G/AG/32  
 
11 November 2021  
(21-8555) Page: 1/4 
Committee on Agriculture    
 
REVIEW OF THE OPERATION OF THE BALI DECISION ON TRQ ADMINISTRATION  
REPORT BY THE CHAIRPERSON TO THE GENERAL COUNCIL  
1.1.  At the Ninth Session of the Ministerial Conference in December 2013 at Bali, Ministers adopted 
the Decision on "Understanding of Tariff Rate Quota Administration Provisions of Agricultural 
Products, as defined in Article 2 of the Agreement on Agriculture" (WT/MIN(13)/39) (hereinafter 
referred to as the "Decision"). The Decision also required a review of its operati on commencing no 
later than end -2017 with a view to improving the rate of TRQ utilization. The future operation of 
paragraph 4 of the Underfill Mechanism in Annex A of the Decision was specifically mandated to be 
taken up under the Review as per paragraphs  13-14 of the Decision.  
1.2.  The Review was concluded when the General Council , at its meeting on 9 -10 December 2019 , 
approved the recommendations by the Committee on Agriculture (CoA) contained in Annex 2 to 
G/AG/29. However, there was no substantive agreement  on the issue of the future operation of 
paragraph 4 of the Underfill Mechanism during the 2017 -19 review exercise. Instead, as per 
paragraph 1 of the approved recommendations in Annex 2 to G/AG/29, Members agreed to defer 
the timeline for a decision on pa ragraph 4 of the Underfill Mechanism by two years, i.e. to end -2021.  
1.3.  The recommendations also allude to a potential fragmentation of the Decision by offering the 
right to select Members, listed in Annex B of the Decision, to discontinue the application of  
paragraph  4, should there be no agreement among Members on the future operation of this 
paragraph. Avoidance of a carve out for certain Members, which the lack of an agreement on the 
future operation of paragraph 4 within the agreed deadline could potenti ally trigger, remained an 
important motivation for several Members to find an agreeable solution on this paragraph in the 
post-2019 CoA discussions on this matter.  
1.4.  In these discussions, Members examined in detail as to how current paragraph 4 would operate  
in practice during the final stage of the Underfill Mechanism. It was noted that the importing Member 
in the final stage of the Underfill Mechanism under current paragraph 4 is obliged to change the TRQ 
administration method to either first -come first -served at customs (FCFS) or an automatic 
unconditional license on demand system - with the option to be chosen based on consultations with 
the concerned exporting Member(s). The selected administration method would then be maintained 
for a minimum of two year s after which, and provided timely fill rates were notified for those two 
years, the matter would be "closed" and marked accordingly on the Secretariat Tracking Register.  
1.5.  Developing importing Members in the final stage of the Underfill Mechanism, under th e latter 
part of current paragraph 4, may choose an alternative TRQ administration method or maintain the 
current method. The choice of an alternative TRQ administration method would need to be notified 
to the CoA within the operation of the Underfill Mech anism. The method selected would be 
maintained for a minimum of two years and the matter would be "closed" provided the fill rate had 
increased by two -thirds of the annual increments described in para graph  3(b) of the Underfill 
Mechanism.  
1.6.  Based on these d iscussions, Members achieved a better appreciation of the main sticking point 
identified in relation to the future operation of paragraph 4 of the Underfill Mechanism, where a 
developing importing Member does not achieve the required increase in the fill r ate while either 
retaining the current TRQ administration method or using an alternative administration method.  G/AG/ 32 
 
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  1.7.  Members' efforts in reaching an agreement on paragraph 4 principally focussed on finding 
possible approaches to address this potential outstandi ng situation for developing importing 
Members in order to achieve a 'closure' of the underfill matter raised.  
1.8.  There was a wide support for an approach along a textual suggestion made informally by Costa 
Rica according to which an importing developing Membe r that fails to meet the required fill rate 
standard (i.e. two -thirds of the annual increments described in paragraph 3 (b) of the Underfill 
Mechanism) after two years in the final stage of the Underfill Mechanism, having used an alternative 
administration  method or maintained the current method in place, would be subject to the standard 
requirement in the first sentence of paragraph 4, if so requested by interested exporting Member(s). 
In the absence of such request, the concern would be marked as 'closed'  after two years in the final 
stage even if the required increase on the fill rate was not achieved. This suggestion seeks to ensure 
that a matter in the final stage of the Mechanism will eventually reach a 'closure' or 'resolution'.  
1.9.  One additional issue t hat was raised more recently in this discussion concerned the relationship 
between the obligations arising from the Underfill Mechanism and specific provisions on TRQ 
administration an importing Member may have in its Schedule of Concessions. Members gener ally 
acknowledged the primacy of concessions and commitments in the Schedules , and that the role of 
the Decision and its Underfill Mechanism was to promote an effective implementation of scheduled 
commitments , rather than to modify them. Here, Members were  specifically guided by paragraph 5 
of the Underfill Mechanism, which explicitly establishes a hierarchy between the obligations under 
the covered agreements (which , as per Article II:7 of the GATT 1994 , include Members' goods 
schedules) and the provisions  of the Underfill Mechanism, by stating that "in the event of any conflict, 
the provisions of the covered agreements shall prevail".  
1.10.  Based on discussions, the proposed draft Decision  on the future operation of paragraph 4 of 
the Underfill Mechanism (as sho wn in Annex to this report)  contains the following elements : 
i. Splitting of current paragraph 4 of the Underfill Mechanism into two sub -paragraphs 
to offer clarity with regard to the 'standard' requirement as in the proposed 
sub-paragraph 4a), and the specia l and differential treatment (S&DT) in 
sub-paragraph 4b);  
ii. The content of the S&DT element in current paragraph 4 is reproduced, without any 
alteration, in the proposed sub -paragraph 4b);  
iii. In order to address the outstanding situation where a developing importing Member 
does not meet the required fill rate standard after two years while either retaining the 
current TRQ administration method or using an alternative administration method, the 
draft decision proposes to add an additional option in  the latter part of 
sub-paragraph  4 (b) in order to reach the 'closure' of the matter. This would require 
the concerned developing importing Member to implement the 'standard' requirement 
in the first part of the current paragraph 4;  
iv. A new footnote 6 is pr oposed to address the potential concerns that a few Members 
expressed on the relationship between the obligations arising from the Underfill 
Mechanism and those contained in importing Members' schedules of concessions. 
Paragraph 5 of the Underfill Mechanis m already clarifies the relationship between the 
obligations arising from the Underfill Mechanism and Members' rights and obligations 
under the 'covered agreements';  
v. As an  agreement on the future operation of paragraph 4 of the Underfill Mechanism  
would al so lead to  the conclusion of the review of the operation of the Bali TRQ Decision 
pursuant to paragraphs 13 -15 of Decision, the draft decision accordingly proposes that 
these three paragraphs , along with Annex B of the Decision , are rendered non -
operationa l. G/AG/ 32 
 
