G/AG/W/129  
 
2 June 2014  
(14-3205)  Page: 1/8  
Committee on Agriculture  Original: English  
 
 ANNUAL EXPORT COMPETITION REVIEW 
SUBMISSION FROM THE CAIRNS GROUP TO THE 74TH MEETING 
OF THE COMMITTEE ON AGRICULTURE (COA) IN JUNE 2014 
The following communication, received on 28 May 2014,  is being circulated at the request of the 
the Cairns Group. 
 
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  At the 9
th WTO Ministerial Conference (MC9) Ministers adopted the Declaration on Export 
Competition (WT/MIN(13)/40). Amongst other things, this established annual dedicated 
discussions in the Committee on Agriculture (CoA) in support of the reform process, and more 
specifically in furtherance of the final objective set out in the 2005 Hong Kong Ministerial 
Declaration i.e. the parallel elimination of all forms of export subsidies and disciplines on all export 
measures with equivalent effect. 
On 21 May 2014 the Secretariat circulated document G/AG/W/125 on "Export Subsidies, export 
credits, export credit guarantees or insurance programmes, international food aid and STEs" 
(hereafter "the report") pursuant to the Ministerial Declaration. 
The Cairns Group welcomes the report as an important contribution to the dedicated annual 
discussions in the CoA to examine developments in the field of export competition. We support the 
analytical approach taken by the Secretariat and we will reflect on possible improvements to the 
approach and the supporting questionna ire following the discussions at the 74th CoA meeting. 
The Cairns Group supplements the report with some key conclusions drawn from the analysis. 
These include considering the alignment of Members' policies with the latest revised draft 
modalities for agriculture (TN/AG/W/4/Rev.4) given that they were considered by Ministers at MC9 as remaining an important basis for an ambitious final agreement in the export competition pillar. 
1  EXPORT SUBSIDIES 
1.1.  Export subsidy use at an aggregate and individual Member level has dramatically decreased, 
and in some cases has been discontinued, in th e period since 1995 when notifications became 
mandatory as part of the Uruguay Round. Exceptions  to this are Canada, Norway and Switzerland. 
1.2.  While this overall trend may be a result of high world commodity prices, it is also the case 
that some WTO Members have taken positive steps to reduce their export subsidy use. For example, under the 2014 Farm Bill the United States of America repealed the Dairy Export 
Incentive Program (DEIP). In addition, Norway ha s discontinued the use of export subsidies for 
several products and the EU's Common Agricultural Policy, adopted in December 2013, stated that export subsidies may only be used as an "exceptional measure". The EU Commissioner for 
Agriculture and Rural Development since announced plans to entirely eliminate export subsidies in 
the framework of preferential partners hip agreements with African countries.
1 
                                               
1 A modern farming sector, producing in line with society's expectations. European Commission - 
SPEECH/14/33, 16/01/2014. Accessed 23 May 2014 at http://europa.eu/rapid/press-release_SPEECH-14-
33_en.htm . G/AG/W/129 
 
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  1.3.  Of the 18 Members2 that had scheduled export subsidy reduction commitments, nine have 
notified zero use of export subsidies since the Doha Round of WTO negotiations started in 2001: Australia, Brazil, Colombia, Iceland, Indonesia, Mexico, New Zealand, South Africa and Uruguay. 
1.4.  Of the remaining Members with scheduled reduction commitments, seven have notified 
recent use of export subsidies: Canada, the European Union, Israel, Norway, Switzerland–
Liechtenstein and the United States of America (T able 1). Many of the Members that are currently 
using export subsidies are doing so on a small proportion of their scheduled product lines and 
utilising a low percentage of their available export subsidy budgetary allowance. The types of 
products for which export subsidies have been notified include dairy products, wheat and wheat flour, coarse grains, beef meat, pig meat, poultry, eggs and incorporated products. The highest total spending in absolute numbers and in te rms of percentage of total budgetary outlay 
commitments appears to be on dairy products, poultry meat and incorporated products. 
1.5.  Clear conclusions can be drawn regarding the extent to which Members' export subsidies 
policies and expenditure align with the final objective of the full elimination of export subsidies. 
This is due to Members' notifications and the supplementary information provided in response to 
the Secretariat's questionnaire. With the except ion of a few Members, export subsidy use has 
fallen to zero and where this is not the case there are some reports of steps being taken to reduce 
their use. 
1.6.  The Secretariat's report and Cairns Group conclusions herein are based on the information 
that Members have provided or notified on their export subsidy use in relation to their scheduled commitments. This does not fully capture all export subsidies such as those not covered by 
budgetary expenditure, and export subsidies purp ortedly made under Article 9.4 of the Agreement 
on Agriculture. Future Secretariat reporting of such subsidies may reveal additional spending patterns by Members and/or products. 
                                               
