RESTRICTED  WORLD TRADE  
ORGANIZATION  G/AG/R/41 
17 February 2005 
 
 (05-0669) 
Committee on Agriculture  
  
 
SUMMARY REPORT OF THE MEET ING HELD ON 18 NOVEMBER 2004 
 
Note by the Secretariat
1 
  
1. The Committee on Agriculture held its forty-first regular meeting on 18 November 2004 
under the chairmanship of Mr. Roald Lapperre from th e Netherlands.  The agenda of the meeting as 
contained in WTO/AIR/2437 was adopted with the addition of a matter raised by the European 
Communities under Art. 18.6 of the Agreement c oncerning wine exports from the European 
Communities  to Venezuela.   
P
ART I:  THE REVIEW PROCESS  
A. MATTERS RELEVANT TO THE IMPLEMENTATION OF CO MMITMENTS UNDER THE REFORM 
PROGRAMME :  ARTICLE 18.6 
(a) Australia:  European Communities – Subsidies for restructuring and conversion of vineyards 
2. Australia stated that the EC had provided funds  for restructuring and conversion of vineyards 
since 2000/01 with annual budgets of up to €450 million for the past five marketing years.  Australia 
requested clarification under which category of  the Green Box in the EC's domestic support 
notification for 2000/01 (G/AG/N/EEC/49) the measure  had been notified and how it complied with 
the relevant criteria of Annex 2 of the Agreemen t.  With reference to Council Regulation 1493/99, 
which indicated that the measure was available for varietal conversion, Australia requested 
clarification from the EC as to whether there was an y requirement to plant, or not to plant, certain 
vine varieties.   
3. The EC referred to its initial Table DS:2 no tification of the measure in G/AG/N/EEC/39 of 
27 June 2002 and the related discussion in the Co mmittee concerning the Green Box conformity of 
the measure.2  
4. Australia expressed disappointment about the lim ited response given by the EC which raised 
a systemic issue about improving the monitoring  and surveillance of Green Box measures.   
5. The United States noted that the EC had previ ously stated that producers were required to 
choose from a "positive list" of grape varieties to receive a payment under its vineyard restructuring 
and conversion programme.  The United States remain ed concerned that the programme did not meet 
the criteria of Annex 2, paragraph 11(e), which states:   "the payments shall not mandate or in any way 
designate the agricultural products to be produced by the recipients..."  The United States sought a 
justification from the EC for notifying the programme as Green Box support with expenditures of 
€360.4 million in 2001 and €424.2 million in 2002.  
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to their rights or obligations under the WTO. 
2 Reports of the Committee meetings in September 2002 (G/AG/R/32, pages 36-38), November 2002 
(G/AG/R/33, page 23), March 2003 (G/AG/R/34 page 38) and June 2003 (G/AG/R/35, page 28), refer. G/AG/R/41 
Page 2  
 
 6. Argentina reiterated its interest in this ma tter.  Canada supported the concerns expressed by 
Australia and the United States and looked forward to a detailed justification from the EC on how the 
programme met Green Box criteria. 
7. The EC considered that the measures should be assigned to the category of structural 
adjustment assistance provided through investme nt aids pursuant to paragraph 11 of Annex 2 
(G/AG/N/EEC/39 refers).  There were sound reasons  why the EC had notified the measure in the 
Green Box.  One of the main elements of th e restructuring and conversion of the vineyards 
programme was the choice by producers to conti nue vine production but with  conversion from surplus 
production to where there was market demand.  The me asure was part of the reform of the EC wine 
market (regulation 1493/99) which included other measures, such as payments for grubbing up of old 
varieties.  
(b) Australia:  United States – Hard White Wheat Incentive Payments 
8. Australia stated that in th e 2002 Farm Bill, the United States had introduced a hard white 
wheat incentive payment (HWWIP), the primary purpose of which was to provide a production 
incentive to producers to increase the supply of hard white wheat available for domestic milling and 
export.  Payments to producers were to commence in October 2003.  Australia sought clarification 
from the United States concerning the eligibility criter ia for the payment, the form of the incentive 
payment (e.g. per acre or tonne of hard white wheat), the amount of payments made in the first year of 
operation and the United States' intentions concerning notification of  the payments. 
9. The United States responded that the objectiv e of the Hard White Wheat Incentive Program 
was to increase production of hard white wheat in  the United States in the 2003-2005 crop years.  
USDA had begun administering the HWWIP with the 2003 hard white wheat crop.  The CCC outlay 
for the three years was based on not more than 2 million acres, or the equivalent volume of 120 million bushels of production, for the 2003 through 2005 crop years.  Both hard white winter wheat 
and hard white spring wheat produced in the United St ates were eligible for payment.  The production 
incentive payment was issued only if hard white wheat was actually produced and after production 
was verified.  A production incentive in the amount of $0.20 per bushel was provided for a minimum 
of No.2 or better hard white wheat.  Payment c ould be earned on a maximum of 60 bushels for each 
planted acre.  An additional incentive in the amou nt of $2.00 per acre was provided for each acre 
planted to certified seed.  The amount of payments  made in the first year of operation would be 
included in the domestic support notification for marketing year 2003. 
(c) New Zealand:  Canada – Proposed scheme to sell skim milk powder to manufacturers of milk 
protein concentrate 
10. New Zealand referred to a report in the Ontario Farmer  on 19 October 2004 outlining a 
proposed scheme to reduce the level of SNF (solids non-fat) stocks in Canada.  As reported, the 
proposal would see the Canadian Milk Supply Ma nagement Committee (CMSMC) sell skim milk 
powder (SMP) at a two-third discount to Canadian manufacturers of milk protein concentrate (MPC) 
which was commonly used in processed cheese ma nufacture.  Currently, all MPC was sourced 
through imports.  The report also noted that pe rmits to access this discounted SMP would only be 
provided to processors who would substitute the Ca nadian MPC for imported ingredients, and that 
some of the Canadian MPC may be exported.  New Zealand sought clarification regarding the 
proposed scheme, the timeframe for implementation and expected impact on imports of MPC.  
11. New Zealand also sought clarification concerning reports that International Trade Canada was 
considering selling some 5,000 tonnes of the surplus SMP at a discount to aid organizations for export 
as food aid.    G/AG/R/41 
 Page 3 
 
