RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/AG/R/20 
27 July 2005  
 (05-3376) 
Committee on Agriculture 
Special Session   
 
 
SUMMARY REPORT ON THE THIRTY-FIRST AND THIRTY-SECOND FORMAL  
SPECIAL SESSIONS OF THE CO MMITTEE ON AGRICULTURE,  
HELD ON 19 APRIL AND 3 JUNE 2005 
 
Note by the Secretariat1 
 
 
1. The Special Session of the Committee on Agricu lture, which was established by the General 
Council (WT/GC/M/53), is pursuing negotiations under paragraphs 13, 14 and other relevant 
provisions of the Doha Ministerial Declaration.  The formal meeting was held on 3 June under the 
chairmanship of Ambassador Tim Groser.  The su spended Thirty-First Special Session was closed. 
2. The agenda as contained in WTO/AIR/2578 of 24 May 2005 was adopted.     
ITEM A (I):  STATEMENT BY CHAIR  
3. A summary of the Chairman's statement is attached.   
ITEM A (II):  STATEMENTS BY PARTICIPANTS  
4. The European Communities drew attention to their recent communication2 which 
highlighted that a lot of important work remained to  be undertaken in areas other than market access.   
Sufficient time thus needed to be allocated to discuss all outstanding issues on the other two pillars, 
including those related to non-trade concerns, if a "first approximation" was to be successfully 
achieved. The European Communiti es indicated that the communicati on contained an illustrative list 
of issues to be addressed in the domestic support and export competition areas. 
5. Speaking on behalf of Côte d'Ivoire, Kenya,  Rwanda, Tanzania, Ug anda and Zimbabwe, 
Uganda introduced a paper on "action required to addr ess the crisis arising from the decline in prices 
of primary commodities faced by commodity-dependent African countries",3 underlining that it had 
received broad support from the African Group.  The full statement made by Uganda is attached.  
6. The joint proposal by Côte d'Ivoire, Kenya,  Rwanda, Tanzania, Uganda and Zimbabwe was 
supported by the Bolivarian Republic of Venezuel a, Cuba, Paraguay and Zambia.  According to 
Paraguay, the difficulties facing Members with a high share of commodities in their exports should be 
effectively addressed through concrete and rapid solutions.  Zambia believed that the proposal 
deserved positive attention as soon as possible.   
7. On behalf of the LDC Group, Zambia pointed out that the current negotiations would have 
profound implications on LDCs' future development prospects as agriculture, in particular, remained 
an important sector for attaining sustainable deve lopment and growth.  The LDC Group believed that 
                                                      
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 Issued as Job(05)/88. 
3 Issued as Job(05)/113. TN/AG/R/20 
Page 2  
 
 discussions on the formula for tariff reduction, sel ection of sensitive products, Special Products (SP), 
the fullest liberalization of tropical products, and the Green Box criteria should take into account 
LDCs' concerns relating to capacity, net food importers, preference erosion, and commodity 
dependence, among others. This would ensure that the reforms envisaged in the current round of 
negotiations would not foreclose LDCs' capacities to undertake policy measures aimed at poverty 
alleviation.    
8. The LDC Group welcomed the creation of a speci al safeguard mechanism (SSM) for use by 
developing countries.  This mechanism should be open  for use by LDCs to enable them to provide 
relief to vulnerable farmers from import surges and de pressed prices.  The disciplines to be developed 
should take into account the specific interests of LD Cs, including: (a) the need to have appropriate 
flexibilities to address the difficulties experienced with re gard to data availability; and (b) the need to 
set trigger levels that would easily be met by LD Cs.  According to the LDC Group, related proposals 
should therefore be accompanied by simulations de monstrating the ease with which LDCs would be 
able to use such a mechanism.  In addition, th ere should be no causal link embedded in the rules for 
the SSM. 
9. On behalf of the G-20, Brazil stated that th e Group had agreed to intensify its technical 
work in order to assist the Chairman, through c oncrete contributions, in finding areas of convergence 
in all subject matters so that a sound document coul d be prepared for the July meeting of the Special 
Session.   
 
10. Speaking on behalf of his delegation, the re presentative of Brazil also expressed sympathy 
for the joint proposal  by a Group of African countries on commodity issues.4   Brazil shared the same 
concerns over the decline of commodity prices and reca lled that this issue had always been at the core 
of UNCTAD's work.  In Brazil's opinion, this issue also deserved attention in the WTO, for example, 
in the context of the review of agricultural polici es, the mechanisms for consultation, notification and 
surveillance could be strengthened.  Possible appr oaches to address commodity price declines should 
also be explored and should be coherent with th e work already undertaken by UNCTAD.  Finally, 
Brazil drew attention to its recently-circulated domestic support notification (G/AG/N/BRA/22) and 
called for improved transparency on the current levels  of trade-distorting domestic support to facilitate 
progress in that area.  In this connection, Brazil ur ged developed country Members, in particular, to 
submit any outstanding notifications.  
11. On behalf of the ACP Group, Mauritius reite rated the importance of the Room D process, 
which was becoming increasingly popular, and was a useful forum for small delegations to express 
their concerns (see also paragraph 25 below).  
12.  Moldova stated that re cently acceded low-income transition economies faced huge 
difficulties in implementing economic and trade policy re forms.   Pointing to  paragraph 47 of the July 
Framework, Moldova called for "specific flexibility provisions" in order to address these concerns.  With agricultural tariff bindings already equal to  12 per cent on average (compared to 43 per cent on 
average for developing countries), Moldova believe d that it had undertaken a high level of 
commitments as part of its terms of accession, a nd that the ensuing rapid liberalization process had 
created additional structural and social difficulties fo r vulnerable farmers.   Moldova further stressed 
that it did not subsidize its agricultural sector. Citing a number of economic indicators, Moldova held that its level of economic development was compar able to that of other low-income developing 
countries. Despite these characteristics, Moldova had not been allowed access to the flexibility 
provisions generally available to  developing countries under the Agreement on Agriculture.  While 
expressing readiness to contribute to the ongoing round of trade liberalization, Moldova was 
                                                     
