RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/R/17
25 January 1999
(99-0279)
Committee on Agriculture
SUMMARY REPORT OF THE MEETING HELD ON 17-18 NOVEMBER 1998
Note by the Secretariat
1. The Committee on Agriculture held its seventeenth meeting on 17-18 November 1998 under
the Chairmanship of Ambassador Nestor Osorio Londoño of Colombia.  The agenda of the meeting as
contained in WTO/AIR/968, modified to include Australia's paper concerning export subsidy
notifications (G/AG/W/37) under agenda item Part I, F , was adopted.
Part I:  The Review Process
Matters Relevant to the Implementation of Commitments under the Reform Programme:   Article 18.6
(a) New Zealand:  Venezuela – Milk powder tariffs applied in excess of bound levels
2. New Zealand sought clarification from Venezuela as to when it would be taking the necessary
steps to bring its applied tariffs on whole milk powder back into conformity with its WTO obligations
and ensure that in the future there would be no breaches of the bound in-quota tariff for whole milk
powder (40 per cent) resulting from the applicati on of the Andean Community price band system.
3. The representative of Venezuela responded that a Government resolution, due to be published
shortly, was designed to ensure strict compliance by the customs authorities of Venezuela with its
WTO commitments and to ensure that the Andean Community price band system would be applied
only up to the ceiling set by the WTO tariff bindings.
(b) European Communities:  Venezuela – Import duties and tariff quota for malt in 1998
4. The European Communities sought clarification from Venezuela with regard to import duties
applied on malt (tariff heading 1107) since the beginning of 1998 and as to whether the tariff quota
for malt had been opened in 1998.
5. In response the representative of Venezuela referred to the clarification given to New Zealand
(paragraph 3).
 (c) New Zealand:  Mexico – Response to questions on import arrangements for milk powder
6. New Zealand sought a response from Mexico to the three questions raised at the Committee
meeting in June 1998 on changes to the administration of Mexico’s tariff quota for milk powder.
7. The representative of Mexico responded that the replies to New Zealand's questions were not
yet ready.
8. The representative of New Zealand drew the Committee's attention to its trade concerns as
well as the lack of transparency associated with Mexico's new import regime for skim milk powder as
New Zealand had been unable to obtain a clear picture either in Mexico City or in the Committee onG/AG/R/17
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Agriculture.  By law, imports of milk powder into Mexico had traditionally been undertaken by
Conasupo.  It was New Zealand's understanding that an arrangement had been reached between the
Mexican Government and another company that would allow that company to import up to
25,000 tonnes of skim milk powder directly, i.e. without using Conasupo to import the product.  New
Zealand also understood that imports had already taken place under these new conditions.  The
approval for this company to by-pass Conasupo appeared to be subject to specific conditions,including a requirement to purchase all surplus fresh milk in certain areas of Mexico and a multi-
million dollar investment in a plant in an under-developed region of Mexico.  If this information was
accurate, New Zealand would be concerned about the discrimination in the import arrangements for
skim milk powder and the linking of import rights with domestic purchases.  The representative of
New Zealand urged the delegate of Mexico to advi se his Government of New Zealand's concerns and
to press for a prompt response to the questions raised.
9. The representative of Mexico undertook to c onvey New Zealand's concerns to his capital.
(d) United States:  Turkey – Sugar export subsidies
10. As a follow-up to the United States' enquiry about the export activities of the Turkish Sugar
Corporation at the last Committee meeting, the United States sought clarification from Turkey
regarding the affiliation of the Corporation to the Turkish Government.  The United States noted thatTurkey claimed that the Corporation was not fund ed by the Government of Turkey but they had
information which indicated that the Corporation was fully owned and funded by the Government of
Turkey and its export losses were underwritten by the Government of Turkey.  The United States also
sought further clarification as to how Turkey justified using export subsidies for sugar when its WTO
export subsidy reduction commitments did not refer to this product.
11. The representative of Turkey reiterated that the Turkish Sugar Company was not granted
subsidies on sugar exports in 1997.  The Turkish Sugar Company was a state economic enterprise
which carried out its production and marketing activities in accordance with market conditions.  It
was entitled to take risks and its management was accountable for its decisions to the Board of
directors. Losses or cash shortages were not necessarily covered by the treasury and the companycould resort to other options for financing its operations, including loans from commercial banks.
12. The representative of the United States responded that the United States had a number of
follow-up questions and would consider approaching the issue in a broader context.
(e) United States:  Egypt – Trade agreement between Egypt and Lebanon
13. The United States referred to a recent report according to which the Governments of Egypt
and Lebanon had entered into a preferential trade agreement whereby Egypt would allow apple
exports from Lebanon to enter Egypt duty-free, and Lebanon would allow potato exports from Egypt
into Lebanon duty-free. The United States sought clarification from Egypt regarding the terms of this
agreement and as to how it was justifiable under GATT Article XXIV, especially the “substantially all
the trade” provision under paragraph 8 thereof, and the MFN provisions of GATT Article I.  The
United States also enquired when Egypt would submit a notification as required under GATTArticle XXIV.
14. The representative of Egypt responded that Egypt intended to make a notification when the
Egypt-Lebanon free trade agreement was finalized.  The notification will be made to the WTO
Committee on Trade and Development and not to the Committee on Regional Trade Agreements
since the agreement was negotiated under the Enabling Clause and not Article XXIV of GATT.
15. The representative of the United States responded that the United States would pursue the
issue bilaterally.G/AG/R/17
Page 3
Review of Notifications
16. 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
Panama (G/AG/N/PAN/2), Poland (G/AG/N/POL/21), South Africa
(G/AG/N/ZAF/19), Switzerland (G/AG/N/CHE/13) and the United States(G/AG/N/USA/19);
(ii) relating to imports under tariff and other quota commitments (Table MA:2):  from
Canada (G/AG/N/CAN/23) , Colombia (G/AG/N/COL/10/Rev.1), European
Communities (G/AG/N/EEC/13), Guatemala (G/AG/N/GTM/5), Iceland
(G/AG/N/ISL/12), Japan (G/AG/N/JPN/31), Norway (G/AG/N/NOR/17/Corr.1),
Panama (G/AG/N/PAN/3), Philippines (G/AG/N/PHL/16), South Africa
(G/AG/N/ZAF/20) and Tunisia (G/AG/N/TUN/11);
(iii) in the context of the special safeguard (Tables MA:3 to MA:5): from Canada
(G/AG/N/CAN/24), Guatemala (G/AG/N/GTM/10), Panama (G/AG/N/PAN/1),
Tunisia (G/AG/N/TUN/10)  and the United States (G/AG/N/USA/18);
(iv) relating to domestic support commitments (Table DS:1): from Australia
(G/AG/N/AUS/20), Benin (G/AG/N/BEN/1), Chile (G/AG/N/CHL/8/Add.1),
Colombia (G/AG/N/COL/6/ Add.1, COL/6/Corr.1, COL/7/A dd.1 and COL/8/Add.1),
Guyana (G/AG/N/GUY/1), Israel (G/AG/N/ISR/8), Korea (G/AG/N/KOR/18),
Philippines (G/AG/N/PHL/14, PHL/14 /Add.1, PHL/15 and PHL/15/Add.1), South
Africa (G/AG/N/ZAF/21), Switzerland (G/AG/N/CHE/15/Corr.1), Thailand
(G/AG/N/THA/29) and Uruguay (G/AG/N/URY/13/Rev.1);
(v) relating to new or modified domestic support measures exempt from reduction
(Table DS:2):  from Korea (G/AG/N/KO R/19) and South Afri ca (G/AG/N/ZAF/22);
and
(vi) relating to export subsidy commitments (Tables ES:1 to ES:3): from Australia
(G/AG/N/AUS/19 and Corr.1), Canada (G/AG/N/CAN/22), European Communities
(G/AG/N/EEC/11), Guyana (G/AG/N/GUY/2), Korea (G/AG/N/KOR/20), New
Zealand (G/AG/N/NZ L/16), Peru (G/AG/ N/PER/2), Poland (G/AG/N/POL/22),
South Africa (G/AG/N/ZA F/15/Rev.1) and Turk ey (G/AG/N/TUR/7).
17. 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.  The notifications G/AG/N/CAN/23 and
G/AG/N/NOR/17/Corr.1 are to be reverted to  at the next meeting of the Committee.
18. 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) on the administration of tariff and other quota commitments (Table MA:1):  from
European Communities (G/AG/N/EEC/14) and Guatemala (G/AG/N/GTM/5/Corr.1);
(ii) in the context of the special safeguard (Tables MA:3 to MA:5): from Japan
(G/AG/N/JPN/32), Panama (G/AG/N/PAN/1/Corr.1) and Poland (G/AG/N/POL/23);
(iii) relating to domestic support commitments (Table DS:1):  from Cyprus
(G/AG/N/CYP/7);  andG/AG/R/17
Page 4
(iv) relating to export subsidy commitments (T ables ES:1 to ES:3):  from  Colombia
(G/AG/N/COL/11, CO L/12 and COL/13) and Domi nica (G/AG/N/DMA/1).
19. 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 review process
20. The deferred replies to questions raised at previous meetings are summarized in Part II of the
Annex to this report.
(b) Overdue notifications
21. 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
17 November 1998 showing the current status of compliance with the Committee's notification
requirements.
22. The representative of the Philippines raised concerns regarding overdue notifications or non-
compliance with notification obligations, particularly by Members with domestic support and exportsubsidy reduction commitments.  Less than half of the Members concerned had submitted relevant
notifications for the 1997 implementation year and for several of those Members notifications for the
1996 implementation year remained outstanding.  The representative recalled the commitment made
at the Singapore Ministerial Conference (WT/ MIN(96)/DEC, paragraph 11) concerning renewed
efforts by Members to submit notifications in a timely manner and that appropriate steps should betaken by the relevant bodies to address the situation.  The Philippines requested the Committee to look
into this matter seriously, taking into account the proposals made by the United States in this regard
(G/AG/W/33).
23. The representative of Australia urged Members, in particular developed countries with
reduction commitments, to submit their notifications in a timely manner.
