RESTRICTED  WORLD TRADE  
ORGANIZATION  G/AG/R/46 
11 July 2006 
 (06-3329) 
Committee on Agriculture  
  
SUMMARY REPORT OF THE ME ETING HELD ON 12 MAY 2006 
 
Note by the Secretariat
1 
  1. The Committee on Agriculture held its forty-si xth regular meeting on 12 May 2006 under the 
chairmanship of Mr. Christian Häberli of Switzerla nd.  The Chairman recalled that, for the reasons 
outlined in the summary report of the meeting of the Committee held in January 2006, this was the 
first regular meeting of the Committee on Agriculture for the year 2006.
2 
2. The agenda of the meeting as set out in WTO/AIR/2815 was adopted. 
I. THE REVIEW PROCESS  
A. M ATTERS RELEVANT TO THE IMPLEMENTATION OF CO MMITMENTS UNDER THE REFORM 
PROGRAMME :  ARTICLE 18.6 
(a)  Argentina:  EC – Details of changes to tariff quotas consolidated in  Schedule CXL  
3. Argentina posed detailed questions to the EC on its tariff quota regime for certain products of 
importance to Argentina.  Argentina's questions , as well as the replies provided by the EC, are 
reproduced in Annex 1 . 
4. In its follow-up comments, Argentina raised doubts as to whether the scheduled commitment 
was actually being fulfilled:  the commitment was to establish an in-quota tariff in such a way that the 
quota was always filled, and, in its view, this was not happening.  Australia expressed its interest in 
this matter. 
(b) Australia:  ECs – Export regime for sugar  
5. Australia posed questions to the EC on its sugar exports (i) for the period commencing 
1 October 2005; (ii) for the period commencing 1 July  2005; (iii) in respect of sugar export quantities 
and budgetary outlays notified to th e Committee on Agriculture; and (iv) in respect of item (ii), details 
on the basis for calculations were sought.  In view of the detailed nature of these questions, these are 
reproduced in Annex 2 .  
6. With regard to the questions under (i) and (ii)  above, the EC responded that these related to 
the implementation of the DSB rulings on EC - Export Subsidies on Sugar  in the marketing year 
2005/2006 and the issue of implementing these ruli ngs as such would be addressed in the DSB 
meeting of 17 May 2006.  The EC indicated that it preferred not to pre-empt on the deliberations in 
the DSB on this issue.  To parts (iii) to (iv) of the questions, the EC responded that the annual 
quantities were notified on the basis of export licen ces granted and the same approach was used for 
                                                      
1 This document has been prepared  under the Secretariat's own respon sibility and is without prejudice 
to the positions of Members or to their rights or obligations under the WTO. 
2 Paragraph 39 of G/AG/R/45 refers. G/AG/R/46 
Page 2  
 
  the notification of the annual budgetary outlays.  The EC also clarified that the same applied for other 
scheduled products. 
7. Australia emphasized that it was seeking in formation falling within the purview of 
Article 18.6 of the Agreement on Agriculture.  Aust ralia urged the EC to reconsider providing the 
information sought.  Australia also enquired as to whether the information sought would be provided 
by the EC in the DSB meeting of 17 May 2006.  While noting that the questions might overlap 
somewhat with the implementation of the DSB ruling in the sugar dispute, Brazil also noted that the 
questions from Australia were within the full aut hority of the Committee on Agriculture under Article 
18.6 of the Agreement on Agriculture.  Brazil urged th e EC to respond to the questions for the sake of 
transparency.  Thailand associated itself with Australia and Brazil, and also urged the EC to provide 
further responses.  The EC took note of the comments. 
(c) Australia:  Iceland – Inflation rates and AMS Commitments
 
8. Further to the responses provided by Iceland dur ing the Committee on Agriculture meeting of 
27 January 20063, Australia pointed out that Members should give due consideration to the influence 
of excessive inflation rates on the ability of any Member to abide by its domestic support 
commitments before a Member unilaterally decided to adjust its commitments for inflation (as per 
Article 18.4 of the Agreement on Agriculture).  In Au stralia's view, Iceland's inflation rates were not 
excessive and could not be used as a reason fo r breaching its AMS commitment.  Australia 
encouraged Iceland to abide by the domestic suppor t commitments agreed to in 1994, given that at 
this time Iceland was fully aware of the eff ect of pre-1994 inflation on this commitment. 
9. Iceland indicated that it did not share the position expressed by Australia and referred to the 
response it had provided in previous meetings. Icelan d invited Australia and others to pursue the issue 
in the context of  bilateral consultations. 
10. Australia thanked Iceland for its offer for bilate ral consultations and noted that it had received 
some useful data on inflation from Iceland when it had raised these questions during the January 2006 
Committee meeting.  The analysis of the data s howed that for the period 1994 onwards, the average 
rate of inflation in Iceland had been 3.3 per cent.   Australia also noted that the corresponding figure 
for Australia was 2.7 per cent.  Australia felt that the inflation data received from Iceland were not 
excessive in light of Article 18.4 of the Agreement on Agriculture and did not justify the adjustment 
made.  
(d) Brazil:  European Communities – EC sugar regime  
11. Brazil  posed detailed questions on the new rul es for the common organization of the markets 
in the sugar sector established in the EC Council Regulation No 318/2006 on (i) the status of  
implementing rules and measures to be adopted under  Articles 40 and 44 of the Regulation; (ii) the 
amount of the state aid; (iii) the type of mechanis ms in place to share data with the WTO Members on 
sugar exports; and (iv) sugar production forecasts fo r 2006-07. Brazil also referred to the EC Council 
Regulation No 319/2006 and sought  (i) detailed information on the number of undertakings entitled to 
receive support;  (ii) the amount of the restructuri ng aid under Article 3.1 of the Regulation; and (iii) 
the status of implementing rules to be adopted u nder Article 12 of the Regulation. In view of the 
detailed nature of these questions, these are reproduced in Annex 3 .  
12. The EC responded that it was currently prepar ing most of the implementing regulations.  
They would be published and would enter into fo rce before 1 July 2006.  The regulations under 
preparation would in particular c over the management of the internal market and the quota system, the 
                                                      
3 G/AG/R/45, pages 18-20 refer.  G/AG/R/46 
 Page 3 
 
 
  temporary scheme for restructuring the EU sugar i ndustry, the out-of-quota production, the imports 
under tariff quotas and preferential agreements, a nd the licences required for imports and exports.  
The EC also noted that a  Commission regulation laying down transitional measures, EC Regulation 
No 493/2006, had already been published in the Offi cial Journal on 28 March 2006.  The Commission 
had prepared a regulation to stop the delivery of cer tificates for C-sugar exports as from 23 May 2006.  
The draft regulation had been voted at the Ma nagement Committee on 4 May and would soon be 
published. 
13. Regarding temporary state aid, the EC responded that the member States which reduced their 
sugar quota by more than 50 per cent might grant tem porary State aid to sugar beet growers.  Since 
the quantities of quota reductions had not yet been  decided, the Commission did not know the amount 
member States would apply for.  However, Artic le 36.2 sets some maximum amounts for aids granted 
by Italy and Finland.  On the question of the mech anism envisaged to make data available on exported 
quantities, export refund amounts, and export licences issued to the WTO Members, the EC clarified that since 1995, it had notified to the WTO the exported quantities and corresponding refunds paid, 
and that the same mechanism would continue under th e new market organisation.  The EC stated that 
the production of quota and out-of-quota sugar for th e marketing year 2006/07 was currently difficult 
to estimate. 
14. On the various issues raised concerning EC Council Regulation No 319/2006, the EC 
clarified that since the implementing regulation w as not finally adopted, neither the number of 
undertakings that would renounce their quota and woul d partially or fully dismantle their production 
facilities nor the amount of quota concerned were known  and the total amount of restructuring aid 
granted would be known only at the end of the four-year restructuring period.  As regards 
implementation, the EC responded that the implemen ting regulations for integrating the sugar regime 
into the decoupled direct support scheme of the Common Agricultural Policy had been published in 
the Official Journal L 116 of 29 April 2006. 
15. Brazil thanked the EC for its replies and sought  the references of the first implementing 
regulation referred to by the EC in paragraph 11 above.  Brazil ho ped that the written version would 
contain more details on the implementing rules for eseen in the Regulation 318/2006.  Australia sought 
clarification from the EC as to whether the expor t licences issued before 23 May 2006 would remain 
valid for the period after 23 May 2006.  Thailand  also associated itself with the questions and 
comments by Brazil and expressed interest in being asso ciated in any future consultations organized 
on this issue. 
(e) United States:  Mexico – Allocation of tariff quotas for certain dairy products
 
