantial increase in outlays forbutter and butter oils, skim milk powder and “other
milk products” in 1996?The outlays increased because there was an
increased demand by domestic industry for use ofthe Dairy Export Incentive Program (DEIP).  The
US generally uses DEIP to counter subsidized
competition.  Therefore, the demand for DEIP bydomestic producers often reflects the level ofsubsidized competition these producers face in other
markets.
United States   G/AG/N/USA/14   Export Subsidies (Table ES:2)
Points raised by other Members Response by Notifying Member
Australia/Canada/New Zealand – Clarification sought
regarding the fact that total exports of butter and
butter oil, skim milk powder and other milk products
are substantially lower than the quantity reported ashaving been subsidized (G/AG/N/USA/12/Add.1refers).The total export quantities for these products in
Table ES:2 reflect actual (physical) shipments made
with awards from the DEIP. Under the DEIP,
exporters have flexibility regarding when they shipthe product.  For this reason, actual shipments mayoccur several months after awards are made andtherefore fall into the next reporting period.  This isthe reason why in 1996, the amounts reported as
subsidized exports were greater than total exports. In
its Uruguay Round Schedule, the United Statesdecided to notify export subsidies based on awards.Therefore, Table ES:1 reflects awards rather than
shipments.
Canada - Could the US identify the data source, orsources, for total exports for all products reported in
Table ES:2?  Is this same data source used for allproducts?  If different sources are used, could the USplease elaborate?The figures reported for all of the products (except
butter, butteroil, skim milk powder and other milk
products) were taken from export data provided bythe US Census Bureau.  For butter, butter oil, skimmilk powder and other milk products data reportedreflect actual shipments based on the CommodityCredit Corporation's (CCC) database.  Census data is
not used for these products because of H.S.
concordance problems between DEIP commoditiesand the Census database.
Canada - Clarification sought regarding what, if any,time restrictions are placed on awards under DEIP
with respect to shipment date.Exporters have flexibility regarding when they ship
the product and awards are often made for shipmentsscheduled 6-9 months in the future.  However, thevast majority of contracts are shipped within six
months.
New Zealand - Request for a revised Table ES:1 that
reflects the actual quantities shipped, rather than
nominal volumes.The United States will continue to submit its
notifications based on awards.G/AG/R/15
Page 63
ATTACHMENT 1  (G/AG/N/CRI/3 refers)
Costa Rica:  Imports of agricultural products subject to tariff quotas – 1997 1
COUNTRY NAME SAC TOTAL VALUE TOTAL
WEIGHT
528 HOLANDA (PAÍSES BAJOS) 0404100000 34.630,00 41.410,00
554 NUEVA ZELANDIA 0404100000 18.900,00 5.080,00
558 NICARAGUA 0403909090 1.290,36 973,00
591 PANAMÁ 0403909020 5,62 0,00
558 NICARAGUA 0403100000 102.311,45 56.587,00
156 CHINA (REP. POPULAR) 0403100000 120,87 229,00
158 TAIWÁN (FORMOSA) 0403100000 50,00 146,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0403100000 34,00 16,00
558 NICARAGUA 0402999000 1.426,57 800,00
591 PANAMÁ 0402991000 3.082.558,03 1.977.627,00
528 HOLANDA (PAÍSES BAJOS) 0402991000 839.943,57 669.101,00
724 ESPAÑA 0402991000 104.383,98 86.180,00
56 BÉLGICA 0402991000 48,00 2,00
340 HONDURAS 0402991 000 6,08 4,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0402991000 5,50 1,00
862 VENEZUELA 0402991000 2,16 2,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0402912000 350,96 215,00
250 FRANCIA 0402912000 279,00 23,00
591 PANAMÁ 0402911000 1.097.312,04 1.117.356,00
528 HOLANDA (PAÍSES BAJOS) 0402911000 62.945,05 56.762,00