 
 12. Canada responded  that the Canadian dairy sect or was currently discussing a range of ideas on 
how to address the level of skim milk powder stocks .  The Government of Canada would ensure that 
any policy or program to address this issue would be fully consistent with Ca nada's WTO obligations.  
13. New Zealand stated that it had a particular inte rest in Canadian dairy policies, given a number 
of dispute settlement actions since 1995.  New Zeala nd would continue to insist that Canada's dairy 
policies be within the confines of its export s ubsidy and domestic support commitments, as well as 
being transparent and WTO-compatible.  
14. The EC and Argentina noted that they had a substantial interest in this matter. 
(d) United States:  European Communities – Tariff quota administration of the tariff quota 
15. The United States reverted to an issue it had ra ised at the September 2004 meeting concerning 
the EC's application of Regulation 1458/2003 on the tariff quota allocation for the pig meat sector 
(G/AG/R/40, paras. 17-19).  It appeared that the 10 per cent allocation limits for each importer 
represented a major constraint for the full utilizatio n of the tariff quotas.  The United States sought 
clarification as to why the EC continued to place  quantitative restrictions on the use of the tariff 
quotas, although they remained greatly under-subscrib ed and firms within the EC sought to import 
larger quantities.  The United States also questi oned why Regulation 1458/20 03 had not been included 
in the EC's notification G/LIC/N/3/EEC/6/Add.1 submitted to the Committee on Import Licensing.  
16. The EC responded that it did not consider that the 10 per cent limits were a major import 
constraint.  The low tariff quota fill rates were a consequence of the supply and demand situation in 
the EC market.  The EC had no indication that firms in the EC sought to import larger quantities.  The 
EC was nevertheless ready to engage constructively in this matter.  Regarding the import licensing 
notification, the EC indicated that Regulation 1458/ 2003 was published in August 2003, that is after 
the reference date of the notification in question (July 2003).   
17. The United States welcomed the indication of in terest by the EC to engage in further 
discussions on this matter. 
(e) United States:  Moldova – Licensing procedures for imports of poultry meat 
18.  The United States reverted to an Art. 18.6 ma tter it had raised at the September 2004 meeting 
concerning Moldova's import licensing procedures fo r poultry meat (G/AG/R/40, paras. 20-22).  In 
addition to the restriction that limited the issu ance of licences to 40 tonnes per importer, the United 
States was aware of other restrictions, which included the requirement that importers purchase domestic poultry to become eligible for the licences.  It appeared that there was no regulation in place 
nor notice procedure to inform importers on th e reasons why licences were refused.  The United 
States remained concerned that Moldova's import licensing procedures for poultry were discretionary 
and acted as a non-tariff barrier to trade within th e meaning of Article XI of the GATT 1994.  The 
United States sought clarification as to when Mold ova would eliminate or revise these procedures to 
bring them into conformity with WTO rules. 
19. Moldova responded that no quantitative restrictions  were currently applied to poultry imports.  
The decision of the Ministry of Agriculture and Food Industry concerning "implementation of the 
plan to regulate imports by the Republic of Moldov a of products of animal origin" had been rescinded 
and the limitations on obtaining a veterinary report had been cancelled.  The original measure was 
temporary and applied to ensure protection of the terr itory against the infiltration of contagious animal 
diseases from other countries.  Authorization to im port meat into Moldova was granted provided the 
veterinary requirements and national standards c oncerning packaging along with the expiry date, 
marking, transport and temper ature regime were observed. G/AG/R/41 
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 (f) United States:  Panama – Limitations on imports of French fries 
20. The United States sought clarification concerning reports that importers of US French fries in 
Panama had been notified to limit their imports to qu antities specified by the Ministry of Agriculture.  
Similar limitations had been im plemented in 2003 when Panama had failed to issue phytosanitary 
certificates for French fries imported from the United St ates.  In the view of the United States, use of 
phytosanitary certificates as a discretionary im port licence violated both the Agreement on 
Agriculture and the SPS Agreement.  The Unite d States sought assurances from Panama that 
phytosanitary certificates for US French fries woul d be issued automatically and that no attempt 
would be made to impose quantitative restrictions.   
21. Panama stated that the US questions were a ddressed in the capital and Panama would respond 
in the near future. 
(g) United States:  Turkey – New import regime for rice 
22. The United States stated that Turkey had implemented a new import regime for rice for the 
period of 1 November 2004 to 31 July 2005, which re quired a domestic purchase in order to obtain an 
import licence.  The United States was concerned about  the consistency of this measure with Article 
III of the GATT 1994 and the Agreement on Trade-Re lated Investment Measures.  Moreover, the 
United States was concerned that imports might be prohibited after 1 August 2005 in violation of 
Article 4.2 of the Agreement on Agriculture. 
23. Turkey recalled its statement on this matter as reflected in G/AG/R/39 (paras. 14-18 refer) 
and stated that technical work was underway in Ankara  in an effort to find a solution for this matter.  
In any event, Turkey was a net importer of rice and imported more than 40 per cent of its needs 
annually.  Importation of rice under the newly estab lished tariff quota had been implied on an MFN 
basis.  The import measure did not constitute a qua ntitative restriction nor discriminate against any 
imported products.  Importation of rice took place on the basis of world prices and free trade rules.  
The implementation of the tariff quota regime was to expire on 31 July 2005 and rice importation 
would continue thereafter at MFN rates.  Turkey al so noted that freight charges for US rice were 
much higher than for shipments from, for example, Egypt and South Eastern Asian countries, which 
made US rice uncompetitive in the Turkish market.  
24. The United States noted its interest in pursui ng the issue of domestic purchase requirements 
and in finding a longer-term solution to ensure predictability of trade.  
25. Turkey responded that, in its view, the TRIMS Ag reement was not applicable in this instance 
since no investment measures were applied under the new rice import regime.  
(h) United States:  Venezuela – Import licensing and SPS permit procedures 
26. The United States requested that Venezuela pr ovide, in accordance with Article 3.5 of the 
Agreement on Import Licensing Procedures, info rmation on import licensing and "SPS permit" 
procedures, as well as import licences and SPS permits i ssued since January 2002.   The United States 
encouraged Venezuela to renew the dialogue with  the United States and other WTO Members in an 
effort to reach an acceptable resolution of this matter. 
27. As a preliminary matter, Venezuela considered  it more appropriate to discuss these questions 
in the Committee on Import Licensing or the SPS Comm ittee.  Venezuela recalled that consultations 
with the United States and five other Members were  held in November 2002 under Articles 1 and 4 of 
the DSU.  Venezuela had provided written replies to all questions posed by the United States and the  G/AG/R/41 
 Page 5 
 