 
4  See Job(05)/113.  TN/AG/R/20 
 Page 3 
 
 
 concerned that the final outcome could actually d eepen existing inequalities, including inequalities in 
Members' tariff structures.     
13. Supporting Moldova's intervention, Georgia noted that it was in a similar situation.  
Although a low-income transition economy, Georgia had committed to substantial liberalization as 
part of its terms of accession, including a 100 per ce nt binding of all agricultural tariffs at a low level 
(11.7 per cent on average, with more than 93 per cent of duties bound below 15 per cent); elimination 
of quotas and other import restrictions;  no right to use export subsidies; and a limitation on the right 
to use domestic support measures up to de minimis  level (defined at 5 per cent).  Under these 
conditions, drastic tariff re ductions would be extremely harmful to the interests of Georgian farmers. 
Georgia maintained therefore that some flexibility  should be accorded to low-income developing 
countries, taking account of their level of economic  development and the significant liberalization 
steps already assumed.  Such flexib ilities could, for example, take the form of a grace period; a longer 
period for implementation; the right to define sens itive products and special pr oducts; and the right to 
use the SSM.  
14. China endorsed the intervention made by Brazil, on behalf of the G-20.  In the course of the 
Agriculture Week, China had been particularly pleased to see the tabling of concrete papers, 
proposals, and suggestions, many of which contribut ed by developing countries, such as: the G-20 
non-paper on Green Box; the G-33 papers on SP5 and on SSM6; and the recent submission by a Group 
of African countries on commodities.7   In China's view, this was proof that the negotiations in the 
current Development Round were gain ing momentum, and such efforts should be further encouraged.  
Supporting the statement made by Moldova, China also  considered that the concerns of all recently-
acceded Members, in general, should be effec tively taken into account in these negotiations.  
15. Underlining its own economy's dependence on commodities, Malaysia expressed sympathy 
for the concerns raised by the Group of African countries on commodity-related issues.  In this 
context, Malaysia evoked its active participati on in the activities organized by UNCTAD and the 
Common Fund for Commodities in the 1970s and 1980s wh ich, in its view, had been in vain.  From 
the lessons drawn, Malaysia explained that its overall stance had shifted: more emphasis was now 
given to improving market access through negotiati on in the Doha Development Round.  Market 
access was crucial for development, and Malaysia firmly believed that addressing high tariffs and 
tariff escalation would enable developing countri es to reduce their dependence on commodities, 
diversify exports towards more value-added pro ducts, and tackle declining terms of trade. 
16. Colombia shared the views expressed by Mala ysia.  The issue of international commodity 
prices was an important one, and Colombia expres sed readiness to study and comment on the joint 
proposal put forward by the Group of African countries on a future occasion.  
17. As a recently acceded Member, Chinese Taipei shared the con cerns expressed by Moldova.  
Chinese Taipei considered that recently acced ed Members had assumed excessive commitments 
during accession compared to other Members at similar levels of development.  Chinese Taipei 
advocated the inclusion of specific and adequate fl exibility provisions, particularly in the market 
access pillar, in the modalities to be elaborated, so as to allow recently acceded Members to pursue 
agricultural reform. 
18. As reflected in its recently circulated paper,8 Turkey expected th at the needs of all 
developing countries in terms of flexibilities in all modalities, especially in the market access pillar, 
                                                      