16. The United States stated that Mexico had not i ssued import licences for certain dairy products 
subject to tariff quota commitments to Mexican import ers.  Specifically, the TR Qs in question were:  
for skim milk powder (HS codes 0402.10.01 and 0402.21.01) and for dairy blends (HS code 
1901.90.05).  The United States indicated that dairy exporters in the United States and other countries 
had already waited four months to utilize these TR Qs, which Mexico was obliged to make available 
for the calendar year (1 January 2006) under its co mmitments.  Given the sizable interest in the 
United States and other WTO Member countries in Mexico's market, the United States sought an 
explanation for the delay in making these licences ava ilable and the date at which Mexico planned to 
make these licences available. 
17. Mexico responded that in respect of powdered milk, import licences had already been issued 
for about 70 per cent of the total quota quantity (app roximately 80 thousand tonnes) and the licences 
for the rest of the quota amount would be issued during the rest of the year.  Regarding the question on tariff quota allocation for dairy blends ( HS code  1901.90.05), Mexico clarified that it had no such 
tariff quota commitments in its WTO Schedule of commitments. G/AG/R/46 
Page 4  
 
  18. The US thanked Mexico for issuing licences to allocate about 70 per cent of the quota, whilst 
raising concerns that the remaining quota had not  yet been allotted.  New Zealand and the EC 
expressed interest in the matter and both emphasized, as a systemic issue, the importance of timely and minimally trade-disrupting allocation of tariff quotas. 
(f) United States:  Turkey – 2005 and 2006 tariff ra te schedules published in the Turkish Official 
Gazettes  
19. The United States sought clarification from Tu rkey as to whether the Turkish Customs 
officials used the tariff rates published in the O fficial Gazettes when assessing customs fees at the 
border.  The United States also sought explanation fr om Turkey as to why the Government of Turkey 
published the Official Gazettes with 2005 and 2006 ta riff rate schedules with rates higher than the 
final bound rates established under the Uruguay Round. 
20. Turkey responded that it had been implem enting its WTO obligations according to the 
Turkish WTO Schedule of Commitments, (i.e. Sc hedule XXXVII), and that the tariff rates on 
agricultural products were determined at the end of  each calendar year on that basis and accordingly 
reflected in the Import Regime Decision.  In this fra mework, the tariff rates to be applied for the year 
2005 were listed in the second ( bis) edition of the Official Gazette published on 31 December 2004, 
numbered 25678.  Similarly for the year 2006, tariff ra tes were published in the Official Gazette on 
31 December 2005, numbered 26040.  Turkey emphasized that applied rates of tariffs did not go, in 
any case, beyond its Uruguay Round bound rates.  Tu rkey also asked the United States to provide 
details of the specific agricultural tariff lines which it felt were subjected to tariff rates higher than the 
bound rates for its examination. 
21. The United States thanked Turkey for the respon se and indicated that it would provide Turkey 
with details of the specific tariff lines where it felt the rates had exceeded the tariff bindings. 
B. R EVIEW OF NOTIFICATIONS  
(a) Notifications in respect of which questions have been raised in advance of the issuance of the 
convening airgram  
22. The Committee reviewed the following no tifications as listed in the agenda: 
(i) on the administration of tariff and other quota commitments (Table MA:1):  from 
El Salvador (SLV/26); 
(ii) relating to imports under tariff and other quota commitments (Table MA:2):  from 
Canada (CAN/56 and Corr.1 and CAN/ 58) and Chinese Taipei (TPKM/35 and 
Corr.1); 
(iii) in the context of the special safeguard  (Tables MA:3 to MA:5):  from Japan 
(JPN/115) and Chinese Taipei (TPKM/30 and TPKM/31);  
(iv) in the context of domestic support commitments (Table DS:1):  from Canada 
(CAN/60), China (CHN/8), European Comm unities (EEC/49 and Corr.1 and EEC/51 
and Corr.1), Switzerland (CHE/34/Rev.1)  and Chinese Taipei (TPKM/32); and 
(v) in the context of export subsidy commitmen ts (Tables ES:1 to ES:3):  from Canada 
(CAN/55).  G/AG/R/46 
 Page 5 
 
 
  23. Specific points raised with respect to the notif ications listed above and the responses thereto 
are summarized in Annex 5 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  
24. The Committee took note of the following notificatio ns, which had been circulated in advance 
of the date on which the notice convening the presen t 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) on the administration of tariff and other quota commitments (Table MA:1):  from 
Chinese Taipei (TPKM/34); 
(ii) relating to imports under tariff and other quota commitments (Table MA:2):  from 
Colombia (COL/31), El Salvador (SLV/25), New Zealand (NZL/43) and the 
Philippines (PHL/34); 
(iii) in the context of the special safeguard (Tables MA:3 to MA:5):  from Canada 
(CAN/59), Colombia (COL/32), Malaysia (MYS/17), Mexico (MEX/12), New Zealand (NZL/44), Norway (NOR/43), Poland (POL/65), and Chinese Taipei 
(TPKM/36); 
(iv) in the context of domestic support commitm ents (Table DS:1):  from Argentina 
(ARG/24), Australia (AUS/61), Bolivia (BOL/10), Hong Kong, China (HKG/16/Rev.1 and HKG/18), Jordan (JOR/7 ), Latvia (LVA/12), Macao, China 
(MAC/19), Mexico (MEX/7/Rev.1 and MEX/13), and South Africa (ZAF/54/Corr.1); 
(v) in the context of new or modified dome stic support measures exempt from reduction 
(Table DS:2):  from Australia (AUS/62 and AUS/63), Canada (CAN/61), Israel 
(ISR/40), and Switzerland (CHE/35); and 
(vi) in the context of export subsidy commitmen ts (Tables ES:1 to ES:3):  from Bolivia 
(BOL/9), Canada (CAN/62), Dominican Republic (DOM/12), Macao, China (MAC/18), Malaysia (MYS/18 a nd MYS/19), New Zealand (NZL/42), 
the Philippines (PHL/17/Corr.1, PHL/35 and PHL/36), South Africa (ZAF/57), 
Switzerland (CHE/33/Rev.1) and Chinese Taipei (TPKM/33). 
(c) Notifications circulated or made available af ter the notice convening the meeting was issued
 
25. 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) relating to imports under tariff and other quota commitments (Table MA:2):  from 
Latvia (LVA/13); 
(ii) on export subsidy commitments (Tables ES:1 to ES:3):  from Latvia (LVA/14). 
(d) Points concerning notifications raised at previous meetings  
26. The Chairman recalled that delegations have the possibility to inform the Committee of the 
outcome of discussions which are of general interest , but which may have been pursued bilaterally as 
a result of the review of notifications.  Th ere was no discussion under this agenda item. G/AG/R/46 
Page 6  
 
  (e) Counter-notifications under Article 18.7 of the Agreement
 
27. The Committee took note that no counter-notifi cations had been received under Article 18.7 
of the Agreement on Agriculture. 
(f) Deferred replies to questions raised under the Review Process  
28. There were no deferred replies to questions previously raised. 
(g) Overdue notifications  
29. The Chairman recalled that the airgram (W TO/AIR/2815 refers) for the present meeting 
contained a reminder regarding overdue notifica tions.  An updated room document showing the 
current status of compliance with notification obl igations was made available by the Secretariat. 
30. The Chairman drew Members' attention to the revised room document  dated 11 May 2006 
which showed that, for the implementation year 1995  alone, 39 notifications were still overdue.  The 
number reached 93 for the implementation year 1999, and 142 for the year 2001.  The Chairman urged Members to comply with the notification oblig ations and stated that notifications were very 
important tools to review the implementation of co mmitments in general and also in the context of 
negotiations.  The Chairman mentioned that sin ce the January 2006 meeting, 60 notifications had 
been received from Members of which 10 covered tariff quota commitments, 22 domestic support, 
and 18 export subsidies.  This represented a s light improvement in compliance compared to the 
situation presented during the January 2006 meeti ng of the Committee.  Ecuador informed the 
Committee that it had submitted all its overdue notifi cations up to the year 2005 to the WTO and also 
thanked the WTO Secretariat for the technical  assistance it had received in this exercise. 
31. Australia underlined the need for timely s ubmissions of domestic support notifications 
particularly in the context of ongoing agricultu re negotiations on domes tic support reduction.  
Australia noted that a couple of major users of domestic support had not supplied notifications since 
2001.  This had made it difficult to make decisions on the issue of domestic support for the next stage 
of the reform process.  Australia, urged, in part icularly the major users, to notify their domestic 
support for the recent years as soon as possible. 
II. OTHER MATTERS WITHIN THE PURVIEW OF THE COMMITTEE 
A. I
MPLEMENTATION -RELATED ISSUES (IN THE CONTEXT OF THE DOHA MINISTERIAL DECISION 
ON IMPLEMENTATION -RELATED ISSUES AND CONCERNS )   
 32. The Chairman recalled that the Doha Ministerial Decision on Implementation-Related Issues 
and Concerns
4 required the Committee to follow-up on three distinct issues namely: 
(a) Members must develop disciplines on export credits, export credit guarantees or 
insurance programmes as per Article 10.2 of the Agreement on Agriculture; 
(b) the Committee must also examine the possi ble means for improving the effectiveness 
of the implementation of the Marrakesh Ministerial Decision ("NFIDC Decision"); 
(c) the Doha Ministerial Conference endorsed the recommendation that the Committee 
keep under review the administration of tariff quotas and submission of Addenda to 
MA:1 notifications concerning tariff quota re gimes.  The Committee must ensure that 
                                                      
