WORLD TRADE
ORGANIZATIONG/AG/NG/W/108
13 February 2001
(01-0664)
Committee on Agriculture
Special SessionOriginal:  Spanish
FIFTH SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
5-7 FEBRUARY 2001
Statement by Argentina
G/AG/NG/W/90 (EC Proposal)
We welcome the proposal.  We profoundly disagree with many of its points, but in overall
terms it is a constructive proposal which facilitates negotiation of our differences.
We do not wish to enter into a philosophical debate, but we cannot fail to point out that there
is no suggestion anywhere in the Agreement on Agriculture that these negotiations must seek a
"balance" between trade and non-trade concerns.
We have agreed to "take into account" non-trade concerns, together with special and
differential treatment in favour of developing countries, inasmuch as this contributes to the aim of
achieving an equitable and market-oriented system of agricultural trade.
I believe that this idea of "balance" between trade and non-trade concerns should not be
pushed too hard, since if it goes as far as the Fourth Ministerial Conference, we shall have a Seattle II.
As far as market access  is concerned, the EU proposes reviving the formula used in the
Uruguay Round (UR).  We are not sure if this means repeating the reduction percentages (36 per cent
average over six years, with a 15 per cent minimum per tariff line), or if it is merely a question of
repeating the idea of an overall average reduction, together with a minimum reduction per tariff line.
We could explore the idea of overall cuts in average tariffs, but we consider it highly
important that this be complemented by a formul a which ensures greater reductions in the highest
tariffs.
It is essential, in our view, to eliminate tariff escalation and tariffs which make trade virtually
impossible.
We agree on the need to increase the transparency of tariff rate quotas (TRQs), but we also
believe that they should be phased out gradually.  These are managed trade systems which create rents
and are incompatible with the principles of the SCM Agreement.  We must reduce out-of-quota tariffs
and increase quota volumes.
Geographical indications are not a topic of these negotiations.The Special Safeguard (SSG) was accepted as an adjunct to tariffication.  As we have already
gone beyond that stage, the SSG has lost its raison d'être  and it has clearly been the subject of abuse.
In the Committee on Agriculture, we have repeatedly examined cases of products for which tariff rateG/AG/NG/W/108
Page 2
quotas have not been used and which have been penalized by special safeguard provisions when
imported out of quota.
With regard to export competition , in its proposal the EU seeks indirectly to maintain its
right to subsidize exports, using the argument that there are other equally trade-distorting instruments
of unfair competition.
For developing countries, despite the special and differential treatment that we receive, there
are only two instruments of competition:  quality and price.  The richest players, on the other hand,
have the possibility of using various means, of varying transparency, to reduce the current value of
their products.
We therefore consider it totally unacceptable that this type of practice should continue.  With
or without a negotiating round, export subsidies and all the variants for their disguised application
must be eliminated.
We are just as unhappy as the EU about the use of export credits and guarantees, food aid and
State trading enterprises (STEs) to circumvent comm itments in respect of export subsidies.  It is
necessary to eliminate and prohibit the use of export subsidies and, in addition, to adopt disciplines
which prevent any circumvention of this prohibitio n.  The commitment to eliminate them should be
negotiated and then supplemented – prior to approval – by disciplines which render circumvention
impossible.
On the subject of domestic support , the EU proposal again contains conditions.  The EU tells
us that it is necessary to ensure the continuity of the "concept of the blue and green boxes", as a
condition for negotiating reductions in subsidies under the Aggregate Measurement of Support
(AMS), which basically involves price subsidies.
We see the present situation differently.  According to the OECD, 60 per cent of the subsidies
provided by developed countries are exempt, in one way or another, from reduction commitments.  It
is therefore unacceptable to stipulate, before starting the negotiations, that we shall only be
negotiating reductions for the remaining 40 per cent, especially since the blue box provides for no
precise limit and the green box for none at all, either precise or imprecise.
We note that the EU considers it important to maintain the "concept" of the blue and green
boxes.  However, we wish to point out that it is one thing to maintain the possibility of making direct
payments under production-limiting programmes (the blue box "concept"), while it is another thing
altogether for such payments to have no precise ceiling, to be exempt from reduction commitments
and to be subject to no conditions or limitations more precise than those currently contained in
Article 6.5.
We are willing to consider the continuity of "c oncepts", provided that such continuity serves
to reduce and eventually eliminate trade-distorting s ubsidies.  In short, now is the time to explore
alternatives and we are open to any that are compatible with the reform process.
Regarding non-trade concerns , the EU provides some interesting clarifications.  Let us for
the moment leave aside rhetoric and start talking about measures that could be used to address those
concerns.  In this connection, the EU tells us that they must be "targeted, transparent and implemented
in no more than minimally trade-distorting ways".
