G/AG/W/179  
 
6 June 2018  
(18-3476) Page: 1/7 
Committee on Agriculture  Original: English  
 
REVIEW OF THE OPERAT ION OF THE BALI MINI STERIAL DECISION ON 
"UNDERSTANDING ON T ARIFF RATE QUOTA ADM INISTRATION  
PROVISIONS OF AGRICU LTURAL PRODUCTS…"1 
SUBMISSION FROM THE CAIRNS GROUP  TO THE 87TH MEETING  
OF THE COMMITTEE ON AGRICULTURE IN JUNE 2018 
_______________  
 
 
1  BACKGROUND  
1.1.  The Und erstanding on tariff rate quota administration provisions of agricultural products, as 
defined in article  2 of the Agreement on Agriculture, (WT/MIN (13)/39) (hereinafter known as the 
Bali Decision on TRQs) establishes i n paragraph 13 that the review of the operation of the Decision 
shall have as objective "to promote a continuing process of improvement in the utilization of tariff 
rate quotas ". 
1.2.  As stated in document RD/AG/28 of 2014, the Cairns Group has already highligh ted the need 
to comply with three requirements under the Bali Decision on TRQs:  
 Notification of administration changes:  paragraphs 1 -5 of the Decision establish 
procedures that may require changes to a Member 's TRQ administration regime. Such 
changes must  be notified to the Committee as part of the existing obligations to 
update  MA:1 notifications.  
 Timeliness of notifications:  Members must comply with their notification commitments, a 
requirement that is even more important in the context of discussions re garding the current 
filling rates of TRQs.  
 Completeness of notifications:  The completeness of notifications is important to assess 
the effectiveness of the "underfill mechanism". This is reflected in Paragraph  6 of the Bali 
Decision on TRQs which requires that tariff quota "fill rates" be notified. Therefore, Members 
must include fill rates in their MA:2 notifications.  
1.3.  In addition to the previous requirements, and in the context of paragraph 13 of the Bali 
Decis ion on TRQs and  its review process2, the Cairn s Group would like to provide additional 
elements to guide discussions on the causes of the underfilling of TRQs and the current practices 
regarding notification.  
2  CAUSES OF THE UNDERF ILLING OF TRQS  
2.1.  There are multiple reasons for the underfilling of TRQs. S ome situations are likely related to 
the specific interaction between bound tariffs, in -quota tariffs, and applied tariffs. Members could 
also be taking advantage of better market access conditions through preferential agreements. The 
underfilling could al so be explained by changes in the market, the evolution of consumers ' tastes 
and preferences, measures of general application, and the functioning of the TRQ administration 
system. Even though it is difficult to assess the prevalence of each situation at a n aggregate level, 
for analytical purposes they could be divided into two broad categories: tariff related; and non -
tariff related causes.  
                                                