4 WT/MIN/(01)/17,  paragraph  2.  G/AG/R/46 
 Page 7 
 
 
  Members' tariff quota regimes are administered in a transparent, equitable and non-
discriminatory manner. The understanding w as that this Decision should not place 
undue new burdens on developing countries.   
33. The Chairman recalled that the last report by  the Committee on Agriculture to the General 
Council on the implementation-related issues (G/AG/16)  was issued three years ago in July 2003.  
The Chairman referred to his fax message of 27 Apri l to Members in which he had indicated that he 
would be inviting the Committee to consider a fo llow-up report to the General Council on the three 
implementation–related issues referr ed to it by the General Council.5  A draft of the proposed follow-
up report had been circulated to Members with the fax. 
34. The Chairman started by briefing the Members on the informal consulta tions he had convened 
on 7 February 2006 at the request of  a certain number of delegations.6  The Chairman explained that 
the purpose of those consultations was to exchange  views on how to proceed with the implementation 
of items (a) and (b) above, with the understanding th at the third implementation issue, i.e. item (c), 
would be dealt with at the May meeting. 
35. As regards the implementation of Artic le 10.2 of the Agreement on Agriculture , the Chairman 
reported that, in his view, most participants c oncurred that this issue was now essentially being 
addressed in the agriculture negotiations. Although it was maintained on the Committee's agenda, the 
general understanding was that the resolution of the export credits issue in the Regular Committee had 
been switched to "sleeping mode" pending the outc ome of the Doha negotiations under the export 
competition pillar. 
36. As far as the implementation of the NFIDC Decision  was concerned, the Chairman had 
invited the participants to consider whether the distinct monitoring mechanisms established by the 
Committee were appropriate in dealing with each of the sub-paragraphs of the Decision.  The 
Chairman's oral report to the Committee on Trad e and Development in Sp ecial Session (CTDSS) 
reflected in detail the outcome of the discussions.7  In that report, the Chairman had stated that the 
proposal by the African Group had been on the age nda of each of the regular meetings of the 
Committee since June 2003, that it had been consider ed in the context of the implementation of the 
Marrakesh Decision, and that dedicated consultati ons had been specifically organized in May 2005, 
and again in February 2006 with discussions mainly focussing on the proposed revolving fund mechanism as a possible means to address short-term financing difficulties.  In this respect, the 
Chairman had noted that several Members, in partic ular donor Members, continued to find the current 
proposal unviable because, in their view, it dealt w ith questions which were either currently under 
negotiation or outside the WTO's te rms of reference.  Overall the discussions had not advanced, and 
the proposal had not been revised.  In fact, the proponents had complained about the absence of any 
counter-proposal.  In his oral report to the CTDSS, the Chairman had indicated that the African Group 
was perhaps ready to address these ma tters in the Special Session, rather than in the Regular Session.  
However, during the February 2006 consultations, a number of Members had expressed concerns that 
by shifting such issues from the Committee's implementation track onto the negotiations track, the 
opportunity for an adequate resolution of these matte rs might be foregone.  Finally, the Chairman had 
concluded his oral report to the CTDSS by confirming that the Committee on Agriculture would be ready to examine any new proposal. 
                                                     
 
5 WT/L/384. 
6 G/AG/R/45, paragraph 33. 
7 In a letter dated 6 March 2006, the Chairman of the CTDSS had invited the Chairpersons of those 
bodies to whom Category II S&D proposals had been referred, to report on the status of work on these 
proposals.  In the case of the Committee on Agriculture, this concerned the proposal made by the African Group 
in the context of the NFIDC Decision (TN/CTD/W/3/Rev.2, paragraph 52). G/AG/R/46 
Page 8  
 
  37. The Chairman also pointed out that he would be  required to provide another oral report to the 
General Council on 15 May 2006, under  his own responsibility.  In this  regard, he intended to provide 
a report taking account of the discussions on the Category II proposal at the present meeting.
8 
38. With respect to the Table MA:1 addenda notifications , the Chairman invited Members to 
consider the relevance of keeping this matter as  a standing item on the Committee's agenda given the 
existence of a well-established and smooth-running re view process.  The Chairman suggested that the 
standing agenda item relating to the Table MA:1 a ddenda could be set aside, while the existing up-
front and ad hoc requirements to notify changes in tariff quota administration through Table MA:1 formats would be relied upon, in line with the notification procedures agreed by the Committee.
9 
39. Speaking on behalf of his delegation, Egypt stat ed that he shared the conclusion outlined in 
the draft report by the Committee on Agricult ure to the General Council as regards the 
implementation of the Marrakesh NFIDC decision.  Egypt considered that the Chairman's suggestion 
to keep this issue in stand-by mode in the Re gular Session actually reflected the current state of 
discussions.  For the past two years the proposal of  the African Group to address one of the aspects of 
the NFIDC Decision had been in stand-by mode de facto .  Egypt could therefore agree with the 
Chairman's suggestion as long as the item remained on the agenda and without prejudice to Members' 
right to raise the issue in any of the regular meeti ngs.  Egypt, however, lamented that in the Special 
Session, whenever the issue of LDCs and NFIDCs arose, the proponents were told that the issue 
should be solved within the framework of the Marra kesh Decision.  When th e issue was discussed in 
the Regular Session, arguments such as that it fell  outside the terms of reference of the WTO were 
given.  Egypt considered it pointless to revise the African Group's proposal when there were no 
concrete comments or counter-proposals from other Members.  Egypt also emphasized that it was 
interested in the full implementation of the Marrakesh NFIDC Decision. 
40. Kenya stressed the need to fully implement the Marrakesh NFIDC Decision.  Kenya did not 
share the idea of keeping the African Group proposal  in stand-by mode, and pr eferred maintaining the  
possibility of pursuing the issue in parallel tracks, in both bodies. 
41. Cuba pointed out that for over 10 years NFIDCs and LDCs had been seeking to fully 
implement the Marrakesh Decision.  Cuba preferred th at the issue be maintained on the agenda of the 
Regular Committee, but that appropriate coordination with the work carried out in the Special Session should be ensured to safeguard the interests of a la rge group of developing countries.  Cuba noted that 
on some issues like "small, vulnerable economies"  this two-track option had worked well. 
42. Argentina stated that, without prejudice to the provisions of Article 10.1 of the Agreement on 
Agriculture with respect to circumvention of ex port subsidy commitments, the establishment of 
additional and specific disciplines on export cr edits, export credit guarantees and insurance 
programmes was still an outstanding implemen tation issue resulting from the Agreement on 
Agriculture of the Uruguay Round.  Argentina theref ore requested that this item be retained on the 
agenda of this Committee. 
43. On the specific suggestion to keep the item in the Regular Committee in stand-by mode, 
Argentina felt that this had been the de facto situation.  Argentina also supported the statement of 
Egypt to the effect that the Ma rrakesh Agreement of 1994 must be implemented integrally.  Brazil 
associated itself with Argentina on this issue.  As  regards the Table MA:1 Addenda, Argentina did not 
share the Chairman's recommendation to place that implementation issue in stand-by mode.  Recalling 
                                                     
