WORLD TRADE  
ORGANIZATION  TN/AG/W/3 
12 July 2006 
 (06-3360) 
Committee on Agriculture 
Special Session  
 
 
 
DRAFT POSSIBLE MODALITIES ON AGRICULTURE 
 This document is the same as that distributed as JOB(06)/199 with the corrections included 
from JOB(06)/199/Corr.1 as well as corrections to a number of typographical errors which were 
included in these documents. TN/AG/W/3 
Page 2  
 
   
Dear Mr Lamy, 
I am sending to you in your capacity as TNC Ch air, the attached document in line with the 
discussions at the informal TNC of 30 May and your fax of 16 June to TNC participants.  
 It sets out draft Modalities for preparing th e Schedules for the Agriculture negotiations.  
I should stress that this document is not in a formal  sense agreed by Members, even as a draft.  But it 
is intended to reflect in a balanced and accurate wa y the state of intensive discussions and reflection to 
this point within the Special Session, consistent w ith the ground rules of our enterprise as laid down, 
for instance, in TNC/1:  "Chairpersons should refl ect consensus, or where this is not possible, 
different positions on issues."  Of course, it is only the Members themselves that can establish 
Modalities, and it is a matter for Members also as to what documentation they wish to adopt in 
working to that end.  That being the case, I forwar d this particular document in my capacity as Chair 
of the Informal session on Agriculture to you as Chair of the TNC. 
 There should be no surprises therein.  Indeed, it has long been the premise of our work that 
this should not be the case.  It has been clear that  the draft that would emerge this week would be 
unlikely to contain things Members have not seen or  heard before, or things that Members would not 
be able to work out for themselves.  Members for thei r part have made it clear  that they do not expect 
invented "solutions" out of thin air, and even if they were to appear, they would serve no practical 
purpose given that they emerge in a vacuum and ar e severed from any real emergent consensus or 
convergence by Members themselves.  They have made  it just as clear that they see draft "Modalities" 
as meaning precisely that: there is no basis to pick and choose among them.  This is a "menu fixe" for 
decision.  It is no smorgasbord.  Reflecting that  approach, I foreshadowed in the Reference Paper 
issued last week that: "unless or  until there is such emergent consensus, one has to respect the 
substantive positions of Members.  Come that date , therefore, I will be issuing a document that does 
so." 
 That is precisely the kind of document that is now attached. 
 It is not an elegant document.  But it reflects th e reality of where we are.  When all is said and 
done, where there are divergences, there are divergences.   There is no point deluding oneself on that.  
Indeed, it would be a profound error to do so.  Apart from anything else, there will never be any prospect of bridging differences if one does not have a sober and realistic view of them to begin with.  
Brushing things under the carpet or wishing things we re otherwise than they are is no way to resolve 
differences.  Dealing with them honestly and fairly  can be the only way that has any chance of moving 
us forward.  I have not, therefore,  attempted to invent solutions wher e none has so far emerged.  To do 
so would not only go against our agreed procedures but also against a Chair's more fundamental duty to deal honestly and fairly with the Membership. 
 A Chair's responsibilities also involve the responsib ility, consistent with that duty of honesty 
and fairness, to call things as they are seen in an e ffort to move the process forward.  In my Reference 
Papers and, indeed, through more informal proce sses, I provided some commentary of my own which 
was aimed at suggesting where I thought particular ef forts could and should be made.  I stand by those 
various comments, but I do not think it is appropri ate now to elaborate further any such personal 
views.  They are on the record, and they served a purpose at the time – which was to try to promote 
convergence.  But we are beyond that point now.   Having made my own comments, positions of 
Members are what they are.  The task here and now is above all to reflect that as fairly and honestly as 
possible.  At this crucial point in the negotiations it is more than ever important to confront the issues 
squarely as they are without distraction or intrusion.  TN/AG/W/3 
 Page 3 
 
 
  I can conclude only by confirming to you and participants that I remain committed to 
facilitating convergence in every way possible in th e time remaining to us.  You may count on my 
continued full support in your efforts as Chair of the TNC to move us forward over the crucial next 
few days in particular. 
  Yours sincerely 
 
  Ambassador Crawford Falconer 
  Chairman   Committee on Agriculture, Special Session TN/AG/W/3 
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  I. DEFINITIONS
1 
• Year in relation to the implementation period and to the specific commitments of a Member 
refers to the calendar, financial or marketi ng year specified in the draft Schedules to be 
submitted pursuant to the modalities. 
• The base period for supporting data is [1995] to [2000] unless otherwise stated [and [1999] to 
[2001] for product-specific AMS caps]. 
• The implementation period is [2008] to [ ] unl ess otherwise stated and [2008] to [ ] for 
developing country Members unless otherwise stated. 
• Total value of agricultural production is defi ned as the gross value of all agricultural 
production of basic products at farm gate pr ices.  The value of production of a basic 
agricultural  product is the gross value of production of that basic product at farm gate prices. 
• Product coverage is as in Annex 1 of the Ag reement on Agriculture with any appropriate 
changes arising from HS2002 applying mutatis mutandis .  
Note:  Members' draft Schedules should be based on HS2002 nomenc lature to the extent 
possible and disaggregated at the HS 6-digit level as a minimum.  In the alternative, Members should clearly indicate the version of  the Harmonized System being used (e.g. 
HS96).   
• Tropical products and products of particular importance to the diversification of production 
from the growing of illicit narcotic crops (hereina fter referred to as tropical and diversification 
products) are defined as those products li sted in Annex F to this document. 
• Cotton is defined as HS headings 52.01 to 52.03: raw cotton, waste and cotton carded or 
combed. 
• A recently acceded Member is a Member of th e WTO that acceded [under Article 12 of the 
Marrakesh Agreement Establishing the World Trade Organization]. 
• "Non-product-specific support" means domestic support [provided in favour of agricultural 
producers in general] [available generally to agricultural producers and not support that is 
effectively only in favour of a few or specific commodities]. 
• "Overall Trade-Distorting Domestic Support" means the sum of (i) the Final Bound Total 
AMS plus (ii) permitted de minimis  level expressed in monetary terms plus (iii) the Blue Box 
level, and which is: 
(i) with respect to support provided during the base period (i.e. the "Base Overall Trade-
Distorting Domestic Support") and the ma ximum support permitted to be provided 
during any year of the implementation peri od or thereafter (i.e. the "Annual" and 
"Final Bound Overall Trade-Distorting Domestic Support Commitment Levels") as 
specified in Section [ ], Part [ ] of a Member's Schedule; and 
                                                     
 
1 In general the definitions would remain as set out in Article 1 of the Agreement on Agriculture but 
some changes are needed in order to reflect the new commitments which Members will make, the new implementation period(s) and other factors. 
  TN/AG/W/3 
 Page 5 
 
 
  (ii) with respect to the level of support actually provided during any year of the 
implementation period and thereafter (i.e. the "Current Overall Trade-Distorting 
Domestic Support", calculated in accordance with the provisions of this Agreement and with the constituent data and methodol ogy used in the tables of supporting 
material incorporated by reference in Part [ ] of the Member's Schedule. TN/AG/W/3 
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  II. MARKET ACCESS 
A. T
IERED FORMULA FOR TARIFF REDUCTIONS  
1. Basis for reductions 
1. Subject to the provisions set out in sections B to  H below, customs duties shall be reduced in 
equal annual instalments from bound duty levels2 using the tiered formula in paragraphs 2.3 and 2.4 
below. 
2. In order to place bound non- ad valorem  tariffs in the appropriate band of the tiered formula, 
Members shall follow the methodology to calculate ad valorem  equivalents (AVEs), along with 
associated provisions, set out in Annex A. 
2. Tiered Formula 
3. Members shall reduce bound duties in accord ance with the following tiered formula: 
(a) Where the bound duty or ad valorem  equivalent is greater than 0 and less than or 
equal to [20-30] the reduction shall be [20-65] per cent; 
(b) Where the bound duty or ad valorem  equivalent is greater than [20-30] per cent and 
less than or equal to [40-60] per cent,  the reduction shall be [30-75] per cent; 
(c) Where the bound duty or ad valorem  equivalent is greater than [40-60] per cent and 
less than or equal to [60-90] per cent, th e reduction shall be [35-85] per cent;  and 
(d) Where the bound duty or ad valorem  equivalent is greater than [60-90] per cent, the 
reduction shall be [42-90] per cent [except for those Members with more than [ ] per cent of tariff lines in the top tier who sh all make a reduction of [ ] per cent]. 
[The average reduction in bound duties by deve loped country Members shall in any case be 
[at least [ ] per cent [with additional tariff reduc tions beyond those otherwise required for any 
particular band, if necessary, to achieve this objective]].] 
4. Developing country Members shall reduce bound duties in accordance with the following 
tiered formula: 
(a) Where the bound duty or ad valorem  equivalent is greater than 0 and less than or 
equal to [20-50] per cent, the reduction sha ll be [15-slightly less than 65] per cent; 
(b) Where the bound duty or ad valorem  equivalent is greater than [20-50] per cent and 
less than or equal to [40-100] per cent, the reduction shall be [20-slightly less than 75] per cent; 
(c) Where the bound duty or ad valorem  equivalent is greater than [40-100] per cent and 
less than or equal to [60-150] per cent, the reduction shall be [25-slightly less than 85] 
per cent;  and 
(d) Where the bound duty or ad valorem  equivalent is greater than [60-150] per cent, the 
reduction shall be [30-slightly less than 90] per cent.   
                                                     
 
2 That is, all out-of-quota duties.  In-quota tariffs sh all be subject to commitments under paragraph 18.    TN/AG/W/3 
 Page 7 
 
 
  [The maximum average reduction in bound duties any developing country Member shall be 
required to undertake is [ ] per cent.  Should the above formula imply an average reduction of more than [ ] per cent for a developing count ry Member, that developing country Member 
shall have the flexibility to apply lesser reduc tions, at its discretion, so that the average 
reduction is no more than [ ] per cent.] 
5. [Developing country Members with ceiling bindings and homogeneous low bindings:  
(a) shall be subject to the overall average reduction only; 
(b) shall have the right to distribute their tari ff lines across the lower tiers of the formula 
on the basis of their own assessment of sensitivities; and 
(c) irrespective of the thresholds for the tiers to be agreed, shall not be required to 
undertake the level of cuts required in the highest tiers.]   
B. 
 [TARIFF CAP 
6. If, after the application of the tiered formula,  a bound duty should be greater than [75-100] per 
cent, it shall be reduced to that level.  [Non- ad valorem  bound duties shall be reduced by the amount 
required to bring the ad valorem  equivalent to this maximum le vel].  For developing country 
Members, the maximum bound duty shall be [150] per cent.] 
C. SENSITIVE PRODUCTS  
1. Designation 
7. Each [developed country] Member shall have the right to designate up to [1-15] per cent of 
[dutiable] tariff lines as "Sensitive Products".  [Dev eloping country Members shall have the right to 
designate up to [50 per cent more than the absolute  number of tariff lines designated by the developed 
country having the highest number of such tariff lines] [ [ ] per cent of [dutiable] tariff lines] as 
"Sensitive Products".] 
8. Designation of such status shall be indicated by the symbol "SePs" in Column [ ] of Table 1, 
Section 1 of the Member's draft Schedule.  Each su ch product shall be subject to a combination of a 
reduction in bound duties and an expansion of tariff quota for the product concerned or a 
proportionate increase if the product is one of a number in a single bound tariff quota [unless a current 
bound quota for the Sensitive Product concerned does not  exist, in which case a Member [may] [shall] 
apply the provisions under pa ragraph 3.10(b)(iii) below]. 
2. Treatment  - Tariff Cut 
9. Bound duties on products designated as Sensitive sh all be reduced by no less than [20-70] per 
cent of the reduction that would otherwise have be en required by the tiered formula.  Developing 
country Members shall have the right to redu ce bound duties on products designated as Sensitive by 
no less than [ ] per cent of the reduction that w ould otherwise have been required by the tiered 
formula.  [Sensitive Products will not be s ubject to the tariff cap under paragraph B.6.] 
3. Tariff Quota Expansion 
10. The basis for expansion of tariff quotas shall be  [domestic consumption expressed in terms of 
physical units] [current bound tariff quota volumes] [current imports [in the years [ ] to [ ]] of the 
product concerned]. TN/AG/W/3 
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  (a) Subject to the provisions set out in (b) below, expansion of the tariff quota for a 
Sensitive Product shall be on a most-favoured-nation basis.   
[Bound tariff quotas shall be increased based on a minimum of [6] per cent of 
domestic consumption or, for de veloping country Members, less than [4] per cent of 
domestic consumption.  For developing country Members, domestic consumption 
shall not include self-consumption of subs istence production.  Developing country 
Members with bound quotas established as a re sult of Article XXVIII negotiations or 
accession commitments shall be able to u se as a base for tariff quota expansion the 
lesser of the bound tariff quota so established or less than [4] per cent of domestic consumption.  The formula for expansion shall be as follows:  [ ] ]  
[Bound tariff quotas shall be increased by the following formula 
∆Q = 100*(0.45 – 0.5*(1-(r f  - rs)/ rf )) 
Where 
∆Q is the expansion in the tariff quota expressed as a percentage of current bound 
tariff quota; 
rf  is the reduction in bound duty under the tiered formula; 
rs is the reduction in bound duty for the sensitive product; and  
the maximum deviation from the tiered formula as measured by (r f  - rs)/ rf shall be 
[80] per cent and the minimum deviation [20] per cent. 
 