1 WT/MIN  (13)/39 AND WT/L/914 dated 11 December 2013 . 
2 Document G/AG/W/171 of 9 February 2018 . G/AG/W/179  
 
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2.1  Tariff related causes  
2.2.  Tariffs may be the most significant reason for low fill rates, but fortunately these cases are 
the easiest to identify ( see Annex 1) and quantify. There are at least, three types of situations that 
fall under this category:  
a. The applied out -of-quota MFN tariff is the same, or lower than the bound or applied 
In-quota tariff.  In this case, the applied out-of-quota MFN tariff offers equal or better market 
access conditions than the one offered under the TRQ. There are also instances where the TRQ 
was advantageous during the implementation period established in the Members ' Schedule but 
lost its purpose o nce the bound tariff reached its final level3. Members administer TRQs in these 
situations in different ways: sometimes they don 't open their TRQs at all, while others open 
their T RQs, but the fill rate is zero.  
b. The applied In -quota tariff is higher than the applied tariff under preferential 
arrangements.  This is a more difficult case to assess, as it requires an analysis of market 
shares and trade under preferential agreements. However, several Members have already 
identified this case as one of the main reasons for the underfilling of their own TRQs in the Q&A 
of the Committee on Agriculture (see Annex 2 -Answer of Norway).  
c. The applied In -quota tariff is close to the out -of-quota tariff . Interested importers might 
find that the difference between the In -quota tariff and the out -of-quota tariff does not warrant 
an application for a TRQ. This case is highly sensitive to the product in question, its pricing 
structure and the perceived costs of applying to the TRQ. It is also the most difficult case to 
identify . 
2.2  Non-Tariff related causes  
2.3.  These causes are particularly difficult to identify, as they often require a certain knowledge of 
the domestic market; and the reasoning behind the decisions of importers regarding the use, or 
not, of a TRQ. This category includes changes in domestic or in ternational markets regarding 
consumer behaviour  and preferences; or even in the industrial organization that may affect 
competition and trade patterns. It may also include measures that are not specific to TRQ 
arrangements in agriculture, such as sanitary  and phytosanitary requirements and technical 
regulations.  
2.4.  The manner in which the TRQ itself is administered may also be a cause. While the Bali 
Decision on TRQs attempts to address some of the most distortive practices, there are still others 
that reduc e a trader 's app etite (or ability) to use a TRQ; f or example, convoluted application 
procedures, inefficient allocation arrangements, restrictive licensing practices, strict eligibility 
requirements and seasonal restrictions; to name a few.  
2.5.  Currently, the  review of the notifications in the Committee on Agriculture and its Q&A is the 
main source of information in the assessment of these situations; however, it remains mostly a 
qualitative tool (See Annex 2). In the case of the TRQ administration systems, th e latest document 
from the Secretariat (TN/AG/S/26/Rev1) dates from March 2013 and should be updated to reflect 
recent changes in legislation following paragraphs 1 -5 of the Bali Decision  on TRQs . 
3  BRIDGING THE INFORMA TION GAP  
3.1.  According to the last Secretar iat's report (G/AG/GEN/86/Rev.3 1), by May 2018, there were 
still pending 7 1 MA:2 notifications for the period 1995 -2016; and only 1 7 of 40 Members with 
notification commitments were up to date. Tables MA:2 must include the fill rates of all TRQs, as 
establ ished in paragraph 6 of the Bali Decision; however, document G/AG/W/169 of October  2017 
shows that 28 out of 40 Members with TRQ commitments are reporting fill rates using the format 
circulated by the Secretariat. Also, out of the 12  Members that have not notified fill rates, eight 
have either not made a single Table MA:2 notification or their latest notified implementation year 
is earlier than the date of adoption of the Bali Ministerial Decision. There are also cases where 
Members did not include fill rat es in the notification as the concerned TRQs were not opened.  
                                                
3 Some recently acceded Members have included "extinction clauses " for some TRQs in their Schedules, 
replacing them with a bound tariff after a previously defined timeframe (see TRQ RUSQ003 for a concrete 
example).  G/AG/W/179  
 
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  3.2.  The issue of transparency in notifications, the domestic process for the attribution of TRQs, 
and the issue of the underfilling have been brought to the attention of the Committee on 
Agriculture  on several occasions; and through multiple questions in the context of the review of 
notifications. Some Members have tried to solve this information gap by including footnotes or 
additional comments in their notifications. However, this practice is far f rom being uniform in its 
format, or universal in its scope; leaving several unresolved questions that are - sometimes - 
addressed through questions (see Annex 3). In this area, there seems to be a broad space for 
further improvements.  
4  QUESTIONS FOR REFLEC TION AND FUTURE WORK  
4.1.  In order to have a well -informed review of the operation of the Decision ( including the 
"underfill mechanism")  the Cairns Group once again underscores the need to fully respect and 
implement the basic requirements for transparency and m onitoring of notifications. In addition, 
compliance with the Bali Decision on TRQs will be a positive contribution towards fully utilizing the 
Members' TRQs. This may also help to clearly identify those underfilled/unfilled TRQ that are not 
attributable to  burdensome administrative procedures that may be constraining imports.  
4.2.  Finally, as the main objectives are to facilitate trade, ensure  access to Members' current 
TRQ commitments, and avoid unnecessary import restrictions, the Cairns Group would like to 
present several questions for further reflection, and encourages all Members to participate 
proactively in the discussions regarding the "underfill mechanism".  
Regarding the causes of the underfilling of TRQs:  
 