276 ALEMANIA 0402911000 59,00 8,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0402911000 6,25 2,00
340 HONDURAS 0402911 000 2,43 3,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0402290000 54,11 3,00
558 NICARAGUA 0402212100 13,00 2,00
340 HONDURAS 0402212 100 2,43 3,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0402211000 52.246,24 6.350,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0402100090 67,72 21,00
320 GUATEMALA 0402100090 20,00 6,00
780 TRINIDAD Y TOBAGO 0402100090 16,78 3,00
528 HOLANDA (PAÍSES BAJOS) 0402100010 360,66 37,00
320 GUATEMALA 0402100010 60,00 10,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0402100010 22,00 8,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0401300010 372,82 5,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0401100000 2.329,19 42,00
                                                     
1 The imports in this list are total imports and include both in-quota and out-of-quota imports.G/AG/R/15
Page 64
COUNTRY NAME SAC TOTAL VALUE TOTAL
WEIGHT
152 CHILE 0401100000 35,00 11,00
32 ARGENTINA 0401100000 20,00 17,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0207360000 1.919,40 492,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0207330000 7.810,15 2.718,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0207279000 3.069,03 990,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0207250000 22.713,39 11.394,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0207149900 227.300,00 266.714,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0207139900 133.568,00 152.409,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0207139100 17,93 5,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1601008000 38,38 10,00
392 JAPÓN 1601008000 4,30 0,00
250 FRANCIA 1601003099 1.167,08 236,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1601003099 235,99 116,00
724 ESPAÑA 1601003099 70,83 6,00
158 TAIWÁN (FORMOSA) 1601003099 38,38 66,00
484 MÉXICO 1601003091 3.308,89 4.741,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1601003091 232,13 117,00
170 COLOMBIA 1601003091 23,89 1,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1601003010 102.527,96 23.950,00
724 ESPAÑA 1601003010 13.090,98 1.558,00
484 MÉXICO 1601003010 63,82 40,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1601002090 195,90 130,00
340 HONDURAS 1601002 090 3,65 3,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1601002010 105,03 4,00
724 ESPAÑA 1601002010 2,00 0,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1601001000 1.190,90 570,00
724 ESPAÑA 1601001000 1,00 1,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0410000000 1.751,94 101,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0409000000 2.653,01 1.727,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0408990000 3.930,91 6.943,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0408910000 8.178,86 1.532,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0408190000 185.311,34 103.554,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0408110000 6.262,14 1.038,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0407001000 2.336.638,76 711.272,00
591 PANAMÁ 0406900000 1.393.336,75 372.901,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0406900000 203.638,41 57.734,00
528 HOLANDA (PAÍSES BAJOS) 0406900000 101.964,73 65.043,00
340 HONDURAS 0406 900000 40.609,67 9.176,00
724 ESPAÑA 0406900000 6.018,16 1.395,00
222 EL SALVADOR 0406900000 1.776,83 730,00G/AG/R/15
Page 65
COUNTRY NAME SAC TOTAL VALUE TOTAL
WEIGHT
250 FRANCIA 0406900000 489,00 90,00
380 ITALIA 0406900000 144,40 80,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0406300000 75.492,52 19.236,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0406209000 31.705,63 12.355,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0406201000 364.829,32 108.938,00