5 See Job(05)/91. 
6 See Job(05)/92. 
7 See Job(05)/113. 
8 See Job(05)/89. TN/AG/R/20 
Page 4  
 
 would be duly reflected in the first approximation.   Turkey noted that balanced progress among the 
pillars was essential for a successf ul outcome.  On process, Turkey was looking forward to the 
continued collaboration among members of different groupings, as a complementary tool to the negotiation process.  Turkey pledged to  make full use of the very limited and critical time that was left 
to accomplish the Doha mandate. 
19. With regard to the statement read by Uganda  on its behalf (see pa ragraph 5 above), Kenya 
stressed that it attached a lot of importance to findi ng a lasting solution to commodity issues.   It was 
also Kenya's expectation that concrete special and differential treatment provisi ons be reflected in all 
the elements of the July approximation, especia lly in the market access pillar, where Members' 
different tariff structures should be duly considered. 
20. Paraguay endorsed the statement made by Br azil on behalf of the G-20. Supporting  
Moldova's intervention, Paraguay believed that Mo ldova's difficulties were those of a landlocked 
transition economy, and as such, Paraguay consider ed that these difficulties were no different from 
those faced by landlocked developing countries.  
21. The Bolivarian Republic of Venezuela expressed satisfaction at the number of valuable 
contributions on important topics of interest to th e Bolivarian Republic of Venezuela, in particular 
those on SP, SSM, and Green Box.  For the Boliva rian Republic of Venezuela, this showed the 
developing countries' intention to positively contribute to the current negotiations.   
22. Indonesia supported the statements made by Braz il on behalf of the G-20, and by Uganda on 
commodity issues.  Indonesia also shared the concerns expressed by Moldova. Indonesia's assessment 
was that the meetings held during the Agriculture  Week had been more constructive than in the 
previous round of discussions.  That momentum  should be maintained to achieve the first 
approximation through a balanced and comprehensiv e solution by the end of July.  On process, 
Indonesia expressed its appreciation of the transpar ent manner in which the consultations had been 
conducted, ensuring the widest participation of Members in all issues, in particular in the topics of SP 
and SSM.  For Indonesia, the tariff reduction formul a was among the core issue in the market access 
pillar.   Indonesia stressed that th e formula to be agreed should not undermine the concept of special 
and differential treatment (S&D). Indonesia also welcomed the positive response by Members to the 
G-33 proposals on SP and SSM, which it regarded as fundamental S&D components.   
23. The United States echoed comments from other Members on the need for steady and 
concrete progress towards a useful July first appr oximation.  Noting the number of informal papers 
which had been distributed during that Agricultu re Week, sometimes describing extreme positions, 
the United States considered that efforts to place mo derate and progressive ideas before negotiators to 
sharpen the debate were helpful.  
24. Ecuador shared the concerns expressed by Uganda  in the intervention it made on behalf of a 
group of African countries on commodity issues.  Ecuador stated that it would study the proposal and pass it on to capital for consideration.  Ecuador al so shared the concerns of those Members who 
referred to recent accession in their intervention.   Ecuador recalled that it had acceded to the 
Organization after the creation of the WTO and that the significance of "recent accession" had not been defined yet.  Ecuador had joined the WTO wi th a view to obtain MFN treatment for one of its 
major agricultural products. Ten years had elapsed a nd Ecuador's expectations in that regard had not 
been met.  From that point of view, Ecuador be lieved that the concerns of those Members which 
acceded to the WTO after its creation were valid.  
25. A number of delegates requested that the stat ements they made at the informal Special 
Session ("Room D process") be included in the su mmary record of the fo rmal Special Session.  
Statements from the following delegations were forwar ded to the Secretariat and are attached to this  TN/AG/R/20 
 Page 5 
 
 
 report:  ACP Group (tiered tariff reduction formul a, sensitive products, SP and SSM); Bolivarian 
Republic of Venezuela (SP); El Salvador (SP); Ke nya (tiered tariff reduction formula; and statement 
issued on behalf of the G339).  
ITEM A (III):  STATEMENTS BY CHAIR ON THE SUB-COMMITTEE ON COTTON  
26. The Chairman's report on the Sub-Committee on Cotton is attached. 
ITEM B: OTHER BUSINESS  
27. Argentina requested the issuance of a corrige ndum to document TN/AG/R/17, subsequently 
issued as TN/AG/R/17/Corr.1. 
                                                      
9 See full statement in Job(05)/91. TN/AG/R/20 
Page 6  
 
 Statement by Tim Groser
 
 
Chairman, Special Session, Committee on Agriculture 
 
3 June 2005 
 
1. As usual, my outline report to the TNC will be  on my personal responsibility.  The date of 
the next Special Session, which was originally planned for 11 July, h as been advanced to 4 July, due 
to the mini-Ministerial in China.  I would like to group my comments under three headings. 
Statements by Members 
2. The statement made by the ACP Group in Room D will be placed on record as requested.   
With respect to the Brazilian domestic support notificati on, I happen to be aware of the complexity of 
this task because of a number of discussions I've  had with Brazilian colleagues. I think that it is 
actually a very important and positive thing, and I would like to thank the Brazilian delegation for 
their notification as this will be helpful, particul arly if we are going to intensify the negotiation 
process on the domestic support pillar.  I can only but echo Brazil's appeal to other Members to 
submit any outstanding notifications.   
3. I would like to thank Côte d'Ivoire, Kenya, Rwanda, Uganda and Zimbabwe, for presenting 
their proposal on commodity issues.  It will take a little time to translate the paper into all three 
languages, but I will hold consultations on that matter in a way that I have to think about because of 
practical considerations of time. 
4. I look forward to seeing the communication from Moldova.  I think that this matter is not 
dissimilar from an issue with which we have to d eal with eventually in the market access pillar and 
which we call the "overlap problem".  We have heard a number of expressions of sympathy from the 
floor but we have to find a way through this in a technical way.  While recognizing the reality of the 
position held by Moldova,  we have to ensure that  it does not compromise other interests and other 
objectives.  I am confident we can do this in due cour se but no doubt we will come back to this at the 
next meeting. 
First approximation 
5. I haven't anything particularly novel to say.  I'm serious about trying to get agreement on 
full modalities but this requires a lot of progress by the end of July.  And a lot of people thought we were in no shape at all in early June 2004 but we got the Framework.  That has proved to be, I would 
say, absolutely essential.  It is my strong persona l opinion that this negotiation would have died 
without that agreement in place.  Now, my aim is to make "steady and concrete progress", as one 
delegation rightly put it.  The first approximation is  not the full modalities but it's another vital step 
towards full modalities.  To put it simply, the first approximation is the July Framework plus as much on all three pillars where I consider that there is enough convergence in the Membership to build on.  
This does not mean that, on other issues where clearly  there is not yet convergen ce, that these will not 
be continuing part of the negotiations.  But simply, it is not going to be possible to, if you like, leap-
frog the process of finding a consensus.  Th is has to be based on real convergence. 
Comments about this Agriculture Week 
6. I'd like to start by taking the point made by Mauritius about the Room D fiasco over the 
seats from a different perspective.  It's actually peopl e voting with their feet.  And I agree with them.  
So what is terribly inconvenient in this large orga nization, since we have now so many developing 
countries that have come in the last 10 or 15 years, it is at the end of the day a positive sign.   It is  TN/AG/R/20 
 Page 7 
 