 Could Members that administer TRQs share their experience regarding the most common cause 
of underfilling of TRQs?  
 Could Members share their national experience regarding the most common challenges faced 
by their firms regarding access and use of TRQs?  
 Which causes, among those identified in this docum ent, should be considered for further 
reflection and analysis in the context of the review process under the Committee on 
Agriculture?  
Regarding the information gap:  
 
 Could Members share their experience regarding the most common problems in the 
presentati on and interpretation of notifications?  
 How could Members increase clarity in their notifications regarding the underfilling of TRQs?  
 Can Members identify best practices that could be replicated in future notifications?  
Regarding future work  
 
 The main objective of this process is to assess and improve the utilization of tariff rate quotas 
in accordance with paragraph 13 of the Bali Decision on TRQs. From an analytical point of view, 
this requires having at least a general idea of the most common causes for the underfilling of 
TRQs. As a first step, the Secretariat could provide a proper estimate of the frequency of tariff 
related causes (particularly those related to MFN applied versus bound tariffs) for the non -
opening/underfilling of TRQs.  
 The latest d ocument from the Secretariat (TN/AG/S/26/Rev1) on TRQ administration systems 
dates from March 2013. The Secretariat could update it to reflect recent changes in legislation 
following paragraphs 1 -5 of the Bali Decision on TRQs.  
 The Secretariat is putting i n place a digital platform for Members to upload their notifications. 
This could open an opportunity for reviewing the digitalization process and find possible ways to 
enhance the transparency of the notifications without creating new administrative proced ures. 
We would like to know more about these new tools and a presentation by the Secretariat at the 
next Committee on Agriculture would be very helpful in guiding future discussions.  
_______________  
  G/AG/W/179  
 
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EXAMPLES OF UNFILLED  TRQS BASED ON TARIFF  RELATED CAUSES  
Member  TRQ Implementation 
period  Implementation  Implementation  MFN Applied 
Tariff1 Fill 
rate Notification  
In-Quota Initial 
Duty  In-Quota 
Final Duty  Out-of-Quota 
Initial Duty  Out-of-Quota 
Final Duty  
Australia  AUSQ002  1995-2000 $0.47/kg  $0.47/kg  - 25 0 - G/AG/N/AUS/107  
Brazil  BRAQ001  1995-2004 15 13.5 - 28.8 10 - G/AG/N/BRA/44  
Costa Rica  CRIQ001  1995-2004 55 45 - 45 45 - G/AG/N/CRI/66  
El Salvador  SLVQ001  1995-2004 40 40 0 79 30 - Not notified*  
European  Union  EECQ092  2016 - 13 - 15.2 15.2 0 G/AG/N/EU/41  
Malaysia  MYSQ001  1995-2004 15 15 - 21 0 - G/AG/N/MYS/39  
New Zealand  NZLQ001  1995-2000 0 0 0 5 0 - G/AG/N/NZL/103  
Norway  NORQ001  1995-2000 344% or 
37.61  NOK/kg 
whichever is 
highest  344% or 
37.61  NOK /kg 
whichever is 
highest  405% or 
44.25  NOK /kg 
whichever is 
highes t 344% or 
37.61  NOK/kg 
whichever is 
highest  5000 NOK/ item - Not notified**  
Norway  NORQ22 7 1995-2000 94% or 10.33 NOK 
/kg whichever is 
highest  94% or 
10.33 NOK /kg 
whichever is 
highest  295% or 
32.29  NOK /kg 
whichever is 
highest  251% or 
27.45  NOK /kg 
whichever is 
highest  27.45  NOK/kg 0 G/AG/N/NOR/97  
* El Salvador registered 11 TRQs in Section I -B of their Schedule. However, their latest notification for 2015 only includes 1 TRQ.  
** Norway registered 232 TRQs in Section I -B of their Schedule. However, their latest notification for 2017 only includes 22 TRQs.
                                                