(c) Domestic support implementation issues
24. As envisaged at the previous meeting (G/ AG/R/16, paragraph 35), the Committee had an
informal exchange of views on domestic support implementation issues.  As a basis for this New
Zealand (G/AG/W/38) and the United States (G/AG/ W/39) had submitted papers for consideration by
the Committee.  With regard to the discussion of the additional papers by New Zealand
"Implementation issues regarding domestic support " (G/AG/W/34) and the United States "Annex 4 of
the Agreement on Agriculture:  Equivalent Meas urement of Support" (G/AG/W/35), it was agreed
that the Committee would revert to the issues ra ised in these papers on an informal basis, as
appropriate.
(d) Export subsidy notification issues
25. In introducing Australia's discussion paper on "Issues regarding export subsidy notifications"
(G/AG/W/37), the representative of Australia note d that Australia had put forward some suggestions
for practical improvements to the export subsidy notification process for the purpose of making the
preparation of notifications and their review less burdensome for Members.  The suggestions were not
meant to involve any matter of interpretation of the Agreement or of Members' Schedules ofcommitments.  The Committee agreed to defer the substantive discussion of Australia's paper to its
next meeting.G/AG/R/17
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Part II:  Other Matters within the Purview of the Committee
Annual monitoring exercise by the Committee of the follow-up to the Ministerial Decision on
Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed
and Net Food-Importing Developing Countries
26. The Chairman noted that under Article 16.2 of  the Agreement, the Committee was required to
monitor, as appropriate, the follow-up to the Marrakesh Ministerial Decision on Measures Concerning
the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing
Developing Countries. Under the Committee's Working Procedures (G/AG/1, paragraph 18), the
monitoring exercise was undertaken at the regular November meetings of the Committee.  It was
conducted on the basis of contributions by Members, including notifications in the NF series
concerning actions taken within the framework of the Decision.
27. Since the November 1997 monitoring exercise, the following Members had submitted
notifications in the NF series: Australia (G/AG/N/AUS/21), Fiji (G/AG/N/FJI/5), Japan
(G/AG/N/JPN/27), Morocco (G/AG/N/MAR/9), New Zealand  (G/AG/N/NZL/17), Norway
(G/AG/N/NOR/19 and Corr.1 and G/AG/N/NOR/20 and Corr.1), South Africa (G/AG/N/ZAF/17)
and the United States (G/AG/N/USA/20 and 21).  In addition, a revised Secretariat background note
on food aid levels had been circulated (G/AG/W/36).
28. The Chairman also noted that the follow-up to paragraph 18 of the Committee's report for the
Ministerial Conference on the Decision (G/L/125) wa s also an important feature of the general
follow-up to the Decision and that, as agreed at the June 1997 meeting of the Committee, the
follow-up to the Singapore Ministerial recommendations with regard to food aid matters(paragraph 18(i) of G/L/125) would continue to be reviewed at the regular meetings of the
Committee.
29. The Chairman recalled that, as agreed at the Committee's last meeting (G/AG/R/16,
paragraph 42), the observer international organizations had been invited, as part of their respective
contributions to the 1998 monitoring exercise, to provide, as appropriate, updated assessments of theimpact of the implementation of the  Agreement on Agriculture on developing countries generally,
including on least-developed and net food-importing developing countries.  In response, the
representatives of the FAO, the IMF, the Inte rnational Grains Council, the OECD, UNCTAD, the
World Food Programme and the World Bank, respectively, contributed statements which have been
reproduced in document G/AG/GEN/31.  A number of delegations thanked the observer organizationsfor their contributions.
30. With regard to the current status of the Food Aid Convention negotiations, the representative
of the United States stated that, at the recent session of the Food Aid Committee in London,
insufficient progress had been made to ensure that a new Food Aid Convention would be in place by
the time the current Convention expired on 30 June 1999.  The United States believed that negotiating
a new Food Aid Convention was important since it would maintain and improve the commitment by
Food Aid Committee members to provide minimum tonnages of foodstuffs to needy developingcountries.  It was also important in order to honour commitments made at Marrakesh and Singapore to
address the food security concerns of developing countries.  Failure to reach agreement would not
reflect well on Food Aid Committee members, particularly at a time when developing countries were
endeavouring to honour their Uruguay Round commitments. The United States wished to repeat its
call for all Food Aid Committee members to take stock of the current status of the negotiations and toreflect on the implications of failing to reach an agreement.  The United States hoped that all members
would be prepared to conclude the negotiations on a new Convention at the additional negotiating
session scheduled for 8-10 December 1998 in Washington, D.C.G/AG/R/17
Page 6
31. The representative of the Canada endorsed the statement by the United States.  The situation
was serious but a new Convention could still be established if the parties involved showed sufficient
flexibility at the forthcoming negotiating session in Washington. The representative of Australia urged
all Food Aid Committee members to make serious efforts to conclude negotiations of a new
Convention by the end of the year.  The representative of the European Communities noted that the
European Communities was heartened by recent developments in the Food Aid Committee and that apositive outcome of the negotiations was possible. The representative of  Japan stated that Japan
would be making every effort for a successful  conclusion of the food aid negotiations at the
forthcoming meeting in Washington to ensure th at a new Convention would take effect on 1 July
1999.  Japan expected that all Food Aid Committee members would show the flexibility needed to
reach an agreement on the outstanding issues.  The representative of Switzerland noted that
Switzerland shared the hopes expressed regarding a timely conclusion of the food aid negotiations.
32. The representative of Norway stated that according to the Secretariat's note on food aid levels
(G/AG/W/36) annual food aid deliveries had declined substantially from 1987 to 1997, with deliveries
of both cereals and non-cereals having been reduced by more than 50 per cent. In light of the decline
in minimum annual contributions to the Food Aid Convention of 1995 compared to the Convention of
1986, this trend was not surprising.   It was nevertheless alarming, bearing in mind that Ministers at
Marrakesh had agreed to establish appropriate mechanisms to ensure that the implementation of theresults of the Uruguay Round on trade in agriculture did not adversely affect the availability of food
aid.  Norway attached great importance to the implementation of the Ministerial Decision and the
completion of the ongoing negotiations on the Food Aid Convention.  Assisting developing countries,
in particular the least-developed countries, in their development efforts was a central objective of
Norway's development policy.  Norway recognized that further efforts were needed to meet the
special needs of least-developed and net food-importing developing countries which in Norway's view
was an issue to which the Committee should revert in its preparations for the upcoming negotiations.
Norway invited the least-developed and net food-importing developing countries to present their
experience and provide guidance with regard to im provements needed for the further development of
the multilateral trading system.
33. The representative of Egypt welcomed the statements made by Norway and the United States
concerning food aid matters. However, the Decision contained further elements and Egypt was
concerned about the implementation of all aspects of the Decision.  While Egypt was disappointed to
see that food aid levels had declined at alarming rates, they were also concerned that the expectations
of net food-importing developing countries at the conclusion of the Uruguay Round had also not beenmet in other areas like concessional finance, technical assistance to raise productivity and address
infrastructure needs of these countries and concessional export credit.  Egypt was concerned that there
was a problem of political will to implement the commitments under the Decision and shared the view
of Norway that these issues should be an important element in the preparations for the negotiations
according to Article 20 of the Agreement on Agricultur e.  Egypt requested that the Secretariat prepare
a paper on the implementation of the various elements of the Decision, drawing on information by,
and in consultation with, the relevant internationa l organizations, as appropriate, for the Committee's
informal consideration in preparation for the negotiations in accordance with Article 20 of the
Agreement.
34. The delegations of Cuba, the Dominican Republic, Mauritius, Peru and the Philippines
associated themselves with the statements made by Norway and Egypt and supported Egypt's
proposal that the Secretariat prepare a background note on implementation of the MarrakeshMinisterial Decision.
35. The representative of Peru noted that only a few Members concerned had complied with their
NF:1 notification obligation.  Peru appealed to Members concerned to submit their notifications to
make the monitoring process more meaningful in the future.G/AG/R/17
Page 7
Chairman's Report on the Process of Analysis  and Information Exchange (AIE process)
36. The Committee took note of the following report by the Chairman on the meeting of the AIE
process held on  16-17 November 1998:
"(i) In line with paragraph 36 of G/AG/R/10 the following is my summary report as
Chairman of the meeting of the AIE process held on 16-17 November 1998.
"(ii) The first theme discussed at this meeting was non-trade concerns. Informal papers by
Norway (AIE/22), Japan (AIE/ 25), New Zealand (AIE /28), Argentina (AIE/32), the United
States (AIE/34) and Australia (AIE/36) had be en the subject of substantive discussion at
earlier meetings.  Two additional papers, AIE/39 by Korea "Non-Trade Concerns in Net
Food-Importing Countries" and AIE/40 by the European Communities "The Multifunctional
Character of Agriculture", had been the subject of preliminary discussion at the last meetingin September and were discussed substantively during this meeting.
"(iii) As I noted in the report on the last AIE meeting there is a broad range of issues
considered relevant in the context of non-trade concerns.  The Korean paper concentrates on
the areas of food security for net food importing-countries and other positive externalitiesassociated with agricultural production,  particularly flood control arising from rice
production.  The paper by the European Communities emphasises the multifunctional nature
of agriculture beyond the production of food and fibres.
"(iv) In the discussions, the need to distinguish between policy objectives related to non-
trade concerns and the measures used to try to achieve these objectives was emphasized.  It
was observed that targeted measures aimed at specific goals were less likely to distort trade
and were needed to achieve specific objectives.  In contrast, a general measure, like market
price support, was economically inefficient and distorted trade, thus also implying a negative
spill over effect on other countries.
"(v) Another distinction was noted, namely that the ranking of non-trade concerns was not
necessarily the same between developed and developing countries.  For many developing
countries food security was the most urgent issue, including the need to ensure income levels
sufficient for the purchase of basic food stuffs and to develop properly functioning fooddistribution systems.