554 NUEVA ZELANDIA 0405901000 14.073,86 5.612,00
208 DINAMARCA 0405901000 27,09 2,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0405100000 2.640,85 1.763,00
250 FRANCIA 0405100000 419,00 49,00
528 HOLANDA (PAÍSES BAJOS) 0404900090 45.505,00 57.706,00
124 CANADÁ 0404900090 27.366,75 40.771,00
484 MÉXICO 0404900090 1.500,00 214,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0404900090 48,76 8,00
528 HOLANDA (PAÍSES BAJOS) 0404900010 33.820,00 38.570,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0404900010 14.033,66 19.469,00
554 NUEVA ZELANDIA 0404900010 1.952,00 500,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 0404100000 228.877,29 330.770,00
124 CANADÁ 0404100000 80.308,96 117.570,00
724 ESPAÑA 1602900090 1.413,83 403,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602900090 208,27 121,00
392 JAPÓN 1602900090 64,65 13,00
320 GUATEMALA 1602500000 21.445,63 6.665,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602500000 8.004,03 2.810,00
484 MÉXICO 1602500000 816,00 178,00
724 ESPAÑA 1602500000 582,68 128,00
344 HONG KONG 1602500000 171,58 135,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602499090 17.598,47 6.434,00
484 MÉXICO 1602499090 8.144,33 4.252,00
344 HONG KONG 1602499090 1.529,48 1.292,00
724 ESPAÑA 1602499090 1.217,14 444,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602499010 4.212,79 2.548,00
484 MÉXICO 1602499010 2.493,36 3.257,00
724 ESPAÑA 1602491000 203.175,00 60.640,00
484 MÉXICO 1602491000 20.550,00 5.390,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602410090 27.719,48 4.531,00
724 ESPAÑA 1602410090 11,00 1,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602410010 18.515,76 6.203,00
340 HONDURAS 1602410 010 2,43 3,00
320 GUATEMALA 1602390000 8.716,49 3.128,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602390000 1.896,84 169,00G/AG/R/15
Page 66
COUNTRY NAME SAC TOTAL VALUE TOTAL
WEIGHT
344 HONG KONG 1602390000 471,33 203,00
484 MÉXICO 1602390000 259,00 85,00
124 CANADÁ 1602390000 128,00 30,00
392 JAPÓN 1602390000 3,56 1,00
320 GUATEMALA 1602320000 1.839,12 690,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602320000 1.339,67 588,00
724 ESPAÑA 1602320000 1.080,43 213,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602310000 61.482,10 13.838,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602200099 306,97 2,00
158 TAIWÁN (FORMOSA) 1602200099 75,32 13,00
124 CANADÁ 1602200099 51,00 15,00
203 REPÚBLICA CHECA 1602200011 31,00 24,00
124 CANADÁ 1602109090 98,98 24,00
392 JAPÓN 1602108000 1,36 1,00
484 MÉXICO 1602103000 4.260,00 1.026,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602103000 3.727,62 1.164,00
158 TAIWÁN (FORMOSA) 1602103000 29,82 46,00
724 ESPAÑA 1602102090 11,00 2,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602102019 134,48 39,00
203 REPÚBLICA CHECA 1602102011 31,00 24,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1602101090 4.619,02 3.604,00
392 JAPÓN 1602101090 2,00 1,00
203 REPÚBLICA CHECA 1602101010 32,00 24,00
840 ESTADOS UNIDOS DE NORTEAMÉRICA 1601009000 5.473,82 1.019,00
344 HONG KONG 1601009000 1.121,89 750,00
156 CHINA (REP. POPULAR) 1601009000 72,52 68,00
724 ESPAÑA 1601008000 244,82 125,00G/AG/R/15
Page 67
ATTACHMENT 2  (G/AG/N/CRI/3 refers)
Costa Rica - Applied tariffs on agricultural products subject to tariff quotas
SAC  95 SAC 97 SUMMARY DESCRIPTION TARIFF LEVEL (%)
0203.1100 En canales o medios canales (cerdo) 45
0203.1200 Jamones, paletas y sus trozos sin deshuesar 50
0203.1900 Las demás 50
0203.2100 En canales o medios canales 45
0203.2200 Jamones, paletas y sus trozos sin deshuesar 50
0203.2900 Los demás 50
0206.3000 Se abre
0206.3010
0206.3090De la especie porcina, frescos, refrigerados
5
50
0206.4100 Hígados 1
0206.4900 Se abre
0206.4910
0206.4990Los demás
5
50
0209.0010 Se abre
0209.001010