 
 other Members involved.  In addition, Venezu ela had responded to a US questionnaire from May 
2003 and had held bilateral discussions in Caracas.  
28. Venezuela informed the Committee that on 16 Oc tober 2004, a devastating fire had occurred 
in a large building in Caracas that was the seat of several government ministries and agencies.  Owing 
to the devastation caused to the national property and archives, Venezuela had declared a state of 
emergency with respect to the bodies and entities co ncerned.  The corresponding Presidential Decree, 
No. 3.184, was issued on 19 October 2004 and pub lished in Official Gazette No. 38.053 of 28 
October 2004.  Although c ontingency measures had been taken, Venezuela anticipated difficulties in 
replying promptly and properly to applications and re quests in view of the damage to the documentary 
archives of the agencies affected .  While most of the ongoing administrative procedures were 
suspended, the authorities in th e affected bodies and entities were under instruction to keep those 
concerned by the procedures informed and to notif y them of the continuation of procedures, as soon 
as the exceptional measures enabled them to functio n properly.  In spite of this serious case of force 
majeure , Venezuela was committed to continuing the di alogue with WTO Members, to responding to 
any enquiries to the best of its ability, and to fulfilling its WTO commitments.  
29. Canada expressed serious concerns regarding Ve nezuela's SPS permit procedures, particularly 
as they related to potatoes, meat and onions.  Chile noted its interest in this matter. 
(i) European Communities:  Venezuela –  Impor ts of wines from the European Communities 
30. The EC reverted to a matter it had raised at the September 2004 meeting concerning  
restrictions on EC wine imports into Venezuela (G/AG/R/40, paras. 23-25).  In response, Venezuela 
had stated that the competitive advantage of Chilean  wines was due to the existence of a free trade 
agreement between Chile and Venezuela.  The EC  sought clarification concerning this free trade 
agreement, including when was it notified to the WTO.   In any event, the EC maintained that it was 
Venezuela's discriminatory Foreign Exchange Contro l system that was causing the negative impact on 
imports of EC wines.  The EC requested that wines be included in the "List of Priority Goods" in order to put an end to the discriminatory treatment of EC wines.   
31. Venezuela responded that the existence of a price differential between wines from the 
European Union and Latin America did not result from the fact that the latter received US dollars at 
the official exchange rate, as the EC had suggested, since wine did not belong to the list of priority 
goods.  Under the Reciprocal Payments and Credit  Agreement of the Latin American Integration 
Association (LAIA), Venezuelan enterprises were ent itled to pay for imports from signatory countries 
through compensation arrangements between central ba nks in the national currency.  This Agreement 
was notified to the International Monetary Fund in 1982.  The competitive advantage of Latin 
American wines in terms of price was helped by  the existence of free trade agreements between 
Venezuela and those countries. 
B. REVIEW
 OF NOTIFICATIONS 
(a) Notifications in respect of which questions have been raised in advance of the issuance of the 
convening airgram 
32. The Committee reviewed the following no tifications as listed in the agenda: 
 (i) relating to imports under tariff and ot her quota commitments (Table MA:2):  from 
China (CHN/5), Japan (JPN/99) and Latvia (LVA/10); 
 (ii) in the context of the special safegua rd (Tables MA:3 to MA:5):  from Poland 
(POL/64) and Chinese Taipei (TPKM/19); G/AG/R/41 
Page 6  
 
