RESTRICTED
WORLD TRADE G/AG/R/5
5July1996
ORGANIZATION(96-2624)
Committee onAgriculture
SUMMARY REPORT OFTHE MEETING HELD ON28-29 MARCH 1996
Note bytheSecretariat
1. TheCommittee onAgriculture helditsfifthmeeting on28-29 March 1996. Intheabsence
oftheChairman, Ambassador Danai Tulalamba ofThailand, itwasagreed thatMr.Jorge Riaboi of
Argentina would chair themeeting. Theagenda ofthemeeting, contained inWTO/AIR/299, was
adopted.
2. TheCommittee tooknotethatUNCTAD hadformally requested observer status inthework
oftheWTO Committee onAgriculture. TheCommittee agreed toinvite UNCTAD toberepresented
asobserver atregular meetings oftheCommittee onanadhocbasis, pending adoption offormal
guidelines fortheparticipation ofinternational intergovernmental organizations bytheWTO General
Council.1
PartI:TheReview Process
3. TheCommittee reviewed thefollowing notifications aslisted ontheagenda:
(i) ontheadministration oftariff andother quota commitments (Table MA:1): from
Canada (G/AG/N/CAN/2/Add.1), Colombia (G/AG/N/COL/1), theEuropean
Communities (G/AG/N/EEC/1, Corr.1 and2,Add.1), Indonesia (G/AG/N/IDN/1 and
3),thePhilippines (G/AG/N/PHL/1), Poland (G/AG/N/POL/1), South Africa
(G/AG/N/ZAF/1/Rev.1), Switzerland (G/AG/N/CHE/1), Thailand (G/AG/N/THA/6
to8),Tunisia (G/AG/N/TUN/1) andtheUnited States (G/AG/N/USA/2/Add.2);
(ii) relating toimports under tariff andother quota commitments (Table MA:2): from
Australia (G/AG/N/AUS/2), Canada (G/AG/N/CAN/4), Norway (G/AG/N/NOR/2)
andThailand (G/AG/N/THA/9);
(iii) inthecontext ofthespecial safeguard (Tables MA:3 toMA:5): from Australia
(G/AG/N/AUS/3), Canada (G/AG/N/CAN/3), theCzech Republic (G/AG/N/CZE/2),
Japan (G/AG/N/JPN/5), Korea (G/AG/N/KOR/2/Add.1), New Zealand
(G/AG/N/NZL/4) andtheSlovak Republic (G/AG/N/SVK/2);
(iv) relating todomestic support commitments (Table DS:1): from Hong Kong
(G/AG/N/HKG/1);
1Forthegeneral understanding regarding participation byobserver international intergovernmental
organizations, seeSummary Report G/AG/R/2, paragraph 22.G/AG/R/5
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(v) relating toexport subsidy commitments (Tables ES:1 toES:3): from Argentina
(G/AG/N/ARG/1), theDominican Republic (G/AG/N/DOM/1), Hong Kong
(G/AG/N/HKG/1), Indonesia (G/AG/N/IDN/2), Malaysia (G/AG/N/MYS/2), Peru
(G/AG/N/PER/1), thePhilippines (G/AG/N/PHL/2), Slovenia (G/AG/N/SVN/2),
Trinidad andTobago (G/AG/N/TTO/1) andUruguay (G/AG/N/URY/1);
(iv) onexport prohibitions andrestrictions (Table ER:1): fromPoland (G/AG/N/POL/2).
4. TheCommittee agreed torevert tothenotifications ofCanada (G/AG/N/CAN/2/Add.1 and
CAN/4), Australia (G/AG/N/AUS/2), andNorway (G/AG/N/NOR/2) atitsnextmeeting.
5. Thefollowing notifications were subject topreliminary review andaretobereverted toat
thenextmeeting inaccordance withparagraph 9oftheCommittee 'sWorking Procedures:
(i) ontheadministration oftariff andother quota commitments (Table MA:1): fromthe
Czech Republic (G/AG/N/CZE/1/Rev.1), Morocco (G/AG/N/MAR/1), Poland
(G/AG/N/POL/1/Rev.1) andtheSlovak Republic (G/AG/N/SVK/1/Rev.1);
(ii) relating toimports under tariffandother quota commitments (Table MA:2): fromthe
Czech Republic (G/AG/N/CZE/3), Morocco (G/AG/N/MAR/2), theSlovak Republic
(G/AG/N/SVK/3),Slovenia(G/AG/N/SVN/3)andtheUnitedStates(G/AG/N/USA/3);
(iii) inthecontext ofthespecial safeguard (Tables MA:3 toMA:5): from Morocco
(G/AG/N/MAR/5) andtheUnited States (G/AG/N/USA/4);
(iv) relating todomestic support commitments (Table DS:1): from Morocco
(G/AG/N/MAR/3);
(v) inthecontext ofexport subsidy commitments (Tables ES:1toES:3): fromtheCzech
Republic (G/AG/N/CZE/4), Morocco (G/AG/N/MAR/4), Norway (G/AG/N/NOR/3),
theSlovak Republic (G/AG/N/SVK/4) andThailand (G/AG/N/THA/10).
6. Specific points raised during themeeting withrespect tothese notifications (paragraphs 3and
5above) aresummarized intheAnnex tothisreport.
7. TheCommittee tooknoteoftheroom document entitled "Notification Obligations: Agriculture"
which theSecretariat hadprepared withaview toreminding eachMember oftheCommittee ofits
notification obligations in1996. Theinformation contained inthisroom document iscomplemented
bytheSecretariat 'snoteonimplementation dates forofeachtypeofcommitment (G/AG/W/2/Rev.4)
which determine when notifications inaccordance withG/AG/2 aredue.
8. With respect topoints raised concerning notifications atprevious meetings, which havebeen
pursued bilaterally, therepresentative ofJapan informed theCommittee thatJapan hadheldseveral
informal bilateral consultations withHungary onHungary 'simplementation ofexport restrictions on
maize (G/AG/N/HUN/2 andG/AG/R/4, page15,refer). Therepresentative noted thatJapan, being
thelargest cereals importer intheworld, wasconcerned about theadverse effects ofthismeasure on
theinternational markets forcereals inanalready tightmarket situation. Japan wasseeking tocontinue
theseinformal consultations withaviewtoclarifying theissueinvolved. Therepresentative ofHungary
undertook toprovide further information ifrequested byJapan.
9. Under thisagenda item,therepresentative ofCanada informed theCommittee thattheEuropean
Communities hadresolved atechnical matter concerning theproduct definition ofpizza cheese forG/AG/R/5
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thepurpose ofatariff quota opened bytheEuropean Communities (G/AG/R/4, page11,refers). He
noted thattheEuropean Communities hadrecently circulated arectification totheWTO ontheproduct
definition ofpizza cheese (G/MA/TAR/RS/6, refers). Therepresentative ofCanada sought further
clarification fromtheEuropean Communities onarelated issue, astowhyquarterly import allocations
under thetariff quota forpizza cheese were largely filled despite aprevious product description for
pizza cheese (before rectification) which Canada considered prohibitive.
Matters Relevant totheImplementation ofCommitments under theReform Programme:
Article 18:6
10. TheCommittee tooknotethat,asagreed attheNovember meeting, informal consultations
regarding thedomestic absorption-related aspects ofColombia 'stariff quota allocation asnotified in
G/AG/N/COL/1 hadtaken place which hadbeen useful inhelping toclarify theissues involved
(G/AG/R/4, paragraph 7,refers). TheCommittee agreed tothecontinuation ofsuch informal
consultations, asappropriate.