0209.001090Tocino
5
5
0209.0020 Se abre
0209.002010
0209.002090Grasa de cerdo
18
18
0210.1100 Jamones, paletas y sus trozos 50
0210.1200 Tocino entreverado 50
0210.1900 Los demás 5
0207.1000 Aves sin trocear 51
0207.2100 Se suprime por
0207.1100
0207.1200Gallos y gallinas
51
51
0207.2200 Se suprime por
0207.2400
0207.2500Pavos
51
51
0207.2300 Se suprime por
0207.3200
0207.3300
0207.3400Patos, gansos, pintadas
51
18
18
0209.0030 Grasa de ave 18
0210.9010 Hígados de aves salados o en salmuera 18
0210.9020 Hígados de aves, secos o ahumados 18
0402.9110 Leche evaporada 9
0402.9910 Leche condensada 9
0406.2010 Tipo Cheddar deshidratado 1
0406.2090 Otros 44
0406.4000 Queso de pasta verde o azulada 18
0406.9000 Los demás quesos 50
0407.0010 Huevos fértiles para la reproducción 1
0407.0020 Se abre
0407.002010
0407.002090Huevos de avestruz
13
13
0407.0090 Se abre
0407.009010
0407.009090Otros
14
14
0408.1100 Secas 9
0408.1900 Las demás 13
0408.9100 Secos 13G/AG/R/15
Page 68
SAC  95 SAC 97 SUMMARY DESCRIPTION TARIFF LEVEL (%)
0408.9900 Los demás 13
0713.3300 Se abre
0713.33100713.3320
0713.3390Frijoles comunes 20
2020
1005.9020 Maíz amarillo 1
1005.9030 Maíz blanco 14
1006.1010 Para la siembra (arroz) 1
1006.1090 Otros 1
1006.2000 Arroz descascarillado 35
1006.3000 Arroz semiblanqueado 35
1006.4000 Arroz partido 35
1501.0000 Manteca de cerdo 18
1503.0010 Estearina solar 14
1503.0090 Otros 1
1601.0030 Se abre
1601.003010Con carne y despojos de porcino
35
1602.1030 Con carne y despojos de porcino 18
1602.4100 Se abre
1602.4100101602.410090Jamones y trozos de jamón
3535
1602.4200 Paletas y trozos de paleta 35
1602.4910 Piel de cerdo deshidratada 5
1602.4990 Se abre
1602.499010
1602.499090Otras
35
35
1701.1100 De caña 51
1701.1200 De remolacha 51
1701.9100 Aromatizados o coloreados 51
1701.9900 Los demás 51
2401.1000 Se abre
2401.1010002401.102000
2401.103000
2401.109000Tabaco sin desvenar o desnervar
1
16
1
16
2401.2000 Se abre
2401.201000
2401.202000
2401.203000Tabaco total o parcialmente desvenado
5
5
1
2401.209000 5
2401.3000 Se abre
2401.301000
2401.3020002401.303000
2401.309000Desperdicios de tabaco
5
51
5
2403.1000 Se abre
2403.101000
2403.109000Picadura de tabaco
40
40
2403.9100 Tabaco homogeneizado 1
2403.9900 Los demás 16
5310 Tejidos de yute y demás fibras textiles 51G/AG/R/15
Page 69
ATTACHMENT 3  (G/AG/N/BRA/10 refers)
Table of de minimis  calculation for Brazil – 1996
Product-specific
Production Value
Product DescriptionTotal product-
specific AMS
US$ 1,000R$ 1,000 US$ 1,0001AMS/Production
value
%
BarleyBrazil waxCashew nuts
Cassava
Castor-oil plantCoffeeCottonEdible beans
Garlic
Grape (and by-products)JuteMaizeOatsPeanuts
Ramie
RiceRyeSisalSorghumSoybeans
Sugar cane
Wheat123.8
98.5
583.6
2,446.8
15.1
11,380.012,710.4
8,567.5
590.0
7,133.0
6.1
73,111.6
31.8
390.8
0.0
46,727.1
0.0
67.470.0
59,326.8
19,420.3
40,631.115,747
11,36065,728
2,448,260
6,996
2,373,673
573,785
1,301,899
71,654
440,759
5,688
3,587,650
23,48049,209
3,080
1,952,936
417
26,03121,149
3,510,486
4,094,643
495,00015,667
11,30265,394
2,435,837
6,961
2,361,629
570,874
1,295,293
71,290
438,523
5,659
3,569,446
23,36148,959
3,064
1,943,027
415
25,89921,042
3,492,763
4,073,866
492,48 80.79
0.870.89
0.10
0.220.482.230.66
0.83
1.630.112.050.140.80
0.00
2.400.000.260.331.70
0.48
8.25
Non-Product-Specific
Production Value
Product DescriptionTotal product-
specific AMS
US$ 1,000 R$ 1,000 US$ 1,0001AMS/Production
value
%
Total of agriculturalproduction value79,811.7 50,454,009 50,197,999 0.16
1Exchange rate applied (annual average):  R$/US$)1.0051
Note:    When the notification was handed in and up to the present date, the official institute of statistics (IBGE – Brazilian
Institute of Geography and Statistics) had not yet published final statistics for each product for the year concerned (1996).