1 MFN applied tariff extracted from the latest year available in MACMAP of the ITC; TRQ information was extracted from TAO, WTO . G/AG/W/179  
 
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  ANNEX 2  
 
EXAMPLES OF ANSWERS REGARDING UNFILLE D/UNDERFILLED TRQS  
BASED ON NON -TARIFF RELATED CAUSE S 
Id Question 
by Notification  Answer 
by Answer (partial transcript)  
85014  United 
States of 
America  G/AG/N/NOR/92  Norway  "In general, the quota fill rates depend on 
fluctuations in consumer demand, domestic prices 
and production, as well as imports under bilateral 
tariff quotas or preferential tariffs. Although 
imports under these arrangements varies due to 
variations in demand as well, it seems that for 
certain products, such as poultry and pork, 
importers have had somewhat higher interest in 
the bilateral E U quotas than in the WTO 
quotas  (…)" 
85040  United 
States of 
America  G/AG/N/KAZ/3  Kazakhstan  "(…) a rather high volume of domestic production 
coupled with the local consumer preferences 
explain low level of beef imports from third 
countries. " 
85082  Thailand  G/AG/N/MYS/39  Malaysia  "The in -quota quantities  reflect the domestic 
demand for the respective products. Note that 
decision to import remains entirely a business 
decision. In some cases, despite the fact that tariff 
quota for the questioned products were made 
available to the private sector, the quota was not 
filled due to the lack of demand for imports. In 
addition, under -utilization of tariff quotas is also 
due to a number of market related factors, 
including the devaluation of the Malaysian Ringgit 
(RM) during the review period. " 
84052  European 
Union G/AG/N/JPN/210  Japan  "(…). Underutilization of some TRQs is mainly 
related to a decrease in domestic demand for those 
TRQs (…). " 
59007  Canada  G/AG/N/CHE/51  Switzerland  "TRQ No. 28 covers several products, namely 
barley, oats and maize, all for human consumption. 
The TRQ is not allocated to specific partners, nor is 
it subject to special access arrangements. This TRQ 
is not administered and the q uantity is thus not 
restricted (cf. G/LIC/N/3/CHE/5). The reason for 
the TRQ underfill is therefore lack of demand. " 
79068  Canada  G/AG/N/CHN/30  China  "a. After a TRQ is allocated and issued to the 
applicants, enterprises with TRQ will decide by 
themselves when and how much they should 
import based on market conditions. Since Chinese 
consumers have their unique preferences and 
consumption habits, demand f or imported wheat is 
mainly concentrated on two specialties: high -gluten 
wheat for making breads and low -gluten wheat for 
making cakes. As for the wheat for making 
steamed bread or noodles, the demand is generally 
satisfied by domestic supply. The demand f or 
imports is limited and is often stable in quantity. " 
61012  European 
Union  G/AG/N/IND/5  India As per the information available, during the 
period  2003/2004  to 2009/2010 the domestic price 
of skimmed milk powder had been generally lower 
than the international price (Oceania origin) even 
on FOB basis. Therefore, it would not have been 
viable to import at a higher cost from the 
international markets under the T RQ mechanism, 
since the import of milk powder under TRQ is 
entirely based on commercial viability.  
 