11. Ontheissue ofHungary 'scompliance withitsexport subsidy commitments, theCommittee
tooknotethatseveral informal consultations onabilateral andplurilateral basis hadtaken place and
that,although arange ofissues relating toHungary 'sexport subsidy commitments andpractices had
beenclarified, noprogress wasmade which would havewarranted continuation ofthese informal
consultations. Therepresentative oftheUnited States informed theCommittee thattheUnited States
hadrecently requested, together withArgentina, Australia, Canada, NewZealand andThailand, formal
consultations withHungary under Article XXII oftheGATT 1994 (WT/DS35/1 andG/AG/W/23,
refer). TheUnited States considered thematter relating toHungary 'snon-compliance withexport
subsidy commitments asaveryserious onewhich called foraquick resolution. Therepresentative
oftheUnited States aswellseveral oftheother Members seeking theconsultations withHungary
noted thattheywould approach theformal consultations inaconstructive spirit withaviewtoexploring
mutually satisfactory solutions. Therepresentative ofNewZealand underlined thatNewZealand 's
decision tojointheconsultations under Article XXII oftheGeneral Agreement wasfounded onthe
extreme seriousness withwhich hisgovernment regarded anyattempt byWTO Members tomodify
export subsidy commitments. Therepresentatives ofAustralia andArgentina expressed similar concerns
inthisregard.
12. Therepresentative ofHungary assured theCommittee thatHungary would giveapositive
response totherequest forArticle XXII consultations. Therepresentative ofHungary reiterated a
point made attheSeptember meeting oftheCommittee innoting thatHungary 'sexport subsidy
commitments were theresult ofagrave error inestablishing baseperiod levels for1986-90 which
wasrelated toHungary 'sdifficulties inthetransition process towards amarket economy atacrucial
timeduring theUruguay Round. Henoted thatHungary 'scurrent export subsidies wereconsiderably
below levels which Hungary considered tobethecorrect commitment levels. Therepresentative stated
thatHungary 'sexport subsidies haddecreased byapproximately 70percentinrealterms since 1991
andthatthenumber ofeligible products hadbeenreduced byhalf. Hisdelegation regretted thefact
thatduring theinformal consultations ithadnotbeenpossible toadvance thediscussion withaview
tocorrecting Hungary 'scommitment levels. Therepresentative drew theattention oftheCommittee
tothefactthatHungary hadsofarrefrained fromredressing thesituation resulting fromtheerror by
taking steps which Hungary considered tobefullyinaccordance withtheprovisions oftheGeneral
Agreement, butwhich someMembers might qualify asanunprecedented solution. Insodoing, Hungary
hadacted withduerespect fortheconcerns ofthecomplaining parties withregard totheimplications
ofsuchaction butHungary would, ifnecessary, consider taking recourse toanylegaloptions available
toittodefend itsinterests.G/AG/R/5
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13. Therepresentative oftheEuropean Communities noted thattheCommunities considered the
Hungarian position tobeunacceptable. TheEuropean Communities tooktheviewthateachMember
hadtorespect itscommitments, inparticular since there were noprocedures available which would
allow suchcorrections. TheEuropean Communities werenotconvinced, onthebasisoftheevidence
provided, thatthesituation wastheresult ofanerror andurged Hungary tocomply with its
commitments. Several delegations expressed theirconcerns inthismatter andreserved theirrightto
revert tothisissue ortojointheformal dispute settlement consultations.
14. Therepresentative oftheUnited States sought clarification from theDominican Republic in
relation tothestatus ofimplementation ofitscommitments, amatter raised attheprevious meeting
oftheCommittee (G/AG/R/4, paragraph 12,refers). Therepresentative oftheDominican Republic
informed theCommittee thattheDominican Republic hadbegun toremove restrictions andtorevise
legislation which wasnotinconformity withtheAgreement onAgriculture, although most ofthe
measures concerned werenotimplemented inpractice. Shenoted thatnodirect subsidy measures were
inoperation. Therepresentative assured theCommittee ofthefirmwillofthegovernment ofthe
Dominican Republic toensure fullimplementation ofitsagricultural commitments assoonaspossible
andexpressed confidence thattheDominican Republic would shortly beabletoannounce theconclusion
ofitswork.
15. Therepresentative ofThailand raised amatter inrespect ofquantitative restrictions maintained
byEgypt ontheimportation ofpoultry andfowls, ameasure which appeared tobeinconflict with
Article 4.2oftheAgreement onAgriculture. Therepresentative noted thatEgypt hadsofarfailed
torespond toThailand 'swritten communications seeking clarification inthismatter andurged Egypt
tobring itsmeasure intoconformity withobligations under theWTO Agreement. Therepresentative
ofEgyptacknowledgedreceiptofthecommunicationsandundertooktoprovidetoaresponsetoThailand
shortly.
16. Australia raised amatter inrelation totheallocation ofm.f.n. tariff quotas bycertain WTO
Members tonon-members. Therepresentative expressed theviewthataccess opportunities under these
concessions should, inviewofthewayinwhich theywerenegotiated, bemade available exclusively
toWTO Members.
17. Therepresentative ofAustralia raised amatter withregard topossible changes intheapplication
oftheEuropean Communities 'special safeguard forfresh fruitandvegetables. Therepresentative
sought clarification withregard toanumber ofpoints which Australia understood werepartofproposed
changes totheeffect that:(i)allproducts facing theentry price system would inthefuture besubject
tothespecial safeguard, regardless oforigin, including within duty-free orpreferential tariff quotas
under freetrade agreements; (ii)thespecial safeguard would beapplicable evenintheperiod when
theentry price system isnotapplicable; (iii)thespecial safeguard would beapplied immediately on
imports without theapplication ofthetariffequivalent; and(iv)theprice-based andvolume-based special
safeguard could beapplied simultaneously andthusahighpricewould notprevent theimplementation
ofthevolume-based special safeguard. Henoted thatitwould beofconcern toAustralia ifpreferential
tariff quotas werenotexempt fromtheapplication ofthespecial safeguard provision since thiswould
leadtotheearly triggering ofthespecial safeguard andtheimposition ofadditional duties onthird
country imports. Heurged theEuropean Communities tohonour itstrigger levels asnotified andnot
toapply thespecial safeguard onfruits andvegetables which aresubject toentry price provisions.
18. Asarelated point tothematter raised byAustralia, therepresentative ofNewZealand sought
clarification withregard tothepossible introduction bytheEuropean Communities ofautomatic import
licensing procedures andexpressed concerns about thepossibility offurther administrative hurdles
forimports offruits andvegetables. Heexpressed theviewthatNewZealand considered thevolume-
based special safeguard tobeinappropriate incases where theentry price system hadbeenrespectedG/AG/R/5
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andthetariff equivalent hadnotbeenapplied. NewZealand would consider itaserious deterioration
ofaccess conditions compared withthepre-Uruguay Round import regime ifthevolume-based special
safeguard were tobeinvoked bytheEuropean Communities. Anumber ofdelegations associated
themselves withtheconcerns expressed.
19. Therepresentative oftheEuropean Communities acknowledged thattheEuropean Communities
were considering policy changes intheareareferred tobyAustralia. Henoted that,byvirtue of
Article 5oftheAgreement onAgriculture together withCommunities 'Schedule, theEuropean
Communities were entitled toinvoke thespecial safeguard. Hecategorically ruled out,asamatter
ofprinciple laiddown intheAgreement onAgriculture, thesimultaneous useoftheprice-based and
thevolume-based special safeguard. Therepresentative noted thattheECCommission considered
theprice-based special safeguard tobeinappropriate fortheproducts concerned andwasconsidering
introducing thevolume-based special safeguard. Attheappropriate time, theEuropean Communities
would bewilling toconsult bilaterally ontheissues involved andprovide further clarification tothe
Committee onAgriculture, asappropriate. Heassured theCommittee thattheEuropean Communities
would, atanyrate,scrupulously adhere toitscommitments. Inrelation totheimport licensing issue
raised byNewZealand, henoted thatitwould betheintention oftheEuropean Communities tointroduce
automatic import licensing procedures soastoenable theECtomonitor imports forthepurpose of
thevolume-based special safeguard. Themodalities under consideration weresuchthatimport licenses
would beissued automatically onthedayofapplication, subject toasecurity ofECU 1.5per100kgs.