 
8 The Chairman's report was later ci rculated in document G/AG/22 of 16 May 2006 and is attached as 
Annex 4 . 
9 G/AG/2.  G/AG/R/46 
 Page 9 
 
 
  the concerns just expressed in connection with Article 18.610, where a change in tariff quota 
administration had not been notified, Argentina insisted that the item be kept on the agenda. 
44. Canada, while sharing the conclusions of the Ch airman as contained in the draft report to the 
General Council, clarified that one of the reasons why no Table MA:1 Addenda  notifications had been 
submitted since 2003 was that Members did not iden tify their Table MA:1 notifications containing 
changes in the tariff quota administration as addenda  notifications.  The fact that there had been 
regular Table MA:1 notifications by Members in li ght of the notification procedures adopted by the 
Committee should be adequately reflected and clar ified in the Committee's Report to the General 
Council. 
45. The Chairman clarified that placing the first two implementation-relate d issues on "stand-by" 
would indicate where, in the view of the Committee, these subjects should be primarily handled. This 
would also reduce Members' tendency to pass these tw o issues repeatedly between fora in an endless 
loop. 
46. In response to a request for clarification from China, the Chairman noted that the Addenda 
notifications were introduced at the request of the General Council in 2001, when it decided that 
developing countries should have more information on tariff quota management.  However, since July 
2003 no addenda had been submitted to the Committee.  The Chairman considered that it was time to 
re-examine whether this was indeed a useful ex ercise, especially since it was supposed to help 
developing countries in designing their export strategies. 
47. The United States noted that the draft report to the General Council seemed to be agreeable to 
the Members and that some drafting changes might make  it acceptable to all.  In specific terms, the 
United States suggested removing brackets around "a dopted" in paragraph 1, to say in paragraph 2 
and 7 that the matter had been, and continued to be , on the agenda of the Committee, and to remove 
the last two sentences in paragraph 16.  Cuba, howev er, pointed out that it needed time to examine the 
drafting suggestions just made;  Cuba felt that such suggestions should be presented in writing.  
Therefore it could not accept the draft report to the General Council in its present form. 
48. The Chairman concluded that in order to reflect the discussions of the Committee, a written 
procedure would be followed to finalize the report.  To  this effect, the Secretariat would transmit to all 
Members, in due course, a new version of the draf t report.  The report would then be finalized for 
submission to the General Council.11 
B. WTO  LIST OF NET FOOD-IMPORTING DEVELOPING COUNTRIES (G/AG/3  AND G/AG/5/R EV.8) 
 
49. The Chairman noted that no new application had been received since March 2005.  The 
former list (G/AG/5/Rev.8) remained therefore valid .   It currently comprises:  (a) the LDCs as 
recognized by the Economic and Social Council of the United Nations;  and (b) 26 NFIDCs. 
C. ELECTION OF THE CHAIRMAN  
50. In light of the agreement reached at the mee ting of the Committee on Trade in Goods in its 
meeting on 10 March 2006, the Committee elected Mr. Christian Häberli of Switzerland as the 
Chairman of the regular session of the Committee on Agriculture.  Mr. C. Häberli will hold office 
until the end of the first meeting of the Committee in 2007. 
                                                      
10 See paragraph 4 and Annex 1 . 
11 G/AG/16/Add.1, dated 13 June 2006. G/AG/R/46 
Page 10  
 
  D. 
DATE OF NEXT MEETING  
51. The next (47th) regular meeting of the Committe e on Agriculture is scheduled to be held on 
Thursday, 21 September 2006.   On this basis,  the convening airgram will be issued on Monday, 
11 September 2006, and the reminder airgram will be issued on Friday, 1 September 2006.  The 
Chairman recalled that the Committee would hold the Annual Transitional Review under paragraph 
18 of the Protocol of Accession of the People's Repub lic of China, in September.  Members were 
invited to submit any questions or comments in that  context by the end of July, with a copy to the 
Secretariat.  G/AG/R/46 
 Page 11 
 
 
  Annexes 
  
   Page
 
 
Annex 1 Argentina:  European Communities – Details of changes to  12 
  tariff quotas consolidated in Schedule CXL    Annex 2 Australia:  European Communities – Export regime for sugar 14 
 
 Annex 3 Brazil:  European Communities – EC sugar regime 16   
Annex 4 G/AG/22 - Status of Category II S&D Proposal - Progress Report  17 
  to the General Council (15 May 2006 Meeting)   Annex 5 Review of notifications by the Committee on Agriculture at the meeting  19 
  on 12 May 2006 
 
    
 
  G/AG/R/46 
Page 12  
 
  Annex 1 
  Argentina
 European Communities – Details of changes to tariff quotas 
consolidated in Schedule CXL  
 
 
 Given Argentina's importance as a supplier of  products whose tariff-quota regimes were 
amended by Regulation 1558/05, we request the EU  to provide answers to the following questions: 
 (1) Can the EU provide assurances that the change to the regulations will not alter 
compliance with the in-quota import volumes? 
 
Reply by the EC
 
 
 The EC confirms its obligation to open the possibility to import 2.5 million tonnes of maize 
into Spain (2 million tonne) and into Portugal ( 500,000 tonnes) under quotas and under the conditions 
laid down in the EC Schedule CXL.  The change to  the regulation to which Argentina refers does not 
affect this obligation.   
(2) Should this be the case, how will su ch compliance be assured in practice? 
 
Reply by the EC
 
  Imports of maize to Spain and Portugal are monitored on a regular basis, using member State's information about import certificates, customs da ta and Eurostat trade statistics.  In the case of 
Spain, imports of substitutes are monitored in the same way.  In case these imports are not sufficient 
to fulfil the quota, the EC opens a tender for the redu ction of the import duty.  Such tenders have been 
opened every year since the application of this scheme.   
(3) Can the EU guarantee that the modifica tion of the quotas in question, bound in 
EC Schedule CXL of 1994 to the WTO with th e description "To be imported into Spain.  
In addition the quota quantity is reduced by quantities of imports into Spain from third 
countries of maize gluten feed, brewers' grains and citrus pulp.  The rate shall be fixed by the competent Community authorities so as  to ensure that the quota will be filled", 
does not constitute a violation of the EU's commitments and/or impair the trade interests of other Members? 
 
Reply by the EC
 
  The EC confirm that the quote made by Argentin a in its question is indeed part of the EC 
Schedule CXL.  The EC do not consider this descr iption to be a violation of its WTO commitments. 
On the contrary, it intends to allow the full use of  this market opening.  Until now the 2.5 million 
tonne quota has always been used to the full extent.  
 
(4) Similarly, can the EU provide assurance th at the change in regulations guarantees that 
it will apply the reduction of the set rate  of import duty in order to fulfil the 
commitments contained in its Schedule? 
 
Reply by the EC
 
  The objective of the quota continues to be the import of 2 million tonnes of maize and substitute products into Spain and 500,000 tonnes into Portugal.  The Community will continue to  G/AG/R/46 
 Page 13 
 
 
  allow for reductions of the import duty as long and as much as these will be necessary to reach the 
quantities in the commitment.   
(5) How will fulfilment of the commitments on volumes and reduction of the rate of import 
duty be guaranteed? 
 
Reply by the EC
 
  The Schedule specifies : " The rate shall be fixed by the competent Community authorities so 
as to ensure that the quota will be filled".  Concretely, the EC monitors imports, then assesses the 
additional quantities needed, and opens a tender for the reduction of the import duty.  The actual duty 
paid thereafter is the one applicable on the day of  import minus the reduction granted in the tender.  
 
(6) If these modifications are consistent with the commitments made in its schedule of tariff 
concessions, then can the EU explain why it did not notify the Committee on Agriculture 
of the modification of this tariff quota?  
 
Reply by the EC
 
  The EC intends to provide a comprehensive upda te of the addenda to the MA:1 notification. 
This update will also include changes to other TR Qs and give informati on on the situation after 
finalisation of XXIV:6 negotiations.  G/AG/R/46 
Page 14  
 
  Annex 2 
 
 
Australia
 European Communities – Export regime for sugar  
 
 Could the European Communities confirm the following? 
 
(i) For  the period commencing 1 October 2005:   
(i) that the total quantity of sugar expor ted or for which export licences have 
been granted, is in excess of 1.273 million tonnes; 
(ii) whether the Sugar Management Committee and implementing Commission 
regulations have approved the export of quota sugar quantities (including 
ACP/India equivalent sugar) in excess of 1.273 million tonnes for export prior to 1 October  2006; 
(iii) whether export licences for quota sugar (including ACP/India equivalent 
sugar) have been granted in excess of that quantity since 1 October 2005 for 
export prior to 1 October 2006; 
(iv) whether any action has been taken to limit or suspend the grant of export 
licences for quantities of quota sugar (including ACP/India equivalent sugar) for export prior to 1 October 2006, in accordance with the provisions of Article 9 a of Commission Regulation 1464/1995; 
(v) whether export licences for C sugar have been approved for C sugar in excess 
of 1.273 million tonnes for expor t prior to 1 October 2006; 
(vi) whether the provisions of Article 9 a(1) of Commission Regulation 1464/1995 
are applied to the grant of export licences of C sugar or whether exports of C sugar are taken into account in applying  those provisions to export licensing 
of quota sugar (including AC P/India equivalent sugar). 
 
(ii) For the period commencing 1 July 2005: 
(i) whether the Sugar Management Committee and implementing Commission 
regulations have approved the gran t of export refunds on quota sugar 
(including ACP/India equivalent suga r) in excess of €499.1 million for export 
prior to 1 July 2006; 
(ii) whether export licences for quota sugar (including ACP/India equivalent 
sugar) have been granted for quota sugar in receipt of export refunds in excess 
of €499.1 million for export prior to 1 July 2006; 
(iii) whether any action has been taken to limit or suspend the grant of export 
refunds for quota sugar (including ACP/ India equivalents sugar) for export 
prior to 1 July 2006, in accordance with the provisions of Article 9a of 
Commission Regulation 1464/1995. 
 