"(vi) A number of observations were made that further liberalization of trade in agriculture
should improve global food security through increased trade volumes and growing
possibilities to diversify sources of supply for food-importers.  It was also recalled that, inter
alia, Annex 2 to the Agreement on Agriculture addressed food security concerns through the
provisions relating to public stockholding and domestic food aid.
"(vii) It was indicated that future discussion in this area should focus on the issue of
appropriate measures to achieve the various objectives that had been identified in the context
of non-trade concerns.  It was also suggested that in order to advance work in this area there
was a need for specific examples of concerns which could not be addressed under Annex 2provisions.
"(viii) Moving to special safeguards, the Secretariat introduced its paper AIE/S12 "Special
Agricultural Safeguard".  This paper, based on notifications and the Uruguay Round Trade
Negotiation files in the WTO IDB (IDB CD-ROM, Release 2), covers both the potential useof special safeguards as notified by Members in their Schedules and the actual use as notified
by Members in their MA:5 notifications.  New Zealand's paper, AIE/20 "Article 5; SpecialG/AG/R/17
Page 8
Safeguard Provisions" had already been the subject of substantive discussion at earlier
meetings.  This paper highlights concerns about the use of the SSG.
"(ix) It was noted that the SSG was an important element of the Agreement on Agriculture
as it had been introduced to address concerns arising from the requirement to tariffy non-tariff
measures.  It was also noted that although many Members had reserved the right to usespecial safeguards little use has been made of the provisions.  A number of concerns were
raised relating to the actual use of the  SSG .  They referred mainly to the triggering of
volume-based safeguard action before the tariff quota had been filled;  the possibility to
invoke the volume-based safeguard in cases where there was no tariff quota;  the triggering of
price-based safeguard action at import prices higher than the external reference price used in
the tariffication exercise;  and issues relating to transparency.
"(x) In the continuing discussion on domestic support two informal papers were
examined.  The first by the United States (AIE/38) "Domestic Support; Response to AIE/23
and AIE/27"  had been the subject of prelimin ary discussion at the September meeting of the
AIE process.  This paper further addresses A nnex 2 (Green Box), Article 6.5 (Blue Box) and
AMS disciplines (Amber Box).
"(xi) The observation was made that Article 6.5 and Annex 2 permitted Members to shift
their policies away from more trade-distorting types of domestic support to less distorting
measures. Tightening of these provisions could reduce the flexibility currently available to
Members.  It was also noted that there is nothing in the Agreement on Agriculture to suggestan expiry of Article 6.5.  On the other hand, it was pointed out that Article 6.5 payments were
of a trade-distorting nature.
"(xii) Another point raised in the discussion was the potential for domestic support
measures to distort trade even though they complied with the letter of Annex 2.  The viewwas expressed that it would be more useful to examine the adequacy of the existing criteria
for Green Box payments rather than to  consider limits to these payments.
"(xiii) As for the Amber Box, the observation wa s made that the commitments related to the
reduction of the overall AMS level and therefore they could allow Members to concentratesupports on a smaller, but more subsidised, group of products, or even to introduce new
subsidies.
"(xiv) The paper by Iceland, AIE/42 "External Reference Price Adjustment", addresses the
issue of excessive rates of inflation and their effects on reduction commitments.  This follows
the paper by South Africa, AIE/33 "The Ef fect of Inflation on Reduction Commitments"
which was discussed at the September meeting.  The paper by Iceland explains themethodology by which Iceland has recalculated its domestic support using SDRs to replace
the Icelandic Króna.
"(xv) Some questions were asked about the methodology used in calculating the
adjustment, in particular matters related to the external reference price and to exchange rateconversions.  It was noted that adjustments for inflation are not meant to maintain real levels
of support but to achieve their reduction on a more equitable basis.  On the other hand, the
point was made that the external reference price was fixed, reflecting the fact that the
reduction commitments agreed in the Uruguay Round were in nominal terms.  It was also
noted that exchange rate adjustments on top of external reference price adjustments wouldover compensate for inflation.G/AG/R/17
Page 9
"(xvi) It was observed that there is flexibility to address problems of inflation through Green
Box measures.   Also, with respect to trade-distorting measures, the de minimis  provisions had
an implicit inflation adjustment mechanism as support is calculated as a proportion of the
current value of production. The view was also expressed that there was nothing in the
Agreement on Agriculture which prevented adjustments for excessive inflation.
"(xvii) It was observed that Article 18.4 provisions were the appropriate route to address
problems associated with excessive inflation.  Concerns were expressed about the absence of
any implementing guidelines for Article 18.4.  It was suggested that any changes made to
account for excessive inflation should be transp arent and should be notified to the Committee
as an adjustment under Article 18.4.  The Committee could then decide if the adjustment was
appropriate.
"(xviii) The paper by South Africa, AIE/41 "The Negative Effects of Export Subsidies on
Developing Countries" outlines concerns on the effects that such subsidies can have on
developing countries.  It notes that export subsidies can adversely affect both net food-
exporting countries and net food-importing countries, including through their impact on
agricultural investment.  The high proportion of the population of developing countries livingin rural areas and who depend on farming meant there should be a favourable multiplier effect
for the economy as a whole if returns from farming increase.
"(xix) It was suggested that export subsidies distorted trade in favour of those countries
which could afford them.  Net food-exporting developing countries had to compete on worldmarkets against subsidized supply from other sources which meant lower prices for them.  As
regards net food-importing countries it was noted that there may be short term benefits from
importing subsidised agricultural products but that these may reduce their potential to develop
agricultural production.
"(xx) It was stated that the positive effects of eliminating export subsidies for net food-
importing developing countries depended on a number of factors.  These factors could range
from climatic conditions to domestic agricultural policies.  Elimination of export subsidies
would have to be accompanied by transitional food aid measures for some countries.  There
was also the view that there was a need to take into consideration the concerns of small states,particularly least-developed and net food-importing small states, when dealing with the issue
of export subsidies, especially as, in this view, no positive conclusion has been forthcoming
with respect to the relevant Marrakesh Decision.
"(xxi) The point was made that the use of export subsidies could also result in recourse to
trade measures to protect domestic producers from subsidised competition. On the other hand,
reducing export subsidies would provide incentives to improve conditions of market accesswhich, in turn, would benefit trade in agricultural products.
"(xxii) India's paper AIE/30 "Issues of Interest to Developing Countries" had already been
discussed at earlier meetings while India's most recent paper, AIE/44 "Food Security - An
Important Non Trade Concern", was the subject of preliminary discussion.  This new paperexamines the issue of food security and, inter alia , suggests that a purely market-oriented
approach may not be the optimal one for some countries, especially developing countries with
their large rural population.  It suggests government intervention may be necessary in pursuit
of the objective of self sufficiency, considered to be an essential element of food security, and
certain other non-trade concerns.G/AG/R/17
Page 10
"(xxiii) In terms of future work for the Secretariat it was suggested that developing countries
should submit a list of the agricultural products of greatest interest to them so that the
Secretariat can provide information on the relevant tariff levels.  In this context reference was
also made to the information contai ned in the AIE/43 paper by Uruguay.
"(xxiv) As the paper AIE/44 was only for preliminary discussion it was agreed to revert to it
at the next meeting which will take place on 17 March, 1999.  Due to time constraints it was
also agreed that discussion of the US paper AIE/37 "Due Restraint Provisions - Article 13"
and the paper by Uruguay AIE/43 "Tariff Peaks and Tariff Escalation for Agricultural and
Agri Food Products and their Effect on Developing and Least Developed Countries" would be
the subject of substantive discussion at the next meeting.  Several Members indicated their
intention to table further papers for this meeting."
Annual consultation under Article 18.5 with respect to Members' participation in the normal growth
of world trade in agricultural products within th e framework of the commitments on export subsidies
37. The Chairman noted that Article 18.5 of the Agreement provided for Members to consult
annually in the Committee with respect to their part icipation in the normal growth of world trade in
agricultural products within the framework of the commitments on export subsidies under the
Agreement.  The Committee's Working Procedures stipulated that this annual consultation was to be
undertaken at the regular November meetings of the Committee (G/AG/1, paragraph 17).  As
requested at the last Committee meeting, the Secretariat had prepared a revision of background note
G/AG/W/32 for the purpose of this  consultation (G/AG/W/32/Rev.1).
38. The representative of the European Communities observed that while the trade volumes of the
commodities covered had remained largely unchanged, a redistribution of export market shares had
occurred, the main beneficiary being Australia.  In the view of the European Communities it would be
helpful for the Committee's annual consultation in 1999 if a revised Secretariat background note
included imports and covered a wider range of products.  The representatives of the United States andChile supported the European Communities' proposal with respect to a broader product coverage.
The representative of the United States observed that the present Secretariat note showed the positive
effects of the reform process on some developing countries.  The representative of Australia found it
difficult to draw any conclusions about the impact of the export subsidy reduction commitments on
market shares since a number of other factors played a role, including climatic and other supply sidefactors as well as changes in demand.
Chairman's report to the Council for Trade in Goods
39. The Committee took note that the brief factual report, which was before the Committee as a
room document, would be submitted, as amended, by Ambassador Osorio Londoño to the Council for
Trade in Goods on his responsibility as Chairman.  The report has been circulated as document
G/L/276.
Other Business
(a) Chile – Support to canned peaches in the European Communities
40. The statement by the representative of Chile on the issue of support provided to canned
peaches in the European Communities has been reproduced in document G/AG/W/41.  During its
intervention, Chile  circulated a study concerning canned peaches (document G/AG/W/40 refers).
The representative of the European Communities regretted that Chile had not given the European
Communities an opportunity to examine the study in advance and to discuss the issues involved on a
bilateral basis.G/AG/R/17
Page 11
41. The representative of Argentina urged the European Communities to decide on a date for a
further information meeting with the parties concerned in order to try to make progress on the
outstanding questions.  The representatives of Australia, Brazil, the Philippines and the United States
noted their governments' interest in continuing the dialogue with the European Communities on this
issue.