Only a preliminary estimation of a negative variation of agricultural production of –0.08 per cent was available, which wasused to present the information contained in the table to avoid unnecessary delays in presenting our notification.  From thiscalculation, we verified that the only product that presented a percentage of domestic support above 2.5 per cent was wheat.
For this reason, and due to the fact that the production of this crop grew more than 100 per cent as a consequence of the rise
in international prices, we tried to reach an estimation of the value of production using as a starting point 3,300,000 tonnes of
production and an averaged price of R$150.00 per tonne, which resulted in R$495,000 thousand or US$492,488 thousand.Considering that in order to exceed the " de minimis " the value of production should have been below US$406,311 thousand,
we would have a margin of error of US$86,117 thousand.  Given the importance that we attribute to the timely presentation
of notifications and the reliability of the method explained above, we opted to inform the Committee that the support givento wheat was also below the " de minimis ". This table will be revised when final statistics are issued by the relevant Institute.G/AG/R/15
Page 70
ATTACHMENT 4  (G/AG/ N/CYP/3/Rev.1 refers)
Cyprus - Supporting Table DS:1, para (viii) infrastructural services
Major components of expenditures
1. Rural Development: Expenditure:  £9,961,075
- Anti-flood and sewerage works in villages
- Re-siting of villages- Integrated – Rural Development Projects:
- Improvement and construction of village roads
- Improvement and construction of farm roads- Village public buildings
- Anti-flood works
- Irrigation and water supply works, etc.
- Regional rural development projects:
- Anti-flood works
- Improvement of public buildings
- Other rural development  projects:
- Maintenance of farm roads
- Village public buildings
- Improvement and construction of farm roads
- Improvement and construction of village roads- Village embellishment projects (parks and squares)- Village street lighting, etc.
2. Water Development
- Irrigation, drainage and dams:  Expenditure £15,600,960
- Major waterworks, Southern conveyor:
- Installation of irrigation networks
- Installation of Telemetry system
- Dhiarizos diversion works
- Construction of Teresphanou Water Treatment Plant- Installation of Tersephanou - Nicosia Water Conveyor, etc.
- Town and other municipalities water supplies:  Expenditure:  £7,548,308
- Construction of water treatment plants
- Installation of water conveyors
- Purchase of materials and equipment, etc.
3. Land Consolidation Works:  Expenditure:  £510,602
- Implementation of land consolidation schemes (including construction of farm roads)
4. Development of livestock areas and zones and other infrastructural works for livestock:  Expenditure:  £103,871:
- Water supply
- Electricity supply to livestock areas- Establishment of livestock areas and zones (access roads etc.)- Treatment of waste.
Total expenditure (as in the Table DS:1 notification):  £33,724,816.G/AG/R/15
Page 71
ANNEX – Part II
Deferred replies to questions on notifications raised at previous meetings
Table MA:1 Notifications
Malaysia   G/AG/N/MYS/10   Tariff Quota Administration (Table MA:1)
Points raised by other Members at the March 1998
meetingResponse by Notifying Member
New Zealand - What are the reasons for changing the
administrative arrangements for wheat flour?Such changes are intended to facilitate trade.
New Zealand - Under the new arrangements, "there
will be no quantitative limitation on the volume of
product that can be imported through the tariff quota".
Under what conditions then, if any, could Malaysiaimpose a volume limit on tariff quota imports ofwheat flour?Malaysia does not intend to impose any quantitative
limitation or restriction on imports of wheat or
meslin flour.