 
 causing us some organizational problems but the deeper meaning of the observation made by 
Mauritius, I think, stands.  People are interested in th is agriculture negotiation.  It's very important to 
many countries for different reasons and I think that has to be welcomed.   
7. Now, I also agreed that this was an important  week.  I happen to share the perspective of 
those who say "we are gaining, not losing, momentum".   At the same time, I realize that some very 
strong proposals have been put forward by the deve loping world this week.  I understand from private 
conversations I've had, particular ly with developed countries, but not  just developed countries, that 
many developing countries also have deep concer ns about some aspects of their proposals and are 
worried:  "are we going backwards?"  No, I don't think we are going backwards provided people are 
committed to the Doha Development Agenda and the centr al role of the agriculture in this agenda, and 
provided people realize that, as I said yesterday, tha t:  "this is the voice of the developing world that 
we are hearing".  That voice must be heard and taken into account in conc rete ways.  I understand 
from those private conversations that aspects of policies proposed give grave problems to some 
delegations.  Of course I understand that, and we have to work through those difficulties.  I would like 
those Members who have expressed those concerns to me privately not to be too concerned about this 
process.  I've said many times that negotiations are fundamentally about adjusting expectations.  The 
normal idea of a good negotiator to me is ludicrous.  The idea of a good negotiator in most people's 
eyes is a "tough" negotiator.  But I've never met a so-called "tough negotiator" who is any use at all 
because all they can say is "no".  And, of course,  they get nothing from that approach.  I actually 
believe the right thing to do is to listen very car efully when people put proposals on the table, to not 
necessarily look at the technical detail alone, although th at's vital, but to look at why they are doing 
this, what is the underlying concern.   
8. If we look at some of the papers this week, pe ople know this negotiation is going to come to 
a successful agreement, and this m eans liberalization and therefore, adjustment.  It will be a positive 
thing eventually but, of course, it always cont ains problems for people.  So, naturally, people 
emphasize their concerns with this process and ar e putting forward ideas that actually are related to 
quite legitimate concerns.  But this has to be done  in a way that is acceptable to the Membership.  
There are legitimate concerns behind all th ese papers. I'm not going to compromise anybody's 
position but of course my brain immediately is calculating a serious way in which some of those concerns can be actually handled quite easily within the framework of this agriculture negotiation, and 
we'll work together on this.     
9. So ladies and gentlemen, thank you for your contribution this week.  I think that it has been 
a positive week.  It's business as usual.  We obviously  have a huge amount of work to do and we lost 
four months through the AVE issue, as I've said repeatedly, which has made the task of first 
approximations more difficult.  But, it's amazing what can be done with people of good will.   
  
 TN/AG/R/20 
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 Statement made in the Formal Special Session
 
Statement by Uganda, on behalf of  
Côte d'Ivoire, Kenya, Rwanda, Tanzania, Uganda and Zimbabwe   
 