2 Counting all European Union Members with  export subsidy commitments as one.  
  G/AG/W/129  
 
- 3 - Table 1 Export subsidy outlay details by Member 
Member  Sum of budgetary 
outlay (US$ 
thousand)3 Date of latest 
information4 Total notified budgetary 
outlays as % total 
commitments  Budgetary outlay as % product level 
commitments5 
European Union US$ 187,761 2011 2% – Wheat and wheat flour, coarse grains, butter and 
butter oil, skim milk powder, cheese, other milk products, beef meat (2%), pig meat (6%), poultry meat (43%), eggs (3%), incorporated products (2%) 
Canada US$ 89,174 2011 21% – Butter, skim milk powder (100%), cheese (89%), 
other milk products (99%), incorporated products 
(100%) 
Switzerland-Liechtenstein US$ 85,923 2011 17%  – Milk products, cattle for breeding and racehorses, 
fruits, potatoes, processed agricultural products (66%) 
Norway US$ 35,407 2012 47% – Swine meat (70%) eggs and egg products (100%), 
butter, cheese (52%), processed agricultural products 
(70%). 
Israel US$ 798 2012 2% – Fresh flowers (1%), fruit other than citrus (10%), 
fresh vegetables (3%), citrus fruits 
United States of America 0 2010 0% – Butter and butter oil, skim milk powder, cheese 
 
 
                                               
3 Conversions to US$ from other currencies are based on the IMF's av erage annual real exchange rate s as reproduced in the USDA E RS exchange rate data sets, available at 
http://www.ers.usda.gov/data-pro ducts/agricultural-exchange-rate -data-set.aspx#.UvusFP0xIpE. 
4 The report contains more recent data than the notifications of Canada and the United States which cover 2010 and 2008 respecti vely. 
5 Products listed have been the subject of notified export subsidies since 2004.  Where percentage is not specified against the product, the outlay at the most recent 
notification was 0. G/AG/W/129 
 
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  1.7.  Room for improvement remains in Members notification performance (Table 2), with the 
most dated being Venezuela (1998), Turkey (2000), Panama (2003), Mexico (2007) and Iceland (2008). 
Table 2 Members' most recent export su bsidy notifications vary from 1998 to 2012
6 
Member  Year last notified for  
New Zealand  2013 
Australia  2012 
Brazil  2012 
Israel  2012 
Norway  2012 
Uruguay  2012 
European  Union  2011 
Indonesia   2011 
Switzerland–Liechtenstein   2011 
Canada  2010 
Colombia   2010 
South Africa  2010 
United States of America  2010 
Iceland  2008 
Mexico  2007 
Panama  2003 
Turkey  2000 
Venezuela,  Bolivarian  Republic of  1998 
 