(b) Canada – Status of matters regarding measures taken by the State of South Dakota and others
42. With regard to the issue of measures taken by the State of South Dakota and others affecting
Canadian exports destined for, or in transit through, that State (G/AG/R/16, page 14) the
representative of Canada noted that the States in question had suspended their trade actions and
therefore Canada had suspended the GATT Articl e XXIII process (G/AG/GE N/27).  Canada hoped
that the ongoing consultations with the United States would lead to a speedy resolution of this and
other border trade issues.
Date of Next Meeting
43. The next regular meeting of the Committee on Agriculture has been rescheduled for Thursday
and Friday, 25-26 March 1999 (WTO/AIR/995).  The airgram convening the meeting and containing
the draft agenda will be issued on Friday, 12 March 1999.G/AG/R/17
Page 12
ANNEX
Page
Part I Summary of specific points raised on  notifications and responses thereto
(17-18 November 1998 meeting)13
(i) on the administration of tariff and other quota commitments (Table MA:1):
Panama (PAN/2), Poland (POL/21), Switzerland (CHE/13) and the United
States (USA/19);13
(ii) relating to imports under tariff and other quota commitments (Table MA:2):
Canada (CAN/23 for preliminary revi ew), Colombia (COL/10/Rev.1),
European Communities (EEC/13), Japan (JPN/31), Panama (PAN/3), the
Philippines (PHL/16) and Tunisia (TUN/11);16
(iii) relating to the use of the special safeguard (Table MA:3 to MA:5):  the
United States (USA/18);21
(iv) relating to domestic support commitments (Table DS:1):  Guyana (GUY/1),
Israel (ISR/8), Korea (KOR/18), th e Philippines (PHL/14 and Add.1, PHL/15
and Add.1) and Thailand (THA/29);22
(v) relating to new or modified domestic support measures exempt from
reduction (Table DS:2):  Korea (KOR/19);27
(vi) relating to export subsidy commitme nts (Tables ES:1 to ES:3):  Canada
(CAN/22), European Communities (EEC/11), Korea (KOR/20), Poland
(POL/22) and Turkey (TUR/7).28
Part II Deferred replies to questions on notifi cations raised at previous meetings 31
relating to imports under tariff and other quota commitments (Table MA:2):
El Salvador (SLV/6).31
Attachments
1. Korea –  Question from New Zealand/United States – Justification of the de minimis
claim32
2. Turkey -  Question from Canada – Export subsidies, Calendar year 1997 33G/AG/R/17
Page 13
ANNEX – Part I
Review of Notifications by the Comm ittee on Agriculture on 17-18 November 1998
Summary of Specific Points Ra ised and Responses Thereto
Table MA:1 Notifications
Panama   G/AG/N/PAN/2   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
European Communities:   Description of the allocation and
management of the tariff quotas.Regulations governing the granting of import licences for
products subject to tariff quotas will be provided to theSecretariat and an addendum will be issued accordingly.Basically, an auction system is applied whereby prices aredetermined by supply and demand factors.
Australia:  Rice, other - Circumstances which led to the
opening of  an "extraordinary tariff quota" under heading
1006.10.90;  whether it has been filled;  plans for further
similar initiatives.Circumstances are explained below in relation to PAN/3.
The tariff quota was filled.  No plans are foreseen forfurther initiatives.
Poland   G/AG/N/POL/21   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Australia:  Reason for changing the method of allocation to
importers, for certain tariff quotas, from a "first-come, first-served" to a historical allocation on a pro rata  basis.
Follow-up:  Any evidence that the change has resulted in
greater fill rates and enhanced market access opportunities
under the concerned tariff quotas:  No data supporting thistrend is available at the moment.The method based on historical performance was thought to
be more suitable since it addresses in a more effectivemanner the interests of those importers who are firmly
established on the market.  However it was subject to
strong criticism by the importers almost immediatelyfollowing its introduction.  Subsequently the "first-come,first-served" method was introduced in May 1998.
New Zealand:  Time constraints imposed on the validity oflicences issued for many fruit and vegetable tariff quotas;whether importers are able to apply for licences throughoutthe year.Many of the fruit and vegetables tariff rate quotas were
underfilled due to the lack of importers' interest and not tothe validity period of licences.  The licences granted refer
to specific periods when specified varieties can be
imported. Importers can apply for licences throughout theyear and their completed applications are reviewed on afirst-come, first served basis.
New Zealand:  Apparent contradiction between the phrase"quota allocations are valid for a calendar year" and"licences are valid for 90 days effective from the date ofissue".Some tariff lines for products, such as cut flowers and some
fruits and vegetables, specify import periods.  Theremaining product categories can be imported throughoutthe whole year.  The Law on Administration of
International Trade  provides that licences are to be issued
for a specific period of time.  Based on that Law, theRegulation of the Minister of Economy limits the validityof licences issued to 90 days.  Importers applying for an
import licence within the tariff quota after the old licence
was used up, expired or returned without being used, mustrepeat the entire application process.  The issuing oflicences can be repeated during the whole year until thetariff quota is filled.G/AG/R/17
Page 14
Poland   G/AG/N/POL/21   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
New Zealand:  Apples  - Method used to determine import
quantities in the different periods when specified varietiescan be imported.
Follow-up:  This practice seems to limit the market access
opportunities available for each variety as consigned in the
Polish Schedule, and as such, is questionable :  this newly
introduced system of allocation is at an early stage of
implementation.  Poland is currently monitoring results inorder to evaluate its appropriateness and relevance to thetariff quota pro ducts concerned.Tariff rate quotas were originally included into the Polish
Schedule as 4-digit CN codes.  In 1997 and 1998, they
were further divided into more specific 9-digit PCN codes.
In order to guarantee a balanced yearly supply of fruit andvegetables, tariff quota quantities are divided into differentperiods when specified varieties can be imported.
New Zealand:  Reason why the 9-digit HS tariff lines forapples and cucumbers  differ from those notified in 1997;
whether the latter are still operational tariff quotas;  if so,method of administration used in 1998.These PCN codes were changed in 1998. The new codes
cover the same products and importing periods previouslycovered in 1997.  The same tariff quota is therefore
involved and the modifications did not have any incidence
on Polish commitments.  In 1998, administration of thistariff quota was carried out on a first-come, first-servedbasis, as in 1997.
Switzerland  G/AG/N/CHE/13   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
United States:  Legal basis for classifying meat treated
with hormones and antibiotics  and egg and egg products
from birds raised in battery cages  for the purposes of
applying the in-quota rates;  basis for restricting in-quota,but not over-quota, imports if public health issues areindeed a concern.
Follow-up :  Australia and Canada stressed the market
access issue at stake. A unilateral change in the coverage
of tariff quota, in this case by creating new codes, could
impair the value of market access commitments. Once the
measures in question are adopted, detailed explanations ontheir market access aspect would  be welcome.These questions relate to three proposed sanitary
regulations which are still at a very early stage of
development and were notified to the SPS Committee fortransparency purposes.  Comments received will be takeninto consideration before the final decision is taken, by theend of 1998.
United States G/AG/N/USA/19   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Raw cane sugar
Japan:  Method by which the overall tariff quota volume is
determined.The US fiscal year 1999 tariff quota was established on the
basis of forecast fiscal year 1999 sugar supply and demand
as reported in the USDA's World Agricultural Supply and
Demand Estimates Report .  Using these estimates, the tariff
quota was established at a level which ensures adequate
supplies of raw sugar in the US market.  It is allocated by
the US Trade Representative on the basis of historical tradeshares from the 1975-81 base period.  The amount offeredby the United States under the current tariff quota is higher
than the access commitment specified by the United States
in its Uruguay Round Schedule.G/AG/R/17
Page 15
United States G/AG/N/USA/19   Tariff Quota Administration (Table MA:1)
Points raised by other Member s Response by Notifying Member
Thailand:  Reason for the large drop in the grand total of
country allocations in 1997 compared to 1998.The US tariff quota was established at 2,100,000 tonnes in
fiscal year 1997 and 1,600,000 in fiscal year 1998.  The
fiscal year 1999 tariff quota was initially established at
1,614,937 tonnes.  However, 450,000 metric tonnes wereheld in reserve for possible allocation during January,March and May (according to the administrative process
described in Table MA:1).  To the extent that it exceeds the
WTO minimum, the tariff quota is established on the basisof US sugar supply and demand forecast.  B ecause sugar
supply and demand fluctuate annually, the volume of
imported raw sugar needed to ensure adequate sugar
supplies changes from year to year.  The amount offeredunder the current tariff quota is higher than the accesscommitment of 1,117,195 tonnes specified by the UnitedStates in its Uruguay Round Schedule.
Japan/Thailand:  Method by which country shares areallocated;   allocation to WTO versus  non-WTO Members;
whether the list of country allocations will be revised in thenear future, and under what criteria.
Follow- up – Colombia
:  Reiterated concerns regarding the
decrease of its allocation, both in percentage and in
absolute terms, compared to that made to Mexico, which
was increased, especially in view of:  (a)  the United States
previous response (G/AG/R/16 refers) that the allocationmade to Mexico was not credited to the tariff quota open toMFN countries;  and (b) The United States' claim that the
allocation is consistent with  the relevant provisions of
Article XIII of GATT 1994.   In this regard Mauritius also
requested confirmation that the allocation of 25,000 tonnesmade to Mexico is not included into MFN quantities but is
above them.  The United States undertook to provide a
response in writing and Mexico expressed an interest in
seeing the information as well.Allocation is consistent with Article XIII of GATT, 1994,
on the basis of the proportions supplied (due account beingtaken of any special factors which may have affected trade)
during the representative period 1975-1981, prior to the
establishment of the US sugar quota.  Regarding theallocation to non-WTO Members, since this allocation isconsistent with Article XIII of GATT 1994, there are
currently no plans to change the present allocation
methodology.
European Communities:  Other cane or beet sugars or
syrups  and sugar-containing products  - Reason why
there is no importer allocation for these tariff quotas,compared to last year's USA/13, where these were allocatedon a first-come, first-served basis.As reported in Table MA:1 covering US fiscal year 1999,
importer allocations for these tariff quotas continue to beallocated on a first-come, first-served bases.  For thisreason, there is no "allocation list".  Any importer can
import at the in-quota tariff rate until the tariff quota is
fully subscribed.