20. TherepresentativeofArgentinaexpressedtheviewthattheproposedautomaticimportlicensing
scheme would introduce aconsiderable degree ofuncertainty among operators during thecurrent
marketing yearwhich might result inadeterioration inproduct quality andadecrease inprices. The
representative oftheEuropean Communities recognized thepossibility ofsome disturbance inthefruit
andvegetable market astheresult oftheintroduction ofthevolume-based special safeguard and
undertook thattheEuropean Communities would takeintoaccount theconcerns expressed bytrading
partners.
21. WithregardtoamatterraisedbyAustraliaandtheUnitedStatesinrelationtotheimplementation
ofcommitments bythePhilippines asindicated ontheagenda, theCommittee tooknoteofthepoints
made inthecourse oftheCommittee 'sreview ofnotification G/AG/N/PHL/1 atthepresent meeting
(page 14ofthisreport, refers).
22. Inrelation toamatter raised byCanada withregard totheuseofexempt export subsidies by
Thailand, therepresentative ofCanada noted thatCanada 'srequest forthismatter tobeputonthe
agenda hadbeenovertaken byThailand 'ssubsequent notification G/AG/N/THA/10 (paragraph 5of
thisreport, refers).
23. Therepresentative oftheUnited States raised amatter withregard tonewdomestic support
measuresfordairyproductsintroducedbyAustralia,amatterpreviouslyraisedattheSeptembermeeting
oftheCommittee (G/AG/R/3, paragraph 17,refers). Therepresentative noted thattheUnited States
hadconsulted withAustralia onhowthese newmeasures would affect Australia 'sability tomeetits
AMS commitments. Henoted that,onthebasis oftheinformation provided byAustralia, itwould
appear thatAustralia intended toalteritsmethod ofcalculation withrespect tothesupport price
provisions ofthedairy policy. Therepresentative ofAustralia noted that,under thenewarrangements,
therewasachange inthewaysupport isdelivered totheAustralian dairy industry necessitating aslight
change inthesupport calculation forthebaseperiod, theresult ofwhich wasnotinconsistent with
AMS calculations ofother Members.
24. Therepresentative oftheUnited States sought clarification from Guatemala withrespect to
progress intheimplementation ofcommitments inviewofthefactthatforanumber ofcommoditiesG/AG/R/5
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tariffquotas hadnotyetbeenopened, amatter alsoraised bytheUnited States attheprevious meeting
(G/AG/R/4, paragraphs 12-13, refer). Therepresentative ofGuatemala informed theCommittee that
Guatemala wasrespecting itsmarket access commitments withimports effectively equal to,orathigher
levels thanitscommitments. Foranumber ofproducts, including maize, rice,wheat andwheat flour,
administrative procedures would shortly besubmitted forcongressional approval andtheresults would
bedulynotified totheCommittee. Regarding other products suchastobacco andapples, thetariff
quota administration wasinthestage ofconsultation among domestic operators withtheexpectation
thattheoutcome would beconsidered forfinalapproval soon. Therepresentative oftheUnited States
stressed that,despite progress being made, Guatemala wasoveroneyearlateinimplementing some
ofitscommitments andexpressed thehopethatGuatemala 'scommitments would beimplemented in
fullinthecourse ofthecoming months.
25. Therepresentative oftheUnited States raised amatter concerning Kenya 'simport banondairy
products. Therepresentative sought ajustification forKenya 'smeasure inlightofKenya 'sobligations
under Article 4:2oftheAgreement onAgriculture. Therepresentative ofKenya acknowledged the
12month suspension ontheimportation ofprescribed dairy products witheffect from5January 1996.
Henoted thatKenya hadtaken recourse tothismeasure astheresult ofasurge inuntaxed andtherefore
illegal imports which hadgiven risetowhatKenya considered tobeunfair competition onthedomestic
market. Kenya 'sefforts tocurbtaxevasion hadbeensuccessful andthebanwastherefore under review
withtheintention ofitbeing lifted. Therepresentative oftheUnited States, while appreciating Kenya 's
problems, stressed thattheWTO Agreements offered remedies, suchassafeguard action, countervailing
andanti-dumping duties, which wereavailable toMembers where imports werecausing harm tothe
domestic industry. Theimport banasimplemented byKenya, however, wasnotsanctioned bythe
General Agreement. Heexpressed thehopethattheimport banwould belifted assoonaspossible.
26. Therepresentative oftheUnited States stated inrelation tothestatus ofimplementation in
Morocco thatthefactthatMorocco hadrecently submitted aMA:1 notification (G/AG/N/MAR/1,
refers) appeared todispel theconcerns oftheUnited States withregard Morocco 'sslow paceof
implementation ofitstariff quota commitments. Therepresentative ofMorocco noted thatMorocco
hadimplemented allofitscommitments.
27. TheUnited States raised amatter withregard toTurkey 'srestrictions onimports ofcornseed
maintained through asystem ofdiscretionary import licensing. Therepresentative oftheUnited States
noted thatanumber ofimporters ofUnited States cornseedhadbeendenied import licenses onthe
grounds thatdomestic supplies weresufficient tomeetmarket demand. Hesought clarification from
Turkey withregard tothejustification ofthismeasure inlightofArticle 4:2oftheAgreement on
Agriculture andonwhether Turkey hadnotified themeasure inquestion totheWTO Committee on
Import Licensing Procedures. Therepresentative ofTurkey undertook toprovide aresponse tothe
United States.
Counter Notifications under Article 18:7oftheAgreement onAgriculture
28. Therepresentative ofAustralia sought clarification fromMexico, intheabsence ofanMA:1
notification, withregard tothetariffquota forrawsugar andsugar containing products, theexpectation
being thatMexico hadaminimum access commitment fortheseproducts. Therepresentative ofMexico
noted thatAustralia 'sconcerns were notentirely clear toMexico butacknowledged thatthismight
beduetoMexico 'sfailure toprovide anotification. Itappeared toMexico thatthere weretwoissues
involved, onerelating tosugar andtheotherrelating toproducts which contain sugar. Therepresentative
noted thatrawcanesugar (HS1701.11) wasnotsubject toatariff quota commitment. Thereference
tominimum access wasasource ofconfusion since thistermappears onlyinArticle 5andAnnex 5
oftheAgreement onAgriculture andMexico hasneither usedanyspecial safeguards under Article 5G/AG/R/5
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norhaditinvoked special treatment under Annex 5.With regard tothesecond issue astowhether
Mexico wasapplying higher tariffs thanitsbound tariffs onproducts containing sugar, therepresentative
ofMexico stated thatthiswasnotthecase.
29. Therepresentative ofCanada sought clarification from Brazil astowhen Brazil would be
submitting thecomprehensive MA:1 notification originally duein1995 ontheadministration ofits
tariffandother quota commitments aswellasaMA:2 notification showing actual imports under these
tariff quota commitments. Therepresentative ofBrazil recognized Brazil 'sdelay innotifying the
administration oftariffquota commitments forapples andpears andforwheat. Heindicated thatBrazil
hadimplemented thetariff quota forapples andpears viatheapplied tariff of10percentwhich was
lower thanthebound in-quota tariffof15percent. Thetariffquota forwheat hadnotyetbeenopened
forreasons which wererelated tothecontinued efforts bytheBrazilian government toliberalize the
economy (e.g.elimination ofallsubsidies andderegulation ofthewheat trade). Therepresentative
noted that,inanycase, theimplementation ofBrazil 'stariff quota commitment of700,000 tonsof
wheat would nothaveanyimpact onitsoverall import needs ofsome 4million tonsofwheat annually.