2  EXPORT FINANCING SUPPORT 
2.1.  Thirty one Members replied to the questionna ire on export credits, export credit guarantees 
and insurance programmes ("export financing suppo rt") provided by Members for the export of 
agricultural products. Of those, 19 replied that they provided no export  financing support and 
12 provided replies with information on their ex port financing support programmes. Nevertheless, 
some observations can be made on the relatively small sample of Members that reported 
information. 
2.2.  Of the four types of export financing suppo rt mentioned in the Rev.4 modalities, risk cover 
(comprising export credit insurance or reinsura nce and export credit guarantees) is the most 
common form of such support to agricultural goods. Of the 25 types of programmes in the sample, 17 (68%) fall within the category of risk cover and 9 out of 12 (75%) Members reported having 
such programmes. On average, around 80% of agri cultural exports that receive export financing 
are supported by some type of risk cover. Of th ose, 90% are exported by the United States by 
means of credit guarantee which means that its programme shapes the whole sample. 
2.3.  The second most used kind of programme within the sample is direct financing support 
(comprising direct credits/financing, refinancing,  and interest rate support). Brazil, Canada, the 
European Union, Malaysia and Viet Nam (42%) provide at least one type of direct financing support and six types of programmes were reported in total. This number could be higher if more 
disaggregated information from the European Union is obtained. 
2.4.  Clear conclusions cannot be drawn on the alignment of Members' export financing 
programmes with the Rev.4 modalities, mostly because most Members did not provide information 
on whether the programmes are self-financing, one of the conditions established by the modalities. 
The report suggests up to four exceptions. New Zealand stated clearly that its programme covers all operating costs and expected losses. Canada ment ioned that its official Export Credit agency is 
self-financing and Australia reported the EFIC to be self-funded. The United States reported that 
                                               
6 As of 23 May 2014, as reported in G/AG/GEN/86/Rev.18. G/AG/W/129 
 
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  its programme must cover the operating costs and losses of the programme "over the long term" 
(but not over a four year rolling period as required by the modalities). Given that detailed information on self-financing was not specifically requested, this is an aspect that could be improved in the Secretariat's next questionnaire on  export competition. In that context, it would 
be useful to have more concrete information on whether and how operating costs and losses are 
covered and over what period. 
2.5.  More than half of the programmes repo rted have a repayment term that exceeds the 
180 days maximum repayment term set out in the Rev.4 modalities. This includes the Export 
Credit Guarantee Programme of the United States (GSM-102), which finances the greatest share of agricultural exports in the sample. On the positive side however, 18 of the 25 types of programmes reported have an average repayment te rm of 180 days or less. This last conclusion 
should be treated with caution though, given that  the European Union reported a general average 
repayment term of 60 days to one year for programmes provided by 15 institutions, and the United States reported an average repayment term of 23 months. Ensuring that information is 
provided at individual programme level could be helpful as well. 
2.6.  The export destination or group of destinations of Members' programmes varies greatly 
without a clear pattern across them, if each programme is given equal weight. However, from an 
exports-weighted point of view, at least around 70% of financed agricultural goods are exported 
from a developed to a developing country. 
2.7.  Moreover, export financing programmes re ported by Members support exports of a large 
variety of basic and processed agricultural goods. Of those, wheat, wheat flour, oilseed and 
oilcakes appear to be products that received the most substantial export financial support in 2013. 
2.8.  The level of detail reported by Members in their questionnaire responses varies greatly, with 
some providing detailed and precise responses and others very general information and/or 
aggregated data. Also, while some Members made an effort to reply to all questions, others simply 
left questions unanswered. This is not related to the level of development of the responding Member. The European Union provided only summary information of export financing within its 
Member States at a high level of aggregation. In this regard, while it is appreciated that some 
Members replied with a meaningful level of disaggregation, there is much room for improvement for the Secretariat's next report on export competition. 
2.9.  Finally, there is also some inconsistency in responses compared to the Secretariat's 2013 
report (TN/AG/S/27/Rev.1). For example the European Union reported EUR 171.226m in total 
exports subject to export finance support in 2012, yet now reports "…at least 500 million Euros annually in the most recent years." Overall, across the responses there is lack of consistency in 
terms of the format of responses rendering comparability and analysis more difficult. 
3  AGRICULTURAL EXPORTING STATE TRADING ENTERPRISES 3.1.  Twenty Members notified or reported in th eir reply to the Secretariat's questionnaire a total 
of 77 agricultural exporting STEs covering a wide range of agriculture products. A further 
20 Members also reported in their reply to the Secretariat's questionnaire that they did not have any agricultural exporting STEs. A positive transparency development was that new and updated information was reported on agricultural exporting STEs by several Members as compared to 
current STE notifications. 
3.2.  China (25), Colombia (14) and India (14) reported by far the most agriculture exporting 
STEs, accounting for 69% of the total reported number by all Members. The distribution by 
product grouping shows a similar concentration with  two product categories (fruits and vegetables, 
and tobacco) accounting for 45% of the reported agriculture exporting STEs. The next most numerous product category was "wheat and wheat flour, coarse grains and rice" with five such 
STEs reported. 
3.3.  Only six of the 20 Members (Australia, Cost a Rica, Israel, Republic of Moldova, New Zealand 
and Ukraine) responded to the section of the qu estionnaire requesting information on export 
values, prices and destinations. Notwithstanding the fact the responses may have been limited by 
commercial confidentiality considerations, these Members account for just eight STEs (10% of G/AG/W/129 
 