1. Two years back (May 2003), my delegation in cooperation with the delegations of Kenya 
and Tanzania submitted a non paper to the Comm ittee on Trade and Development emphasising the 
need to take urgent action under the WTO’s lega l framework, to address economic problems that are 
being encountered, by the commodity dependent developing exporting countries as a result of price volatility of agriculture commodities. The non-paper fu rther stated that it was the intention of the 
three delegations to submit, at an appropriate ti me, a paper identifying issues that needed to be 
addressed in the ongoing agriculture negotiations. 
2. The submission that has been circulated t oday describes the procedures that could be 
adopted for negotiations on commodity issues in this special Committee on Agriculture. I would like 
to add that even through the pa per has been formally circulated by a few delegations, the views 
expressed and the proposals made in the paper, ha ve received the general support from the members 
of the African Group. 
3. The purpose of my brief intervention today is therefore to explain briefly the impact of the 
problems that the commodity dependent exporting deve loping countries are facing.  In this regard, I 
wish to highlight on the proposals contained in the paper which seek to find lasting solutions to the 
problems. 
4. There are over fifty developing countries in the world, which are dependent for major 
portion of their export earnings on one or two commodities.  Most of these countries are situated in 
Africa.  Many of them are highly indebted countries.  The farmers who produce these crops are amongst the poorest section of the population in these countries and are living below poverty line. 
5. The persistent decline in prices of these comm odities has adversely affected the efforts these 
countries are making towards alleviating poverty.  The WTO report for 2003 for instance estimates 
that the decline in terms of trade of African countries (measured as relative price of imports and 
exports) was nearly 36 per cent in the 1980s.  As a result, the annual growth rate of these countries 
was less by 0.7 percentage points.  Since then, term s of trade of these countries have declined further 
as a result of persistent fall in prices of these commodities. The problems faced by these countries are 
further exacerbated by colossal asy mmetry in commodity markets.  As a result, firms engaged in 
processing and distribution chain end up benefiting at the expense of the farmers producing these 
crops. 
6. As a result of the discussions which took place in the Committee on Trade and Development 
and later in the General Council on the basis of th e Non Paper submitted by the three delegations, the 
July Framework adopted on 1 August 2004 now pr ovides specific mandate for negotiations on 
commodity issues.  The paragraph on “Development  Issues” in the Framework provides that specific 
trade and development needs and concerns of de veloping countries including capacity constraints, 
food security, rural development, livelihood, co mmodities and net food imports, shall be given 
"special attention” in the course of the Agricu lture and NAMA negotiations, taking into account the 
“fundamental principles of the WTO and relevant pr ovisions of GATT 1994”.  In this context, it is 
also relevant to note that Part IV of GATT 1994, particularly paragraph 2(a) of Article XXXVIII, 
obligates Members to take joint actions, where a ppropriate, and devise measures designed to stabilize 
and improve conditions of world markets for primar y products with the objective of attaining “stable, 
equitable and remunerative prices”.  TN/AG/R/20 
 Page 9 
 
 
 7. Taking into account this mandate, the submi ssion, which we have tabled, envisages 
adoption of three-pronged approach for dealing wi th the problems faced by commodity dependent 
African countries in the negotiations on agriculture .  The three elements of the approach are: 
(i) Adoption of special procedures for negotiations  on issue by issue basis on tariffs, non 
tariff measures and on export and trade-distor ting subsidies that complement the modalities 
that would be adopted for negotiation in the area of agriculture; 
(ii) Clarification of the GATT rules relating to stabilisation of prices; and 
(iii) Examination of the possibility of establishing, under the umbrella of WTO a suitable 
mechanism for consultations on issues rela ting to production, trade and prices of 
commodities, in which governments of produci ng and consuming countries, all interested 
private sector and stake holders are able to participate.  
8. To enable members understand the main objective and the purpose for which these 
approaches have been suggested, I shall at this stage make a few observations on each of the three 
approaches. 
9. The special procedures that would be adopted for negotiations could enable commodity 
dependent exporting countries to seek special and di fferential treatment on tariffs, non-tariff measures 
and subsidies that takes into account their specific n eeds.  For instance, they could request under these 
procedures, the maintenance of preferential margin s, where reductions resulting from formula cuts are 
likely to affect actual trade or potentia l for the development of such trade. 
10. The need for clarification of the GATT rul es arises as there is increasing view amongst 
analysts, that in order to resolve the problems faced by countries producing such crops as coffee and 
cocoa where the over supply at world level is of st ructural nature, it may be necessary to adopt supply 
management systems that may be negotiated by  the producing countries themselves on a regional or 
global basis or alternatively with the support of UNCTAD.  It would be therefore necessary to examine whether there is need to clarify the provisions, inter alia , of GATT Article XXXVIII which 
urges WTO members to take “joint action for stabilization of prices of primary commodities. It would 
be also necessary to examine wh ether any clarification is needed on GATT rules governing the 
techniques that would be used under supply manage ment systems, such as those relating to export 
taxes and export restrictions.  In this context, it is important to note that one of the important aims of 
the Agreement on Dairy Products, which was nego tiated during the GATT years, was to stabilize 
prices of dairy products through adoption of a mechanism by producing countries for supply 
management. 
11. The third complimentary approach suggested is to examine the possibility of establishing 
under the umbrella of WTO, a mechanism for cons ultations on problems posed by the asymmetry in 
commodity markets.  We would like to emphasise that the ideas for establishing such mechanism in 
the  WTO is not a new one, as the Agreement on Pr eshipment Inspection, which was negotiated in the 
Uruguay Round, provided for an institutional fra mework for consultation among “preshipment 
inspection companies and exporters” on their di fferences under the auspices of WTO. These 
procedures are independent of the WTO Dispute Settlement Procedures. Though these procedures have not, according to our informa tion, been used, they may provid e useful basis for discussions on 
the feasibility and desirability of establishing in the WTO a mechanism for periodic consultations 
among all stake holders on prices and other problems affecting trade in commodities. We however recognise that the issues the proposal raises are complex and would need further examination. 
12. In concluding, I would like to add that it is of ten suggested that the most effective long-term 
solution to the problems faced by the commodity dependent exporting countries is: TN/AG/R/20 
Page 10  
 