(iii) In respect of sugar export quantities notified to the Committee on Agriculture: 
The basis of notifying the annual quantities for the designated marketing year 
1 October-30 September – for example on the basis of grant of export licences or 
actual shipments - in respect of: 
(i) sugar exports notified as in r eceipt of export subsidies; 
(ii) total sugar exports. 
  G/AG/R/46 
 Page 15 
 
 
  (iv) In respect of budgetary outlays on sugar exports notified to the Committee on 
Agriculture: 
The basis for notifying the annual budgetary  outlays on sugar export subsidies for the 
designated marketing year 1 July-30 June, for example on the basis of export licences for sugar in receipt of export refunds, the date of shipment or the date of actual 
payment of an export refund 
(v) In respect of notifications to the Comm ittee on Agriculture for export quantities and 
budgetary outlays, whether the same basis for cal culation is applied to notifications for other 
scheduled products as is applied for sugar. G/AG/R/46 
Page 16  
 
  Annex 3 
  
Brazil
 European Communities – EC sugar regime 
 
1. On 28 February 2006, the EC published Counc il Regulation (EC) No 318/2006 establishing 
new rules for the common organization of the markets in the sugar sector ("EC sugar regime") to enter into force on 1 July 2006.  Article 40 ( Implementing rules ) of the cited Regulation 
refers to the adoption of rules for the implemen tation of the new sugar regime.  Could the EC 
indicate which, if any, of such implementing rules have already been adopted? 
2. Article 44 of Regulation (E C) No 318/2006 refers to transitional measures  to be adopted to 
facilitate transition from the old to the new suga r regime, and to ensure compliance by the EC 
with its international obligations concerning "C " sugar.  Could the EC refer to the measures 
adopted or to be adopted under that provision? 
3. Article 36.2 of Regulation (EC) No 318/2006 sets forth the possibility of EC member States 
granting temporary state aid  for sugar beet growers.  Has the European Commission decided 
on the amount of state aid  to be made available under such provision?  If not, when would 
such a decision be taken? 
4. Chapter 3 of Regulation (EC) No 318/2006 assemb les provisions related to sugar exports 
from the EC.  What type of mechanism(s) th e EC has envisaged for making data on exported 
quantities, export refund amounts and export licen ces issued available to WTO Members in a 
comprehensive and timely fashion? 
5. Could the EC share any estimate or forecast for production of quota and out-of-quota sugar 
for the marketing year 2006-2007 (1 July 2006 – 30 September 2007)? 
6. On 28 February 2006, the EC published Counc il Regulation (EC) No 319/2006 establishing a 
"temporary scheme for the restructuring of th e sugar industry in the Community".  In 
Article 3.1 thereof, undertakings producing the pr oducts covered by the legislation at issue are 
entitled, under certain conditions, to receive the so-called restructuring aid .  Could the EC 
indicate in respect of marketing year 2006-2007: 
(a) How many undertakings, if any, have renounced their respective quotas and fully 
dismantled the production facilities of the factor ies concerned (Article  3.1(a))?  What 
is the amount of quota renounced under such provision? 
(b) How many undertakings, if any, have renounced their respective quotas and partially 
dismantled the production facilities of the factor ies concerned (Article 3.1(b))?  What 
is the amount of quota renounced under such provision? 
(c) How many undertakings, if any, have renounced a part of their respective quotas and 
not used the production facilities of the fact ories concerned for refining raw sugar, 
pursuant to Article 3.1(c)?  What is the amount of quota renounced under such 
provision? 
(d) What is the amount, if any, of restructuring aid  to be granted under (a), (b) and (c)?  
7. Article 12 of Regulation (EC) No 319/2006 refers  to the adoption of detailed rules for its 
implementation.  Could the EC indicate whethe r, and which of, any such detailed rule has 
been already adopted?  G/AG/R/46 
 Page 17 
 
 
  Annex 4 
  
 
WORLD TRADE  
ORGANIZATION  G/AG/22 
16 May 2006 
 (06-2383) 
Committee on Agriculture  
  
 
STATUS OF CATEGORY II S&D PROPOSAL
12  
 
Progress Report to the General Council (15 May 2006 Meeting)  
 
 
The progress report is submitted under the responsibility of the Chairman, 
Mr. Christian Häberli, in the framework of the WTO's Work Programme on Special and Differential 
Treatment. 
_______________ 
 
Background 
 
1. My report relates to the Committee's considerati on of one Category II proposal tabled by the 
African Group, which  has been on the agenda of each of the regular meetings of the Committee since 
June 2003.  It has been considered in the contex t of the implementation of the Marrakesh Decision on 
Measures Concerning the Possible Negative Effect s of the Reform Programme on Least-Developed 
and Net Food-Importing Developing Countries (thereaf ter the "NFIDC Decision").  In addition, 
informal consultations specifically dedicated to that proposal were held in May 2005 and more 
recently, in February 2006. 
2. Several Members, particularly donor Members, c onsider that the proposal is unviable in the 
sense that it deals with questions which are either  currently under negotiation or outside the WTO's 
terms of reference, such as:  the scheduling by de veloped country Members of their contributions to 
the proposed revolving fund;  the review and est ablishment of effective disciplines on food aid 
commitments under the Food Aid Convention 1999;  disciplines on the degree of concessionality of 
food aid;  and appropriate S&D provisions in fa vour of LDCs and NFIDCs in any agreement on 
agricultural export credits, in accordance w ith paragraph 4 of the NFIDC Decision. 
3. In light of this, the discussions in the Co mmittee have mainly focussed on the proposed 
revolving fund mechanism as a possi ble means to address the short-te rm financing difficulties that 
might be experienced by LDCs and NFIDCs. 
4. Recently, it became clear that the African Group di d not intend to revise the original proposal 
as previously announced.  Rather, some disappointment was expressed by the proponents at the 
absence of any counter-proposal, which might have  assisted in the fine-tuning of the original 
                                                      
12 See paragraph 52 of TN/CTD/W/3/Rev.2. G/AG/R/46 
Page 18  
 
  submission.  It also appeared that some of the pr oponents fully recognized that certain aspects of the 
Marrakesh Decision would be more effectively d ealt with under the DDA negotiations track.  There 
are concerns, however, that by shifting such i ssues from the Committee's implementation track onto 
the negotiations track, the opportunity for an adequa te resolution of these matters might be foregone. 
Status of the proposal  
5. I share some of the proponents' opinion that the current "ping-pong" situation between two 
WTO bodies is most unfortunate, counter-productive, and untenable.  This is why I have tried to break 
the current deadlock by holding informal consu ltations in February 2006, unfortunately, without 
tangible results.  During the 12 May 2006 meeting of the Committee, I have also suggested that a concrete solution could perhaps bette r be reached if the proponents' efforts were concentrated in the 
Special Session of the Committee on Agriculture al one.  This would send a clear signal to the 
membership as to where the main thrust of that pa rticular Category II proposal should be first and 
foremost, without prejudging any outcome, and w ithout imposing any obligation on any Member. 
6. From a practical point-of-view, that compromise would have also allowed the regular 
Committee on Agriculture to switch the Category II propo sal to a "stand-by" mode in its agenda, until 
the end of the Doha negotiations.  The regular Committee would have, of course, continued to 
monitor the follow-up of the Marrakech Decision on NFIDCs on a regular basis, and Members' rights 
to raise specific matters or to submit new proposal s in that context would have been safeguarded. 
7. A few delegations did not feel immediately comf ortable with this suggestion.  While being 
fully aware that nothing precluded Members from tabling negotiating proposals in any forum, these delegations indicated that they preferred to pursu e the debate in the regular session of the Committee 
on Agriculture as well, because the Marrakech Deci sion was primarily an implementation issue.  In 
our discussions, some participants recognized, how ever, that the suggested "stand-by" option was 
merely a reflection of the existing de facto  situation with respect to a pr oposal which has been before 
the Committee on Agriculture for the past three year s.  Nevertheless, the Committee could not reach a 
decision on the course of action on this issue. 
8. In the absence of consensus over the proposal as it stands, and given the absence of additional 
inputs into the discussions, it is not possible to proceed any further with the current Category II proposal – not even with respect to the question as to  the most appropriate forum in which some of its 
key aspects could be better dealt with.   
9. The Committee on Agriculture, however, stands r eady to consider any proposal that might be 
presented to it in future.  G/AG/R/46 
 Page 19 
 
 
  Annex 5 
 
Review of notifications by the Committee on  Agriculture at the meeting on 12 May 2006 
 
 
(i) Table MA:1 Notifications 
 
 El Salvador    G/AG/N/SLV/26  
 
1. Question by Australia - Has El Salvador recently reconsidered implementing another 
method of allocating tariff quotas in light of  ongoing concerns expressed about the possible 
WTO inconsistency of public auctioning?  
 El Salvador undertook to provide a response. 
 