  G/AG/W/179  
 
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ANNEX 3  
 
EXAMPLES OF ADDITION AL INFORMATION PROVI DED BY MEMBERS IN TH EIR 
NOTIFICATIONS AND TH E REVIEW PROCESS UND ER THE Q&A  
Member  Notification  Position  Text 
Australia  G/AG/N/AUS/107  Cover and 
footnote  AUSQ002 – Unmanufactured tobacco is not included. 
Australia does not administer tariff quota access for 
unmanufactured tobacco because the applied rate of duty 
for all imports is zero. The Australian Border  Force does 
collect the excise equivalent duty on imports of 
unmanufactured tobacco at the border to ensure consistency 
in treatment for both imported and domestic goods in the 
Australian market. Please refer to Australian Customs and 
Border Protection Not ice 2012/42.  
Brazil  G/AG/N/BRA/44  Cover  Brazil informs the Committee on Agriculture that the tariff 
rate quota for apples and pears was not implemented, given 
that the applied tariffs (10%) were below the in -quota rate 
(13.5%) for both products. Regarding  the tariff rate quota 
for wheat, Brazil notified to the WTO, in April 1996, its 
intention to eliminate it. Negotiations with the United States 
(initial negotiating rights) and Canada (substantial supplier) 
are not concluded.  
Costa 
Rica G/AG/N/CRI/66  Additional 
column and 
footnote  The tariff quota on this column was not opened, given that 
the applied tariff is equal or lower than the in -quota bound 
tariff.  
India G/AG/N/IND/5  Footnotes  1 No applications were received for the allocation of the tariff 
quota.  
Note: The tariff quota for 'sunflower -seed oil or safflower oil 
and fractions thereof, crude oil' is not included as the 
government reduced the out -of-quota tariff to a level equal 
to the bound in -quota tariff of 50 per cent, and therefore 
decided not to open the tariff quota for 2007/2008 . 
Japan  G/AG/N/JPN/217  Table and 
Footnote  JPNQ003 and JPNQ005: listed in the Schedule, are included 
at the end of the table, because tariff quota systems are not 
applied to them. These products can be introduced into 
Japan under the Hozei area (area where collection of 
customs duties on imports is  temporarily reserved) system, 
without imposed customs duties and required quota 
certifications, provided that they are used for consumption 
in the cruise of international maritime vessels and 
international airlines as described in the Notes to Section I -B 
of Part I of the Schedule. The statistics of imports for these 
products under the Hozei area system are not available.  
Malaysia  G/AG/N/MYS/39  Answer to 
Question 
AG-IMS 
ID 85083 to the 
notification 
G/AG/N/MYS/39  a. TRQs for the identified products were not opened due to 
that fact that Malaysia's existing MFN applied duty (during 
the review period) was lower than in -quota tariff, as 
contained in Malaysia's Schedule of Commitments at 
the WTO.  
Norway  G/AG/N/NOR/97  Cover  The import data in this document provides the Table MA:2 
notification for 2017. Both minimum access quotas and 
current access quotas for cheese, sheep meat, meat to 
promotional fairs, meat of game, apples, pears, hay and 
turkey roll are included in the notification. For other current 
access quotas included in Norway 's Schedule, as of 2000 the 
bound MFN tariff has been at the level of the in -quota tariff. 
A tariff -only regime applies to these TR Qs from 2000 and 
onwards. Since Norway has fulfilled its commitments, for the 
current access quotas with a tariff -only regime, these will 
not be a part of the notification. " 
New 
Zealand  G/AG/N/NZL/103  Footnote  New Zealand does not administer tariff quota access for the 
products listed in Section I -B of its Schedule because the 
applied rate of duty for all imports of these products is zero. 
The quantity recorded in column 4 is the total volume of 
product imported in the calendar year 2017.  G/AG/W/179  
 
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  Member  Notification  Position  Text 
Ukraine  G/AG/N/U KR/21  Answer to 
Question 
AG-IMS 
ID 79049 to the 
notification 
G/AG/N/UKR/21  In 2015 the Ministry of Economic Development and Trade of 
Ukraine did not get any application for obtaining a license on 
raw cane sugar import. Among the reasons for importers not 
applying for import licenses in 2015 could be: the 
unfavorable economic situation in Ukraine (devaluation of 
national currency about  three times in comparison with 2013 
and about  two times in comparison with 2014 resulting in 
deterioration of the purchasing  power of the population) 
Consumption of sugar per capita declined steadily in recent 
years. Import of sugar also is decreasing annually. At the 
same time, in 2012 –2015, domestic sugar producers fully 
satisfied the domestic needs and created its sugar expo rt 
potential. In this regard, during 2012 –2015 Ukraine had no 
need for import of raw sugar from cane within the tariff 
quota.  
 
 
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