PartII:Other Matters within thePurview oftheCommittee
Decision onMeasures concerning thePossible Negative Effects oftheReform Programme onLeast-
Developed andNetFood-Importing Developing Countries
30. TheCommittee tooknotethat,withaviewtoestablishing alistofWTO NetFood-Importing
Developing Countries ("thelist")forthepurposes oftheMarrakesh Ministerial Decision atthepresent
meetingoftheCommittee,WTOnet-foodimportingdevelopingcountryMemberswereinvitedtosubmit
notifications inaccordance withparagraphs 1(b)and2ofG/AG/3 by12March 1996(WTO/AIR/276,
refers). Asof12March 1996, tenWTO developing country Members hadnotified theWTO Secretariat
oftheirdecision tobeinscribed onthelist(G/AG/W/21, refers). TheCommittee tooknotethat
subsequently fourdeveloping country Members -Barbados, theDominican Republic, Honduras and
Venezuela -hadformally notified theirintention tobelisted asnetfood-importing developing countries.
31. Inaddition, therepresentative ofKenya presented aformal request atthemeeting thatKenya
beincluded inthelist.Henoted that,while recognizing Kenya 'sdelay, anotification including relevant
statistical datareferred toinparagraph 2ofG/AG/3 wasimminent. TheCommittee approved Kenya 's
request tobelisted.
32. Therepresentative ofMexico reserved Mexico 'srighttobelisted atalaterstage, ifthestatistical
datarequired under paragraph 2ofG/AG/3 were toshow thatMexico could exercise itsright.
33. Therepresentative ofKorea stated thatKorea hadnotsubmitted anotification forthepurposes
ofbeing listed since Korea, although onpurely conceptual terms itwould fallintothiscategory, had
nottheintention toclaim suchbenefits asreferred tointheMarrakesh Ministerial Decision. Korea
wished nonetheless toreserve itsrights regarding Korea 'sstatus asadeveloping country.
34. TheCommittee, acting under paragraph 3ofG/AG/3, established aWTO listofNetFood-
Importing Developing Countries comprising:
(i) least-developed countries asrecognized bytheEconomic andSocial Council ofthe
United Nations; plus
(ii) 15developing country Members which hadformally notified theirdecision tobelisted
asWTO NetFood-Importing Developing Country Members.G/AG/R/5
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35. Thelistwassubsequently issued asdocument G/AG/5. TheCommittee noted thattheinclusion
inthelistofMembers which hadnotyetsubmitted relevant statistical datainaccordance withparagraph
2ofG/AG/3 wasontheunderstanding thattheMembers concerned undertook todosoinduetime
soastoallow other Members toexamine theinformation.
Preparatory Work Programme concerning Paragraph 3(i)and(ii)oftheMarrakesh Ministerial
Decision
36. Therepresentative ofEgypt noted thattheCommittee 'sdecision toestablish aWTO listof
NetFood-Importing Developing Countries constituted aprocedural steptowards implementation of
theMarrakesh Ministerial Decision. Hestated thattheMinisterial Meeting inSingapore should be
devotedtoexamininghowMembersconcernedhadimplementedtheircommitmentsundertheMinisterial
Decision inaconcrete manner andtoidentify anyadditional stepsthatmaybenecessary. Heexpressed
theviewthatlackofconcrete action would create anenvironment ofuncertainty withregard tothe
balance ofbenefits andcostsoftheUruguay Round inEgypt andother countries concerned andimpair
thecredibility oftheinternational trading system. Therepresentative ofEgypt noted thatprices for
basic foodstuffs hadincreased since, orevenbefore, theentry intoforce oftheWTO on1January
1995, while foodaidlevels haddeclined totheirlowest levelin20years. Therepresentative expressed
theviewthattheincrease inprices, while inpartbeing duetoadverse weather conditions, waslargely
theresult oftheUruguay Round Agreement onAgriculture, including structural changes associated
withtheimplementation oftheUruguay Round commitments; supply control measures resulting in
stock depletion; andbudgetary cutsrelated toexport subsidy reduction commitments. Hestressed
thatthecommitments undertaken bydeveloped country Members under theMarrakesh Ministerial
Decisionhadtobeimplementedfaithfullyatboththemultilateralandthebilaterallevels.Egyptproposed
thattheCommittee, withaviewtoelaborating aplanofaction inadvance oftheMinisterial Meeting
inSingapore, consider: (i)agreeing onanearly timelimitforthesubmission ofproposals inrespect
ofPartCoftheWork Programme G/AG/4; (ii)requesting developed country Members topresent
actions taken aswellasproposed actions within theframework oftheMinisterial Decision, and(iii)
forwarding areport onthepriceincrease forfoodstuffs aswellasthedecrease infoodaidtotherelevant
international organizations andinstitutions withaviewtoseeking theirsuggestions onhowtoimplement
theMarrakeshMinisterialDecision,theresponsestowhichwouldbeforconsiderationbytheCommittee
andforinclusion, asappropriate, initsreport totheMinisterial Conference inSingapore. The
representative reiterated Egypt 'sdisappointment attheposition oftheIMFandWorld Bankaselaborated
attheNovember meeting oftheCommittee andurged theorganizations concerned toreconsider their
positions inlightoftherecent market developments forfoodstuffs.
37. Jamaica suggested thattheWTO Secretariat, inconsultation withtheIMF, theWorld Bank
andtheFAO, undertake ananalysis ontherelationship between therecent priceincrease forfoodstuffs
andtrade liberalization resulting from theUruguay Round, aproposal which wassupported bythe
representative ofPeru. Therepresentative ofJamaica urged furthermore thatthepacetowards full
implementation oftheMinisterial Decision beaccelerated andcommitments under theDecision be
honoured.
38. Therepresentative ofCanada noted thatoneofthequestions facing theCommittee waswith
respect totheappropriate forum toinitiate discussions ontheappropriate level offoodaid. The
representative recommended thattheWTO Secretariat drawupalistofthespecific decisions implicit
intheMarrakesh Ministerial Decision asabasis forinformal consultations to"refine" thework
programme, andtodetermine appropriate timeframes aswellasbodies bestplaced toadvise the
Committee onthese matters. Heexpressed theview thattheSingapore Ministerial Meeting called
forareport onsteps taken bytheCommittee tomonitor theimpact ofthereform process onfood
supplies asabasis fortheMinisterial review, andproposed thattheCommittee consider thenatureG/AG/R/5
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ofsuchreview. Therepresentative ofJapan supported theproposal made byCanada. Therepresentative
oftheUnited States welcomed thefactthattheFood AidCommittee oftheFood AidConvention had
agreedtocommencebackgroundworkonthematterunderconsiderationandsupportedCanada'sproposal
thattheCommittee identify elements ofthework programme which might benefit fromtheexpertise
oftheFood AidCommittee andother relevant international organizations.
39. Therepresentative oftheEuropean Communities recognized that,anyweather-related impact
notwithstanding, theresults oftheUruguay Round andthebeginning ofthereform process hadindirect
effects ontheavailability offoodstuffs. Henoted that,although ithadnotbeenanticipated thatthe
market situation would change soquickly anddrastically, theMarrakesh Ministerial Decision foresees
thepossibility ofproviding assistance tocountries negatively affected bythereform process. The
representative supported theideathattheCommittee continue onthebasisofitswork programme with
aviewtoreaching appropriate conclusions attheSingapore Ministerial Conference.
40. TheCommitteeagreedthattheChairmanundertakeinformalconsultationsontheimplementation
ofthepreparatory workprogramme assetoutinG/AG/4, taking intoaccount theproposals made during
thepresent meeting oftheCommittee.