European Communities:  Conditions for obtaining a
"specialty sugar certificate".Any application must include the following information:
name and address of the applicant;  if known:  a statement
of the anticipated quantity, date of entry, anticipated
consumer of specialty sugars to be imported;  theappropriate 6-digit sub-heading number;  a description ofthe specialty sugar the impor ter expects to import during
the period of the certificate (certificates are renewed
annually on a US fiscal year basis);  sufficient evidence topermit the Certifying Authority to make a reasonabledetermination that the sugars are specialty sugars.G/AG/R/17
Page 16
Table MA:2 Notifications
Canada  G/AG/N/CAN/23   Tariff Quota Fill (Table MA:2) – Preliminary review
Points raised by other Member s Response by Notifying Member
Australia:  Wheat  and Barley  - Confirmation that all in-
quota imports of wheat entered at the in-quota tariff rate;that underfill for wheat and barley was driven by marketforces.All in-quota imports entered at the in-quota tariff rate.
Given the administration method chosen for both tariffquotas (i.e. first-come, first-served) and the possibility to
invoke the general import permit without advance
application, it can be assumed that the fill rates truly reflectmarket conditions.
Colombia   G/AG/N/COL/10/Rev.1   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia:  Reasons for the continuing low tariff quota fill
on a number of products.As can be observed for several WTO Members, the levels
of tariff quota imports are sometimes above the committed
volumes while in other instances they are below.  Theapplied duties are below the bound in-quota tariff rates andconsequently, no monitoring system is implemented inorder to control import volumes. Import volumes may be
influenced by changes in internal demand (e.g. soyabean or
sunflower oils) or consumer preferences for domesticagricultural products (Colombia is an important producer ofAfrican palm oil, raw sugar and malt).
Argentina:  Bovine meat, fresh and frozen  -  Reasons for
low tariff quota utilization.In 1997, imports of frozen bovine meat were above the
levels indicated in Colombia's Schedule.
The low fill rates registered for fresh bovine meat appear to
result from the lack of import demand as reflected by the
equally low level of demand for import licences (allapplications were approved).  The lack of demand could beexplained by the increase in production (3% annual).G/AG/R/17
Page 17
European Communities   G/AG/N/EEC/13   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
United States:  Whether in-quota imports include imports
under preferential arrangements, such as those from the
European Agreements;  if so, breakdown of in-quota
imports for preferential a nd non-preferential imports.For certain tariff quotas, the possibility to include imports
under the Europe Agreements is indicated in Schedule
CXL.  It is the EC's view that this can be done only when
the preferential duty rate is the same as the in-quota rateapplied.  In no other case have preferential imports beencounted against the WTO commitments.
United States:  Meaning of "effective imports";  whetherthese are actual imports as reported by the EC customsservice;  calculation method used to compile "effectiveimports"."Effective imports" represent actual imports as reported by
the customs services on the basis of accepted importdeclarations.
United States:  Whether listed in-quota imports includeproducts re-exported under the inward-processing régime.
It is the United States' understanding that such imports
should not count towards the fulfilment of Uruguay Round
market-access commitments, since they are eventually re-exported.The import quantities notified represent products that are
put in free circulation.  They do not cover imports under theinward-processing regime.
Japan/New Zealand:  Apricots, oranges, sweet potatoes :
Reasons for underfill;  incidence of chosen allocationmethod on fill rates.
Follow-up:  Philippines :  Whether country allocations are
made for the tariff quota fo r sweet potatoes;  whether
unused allocations are re-distributed among othersupplying countries. The European Communities undertookto revert to provide answers at a later stage.Tariff quota underfill is not caused by the chosen method of
administration.  Tariff quotas for apricots and oranges are
administered on a first-come, first-served basis. Thequantities imported are thus defined by private commercial
and economic interests of importers and exporters.  Low
imports of sweet potatoes in recent years are due to
declining EC demand for this product because of:  (a)competition with other products for feeding purposes;  and
(b) declining export capacity of the main supplier, China,
as a result of the increase of its own internal consumptionneeds.
Japan:  Arrowroot, salep  -  Reasons for tariff quota
underfill.Other animal feeds are abundantly available on the EC
market at competitive prices.
Australia/United States:  Butter -  Data on the  level of
imports;  whether import figures are based on "effectiveimports" or authorizations (licences).Import figures are still subject to verification and will be
notified as soon as the process is completed.  The source ofdata will be duly indicated.
Japan/Thailand:  Manioc  (cassava)  and Manioc (cassava),
other than pellets of flour and meal  -  Reasons for very
low in-quota imports.Major manioc producing countries are increasingly
becoming major users themselves.  In other countries,demand for manioc is also increasing.  Furthermore, other
animal feeds are abundantly available on the EC market at
competitive prices.
Canada:  Preparations of mixtures of malt sprouts;
barley screenings;  mushrooms  -  Reasons for underfill.Preparations of mixtures of malt sprouts and barley
screenings:  these are in direct competition with other
animal feeds that are abundantly available on the EC
market (coarse grain, feed wheat) or can be imported atzero duty (cereal substitutes such as corn gluten feed);
Mushrooms:  This tariff quota is mostly used for imports
from China and European countries.  The underfill is
mainly due to a reduction of the production capacity in thelatter countries.
Thailand:  Rice , husked, brown ;  and semi-milled or
wholly-milled  - Method used in allocating shares to the
United States considering their low fill rates in 1997;effective imports of both types of rice in 1997.The 1997 quota shares for the United States will be added
to the US quota allocation for the following years.  Thisarrangement is due to the fact that in 1996 the necessaryprovisions were not in place to make the US quota shareoperational.
In 1997, total EC imports amounted to:  (a) husked rice:
530,000 tonnes ;  (b) milled rice :  180,000 tonnes.G/AG/R/17
Page 18
European Communities   G/AG/N/EEC/13   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia:  Sheepmeat :  Reasons for tariff quota underfill. Imports of sheepmeat from certain countries remained low
as a result of de-stocking that has taken place duringprevious years in certain supplier countries.
Australia:  Swine, meat of :  Reasons why tariff quota was
not filled.There was sufficient internal supply on the EC market.  In
addition, internal prices declined towards the end of 1997.
Argentina/Australia/Japan:  Wheat -  Reasons for tariff
quota underfill.The underfill of the quota for quality wheat is due to the
fact that for most of 1997, the normal import duty was zero.
Japan  G/AG/N/JPN/31   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia/European Communities:  Reasons for the
continuing low quota fill for a number of products.Reasons for declining import demand are due to:  skimmed
milk powder for school lunches:  declining number of
school children;   skimmed milk powder for other purposes:
declining number of livestock animals and demand for
feed, which is the end use of most of this tariff quota;evaporated milk:  methods of utilization of this product are
still under development;   whey and modified whey for
feed:  Decreasing number of livestock animals.  However,
this product is increasingly be ing used as a substitute for
skimmed milk powder;   prepared whey for infant formula:
declining number of newborn children and increasing
interest in breast-feeding;  mineral concentrated whey:
lagging development of processed products using whey.
However, demand for calcium-added beverages and food isexpected to increase;  ground nuts:  recent diversification of
food intake in Japan and price competitiveness of other
types of nuts;  silk worm cocoons and raw silk:  stagnant
demand reflects the depressed economic situation in Japan.
European Communities :  Butter/butter oil  and skimmed
milk powder -  Whether the in-quota imports include
products destined for outward processing.The quantity shown in Japan's Schedule (Section 1-B,
Part I) includes products for outward processing and
products consumed in international maritime vessels andinternational airlines.  However, actual imports of theseproducts for these purposes are not included in the figure of
in-quota imports in Column 4 of the notification because of
a lack of relevant statistical data (these products do notundergo custom clearance procedures), which in turnexplains the apparent low rate of tariff quota fill.G/AG/R/17
Page 19
Japan  G/AG/N/JPN/31   Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
European Communities/New Zealand/United States:
"other dairy products for general use " and " starch,
inulin and preparations of starches ".  Reasons for
underfill, in particular in view of the substantial over-subscription for general use dairy products in Fiscal Year
1997 (FY 1997).  Details on out-of-tariff quota trade for
products subject to the volume-base special safeguard (V-
SSG) during FY 1997 (inulin, milk and cream andcondensed milk, which are included in these two baskettariff quotas);   administrative procedures and importquantities involved.
Follow-up:  New Zealand noted that there appears to be
some demand for out-of-quota trade for those dairy
products subject to the V-SSG, and yet there was tariff
quota underfill.  This situati on would seem to warrant some
adjustments of in-tariff quota administration arrangementsso that the quota would be eventually filled, without havingrecourse to out-of-quota trad e nor the imposition of the V-
SSG in certain cases.Starch and preparations of starch:  Underfill is due to the
fact that starch for manufacturing glucose and fructose is
relatively expensive when compared to corn starch which is
domestically produced from imported corn.
Dairy Products for General Use:  The Agriculture and
Livestock Industries Corporation (ALIC), which is a state
trading enterprise, imports dair y products for general use in
the tariff quota, taking into consideration supply anddemand factors for dairy products.  Regarding out-of-quotaimports during fiscal year 1997, the figures are:  inulin:  no
imports;   milk and cream:  2.213 tonnes;  condensed milk :
9.438 tonnes.  Milk and cream and condensed milk  are
subject to a basket tariff quota, which was almost filled.
Thailand:  Rice  - Imports from non-WTO Members;  level
of imports of Japonica and Indica types in 1997;   end-useof rice imports.Rice was imported from the United States, Australia,
China, Thailand, Vietnam
, Pakistan, Egypt, Uruguay, Italy
and Spain. In fiscal year 1997, 75 per cent of total rice
imports were of the Japonica-type and 25 per cent of the
Indica type (assuming that medium and short grains areclassified in the Japonica type and long grains in the Indicatype).  Almost all rice imports were destined for humanconsumption.