Argentina/Australia/Canada/EC - Confirmation sought
that the applied rate on wheat and meslin flour is equal
to or lower than the bound in-quota tariff rate.The current applied rate to all wheat and meslin
imports is zero, which is lower than the bound in-
quota rate of 5 per cent.G/AG/R/15
Page 72
Table MA:2 Notifications
Malaysia   G/AG/N/MYS/11   Tariff Quota Fill (Table MA:2)
Points raised by other Members at the March 1998
meetingResponse by Notifying Member
Argentina/Australia/Brazil/Japan/New Zealand - In
spite of some improvements since 1995, some tariffquotas remain unfilled in 1996 (in particular, sugar,pigs/pork, eggs, live fowls and livers of geese and
ducks).  What are the reasons for this?Tariff quotas for several livestock and livestock
products (meat of swine, bellies, bacon and others,hens' eggs and other eggs; fatty livers of geese,ducks and live fowl) continue to be under- filled orregister no imports because of the lack of demand.
Malaysia believes this is a market-oriented, business
decision taken by the importers themselves.  For thesame reasons, the tariff quotas for liquid milk andcream (0401.10.920 and 0401.30292) and day-old
chicks (0105.11.100) are consistently over-filled.
Canada/EC – In cases where in-quota imports exceedtariff quota quantities, do the notified in-quota imports
reflect total imports during 1996?  At what duty rateshave these imports taken place?Total imports were higher than the in-quota imports
during 1996, based on statistics compiled by the
license issuing authorities.  The duty rates applicableare zero or below the bound rates.
Canada/EC - What was the level of imports of wheatand wheat flour in 1996?Total imports were 27,361 metric tonnes.  The
currently applied tariff rate is zero.
Canada/EC - Information requested regarding the
tariff quota for wheat and meslin flour.The relevant information was made available in
G/AG/N/MYS/10 dated 11 December 1997.
EC - Clarification sought with regard to the approach
taken in order to increase tariff quota accessopportunities over the implementation period?Malaysia expands its tariff quotas on the basis of
annual percentage increases.  To the extent that thismethod may not have been  adhered to for someproducts, the necessary corrective measures will be
taken in 1998.
Japan - Clarification sought regarding the import
license system and its impact on tariff quota fill rates,
in particular for sugar.Imports of sugar originating from all countries are
subject to import licensing.  The global tariff quota
is applied to ensure that supply and prices are
maintained.  The low fill rates are caused bydeclining demand due to the higher world price forsugar.
Venezuela   G/AG/N/VEN/10   Tariff Quota Fill (Table MA:2)
Points raised by other Members at the March 1998
meetingResponse by Notifying Member
Canada/United States - Why were there no poultry
meat imports in 1996 even though the available tariff
quota quantity amounts to 3,426 tonnes?Zoosanitary measures were taken by Venezuela
against products from countries where avian
influenza is prevalent, such as the United States.
Canada/United States - What are the currently appliedduties on poultry meat?Venezuela applies an ad valorem  rate of duty which
is below the rates bound in its Schedule.
United States - Reasons for the low fill rate registered
for sorghum.The agro-industrial sector showed a marked
preference for yellow maize versus sorghum in1996.  Imports of sorghum were not subjected to any
quantitative restrictions.  An ad valorem tariff,
below Venezuela's bound rate, was applied.G/AG/R/15
Page 73
Venezuela   G/AG/N/VEN/10   Tariff Quota Fill (Table MA:2)
Points raised by other Members at the March 1998
meetingResponse by Notifying Member
Canada - What is the tariff rate currently applied to
imports of yellow maize? What was the percentage
decline in imports from 1995 to 1996?During the period 1995-96, the tariff quota
mechanism was not used and all imports were only
subject to an ad valorem  tariff which was below
Venezuela's bound rates.  The currently appliedtariff is 20 per cent ad valorem .  Imports of yellow
maize declined by 19 per cent during 1995-96.