41. Therepresentative oftheInternational Grains Council informed theCommittee thattheFood
AidCommittee hadrecently considered itsresponse totheinvitation bytheWTO Secretariat tomake
acontribution totheWTO 'sreview offoodaidneeds andavailabilites aswellasguidelines on
concessionality. TheFood AidCommittee hadconfirmed itswillingness tocooperate withtheWTO
andtoprovide appropriate information thatmayberequested forthispurpose. Meanwhile, thematter
would bekeptunder review intheFood AidCommittee. Therepresentative noted thattheissue of
improving the"quality" oftheassistance provided soastoenhance thevalue offoodaidtofinal
recipients would befurther examined intheFood AidCommittee.
Notification Requirements inrespect ofSubsidies under theAgreement onSubsidies and
Countervailing Measures andtheAgreement onAgriculture
42. TheCommittee tooknotethatAmbassador Tulalamba, asChairman, hadreceived from the
Chairman oftheWorking Group onNotification Obligations andProcedures acommunication inviting
theCommittee onAgriculture togivefurther consideration totheissue ofduplication ofnotification
formats andrequirements.
43. Therepresentative oftheUnited States informed theCommittee thattheUnited States had
circulated toaninformal meeting oftheWorking Group draftnotification formats modelled onthe
formats oftheCommittee onAgriculture G/AG/2 andmodified toinclude thesubstance ofnotification
obligationsundertheAgreementonSubsidiesandCountervailingMeasures("theSubsidiesAgreement"),
theideabeing toconsolidate bothnotification formats without sacrificing anything inthewayof
transparency. Theobjective would beestablish acompromise intheWorking Group, theresulting
notification format ofwhich would bepresented asawhole tobothCommittees concerned, without
re-opening thedebate onnotification requirements andformats intheCommittee onAgriculture. The
representative oftheEuropean Communities noted thattheEChadalsosubmitted apaper identifying
whatitconsiders tobeoverlap innotification requirements. Other Members expressed doubts about
re-opening thenotification issue butexpressed awillingness toexamine theproposal oftheUnited
States andthepaper oftheEuropean Communities.G/AG/R/5
Page10
Formal Rules ofProcedures fortheCommittee onAgriculture
44. TheCommittee tooknotethat,asagreed attheNovember meeting oftheCommittee, the
Chairman, Ambassador Tulalamba, hadconsulted informally onthematter offormal rulesofprocedure
fortheCommittee onthebasisofaSecretariat draft, theresulting revised version ofwhich wasbefore
theCommittee forconsideration andapproval (G/AG/W/22). TheCommittee adopted therules of
procedurecontainedinG/AG/W/22onthebasisthattheywouldbeforwardedforapprovaltotheCouncil
forTrade inGoods inaccordance withparagraph 6ofArticle IVoftheWTO Agreement.
Preparatory Work bytheCommittee onAgriculture intheContext oftheSingapore Ministerial
Meeting
45. TheCommittee tooknotethattheCommittee onAgriculture would berequired toprovide
areport totheCouncil ofTrade inGoods orother information forthepurpose oftheSingapore
Ministerial Meeting. TheCommittee therefore requested Ambassador Tulalamba tocarry outinformal
consultations, including onmatters, suchasanyissues involved intheMarrakesh Ministerial Decision
onMeasures concerning thePossible Negative Effects oftheReform Programme onLeast-Developed
andNetFood-Importing Developing Countries, thatmaybenecessary inorder tohaveanappropriate
basis forconsideration bytheCommittee atitsnextregular meeting inSeptember.
Other Business
46. Under "other business", therepresentative ofArgentina expressed concerns inrelation toa
communication oftheEuropean Communities circulated asdocument G/L/65/Rev.1, inwhich the
European Communities hadnotified theconclusion ofnegotiations withmosttrading partners under
Article XXIV:6 oftheGeneral Agreement regarding theaccession ofAustria, Finland andSweden
totheEuropean Communities. Therepresentative tookexception tothereference totrigger prices
under Article 5oftheAgreement onAgriculture inthecommunication attached tothedraftSchedule
CXL,wheretheEuropeanCommunitiesstatedthatthetriggerpricesshouldbeconsideredasan"integral
part" ofitsSchedule. Heexpressed concern overtheprocedure chosen bytheEuropean Communities
which Argentina considered tobeanamendment totheSchedule andapoorprecedent forthemultilateral
trading system. Inhisview, theCommittee onAgriculture wastherelevant forum todealwithissues
concerning thespecial safeguard. With reference totheEuropean Communities being prepared to
bindother commitments initsSchedule CXL(paragraph 3ofG/L/65/Ref. 1,refers), therepresentative
ofArgentina questioned thelegalbasisfortheEuropean Communities requesting comments onsubsidy
commitments, given thattheprovisions ofArticle XXIV:6 wereonlyapplicable tothetariffconcessions,
notsubsidy commitments. InArgentina 'sview, anydecision onthismatter should beprepared in
theWorking Party ontheenlargement oftheEuropean Communities forconsideration andadoption
bytheCouncil forTrade inGoods. Therepresentative ofAustralia expressed theviewthatithad
beenensured intheUruguay Round negotiations thatcommitments inPartIVofSchedules could not
besubject tomodification orwithdrawal under Article XXVIII oftheGeneral Agreement. Henoted
thatitwould therefore bemost disturbing ifaMember were tounilaterally withdraw ormodify its
subsidy commitments. Heendorsed theviewthatmutually satisfactory solutions onthespecific issue
involving theEuropean Communities should besought inthecontext oftheWorking Party onthe
enlargement oftheEuropean Communities.
47. Anumber ofdelegations flagged similar concerns onthisissue. Therepresentative ofMexico
expressed theviewthatthetrigger prices notified bytheEuropean Communities ought tobesubject
tomultilateral verification.G/AG/R/5
Page11
48. Therepresentative oftheEuropean Communities noted thattheEuropean Communities had
nottheintention ofunilaterally modifying itsdomestic support andexport subsidy commitments. It
considered thatitwasnotaquestion ofmodifying existing commitments butoneofmerging the
commitments oftheEuropean Communities (12)withthose ofitsnewmember states. TheEuropean
Communities haddeemed ittimetocirculate itsdraftSchedule CXL inorder toenable Members to
examine itsSchedule, notleastinviewofthefactthattheWorking Party ontheenlargement ofthe
European Communities hadnotyettaken upitswork. Inanycase,theEuropean Communities would
beamenable tofurther discussing solutions withMembers ontheprocedural point raised Argentina.
With regard tothetrigger price issue, therepresentative oftheEuropean Communities stated the
European Communities hadalways made itclearineachofitscommunications totheWTO regarding
theSchedule oftheEuropean Communities thatitconsidered thetrigger prices aspartofitsSchedule;
thelistoftrigger prices attached toitsdraftSchedule CXL wasinkeeping withprevious practice.
Appointment ofChairperson
49. TheCommittee tooknotethattheCouncil forTrade inGoods hadappointed Ambassador
Tulalamba ofThailand toholdtheoffice ofChairperson oftheCommittee onAgriculture in1996
(G/C/M/8, page12,refers).
Date ofNext Meeting
50. Thenextmeeting oftheCommittee onAgriculture willbeheldon24-25 September 1996.
Theairgramme convening thismeeting andthedraftagenda willbeissued on12September 1996.G/AG/R/5
Page12
ANNEX
Review ofNotifications bytheCommittee onAgriculture atitsMeeting on28-29 March 1996
Summary ofSpecific Points Raised andResponses Thereto
Canada G/AG/N/CAN/2/Add.1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
European Communities/New Zealand -Expressed
concerns regarding theallocation ofthetariff
quota forbutter totheCanadian Dairy
Commission.
New Zealand -Noted thatnobutter under tariff
quota hadbeen imported intoCanada despite the
price gapbetween Canada 'sinternal price andthe
world price. Thissituation wassolely duetothe
import monopoly powers thathave been granted to
theCanadian Dairy Commission. Canada had
thereby reverted toameasure required tobe
converted intoordinary customs duties, contrary to
Article 4:2oftheAgreement onAgriculture. The
representative ofNew Zealand reminded Canada
ofitsobligations under Article II:4oftheGATT
1994.