 
(ii) Table MA:2 Notifications 
 
 Canada    G/AG/N/CAN/56 AND Corr.1 and G/AG/N/CAN/58  
 
2. Question by Australia - We note low fill rat es for margarine, wheat and barley in the 
years reported.  What are the reasons for su ch low fill rates, and has Canada considered 
whether it is necessary to retain a tariff quota on these items?  
Margarine :  Canada has responded to similar questions  at the June 1999 meeting of the Committee.13 
Canada administers the TRQ on a first-come, first-serv ed basis, without restriction on the applicants.  
The TRQ for margarine was not filled due to the overall competitiveness of the domestic industry and 
very little demand for import permits.  The limit per importer was increased to 500 tonnes in 1998 
from 200 tonnes in 1996 and from 100 tonnes in 1995.  This  limit is not believed to restrict importers' 
ability to import.  Currently, there are no plan s to review the tariff quota on margarine.  
 Wheat and Barley
:  Canada has responded to similar qu estions at the November 1997, March 1998 
and March 1999 meetings of the Committee.14  Canada did not provide any allocations to importers 
and the TRQ is administered on a first-come, first- served basis by Canada Border Services Agency.  
There are no restrictive conditions on the issuance of import permits.  The TRQ for wheat has 
generally had a low fill rate with the exception of  1996/97 where the TRQ was 74 per cent filled.  
Imports increased temporarily in the 1996/97 marketing year because of supply conditions.  Competitive domestic prices and market surpluses generally account for the low rate of fill, as Canadian wheat is competitive in the world market.  The barley TRQ has consistently registered low 
utilization rates because of the relatively modest import demand due to prevailing market conditions 
(competitive domestic prices and market surpluses).  Cu rrently, there are no plans to review the tariff 
quotas on wheat, barley, and their products.  
3. Question by United States - Could Canada please explain the conditions and 
requirements for the TRQ for fluid milk (0404.10.10; 0401.20.10)?  Please explain what is 
involved with General Import Permit #1?  For exam ple, how does one acqui re such a permit?  If 
the only way to have access to the TRQ is for Canadian residents to "import" fluid milk for 
personal use and data are not co llected, how does that arrangement provide for any real market 
access?  Does Canada have an ex planation for the low fill rate  for margarine (1517.10.10; 
1512.90.21)?  Can Canada please explain if there a re any provincial standards in place affecting 
                                                     
 
13 G/AG/R/19 refers. 
14 G/AG/R/13, G/AG/R14 and G/AG/R/18 refer- G/AG/R/46 
Page 20  
 
  margarine and whether these may hinder imports?  Can Canada please explain the low fill rate 
for wheat (1001.10.10; 1001.90.10)?  What is the process for importing wheat?  Are licences required?  Are standards enforced on the types or qualities of wheat allowed?  Are there any 
different requirements for durum and non-durum wheat?  Can Canada please explain the low 
fill rate for barley (1003.00.11; 1003.00.91)?  What is the process for importing barley?  Are 
licences required?  Are standards enforced on the ty pes or qualities of malting barley allowed?  
Are there any different requirements for feed and malting barley?  
Fluid Milk
:  By virtue of General Import Permit #1, wh ich regulates the importa tion of dairy products 
for personal use, any resident of Canada may import fluid milk.  There are no formal applications for 
any resident of Canada to import fluid milk in Canada.  Consumers importing fluid milk must only 
invoke General Import Permit # 1 when completing th e normal customs entry document.  The fill rate 
for this is not available since there is no form al counting of cross border imports.  Canada's 
administration of this TRQ is c onsistent with its commitments. 
Margarine :  Canada has responded to similar questions  at the June 1999 meeting of the Committee.15  
Canada administers the TRQ on a first-come, first-serv ed basis, without restriction on the applicants.  
The TRQ for margarine was not filled due to the overall competitiveness of the domestic industry and 
limited demand for import permits.  The limit per importer was increased to 500 tonnes in 1998 from 
200 tonnes in 1996 and from 100 tonnes in 1995.  This limit is not believed to restrict importers' ability to import.  Some provincial product standard s exist for margarine, most notably Québec's 
Regulation Respecting Dairy Products Substitutes which requires margarine to be of a certain colour.  
However these standards are not believed to hinder imports as permits are unrestricted and all requests 
for permits have been met. 
 Wheat
:  Canada has responded to similar ques tions at the November 1997, March 1998 and 
March 1999 meetings of the Committee.16  The TRQ for wheat has generally had a low fill rate with 
the exception of 1996/97 where the TRQ was 74 per cent filled.  Imports increased temporarily in the 
marketing year 1996/97 because of supply conditi ons.  Competitive domestic prices and market 
surpluses generally account for the low rate of fill,  as Canadian wheat is competitive in the world 
market.  Canadian producers produce for both the dom estic and international markets at world market 
prices.  General import permits are required for the import of wheat into Canada.  There are no 
restrictive conditions on the issuance of import permits but they are issued only to Canadian residents.  
Canada does not provide any allocations to importe rs and the TRQ is administered on a first-come, 
first-served basis by Canada Border Services Agency.  Requirements for the import of durum and 
non-durum wheat are the same.  Canada enforces only phytosanitary measures for the import of 
wheat.  In the time period in question (1999-2002) , imports of wheat into grain elevators had to 
receive regulatory authorization by the Canadian Grain Commission.  In practice this was freely granted.  However, this requirement was eliminated on 1 August 2005. 
 
Barley
:  Canada has responded to similar questi ons at the November 1997, March 1998 and 
March 1999 meetings of the Committee.17  The TRQ has had a low fill rate because of the relatively 
modest import demand due to prevailing market conditions (competitive domes tic prices and market 
surpluses).  General import permits are required for the import of barley into Canada.  There are no restrictive conditions on the issuance of import permits but they are issued only to Canadian residents.  
Canada does not provide any allocations to importe rs and the TRQ is administered on a first-come, 
first-served basis by Canada Border Services Agency. Requirements for the import of feed and malting barley are the same.  Canada enforces onl y phytosanitary measures for the import of malting 
barley.  In the time period in question (1999-2002), imports of barley into grain elevators had to 
                                                     
 
15 G/AG/R/19 refers. 
16 G/AG/R/13, G/AG/R14 and G/AG/R/18 refer. 
17 Ibid.  G/AG/R/46 
 Page 21 
 
 
  receive regulatory authorization by the Canadian Grain Commission.  In practice, this was freely 
granted.  However, this requirement was eliminated on 1 August 2005. 
 
 Follow-up comments:  On the TQ for fluid milk, the United States expressed concern that the 
TQ was only for personal use and the imports statistics were also not collected.  Therefore, it was not 
clear as to how the tariff quota granted any real market access.  The EC also expressed general 
concerns on the market access in the dairy sector in Canada.   
Chinese Taipei    G/AG/N/TPKM/35 and Corr.1
 
 4. Question by Australia – We note that on a number of products (bananas, dairy, dried 
shiitake, dried day lily, betel nuts, pineapples,  mangoes, shaddocks, persimmons, and dried 
longans/longan pulp), Chinese Taipei has recorded a nil fill rate or a significant underfill.  Can 
Chinese Taipei please explain why quotas are no t filled or underfilled for these products.  Has 
Chinese Taipei considered whether it is necessary  to retain a tariff quota on these items if lack 
of market demand is the reason given for the nil/low fill rates?  
 We are recording a nil fill rate on bananas, pineapples, mangoes, shaddocks, betel nuts, dried 
day lily, dried shiitake and longan because related products from the main exporting countries did not 
meet our SPS requirements.  The underfill recorded on dairy products and pe rsimmon quotas is due to 
domestic market factors.  For example, our consumers prefer fresh milk to sterilized milk.  Compared to imported fresh milk, which has to be transpor ted a considerable distance and thus loses its 
freshness, domestic fresh milk is more competitive. 
  Follow-up comments:   The Philippines expressed interest in the matter and requested Chinese 
Taipei to provide it with a copy of th e response to the Australian questions.  
 
 
(iii) Tables MA:3 to MA:5 Notifications  
 Japan    G/AG/N/JPN/115  (Table MA:3)
 
 
5. Question by Australia - Australia notes that the trigger volume is zero for yoghurt.  Can 
Japan explain its reasons for invoking this safeguard?  
 The trigger level was duly calculated in accordan ce with the Article 5.4 of the Agreement on 
Agriculture.  The measure in question is fully consistent with the Agreement on Agriculture. 
 