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  1.11.  Paragraph 14 of the Decision requires that the General Council recommendations in relation 
to paragraph 4 of the Underfill Mechanism shall provide for S&DT. In this regard, t he draft Decision 
containing recommendations for the future operation of paragr aph 4 retains  the current  S&DT 
provision under the proposed sub-paragraph 4b), as it states that a  developing importing Member 
in the final stage of the Underfill Mechanism may maintain the current TRQ administration method 
or use an alternative administration method, and achieve a resolution of the matter by showing the 
required increase in the fill r ate. This option, as in current paragraph 4 of the Decision, remains 
unchanged.  When , in the following two years,  the importing developing Member does not achieve 
the required increase in the fill rate under these circumstances, the proposed  Decision may r equire  
that Member to apply the 'standard' requirement as in the first part of current paragraph 4 (i.e. first -
come first -served at the customs or automatic licensing). It should be noted that  the requirement 
to apply that provision is not automatic even a fter those two years. Instead, the proposed obligation 
would apply only based on request by the concerned exporting Member(s). In case no request is 
made, despite the importing developing Member not meeting the required fill rate standard, the 
underfill ma tter would be marked as 'closed'.  
1.12.  The Committee on Agriculture reconvened its 99th regular meeting on 9 November 2021 to 
take up the suspended agenda item 2 D(i) on the implementation of the Bali Decision on TRQ 
administration. At that meeting, the Committ ee agreed to forward the draft Decision1 in 
Annex to this report to the General Council for consideration and for its subsequent 
submission to the Twelfth Ministerial Conference (MC -12) for a decision by Ministers . 
 
1 Some Members indicated that they would need additional time to consult with their capi tals. G/AG/ 32 
 
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  Annex  
The Ministerial Conference,  
 
Having  regard to paragraph 1 of Article IX of the Marrakesh Agreement establishing the World Trade 
Organization (the "WTO Agreement");  
 
Noting  the Ministerial Decision of 7 December 2013 on Understanding on Tariff Rate Quota 
Administration Provisions of Agricult ural Products, as Defined in Article 2 of the Agreement on 
Agriculture  (WT/MIN(13)/39 -WT/L/914) dated 11 December 2013 (hereinafter referred to as the 
"Bali Decision on TRQ Administration");  
 
Recalling  the recommendations of the Review of the operation of the Bali Decision on TRQ 
Administration in Annex 2 to G/AG/29 approved by the General Council at its meeting on 
9-10 December 2019;  
 
Recognizing  that paragraph 1 of the aforementioned recommendations set the deadline of 
31 December 2021 for a decision on the future operation of paragraph 4 of Annex A of the Bali 
Decision on TRQ Administration;   
 
Decides  that: 
 
1.  Paragraph 4 of Annex A of the Bali Decision on TRQ Administration shall be read as follo ws: 
4.a. The importing Member shall then promptly provide unencumbered access via one of the 
following tariff quota administration methods5,6: a first -come, first -served only basis (at the 
border); or an automatic, unconditional license on demand system within the tariff quota. 
In taking a decision on which of these two options to implement, the importing Member will 
consult with interested exporting Members. The method selected shall be maintained by the 
importing Member for a minimum of two years, after  which time – provided that timely 
notifications for the two years have been submitted – it will be noted on the Secretariat's 
tracking register and the concern marked "closed".  
4.b. Developing country Members may choose an alternative tariff quota admini stration 
method or maintain the current method in place. This choice of an alternative tariff quota 
administration method shall be notified to the Committee on Agriculture under the provisions 
of this mechanism. The method selected shall be maintained by t he importing Member for a 
minimum of two years, after which time, if the fill rate has increased by two -thirds of the 
annual increments described in paragraph 3(b), it will be noted on the Secretariat's tracking 
register and the concern marked "closed". At the request of an interested Member, the 
provisions under paragraph 4(a) shall apply if after the two years the fill rate has not increased 
at least by two -thirds of the annual increments described in paragraph 3(b). If no request is 
made, the concern sha ll be marked as "closed" . 
2  Henceforth, paragraphs 13 -15 of the Bali Decision on TRQ Administration, along with Annex  B, 
are rendered non -operational.  
 
__________  
 
5 The actions and remedies taken by the importing Member shall not modify or impede the rights of a 
Member holding a country -specific allocation for that tariff quota with respect to their country -specific allocation . 
6 In the event of a conflict, the specific provisions on tariff quota import arrangements specified in the 
importing Member’s Schedule of Concessions shall prevail to the extent of the conflict.