 
] 
[Bound tariff quotas shall be increased by the following formula 
∆Q = [∆Qb] + (T 1s – T 1n)*[S] 
Where  
∆Q is the expansion in the tariff quota expressed as a percentage of domestic 
consumption; 
∆Qb is the base expansion of the tariff quota expressed as a percentage of 
domestic consumption; 
T1s is the bound duty to be applied to the sensitive product;  
T1n  is the bound duty as calculated under the tiered formula; 
S is the Slope. 
]  TN/AG/W/3 
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  [Bound tariff quotas shall be increased by the following formula 
∆Q = [0.8] *  (r f  - rs) * 100 / (1 + t 0) 
Where  
∆Q is the expansion in the tariff quota expressed as a percentage of current 
imports; 
rf  is the reduction in bound duty under the tiered formula; 
rs is the reduction in bound duty for the sensitive product; and  
t0 is the current bound duty or its ad valorem  equivalent. 
 
] 
(b) In cases where: 
(i) [the existing bound tariff quota represents: 
- more than [30] per cent of domestic  consumption the expansion in the 
tariff quota under (a) above shall be adjusted by a factor of [0.2]; 
- more than [10] per cent but less than  or equal to [30] per cent of 
domestic consumption the tariff quota under (a) above shall be 
adjusted by a factor of [0.33];  
- more than [5] per cent but less than or equal to [10] per cent of 
domestic consumption the tariff quota under (a) above shall be 
adjusted by a factor of [1];  
- more than [2.5] per cent but less than or equal to [5] per cent of 
domestic consumption the tariff quota under (a) above shall be 
adjusted by a factor of [2];  
- less than or equal to [2.5] per cent of domestic consumption the tariff 
quota under (a) above shall be adjusted by a factor of [3]; 
- an exceptionally high percentage of domestic consumption the 
additional tariff quota commitment will be adjusted further in Schedules negotiations in an equitable manner.] 
(ii) [ [current imports] [the existing bound tariff quota] represent[s] less than [ ] 
per cent of domestic consumption, the expansion in the tariff quota under (a) 
above shall be adjusted by [ ]]; 
(iii) [there is no existing final bound ta riff quota commitment for a Sensitive 
Product the Member concerned [may choo se to] [shall not] create a new tariff 
quota, [provided that the tariff cut for the Sensitive Product shall be achieved in a shorter implementation period.  A lternatively, a Member may opt for a 
longer implementation period for the full tariff cut required by the tiered 
formula.]  [Developing country Members shall have the right to apply a lower reduction in bound duties than would ot herwise have been required under the 
tiered formula over the implementation period, or a reduction in bound duties 
of up to [55] per cent of that required by the tiered formula over a shorter TN/AG/W/3 
Page 10  
 
  implementation period, or the reduction required by the tiered formula over a 
longer implementation period or [ ] ]. ] 
D. O
THER ISSUES  
1. Tariff escalation 
11. [Should, after application of the tiered form ula for tariff reductions, the bound duty on a 
processed agricultural product be greater than th e bound duty on the primary product, the bound duty 
for the processed agriculture product shall be reduced by applying a factor of [1.3] compared to the 
reduction which would otherwise have been require d under the tiered formula or by reducing to the 
rate applicable to the unprocessed  product, whichever is the lesser. 
12. The list of primary products and their processed forms is yet to be determined, and will be 
elaborated taking into account the provisional and illustrative elements in the proposals cited in 
Annex B.] 
13. [Members shall implement an additional tariff cut of [ ] per cent on a list of tariff lines of 
special interest to developing country Members for which: 
(a) tariff escalation is clearly identified and its  calculation takes into account all the raw 
materials processed into the end product; 
(b) tariff escalation is substantial;  and 
(c) trade flows in the raw material are significant.] 
14. [When the bound duty on a processed agricultural pr oduct is greater than that of the relevant 
primary product, and: 
(a) if the tariff lines for both products are in th e same tier (except for the highest tier), the 
bound duty for the processed tariff lines shall be reduced by the cut rate that would 
otherwise be applied for the tier immediat ely above, as long as the tariff rate on the 
processed product will not fall below the tariff rate for the primary products. 
(b) if they both belong to the highest tier, the bound duty for the processed tariff lines 
shall be subject to an additional reduction of [ ] per cent compared to the reduction 
which would have been otherwise requir ed under the tiered formula, as long as the 
tariff rate on the processed product will not fall below the tariff rate for the primary products.] 
2. Commodities 
15. [In the event that adverse effects of tariff escal ation were not to be eliminated via the tiered 
formula for reductions in bound duties and such spec ific measures on tariff escalation as are provided 
for, Members shall engage with commodity de pendent producing country Members to ensure 
satisfactory solutions.] 
16. [Provision shall be made for suitable proce dures for negotiations on the elimination of non-
tariff measures affecting trade in commodities.]  TN/AG/W/3 
 Page 11 
 
 
  3. Tariff simplification 
17. [All bound duties on agricultural products shall be expressed as simple ad valorem  [or 
specific] duties.]  [While reductions in bound dutie s shall be made on the basis of existing bound 
duties in whatever form they are currently expr essed, highly complex forms of bound duties, such as 
complex matrix tariffs [or compound tariffs] shal l be simplified.]  [Members undertaking such 
simplification shall supply supporting data with th eir draft Schedules that demonstrates that the 
simplified bound duty is representative of the original complex duty.]  
4. Tariff quotas 
(a) Bound in-quota duties 
18. [Bound in-quota duties rates shall be [eliminated] [reduced by [ ] percent].] 
(b) Tariff quota administration 
19. The administration of bound tariff quotas shall be subject to the disciplines [to be developed 
taking into account the provisional and i llustrative proposals cited in Annex C]. 
5. Special Agricultural Safeguard 
20. [Article 5 of the Agreement on Agriculture sha ll expire [for developed country Members] [at 
the [beginning] [end] of the implementation period] [at the end of the reform process].]  [Members 
shall have the right to apply the Special Safegua rd Provisions of Article 5 of the Agreement on 
Agriculture.  Members shall reduce the number of tariff lines eligible for the SSG under the Uruguay 
Round Agreement on Agriculture by [ ] per cent.] 
E. SPECIAL AND DIFFERENTIAL TREATMENT  
1. Special Products 
(a) Selection 
21. Each developing country Member shall have th e right to self-designate [at least 20 per cent 
of] [up to 5] tariff lines in the Member's Sche dule as "Special Products"] [until the end of the 
implementation period].  Such tariff lines shall be designated by the symbol "SP" in column [ ] of Table 1 of Section 1 of its draft Schedule.  
22.  [Designation shall be guided by the indicator s listed in Annex D which are based on the 
criteria of food security, livelihood security and/or rural development needs of individual developing 
country Members.]  [To be a candidate for desi gnation as a "Special Product" [a product must be 
produced domestically or be a close substitute of products produced domestically] [, [ ] per cent of 
domestic consumption of the product must be met through domestic production; or the product must 
represent more than [ ] per cent of agriculture GDP; or  the product must contribute at least [ ] per cent 
of the total nutritional value (dietary and calorific requirement) of the population].] 
23. [A tariff line shall not be designated as a "S pecial Product" if: [developing country Members 
export more than [ ] per cent of world exports of th at product; or more than [ ] of imports by the 
Member concerned are imported from other developi ng country Members;] [the developing country 
Member concerned is a net exporter; or if the developing country Member  concerned exports the 
product on a most-favoured-nation basis;] [the pr oduct is eligible for the Special Safeguard 
Mechanism].] TN/AG/W/3 
Page 12  
 
  24.  [Any product accordingly designated and notif ied as SP, whether in its natural unprocessed 
form or in its processed forms, shall be presumed to meet at least one of the indicators given in 
Annex D, either at the national or regional level,  in the developing country Member concerned.  A 
product in any of its processed forms shall be d eemed to be eligible for designation as SP if the 
product in its natural unprocessed form is designate d as SP.  The right to self-designate any product as 
SP shall not be questioned at any stage of the negotiating processes, including the processes for 
verification of the Schedules of Members.]  [To s how compliance with the criteria, each developing 
country designating a product as "SP" shall, [upon request] demonstrate, using appropriate indicators 
how the product concerned meets the criteria of food security, livelihood security and rural 
development.] 
(b) Treatment 
25. [No product designated as a Special Product sh all be subject to [a cap on the bound duty 
under paragraph B.6] [or to] [any new tariff quota commitment].] 
26. [Notwithstanding paragraphs 1 a nd 2 of Article 4 of the Agreement on Agriculture, in respect 
of the total tariff lines covering agricultural produ cts, at the duty level, designated as SP by a 
developing country Member based on the guidance pr ovided by the indicators listed in Annex D, the 
following treatment on bound import tariff rates shall apply: 
(a) At least [50] per cent  of the aforementi oned tariff lines will not be subject to any 
tariff reduction commitment;  Provided that, if any developing country Member is 
characterised by special circumstances
3, an additional [15] per cent of the 
aforementioned tariff lines will not be subject to any tariff reduction commitment; 
(b) [25] per cent other than those categorised in subparagraph (a) above, of the 
aforementioned tariff lines will be subject to a reduction of [5] per cent;  and 
(c) Each residual tariff line, other than those categorised in subparagraphs (a) and (b) 
above, of the aforementioned tariff lines will be subject to a reduction of not more 
than [10] per cent..] 
27. [Products designated as "Special Products" shall be subject to a reduction in bound duties of 
[ ] per cent of the reduction that would otherwise have been applicable under the tiered formula for 
reductions in bound duties or, in the case where a cap in the bound duty would otherwise have been 
applied, the cap shall be [ ] per cent higher  than would otherwise have been the case.] 
28. ["Special Products" [currently subject to bound tariff quotas] shall be subject to tariff quota 
expansion of [ ] per cent.] 
2. Special Safeguard Mechanism 
(a) Selection 
29. Each developing [and least-developed] country Member [shall have access to a Special 
Safeguard Mechanism for all agricultural products] [sha ll have the right to designate up to [ ] [per cent 
                                                      
3 Special circumstances refer to situatio ns where a developing country Member: 
(a) had bound at least [25%] of its total tariff lines at a maximum import duty of [80%] at the start 
of the implementation period; 
(b) had undertaken ceiling binding commitments under the Uruguay Round; (c) has predominantly low income or resource poor producers;  or 
(d) has any other structural difficulties in its agriculture sector.  TN/AG/W/3 
 Page 13 
 
 
  of] tariff lines [at the HS 6-digit level] as "SSM" in column [ ] in Part I, Section I of its Schedule] 
[may designate as "SSM" in its Schedule those products which have unde rtaken tariff reductions 
greater than [ ] per cent [which result in a reduction in  the bound duty to less th an then current applied 
duty] ].  [Products designated as "Special Products" may not be designated as "SSM".]  
(b) Trigger and Remedy 
30. The quantity and price triggers under which the Special Safeguard Mechanism may be 
invoked and the additional duties that may be charged are set out in Annex E. 
3. Fullest liberalization of trade in tropical and diversification products 
31. [Tropical and diversification products are those lis ted in Annex F.] [A list of tropical products 
shall be established on the basis of the indicative list of the Uruguay Round and shall not include 
products produced in significant quantities in non- tropical countries.  For Members identified as 
operating the diversification of pr oduction from the growing of illicit na rcotic crops, a list of products 
of particular importance for dive rsification shall be established.] 
32. [Developed country Members shall reduce bound duties on tropical and diversification 
products  
(a) by the reduction applicable unde r paragraph A.2.3(d) above;  
(b) where such products are subject to tariff escalation, an additional reduction in bound 
duties of 10 percentage points;  and 
(c) any bound in-quota duty shall be eliminated.] 
33. [Members shall reduce bound duties on tropical products according to the following 
modalities:  
(a) [ ] per cent of tropical product tariff lines shall be reduced to [0]; 
(b) [ ] per cent of tropical product tariff lines shall be reduced by the reduction foreseen 
for the tier immediately above the one fo r the product in question in the tiered 
formula; 
(c) bound duties on other tropical products shall be reduced by the reduction applicable 
under the tiered formula. 
34. For diversification products, importing Members sha ll designate [ ] per cent of the tariff lines 
on the above list and provide preferential access to the Members concerned for as long as an effective 
diversification programme is in place.] 
35. [No tropical or diversification product listed in Annex F may be designated as a Sensitive 
Product by a developed country Member.]  [Tropical and diversification products may be declared as 
Sensitive Products or as Special Products and be treated as such.] 
4. Preference erosion 
36. In recognition of the importance of long-standing preferences, preference erosion [associated 
with the products and markets listed in Annex G] shall be addressed by: TN/AG/W/3 
Page 14  
 
  (a) [[the preference granting Member] applying a lesser reduction of [ ] percent of the 
appropriate reduction under the tiered formula;] [and] [or] 
(b) [[the preference granting Member] wherever relevant, eliminating any bound in-quota 
duty] [and] [or] 
(c) [[the preference granting Member] implementing the tariff reduction over an 
additional period of [ ] years [with the first year of the implementation deferred by [ ] 
years];]  [and] [or]  
(d) [[the preference granting Member,] to the ex tent technically feasible, maintaining the 
preference margin;] [and] [or] 
(e) [[the preference granting Member] providing improved market access opportunities 
for non-preference-receiving products which are also of vital export interest to 
preference receiving Members, to the extent possible;] [and] [or] 
(f) [[the preference granting Member] taking full y into account the issue of preference 
erosion in designating Sensitive Products].  
37. [[Preference granting Member] [Members] shal l provide targeted technical assistance, 
including additional financial and capacity building assistance, to help address supply-side constraints 
and to promote the diversification of existing pr oduction in the territories of preference receiving 
Members.] 
 