New Zealand expressed concern withregard to
Canada 'sinterpretation ofparagraph 3b(i) ofthe
Committee 'snotification requirements andformats
G/AG/2 (page 3thereof, refers).Canada noted thattheCanadian Dairy Commission
andtheNew Zealand Dairy Board were
commercially operated entities andgovernments
should notintervene inpricing.
Canada would submit anMA:2 notification prior
totheSeptember meeting oftheCommittee which
would show whether ornotbutter wasimported
under thetariff quota.
European Communities/New Zealand/Australia -
Noted thattheallocation ofthetariff quota for
butter wassubject tothecondition thatimported
butter beused byprocessors orfurther processors.
New Zealand andtheEuropean Communities
considered thatthisrequirement wasanadditional
restriction notbound inCanada 'sSchedule.
United States -Noted thatthere were noclear
rules which would prohibit allocating tariff quotas
toprocessors. However, Members have the
obligation under theAgreement onImport
Licensing Procedures andother provisions ofthe
WTO toensure thatthemethod oftariff quota
administration does notimpair thevalue ofthe
concession.Thecountry reserve of1,200 tonsofbutter for
New Zealand represented theonlycondition
attached totheallocation ofthetariff quota for
butter. TheCanadian retail market ofbutter had
been declining, whereas theindustrial market had
been growing. TheFederal Government had
therefore decided toprovide imported butter ona
priority basis totheindustrial sector.G/AG/R/5
Page13
European Communities G/AG/N/EEC/1, Corr.1 and2,Add.1
Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
Australia -Noted thatbilateral informal
consultations would continue ontheissue ofthe
allocation ofm.f.n. tariff quotas topreferential
supplying countries.
Canada -Clarification sought regarding thetariff
quotas which hadnotbeen notified under Table
MA:1. Didlackofnotification mean thatthe
initial access level waszero? Could theEC
provide information onhowthetariff quotas for
theremaining products would beadministered, in
particular forpigmeat.Products forwhich theinitial access level was
zerohadnotbeen notified inTable MA:1. The
ECwould notify thetariff quota administration in
duecourse.
United States -When willthetariff quotas be
notified forlemons andoranges?Tariff quotas forlemons andoranges are
administered onacalendar yearbasis andwillbe
notified shortly.
Indonesia G/AG/N/IDN/1 and3Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
New Zealand -Expressed theview thatthe
notification does notreflect theunderstanding
reached intheUruguay Round andthebilateral
discussions, inparticular withrespect tothe
applied tariffs andthetariff linecoverage.
Clarification sought regarding thepossible
intensification ofrestrictions ontheimports of
dairy products.There isnointensification ofrestrictions.
Technical difficulties inpreparing thenotification
willbesolved. Bilateral discussions withNew
Zealand willcontinue.
Australia -Clarification sought regarding thetariff
quota forrice. Which tariff lines arecovered by
theglobal quota? What isthemeaning ofthe
footnote indicating thattheallocation ofthetariff
ratequota ismade onthebasis ofprevious
domestic consumption andprocurement plans
(G/AG/N/IDN/1, footnote (b),iii,page 2)?Does
BULOG callfortenders?
Could Indonesia confirm itsintention toadjust the
arrangement forriceoverthenexttenyears?
United States -Clarification sought astowhether
Indonesia hadinvoked thespecial treatment for
riceunder Annex 5oftheAgreement on
Agriculture.Indonesia hasimplemented atariff quota forrice,
which hasbeen notified totheCommittee of
Agriculture. Theadditional questions willbe
reverted to.
Australia -Clarification sought regarding milk and
cream offatsanditsproducts. Does the
notification cover tariff lines HS0403.90100 and
HS0405.00100? Could Indonesia givean
indication ofthecurrent ratio ofdomestic
production toimports?Indonesia willprovide information.G/AG/R/5
Page14
Philippines G/AG/N/PHL/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
Australia/Canada/European Communities/United
States -When willthetariff ratequotas be
implemented fortheremaining products? Given
thedelay inimplementation, howwillthe
Philippines ensure thattariff ratequotas willbe
filled before 30June 1996?
Canada -Confirmation requested thatthere willbe
anincrease ofthetariff quota forpork inlinewith
thecommitments undertaken intheUruguay
Round.Noted thattheCongress ofthePhilippines had
adopted theAgriculture Tariffication Actandthe
President hadsigned it.TheAgriculture
Tariffication Actrepeals laws andprovisions
requiring theuseofnon-tariff measures against
imports ofagricultural products, except forrice.
TheGovernment ofthePhilippines would takeall
necessary measures toimplement itsminimum
access commitments assoon aspossible.
AsofDecember 1995, thePhilippines had
imported: 192,000 head ofcattle; 2,400 head of
swine; 44,000 tonsofbeef, 776,000 tonsof
sugar; 61,000 tonsofcoffee; 208,000 tonsof
corn; 263,000 tonsofrice; 2,000 tonsofpork and
poultry. ThePhilippines hasthuscomplied with
itsminimum access commitments withthe
exception ofpork andpoultry meat where imports
areexpected tocatch upbytheendoftheyear.
Except forbeefwhich wasimported atthebound
in-quota tariff, imports entered atlower rates than
therespective bound in-quota tariffs.
European Communities -Clarification sought
regarding theliberalization ofimports oflive
horses? Does thismean thatthedutyrateiszero?Theimports oflivehorses were liberalized in
1992 andtheapplied customs duties range from 3
to10percent.
United States/Canada -Clarification sought
regarding theimplementation ofthetariff quotas
forpork andpoultry meat. When willthetariff
ratequotas beopened? Arethere sub-allocations
oftheHSfour-digit access commitments attheHS
six-digit level? Ifso,howdoes thesystem work?ThePhilippines iscurrently determining sub-
allocations oftheHSfour-digit access
commitments totheHSeight-digit level. A
notification willbeforthcoming.
United States/Australia/New Zealand/European
Communities -Concerns raised regarding the
administration oftariff ratequotas bystate trading
enterprises andtheir potential toimpair thevalue
ofconcessions.Theimportation ofriceandother bulkproducts is
undertaken solely bystate trading enterprises.
Under thissystem market access opportunities are
fully provided andstate trading enterprises arenot
ameans todampen domestic demand. Thisaimis
tofacilitate small importers togroup themselves in
order tobeabletopurchase inbulk.
United States/Argentina -Noted thattheimports
under tariff ratequotas aresubject tothecondition
thatimporters beregistered oraccredited. Who is
eligible toregister/apply foraccreditation? Are
non-citizens eligible? Arefirms, organizations,
individuals whoaredulyregistered/accredited
permitted toimport oraretheyonlyeligible to
receive products imported bythestate trading
enterprise?Atthemoment, onlyend-users andprocessors are
eligible toregister/apply foraccreditation.
Registration/accreditation allows themonitoring of
theactivities offirms inorder toensure
quantitative requirements andisfortaxpurposes.G/AG/R/5
Page15
South Africa G/AG/N/ZAF/1/Rev.1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
Canada -According totheSouth African
Schedule, thein-quota tariffs willnotexceed 20
percentofthebound rate. Thus forpork, thein-
quota rateshould notexceed 9percentin1996.
How does South Africa explain therateof15per
centapplied toalmost allcutsofpigmeat, except
ribswhich enter dutyfree? Canada considered
thatnotariff should behigher thanthebound rate,
including ontrade insub-items.South Africa 'scommitments aremade attheHS
four-digit level. 80percentoftheimports of
pigmeat (under tariff heading HS0203) areribs.
Once thequota hasbeen filled, South Africa has
nofurther obligations tocontinue toapply thein-
quota tariff rate, nortoextend ittoother products
which areunder thesame four-digit heading line.