Argentina:  Wheat, meslin triticale and their processed
products;  barley and its processed products  -  Level of
imports for each product falling under each of these global
tariff quotas.
Follow-up - Argentina reiterated the above request.  Japan
undertook to provide an answer in writing.Volume of imports for each tariff quota is as indicated in
the notification.
Panama   G/AG/N/PAN/3  Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia/Canada:  Reason why notified imports match
tariff quota quantities, i.e. whether data reflect licences
issued rather than actual imports or whether Panama hasonly notified imports up to the tariff quota quantitycalculated for the four-month period.Column 4 only includes in-quota, and not total, effective
imports.
Australia/Canada/European Communities:  Poultry meat
and tomatoes - Reason for the lack of imports.Despite opening the tariff quota, there was a lack of interest
by importers and no applications were received.
European Communities:  Rice  - Noted that in-quota
imports of rice exceed the quota quantity.  Whether allnotified imports have taken place under the conditions
applicable to in-quota imports.In order to ensure adequate rice supplies during the end of
1997 and beginning of 1998, the Government opened an"extraordinary" tariff quota (explanations provided underPAN/2 above refer) amounting to 99,336 tonnes.
Additional out-of-quota imports took place at a preferential
rate of duty (not to exceed 15 per cent) starting inNovember 1997.  Thus import quantities shown include theallocations made for November and December (i.e.16,556 tonnes per month) under the "extra-ordinary" tariffquota.G/AG/R/17
Page 20
Philippines   G/AG/N/PHL/16  Tariff Quota F ill (Table MA:2)
Points raised by other Member s Response by Notifying Member
Australia/New Zealand:  Reason why some tariff quotas
were not, or under-, utilized (including swine, poultry, goats,pork, goat meat, poultry meat, potatoes, sugar, coffee, corn)The tariff quotas were made available to the private sector
but there were only a few takers or interested parties.
Decisions to import remain entirely business decisions.
Live swine and live poultry, goat and goat-meat:  no
licences were issued because there were no applicants. Forother commodities, including poultry meat, pork, potatoes
and coffee:  licences have been issued but no parties were
interested in importing the products concerned.  Under-utilization of tariff quotas is also due to a number ofmarket related factors, including the economic crisis inseveral Asian countries and an average 40 per cent
devaluation of the Philippine peso during 1997.  It should
be recalled that in response to concerns raised byMembers, the Philippines has implemented changes to itsmethod of administration in 1998.
Tunisia   G/AG/N/TUN/11  Tariff Quota Fill (Table MA:2)
Points raised by other Member s Response by Notifying Member
New Zealand:  Reporting period. Calendar year 1997.
Australia/New Zealand:  Reason for the low quota fill for a
number of products (including calves, bullocks, bovinemeat, milk powder, butter);  reason for the non-utilization ofcertain tariff quotas.In 1997, all tariff quotas were opened and administered in
conformity with the procedures notified to the Committee.Low fill rates may have resulted from:  the lack of import
demand;  the development of local production;  consumer
behaviour;  and high priced products.
New Zealand:  Almonds, shelled, tomato concentrate  -
Reason why tariff quota quantities were reduced, compared
to the last notification.This is due to a transposition  error. A corrigendum will be
shortly submitted.
Argentina:  Durum wheat, soft wheat, barley  -  Whether
any imports were recorded outside the tariff quota.The year 1997 was characterized by an increase of cereal
imports.  The quantities recorded were slightly above the
relevant tariff quotas.
Argentina/Canada:  Method of counting in-quota imports
given that five tariff quotas are reported as being exactly
filled;  whether notified imports reflect import licences or
actual imports.Notified imports reflect effective imports under the related
tariff quotas. These are monitored on a daily basis by thecompetent authorities.G/AG/R/17
Page 21
Tables MA:3 to MA:5 Notifications
United States   G/AG/N/USA/18  (Table MA:3)
Points raised by other Member s Response by Notifying Member
New Zealand:  Reason why consumption was not taken into
account in calculating the trigger level.Preliminary data indicates that imports were about 65 per
cent of consumption over the last three years.  If this hadbeen taken into account, the special safeguard would havebeen triggered three months earlier.G/AG/R/17
Page 22
Table DS:1 Notifications
Guyana   G/AG/N/GUY/1   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Australia:  Whether industrial producers r eceive payments
under the Agriculture Loan Programme.Questions were forwarded to the Delegation.
New Zealand:  In cases where Green Box measures have
been co-financed by other Funds, whether figures reflect
total expenditure on the project or simply the expenditureby the government of Guyana.
Israel   G/AG/N/ISR/8   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
New Zealand:  Reason for the significant increase in AMS
support in 1996 compared to 1995;  whether this trend is
expected to continue.Commitments were calculated in the AGST tables in New
Israel Shekels and converted into US dollars.  The same
conversion method was used for the calculation of thecurrent AMS in 1995 and 1996. Following the CentralBank's policy to curb inflation, the domestic rate of
inflation rose by 212 per cent between 1988 and 1997,
while the devaluation of the shekel vis-à-vis  the US dollar
was only 115 per cent.  This had the effect of increasing thevalue of the total AMS in nominal terms. Israel decided not
to recalculate external reference prices because:  (a) the gap
between the internal rate of inflation and the shekel/US$exchange rate narrowed during the last couple of monthsand (b) despite the increase noted by New Zealand, the
current AMS remains below commitment levels, both in
1995 and 1996. Therefore, this trend is not expected tocontinue.
New Zealand/United States:  Supporting Table DS:5  -
Confirmation that external prices are the same as used in
calculating the equivalent commitments in AGST tables;  ifnot, reference years used.The same fixed external reference prices which were used
in the 1986-88 base period to calculate the EMS are used
again in the present notification.
Korea   G/AG/N/KOR/18   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Supporting Table DS:1
New Zealand:  "Infrastructural Services" - Reason for the
significant increase in expenditure on this category between
1996 and 1997;  whether this is due to the increasednumber of projects or to higher cost projects being initiated.Significant efforts have been made since 1992 towards
structural adjustment, notably through the Comprehensive
Rural Development Plan.  These efforts include:  theimprovement of infrastructural services including irrigationsystems, and rural road and water supply facilities.  This
investment plan was initially scheduled to be completed by
2001, but is now rescheduled to be phased out by 1998 toexpedite structural adjustment.  As a result, in 1997, thenumber of projects increased considerably compared to
1996, leading to a significant increase in total expenditure
on infrastructural services.G/AG/R/17
Page 23
Korea   G/AG/N/KOR/18   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
United States:  "Support for structural adjustment" -  Type
of machinery provided;  conformity with criteria in para 11,
Annex 2.Small-scale farms, poor infrastructure and insufficient
levels of mechanization prevail in Korean agriculture.
Mechanization is essential to improve the competitiveness
and viability of agriculture given the internal decline of theagricultural labour force and the rising proportion of agedfarmers.  Loans and subsidies were introduced for the
purchase and storage of small, multi-purpose types of
machinery which suit Korea's unique geographical features.Support is targeted to the disadvantaged farmers not toincrease production but to expedite structural adjustment.
Support has been concentrated during the period 1993-97,
and has declined since 1998.
United States:  "Other" - In view of responses provided in
G/AG/R/13, the buffer stock management fund seems to
provide price support and should be removed from theGreen Box.  Conformity with criteria in para 1, Annex 2.This programme is designed to stabilize domestic consumer
prices of fresh fruit and vegetables through (a) purchasing
and storing activities during harvests when prices are low atmarket prices (i.e. not pre-determined administered prices)and (b) releasing them in the wholesale market during off-seasons when prices soar.  Since markets for these products
are small and demand is price-inelastic, a small change in
the volume of production could easily disrupt domesticmarkets, e.g. when unpredictable factors such as extremeclimatic conditions during the planting period arise.  This
programme does not have the effect of providing price
support to the farmers. The purchased quantities areminimal compared to total production.
Supporting Table DS:2
New Zealand:  Decision process involved in the allocationof investment subsidies, in view of the substantial change
of the types of ventures benefitting from subsidies in 1997
compared to 1996;  whether such subsidies are targetedonly to the products listed.This support is targeted to farmers living in mountainous
areas.  Such farmers live under unfavourable conditionsand grow crops such as mushrooms, mountain herbs andnuts. With the recent decrease in demand for silk, demand
for mulberry field rehabilitation has dwindled.  This type of
support is aimed at improving generally unfavourableagricultural conditions not to increase production of anyspecific products.  It is provided in the form of  subsidies or
loans at concessional rates.  It is invested in facilities and
equipment suitable for farming in mountainous areas.
Supporting Table DS:4
New Zealand/United States:  Justification of the de minimis
claim for (a) product-specific and (b) non-product specificcategories of support.The related data is provided in Attachment no. 1 .
Follow-up:  United States and Canada:  The provision of
data concerning the value of production should become a
regular feature of all ST/DS:4 notifications.G/AG/R/17
Page 24
Korea   G/AG/N/KOR/18   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Supporting Table DS:5
New Zealand:  Beef  - Reason for the large increase of the
amount of production eligible for support.Demand and supply for beef have increased rapidly in the
1990's.  Increased demand has been met mostly by
imported beef.  However, this trend slowed down since the
end of 1996 which led to oversupply and build up of stocks.Cattle prices dropped drastically affecting the domesticindustry.  From the end of 1996, the National Livestock
Cooperative Federation began to purchase cattle in order to
stabilize cattle prices.  The volume of production eligiblefor support increased in 1997 because the purchaseprogramme began at the end of 1996 and continued
throughout 1997.  However, this support measure was
temporary and was discontinued in August 1998 as cattleprices recovered to a certain extent.
Supporting Table DS:7
United States:  Noted the usefulness of information
regarding the specific types of subsidies.  Where two
measures are listed, details requested on allocation ofexpenditures among them;  calculation details in column 5(or column 4 in case of budgetary outlays).  Suggestion is
made that measures are listed separately to avoid
confusion.Expenditures (billion won) are as follows:  ginseng:  3.27
for quality improvement and 5.16 for loan interest rate
subsidy;  pigmeat:  9.52 fo r quality improvement and 2.52
for loan interest rate subsidy.  The amount shown in
column 5 indicates the loan interest subsidy and is
calculated by multiplying the difference between the
market interest rate and the concessional rate granted toproducers by the amount of loans provided.