F. R
ECENTLY ACCEDED MEMBERS  
38. [The implementation period for [developing] re cently acceded Members shall be [2011] to 
[three years after the end of the implementation period for other [developing country] Members ].]   [To the extent that the implementation period of commitments undertaken in acceding to the WTO overlaps with the implementation period of co mmitments undertaken in association with these 
modalities, the start of implementation of comm itments undertaken in association with these 
modalities shall begin [immediately] [[ ] years]  after the end of implementation of accession 
commitments.] 
39. [Recently acceded Members may reduce bound duties by [ ] per cent of the reduction that 
would otherwise have been required by tiered formula [and bound duties below [10] per cent in a 
[developing] recently acceded Member shall be exempt from reduction].]  
40. [Developing] [R][r]ecently acceded  Members shall have the fo llowing additi onal flexibility 
on the selection and treatment of Special Products:  [ ].  And on sensitive products the following additional flexibility [ ].] 
41. [Small low-income, recently acceded Members with economies in transition shall not be 
required to undertake reductions in bound duties and sh all have access to all instruments available to 
other Members at the same level of development under Market Access.] 
G. L
EAST -DEVELOPED COUNTRIES  
42. Least-developed country Members shall have full access to all special and differential 
treatment provision and shall not be requ ired to undertake reduction commitments.  TN/AG/W/3 
 Page 15 
 
 
  43. [Developed-country Members shall, and deve loping-country Members declaring themselves 
in a position to do so should4:  
(a) Provide duty-free and quota-free market access on a lasting basis, for all products 
originating from all LDCs by 2008 or no la ter than the start of the implementation 
period in a manner that ensures stability, security and predictability. 
(b) Members facing difficulties at this time to  provide market access as set out above 
shall provide duty-free and quota-free market access for at least 97 per cent of products originating from LDCs, defined at th e tariff line level, by 2008 or no later 
than the start of the implementation period.  In addition, these Members shall take steps to progressively achieve compliance with the obligations set out above, taking 
into account the impact on other developi ng country Members at similar levels of 
development, and, as appropriate, by incr ementally building on the initial list of 
covered products. 
(c) Developing-country Members shall be perm itted to phase in their commitments and 
shall enjoy appropriate flexibility in coverage. 
(d) Ensure that preferential rules of origin  applicable to imports from LDCs are 
transparent and simple, and contribu te to facilitating market access.] 
 
[By the time Members submit their comprehens ive draft schedules of concessions, developed-
country Members shall, and developing-country  Members declaring themselves in a position 
to do so should: 
- inform the WTO of the products that ar e currently covered under duty free and quota 
free market access for LDCs;  
- notify the internal procedures by which they will implement the Decision; and - provide an indication of the possible time frame within which th ey intend to fully 
implement the Decision as agreed.] 
H. C
OTTON  
44. Developed country Members [and developing c ountry Members [in a position to do so]] shall 
give duty and quota free access for cotton exports fr om least-developed count ry Members from the 
commencement of the implementation period. 
45. [Developing country Members that are not in a position to give duty- and quota-free access 
for cotton exports from least-developed country Me mbers undertake to facilitate imports of cotton 
from the least-developed country Members from th e commencement of the implementation period.] 
46. [Developed country Members [shall] [should] grant duty- and quota-free access for cotton 
exports from [least-developed] [developing] c ountry Members from the commencement of the 
implementation period.] 
                                                      
 4 The text of this paragraph is the "Decision on Meas ures in Favour of Least-Developed Countries" in 
Annex F of the Hong Kong Ministerial Declaration (WT/MIN(05)/DEC). TN/AG/W/3 
Page 16  
 
  I. [S
MALL , VULNERABLE ECONOMIES  
47. Members with economies that, in the period [ 1999] to [2004], had an average share of 
[(a) world merchandise trade of no more than [0.16]  per cent,] [(b) world trade in non-agricultural 
products of no more than [0.10] per cent] [and] [( c) world trade in agricultural products of no more 
than [0.40] per cent] shall have the right to reduce bound duties by [ ] less than those that would 
otherwise have been required under paragraph 4 above.   
48. Any Member meeting the criteria in paragraph 47 shall have the right to self-designate at least 
[ ] per cent of tariff lines as Special Products based on criteria of food security, livelihood security and rural development needs.  Such  Members shall not be required to undertake reductions in bound 
duties, increase bound tariff quotas [or be subject to a tariff cap] on these products.] 
49. [Developed country] Members shall provide e nhanced improvements in market access for 
products of export interest to Member s with small, vulnerable economies.] 
J. M
ONITORING AND SURVEILLANCE   TN/AG/W/3 
 Page 17 
 
 
  III. DOMESTIC SUPPORT 
A. FINAL BOUND TOTAL AMS:   A TIERED FORMULA  
1. Tiered reduction formula 
(a) Reductions in Final Bound Total AMS 
50. The Final Bound Total AMS shall be reduced  in accordance with the following tiered 
formula: 
(a) Where the Final Bound Total AMS is greater than US$40 billion, or the equivalent in 
the monetary terms in which the binding is  expressed, the reduction shall be [70-83] 
per cent; 
(b) Where the Final Bound Total AMS is greater than US$15 billion and less than or 
equal to US$40 billion, or the equivalents in  the monetary terms in which the binding 
is expressed, the reduction shall be [60-70] per cent; 
(c) Where the Final Bound Total AMS is less than or equal to US$15 billion, or the 
equivalent in the monetary terms in wh ich the binding is expressed, the rate of 
reduction shall be [37-60] per cent. 
51. Developed country Members with high relative le vels of Final Bound Total AMS [of at least 
[40] per cent of the total value of agricultural production] shall undertake an additional reduction 
[equal to at least half of the difference between the reduction rate specified in their tier and the 
reduction rate specified in the higher tier].  
(b) Implementation period and staging 
52. The reductions in Final Bound Total AMS shall be implemented according to the following 
schedule [ ]. 
(c) Special and differential treatment 
53. The reduction in Final Bound Total AMS applicable to developing country Members with 
Final Bound Total AMS commitments shall be [two thirds] of the reduction applicable under sub-
paragraph (a)50(c) above.  The re ductions in Final Bound Total AM S shall be implemented according 
to the following schedule [ ]. [Net food-importing developing country Members shall be exempt from 
reductions in Final Bound Total AMS.] 
54. Developing country Members shall have continue d access to the provisions of Article 6.2 of 
the Agreement on Agriculture. 
(d) Other  
55. [As provided for under Article 18.4 of the Agreement on Agriculture, those cases where 
[exchange rate fluctuations] [and in flation rates] have caused extraord inary situations shall be dealt 
with separately and on a pragmatic case-by-case basis.] 
 TN/AG/W/3 
Page 18  
 
  B. P
RODUCT -SPECIFIC AMS  CAPS 
1. Product-specific AMS caps 
56. Product-specific AMS limits shall be set out in  the Schedule of the Member concerned.   
57. Article 6.3 of the Agreement on Agriculture sh all be amended to reflect the modalities with 
respect to product-specific AMS caps by the addition of the following: 
Ad Article 6.3:  
A Member shall not exceed the product-specific AMS limits specified in its Schedule. 
58. The product-specific AMS limits specified in each Member's Schedule shall be the average 
applied levels of such support provided during the base period [1995 to 2000] [1999 to 2001].      
59. [In cases where a product-specific AMS during the base period was below the de minimis  
level the Current AMS for such products shall not exceed [the de minimis  level] [[ ] per cent of the 
value of production of that product] and the limit for such products shall be denoted accordingly in the 
Schedule.] [In cases where product-specific AMS exceeded de minimis  after the base period the 
product-specific limit shall not exceed [ ].] 
60. Product-specific AMS caps shall be implemented [according to the following schedule [ ]]. 
2. Special and differential treatment 
61. [In the case of developing country Members, the Current AMS for individual products shall 
not exceed the respective levels establishe d by one of the following methods:  
(a) the average applied levels during the base period [1995 to 2000] or [1995 to 2004], as 
may be selected by the Member concerned; or 
(b) [twice] the Member's product-specific de minimis  level; or 
(c) [20] per cent of the Annual Bound Total AMS in any year.] 
C. DE MINIMIS  
1. Reductions 
62. The de minimis  levels pursuant to Article 6.4(a) of  the Agreement on Agriculture shall be 
reduced by [50] [80] [] per cent  [or by such an amount as would be required to adjust to the rate of 
cut of Overall Trade-Distorting Domestic Support if that is greater].  The new de minimis  levels shall 
[become effective from the beginning of the impl ementation period] [be phased in through equal 
annual instalments over the implementation period]. 
2.  Special and differential treatment 
63. Developing country Members: 
(a) that allocate almost all de minimis  support for subsistence and resource-poor farmers; 
(b) with no AMS commitments[.] [; and]   TN/AG/W/3 
 Page 19 
 
 
  (c) [net food-importing developing country Members.] 
shall be exempt from reductions in de minimis . 
64. For other developing country Members, the de minimis  levels pursuant to Article 6.4(b) of the 
Agreement on Agriculture shall be reduced by [ ] pe r cent [or by such an amount as would be required 
to adjust to the rate of cut of Overall Trade-Distor ting Domestic Support if that is greater].  For these 
Members, the new de minimis  levels shall [be phased in over a period[ ]]. 
D. BLUE BOX 
1. Basic criteria 
65. Subject to the additional criteria set out be low Article 6.5 shall be amended as follows: 
 Article 6.5 
The value of the following direct payments sh all be excluded from a Member's calculation of 
its Current Total AMS: 
(a) Direct payments under production-limiting programmes if: 
(i) such payments are based on fixed and unchanging areas and yields; or (ii) such payments are made on 85 per cen t or less of a fixed and unchanging base 
level of production; or 
(iii) livestock payments are made on a fixed and unchanging number of head. 
Or (b)   Direct payments that do not require production if: 
(i) such payments are based on fixed and unchanging bases and yields; or  (ii) livestock payments made on a fixe d and unchanging number of head; and 
(iii) such payments are made on 85 per cen t or less of a fixed and unchanging base 
level of production. 
2. Additional criteria 
(a) Blue Box cap 
66. In addition to the criteria set out in paragra ph 1.65 a Member shall not provide support under 
Article 6.5 in excess of the amount as determined be low.  This will be expressed consistently in the 
value-specific commitments set out in  that Member's Schedule. 
67. The maximum permitted value of support under Ar ticle 6.5 shall not exceed [2.5] per cent of 
the average total value of agricultural production dur ing the base period.  This limit will [apply from 
the commencement of the implementation period] [be reduced to [ ] per cent in accordance with the 
following schedule [ ]] [be phased in, starting, in the first year of implementation, from 5 per cent of 
the average total value of agricultural production in the base period, according to the following 
schedule [ ] ]. TN/AG/W/3 
Page 20  
 
  68. In cases where a Member has placed an exceptiona lly large percentage of its trade-distorting 
support [greater than [40] per cent during the base pe riod] in the Blue Box, [the percentage reduction 
in that support under Article 6.5 will equal the pe rcentage reduction that the Member concerned will 
make in the Final Bound Total AMS]  [the limit under Article 6.5 shall be [ ] percent of the average 
total value of agricultural production]. 
(b) Other criteria 
69. [The value of support provided to an individua l product under Article 6.5(a) shall not exceed 
the average value of support provided to it during the period [ ].  [Members using such payments shall 
demonstrate through notification that the production  of the individual product in receipt of such 
payments has not increased in relation to the pe riod when the application of such payments was 
decided.]] 
70. [The value of support provided to an indi vidual product under Article 6.5(b) shall: 
(a) not exceed [ ] per cent of the value of the overall Blue Box cap; [and  
(b) not exceed [ ] per cent of the value of production of the product concerned in the 
period [ ].]] 
71. [Direct payments under Article 6.5(b) that are based on compensating for a differential 
between prices actually received as compared to a price benchmark [shall use a historical or specified reference period] [and] [shall not compensate for more than [ ] per cent of the differential in prices.] ] 
72. [An increase in Blue Box support for any individual product beyond the limitations 
determined under this Article shall be permissible where that amount does not exceed [[ ] per cent of] 
a corresponding reduction in Current AMS support for the product(s) concerned.]  [Where there was 
no Current AMS support in the base period [ ] to [ ] for a particular product, an increase in Blue Box 
support is permissible for that product where the support concerned does not exceed [ ] percent of value of production and the overall Blue Box cap is still respected.] 
73. [Where more than [ ] per cent of the total va lue of agricultural production is derived from [ ] 
basic agricultural products, the Member con cerned shall have the flexibility to [ ].] 
3. Special and differential treatment 
74. For developing country Members, the maximu m permitted level for the value of support 
under Article 6.5 shall not exceed [5] cent of the av erage total value of agricultural production in the 
[base] period [from [ ] to [ ]].   
4. Transparency Requirements 
75. [Members using direct payments under Article  6.5, shall for the products receiving such 
payments, notify: 
(a) All parameters referring to any existing or additional criteria, at the time when the 
programmes were established; 
(b) As from the first implementation year of the Doha Development Agenda, all those 
parameters, such as base period, production levels, area planted, number of head, and 
other parameters [to be completed] shal l be notified at product-specific level.  TN/AG/W/3 
 Page 21 
 