European Communities -Clarification sought
regarding theexclusion ofsweet milk andcheddar
cheese from theglobal tariff quota forcheese.
New Zealand andtheECconsidered thatno
products should beexcluded from thetariff quota.Thereasons whysweet milk andcheddar cheese
have been excluded from theglobal tariff rate
quota forcheese arethefollowing: firstly, South
Africa isselfsufficient inthese twoproducts and
secondly, thetariff quota isfilled byother
cheeses, which reflects thetrade pattern ofthe
past. During thefirstninemonths of1995,
imports exceeded theannual tariff quota by80per
cent.
European Communities -Noted thatthetariff rate
quota fordried grapes issub-allocated between
100tonsofcurrants andother dried grapes. On
what basis isthetariff ratequota allocated?Thecurrently applied m.f.n. tariff islower than
thein-quota tariff anditistherefore notnecessary
toadminister atariff quota. Acorrigendum tothe
notification willbeforthcoming.
New Zealand -Clarification sought regarding the
dateofimplementation ofaccess commitments.
WillSouth Africa allow additional tariff quota
access opportunities in1996 tocompensate forlate
ornon-implementation oftariff quotas in1995?Theimplementation oftariff quotas inSouth
Africa isalongprocess involving three different
government departments. Duetotheextensive
tariffication process tariff quotas were not
implemented forallproducts in1995. However
applied tariffs were inmost cases lower thanthe
in-quota ratelisted intheSchedule andimports
increased inmost other cases where acommitment
existed. South Africa does nottherefore intend to
addany1995 quantities toits1996 tariff quota
access opportunities.
New Zealand -Clarification sought regarding the
validity period ofimport permits, which isthree
months inthenotification andfourmonths inthe
government gazette.Ifthere isaneed, thethree month validity period
canbeextended without prior notification tothe
WTO. Thelonger period ofvalidity assists
importers.
New Zealand -Does South Africa credit import
quantities allocated under preferential trade
agreements against itsminimum access
commitments? Ifso,what arethedutyrates
applied? New Zealand andArgentina expressed
theview thatimports under preferential
agreements should notbecredited against
minimum access commitments. New Zealand
considered thatimports under preferential
agreements could notbecharged alower dutyrate
thanthose applied tom.f.n. tariff quotas.Imports under preferential agreements were
included inthecalculation ofmarket access
commitments. Thedutyrates applied to
preferential imports arebydefinition lower than
those applied toglobal suppliers.G/AG/R/5
Page16
South Africa G/AG/N/ZAF/1/Rev.1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
New Zealand -Noted that85percentofthetariff
ratequota formilk powder andbutter was
reserved fortraditional manufacturers. How does
South Africa explain thisallocation tothedomestic
industry, withwhich imports willbecompeting in
theSouth African market?Prior totheUruguay Round, traditional
manufacturers accounted formore than85per
centofmilk powder andbutter imported.
Argentina -Clarification sought regarding the
allocation oftariff ratequotas to"traditional
suppliers", onapriority basis, forbovine meat,
sheepmeat andsugar.
What does traditional suppliers mean?
What does thecriterion "proratabasis "mean?
Isthere anyprovision forother countries?Traditional suppliers arethose countries which
supplied theSouth African market during themost
recent three years. The"proratabasis" means
thattheallocations aremade onthebasis ofthe
pastrelative shares inimports inthe1992-1994
period. Inmost cases anamount, typically 5to
10percentofthequota, isreserved fornew
importers.
Switzerland G/AG/N/CHE/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members
Australia/European Communities/New Zealand/Canada/Mexico -Clarification sought onthefunctioning
ofthe"prise encharge" system. Does Switzerland claim thatthedomestic purchase requirement isin
conformity withArticle III:1 oftheGATT 1994 andArticle 4:2oftheAgreement onAgriculture?
Response byNotifying Member
The"prise encharge" system isbeing handled inamanner which innocaseconstitutes, either dejure
ordefacto, market access conditions more restrictive thanthose applied during thebaseperiod. The
following principles areapplied inconformity withtheAgreement onAgriculture, inparticular
Article 4.2thereof, andArticle 3oftheAgreement onImport Licensing Procedures: no"prise en
charge" applies toimports outside access commitments; nodomestic purchase obligation ishigher than
during thebaseperiod; andnoproduct issubject toaratio forimports versus domestic purchases which
would pre-empt thepossibility offullabsorption bythedomestic market ofthetotal tariff quota forthat
product. Forexample, iftotalconsumption foroneproduct is1,000 tonsandthetariff ratequota is
500tons, theobligation topurchases domestically must notexceed 1:1. Inaddition, producers andtheir
organizations arenotentitled totariff ratequotas forproducts subject to"prise encharge". The"prise
encharge" system hastherefore notrade-restrictive effect over andabove therestriction inherent inany
tariff quotas. Switzerland 'sforthcoming MA:2 notification regarding quota utilization willshow thatin
most cases theWTO-bound tariff ratequotas have been fully used. Thesystem does notinanyway
influence import origin, import prices orquality. Itcould beargued that"prise encharge" enhances
quota fill,since theauthorities handling quota imports might finditdifficult toprove lackofdemand in
cases where products subject to"prise encharge" arenotimported uptothescheduled quantities. In
other words, theSwiss "prise encharge" system means thatmarket access opportunities have a
tendency, through theapplication of"prise encharge", tobecome market access "obligations". In
summary, the"prise encharge" system isatariff quota allocation system which inlegal terms
constitutes aninternal measure which deals elegantly andefficiently withtheinevitable problem ofquota
rents. Itisnot(andcannot be)awayofensuring absorption ofdomestic production attheexpense of
imports. There isthusnoinfringement ofWTO rights ofother Members orobligations ofSwitzerland
under thevarious WTO Agreements which maybeapplicable.G/AG/R/5
Page17
Switzerland G/AG/N/CHE/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members
European Communities/Canada -Clarification sought ontheuseofauctioning.
Response byNotifying Member
Asregards auctioning, thesituation issimilar totheoneapplicable tothe"prise encharge" inlegal
terms. Thequestion astowhether auction feesarelevies inthesense ofArticle II:1(b) and
Article VIII:1(a) oftheGATT 94hastobeanswered inlight oftheratio legis ofthese provisions. A
distinction should bemade between in-quota tariff rates andout-quota tariff rates. Auctioning tariff rate
quotas may(ormaynot)replace ameasure withsimilar effect inplace during thebaseperiod, inwhich
caseitwould appear tobeinconformity withprovisions relating tothecurrent access definition ofthe
Agreement onAgriculture. Switzerland hasnointention ofauctioning minimum access quotas. Both
Articles IIandVIIIapply toborder measures. Their purpose istoensure thattheonlyform of
legitimate border protection isexpressed intariffs andtheir equivalent, andtoprovide equal market
opportunities toallWTO Members. Auctioning does notinanywayrestrict market access
opportunities.
Auctioning istherefore aninternal measure used toallocate tariff ratequotas atthebound rates,
primarily intended toincrease competition andtoshiftthequota rentfrom importers totheGovernment.
Auction premia arethusacharge ontheright toobtain import licences, butnotacharge imposed on,or
inconnection with, importation.
Asanadditional consideration itmaybeargued that, although auctioning might bequestionable from a
purely legalistic viewpoint, itconstitutes intheSwiss case"abestavailable option" compared with
alternatives such asthehistorically veryhighimporter rents prevalent during thebaseperiod; insome
cases auctioning appears even preferable, from aneconomic andprocedural point ofview, tothe"first-
come-first-served" system. Insummary, auctioning does notconstitute aborder measure intheterms of
Articles IIandVIIIoftheGATT 1994. Itisaneconomically efficient andequitable wayofensuring
thatthequota rentwhich isinherent inanytariff ratequota goes atleast partly tothegovernment.