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  those reported), making it nearly impossible to assess the overall influence of agriculture exporting 
STEs on global markets. Where such information is provided, export volumes and values generally (but not always) appear small relative to overall global trade in the products in question. 
3.4.  China reports that STEs for tea and silk we re abolished in 2005 and that it has not applied 
state trading for soybeans since acceding to the WTO in 2001. Canada reports that the Canadian 
wheat board no longer has exclusive control over marketing of any grain. It is in a transition period that may last up to five years, until no late r than 31 July 2017, during which it will continue 
to receive government borrowing guarantees, and have its pool payment levels guaranteed by the 
government. Ecuador, Indonesia, Israel and Ukraine each reported the establishment of a new agriculture export STE (or marketing boards in the case of Israel) since 2001. 
3.5.  Of the four developed countries that reported agriculture exporting STEs (one each in 
Australia, Canada, New Zealand and Ukraine), those in Australia, New Zealand and Ukraine appear 
to have export monopoly powers. Of the 74 agriculture exporting STEs reported by 16 developing countries, several appear to have export monopoly powers or other special privileges. The report 
does not however contain sufficiently detailed trade statistics to determine whether these STEs 
would meet the Rev.4 modalities general de minimis  criteria (Annex K footnote 5). Similarly, while 
many of the developing country STEs would likely meet the Rev.4 modalities special and 
differential treatment criteria (Annex K paragraphs 4-6), in most cases more information would be 
required to make a complete assessment, particularly with respect to paragraph 6. 
4  INTERNATIONAL FOOD AID 4.1.  Of the 14 Members that reported the deta ils of their current food aid programmes, the 
programmes of just over half already appear to be broadly consistent with Annex L of the Rev.4 
modalities (Table 3). 
4.2.  Based on the sample, at least six Members (Australia, Canada, the European Union, 
New Zealand, Switzerland and the United States of America) provide untied cash based food aid 
(Annex L, paragraph 4). In fact, in the sample, the majority of food aid provided is cash based. Where Members provide ‘in kind’ food aid a majori ty of Members in the sample (Brazil, China, 
Japan, South Africa, Thailand and the United States of America) have provided aid to the World 
Food Programme or in response to emergency situations (Annex L paragraphs 3 and 6). 
4.3.  However the information provided by some Members on food aid is incomplete and makes it 
difficult to analyse their compliance with existing obligations under the AoA. This also makes 
comparison with the Rev.4 modalities difficult. Furthermore, numerous Members who provide food 
aid have not responded at all. 
4.4.  Three Members (China, Japan and the United St ates of America) explicitly permit the practice 
of monetisation in circumstances that are not emergency situations or where the beneficiary is not 
an LDC (Annex L paragraph 8). 
  