 
  76. No Blue Box payments shall be used until a ll notifications obligations above are complied 
with timely and accurately.] 
77. Transparency of the Blue Box measures sha ll be increased through improved notification 
requirements. 
E. OVERALL REDUCTION OF TRADE -DISTORTING DOMESTIC SUPPORT :  A TIERED FORMULA  
1. Base level 
78. The Base Overall Trade-Distorting Domestic Suppo rt shall be the sum of (i) the Final Bound 
Total AMS plus (ii) permitted de minimis  level expressed in monetary terms plus (iii) the Blue Box 
level expressed in monetary terms where; 
(a) the "Final Bound Total AMS" is the "Final Bound Commitment Level" as defined in 
Article 1(h) of the Agreement on Agriculture; 
(b) for the purpose of this base level for reduc tions in Overall Trade-Distorting Domestic 
Support, the permitted de minimis  level is the annual average of the sum of a 
Member's: 
(i) product-specific de minimis levels [for those products where the average 
value of product-specific AMS support in the base period did not exceed the 
de minimis level] [for those products that did not receive AMS support in any 
year of the base period]; and  
(ii) non-product-specific de minimis  levels in the base period  [, for those years 
for which non-product-specific AMS support was provided, the non-product-specific de minimis  level shall be deemed to be zero]; 
as specified in Article 6.4 of the current Ag reement on Agriculture [or the Protocol of 
Accession of the Member concerned], expressed in monetary terms, during the base period; and 
(c) for the purpose of this base level of reducti ons in Overall Trade-Distorting Domestic 
Support, the Blue Box level is the higher of existing average Blue Box payments 
during the base period and 5 per cent of th e average total value of agricultural 
production during the base period. 
2. Tiered reduction formula 
79. The base level of Overall Trade-Distorting Dom estic Support shall be reduced in accordance 
with the following tiered formula: 
(a) Where the base level of Overall Trade-Distorting Domestic Support is greater than 
US$60 billion, or the equivalent in the monetary terms in which the binding is 
expressed, the reduction shall be [70-80] per cent; 
(b) Where the base level of Overall Trade-Distorting Domestic Support is greater than 
US$10 billion and less than or equal to US$60 billion, or the equivalents in the 
monetary terms in which the binding is e xpressed, the reduction shall be [53-75] per 
cent; TN/AG/W/3 
Page 22  
 
  (c) Where the base level of Overall Trade-Distorting Domestic Support is less than or 
equal to US$10 billion, or the equivalent in  the monetary terms in which the binding 
is expressed, the rate of reducti on shall be [31-70] per cent. 
3. Implementation period and staging 
80. As the first instalment of the overall reduction, in the first year and throughout the 
implementation period, the sum of all trade-distorting support shall not exceed 80 per cent of the base 
level of Overall Trade-Distorting Domestic Suppor t.  As for the second and subsequent years of 
implementation, the remaining reductions shall be  implemented according to the following schedule 
[ ]. 
4. Special and differential treatment 
81. Developing country [, and recently acceded] Members with no AMS Commitments shall not 
be required to make commitments on reductions in Overall Trade-Distorting Domestic Support.  [In 
addition, net food-importing developi ng country Members shall also be exempt from commitments to 
reduce Overall Trade-Distorting Domestic Support.] 
82. For [other] developing country Members [with AMS commitments], the applicable reduction 
for Overall Trade-Distorting Domestic Support shall be [two thirds] [[ ] per cent] of the relevant rate 
specified in paragraph 2.79(c) above.  
83. As the first instalment of the overall cut, in the first year and throughout the implementation 
period, the sum of all trade-distorting support shall not exceed 80 per cent of the base level of Overall 
Trade-Distorting Domestic Support.  As for the sec ond and subsequent years of implementation, the 
remaining reductions shall be implemented according to the following schedule [ ].    
5. Other 
84. Commitments relating to reductions in Overall Trade-Distorting Domestic Support shall apply 
as a minimum overall commitment.  If necessary, a Member shall be required to make additional 
commitments on reductions or limits in Sec tion A (Final Bound Total AMS), Section C ( De minimis ) 
and/or Section D (Blue Box) in order to achieve the appropriate reduction in Overall Trade-Distorting 
Domestic Support.  
F. G
REEN BOX 
85. Annex 2 of the Agreement on Agriculture shall be amended as set out in Annex H of this 
document. 
G. COTTON  
1. Reductions in Support for Cotton Production 
86. Trade-distorting domestic support for cotton shall be reduced by [ ] per cent more than the 
reduction in Final Bound Total AMS [or Overall Tr ade-Distorting Domestic Support whichever is the 
greater] and set out in Part [ ] of each Member's Schedule.    TN/AG/W/3 
 Page 23 
 
 
  87. [AMS support for cotton shall be [eliminated] [r educed according to the following formula   
Rc = Rg + (100 – Rg) * 100  
 3 * Rg 
Rc = Specific reduction applicable to cotton as a percentage 
Rg = General reduction in AMS as a percentage 
 
88. This will be applied to the base value of s upport calculated as the arithmetic average of the 
amounts notified by Members for cotton in supporting tables DS:4 from 1995 to 2000.] 
89. [The ceiling on Blue Box subsidies for cotton sha ll be [5 per cent of total Blue Box ceiling] 
[one-third of [the ceiling on the Blue Box for agriculture as a whole] [the production value for cotton] 
[the amount that would be otherwise determined  respectively through application of paragraph 
D.2(b)69 above and the "double trigger" approach sp ecified in paragraph D.2(b)70(a) and (b) above.]] 
2. Implementation  
90. The reductions for trade-distorting domestic support on cotton shall be implemented over a 
period [which is one third of the implementation period] [according to the following schedule [ ]].  
3. Special and Differential Treatment 
91. [Developing country Members shall have the following rates of reduction for trade-distorting 
domestic support for cotton [ ] [, provided that the rate  of reduction is no less than two thirds of that 
specified in paragraph 1.86 above.]]  
92. [The relevant Blue Box cap for developing country Members [which are net producers and 
exporters of cotton] shall be [ ].  The relevant  Blue Box cap for cotton for developing country 
Members shall be [ ].] 
93. [Developing country Members shall implement their reduction commitments for cotton over a 
period of up to [ ] years.]  
H. RECENTLY ACCEDED MEMBERS  
94. [The implementation period for [developing] re cently acceded Members shall be [2011] to 
[three years after the end of the implementation pe riod for other [developing country] Members.]]   
[To the extent that the implementation period of commitments undertaken in acceding to the WTO overlaps with the implementation period of co mmitments undertaken in association with these 
modalities, the start of implementation of comm itments undertaken in association with these 
modalities shall begin [immediately]  [[ ] years]  after the end of implementation of accession 
commitments.] 
95. [Small, low-income, recently acceded Members with economies in transition shall not be 
required to undertake reductions in  Final Bound Total AMS [and] [or] de minimis  level.] 
96. [In the case of such Members, investment subsid ies and input subsidies generally available to 
agriculture, interest subsidies to  reduce the costs of financing as well as grants to cover debt 
repayment shall be exempted from domestic support AMS commitments.] TN/AG/W/3 
Page 24  
 
  I. M
ONITORING AND SURVEILLANCE  
97. Procedures and notification requirements a nd formats shall be improved to ensure 
transparency and enhance monitoring of domestic su pport measures.  Details to be developed in the 
context of horizontal modalities for monitoring and surveillance.    TN/AG/W/3 
 Page 25 
 
 
  IV. EXPORT COMPETITION 
A. GENERAL PROVISIONS ON EXPORT COMPETITION  
98. Nothing in the modalities on export competition can be construed to give any Member the 
right to provide, directly or indirectly, support to exports of agricultural products in excess of the 
commitments set out in Members' Schedules or in conflict with the terms of Article 8 of this 
Agreement.  Furthermore, nothing can be construed to imply any change to the obligations and rights 
under Article 10.1 or to diminish in any way ex isting obligations under other provisions of the 
Agreement on Agriculture or other WTO Agreements. 
99. The following provisions will give effect to the detailed modalities ensuring parallel 
elimination of all forms of expor t subsidies and disciplines on all export measures with equivalent 
effect pursuant to the July 2004 Agreed Framew ork and the Hong Kong Ministerial Declaration. 
B. EXPORT SUBSIDY COMMITMENTS  
100. Developed country Members shall eliminate thei r export subsidies by the end of 2013.  This 
will be on the basis of annual budgetary outlay co mmitments being reduced by [ ] percent [and 
quantity commitments being reduced by [ ] percent]  in each year commencing 2008 to 2013, such that 
a substantial part of the elimination of export subsidy commitments is achieved by 2010, the mid-
point of implementation for developed country Members. 
101. Developing country Members shall eliminate thei r export subsidies by the end of [ ].  This 
will be on the basis of annual budgetary outlay co mmitments being reduced by [ ] percent [and 
quantity commitments being reduced by [ ] percent]  in each year commencing 2008 to [ ] such that a 
substantial part of the eliminati on of export subsidy commitments is achieved by [ ], the mid-point of 
implementation for developing country Members. 
102. In accordance with the Hong Kong Ministerial D eclaration, developing country Members will 
continue to benefit from the provisions of Article 9.4 of the Agreement on Agriculture for five years 
after the end-date for elimination of  all forms of export subsidies. 
C. EXPORT CREDITS , EXPORT CREDIT GUARANTEES OR INSURANCE PROGRAMMES  
103. Export credit, export credit guarantees or insu rance programmes shall comply with the 
detailed disciplines set out in Annex I. 
104. [Export financing support, which does not confor m with the provisions of paragraph 3.4 of 
Annex I, or which is provided in circumstances as may otherwise be allowable under Article 9 of this 
Agreement, constitute export subsidies for the pur poses of this Agreement and are therefore [subject 
to specific export financing elimination commitme nts contained in Members' Schedules] [to be 
prohibited by [ ] for developed country Members and [ ] for developing country Members] [to be 
eliminated within the binding levels of Memb ers' export subsidies el imination Schedules].] 
105. [The disciplines set out in Annex I, shall appl y from the first day of the implementation period 
of the Doha Round for developed country Members [a nd from [ ] for developing country Members] [.] 
[and the maximum repayment term of 180 days shall be phased in according to the following schedule 
[ ].] ] 
106. [The disciplines set out in Annex I, shall appl y from the first day of the implementation period 
of the Doha Round for developed country Members [a nd from [ ] for developing country Members] [.] TN/AG/W/3 
Page 26  
 
  [and the maximum repayment term of 180 days shall be phased in according to the following schedule 
[ ].] ] 
D. A
GRICULTURAL EXPORTING STATE TRADING ENTERPRISES  
107. Agricultural exporting state trading enterprises sh all comply with the detailed disciplines set 
out in Annex J.  
108. Members shall,  
(a) eliminate by [ ] [the end of 2013] for deve loped country Members, and by [ ] [the end 
of [ ]] for developing country Members, [in accordance with the following timetable 
[to be developed]] [in parallel with the elimination of export subsidies]: 
(i) those export subsidies, defined by Article 1(e) of the Agreement on 
Agriculture, which are currently provided  to or by an agricultural exporting 
state trading enterprise, consistent with Members export subsidy commitments and the provisions of Article 9.4 of the Agreement on Agriculture; 
(ii) government financing of exporting stat e trading enterprises, [including, inter 
alia], preferential access to capital or othe r special privileges with respect to 
government financing or re-financi ng facilities, borrowing, lending or 
government guarantees for commercial borrowing or lending, at below market rates; and 
(iii) government underwriting of losses, either directly or indirectly, [including, 
inter alia ] losses or reimbursement of the costs or write-downs or write-offs 
of debts owed [to, or] by export state trading enterprises on their export sales.  
(b) [[prohibit] [phase-out] by [ ] [the end of 2013] [in parallel with the elimination of 
export subsidies] the use of monopoly powers for such enterprises, after which Members shall not restrict the right of any in terested entity to export, or to purchase 
for export, agricultural products.] 
109. The provisions of paragraph 108(b) for developi ng country Members shall be subject to the 
provisions contained in paragraph 3.4(a) and (b) of Annex J.  
E. I
NTERNATIONAL FOOD AID 
110. International food aid shall comply with the detailed disciplines set out in Annex K. 
111. [In-kind food aid [provided in situations other th an those defined in paragraphs 2.4 and 2.6 of 
Annex K] shall be [prohibited] [phased out] by [ ] [the end of 2013] for developed country Members 
and by [ ] [the end of [ ] for developing coun try Members] [in accordance with the following 
timetable [ ] ] [in parallel with the elimination of export subsidies].] 
112. [The monetisation of in-kind food aid shall be [p rohibited] [phased out] by [the end of 2013] 
for developed country Members and by [ ] [the e nd of [ ] ] for developing country Members [in 
accordance with the followi ng timetable [ ] ] [in parallel with the elimination of export subsidies] [.] 
[except where it is n ecessary to fund activities that  are directly related to the delivery of food aid to 
the recipient or for the procurement of agricultural inputs.]    TN/AG/W/3 
 Page 27 
 
 
  F. COTTON  
113. All forms of export subsidies for cotton shall be  eliminated by developed countries in 2006 
[and developed countries concerned shall provide information on measures they have taken to 
implement this [and their schedules of commitments shall be modified with effect from 31 December 
2006.].]  
114. [All forms of export subsidies for cotton shall be eliminated by developing country Members 
in 2007 [and developing country Members concerne d shall provide information on measures they 
have taken to implement this] [and their schedules of  commitments shall be modified with effect from 
31 December 2007].]  
115. [The extent to which disciplines and commitments  for the parallel elimination of all forms of 
export subsidies and disciplines on all export measur es with equivalent effect for export credits, 
agricultural exporting state trading enterprises and in ternational food aid, apply to cotton and their 
scheduling shall be specified in the lists of commitments.] 
V. EXPORT PROHIBITIONS AND RESTRICTIONS 
A. ARTICLE 12.1 
116. [Article 12.1 of the Agreement on Agriculture shall be amended to include the measures set 
out in Annex L.] 
VI. COMMODITY ARRANGEMENTS 
A. UNDERSTANDING ON THE PROVISIONS OF ARTICLES XX( H) AND XXXVIII  OF GATT  1994 
117. [An Understanding on the provisions of Ar ticles XX(h) and XXXVIII of GATT 1994 is set 
out in Annex M.] 
VII. [OTHER ISSUES] 
A. [SECTORAL INITIATIVES ] 
B. [GEOGRAPHICAL INDICATIONS ] 
C. [DIFFERENTIAL EXPORT TAXES  
118. The differential element of export taxes sh all be eliminated by the end date for 
implementation.] 
 