 Follow-up comments:   Australia emphasized that these were obvious deficiencies in the 
Agreement, however, the calculations did not in their view represent the spirit of the Agreement 
which was to tackle import surges.  New Zealan d shared Australia's concerns on the issue of 
invocation of SSG mechanism with zero trigger volume.  
  Chinese Taipei    G/AG/N/TPKM/30 and TPKM/31  (Table MA:3)
 
 
6. Question by Australia - Australia notes that Chinese Taipei has calculated a trigger level 
for persimmon and garlic bulb of 307 tonnes and 1,648 tonnes respectively in late-2005.  The 
trigger level was calculated on imports from 2001 to 2003.  Article 5.4 of the Agreement on Agriculture requires trigger levels for the special  safeguard to be calculated using "average 
quantity of imports during the three preceding years for which data are available".  Could 
Chinese Taipei please explain why data for 2004 was unavailable to use in its late-2005 trigger 
level calculation?  G/AG/R/46 
Page 22  
 
   As you rightly say, Article 5.4 of the Agreement on Agriculture states that the SSG trigger 
level should be calculated using th e "average quantity of imports during the three preceding years for 
which data are available".  Since the trigger le vel for 2005 was calculated and published before the 
end of 2004, and data for actual im ports in 2004 was not available at that time, the trigger level was 
calculated using the average quantity of imports during the three years from 2001 to 2003.  The 
reason for publishing the trigger level for each year befo re the end of the previous year is so that a 
more transparent and predictable trade regime can be provided. 
 
 (iv) Table DS:1 Notifications 
  Canada    G/AG/N/CAN/60
 
 
7. Question by Australia - Supporting Table DS:5  - Can Canada please provide its 
justification for excluding product sales for butter and skim milk powder (SMP) for further 
processing and total exports and SM P for animal feed in the calculation of eligible production 
for market price support?  The ex clusion of some production in the calculation of price support 
is a systemic one.  Price support confers bene fits to all producers of the commodity, regardless 
of whether the product is purchased in the domestic  market or the end use.  If the price support 
system is based on purchasing arrangements , then the report of the Appellate Body 
determination in Korea – Measures Affecting the Importation of Fresh, Chilled and Frozen Beef  
(WT/DS161/AB/R) is relevant.  In this report,  the Appellate Body determined eligible 
production as referring to "production that was 'fit or entitled' to be purchased rather than 
production that was actually purchased".  
 Canada answered a similar question in June 2000.18  Sales of butter and skim milk powder for 
further processing, total exports and skim milk pow der for animal feed are not counted as eligible 
production in the calculation of market price support since sales of these products for these uses are 
not eligible to receive the support price.  All production of butter and skim milk powder that is 
eligible to receive the support price (not that wh ich is purchased) is counted as eligible production in 
the calculation of market price support.  This is co nsistent with both Annex 3, paragraph 8, of the 
Agreement concerning the calculation of market pr ice support and the jurisprudence on this issue. 
 
 Follow-up comments:  On the issue of calculation of elig ible production, Australia underlined 
that price support did confer benefit on producers of  the commodities regardless of their end use. 
 
8. Question by New Zealand - New Zealand no tes the large increase in Canada's AMS 
spending from the year 2000 ($848 .2 million) to the year 2001 ( $2,824.1 million).  The largest 
increases in spending appear to come under no n-product-specific AMS.  Could Canada please 
explain this increase in spending and provide further detail on the following programmes in 
particular: the "Canada-Manitoba Adjustme nt Program II", the "Canada-Saskatchewan 
Adjustment Program II" and the "Provincial Programs".  
 The increase in non-product-specific AMS is due to increased expenditures under crop 
insurance due to the drought in Western Cana da as well as increased expenditures under provincial 
programs.  The increase is also attributed to th e expenditures under the Canada-Manitoba Adjustment 
Program II and the Canada-Saskatchewan Adjustment Program II.   Expenditures under provincial programs consis t primarily of fuel tax exemptions and 
payments under the Farm Income Assistance Program in Alberta.  The incr ease in expenditure under 
provincial programs is accounted for by increased  expenditures under the Farm Income Assistance 
                                                     
 
18 G/AG/R/23, page 27, refers.  G/AG/R/46 
 Page 23 
 
 
  Program in 2001.  The increase was due to part of the payments for the 2000 program being paid in 
2001 and a slightly higher payment rate for uncu ltivated acres in 2001.  The Farm Income Assistance 
Program provided a payment per acre for all cultivat ed acres and uncultivated acres (e.g., tame forage, 
native hay, fenced native forage).  In 2002 it also included perennial horticultu ral crops, covered crops 
(greenhouses, mushroom production) and bee hives. 
 
 Canada-Manitoba Adjustment Program II and the Canada-Saskatchewan Adjustment Program 
II are a one-year extension of the Canada-Man itoba Adjustment Program and the Canada-
Saskatchewan Adjustment Program that were notif ied as green in G/AG/N/CAN/36.  Payments were 
made in the same manner as the original programs as a percentage of the average historic qualifying 
sales.  However, in the Canada-Manitoba Adju stment Program II and the Canada-Saskatchewan 
Adjustment Program II, the base period for eligib ility, and the averaging period of historical 
qualifying sales were different from those in the previous program.  As a consequence, these 
programs no longer meet the criteria for the green box,  and have been notified as amber.  We would 
encourage others to do the same when successor pr ograms have different or updated base periods.  
 
 China    G/AG/N/CHN/8  
 
9. Question by Australia - Can China please provi de more information on the operation of 
the Protective Price System for wheat, rice and corn?  Can China please confirm that 
expenditure on infrastructure services are for capi tal works only?  We note an upward trend in 
domestic support for many of the measures notified .  Can China please give an indication of the 
likely trend in domestic support expenditure beyond this reporting period?  
 For more information on the operation of the Protective Price System for wheat, rice and 
corn, Australia is advised to refer to the notes of  the base period notification as well as the notes to the 
notification G/AG/N/CHN/8. 
 
 China adopted domestic support measures in acco rdance with the provisions of Agreeement 
on Agriculture, and the relevant infrastructure expe nditure was only for basic infrastructure works. 
  The Australia delegation noted an upward tr end in China's domestic supports.  However, 
Australia could simultaneously also note that fo r the reporting period of 1999-2001 on our domestic 
support measure, the only category of supports that went up somewhat from the level of the base 
period was Green Box measures, while the level of de minimis measure was even lower than that of 
the base period.  Except for cotton, our product-speci fic supports for wheat, rice, corn, etc. were all 
negative.  The amount of non-product-specific support for the reporting period was less than 1 per 
cent of its agriculture production value, far lower than  the level of the commitments.  With regard to 
the likely trend in China's domestic support expenditu re, our judgment is that the Chinese government 
is very likely to continue providing necessary support fo r the development of its agriculture in light of 
the relevant WTO rules and our commitments.  
10. Question by Canada - Canada appreciates the time and effort that China has put into 
preparing this notification which provides Members with information on China's agriculture in 
the years before its accession to the WTO.  To further the interests of transparency and to 
increase our understanding of the information pr ovided in G/AG/N/CHN/8 Canada would like 
additional information on the following.  Coul d China please provide more information on the 
"Agricultural Comprehensive Development Progr ammes" noted in Supporting Table DS:1?  
Could China please describe the methodology used to  calculate the value of production noted in 
Supporting Table DS:4?  G/AG/R/46 
Page 24  
 
   Against the backdrop of scarce land and limited water resources relative to the great size of 
population in China, the Chinese government established its Agricultural Comprehensive 
Development Programmes (ACDPs) in 1988 by draw ing on the experience of World Bank project 
management.  Such programmes focused on transf ormation and improvement of low-yield/medium-
yield farm land, through strengthened efforts in agro-production infrastructure development, for the 
purpose of improving the yield of existing farm land and raising the efficiency of water utilization.  
The programmes were designed to generate stea dy improvement in agricultural comprehensive 
production capacity and to help ensure food security.  The fundamental goal of ACDPs is therefore to 
strengthen agro-infrastructure development and to improve the comprehensive agro-production 
capacity.  While focusing on improvement of low- yield land, ACDPs also facilitated the ecological 
infrastructure development where appropriate.  Thes e programmes were consiste nt with the relevant 
provisions of WTO Agreement on Agriculture on "infrastructure services".   To maintain the coherence of data and compar ability of results, the notification from China in 
G/AG/N/CHN/8 used the sa me methodology to calculate the value of production as that used for the 
notification of the base period. 
 
 Follow-up comments:  Canada thanked China for the responses and clarified that it did not 
question the methodology itself adopted by China to  calculate the value of production, but simply 
sought more details. 
 