Canada - Information requested on import
requirements (applied tariff, regulatory, etc.) in effect
for pork products and rate of decline of imports
thereof during 1995-96.No quantitative control is maintained.  A tariff-only
régime is applied at rates below Venezuela's bound
rates.  During the period 1995-96, the tariff quota
mechanism was not used and all imports entered freeof any quantitative restrictions.  Imports of porkproducts declined by 29 per cent during that period.G/AG/R/15
Page 74
Table DS:1 Notifications
Cuba   G/AG/N/CUB/6   Domestic Support (Table DS:1)
Points raised by other Members at the March 1998
meetingResponse by Notifying Member
Canada  - When will Cuba provide a notification for
the 1995 calendar year?Cuba will supply a notification for the 1995 calendar
year covering the same type of support as in 1996.A notification for 1997 is also being prepared forearly submission.  A corrigendum G/AG/N/CUB/6Corr. 1 was issued on 27 April 1998 to include
information on rural specialized education, an item
which had been previously omitted from SupportingTable DS:1.
Canada - Clarification sought regarding the "domesticfood aid" programme (not included in the base periodAGST supporting material) and its conformity with
criteria in paragraph 2 of Annex 2 .The retail price subsidy programme under "domestic
food aid" was applied subsequently to the baseperiod, as a result of the economic situation faced by
the country, as reflected in the introductory note to
the document G/AG/AGST/CUB.   This programmeis reported now because of its importance forguaranteeing the food requirements of the entireCuban population which is able to buy theseregulated basic products at subsidized prices.  The
State absorbs the difference between the market
price at which these products are purchased and thelower price at which they are sold, in conformitywith the criteria of paragraph 4 of Annex 2.
Canada - What is the currency used in the
notification?As shown in Column 3 of the original notification
(Spanish version) the currency used is million
Cuban pesos, which are equivalent to US dollars
according to the official exchange rate in Cuba.
Malaysia   G/AG/N/MYS/7   Domestic Support (Table DS:1)
Points raised by other Members at the March 1998
meetingResponse by Notifying Member
Canada  - Substantiation of Green Box status sought
for each of the programmes listed in the notification.All the programmes reported in Supporting Table
DS:1 meet the relevant policy specific criteria
specified, respectively, in paras 1(a); 1(b); 2(a); 2(b);
2(c); 2(d); 2(f); 2(g); 6(a); 6(c); and 6(d) of Annex 2of the Agreement on Agriculture.
Canada - In particular, how does the "price subsidyand guaranteed minimum price" programme meet the
criteria stipulated in para 1(b) of Annex 2?Price support subsidy to rice farmers is provided not
as a production incentive but as one of the povertyalleviation programmes of the government.  This isto ensure that farmers receive an income at least as
or higher than the poverty line income level (PLI)
set by the government.  The guaranteed minimumprice (GMP) has no trade-distorting effects since theprevailing market price is much higher than the
GMP.G/AG/R/15
Page 75
Mexico   G/AG/N/MEX/5   Domestic Support (Table DS:1)
Points raised by other Members at the June  1997
meetingResponse by Notifying Member
Australia/Canada – Clarification sought as  to whether
Mexico intends to notify PROCAMPO conformity
with Green Box or, alternatively, with blue box,criteria.The reference to "payments based on fixed areas and
yields" in column 1, Supporting Table DS:1, is
inappropriate and should read "(d) Decoupledincome support".
Canada  - Is there a floor price for corn under the
Procampo programme?This programme is completely dissociated from crop
yields. Its principal features are: (a) fixed paymentsper hectare are made in support of farmers' incomes;(b) the payments are not related to output level,
productivity or sowing requirements; (c) for land to
be eligible, maize, beans, wheat, sorghum, rice, soybeans, safflower, cotton or barley must have beengrown on it in one of the farming seasons during thethree years preceding August 1993; (d) farmers who
did not cultivate any of these crops during that
period are not eligible for support even if they arenow growing such crops; (e)  the land can bedevoted to any crop, livestock or forestry activity orto environmental protection. No floor prices are
used.
The nominal 1995 values were deflated to 1991prices using the annual average national consumer
price index (INPC) published by the Bank ofMexico.