 
 
 
 TN/AG/W/3 
Page 28  
 
  Annex A 
D
RAFT GUIDELINES FOR THE CONVERSION OF FINAL BOUND NON -AD VALOREM  DUTIES  
INTO AD VALOREM  EQUIVALENTS5 
 
 
I. OBJECTIVE 
1. There is general understanding amongst Members that construction of a tiered formula for 
tariff reductions requires a common measurement device for converting the various types of non- ad 
valorem  final bound tariffs to ad valorem  equivalents ("AVEs").  These Guidelines are intended to 
establish such a common methodology for the calcula tion, and subsequent submission, of AVEs for 
the purposes of allocating tariffs to the various tiers  to be established.  The Guidelines are based on 
the principles of practicality, comparability, simplicity, transparency and verifiability. 
2. All Members with final bound non- ad valorem  tariffs for agricultural products (as defined in 
Annex 1 of the Agreement on Agriculture) in their WTO Schedules will apply these Guidelines for 
converting their non- ad valorem  tariffs into AVEs.6 
3. There are no preconditions to the tabling of data  sets as a working basis.  However, it should 
be noted in this context that a ll tariff reductions will be made from Members' bound rates, as agreed in 
paragraph 29 of the Framework Agreement.  The issue of tariff simplification remains under 
negotiation in accordance with paragra ph 37 of the Framework Agreement. 
4. A solution to the issue of the potential "overlap " in tariff cuts, which may be created at the 
margins of the tariff bands, will need to be found. 
5. While there is broad acceptance that Member s are searching for the closest approximation 
possible of the correct AVE (exact precision bei ng unattainable), it should be noted that in the 
consultations strong linkages have been made  between providing Members "flexibility" and 
"verification" procedures. 
6. At the request of Members, the Secretariat will continue to provide advice on technical 
matters, including technical assistance which may be necessary in the case of some developing 
country Members for applying the methodology set out below. 
II. CONVERSION METHODOLOGY 
7. The principal method for converting the final bound non- ad valorem  duties into their ad 
valorem  equivalents will be the unit value method b ased on IDB import data.  This method will be 
applied in accordance with the moda lities outlined in Section A below. 
8. An alternative conversion method will be applie d to the extent that the unit value method 
based on IDB import data is not appropriate or not  practicable as determined in Section B below. 
                                                      
5 This text was first distributed as document number 2601 on 10 May 2005.  The text and Members’ 
submissions of ad valorem  equivalents of bound non ad valorem  tariffs can be found on the Members’ website. 
6 Secretariat notes TN/AG/S/11, S/11/Add.1 and S/11/Add.2 describe the incidence of final bound non-
ad valorem  duties in Members' WTO Schedules.   TN/AG/W/3 
 Page 29 
 
 
  A. UNIT VALUE METHOD BASED ON IDB  IMPORT DATA 
1. Formula 
9. The final bound non- ad valorem  MFN duties specified in Members' Schedules will be 
converted into their AVEs in accordan ce with the following formula: 
AVE = (SP * 100)/(UV * XR) 
AVE:  AD VALOREM  EQUIVALENT (per cent) 
SP:  M ONETARY VALUE OF DUTY PER UNIT OF IMPORTS  
UV:  I MPORT UNIT VALUE  
 where  UV  = V/(Q * C Q) 
 V = value of imports 
 Q = quantity of imports 
 C Q = conversion factor for quantity units, where 
appropriate 
XR:  C URRENCY EXCHANGE RATE, where appropriate 
  
2. Parameters for the calculations 
10. The calculations will be based on total import flows with respect to the non- ad valorem  tariff 
item concerned.  The result of the calculations must be closely representative of the true level of tariff 
protection afforded by the non- ad valorem  tariff. 
11. The calculations of AVEs will be made in term s of a weighted average for the period 1999-
2001.  Any exchange rates and conversion factors that may be requ ired for the calculations will relate 
to, and be applied on, the raw data  (i.e. value and/or quantity of imports) for the individual years of 
this period prior to summing up the values or volum es for the three-year period for the purposes of 
calculating the weighted averages.  In other word s, weighted averages for IDB import unit values and 
world Comtrade import unit values will be calculated,  for each tariff line con cerned, in the following 
manner:  the import values registered during the th ree-year period 1999-2001 will be first summed up 
and then divided by the sum of the import quantities registered during the same period. 
12. In the case of seasonal tariffs, a separate AVE will be calculated for each of the seasons. 
3. Data requirements and sources 
13. The final bound non- ad valorem  MFN duties will be sourced from the Consolidated Tariff 
Schedules Database (CTS). 
14. The import values and import quantities will be sourced from the WTO Integrated Database 
(IDB) at the most disaggregated tariff line level.  The data necessary to calculate world import unit 
values at the HS-six-digit level derived from the UN Commodity Trade Statistics Database 
(Comtrade) can be downloaded from the password-pr otected Members' Web Site.  In the following 
paragraphs, these world import unit values will be referred to as "Comtrade unit values". TN/AG/W/3 
Page 30  
 
  B. A
LTERNATIVE AVE  CALCULATION  
1. Specific situations covered 
Missing data 
 
15. An alternative method for the calculation of AVE s to that outlined in Section A above will 
apply in the following situations: 
• the IDB import data for the tariff line concerned are missing, or 
 
• the IDB import value for the tariff line concerne d is, on weighted average of the 1999-2001 
period, lower than US$ 2,500 or the equivalent in another currency, or 
 
• there are reporting or other errors  in the IDB import data. 
 
40/20 Filter 
 
16. An alternative method to that outlined in S ection A above will also apply in any case where 
the IDB-based AVE cannot be considered to reflect th e true level of tariff protection afforded by the 
non-ad valorem tariff.  The "40/20 filter" is designed to systematically identify distorted IDB-based 
AVEs using existing, publicly available data that  all Members have access to.  This filter will be 
applied to all AVEs calculated on the basis of IDB im port data in accordance with Section A above as 
well as in the cases specified in paragraphs 22-24 below. 
 Step 1:  Identification of distorted IDB import unit values 
 17. The difference between the IDB import unit value and an estimated world import unit value is 
the basis of the first step of the 40/20 filter.  To run this filter Members shall: 
• Calculate the difference in per cent between (i) the weighted average 1999-2001 IDB import 
unit values at the tariff line level
7 and (ii) the weighted average 1999-2001 Comtrade unit 
values.8 
• If the IDB import unit value exceeds the Comtra de unit value by more than 40%, the tariff 
item is subject to Step 2.   
• Otherwise, the IDB AVE is directly used to a llocate this item in the appropriate tier of the 
tariff reduction formula to be established, and the item is not subject to Step 2. 
 
Step 2: Relevance test 
 
18. An IDB import unit value that exceeds the Comt rade unit value by more than 40% does not 
alone indicate whether a product should be subject to  an alternative method of AVE calculation.  
Calculation of AVEs is not an exact science.  In the end, the tariff will be placed within the tiers of the 
tariff reduction formula.  Member s are only attempting to identify those products, which are most 
likely to move to a lower tariff reduction tier as a result of distorted import unit values.  Therefore, there should be no concern about an IDB import unit value that is 100% greater than the Comtrade 
                                                     
 
7 It should be noted that the majority of non- ad valorem  tariffs is bound at the HS-eight-digit level.  In 
the event that a Memb er has bound its non- ad valorem  tariffs at a more disaggregated (or more aggregated) 
level, the IDB import unit values will be calculated at th at more disaggregated (or more aggregated) level.   
8 For the calculation of weighted av erages, see paragraph 11 above.    TN/AG/W/3 
 Page 31 
 
 
  unit value, if the resulting AVE is 3% using IDB da ta, rather than 6% using Comtrade data.  Though 
there is a 100% difference here, the absolute diffe rence between the AVEs is low enough so as not to 
warrant additional attention. 
19. The relevance test is designed to only identify tariff lines in which ther e is a large absolute 
difference between the AVE calculated using IDB a nd the AVE calculated using Comtrade.  To run 
this test Members will: 
• Complete the calculation of AVEs using IDB import unit values. 
 
• Calculate AVEs using Comtrade unit values fo r those tariff lines identified in Step 1 as 
requiring the Step 2 relevance test. 
 
• Subtract the IDB AVE from the Comtrade AVE. 
 
• If the resulting difference is greater than 20 percen tage points then the tariff line is subject to 
an alternative AVE calculation method as specified in paragraph 25 below.  Otherwise, the 
IDB AVE is used to allocate th is item in the appropriate tier of  the tariff reduction formula to 
be established. 
 
Other 
 
20. Sugar will be treated in accordance with  the provisions of paragraph 26 below. 
2. Alternative methods  
21. In any of the cases identified as a result of th e provisions under in para graphs 15 to 20 above, 
the provisions of paragraphs 9 to 14 will be applied, subject to the following modifications. 
Missing data 
 
22. In the case of missing data as specified in para graph 15 above, Members may apply one of the 
following alternative methods in place of the av erage 1999-2001 IDB import unit value, subject to 
identification of the source of the data: 
(i) extend the base period 1999-2001 by up to two years at either end; 
(ii) use the IDB import unit value of a closely related tariff line;  
(iii) use the IDB import unit value of the tariff line at issue of a near country;  or 
(iv) use the Comtrade unit value. 
 
23. Members should in principle use a consistent me thod across all tariff lines.  Should the choice 
vary in order to obtain the most representative pr ice, Members shall specify for each such tariff line 
which method was used. 
24. Except where option (iv) has been chosen, the provisions of paragra phs 16-19 above (40/20 
filter) apply. TN/AG/W/3 
Page 32  
 
  Alternative treatment purs uant to the 40/20 filter 
 
25. The conversion of non- ad valorem  duties, captured in the 40/20 filter, into their AVEs will be 
calculated using the following weightings b ased on unit values of Comtrade and IDB data: 
(a) For HS Chapters 1 to 16, and the products in Annex 1 of the Agreement on 
Agriculture in the HS Chapters beyond Chapter 24, a 82.5/17.5 (Comtrade/IDB) 
weighting will apply. 
(b) For HS Chapters 17-24, a 60/40 (Comtrade/IDB) weighting will apply. 
Other 
 
26. For all tariff lines for raw and refined sugar, [w orld prices] [or other prices] will apply [ ]. 
C. A
DDITIONAL DATA REQUIREMENTS  
27. The following provisions apply for the me thods under both section A and section B above. 
28. Where technical conversion factors are necessar y, these will be sourced from the FAO unless 
they are already specified in the Schedule of the Member concerned. 
29. All import unit values/prices will be expressed on a c. i.f. basis.  Where necessary, f.o.b./c.i.f. 
conversion factors will be applied accordi ng to a methodology to be established. 
30. Where the conversion of the currency used to record import values is necessary, the exchange 
rate to be used will be the annual averag e market exchange rate published in the International 
Financial Statistics (IFS) by the International Monetary Fund (IMF).9  Where the exchange rates are 
unavailable from the IFS Yearbook , the rate of exchange to be used  will be that duly published by the 
competent authorities of the importing Member concerned and will reflect, as effectively as possible, 
the current value of the currency in commercial transactions in terms of  the currency of the country of 
importation. 
III. MULTILATERAL VERIFICATION PROCEDURE 
31. In order to ensure transparency, the pr eliminary AVE calculations resulting from the 
conversion methodology set out in Section II above will be subject to the multilateral verification 
procedure set out below. 
1. Submissions of  AVE calculations 
32. Members will submit to the Secretariat their preliminary AVE calculations, including full 
details of the constituent data, data sources and methods applied, using the annexed electronic 
spreadsheet format.10  Those tariff lines that have been id entified by the procedures under paragraphs 
15 to 20 above will be identified as such in order to  allow particular scrutiny.  The Secretariat will 
post all submissions on the password-protected Me mbers' WTO Web Site for the purposes of the 
multilateral review. 
                                                      
9 In the country tables of the monthly editions of the International Financial Statistics  the annual 
average market exchange rate can be found in line "rf" of the exchange rates section.  
10 To be distributed separately.  TN/AG/W/3 
 Page 33 
 
 
  2. Verification 
33. The verification process is to ensure that th e AVE calculations have been performed in 
accordance with these Gu idelines [details to be developed.] 
34. Final lists of AVEs are to be submitted to th e Secretariat within [ ] days following the 
completion of the verification process.  Upon rece ipt, the Secretariat will promptly post these 
submissions on the password-protected Members' Web Site. 
 TN/AG/W/3 
Page 34  
 