  G/AG/W/129  
 
- 7 - Table 3 Overview of Members' food aid programmes 
Member  Is aid provided on 
a cash basis?7 Is aid provided "in-kind" 
i.e. actual commodities?  If aid is provided "in kind" 
is it provided to the WFP, 
relevant international 
organisation or in response 
to an emergency?  Is the aid 
provided in fully 
grant form (not 
tied)?  Is monetization 
of the aid 
provided 
prohibited?  
Australia Yes - $A 570 million in 
FY 2012/13 No N/A Yes Yes 
Brazil No Yes – US$ 8.842 million of rice 
and US$ 209,331 of beans8 Yes to the WFP Yes Yes 
Canada Yes - 360,265 tonnes of 
commodities purchased No No Yes Yes 
Cuba No Yes - 2,500 tonnes of sugar Not specified9 Not specified Not specified 
China No Yes - RMB 533 million of food aid In part - a portion of aid was 
provided to the WFP Yes No 
European 
Union Yes - 405,000 tonnes 
equivalent of cash based 
aid provided, one quarter 
in wheat purchases No N/A Yes Yes 
Japan Unclear Yes - 10 billion Yen In part - a portion of aid 
provided through WFP Yes No 
New Zealand Yes - $NZ 7million No N/A Yes Yes 
Russian 
Federation Yes US$ 50 million No N/A Not specified Not specified 
South Africa No Yes - 100 tonnes of maize 2002 Yes - in response to emergency Not specified Not specified 
Switzerland Yes - 25,000 tonnes worth 
of cash grain equivalent Yes – 3,144 tonnes of SMP and 
96 tonnes of cheese No Yes Yes 
Thailand No Yes 500 tonnes Yes - in response to emergency Yes Yes 
United States 
of America Yes – US$ 577 million Yes US$ 694 million worth of 
commodities A portion to the WFP and a 
portion in response to emergency situations Yes No 
Viet Nam No Yes - 14,000 tonnes of rice Not specified Not specified Not specified 
 
                                               
7 The information summarised here is only on  the basis of submissions made to the export competition questionnaire and the infor mation compiled in G/AG/W/125/Add.3. 
8 The value or volume of aid listed herein is taken from the last  available year listed for the Me mber in document G/AG/W/125/Ad d.3. 
9 The phrase "not specified" means there is not a specific an swer to the question for that Member in G/AG/W/125/Add.3. G/AG/W/129 
 
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  4.5.  As noted, most in-kind food aid reported is provided to the World Food Programme. Where 
in-kind food aid is not provided to the World F ood Programme or is not otherwise for emergency 
situations it is not always clear from Members' responses whether they consider the extent to which the in-kind aid will have adverse effects on local markets and local production (Annex L 
paragraph 3). 
4.6.  To contemplate the extent to which some Members would need to make policy changes to 
fully align with Annex L it would be useful to have more information on the practice of 
monetisation (including the circumstances in which it is permitted, and what if any disciplines are 
imposed on its use by the Member). It would also be useful to have more information regarding the circumstances surrounding the provision of in-kind food aid, including on when it is not provided to an international organisation such as the World Food Programme in response to an 
emergency and whether or not any conditions are put on such aid. 
5  CONCLUSIONS 5.1.  While there are a number of gaps in Members' notifications and responses to the Secretariat 
questionnaire, the Secretariat's report provides Members with an informed view of the export 
competition landscape, in particular amongst most of the major exporters. We encourage Members to make further efforts to improve transparency, such as submitting overdue notifications of 
export subsidies (whether or not in relation to scheduled commitments) and submitting 
outstanding questionnaire responses. This includes providing nil responses where appropriate and, if necessary, providing information in the first instance that it is available. We appeal for such information as soon as possible, and in any case in advance of the 2015 annual CoA review, to 
enable an even more comprehensive understanding and to support MC10 where Ministers will 
review the export competition situation. 
5.2.  Despite some of the information gaps, the Secretariat's report reaffirms the fact that since 
the launch of the Doha Round there have been positive developments in the export competition 
pillar. In particular, export subsidy expenditure ha s fallen significantly and there are examples of 
individual Members' reforms in the other pillars. This generally positive trend however is not 
without exception as not all Members have reformed and some have introduced new export 
competition policies since the beginning of the Doha negotiations and in recent years. 
5.3.  This positive but mixed story demonstrates two key points. Firstly, judging by the reported 
policy settings, the Rev.4 modalities on export competition are doable. Secondly, the Rev.4 
modalities on export competition are necessary because domestic reform is neither a guarantee 
nor a substitute for the elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect through WTO re form. It is important that domestic reforms 
continue but it is essential that the Doha negotiation objectives on export competition be met 
without delay. The overall policy and price enviro nment presents a valuable opportunity to deliver 
on this objective. 
 
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