 (i) To shift production away from traditi onal commodities to dynamic commodities 
(horizontal diversification) 
(ii) To encourage high level value added activities through establishing commodity 
processing industries (vertical diversification) and/or 
(iii) To develop the service sector with export potential. 
13. The past experience of assisting countries in  diversifying horizontally has been far from 
successful.  The main difficulty has been to id entify agricultural products for which favourable 
demand and price conditions would remain stable ove r an extended period of time.  The immediate 
scope for vertical diversification in most of the co mmodity exporting countries is also severely limited 
by the lack of domestic entrepreneurial capacity and the reluctance of foreign investors to invest in 
commodity processing in these countries because of th e lack of sufficient number of technically 
qualified persons who can work in such industri es.  Development of the service sector requires 
investment for the development of infrastructure and human resources. Consequently, prospects for diversification of an economy that is dependent  heavily on agriculture to an economy where 
production and exports of services play an important role are far from encouraging for most of the 
commodity exporting developing countries. 
14. Against this background, it is evident that th e primary responsibility for the stabilization of 
prices of agricultural commodities would have to be taken by the WTO under its rules-based system. Addressing the problems posed by such declining prices would however require a multifaceted approach. It would be necessary to ensure that UNCTAD and other international organizations like 
FAO, the Commonwealth Secretariat, the Intern ational Trade Centre UNCTAD/WTO (ITC), and the 
International Commodity Councils that have been ac tively engaged in this area, participate in all 
phases of the discussions and negotiations in the WTO on commodity issues. In this context, we note 
that, at the eleventh UNCTAD Conference, Agr eement was reached on the establishment of "a 
partnership on commodities using networking appr oach" which will involve the Common Fund for 
Commodities, the World Bank, ITC, ILO, Commonwea lth Secretariat, Civil Society groups and the 
private sector. The work done under such a networki ng approach would complement the work that 
could be undertaken in the present ongoing negotiati ons in finding solutions under the WTO rules-
based system to the problems that have arisen as a result of declining commodity prices and for 
securing further liberalization of trade, taking into  account varying needs of the commodity exporting 
African countries.   TN/AG/R/20 
 Page 11 
 
 
 Statements made in the Informal Special Session 
 
Statement by Mauritius on behalf of the ACP Group  
 General Remark 
 
1. The ACP considers that the market access pilla r, given the numerous interlinkages of its 
various elements, namely tariff reduction formul a, number of bands, thresholds for the bands, 
selection and treatment of sensitive products, Speci al Products, SSM and longstanding preferences, 
has to be addressed as a whole and should deliver a balanced package, which takes into account the 
interest of one and all, and in particular the interests and concerns of  the small and vulnerable 
countries.  In this regard, the ACP wish to point out  that their vulnerability is a serious constraint to 
their competitiveness and this factor has to be reckon ed with.  Indeed, one shou ld never lose sight that 
we are in a development round.  Tariff reduction formula (para 28 and 30) 
 
2. At this stage, the ACP would tender some preliminary comments on the tariff reduction formula.  The ACP would like to understore that:  
(i) its primary objectives in respect of the tariff reduction formula are: 
 
(a) to retain the appropriate level of prot ection in the domestic market to enable 
domestic production to thrive in the ACP countries; 
(b) to mitigate the erosion of preferential margins that is likely to result from 
tariff reduction. 
 
(ii) The use of the Swiss formula within the bands of the tiered formula is not acceptable 
to the ACP.  In fact, a UR type formula that provides the required flexibility is our preferred option. 
 (iii) All tariff reductions should be  made from the bound tariffs. 
 
(iv) LDCs shall be exempted from  tariff reduction commitments. 
 
Sensitive products (paras 31-34 of the Agreed Framework) 
 
3. Earnings from long-standing preferences fulfill key roles in respect of rural development, 
food procurement and livelihood security needs in sma ll and vulnerable economies.  Accordingly, it is 
critical that products relating to longstanding preferen ces be deemed to be sensitive products.  In this 
regard, the ACP would wish to be closely asso ciated with all discussions on the selection and 
treatment of sensitive products so as to ensure tr ansparency, inclusiveness and political ownership and 
acceptability of the outcome of negotiations.  The AC P would wish to recall that the importance of 
these longstanding preferences has been fully reco gnized in the Framework on Agriculture, the 
provisions of  para 44 of the Fram ework on Agriculture and para 16 of Rev 1 are particularly relevant.  
Furthermore the ACP would wish to underscore that pr eference erosion is an issue of serious concern 
for the group, which essentially comp rises small and vulnerable economies. 
 
Special Products and SSM  
4. The ACP comprises the majority of the G33, and it is therefore only natural that the group 
fully supports the statement made by the G33 on special products and SSM. TN/AG/R/20 
Page 12  
 