 Annex B
 
 
Tariff Escalation  
 Provisional Draft List of Primary and Processed Products1 
 
[ 
Bovine meat  
  
Primary product Processed product 
0102.90 Live bovine animals other than pure bred 
breeding animals 
 0201.10 – Meat of bovine animals, fresh or chilled;  
Carcasses and half-carcasses 
 Meat of bovine animals, fresh or chilled. 
0201.20 – Other cuts with bone in 
0201.30 – Boneless  
0202.10 – Meat of bovine animals, frozen;  Carcasses and 
half-carcasses   
Meat of bovine animals, frozen. 
0202.20 – Other cuts with bone in 0202.30 – Boneless  
 
0206.10 – Edible offal of bovine animals, fresh or chilled  
Edible offal of bovine animals, frozen. 
0206.21 – Tongues 0206.22 – Livers  0206.29 – Other 
 
0210.20 – Meat of bovine animals salted, in brine or dried or smoked; Other, including edible flours and meals of meat 
and meat offal 
 1602.50 – Prepared or preserved meat, meat offal or blood 
of bovine animals 
                                                      
1 The list is that proposed by Canada in JOB(06)/166  and is included here provisionally only.  The 
ultimate list would need to be agreed  specifically in accordance with the particular propo sal adopted in the main 
text.  TN/AG/W/3 
 Page 35 
 
 
 Swine meat  
  
Primary product Processed product  
Live Swine, other than pure-bred breeding animals 
0103.91 Weighing less than 50 kg 0103.92  Weighing 50 kg or more  0203.11 – Meat of swine, fresh or chilled; Carcasses and 
half-carcasses  
Meat of swine, fresh or chilled. 
0203.12 – Hams, shoulders and cuts thereof, with bone in 0203.19 – Other   
0203.21 – Meat of swine, frozen;  Carcasses and half 
carcasses  
Meat of swine, fresh or chilled. 
0203.12 – Hams, shoulders and cuts thereof, with bone in 0203.19 – Other  
 
Meat of swine, frozen. 0203.22 – Hams, shoulders and cuts thereof, with bone in 
0203.29 – Other  
 0206.30 – Edible offal of swine, fresh or chilled 
Edible offal of swine, frozen. 
0206.41 – Livers 0206.49 – Other 
 
Meat of swine salted, in brine, dried or smoked; Edible flours and meals of meat and meat offal 0210.11 – Hams, shoulders and cuts thereof, with bone in 
0210.12 – Bellies (streaky) and cuts thereof 
0210.19 – Other  
Prepared or preserved meat, meat offal or blood of swine. 
1602.41 – Hams and cuts thereof 1602.42 – Shoulders and cuts thereof 
1602.49 – Other, including mixtures 
Sheep meat  
  
Primary product Processed product  
0104.10 Live sheep 0204.10 –Carcasses and hal f-carcasses of lamb, fresh or 
chilled   
0204.21 – Other meat of sheep, fresh or chilled;  Carcasses 
and half-carcasses  0204.30 – Carcasses and half-carcasses of lamb, frozen 
 
Other meat of sheep, fresh or chilled. 0204.22 – Other cuts with bone in 
0204.23 – Boneless  
 Other meat of sheep, frozen. 
0204.42 – Other cuts with bone in 
0204.43 – Boneless 
Vegetables  
  
Primary product Processed product  
0701.90 – Potatoes, fresh or chilled; Other than seed 0710. 10 – Potatoes (uncooked or cooked by steaming or 
boiling in water), frozen   
2004.10 – Potatoes prepared or preserved otherwise than by 
vinegar or acetic acid, frozen TN/AG/W/3 
Page 36  
 
 0702.00 – Tomatoes, fresh or chilled Tomatoes pr epared or preserved other wise than by vinegar 
or acetic acid. 
2002.10 – Tomatoes, whole or in pieces 2002.90 – Other  
 
2009.50 – Tomato juice, unfermented and not containing added sugar or other sweetening matter  
2103.20 – Tomato ketchup and other tomato sauces 
Fruits  
  
Primary product Processed product 
0805.10 – Oranges, fresh or dried Orange juice,  unfermented and not containing added spirit, 
whether or not containing added sugar or sweetening matter. 2009.11 – Orange juice, frozen 
2009.12 – Orange juice, not frozen, of a Brix value not 
exceeding 20 2009.19 – Other  
0805.40 – Grapefruit, fresh or dried Grapefruit  juice, unfermented and not containing added 
spirit, whether or not containing added sugar or sweetening matter.  
2009.21 – Of a Brix value not exceeding 20 
2009.29 – Other  
0806.10 – Grapes, fresh  0806.20 – Grapes, dried 
0808.10 – Apples, fresh 0813.30 – Apples, dried 
 
Apple juice, unfermented and not containing added spirit, 
whether or not containing added sugar or sweetening matter. 2009.71 – Of a Brix value not exceeding 20 
2009.79 – Other 
Coffee  
  
Primary Product Processed Product  
0901.11 – Coffee, not roasted: Not decaffeinated 0901.21 – Coffee, roasted: Not decaffeinated 
2101.11 – Extracts, essences and concentrates  
0901.12 – Coffee, not roasted: Decaffeinated 0901.22 – Coffee, roasted: Decaffeinated 
2101.11- Extracts, essences and concentrates 
Cereals  
  
Primary Product Processed Product 
 
1001.10 – Durum Wheat  
1001.90 – Wheat: Other 11.01 – Wheat or meslin flour 
11.03.11 – Groats and meal, of wheat 
11.03.20 – Pellets2 
1108.11 – Wheat starch 
11.09 – Wheat gluten, whether or not dried 
10.03 – Barley 11.03.19 Groats and meal, of other cereals1 
11.03.20 Pellets1 
 
1104.19 – Rolled or flaked grains, of other cereals1 
1104.29 – Other worked grains, of other cereals1 
 Malt, whether or not roasted 1107.10 – Not roasted 
1107.20 – Malt, Roasted 
                                                      
2 The test for determining tariff escalation will require examination of national schedules with detail 
beyond the 6 digit level.  TN/AG/W/3 
 Page 37 
 
 
 10.04 – Oats 11.03.19 Groats and meal, of other cereals1 
11.03.20 Pellets1 
 
Cereal Grains Otherwise Wo rked (for example, hulled, 
rolled, flaked, pearled, sliced or kibbled), except rice of 
heading  10.06; germ of cereals, whole, rolled, flaked or ground 1104.12 – Rolled or flaked grains: Of oats 
1104.22 – Other worked grains: Of oats 
Oilseeds  
  
Primary Product Processed Product 
12.01 – Soya Beans, whether or not broken Flours and m eals of oil seeds or ol eaginous fruits, other than 
those of mustard:  1208.10 – Of soya bean 
 
Soya bean oil and its fractions, whether or not refined, but not chemically modified. 
1507.10 – Crude oil, whether or not degummed 
1507.90 – Other 
1202.10 – Ground-nuts, not roasted or otherwise cooked, 
whether or not shelled or broken: In shell Ground-nuts, not roasted or otherwise cooked, whether or 
not shelled or broken:  
1202.20 – Shelled, whether or not broken  
Flours and Meals of Oilseeds or  oleaginous fruits, other than 
those of mustard,  12.08.90 – Other than of soybeans
1 
 Ground-nut oil and its fractions, whether or not refined, but not chemically modified. 1508.10 – Crude oil 
1508.90 – Other 
 Fruit, nuts and other edible parts of plants, otherwise 
prepared or preserved, whether or not containing added 
sugar or other sweetening matter or spirit, not elsewhere specified or included. 
2008.11 – Ground nuts 
Rape or colza seeds, whether or not broken 
1205.10 – Low erucic acid rape or colza seed 1205.90 – Other Flours and Meals of Oilseeds or  oleaginous fruits, other than 
those of mustard,  12.08.90 – Other than of soybeans
1 
 Rape, colza or mustard oil and fractions thereof, whether or not refined, but not chemically modified. - Low erucic acid rape or colza oil and its fractions: 
1514.11 – Crude oil 
1514.19 – Other - Other: 
1514.91 – Crude oil 
1514.99 – Other 
12.06 – Sunflower seeds, whether or not broken   Flours and Meals of Oilseeds or  oleaginous fruits, other than 
those of mustard,  12.08.90 – Other than of soybeans
1 
 Sunflower-seed, safflower or cotton-seed oil and fractions thereof, whether or not refined, but not chemically modified. 
Sunflower-seed or safflower oil and fractions thereof: 
1512.11 – Crude oil 1512.19 – Other TN/AG/W/3 
Page 38  
 
 1207.60 – Safflower seeds Flours and Meals of Oilseeds or oleaginous fruits, other than 
those of mustard,  
12.08.90 – Other than of soybeans1 
 
Sunflower-seed, safflower or cotton-seed oil and fractions 
thereof, whether or not refined, but not chemically modified.  Sunflower-seed or safflower oil and fractions thereof: 1512.11 – Crude oil 
1512.19 – Other 
Other oil seeds and oleaginous fruits, whether or not broken 
 1207.10 – Palm nuts and kernels Flours and Meals of Oilseeds or  oleaginous fruits, other than 
those of mustard,  
12.08.90 – Other than of soybeans
1 
 
Palm oil and its refractions, whether or not refined, but not 
chemically modified  
1511.10 – Crude oil 
1511.90 – Other
 
Other oil seeds and oleaginous fruits, whether or not 
broken 
 
1207.20 – Cotton seeds Flours and Meals of Oilseeds or  oleaginous fruits, other than 
those of mustard,  
12.08.90 – Other than of soybeans1 
 
Sunflower-seed, safflower or cotton-seed oil and fractions 
thereof, whether or not refined, but not chemically modified. Cotton-seed oil and its fractions: 
1512.21 – Crude oil, whether or not gossypol has been 
removed 1512.29 – Other 
Sugar  
  
Primary product Processed product3 
1701.11 – Raw cane sugar, not containing added 
flavouring or colouring matter 
 
1701.12 – Raw beet sugar, not containing added flavouring or colouring matter 1701.91 – Cane or beet sugar containing added flavouring or 
colouring matter 
 
1701.99 – Cane or beet sugar, other than containing added flavouring or colouring matter 
 
1704 – Sugar confectionery (incl uding white chocolate) not 
containing cocoa 
Cocoa  
  
Primary product Processed product 
1801.00 – Cocoa beans, whole or broken, raw or roasted 1803.10 – Cocoa paste, not defatted 
1803.20 – Cocoa paste, wholly or partly defatted 
 
1805.00 – Cocoa powder, not containing added sugar or other sweetening matter 
 
1804.00 – Cocoa butter, fat and oil  
Chocolate and other food prepa rations containing cocoa. 
1806.10 – Cocoa powder, containing added sugar or other sweetening matter  
1806.20 – Other preparations in blocks, slabs or bars more 
than 2 kg or liquid, paste, powder, granular or other bulk form in containers or immediate packings of a content exceeding 2 kg 
1806.32 – Other, in blocks, slabs or bars, not filled 
1806.90 – Other 
  
][other]
                                                      
3 This does not preclude the possible addition of additional products within Chapter 17 and 18 that can 
be linked back to the primary product.  TN/AG/W/3 
 Page 39 
 
 
 Annex C  
 
Provisional draft  
Tariff Quota Administration1 
 
1. Tariff quota commitments shall be administer ed in a manner which is transparent and 
predictable, and ensures that the market access opportunities represented by such commitments are 
made fully and effectively available. 
2. [In order to promote this,] Members shall admi nister tariff quotas in conformity with WTO 
provisions, including through the following requirements: 
(a) A tariff quota commitment shall not be admi nistered in a manner which [hinders] 
[precludes] in any way the importation of an y product or tariff line within the tariff 
quota. 
(b) Members shall provide timely initial alloca tions of import licences and mechanisms 
for re-allocation or tradability of tariff quota allotments to ensure that the annual tariff 
quota quantity is imported within the quota year. 
(c) [Members shall not impose seasonal or ot her time limits on imports under tariff 
quotas, including those created through delays arising from licensing and associated procedures, which result in under-fill of the quota.] 
(d) Members shall not impose [additional] [unfavourable commercial] terms [or 
requirements] which act to restrict [t he importation of] products [eligible for 
importation under a tariff quota, such as] [within the tariff quota commitment, 
including] product specification requirement s, domestic purchasing requirements, 
non-viable quota allotments, [restrictions on quota allocation to] [denial of access to 
quota allocations for]  retail distributors a nd other end-users, restrictions on sales to 
final consumers, or export or re-export requirements. 
(e) [Members shall not credit [allocations or] preferential [imports][tariff quota quantities 
under] [post-Uruguay Round] bilateral and re gional trade agreements against their 
scheduled WTO tariff quota commitments.]   [Members [shall] [may] credit 
preferential imports, including existing preferential tariff quotas, against scheduled WTO tariff quota commitments.] 
(f) Members shall publish [all relevant inform ation] sufficiently in advance [of the 
opening date for the tariff quota all releva nt information] in relation to their 
administration of tariff quota commitments, including information regarding administrative requirements and procedures [,] [Through the year, information shall be made readily available on]  the contact  details of importers to whom tariff quota 
allocations have been attributed and curren t tariff quota fill rates.  [For Members that 
do not publish publicly available import statistics on tariff quota imports, detailed 
import statistics for tariff quotas, by tariff lin e, shall be reported to the Committee on 
Agriculture on an annual basis.] 
                                                     
 
1 This draft is a composite for provisional and discussion purposes derived from JOB(06)/168 and 
JOB(06)/171. TN/AG/W/3 
Page 40  
 
 (g) [No charges, deposits or other financial re quirements shall be imposed, directly or 
indirectly, on or in connection with the administration of tariff quota commitments or 
with importation of tariff quota products  other than as permitted under the GATT 
1994.] 
(h) [Members shall not impose unfavourable commercial terms or requirements which 
act to restrict products eligible for importation under a TRQ such as: 
(i) domestic purchasing requirements; 
(ii) non-viable quota allotments;  and 
(iii) export or re-export requirements  which restrict imports.] 
(i) [Members shall establish a mechanism of redi stribution of unused licences in order to 
ensure that the system is operating accord ing to its intentions.  Reallocated quota 
shares must be valid until the end of the quota period in question.] 
3. [Underfill Mechanism: 
(a) [If the tariff quota fill rate in any year falls below [85%]
2 the under-filled portion of 
the tariff quota shall be added to the tariff quota quantity for the following year. 
(b) If fill rates are, in each year over a [t wo-year] period, less than [85] per cent 
(excluding any additional amount added to the tariff quota under 3(a)), the out-of-quota duty shall be reduced to the in-quota rate [until such time that annual imports 
equal or exceed the volume specified in the Member's schedule].  Thereafter, the 
Member shall adopt one of the following opt ions for administering the tariff quota:  
applied tariffs or licences on demand.] 
(a) [If fill rates are, in each year over a [two y ear] period, less than [80] per cent, the out-
of-quota duty shall be reduced to the in-quot a rate until such time that imports equal 
or exceed the volume specified in the Member's Schedule.  Until imports equal or exceed the volume specified in the Member's Schedule, the tariff quota shall be 
operated on an applied tariff basis at the in-quota rate. 
(b) If the fill rate drops below [80] per cent in any subsequent [year], the out of quota 
duty shall again be reduced to the in quot a rate until imports equal or exceed the 
volume specified in the Member's Schedule.] 
(a) [If the tariff quota fill rate for any two c onsecutive years falls below [75] per cent
3 
each year, the tariff quota must be administered on a first-come, first-served basis the following year.]] 
 