I suspect that we shall have differences of view about the scope of this "concept" of
"minimally trade-distorting ways", but I hope that th ese differences are limited to one or two areas at
the most.  For the moment, we could define the extent of our misunderstandings.  We could agree that
neither export subsidies nor the subsidies included in the calculation of the "aggregate measurement
of support" can be considered as "minimally trade-distorting".G/AG/NG/W/108
Page 3
Besides this, my delegation submitted a technical document analysing the effects of price-
distorting subsidies on three non-trade issues of particular concern to Argentina:  rural poverty,
unemployment and sustainable development of natural resources (environmental protection).  We
hope to be able to consider that document in the course of this session.
The topic of food safety  is obviously very important to the EU at this time and we hope that
this problem will be overcome as soon as possible.  That could be done more easily if the EU were to
reduce its intensive meat production which is made possible by a combination of subsidies and tariffs.
The same can be said about what the EU calls the "precautionary principle".The EU requests extension of the so-called "peace clause" as the "logical corollary" of the
nature of the agreement.  Which agreement?  The existing one or the future one?  If the reference is to
the existing one, the "logical corollary" will inevitably end on 31 December 2003.  If the reference is
to the future agreement, let us first see what kind of agreement it is and then talk about its "corollary".
Finally, I should like to refer to the matter of preferential access for the least-developed
countries.  We consider it necessary to make a clear distinction between "creation" and "diversion" of
trade.  If what the EU is suggesting is the "creation" of new trade flows in favour of the LDCs, we
applaud the idea and wish them the best of luck with their sugar producers.
On the other hand, if what the EU is suggesting is to "divert" trade for the benefit of LDCs,
we think that the matter should be considered very carefully.  Any initiative of this kind should not be
allowed to result in a deterioration of the conditions of access by developing countries as a whole to
the developed countries' markets.  This would be counterproductive and would end by becoming an
exercise in "sham aid" to the LDCs.  It is the developing countries as a whole which would actually
pay for such generosity.
G/AG/NG/W/91 (Japanese proposal)
Our mandate from the Uruguay Round is to pursue negotiations aimed at further liberalizing
two basic sectors, one traditional ( agriculture ), the other still actively searching for a role in
international trade ( services ).  This mandate is independent of a new global round but is at the same
time consistent with that round under certain conditions.
The mandate is to go forward with liberalization, not to go back.  Regrettably, the Japanese
document on agriculture fails to meet this essential requirement not only in the matter of agriculture
but with regard to the principles governin g international trade in general.  It is therefore
incompatible with the objective of reform .  Its main lines of approach may be characterized as
Uruguay Round "minus" .
Let me explain specifically what I mean by this statement:- The document states that tariffs must be maintained in order to "adjust" differences in
the natural and economic conditions of Members (page 8, point 2.1(c)) and that
subsidies are needed to fill the productivity gap between agriculture and industry
(page 14, point 3.2(b)).  If we were to apply this line of approach, we would be
burying world trade and the WTO and wrecking the basic principles of the
modern economy .
- Reductions in market access opportunities are suggested (paragraph 11), including
additional protection for the food industry (paragraph 8), which implies defending
tariff escalation.G/AG/NG/W/108
Page 4
- It is asserted that each Member may adopt individual methods to administer its quota
system and that a new special safeguard mechanism should be introduced
(paragraphs 12 and 14), in addition to the existing special safeguard.
- Consideration is given to enhancing the link (recoupling) between income support
and production (paragraph 19 and explanatory notes).
- It is considered possible to increase the subsidies included in the aggregate
measurement of support (paragraphs 21 and 22 and explanatory notes).
- It is asserted that any reform which entails adjustment problems provides justification
for additional subsidies (page 5, point (d)).
- Freely established market prices cannot be used as an indicator (page 5,
point 1.1.1 (a)) and compensating 70 per cent of income loss is insufficient (page 13,
note (ii) (b)).
- The entire analysis suggests that only exporters benefit.  Exporters benefit,
importers lose out .  The utter disregard for the interests of consumers is striking and
provides a further incentive to discontinue  international trade, which is curious
coming from a country which runs an enormous trade surplus (page 2, penultimate
paragraph).
Mr. Chairman, it is not enough to use over and over again terms like "should be improved" or
"should be determined in a realistic manner" in order to reflect the philosophy, the ideas or the
opinions put forward throughout the document, the most disappointing aspects of which I have just
enumerated.
Just as in criminal law, certain errors have an  "aggravating" effect, that is to say that they
magnify the responsibility of the person who commits them.  The same is true of a document
submitted by a highly developed country which has used international trade – and has done so very
astutely – as a platform for its development.  This is what cannot now be denied to other countries,
and in particular to developing countries .
Argentina continues to be firmly committed to the global trade liberalization process, with its
attendant market economy principles, and is prepared to discuss  realistically  any proposals which do
not represent a backward step, but no others.
__________