 Statement made by El Salvador 
 
 
1. The decision of July 2004, adopted by the entire membership, establishes that "Developing 
country Members will have the flexibility to designa te an appropriate number of products as Special 
Products, based on criteria of food security, live lihood security and rural development needs." 
2. It likewise recognizes that these products shall be  so treated as to take full account of the 
fundamental importance that Special Pr oducts have for developing countries. 
3. El Salvador wishes to underscore the importance it attaches to the issue of Special Products, 
as a form of special and differential treatment thr ough which it will be possible to address some of the 
objectives and legitimate concerns that developing countries have with regard to the agriculture 
negotiations, including the leeway they need in order for their domestic measures to promote food 
security for the population and secure social and economic stability for small-scale and subsistence 
farming. 
4. Because agriculture plays a fundamental role  in their development policies in selecting 
Special Products, countries such as El Salvador n eed to take account of the context in terms of 
national and regional policies and the particular featur es of the agricultural sector in countries that will 
use this provision. 
5. To echo what the delegation of Indonesia said on behalf of G-33, we consider that 
designation of Special Products on the basis of  food security, livelihood security and rural 
development needs is bound to be linked to consider ations such as the importance of certain products 
for the subsistence strategies of small farmers;  the significance of an agricultural product for the 
consumption profile of the population;  the cont ribution of a product to the economy as a whole, 
including from the perspective of income and em ployment generation in rural areas;  and the 
integration of production chains with a view to dive rsification of exports and use of marginal lands. 
6. Bearing the above considerations in mind, I now turn to the treatment these products should 
have in the present negotiations.  In El Salvador 's view, in order to safeguard and achieve the 
legitimate objectives that derive from the applica tion of such measures, Special Products should not 
be subject to further tariff reductions or tariff quota commitments. 
  TN/AG/R/20 
 Page 13 
 
 
 Statement made by the Bolivarian Republic of Venezuela 
 
 1. Our delegation endorses the statement read out by  the delegation of Kenya on behalf of the 
 G-33. 
2. The Bolivarian Republic of Venezuela, like other Members, has a sovereign right to 
promote sustainable agriculture in the interests of ru ral development, to ensure  the food security of its 
people and to alleviate two of the scourges that mo st afflict humanity, namely poverty and hunger. 
3. Venezuela acknowledges the fundamental role of the market access pillar and above all of 
the tariff, which for many countries is the only av ailable tool to protect their producers from the 
constant volatility of prices in inte rnational trade in agriculture, a nd to safeguard such areas as will 
allow them to implement active policies for progress and for the social and economic development of 
their peoples.  When viewed from this perspectiv e, the importance of Special Products for such 
countries is magnified. 
4. We believe that developing countries should ha ve the necessary flexibility to designate an 
appropriate number of Special Products on the basi s of food security, livelihood security and rural 
development criteria, as provide d by the Framework Agreement.  We wish to emphasize that 
countries should be free to select the products them selves, since only a country is in a position to 
determine the areas it needs to develop in order to  ensure food security for its population and foster 
rural development.  We, in Venezuela, have seen a number of our most essential crops displaced by imports as a result of liberalization, generati ng major problems in terms of unemployment, 
sustainability and poverty and raising even more barriers to our  rural development. 
5. As to treatment, Special Products should enjo y the greatest possible flexibility and be 
exempt from all commitments, whether on tariff reduc tions or quotas.  They must also have access to 
the Special Safeguard Mechanism. 
 TN/AG/R/20 
Page 14  
 
 Statement made by Kenya 
 
 1. The number of bands in the tariff reduction form ula is important but the critical issue for 
Kenya and other African countries who bound their agricultural tariffs at a ceiling level is the 
definition of bands. 
 2. The Uruguay Round Agreement on Agriculture provided developing countries with the 
flexibility to bind their agricultural tariffs at a ceili ng level.  As a result the tariff structures of many 
developing countries, particularly low-income countri es in Africa, is horizontal and therefore only one 
bound tariff rate applies to all products. 
 3. The ceiling binding rate among non-LDC African countries ranges around 100% going up to 
310%.  This implies that defining bands accordi ng to the Uruguay Round final bound rates will lead 
to a situation where the bound tariffs of the major ity of these poor African countries will fall into the 
higher tariff bands  which means cutting th eir bound tariffs at the maximum rate. 
 4. Kenya believes that it would be unfair to pena lize this group of poorer developing countries 
for utilizing the Special and Differential Treatment  that was available to them during the Uruguay 
Round.  Indeed an S&D in the past should not end up becoming a liability in this subsequent period. 
 
5. Paragraph 28 states that tariff reductions will be  made through a tiered formula that takes into 
account different tariff structures.  We believe that ce iling binds is a clear and concrete case of a tariff 
structure that should be given special considera tion in defining any tariff bands and thresholds. 
 6. In this regard, Kenya proposes that the non- LDC African countries which bound their tariffs 
at a ceiling binding should be allowed to self-select tariff lines for each tariff band or to reduce tariffs 
at one lowest rate of tariff reduction. 
  TN/AG/R/20 
 Page 15 
 
 
 Statement by Chair on third meeting of the Sub-Committee on Cotton held on 29 April 2005 
 
Assessment of progress in the Agriculture Special Session  
 
 I gave the Sub-Committee my assessment of pr ogress in the Agriculture negotiations with a 
particular focus on cotton. The main message I conve yed to the Sub-Committee was that of the urgent 
need to solve the AVEs  issue.  The issue was critical to carry ing the agriculture negotiations forward, 
and hence also affected any possible future results  in cotton. I urged delegations to consider the 
broader impact of the inability to agree to a meth odology and suggested that delegations reflect on 
their positions and continue their contacts.   
 