4. Special and differential treatment 
(a) [Developed country Members shall accord special and differential treatment to 
products from developing country Members in connection with the allocation of 
                                                     
 
2 A quota fill rate shall be deemed to be below 85 per cent unless notified otherwise by the relevant 
Member to the Committee on Agriculture. 
3 As notified to the Committee on Agriculture by the relevant Member.  TN/AG/W/3 
 Page 41 
 
 
 expanded access under existing or new tariff quotas resulting from the negotiations 
under the Doha Development Agenda.  Fo r the purposes of Article XIII of GATT 
1994, where a tariff quota has been allocated in full or in part among developing country suppliers the individual country a llocations shall be as specified in the 
Schedule of the Member concerned; and any re-allocation of shortfalls shall be made 
among the developing country suppliers c oncerned.  Developed country Members 
shall, on request, provide to the maximum extent possible advisory and marketing assistance in order to facilitate imports  from developing countries under tariff 
quotas.] 
 
 
 TN/AG/W/3 
Page 42  
 
 Annex D 
 
Illustrative list of indicators for designation of Special Products
 
 
(i) The product has been identified as a staple f ood or as part of the basic food basket of the 
developing country Member concerned through laws and regulations, including 
administrative guidelines. 
 (ii) (a) A significant proportion of the domestic consumption of the product in its natural 
unprocessed or processed form is met throug h domestic production in the developing 
country Member concerned; or 
 (b) Total domestic production of each food class (in terms of carbohydrates, fats and 
proteins or any other food class) accounts for a significant proportion of the total normative requirement of that food class in accordance with the dietary preferences in 
the developing country Member concerned; or  
 (c) The product contributes to a significant pr oportion of the total calorific intake per 
capita per day. 
 (iii) (a) A significant proportion of the total food expenditure, or of the total income, at the 
household level in the developing country Member concerned is spent on the product; 
or 
 (b) A significant proportion of the total agricu ltural income at the household level in the 
developing country Member concerned is derived from the production of the product. 
 (iv) Domestic consumption of the product in th e developing country Member is significant in 
relation to total world exports of that product. 
 
(v) A significant proportion of total world exports of the product is accounted for by the largest 
exporting country. 
 (vi) (a) A significant proportion of the total domestic production of the product is produced 
on farms or operational land holdings of twenty  (20) hectares or of average farm size 
of the developing country Member concerned or less in size; or  
 (b) A significant proportion of the farms or operational land holdings producing the 
product are of twenty (20) hectares or the average farm size of the developing country 
Member concerned or less in size. 
 
(vii) A significant proportion of the producers engaged in the production of the product are low 
income, resource poor or are subsistenc e farmer or disadvantaged producers. 
  (viii) (a) A relatively high absolute number of  people are dependent on the product; or  
 (b) A significant proportion of the total agricultural population or rural labour force is 
employed in the production of the product. 
 
(ix) A significant proportion of the gross arable  land is under cultivation of the product. 
 (x) A significant proportion of the domestic production of the product, including a product 
produced from livestock is produced in droug ht-prone or hilly or mountainous regions. 
 
(xi) A significant proportion of the domestic production of the product is produced by vulnerable 
populations such as tribal communities, ethnic groups, women, aged people, or disadvantaged producers. 
   TN/AG/W/3 
 Page 43 
 
 
 (xii) The productivity per worker or per hectare of the product in the developing country Member 
is relatively low as compared to either the av erage productivity in the world or the highest 
productivity level achieved in any country. 
 (xiii) A relatively low proportion of the product is  processed in the developing country Member as 
compared to the world average. 
 (xiv) The product contributes to improving the living standards of the rural population directly and 
through its linkages to non-farm  rural economic activities, incl uding handicrafts and cottage 
industries or any other form of rural value addition. 
 
(xv) A significant proportion of the total value of agricultural production or agricultural GDP or 
agricultural income is contri buted to by the product. 
 (xvi) A significant proportion of the customs tariff revenue is derived from the product in a 
developing country Member.  
 (xvii) (a) A significant proportion of the agricultural income or agricultural production is 
derived from the production of the livestock product(s), or  
 (b) A significant proportion of the agricultural population or rural labour is employed in 
the production of the livestock product(s). 
 
(xviii) The product in respect of which product- specific AMS has been notified by any other 
Member and which has been exported by that notifying Member during any year of the implementation period of the Uruguay Round. TN/AG/W/3 
Page 44  
 
 Annex E
 
Draft  
Special Safeguard Mechanism for Developing Country Members  
1. Notwithstanding the provisions of paragraph 1( b) of Article II of GATT 1994 or of Article 4 
of this Agreement, any developing country Memb er may take recourse to the imposition of an 
additional duty in accordance with the provisions of paragraphs 4 and 5 below in connection with the 
importation of any agricultural product [which is d esignated in its Schedule with the symbol "SSM"] 
if:   
(a) the quantity of imports of that produc t entering the customs territory of that 
developing country Member [during any year] exceeds a trigger level equal to 
[130 per cent of] the average yearly quan tity of imports [on a most-favoured-nation 
basis] for the [36 month] period preceding the year of importation for which data are available [or 130 per cent of the average yearly import quantity on a most-favoured-nation basis for the base period of [ ] to [ ], whichever is the greater] (hereinafter 
referred to as the "average import volume" )[.] [and domestic prices are declining.] 
[and unit import value of trade on a most-favoured-nation basis are declining relative 
to the base period.] 
 [Where there are no, or minimal, levels of imports in the base period or the most 
recent three-year period for which data are available, [ ] per cent of domestic 
consumption of the product shall be used as a proxy for "average import volume".  
Where historical trade patterns have been disrupted due to historical circumstances, 
an alternative representative base period shall be used];  
 or, but not concurrently:  (b) the c.i.f. import price, expressed in terms of the developing country Member's 
domestic currency, at which a shipment
1 of imports of that pr oduct enters the customs 
territory of that developing country Member  during any year (hereinafter referred to 
as the "import price"), falls below a trigger price equal to [70 per cent of] the average 
[monthly price2] [annual price] for that product [on a most-favoured-nation basis] [for 
the most recent three-year period preceding the year of importation for which data are available] [for the previous 36  month period] [or 70 per cent of the average price of imports of that product on a most-favoured-n ation basis for the base period of [ ] to 
[ ], whichever is the greater] (hereinafter  referred to as the "average [import] 
[monthly] price")[.] [and imports are increasing.]  
[Provided that, where the developing count ry Member's domestic currency has at the 
time of importation depreciated by at least 10 per cent over the preceding 12 months against the international currency or curre ncies against which it is normally valued 
the import price shall be computed using the average exchange rate of the domestic 
                                                     
 
1 A shipment shall not be considered for purposes of this subparagraph or paragraph 5 unless the 
volume of the product included in that shipment is within the range of normal commercial shipments of that 
product entering into the customs territory of that developing country Member. 
2 The trigger price used to invoke the provisions of this subparagraph shall, in general, be based on the 
average monthly c.i.f. unit value of the product concerned, or otherwise shall be based on a price that 
appropriately reflects  the quality of the product and its st age of processing.  The trigger price shall, following its 
initial use, be publicly disclosed and available to the extent necessary to allow other Members to assess the 
additional duty that may be levied.   TN/AG/W/3 
 Page 45 
 
 
 currency against such international currenc y or currencies for the three-year period 
referred to above.] 
2. Imports under any [bound] tariff quota shall be  counted for the purpose of determining the 
volume of imports required for invoking the provisions  of subparagraph 1(a) and paragraph 4, but 
imports within such [bound] tariff quota shall not be affected by any additional duty imposed under 
either subparagraph 1(a) and paragraph 4 or subparagraph 1( b) and paragraph 5 below. 
3. Any shipments of the product in question which have been contracted and were en route after 
completion of custom clearance procedures in th e exporting country before the additional duty is 
imposed either under subparagraph 1( a) and paragraph 4 or under s ubparagraph 1(b) and paragraph 5 
shall be exempted from any such additional duty, provided that: 
(a) the volume of such shipments may be counted in the volume of imports of the 
product in question during the following year for the purposes of triggering the provisions of subparagraph 1(a) in that year; or 
(b) the price of any such shipment may be u sed during the following year in determining 
the average [import] [monthly] price tr igger for the purposes of triggering the 
provisions of subparagraphs 1(b) in that year. 
4. (a) Any additional duty imposed under subpara graph 1(a) shall be maintained [for no 
more than 12 months after it has been imposed] [only until the end of the year in which it has been imposed].  [If, import quantities are such that an additional duty under subparagraph 1(a) is applicable in tw o consecutive years the additional duty in 
the second year shall be two thirds that a pplicable in the first year.  If, import 
quantities are such that an additional duty under subparagraph 1(a) is applicable in 
three consecutive years the additional duty in the third year shall be one third that applicable in the first year.  No additi onal duty under subparagraph 1(a) may be 
imposed until [ ] years have passed after th e third consecutive year of application of 
additional duties. 
 [(b) An additional duty imposed under subparag raph 1(a) may only be levied at levels that 
do not exceed [20 per cent of the current bound duty.] [those specified in the following schedule: 
(i) where the level of imports during a year does not exceed 105 per cent of the 
average import volume, no additional duty may be imposed; 
(ii) where the level of imports during a year exceeds 105  per cent but does not 
exceed 110 per cent of the average import volume, the maximum additional 
duty that may be imposed shall not exceed 50 per cent of the bound tariff or 40 percentage points, whichever is higher; 
(iii) where the level of imports during a year exceeds 110 per cent but does not 
exceed 130 per cent of the average import volume, the maximum additional 
duty that may be  imposed shall not exceed 75 per cent of the bound tariffs or 
50  percentage points, whichever is higher;  and 
(iv) where the level of imports during a year exceeds 130 per cent of the average 
import volume, the maximum additional duty that may be imposed shall not 
exceed 100 per cent of the bound tariff or 60 percentage points, whichever is 
higher.]] TN/AG/W/3 
Page 46  
 
  [(b)  An additional duty unde r subparagraph 1(a) may be invoked if imports over the 
previous six months are [ ] per cent great er than imports over the same six months 
period in the preceding twelve months. 
  Any additional duty under subparagraph 1(a)  and 1(b) above shall not exceed [ ] per 
cent of the difference between the Final Bound Rate of duty of the Uruguay Round 
and the current Bound Rate in the developing country Member's Schedule.  Least-
developed country Members may apply an additional duty of [ ].] 
5. [(a) Any additional duty imposed under su bparagraph 1(b) may be assessed either on a 
shipment-by-shipment basis or on an ad valorem  basis for a duration of no more than 
12 months as defined in subparagraph 5(b) below. 
(b) In the event that the additional duty is assessed on that product: 
(i) on a shipment-by-shipment basis, the additional duty shall not exceed the 
difference between the import price of each shipment and the trigger price; 
(ii) on an ad valorem basis, the additional duty sh all not exceed the difference 
between the import price of the shipment and the trigger price referred to in 
subparagraph 1(b) above, expressed as a percentage of that import price; 
provided that if at least two subsequent shipments are at import prices that are 
5 per cent or more lower than the trigger price referred to in subparagraph 1(b), the developing country Member may shift to the imposition of additional duty on a shipment-by-shipment basis as set out in subparagraph 5(b)(i) above.] 
 [(a) An additional duty unde r subparagraph 1(a) may be i nvoked if the average domestic 
prices over the previous [ ] months are [ ] per cent lower than the average domestic 
prices over the same six month period in the preceding twelve months. 
 (b) Any additional duty under subparagraph 1(a) and 1(b) a bove shall not exceed [ ] per 
cent of the difference between the Final Bound Rate of duty of the Uruguay Round 
and the current Bound Rate in the developing country Member's Schedule.  Least-
developed country Members may apply an additional duty of [ ].] 
[(a) Any additional duty under subparagraph 1(b) shall apply on a shipment-by-shipment 
basis according to the following schedule: 
 (i) no additional duty may be  applied if the import price is less than 20 per cent 
below the trigger price defined in subparagraph 1(b);  
 (ii) an additional duty of up to 15 per cent of the difference between the import 
price and the trigger price may be appl ied if the import price is more than 
20 per cent but less than, or equal to, 30 per cent below the trigger price; 
 (iii) an additional duty of up to 20 per cent of the difference between the import 
price and the trigger price may be appl ied if the import price is more than 
30 per cent but less than, or equal to, 40 per cent below the trigger price;  TN/AG/W/3 
 Page 47 
 