  (iii) in the context of domestic support commitments (Table DS:1):  from Tunisia 
(TUN/30); and 
 (iv) in the context of actions taken w ithin the framework of  the Marrakesh NFIDC 
Decision (Table NF:1):  from the European Communities (EEC/50). 
33. Specific points raised with respect to the notif ications listed above and the responses thereto 
are summarized in the Annex to this report. 
(b) Notifications subject to review in respect of wh ich no questions have been raised in advance 
of the issuance of the convening airgram 
34. The Committee took note of the following notificatio ns, which had been circulated in advance 
of the date on which the notice convening the present meeting was issued but in respect of which no 
questions had been raised by that date unde r the Committee's Working Procedures (G/AG/1): 
 (i) relating to imports under tariff and ot her quota commitments (Table MA:2):  from 
Australia (AUS/55), New Zealand (NZL/36) and South Africa (ZAF/52); 
 (ii) in the context of the special safegua rd (Tables MA:3 to MA:5):  from Australia 
(AUS/54), Japan (JPN/101) and New Zealand (NZL/37); 
 (iii) in the context of domestic support commitments (Table DS:1):  from Bahrain 
(BHR/3), Dominican Republic (DOM/8/Rev.1 and DOM/9), the European Communities (EEC/51), Honduras (HND/16/Re v.1), Paraguay (PRY/12), Slovenia 
(SVN/28), Thailand (THA/50) and Trinidad and Tobago (TTO/6); 
 (iv) in the context of new or modified domestic support measures exempt from reduction 
(Table DS:2):  from Honduras (HND/17/Rev.1);  and 
 (v) on export subsidy commitments (Tables ES:1 to ES:3):  from Australia (AUS/56), 
Hungary (HUN/38), Latvia (LVA/11), New Zealand (NZL/38), Slovenia (SVN/27) and Trinidad and Tobago (TTO/5). 
(c) Notifications circulated or made available af ter the notice convening the meeting was issued 
35. The following notifications were subject to prelim inary review and are to be reverted to at the 
next meeting for substantive review in accordan ce with paragraph 9 of the Committee's Working 
Procedures: 
(i) in the context of the special safegua rd (Tables MA:3 to MA:5):  from Japan 
(JPN/102) and Chinese Taipei (TPKM/17/Corr.1 and TPKM/20); 
(ii) on domestic support commitments (Table DS:1):  from Slovenia (SVN/28/Corr.1);  
and 
(iii) on export subsidy commitments (Tables ES:1 to ES:3):  from Myanmar (MYN/4). 
(d) Points concerning notifications raised at previous meetings 
36. There was no discussion under this agenda item.  G/AG/R/41 
 Page 7 
 
 
 (e) Counter-notifications under Article 18.7 of the Agreement 
37. The Committee took note that no counter-notifi cations had been received under Article 18.7 
of the Agreement. 
(f) Deferred replies to questions raised under the Review Process 
38. The United States noted that, at the September 2004 meeting, it had undertaken to provide 
information requested by the EC regarding the d estinations of sales of non-fat dry milk stocks 
(G/AG/R/40, para. 16).  The United States would provide a response in the near future. 
(g) Overdue notifications 
39. The Committee took note that the Secretariat ha d made available a revised and updated room 
document, dated 17 November 2004, showing the cu rrent status of compliance with notification 
obligations. 
40. Australia emphasised the need for up-to-date in formation on domestic support in the context 
of the agricultural negotiations, including  th e establishment of product-specific AMS caps.   
41. The United States stated that its domestic support notification for 2002/03 was under 
preparation.  The United States had taken note of the last two EC notifications on export subsidy 
commitments: G/AG/N/EEC/36 from 19 March 2002 covering the period of 2000/01 and 
G/AG/N/EEC/44 from 11 June 2003 covering the period of 2001/02.  In light of the significantly increasing time lag relative to the outstanding 2002/03 notification, the United States sought 
clarification as to when the EC would subm it its export subsidy notification for 2002/03. 
42. The EC responded that it expected to provide its  export subsidy notification for 2000/03 in the 
near future.  Furthermore, the EC was in the pro cess of collecting data from the member States for the 
preparation of the domestic support notification for 2002/03.  
(h) Addenda to Table MA:1 notifications 
43. The Committee took note that the following Members administering tariff quotas had 
submitted the requisite Table MA :1 Addenda in accordance with the General Council Decision of 
December 2000 (paragraph 1.1 of WT/L/384 refers):   Australia, Canada, th e Czech Republic, the  
EC-15, Hungary, Japan, Latvia, New Zealand, No rway, Slovenia, Switzerla nd, Thailand, and the 
United States.  The Chairman urged those Members administering tariff quotas which had not yet done so to provide Addenda to their Table MA:1 no tifications in accordance with the General Council 
Decision in WT/L/384. 
P
ART II:  OTHER MATTERS WITHIN THE PURVIEW OF THE COMMITTEE  
A. IMPLEMENTATION -RELATED ISSUES  
44. The Committee took note that this agenda item concerned the implementation of Article 10.2 
of the Agreement and the related provisions of the Marrakesh NFIDC Decision (G/AG/16, Section 
A).  
45. Argentina recalled its statement at the Sept ember 2004 meeting of the Committee concerning 
the matter of implementation of Article 10.2 of  the Agreement (see G/AG/R/40, paragraph 37). G/AG/R/41 
Page 8  
 