Supporting Table DS:9
New Zealand:  "Loan Interest Subsidy for Farming" -
Reason for the significant increase in 1997 expenditurescompared to 1996.This programme, introduced in 1961, provides short-term
loans to farmers at a concessional rate. The total amount ofsubsidy is calculated by multiplying the amount of the loanby the interest differentials.  The subsidy rose significantly
in 1997 because the am ount of the loan was expanded due
to increased production costs and the interest differentialsbroadened.
United States:  Request for calculation details in column 5. There were no associated fees or levies on farmers in 1997.
Philippines   G/AG/N/PHL/14 and Add.1;  PHL/ 15 and Add.1  Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Supporting Table DS:1
Japan:  Reason for the general increase in Green Box
expenditures compared to 1996.This is largely attributed to the sub-item "general research".
There has been renewed priority in improving farmproductivity, such that the relevant research programmes in1997 have increased compared to 1996.
Japan/New Zealand/United States:  General research
relating to particular products – Reason for increased
expenditures in 1996 and 1997.These programmes include research studies to generate and
develop technologies on specific commodities such as riceand corn, crops, livestock and fisheries.  For example, these
research programmes are conducted to improve resistance
to diseases and reduce post-harvest losses.  The notifiedfigures do not reflect actual expenditures but budgetsprovided for such activities and actual expenditures maytherefore be lower than the provision.G/AG/R/17
Page 25
Philippines   G/AG/N/PHL/14 and Add.1;  PHL/ 15 and Add.1  Domestic Support (Table DS:1)
Australia/Japan/New Zealand/United States:  Production
and market infrastructure:  Operation details;  reason for
the sharp increase in spending in 1997;  conformity with
criteria of Annex 2, para 2(g), which excludes thesubsidized provis ion of on-farm facilities such as
slaughterhouses, etc.All infrastructure services listed are consistent with the
provisions of para 2(g) of Annex 2 since each service
involves the construction of capital works only.  The solar
dryers, for example, are multi-purpose drying pavementswhere farmers can spread their products for drying in thesun.  Such facilities are provided by the government and
are available for use by the public.  The construction of
facilities such as slaughterhouses and similar buildingsinvolves the building of structures only and does notinclude facilities required to operate them.
Japan:  Crop insurance and calamity fund - Operation
details;  reason for the sharp increase in 1997 spending.Undertook to provide a response at a later stage.
Australia/New Zealand:  Stabilization programme for rice
and corn - Reason for large cuts in the expenditures;
operation details.The apparent cut in expenditures is due to a typographical
error.  The figure for 1997 should read 1.5 billion pesos
(instead of 1.5 million pesos).
Under this programme, the government appropriates a
budget for the procurement of a portion of the domestic rice
and corn production of farmers.  The rice and corn
procured form part of the government buffer stocks whichare used to ensure the availability of rice and corn atreasonable prices.  The government also imports rice and
corn, if necessary, to supplement domestic production.
These commodities are distributed in strategic areas.
Supporting Table DS:2
New Zealand:  Reason for changing programmes
descriptions and titles;  whether such programmes are new
or whether new elements have been included;  reason fordecrease in expenditures.The activities under the programmes are essentially the
same.  The decrease in expenditures may be attributed to
the shift in strategy in the government's productionenhancement programmes from the provision of inputsubsidies to the provision of production loans to farmers.
Supporting Table DS:5
New Zealand/United States:  Rice  and corn  - Reason for
fluctuating expenditures, including in the volume of cornproduction for which support was provided in both 1996and 1997 compared to previous years;  compared to baseperiod;  basis for determining eligible production.The eligible production notified reflects the actual
procurement level of paddy (and rice) and corn by theNational Food Authority (NFA).  NFA procurement ofcereals depends on several factors such as:  volume of
production;  farm prices;  budgetary position of the
government;  and the credit that NFA can generate fromdomestic sources.  However, government intervention inthe rice and corn market takes place only when the
prevailing prices are lower than the support price. In view
of the above, NFA's level of expenditure may vary fromtime to time.G/AG/R/17
Page 26
Thailand    G/AG/N/THA/29   Domestic Support (Table DS:1)
Points raised by other Member s Response by Notifying Member
Supporting Table DS:2
Australia/New Zealand:  Soft-loans for Agricultural Invest-
ment - Operations;  conformity with Article 6.2;  reason for
the decrease in expenditures between 1996 and 1997.This programme is generally available to agricultural
producers in accordance with Article 6.2.  It is operatedthrough farmers' groups and offers them concessionalinterest rates to support their needs (quality improvement,
storage facilities, product processing projects, etc.).
Decreased expenditures under this programme were due tothe financial crisis in Thailand.
Australia/New Zealand:  Farming Input Assistance Pro-
gramme – Reasons for (a) increase in expenditures between
1990/91 and 1997;  and (b) decrease in expendituresbetween 1996 and 1997.(a) This is due to the continuous adjustment by government
of its agricultural production policies by supporting
agricultural inputs.  A large number of farmers participatein this programme.  In response to local demand, thegovernment has also initiated a crop replacement projectunder this programme.
(b) This is due to the financial crisis in Thailand.
Supporting Table DS:5
New Zealand:  Whether product-specific programmes for
non-listed, but previously no tified, products still exist;
whether the non-reporting of such information is due to ade minimis claim;  if so, justification is requested.In 1997, support levels for chicken eggs and lemons were
below the product-specific de minimis  levels.  Fresh milk,
soya beans, duck eggs and palm oil received no supportduring that year.
Japan:  Coffee seed, shallot, tapioca  - Considering
THA/23, confirmation sought that related subsidization was
started in 1997 only;  operation details.In 1996, only shallot received support which remained
below the de minimis level as specified in G/AG/R/13.  In
1997, the support programme for coffee seed, shallot andtapioca had operated through market price interventionwhen domestic prices were low.
Japan:  Garlic  - Operation details.  Noted that subsidies
were granted in 1995 and 1997, but not in 1996.Support for garlic in 1996 was below the de minimis  level
as specified in G/AG/R/13.  Market price intervention wasactivated only when domestic prices were low which
explains why such a support programme is not operated
every year.
United States:  Milk  -  Whether the producer price for milk
was guaranteed in 1997.No support was granted to milk during 1997.
New Zealand:  Onions  - Reasons for the large increase of
product-specific support in 1997 compared to 1996.This was due to the very low domestic prices for onions
during 1997.
United States:  Soybeans  - Whether price support is still
provided to producers by requiring crushers to buy beans atan established price level.No support was granted to soybeans during 1997.
Supporting Table DS:7
United States:  Method used to calculate market price
intervention for the listed commodities;  reason why price
gap methodology described in Annex 3 was not used.The market price intervention programme was operated on
the basis of budgetary outlays in accordance with para 10
of Annex 3.  Product-specific support is granted through amarket price intervention programme in Thailand.  It isoperated only when the local prices are very low.  This
intervention system is entirely different from a guaranteed-
price system.
Follow-up:  New Zealand - It would greatly reduce the burden of questioning if the de minimis  claims were regularly
substantiated with the relevant data and notifie d  to the Committee along with the notifications.G/AG/R/17
Page 27
Table DS:2 Notifications
Korea   G/AG/N/KOR/19   New or Modi fied Domestic Support (Table DS:2)
Points raised by other Member s Response by Notifying Member
New Zealand:  How will Korea ensure that "support
installations" are limited to the extra costs or losses of
income involved in complying with the programme, asstipulated in Annex 2, para 12?
United States:  Details sought on implementation means
(financial payments, loans, equipment);  eligibility criteria.Environmental preservations issues have recently emerged
as water pollution and soil degradation are worsening. The
Pro-Environment Promotion Act was established inDecember 1997 and support measures for building asustainable agricultural zone were introduced.  In order to
encourage environment-friendly agriculture, support is
targeted to farmers in those areas that are designated assustainable agricultural zones, mainly in the form ofsubsidies for livestock waste disposal facilities and organic
farming facilities and equipment.  Beneficiaries of this type
of support are required to record the use of pesticides,chemical fertilizers, and livestock waste disposal facilities.Support covers only up to 80 per cent of the costs incurred.G/AG/R/17
Page 28
Tables ES:1 to ES:3 Notifications
Canada   G/AG/N/CAN/22   Export Subsidies (Tables ES:1 to ES:3)
Points raised by other Member s Response by Notifying Member
Japan/Thailand:  Operation of the food aid programme;
whether international organizations are involved;procurement and exporting to recipient countries;  amountof government spending for procurement activities.Food aid is provided through the Canadian International
Development Agency (CIDA) through three channels:  (a)to international partners such as the WFP and UNICEF;  (b)directly to the government of the recipient country;  (c) to
Canadian partners/NGOs, such as the Canadian Foodgrains
Bank.  Products are procured either by CIDA or its partner.Food is purchased in Canada on the commercial marketbased on recipient countries' needs.  However, food is
occasionally purchased in developing countries to meet the
dietary requirements of the people in need.  Canadian foodmay also be shipped to one country in exchange for moreappropriate food from that country to go to another.  The
food aid reported in Table ES:1 relates to products
purchased in Canada.  During the 1996/97 fiscal year,CIDA's Food Aid Programme disbursed C$249.6 million.
Thailand:  Criteria applied in selecting commodities
destined to food aid programme;   whether these are surplus
commodities or whether the selection is made in responseto recipient countries.Commodities provided as food aid are determined both by
Canada's commitments under the FAC as well as by the
needs of recipient countries.  Food aid provided in the formof wheat, wheat flour, corn, and dried peas and beans countas contributions towards Canada's current annual pledge of
400,000 tonnes of wheat equivalent under the FAC.  Other
products are provided as food aid based on the needs ofrecipients and available supplies.  Canada's food aid is not asurplus removal programme.