Exporters 'rights andinterests arenotaffected.G/AG/R/5
Page18
Switzerland G/AG/N/CHE/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
Australia -How does Switzerland sub-allocate
tariff quotas fordairy products, bread grains and
coarse grains?Switzerland undertook torespond inwriting.
New Zealand -Clarification sought regarding the
Butter Supply Board.Theimport monopoly forbutter hasbeen a
traditional monopoly andhasbeen notified for
many years under Article XVII oftheGATT.
TheSwiss government hastheintention toabolish
thisBoard.
United States -Noted thattheadministration of
tariff ratequotas forwine encountered difficulties
in1995. CanSwitzerland confirm thatthesystem
willbealtered before thebeginning ofthe1996/97
marketing year? Ifso,could Switzerland provide
some information onthenewsystem?Since 1996 import licences areissued onafirst-
come-first-served basis. Asthissystem metwith
anumber ofproblems thegovernment iscurrently
looking forbetter ways toallocate tariff quotas in
1997.
Argentina -Clarification sought withregard tothe
statement inthenotification forvegetables and
fruits that"theallocation oftariff ratequota shares
maybesubject topurchase commitments inorder
toensure thatforeach yearaproduct under tariff
quotas does notexceed market demand"?Thegovernment relies onadvice given byan
expert group composed ofimporters, producers
andconsumers. Their recommendations arebased
onestimates ofproduction anddemand forecasts.
Argentina -Clarification sought regarding the
persons eligible fortariff quota shares forfruits,
cider andseeds fruitproducts. Are foreigners
based inSwitzerland eligible?Foreigners based inSwitzerland areeligible.
Argentina -Noted thattheallocation oftariff
quotas forbread grains issubject tothecondition
that"apermanent ratio of85percentpurchases in
Switzerland to15percentimports must be
observed"and theallocation ofthetariff quotas for
horses aremade onthebasis ofpurchases ofSwiss
horses. Does Switzerland claim thatthese
requirements areinconformity withArticle III:4
oftheGATT 1994 andtheTRIMs Agreement?With regard tothe"prise encharge" system, see
answer tothegeneral question above. Forbread
grains, imports equal orexceed thetariff rate
quota.
Mexico -Noted thatimport permits forcutflowers
andvegetable products aregranted onthebasis of
purchase ofdomestic products andlicences arenot
granted when theygobeyond market demand.
Does Switzerland claim thatthese requirements are
inconformity withtheGATT 1994?These criteria areused inorder toadjust
Switzerland 'sdemand seasonally. Notification
MA:2 willshow thattariff quota imports in1995
have considerably exceeded thelevels bound inthe
Schedule.G/AG/R/5
Page19
Thailand G/AG/N/THA/6 to8Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
New Zealand/European Communities/Australia -
Clarification sought regarding theallocation of
tariff quotas todomestic producer organizations, in
particular fordairy products.Tariff quotas fordairy products areallocated to
juridical persons withhistorical performance
during 1991-1994. There arethree groups of
importers: theDairy Farming Promotion
Organization; theMinistry ofAgriculture and
Cooperatives; manufacturers ofcondensed milk.
In1995, Thailand imported 53,500 tonsofmilk
andcream ascompared toacommitment of
45,000 tons. Formilk andcream (not
concentrated) there have been noimports.
Poland G/AG/N/POL/1 Tariff Quota Administration (Table MA:1)
Points raised byother Members Response byNotifying Member
Argentina -Clarification sought regarding the
footnote indicating thatthe"quantity allocation for
each importer maybelimited, inparticular for
meats, milk andeggs (G/AG/N/POL/1,
footnote (b)iii). How willPoland limit the
quantity allocated?Thecriterion applies when demand fortariff
quotas exceeds thetariff quota.
Australia -Clarification sought regarding thetariff
quotas which have notyetbeen notified. Canitbe
assumed thatthetariff rates applied arelower than
thein-quota rates listed intheSchedule?Thetariff rateapplied islower thanorequal tothe
in-quota rates.
Australia/United States/New Zealand/Uruguay -
Clarification sought regarding theallocation of
m.f.n. tariff quotas topreferential supplying
countries.Import quantities allocated under preferential trade
agreements arenotcredited against theminimum
access commitments.
United States -Thenotification states thattariff
ratequotas areallocated bytheMinistry of
Foreign Economic Relations andlicences are
issued bytheDepartment ofTrade Relations -
Agriculture Section. Arethere anyrestrictions on
theeligibility ofapplicants foranimport licence?Undertook toprovide response.
Mexico -Clarification sought regarding the
allocation oftheglobal tariff ratequota foritem
HS22.08? Does Poland takeintoaccount any
typeofpreferential agreement?Undertook toprovide response.G/AG/R/5
Page20
Thailand G/AG/N/THA/9 Tariff Quota Fill(Table MA:2)
Points raised byother Members Response byNotifying Member
European Communities/Argentina -Clarification
sought regarding thetariff ratequotas which have
notbeen filled, inparticular forcoffee, longans,
onions, garlic, rawsilk,coconut oil,milk and
cream.Tariff ratequotas have notbeen filled because
there wasnodemand forimports.
Foronions there were noimports, butThailand
exported 12,700 tons(20% ofproduction) and
domestic prices were wellbelow world prices.
The1996 tariff quota hasalready been opened for
onions andother products.
Canada G/AG/N/CAN/4 Tariff Quota Fill(Table MA:2)
Points raised byother Members Response byNotifying Member
European Communities -Noted thattariff quota
formargarine amounts to4,535 tons, whereas
Canada hadimported 87tons.
ECwould liketorevert tothismatter.Tariff quotas formargarine areadministered ona
first-come-first-served basis. Theallocation was
initially subject tothree conditions: 1)aquarterly
limit; 2)alimit of100tonspercompany per
yearand3)areserve of50tonsforkosher
margarine which isnotmade inCanada.
Canada hasimported 87tonsofkosher margarine.
Although theconditions were relaxed
progressively, there wasnodemand forother
margarine.
Korea G/AG/N/KOR/2/Add.1 Trigger Prices (Table MA:4)
Points raised byother Members Response byNotifying Member
European Communities -Clarification sought
regarding thebaseperiod used tocalculate trigger
prices.
United States -TheUnited States hadagreed
during Uruguay Round toKorea 'schoice ofthe
baseperiod 1988-90 forthetariffication exercise.Forreasons ofconsistency, Korea hasused the
baseperiod 1988-90 instead ofbase-period 1986-
88.Thesame prices have been used forthe
calculation oftariff equivalents duetothe
transition from theCCCN totheHSin1988.
Australia/New Zealand -Clarification sought
regarding apress report indicating thattheKorean
Government would seektoimpose aspecial
emergency tariff for31products duetobe
liberalised on1July1997 inorder todiscourage
imports.That isonlyarumour.
Malaysia G/AG/N/MYS/2 Export Subsidies (Table ES:1 ToES:3)
Points raised byother Members Response byNotifying Member
Canada -Thenotification indicates thatMalaysia
hadnoexport subsidy programme subject to
reduction commitments in1995. Arethere other
export subsidy programmes notsubject to
reduction commitments?Malaysia didnotmaintain anyexport subsidies.G/AG/R/5
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United States G/AG/N/USA/3 Tariff Quota Fill(Table MA:2)
Points raised byother Members Response byNotifying Member
Argentina -Clarification sought regarding peanut
butter andpaste. Could theUnited States explain
whythetariff quota wasonlytwothird filled?Tobereverted to.
United States G/AG/N/USA/4 Summary ofSpecial Safeguard Actions (Table MA:5)
Points raised byother Members Response byNotifying Member
New Zealand -Clarification sought withregard to
theuseofthespecial safeguard on15kilograms
ofcheese imported from New Zealand.Tobereverted to.