1991 1995Average 1995/average
1991= 183.06
Jan 68.87 107.14
Feb 70.07 111.68
Mar 71.07 118.27
Apr 71.81 127.69
May 72.52 133.03
Jun 73.28 137.25
July 73.93 140.05
Aug 74.44 142.37
Sep 75.18 145.32
Oct 76.06 148.31
Nov 77.94 151.96
Dec 79.78 156.92Canada - Explanation sought as to how support for
1995 was calculated.  What adjustments were made in
relation to the base period commitment?
Average 73.75 135.00 Source: Bank of Mexico
Canada - What are the specific programmes includedin infrastructural works?  Are on-farm facilities
supported?Canada - In 1995, there was no infrastructural
support at farm level.G/AG/R/15
Page 76
Mexico   G/AG/N/MEX/5   Domestic Support (Table DS:1)
Points raised by other Members at the June  1997
meetingResponse by Notifying Member
Canada - Clarification sought regarding the
discrepancy between the volume of production used to
calculate market price support for wheat in SupportingTable DS:5 and that used in Supporting Table DS:6under "eligible production".  What is the source of this
data?Canada - In Supporting Table DS:5, the correct
figure for wheat is 2,909 thousand tonnes.
Canada - In Supporting Table DS:6, which
programmes entailed direct payments to producers?
Information sought regarding programme descriptions
and the method for calculating payments to producers.In process.
Canada - Clarification sought regarding market price
support made available to product categories notmentioned during the base period in the AGST
documentCanada - Since domestic support commitments
consist in a reduction in the total AMS, newproducts can become eligible for support in full
consistency with the Agreement on Agriculture.
The external reference prices, prices, timetable andentry points used are the same as those reportedduring Mexico's Agricultural Policy Review for the
OECD.
Australia  - Clarification sought regarding the
introduction of price support for sugar and some other
products which were not included in AGST tables.In process.
Australia - Clarification sought regarding the apparent
omission of market price support for milk inSupporting Table DS:7.This figure was inadvertently omitted while
compiling the Supporting Table DS:7 which shouldhave included the figure indicated in Columns 8 and
4 of Supporting Tables 5 and 4 respectively.G/AG/R/15
Page 77
Tables ES:1 to ES:3 Notifications
Cyprus   G/AG/N/CYP/5 and 6   Export Subsidies (Tables ES:1 and ES:2)
Points raised by other Members at the March 1998
meetingResponse by Notifying Member
New Zealand - After exceeding its commitment levels
for cheese in 1995, how does Cyprus intend tocompensate for this breach?As stated in the notification, the 1995 excess was
due to a misinterpretation by the executiveauthorities of the export subsidy scheme.  All thenecessary corrective measures were taken and,already in 1996, Cyprus was in conformity with its
obligations.  The relevant procedures were revised,
but no further measures, remedial actions orcompensations are envisaged.  It is worth noting thatthe product concerned is of a particular type,produced only in Cyprus.  It could therefore beassumed that there was no serious prejudice to the
interests of any other WTO Member.
Argentina/Australia - Confirmation sought that
exports above the annual quantity commitment levelswere not subsidized in 1995 and 1996.Confirmation that the exported quantities over and
above the stated quantities subsidized in 1995 andcommitment levels of subsidized exported cheese
for 1966 received no subsidy.
Australia - Clarification sought regarding export datafor sheepmeat in 1995.In 1995, Cyprus did not export sheepmeat.
Venezuela   G/AG/N/VEN/9   Export Subsidies (Tables ES:1 and ES:2)
Points raised by other Members at the March 1998
meetingResponse by Notifying Member
United States - Explanations sought regarding
apparent discrepancies between Venezuela's Scheduleand the annual export subsidy commitment levelsindicated in the notification.These discrepancies are due to the inadvertent
omission of decimal points during the transcriptionof data.  A corrigendum will be issued.
United States - Could Venezuela provide HS codes for
all the products listed in the notification?In September 1996, Venezuela provided the WTO
Secretariat with the transposition of its tariffs intothe HS 1996.  The system is not applied yet owing to
observations made by certain countries during the
verification process.  Once the process is completed,Venezuela will use the HS 96 in its future
notifications.
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