 B. A
NNUAL MONITORING EXERCISE ON THE FOLLOW -UP TO THE MARRAKESH NFIDC  
DECISION , INCLUDING THE FOLLOW -UP TO A PENDING PROPOSAL BY THE AFRICAN GROUP 
(SECTION  B OF G/AG/16,  TN/CTD/W/3/R EV.2, AND PARAGRAPH 1.D OF WT/L/579  REFER ) 
46. The Committee took note of the following Table NF :1 notifications that had been received 
since the last annual monitoring exercise of the NFIDC Decision in November 2003:  Cuba 
(G/AG/N/CUB/24), EC (G/AG/N/EEC/46/Add.1 and EEC/50), New Zealand (G/AG/N/NZL/39 and 
NZL/40) and the United States (G/AG/N/USA/52).   
47. A revision of the Secretariat background note  for the purpose of facilitating the annual 
monitoring exercise was circulated as G/AG/W/42/Rev.7 dated 15 November 2004.  The contributions by the observer organizations (FAO, International Grains Council, IMF, UNCTAD, the 
World Bank and World Food Programme) were circ ulated in document G/AG/GEN/68 dated 24 
January 2005.  
48. The Philippines expressed a particular interest in the contribution by the World Bank and 
noted that it would carefully review the statemen t in the context of the agriculture negotiations 
(G/AG/GEN/68, pages 19-25 refer).  The Philippines were surprised by some of the World Bank's 
views regarding food security and the concept of Sp ecial Products.  For its part, the Philippines, as a 
member of the G-33, viewed Special Products as a progressive rather than regressive concept.  
49. The Chairman announced that Ambassador Ismail,  in his capacity as Chairman of the Special 
Session of the Committee on Trade and Development, was convening a meeting on 29 November 2004 inviting the Chairpersons of those bodies to which so-called Category II proposals 
on S&D have been referred to.  In the case of this  Committee, this concerned the pending proposal by 
the African Group (TN/CTD/W/3/R
EV.2).  The purpose of the meeting of the Chairpersons was to 
review the state of play and to discuss how efforts could be better coordinate d to fulfil the mandate 
contained in the July Framework Decision with regard  to S&D.  The Chairman stated that he would 
report to the Committee on the outcome of the meeting.  
C. ANNUAL CONSULTATION UNDER ARTICLE 18.5  OF THE AGREEMENT ON AGRICULTURE WITH 
RESPECT TO MEMBERS ' PARTICIPATION IN THE NORMAL GROWTH OF WORLD TRADE IN 
AGRICULTURAL PRODUCTS WITHIN THE FRAMEWORK OF THE COMMITMENTS ON EXPORT 
SUBSIDIES UNDER THE AGREEMENT  
50. The Committee took note of the statistical background paper by the Secretariat 
(G/AG/W/32/R EV.7) for the purposes of the annual consultati ons under Art. 18.5 of the Agreement. 
D. MATTERS RAISED UNDER "OTHER BUSINESS " 
(a) Annual Report to the Council for Trade in Goods 
51. In line with the Committee's practice in the pr evious years, the Chairman had circulated, 
before this meeting, a short factual report for th e Council for Trade in Goods on the work undertaken 
by the Committee in the course of 2004, in order to  facilitate consideration of this matter.  The 
Committee took note of the report and agreed that  the report, updated as appropriate, would be 
submitted to the General Council on the res ponsibility of the Chairman (G/L/719 dated 
19 November 2004).  G/AG/R/41 
 Page 9 
 
 
 (b) Date of Next Meeting 
52. The next regular meeting of the Committee on Agriculture will be held on Wednesday, 
16 March 2005.  The airgram convening the meeting and containing the draft agenda will be issued on 
Friday, 4 March 2005. G/AG/R/41 
Page 10  
 
 ANNEX
 
 
  Page  
Part 1  Review of notifications by the Committe e on Agriculture at the meeting on  
18 November 2004   
 
 (i) imports under tariff and ot her quota commitments (Table MA:2 ):  China 
(CHN/5), Japan (JPN/99) and Latvia (LVA/10); 10 
    
 (ii) use of the special safeguard (Tables MA:3-MA:5 ):  Poland (POL/64) and 
Chinese Taipei (TPKM/19); 12 
    
 (iii) domestic support commitments (Table DS:1 ):  Tunisia (TUN/30); 14 
    
 (iv) actions taken within the framewo rk of the Marrakesh NFIDC Decision 
(Table NF:1) :  the European Communities (EEC/50). 16 
    
    
Attachment  Comparison between import costs and Dome stic prices of some TQ products in 
China in 2003 17 
 G/AG/R/41 
 Page 11 
 
 
 ANNEX  
 
Review of notifications by the Committee on Ag riculture at the meeting on 18 November 2004 
 
Summary of specific points raised and responses thereto  
Table MA:2 Notifications 
 
China    G/AG/N/CHN/5     Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
Australia – Explanation sought for continuing low fill 
rates of all but a few of China's minimum access 
TQs. 
  