 European Communities    G/AG/N/EEC/49 and Corr.1 and EEC/51 and Corr.1
 
 
11. Question by United States - As the European Communities and other Members are well 
aware, over the past few years the United States has asked several questions regarding the EC wine restructuring and conversion program.  We continue to be concerned about the lack of 
clarity of how this program meets the Green Box classification of being minimally trade-
distorting.  As we have stated before, the EC has a "positive list" of grape varieties from which 
a producer must choose in order to receive a p ayment under this program.  We believe such a 
requirement does not comply with  Annex 2, paragraph 11(e): "shall not mandate or in any way 
designate the agricultural products to be pro duced by the recipients."  We understand from 
previous EC responses that these programs are in tended to facilitate market-oriented structure 
for certain wine varietals.  However, that ex planation does not address the inconsistency of 
these payments with Annex 2 criteria.  We also note that the EC is currently undertaking efforts 
to reform its wine marketing programs and regul ations.  We understand a new proposal for the 
wine sector could be adopted as early as th e summer of 2006.  The United States would be 
pleased to know how our long-standi ng concern with this particular aspect of the program may 
be under consideration for changes in the curr ent reform program.  Can the EC describe how 
the longstanding US concerns will be incorporated into the new program?  
 We note the longstanding concern of the United States, but as before the EC is of the opinion 
that the measure is in conformity with the Green B ox for reasons indicated in previous meetings of the 
Committee.  Work on a possible review of the Co mmon Market Organisation for wine has only just 
been initiated.  Any communication on the content of  the reform at this stage would be premature. 
 
 Follow-up comments:   The United States hoped that disci plines in Annex 2 of the Agreement 
would be taken into account during the review of th e wine CMO.  Canada also expressed its interest 
in the matter.  G/AG/R/46 
 Page 25 
 
 
   
 Switzerland    G/AG/N/CHE/34/Rev.1  
 
12. Question by New Zealand – We would like to thank Switzerland for providing this 
revised notification and moving the programme "payments for arable farming" out of 
Supporting Table DS:1.  We have read with inte rest Switzerland's responses to our questions on 
notification G/AG/N/CHE/34 in relation to pr ogrammes listed under "(k) Regional Assistance 
Programmes" and would like to ask some follow- up questions.  Responding to our question on 
how the programme "payments for herding anim als under difficult conditions" complies with 
paragraph 13 of Annex 2 of the Agreement on Agriculture, Switzerland noted as part of its 
answer that payments under this programme ar e allocated per livestock unit.  We are still 
unclear how this programme comp lies with paragraph 13(b) which states that "payments in any 
given year shall not be related to, or based on , the type or volume of production (including 
livestock units) undertaken by the producer in an y year after the base period other than to 
reduce that production".  We would therefore be grateful if Switzerland could provide further 
elaboration on how this programme complies with  paragraph 13 of Annex 2.  Likewise, we are 
still unclear how the programme "Allowances for milk processed into cheese" complies with 
paragraph 13(b) of the Agreement on Agricult ure which, as outlined above, states that 
payments shall not be based on the type of pro duction.  In addition, paragraph 13(d) states that 
"payments shall be available only to producers in eligible regions, but generally available to all 
producers within such regions".  We'd be gratef ul if Switzerland could elaborate further on 
how it believes this programme comp lies with paragraph 13 of Annex 2.  
 On the first part relating to payments for herd ing animals, these payments are available to all 
animals that live in economically disadvantaged re gions, as defined by the Swiss authorities.  These 
are allocated on a animal standard unit basis with an upper limit per hectare.  The amount of direct 
payments per animal standard unit sharply increases the higher the pastures lie above sea level.  There 
is also an upper limit per hectare which is decreasing the higher the pastures lie above sea level.  In 
addition, an upper limit of animal standard units per farm is applied.  As regards the payments for 
transformation into cheese, these payments aim at maintaining pasture landscapes as well as 
decentralised settlement through employment in th e economically disadvantaged regions.  Often the 
only sustainable development possibility in those regi ons is to produce milk and to transform it into 
cheese.  That is therefore the main production in those regions.   
 Chinese Taipei    G/AG/N/TPKM/32
 
 
13. Question by Australia – Can Chinese Taip ei please confirm that expenditure on 
infrastructural services was for capital works only?  Can Chin ese Taipei please provide more 
information on the eligibility requirements for a "living allowance for the farmers participating 
in the training of moving to non-agricultural occupation".  Specifically are producers still in 
marketable agricultural production eligible fo r payments under this measure?  Can Chinese 
Taipei please confirm that eligible production in the calculation of market price support for 
rice, tobacco and sugar is total production for these commodities?  
 We can confirm that expenditure on infrast ructural services was for capital works only. 
  Our regulations require that  only those farmers who are still in agricultural production can 
participate in training for moving to a non-agricultura l occupation.  The training course lasts for three 
months, at least, and the living allowance (NT$16,000 per month) is provided to farmers because they 
are not able to engage in agricu ltural production during the training pe riod.  Furthermore, according to 
our statistics, most of these farmers successfully move to non-agricultural occupations after the 
training course. G/AG/R/46 
Page 26  
 
   
 Under our guaranteed-price programmes for ri ce, tobacco and sugar, only part of the 
production can receive the support, subject to certain  conditions.  Therefore, the amount of eligible 
production used in the calculation of market price support is not the total amount produced of these commodities. 
 
 
(v) Tables ES:1 to ES:3 Notifications 
  Canada    G/AG/N/CAN/55  (Table ES:1 to ES:3)
 
 
14. Question by United States - Can Canada pl ease explain what data did the CDC collect 
during this period – for example, exports from m ilk in Special Classes 5(d) and (e), or exports 
under the Commercial Export Milk (CEM) program?  Can Canada explain under which 
mechanism subsidized dairy products were expo rted during 2000/01-2002/03 .  What changed in 
2003/04 to allow CDC to collect and report data on  subsidized exports?  For example, in 2003/04 
10,834 tonnes of cheese were exported, but only 5,967 tonnes were exported with subsidy.  How 
does the CDC determine these categories?  Given that the CEM program was eliminated, how 
does Canada export dairy products without subs idy?  How is the value of the budgetary outlay 
for the export subsidy commitment measured?  What is the legal status of the Georgian Bay Milk Company and how have exports from this entity been notified?  
 On data collection, CEM exports were never tr acked by the CDC, as they were made without 
any federal government involvement.  As the special  class 5(e) was abolished by 1 August 2000, only 
dairy exports made with milk procured under special class 5(d) were tracked by the CDC. 
 
 As regards the mechanism for subsidized dair y exports during 2000/01-2002/03, the answer  
is: special class 5(d) and, as ruled by the WTO Appellate Body in December 2002, the CEM mechanism.  
 As regards the change in 2003/04 , the CEM mechanism was eliminated. 
  On total exports and exports with subsidies, the 10,834 tonnes of cheese were total exports as 
reported by Statistics Canada, in Merchandise Trad e Database.  The 5,967 tonnes of cheese identified 
in the notification as export subsidies were made  using special class 5(d) milk, which is export 
subsidized. 
  On the question relating to exports after the elimination of CEM programme, Canada exports 
dairy products made from milk proc ured at the domestic price or fro m milk or other dairy components 
imported under the Import for Re-Export Program (IREP).  
 Budgetary outlays are valued by comparing special class 5(d) component prices for each dairy 
product with prevailing domestic pr ices on a component basis, i.e. for butterfat and solids non-fat.  
The prevailing domestic prices used are the component prices that are calculated by the CDC to achieve the target return to producers for industr ial milk and set support pr ices for butter and skim 
milk powder.  The budgetary outlays are calculated as a running total each time a 5(d) permit is 
issued. 
  On 9 May 2003, Canada notified the WTO that  it had reached mutually-agreed solutions to 
settle the dairy dispute it had with New Zealand and the US.  Among the elements set out in Canada's 
mutually-agreed solutions with the US was a confirma tion by Canada that subject to judicial or quasi-
judicial proceedings, beginning 1 May 2003, there w ould be no further deliveries of CEM in Canada.  
The exception concerning judicial and quasi-judici al proceedings was adopted because the Georgian  G/AG/R/46 
 Page 27 
 
 
  Bay Milk Company (GBMC) had been challenging the regulation adopted by the Government of 
Ontario to eliminate the CEM mechanism in the pr ovince.  GBMC has been granted the right to 
continue procuring milk from a limited number of non-quota holder dairy producers while legal 
proceedings concerning it were pending.  However, GBMC's right to procure such milk has been 
judicially capped at a certain historical level, whic h it cannot exceed.Legal ac tion is still pending with 
respect to GBMC, as it is currently appealing an adverse decision of the Divisional Court of the 
Ontario Superior Court of Justice, which, if upheld , would effectively force it to procure milk from 
quota holders.  Exports of milk or dairy products by  the Georgian Bay Milk Company are included in 
Table ES:2, which reports Canada's total exports of all products fo r which Canada has export subsidy 
commitments, using data from Statisti cs Canada, Merchandise Trade Database. 
 
 Follow-up comments:   New Zealand and the EC also expressed their interest in the matter. 
  
__________