Thailand:  Reason why only butter and skimmed milkpowder received export subsidies.During the Uruguay Round base period, Canada provided
export subsidies under the Western Grain TransportationAct, in the form of more favourable freight rates for export
than for domestic movements, for wheat and wheat flour,
coarse grains, oilseeds, vegetable oils, oilcakes, and driedleguminous vegetables.  This programme was eliminatedon 31 July 1995 and since then, Canada has not provided
any export subsidies for these products.  In addition,
producer financed export subsidies were provided forbutter, skimmed milk powder, cheese and other milkproducts during the Uruguay Round base period.  On1 August 1995, the system of producer funded rebates on
dairy product exports was eliminated.  In the case of butter
and skimmed milk powder, some exports of these productscontinued to receive export subsidies in 1995/96 and in1996/97, in the transition from  the previous régime.  The
subsidized exports notified occurred when stocks
previously purchased at the domestic support price wereexported at lower world prices, with the difference made upby payments financed by producer levy funds.G/AG/R/17
Page 29
Canada   G/AG/N/CAN/22   Export Subsidies (Tables ES:1 to ES:3)
Points raised by other Member s Response by Notifying Member
European Communities/Thailand :  Butter, skimmed milk
powder  - Comment sought on the decrease of the share of
subsidized exports in total exports from 1996/97 compared
to 1995/96;  whether exports of butter and skimmed milkpowder benefit from the special milk classes scheme.The system of producer funded rebates on dairy products
was terminated on 1 August 1995.  For these products,
export subsidies on some exports continued in 1995/96 and
1996/97 in the transition from the previous regime.  Theseoccurred when stocks previously purchased at the domesticsupport price were exported at lower world prices, with the
difference made up by payments financed by producer levy
funds.
Some exports of butter and skimmed milk powder benefit
from the special milk classes.  However, Canadian dairy
products made from milk sold to processors under the
special classes do not receive export subsidies and thereforeexports of these products have not been notified as exportsreceiving export subsidies.
New Zealand/United States:  Agency involved in exportingthe products concerned;  when, and under whichprogramme;  explanation of how these activities are"producer-financed".In 1996/97, exports of skimmed milk powder were made
both by the CDC and private traders while butter exportswere undertaken by private traders.  The 666 tonnes ofbutter and 1,479 tonnes of skimmed milk powder notified
in Table ES:1 are export sales made during the 1996/97
dairy year of products which had been previouslypurchased at the domestic support price, under the Offer-to-Purchase-Programme.  These quantities were sold from
CDC inventories, of butter and skimmed milk powder
which had been purchased in previous dairy years at thesupport price.  The CDC paid funds from levies previouslycollected from producers to finance the exports during the1996/97 dairy year.
Producer levy funds were used to finance exports of dairy
products sold in world markets at prices below Canadianprices.  Rebates to cover the loss on sales were made toprocessors using funds collected through a producer levy.
European Communities   G/AG/N/EEC/11   Export Subsidies (Tables ES:1 and ES:3)
Points raised by other Member s Response by Notifying Member
United States:  Follow-up to questions posed by Australia
and Switzerland at June 98 meeting  -  Values and quantities
of subsidized exports of sugar of ACP and Indian origin.
United States:  Since EC export statistics do not distinguishbetween (a) refined sugar from ACP countries and India;and (b) other sugar, confirmation that an amount equal toACP and Indian sugar imports are in turn exported eachyear.The European Communities confirm that an amount of
white sugar equal to an equivalent quantity of raw sugarimported from ACP countries and India is in turn exported.
United States:  Understands that internal EC prices lesstransportation costs apply to imported sugar;  that imported
sugar is refined in Europe and most of it is exported at
lower world market prices. Whether this financialassistance is reported to the WTO;  its magnitude.
Follow-up:  United States - Assumed that "no reduction
commitment" did not mean that the EC had no commitment
at all as regards export subsidization of agriculturalproducts.  To the extent that WTO rules exist on the subject,the United States hoped to see more information on sugar
exports under the EC financial support programme in
future.As indicated in footnote (1) of the table on export subsidies
contained in Part IV, section II of Schedule CXL, the EC is
not undertaking any reduction commitment on exports of
ACP or Indian sugar. Consequently, any financialassistance is not reported to the WTO.  For information,these exports amount to approximately 1.6 million tonnesper year.G/AG/R/17
Page 30
Poland   G/AG/N/POL/22   Export Subsidies (Table ES:1)
Points raised by other Member s Response by Notifying Member
Argentina/Australia/Philippines/Thailand:  Rationale for
resorting to the roll-over of export subsidy quantities forsugar in 1997;  export markets in 1996 and 1997.Due to economic reasons and low prices on the global
sugar market, Poland decided to carry over unused export
subsidy quantities for sugar in 1996 and 1997.
Article 9.2(b) provides for the possibility of carrying overunused export subsidy quantities in 1998 and 1999.  Nodata is available for the time being as regards the marketsof subsidized sugar nor the subsidized portion of sugar
exports to Thailand.  Poland stated that it used export
subsidies in a limited and responsible manner and informedthe Committee that only sugar is subsidized out of 11
groups of products allowed.
Australia/New Zealand/Thailand:  Whether Poland intendsto continue this practice in the future and for whichproducts.The economic environment will determine whether Poland
will apply its right to invoke Article 9.2(b) and to whatextent.
Follow-up:  Notwithstanding the limited and responsible
use made by Poland of Article 9.2(b), the Philippines and
Thailand stressed the power of export subsidies to distort
world agricultural markets and erode competitive
advantages.  In this case, Poland was successful in
exporting sugar to Thailand,  a major sugar exportingcountry which does not use export subsidies. Australia and
New Zealand reiterated that the cumulation of export
subsidies can potentially undermine the effectiveness of theUruguay Round export subsidy disciplines and urged WTOMembers to exercise restraint in resorting to exportsubsidization.Total exports of sugar to Thailand in 1995-1997 reached
93, 52 and 63 kgs. respectively.
Turkey  G/AG/N/TUR/7   Export Subsidies (Tables ES:1 to ES:3)
Points raised by other Member s Response by Notifying Member
Canada:  Reason why 18 products or product categories
received export subsidies in 1997, while only 5 receivedsuch subsidies in 1996.Forty-four product groups are eligible to receive export
subsidies according Turkey's scheduled commitments.
Canada:  For "basket" product categories such as creams
(HS 0401 and HS 0402);  potatoes frozen and fried  (HS
0710 and 2004.10);  preserves and pastes  (HS 2001-3,
2004.90, 2005-6, 2008):  detailed list of HS tariff lineswhich received subsidies in 1997.During calendar years 1996 and 1997, only five and
eighteen product groups respectively received exportsubsidies. Attachment no. 2  lists the specific HS lines
involved.
New Zealand:  Confirmation that no export subsidies wereprovided on exports greater than the quantities listed in
column 4, Table ES:1 (bovine meat, sheepmeat, butter,
dried onions and citrus fruit);  operation of the relevantexport subsidy programmes.No export subsidies were granted to:  meat of bovine
animals, meat of sheep, butter, during 1997.  Export
subsidies granted to dried onions were below the
corresponding commitment level.  Total exports of dried
onions exceed the level of subsidized exports.  This figureincludes exports to one non-WTO Member country, whichwere not subsidized.
A "quantity threshold system" is used to monitor the level
of effective export subsidization of each product againstWTO commitments. The system was used in 1997 for
citrus fruit and only 67 per cent of the exported quantity
was eligible to receive export subsidies. Operational details
are available in documents G/SCM/N/16/TUR andG/SCM/N/25/TUR.G/AG/R/17
Page 31
ANNEX – Part II
Deferred replies to questions on notifications raised at previous meetings
Table MA:2 Notifications
El Salvador   G/AG/N/SLV/6    Tariff Quota Fill    (Table MA:2)
Points raised by other Members at the
September 1998 meetingResponse by Notifying Member
European Communities:  Applied duty rates for tariff quota
products and whether these are applied to all imports of theproducts concerned.Up to the present date, El Salvador has not decided to open
tariff quotas for the products concerned.  Applied rates areMFN rates.G/AG/R/17
Page 32
Attachment No.1
Korea – Question from New Zealand/United States
G/AG/N/KOR/18:  Justification of the de minimis  claim
Percentage AMS to Production Value
( Million won)
Products1997
AMS
(A)1996 Production
value
(B)*(A/B, %)
 Soybean 7,856 281,727 2.79
 Malting barley 785 138,065 0.57
 Red pepper 1,603 1,356,649 0.12
 Garlic 1,244 746,702 0.17
 Apple 3,101 628,007 0.49
 Pear 856 373,637 0.23
 Citrus fruit 145 544,759 0.03
 Chestnut 3,227 233,652 1.38
 Ginseng roots 8,425 245,232 3.44
 Beef 195,273 2,105,039 9.28
 Pigmeat 12,038 1,901,262 0.63
 Other cereal 827 n.a. n.a.
 Potatoes 286 540,687 0.05
 Other vegetables 21,314 4,252,992 0.50
 Other fruits 865 1,008,435 0.09
 Medicinal crops 541 220,149 0.25
 Flowering plants 2,284 607,203 0.38
 Mushrooms 1,315 490,741 0.27
 Other Agr. Products 5 1,253 0.40
 Non-Product-Specific 393,329 28,965,173        1.36
*Agricultural Information and Statistics Bureau, Ministry of Agriculture and Forestry, Korea.G/AG/R/17
Page 33
Attachment 2
Turkey – Question from Canada
G/AG/N/TUR/7 – Export subsidies, Calendar year 1997
-  For the product category covering "creams", only the tariff line 04.02 received export
subsidies.
-  For the product category "potatoes, frozen and fried", only the tariff line 2004.10  was
granted export subsidies.
-  For "preserves and pastes", please find the detailed information in the table below.
Quantity (tonnes) Value ($)
2001 90,967 5,003,185
2002 102,425 5,633,375
2003 133 7,315
2004.90 2,874 158,070
2005 28,100 1,545,500
2006 466 25,630
2008 55,675 3,062,125
Total 280,640 15,435,200
__________