 
 
 
  
 
EC – Reasons for low fill rate of the TQ for wheat
. 
 Pointed out that the reference in Australia's question 
to minimum access TQs was a misunderstanding.  
According to the accession protocol, China's TQ 
quantity commitments provide market access opportunities to Members rather than commit China 
to minimum imports.  
 
Drew attention to high fill rates in 2003 of some 
products subject to TQs, e.g. palm oil, soybean oil, wool and cotton. 
 
Low fill rates were due to costs of imported TQ products being higher than domestic prices.  
Attachment 1
 to this report presents a comparison 
between domestic prices and import costs of some TQ products in 2003. 
 
Wool
:  Following a sharp increase in world prices, 
China's wool textile industry experienced a decline 
which lowered demand for wool.  The average price 
of imported wool increased 34% from the previous year to $4,518 per tonne. 
 
China reiterated that importation of TQ products is market-oriented, based on demand in the domestic 
market, and the balance between import cost and  
domestic prices. 
Follow-up comment by Australia:  Welcomed China's 
provision of information on domestic and import  
prices and encouraged other Members with TQ underfill to follow this precedent in order to enable 
the Committee to assess what is said to be a lack of 
import demand.    
Follow-up comment by the US:  Concurred with 
Australia's follow-up comment on improving  
transparency.   
Follow-up comment by Canada:  Welcomed China's 
provision of additional information as helpful for 
examining the question of underfill.   
 
 G/AG/R/41 
Page 12  
 
 Japan     G/AG/N/JPN/99     Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
United States – Expressed concern over the trend in 
recent years that the commit ment made in Annex 5, 
Section A, paragraph 2 of the Agreement may not be 
fully met and that mark et access opportunities for 
rice were again not fulfilled.  Enquired about 
measures to guarantee full utilization of TQs in future 
years to fulfil the mini mum access commitment for 
rice. 
Whether Japan would increase the TQ level in 
FY 2004 by the amount unfilled in 2003. To reach the minimum access for rice imports, since 
1995 Japan has imported 4,500 tonnes of husked rice 
by the private sector (ri ce powder for dyeing, 
breakfast cereals) and the remainder through imports 
by State enterprises.  Th e reasons why the quota of 
682,200 tonnes of husked rice was not filled in 2003 
are the following: 
- although Japan had opened up access for 4,500 
tonnes of husked rice for private imports, the quantity 
of husked rice imports (1,570 tonnes) was lower than 
the quota; 
- part of the State enterprise imports suffered weight 
losses due to drying or other procedures during 
loading and transport (99 per cent rate in the State enterprise sector). 
Japan intends to continue minimum access rice 
imports under the Uruguay Round agreements.  
Japan, is not, however, considering changing its 
import system or carrying the un-imported portion over to the following year. 
New Zealand – Noted that fill rates for many dairy 
quotas  remained below 50% ag ain in FY 2003 (SMP 
for school lunch, SMP for other purposes, prepared 
whey for infant formula, butter and butter oil, mineral 
concentrated whey). 
Lack of domestic demand had previously been given 
by Japan as a reason for this low fill rate.  Since fill 
rates have not improved since 1995, and if demand 
has been consistently low, could Japan move to a 
tariff-only regime at the in-quota tariff rate instead of retaining a complicated administration system. Tariff quota commitments for tariffied products 
impose an obligation to provide access opportunities, 
but do not require full use of these quotas. 
Accordingly, to improve the tariff quota fill rate, 
Japan believes that it is incumbent upon exporters to 
make commercial efforts in the private sector and to 
work on market development.  Japan does at present time envisage a review of the system. 
 
Follow-up comment by New Zealand:  New Zealand  
exporters continue to make  efforts to increase their 
presence in the Japanese market, especially given the 
large price differential compar ed to the world price as 
a result of some very high tariffs.    
 
 
Latvia     G/AG/N/LVA/10     Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
Australia – Explanation sought for fill rates 
remaining at zero for each minimum access TQ, and 
for each year between 1999 and 2003.   There was sufficient supply at competitive prices.  
For raw cane sugar for further processing,  there was 
no market demand due to limited refining capacity. 
 
 
  G/AG/R/41 
 Page 13 
 
 
 Tables MA:3 to MA:5 Notifications 
 
Poland     G/AG/N/POL/64     Price-Based Special Safeguard (Table MA:4) 
Points raised by other Members  Response by Notifying Member 
Australia – Noted the absence of information to 
explain the calculation of trigger prices.  In 
accordance with the transpar ency requirements in 
Art. 5.7 of the Agreement, requested the following information: 
 
- the current c.i.f. import price of the products (including sources); 
-  the  duty  levied  on  the  products   (including   the 
method of calculation of the duty); 
- reference prices for the products for each of the 
years 1986 to 1989.  
 