Presentation by the African Group of document TN/AG/SCC/GEN/2: "Draft Modalities Concerning 
the Sectoral Initiative in favour of Cotton"  
 
 The meeting was the most substantive m eeting to date of the Sub-Committee with 
constructive discussion and exchange taking place following the presentation by the African group of 
a proposal on "Draft Modalities Concerning the Sectoral Initiative in favour of Cotton". 
This document from the African Group constitute d quite a notable development in the work 
and discussions of the Sub-Committee and this was cl early reflected by the substantive, varied and 
lengthy discussions which followed its presentation.   Rwanda, for the African Group, presented the 
document which was tabled on 22 April and which proposes the following: 
- bound duty-free and quota-free access for cotton an d cotton by-products for LDCs cotton producers 
and net exporters;  
- elimination, by 21 September 2005, of domestic su pport measures that distort international trade in 
cotton,  the development of specific disciplines to prevent box-shifting of domestic support and 
ambitious cotton-specific criteria for measures authorized under the Green and Blue Boxes;  
- elimination of all forms of cotton export s ubsidies by 1 July 2005, at the latest; and 
- creation of an emergency fund amounting to 20% of the highest value of cotton production in the 
last three years in each country concerned, to “contain the serious socio-economic consequences for 
the farming communities” of loss of revenue, and managed by representatives of donors, producers 
and governments. The amount would decrease pr oportionately as subsidies and supports are 
eliminated.  It is further proposed that the emerge ncy fund should be a part of the First Approximation 
by the General Council in July 2005 with a final decision in December 2005. 
While Members welcomed the effort invested in the preparation and circulation of the 
proposed elements of modalities for the treatment of  cotton by the African Group, there were mixed 
reactions on the details.  Several indicated they n eeded time to study the proposed modalities, some 
expressed support for the proposal in its entirety, others considered the proposals a good basis for 
discussions, and others were opposed to some  aspects of the proposed modalities.   
The European Communities indicated that, as stated by Trade Commissioner Mandelson in 
Mali, they were predisposed to "fast-tracking the discussions and front-loading the implementation of 
the results".  The EC also noted the value of autonomous commitments in addition to whatever would 
be agreed multilaterally. 
 The United States stressed its commitment to d ealing with the problem because it understood 
the critical role cotton played. But, the outcome should be part of the “single undertaking” of the Doha negotiations and part of the ambitious an d comprehensive package on agriculture. The US 
cautioned that an “early harvest” on cotton would undermine the “cross-cutting” approach of the 
negotiations.  TN/AG/R/20 
Page 16  
 
 China noted that while the proposals by the African Group were still being examined by its 
capital, it wished to welcome the document and offer initial comments.  China also stated that cotton 
was grown by more than 100 million people in China,  a majority of whom were living in conditions 
of rural poverty.  Furthermore,  China was a ne t importer of cotton, with its imports from the 4 
proponents of the cotton initiative steadily growing, and its cotton production did not distort 
international markets.  
 Regarding the proposal in the African Group document for an emergency fund, some 
Members such as Canada, Japan or the United States  noted their reserve because the proposal was 
"anti-competitive" or "inconsistent with the July Mandate", or because it would not provide a 
response to the fundamental challenges faced by A frican cotton farmers.  Instead, the United States 
noted that Members should focus on better aid programmes. 
  The exchange of views which followed the pr esentation by the African Group also included 
requests for clarification by Members on details of the proposed modalities.  For instance, clarifications were sought on the rationale for the date of "21 September 2005" for the total 
elimination of domestic support, on the meaning of "by-products", to determine whether such by-
products were limited to agricultural products or we re extended to include non-agricultural industrial 
products, such as in textiles and clothing.     
Members such as Paraguay, Uganda, Zimbabwe took the floor to stress that other countries 
were affected beyond the four proponents of the cotton initiative and ask that discussions and 
solutions be widened to all developing countries that produced and traded cotton.  
In a general reply to the many points raised  on the African group proposal, Benin welcomed 
the fact that discussions  were actively underway in the Sub-Committee and moving in the right direction. Benin, referring to the specific dat es mentioned in the proposed modalities (21 September 
for domestic support and 1 July for export subsidies) , stated that cotton had to be tackled with a 
holistic approach within the WTO and that included the Agriculture negotiations but also legal issues 
such as those relating to the cotton panel between Brazil and the United States.  
Coherence between trade and development aspects: Update on the development aspects
 
 For the WTO Secretariat, Mr Chiedu O sakwe updated Members on the third round of 
consultations on the development assistance aspec ts of the cotton initiative which took place on 25 
April. He outlined the latest activities of bilatera l donors: the European Commission, Germany, Japan, 
Canada and the United States.  A report was also  provided on the activities of multilateral agencies: 
the FAO, UNIDO, ITC and the IMF. A particular mention was made of the IMF's Cotton Seminar on 
18 May in Cotonou to assess the macroeconomic con sequences of cotton price developments for the 
region and also to consider concrete steps that  would safeguard progress in the region towards 
achieving the Millennium Development Goals (MDGs).    
 
 Finally, Mr Osakwe reported on the "prudent opt imism" expressed by Benin, on behalf of the 
four Cotton proponents, regarding the informati on provided on the implementation of programmes, 
projects and activities underway, and the informa tion also provided on enhanced opportunities by 
bilateral donors and agencies.    
The next meeting of the Sub-Committee on Co tton will take place on Wednesday 22 June.  
__________