 
  
 
Variable, and subject to the conditions of a particular transaction. 
Dependent on the differen ce between the import price 
of the shipment concerned and the trigger price. 
Based on the reference prices in the EC notification 
EEC/2 of 8 August 1995.  EUR prices have been 
converted into Polish currency with the exchange rate of 2 January 2004 as quoted by the Polish Central 
Bank. 
 
 
Chinese Taipei     G/AG/N/TPKM/19     Volume-Based Special Safeguard (Table MA:3) 
Points raised by other Members  Response by Notifying Member 
Australia - In TPKM/17, the trigger level for dried 
shiitake  was 71 tonnes in 2004, calculated on imports 
from 2000 to 2002, including an import volume for 
2001 of 110 tonnes.   In TPKM/19, imports for 2001 are notified as zero.  Confirmation sought as to the 
correct figure and why two different figures were 
notified. 
 The correct figure is 0 tonne;  thus the trigger level, 
the amount of consumption in that year, and other 
figures derived from it, have had to be corrected.  A 
corrigendum to notification TPKM/17 was issued on 17 November 2004. 
Confirmed zero imports of dried shiitake in 2001 as 
the product was subject to an import ban prior to 
Chinese Taipei's accession to  the WTO on 1 January 
2002. G/AG/R/41 
Page 14  
 
 Chinese Taipei     G/AG/N/TPKM/19     Volume-Based Special Safeguard (Table MA:3) 
Points raised by other Members  Response by Notifying Member 
New Zealand – Noted trigger levels of zero for all 
SSGs notified, due to three consecutive years of no 
imports of the products listed. 
 
Questioned why the import figures for liquid milk 
and persimmon  were zero when both operate under a 
tariff quota.     
 
 The latest Table MA:2 notification shows that import 
data exists for liquid milk and persimmons.  Enquired 
whether only out-of-quota imports figures had been used to calculate the trigger level.   
 
 Enquired why the three co nsecutive years are 1999-
2001. 
  
 
  
 
 
 
  
 
 
 
Confirmed that there were no imports of liquid milk 
and persimmon from 1999 to 2001. These products 
were subject to an import ban prior to accession to the WTO on 1 January 2002. 
 
 Confirmed that the sum of the out-of-quota and the 
in-quota import figures will be applied to the 
calculation of SSG trigger levels.  
 
 Recalled replies given to Australia at September 2004 
meeting.  To ensure a transparent and predictable TQ 
administration system, the trigger levels for liquid milk and persimmon for 2003 were calculated and 
published at the end of November 2002, at which 
time the data for actual imports in the full year 2002 were not available. Trigger levels were therefore 
calculated using the average quantity of imports 
during 1999 to 2001, i.e. the three preceding years for 
which data were available, as per Article 5.4 of the 
Agreement. 
Follow-up comment by New Zealand:   Appreciated 
Chinese Taipei's objective of transparency and 
predictability but questioned the need for a two-year gap in calculating the trigger price.  Given that the 
SSG was triggered in January 2003, two years of 
additional data could have been factored into the calculation. Recalling its answers to Australia at the previous 
Committee meeting, reiterated that to assure 
predictable trade, quota allocations and the SSG are published so that importers are advised of trigger 
volumes in advance.  Ther efore, the above-mentioned 
data for 2003 are published at end-November, one month before year-end.  In calculating the trigger 
level for 2003, import data for the whole year of 2002 
are not available, therefor e the most recent data are 
for 2001.  For the same reason, in calculating the 
trigger volume for 2004, data from 2002 will be used. 
 
  G/AG/R/41 
 Page 15 
 
 
 Table DS:1 Notifications 
 
Tunisia   G/AG/N/TUN/30      Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
Green Box 
Australia - Structural adju stment assistance provided 
through investment aids  
Recalled requests made in March 2001 and March 
2002 to provide missing programme details. No 
Table DS:2 notification has been submitted since the 
first notification of the programme in 1996.   
 These are specific measures for small farmers 
without the requisite guarantees to obtain agricultural 
credits for the start of the new crop year. These 
measures are for small-holders and farmers affected by drought during a previous crop year and take the 
form of aid in kind (seed, fertilizer, animal feed). The 
main structural disadvantage is the difficulty in obtaining credit due to lack of the necessary 
guarantees.  Payments are made in kind on the basis 
of needs.  
In 1999, this was an exceptional measure designed to 
cope with the problem of indebtedness.  The measure 
consisted of eliminating the outstanding agricultural 
credits obtained before 1998 and establishing a total 
amount of principal not exceeding 2,000 dinars per farmer. 
Amber Box 
Australia - Supporting Table DS:4 – Calculation of 
Current Total AMS  
Suggested that where a negative AMS value results 
in column 2, it should be equated to zero.  Pointed 
out that AMS measures constitute support in favour 
of agricultural producer s whereas a negative AMS 
indicates a tax on agricultural producers.  
Request made for calculations to be amended to 
equate negative AMS values to zero. Negative support is reported in column 2 of ST/DS:4 
to carry over the product support in ST/DS:5.  This 
support was equated to zero in column 4 of ST/DS:4.  
Accordingly, the calculations were made by equating 
the negative support to zero; the AMS calculation 
does not need to be amended. 
New Zealand – Supporting Table DS:5 – Market 
Price Support  
Noted the adjustment of the external reference prices 
for inflation.  Explanation sought for this adjustment 
and request made for unadjusted data for the 
reporting period for transparency reasons. 
 Considered that inflation and the depreciation of the 
local currency vis-à-vis  foreign currencies between 
1988 and 1999 were excessive and warranted the 
adjustment made. 
Noted that cumulative inflation from 1988 to 2000 
stood at 60 per cent reflecting the movement of the 
consumer price index at average annual rates ranging from 5 to 7 per cent;  only in the last three years was 
the rate of inflation approximately 3 per cent.  The 
inflation rate in Tunisia is published in the Annual Report of the Central Bank of Tunisia and shows the 
following rates: G/AG/R/41 
Page 16  
 
 Tunisia   G/AG/N/TUN/30      Domestic Support (Table DS:1)  
Points raised by other Members  Response by Notifying Member 
Year Annual rate of 
inflation Exchange rate 
US$/dinar 
1988 7.2 0.8543 
1989 7.7 0.9946 
1990 6.5 0.8602 
1991 7.8 0.9459 
1992 5.5 0.8844 
1993 4.0 1.0057 
1994 4.7 1.0133 
1995 6.3 0.9458 
1996 3.7 0.9747 
1997 3.7 1.1029 
1998 3.1 1.1374 
1999 2.7 1.1884 
2000 2.9 1.3716 New Zealand (cont'd) 
2001 2.0 1.4390 
 Similarly, the exchange rate  for the external reference 
prices in the 1986-1988 base period in local currency 
has changed substantially.  The exchange rate, which was $0.88 to the Tunisian dinar during the reference 
period, stood at US$1.44 to the Tunisian dinar in 
2001, as published in the Central Bank of Tunisia's "Financial Statistics" report. 
It should be noted that the Current Total AMS in 
2000 without adjusting exte rnal reference prices was 
200 million dinars;  the depreciation of the Tunisian 
dinar vis-à-vis the US dollar between the reference period and the year 2000 reduces the support to 63.4 
million dinars.  The trend in the Current Total AMS 
calculated without adjusting external reference prices is as follows: 
Year Current AMS without  
reference price 
adjustment  
(millions of dinars) Current AMS with price 
adjustment              
(millions of dinars) 
1996 264 64 
1997 207 53 
1998 223 61 
1999 132 23 
2000 200 de minimis  
2001 117 de minimis 
 
   G/AG/R/41 
 Page 17 
 
 
 Table NF:1 Notifications 
 
European Communities     G/AG/N/EEC/50   Marrakesh NFIDC Decision (Table NF:1)  
Points raised by other Members  Response by Notifying Member 
United States – Requested clar ification as to whether  
the aid transactions are limited to those undertaken 
by the European Commission on behalf of the 
European Communities, or whether it includes all, or 
part of, member State transactions of this nature.  
If this notification does not include those aid 
transactions/donations undertaken by member States, where are these accounted for and reported? 
Requested a break-down of the resources used by 
member States and the EC.  
Whether the EC reported these transactions to the 
Consultative Subcommittee on Surplus Disposal of the FAO. 
 
The footnote to the table provides for a mixture of actual expenditures together with planned, but not yet 
executed budgetary amounts. Requested clarification 
as to which line items are in fact mixtures, and the 
provision of the percentage of actual to unutilized 
allocated budgetary amounts. No reply can be given at this stage due to difficulties 
in data collection as a result of EC food aid policy 
having changed from being supply-driven to being 
entirely demand-driven since 1996.  Undertook to 
follow-up on this matter and to report back to the next meeting in March 2005. 
 
  
 
  
 
  
 
Stated that the table woul d be changed to indicate 
that the amounts are in  fact all commitments. 
 G/AG/R/41 
Page 18  
 
 Attachment 1 
 
 
Comparison between Import Costs and Domestic Prices of some  
TQ Products in China in 2003 
 
G/AG/N/CHN/5 
 
 
Product Period Import cost  
(RMB yuan per tonne) Domestic price  
(RMB yuan per tonne) 
US No. 2 Soft Red Winter Wheat (SRW) 2,283 
US No. 2 Hard Red Winter Wheat (HRW) 2,206 
Canadian No. 2 Western Red Spring Wheat (CWRS) 2,322 Wheat 2003 
Australian Standard Wheat (ASW) 1,966 High quality 
domestic 
wheat 1,820-
1,850 
Corn 2003  1,587  1,2871 
Thai, fragrant 5,100 long 1,940 
Thai, long, 15% broken 2,000 short 2,000 
US, medium, husked, 5% broken 4,000   Rice 2003 
Australian, short, 5% broken 4,400   
Rape-
seed oil 2003  5,970  5,950 
Sugar 2003  2,530  2,350 
 
1The price in the main consumption areas of south China. 
 
__________