 
 (iv) an additional duty of up to 25 per cent of the difference between the import 
price and the trigger price may be appl ied if the import price is more than 
40 per cent but less than, or equal to, 50 per cent below the trigger price; 
 (v) an additional duty of up to 30 per cent of the difference between the import 
price and the trigger price may be appl ied if the import price is more than 
50 per cent below the trigger price. 
6. [The trigger levels under paragraphs 1(a) may be decr eased by [20] per cent and under 
paragraph 1(b) may be reduced by [20] per cent an d the additional duty under subparagraphs 1(a) and 
1(b) may be increased by [20] per cent for prod ucts the export of which was subsidized by a 
developed country Member.] 
7. [Any additional duty under subparagraphs 1(a)  or 1(b) shall not exceed [ ] per cent of the 
difference between the bound duty applicable in [2007] and the current bound duty.] 
8. For perishable and seasonal products, the conditio ns set out above shall be applied in such a 
manner as to take account of the specific characteristi cs of such products.  In particular, shorter time 
periods under subparagraph 1(a) and paragraph 4 may be used in reference to the corresponding 
period in the three-year period referred to in s ubparagraph 1(a) and different trigger prices for 
different periods may be used under subparagraph 1(b). 
9. The operation of the special safeguard shall be carried out in a transparent manner.  Any 
developing country Member taking action under subparagraph 1(a) above  shall give notice in writing, 
indicating the tariff lines affected by the measure and including relevant data to the extent available, 
to the Committee on Agriculture as fa r in advance as may be practicable and in any event within 30 
days of the implementation of such action. A developing country Member taking action under 
paragraph 4 shall afford any interested Members th e opportunity to consult with it in respect of the 
conditions of application of such action.  Any developing country Member taking action under 
subparagraph 1(b) above shall give notice in writ ing, indicating the tariff lines affected by the 
measure and including relevant data to the extent available, to the Committee on Agriculture within  
30 days of the implementation of the first such ac tion or, for perishable and seasonal products, the 
first action in any period.  Developing country Me mbers undertake, as far as practicable, not to take 
recourse to the provisions of subparagraph 1(b)  where the volume of imports of the products 
concerned are declining.  In either case a developi ng country Member taking such action shall afford 
any interested Members the opportunity to consult with  it in respect of the condi tions of application of 
such action. 
10. Where measures are taken in conformity with paragraphs 1 through 7 above, Members 
undertake not to have recourse, in respect of such me asures, to the provisions of  paragraphs 1(a) and 3 
of Article XIX of GATT 1994 or paragraph 2 of  Article 8 of the Agreement on Safeguards. 
[11. No developing country Member shall take r ecourse to measures under Article 5 in respect of 
any product on which it has imposed additional duti es pursuant to the provisions of this Article.] 
[12. This Article shall expire [ ].] TN/AG/W/3 
Page 48  
 
 Annex F
 
Draft [Indicative List of ]  
Tropical Agricultural Products and Products of Particular Importance to the Diversification of 
Production from the Growing of Illicit Narcotic Crops1 
HS4 HS4 DESCRIPTION 
0602 Other live plants (including their ro ots), cuttings and slips; mushroom spawn. 
0603 Cut flowers and flower buds of a kind suitable  for bouquets or for ornamental purposes, fresh, 
dried, dyed, bleached, impreg nated or otherwise prepared. 
0604 Foliage, branches and other parts of plants, without flowers or flower buds, and grasses, mosses and 
lichens, being goods of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, 
bleached, impregnated or otherwise prepared. 
0701 Potatoes, fresh or chilled. 
0702 Tomatoes, fresh or chilled. 
0709 Other vegetables, fresh or chilled. 
0711 Vegetables provisionally preserved (for example, by sulphur dioxide gas, in brine, in sulphur water 
or in other preservative solutions), but unsuitable in that state for immediate consumption. 
0713 Dried leguminous vegetables, shelle d, whether or not skinned or split. 
0714 Manioc, arrowroot, salep, Jerusalem artichok es, sweet potatoes and similar roots and tubers 
with high starch or inulin content, fresh, chilled,  frozen or dried, whether or not sliced or in 
the form of pellets; sago pith. 
0801 Coconuts, Brazil nuts and cashew nuts, fresh or dried, whether or not shelled or peeled. 
0802 Other nuts, fresh or dried, whether or not shelled or peeled. 
0803 Bananas, including pl antains, fresh or dried. 
0804 Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh or dried. 
0805 Citrus fruit, fresh or dried. 
0807 Melons (including watermelons)  and papaws (papayas), fresh. 
0810 Other fruit, fresh. 
0811 Fruit and nuts, uncooked or cooked by steaming or boiling in water, frozen, whether or not 
containing added sugar or other sweetening matter. 
0812 Fruit and nuts, provisionally preserved (for example, by sulphur dioxide gas, in brine, in sulphur 
water or in other preservative solutions), but unsuitable in that state for immediate consumption. 
0813 Fruit, dried, other than that of headings Nos. 08.01 to 08.06; mixtures of nuts or dried fruits of this 
Chapter. 
0814 Peel of citrus fruit or melons (including watermelons), fresh, frozen, dried or provisionally 
preserved in brine, in sulphur water or in other preservative solutions. 
0901 Coffee, whether or not roasted or decaffei nated; coffee husks and skins; coffee substitutes 
containing coffee in any proportion. 
0902 Tea, whether or not flavoured. 
0904 Pepper of the genus Piper; dried or crushed or  ground fruits of the genus Capsicum or of the 
genus Pimenta. 
0905 Vanilla. 
0906 Cinnamon and cinnamon-tree flowers. 
0907 Cloves (whole frui t, cloves and stems). 
0908 Nutmeg, mace and cardamoms. 
0909 Seeds of anise, badian, fennel, cori ander, cumin or cara way; juniper berries. 
0910 Ginger, saffron, turmeric (curcuma), th yme, bay leaves, curry and other spices. 
1106 Flour, meal and powder of the dried leguminous vegetables of heading No. 07.13, of sago or of 
roots or tubers of heading No. 07.14 or of the products of Chapter 8. 
                                                      
1 This list is derived from that included in JOB(06)/129 by Bolivia, Colombia, Costa Rica, Ecuador, 
Guatemala, Nicaragua, Panama and Peru.  The items in bold are also found in the Indicative List of Tropical 
Products used in the Uruguay Round.   TN/AG/W/3 
 Page 49 
 
 
 HS4 HS4 DESCRIPTION 
1108 Starches; inulin. 
1202 Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken. 
1203 Copra. 
1207 Other oil seeds and oleaginous  fruits, whether or not broken. 
1208 Flours and meals of oil seeds or oleaginous fruits, other than those of mustard. 
1211 Plants and parts of plants (i ncluding seeds and fruits), of a kind used primarily in perfumery, 
in pharmacy or for insecticidal, fungicidal or similar purposes, fresh or dried, whether or not 
cut, crushed or powdered. 
1212 Locust beans, seaweeds and other algae, sugar b eet and sugar cane, fresh, chilled, frozen or dried, 
whether or not ground; fruit stones and kernels and other vegetable products (including unroasted 
chicory roots of the variety Cichorium intybus sativum) of a kind used primarily for human 
consumption, not elsewher e specified or included. 
1301 Lac; natural gums, resin s, gum-resins and oleoresins (for example, balsams). 
1302 Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other 
mucilages and thickeners, whether or not mo dified, derived from vegetable products. 
1401 Vegetable materials of a kind used primarily for plaiting (for example, bamboos, rattans, 
reeds, rushes, osier, raffia, cleaned, bleach ed or dyed cereal st raw, and lime bark). 
1402 Vegetable materials of a kind used primarily as stuffing or as padding (for example, kapok, 
vegetable hair and eel-grass), whether or not put up as a layer with or without supporting 
material. 
1403 Vegetable materials of a kind used primar ily in brooms or in brushes (for example, 
broomcorn, piassava, couch-grass and istle), whether or not in hanks or bundles. 
1404 Vegetable products not el sewhere specified or included. 
1502 Fats of bovine animals, sheep or goats, other than those of heading No. 15.03. 
1504 Fats and oils and their fractions, of fish or marine mammals, whether or not refined, but not 
chemically modified. 
1505 Wool grease and fatty substances derived therefrom (including lanolin). 
1507 Soya-bean oil and its fractions, whether or not refined, but not chemically modified. 
1508 Ground-nut oil and its fractions, whethe r or not refined, but not chemically modified. 
1511 Palm oil and its fractions, whether or not refined, but not chemically modified. 
1512 Sunflower-seed, safflower or cotton-seed oil and fractions thereof, whether or not refined, but not 
chemically modified. 
1513 Coconut (copra), palm kernel  or babassu oil and fractions thereo f, whether or not refined, but 
not chemically modified. 
1515 Other fixed vegetable fats and oils (including  jojoba oil) and their fractions, whether or not 
refined, but not chemically modified. 
1516 Animal or vegetable fats and oils and their fractions, partly or wholly hydrogenated, inter-
esterified, re-esterified or elaidinised, whet her or not refined, but not further prepared. 
1517 Margarine; edible mixtures or preparations of animal or vegetable fats or oils or of fractions of 
different fats or oils of this Chapter, other than ed ible fats or oils or their fractions of heading No. 
15.16. 
1518 Animal or vegetable fats and oils and their fractions, boiled, oxidised, dehydrated, 
sulphurised, blown, polymerised by heat in vac uum or in inert gas or otherwise chemically 
modified, excluding those of heading No. 15.16; inedible mixtures or preparations of animal or 
vegetable fats or oils or of fractions of diff erent fats or oils of this Chapter, not elsewhere 
specified or included. 
1520 Glycerol, crude; glycerol  waters and glycerol lyes. 
1521 Vegetable waxes (other than triglycerides) , beeswax, other insect  waxes and spermaceti, 
whether or not refined or coloured. 
1522 Degras; residues resulting from the treatment of fatty substances or animal or vegetable waxes. 
1701 Cane or beet sugar and chemically pure sucrose, in solid form. 
1703 Molasses resulting from the extraction or refining of sugar. 
1801 Cocoa beans, whole or broken, raw or roasted. 
1802 Cocoa shells, husks, skins and other cocoa waste. TN/AG/W/3 
Page 50  
 
 HS4 HS4 DESCRIPTION 
1803 Cocoa paste, whether or not defatted. 
1804 Cocoa butter, fat and oil. 
1805 Cocoa powder, not containing adde d sugar or other sweetening matter. 
1806 Chocolate and other food preparations containing cocoa. 
1903 Tapioca and substitutes therefore prepared from starch, in the form of flakes, grains, pearls, 
siftings or in similar forms. 
2001 Vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic 
acid. 
2004 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen, other than 
products of heading No. 20.06. 
2005 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other 
than products of heading No. 20.06. 
2006 Vegetables, fruit, nuts, fruit-peel and other pa rts of plants, preserved by sugar (drained, glacés 
or crystallised). 
2007 Jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, being cooked 
preparations, whether or not containing added sugar or other sweetening matter. 
2008 Fruit, nuts and other edible parts of plants , otherwise prepared or preserved, whether or not 
containing added sugar or ot her sweetening matter or spirit, not elsewhere specified or 
included. 
2009 Fruit juices (including grape must) and vegetable juices, unfermented and not containing added 
spirit, whether or not containing added sugar or other sweetening matter. 
2101 Extracts, essences and concentrates, of coffee, tea or maté and preparations with a basis of 
these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee 
substitutes, and extracts, essences and concentrates thereof. 
2103 Sauces and preparations therefore; mixed condiments and mixed seasonings; mustard flour and meal 
and prepared mustard. 
2208 Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 % vol.; spirits, 
liqueurs and other spirituous beverages. 
2305 Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting 
from the extraction of ground-nut oil. 
2306 Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting 
from the extraction of vegetable fats or oils, other than those of heading No. 23.04 or 23.05. 
2401 Unmanufactured to bacco; tobacco refuse. 
2402 Cigars, cheroots, cigarillos and cigarette s, of tobacco or of tobacco substitutes. 
2403 Other manufactured tobacco and manufactur ed tobacco substitutes; "homogenised" or 
"reconstituted" tobacco; tobacco extracts and essences. 
3203 Colouring matter of vegetable or animal origin (including dyeing extracts but excluding animal 
black), whether or not chemically de fined; preparations as specified in Note 3 to this Chapter based 
on colouring matter of vegetable or animal origin. 
3301 Essential oils (terp eneless or not), including concretes and absolutes; resinoids; extracted 
oleoresins; concentrates of essential oils in fats, in fixed oils, in waxes or the like, obtained by 
enfleurage or maceration; terpenic by-products of the deterpenation of essential oils; aqueous 
distillates and aqueous solutions of essential oils. 
5001 Silk-worm cocoons suitable for reeling 
5202 Cotton, not carded or combed 
  
 
 TN/AG/W/3 
Page 51 
 
 
  Annex G  
[Draft List of Products Relating to Long -standing Preferences and Preference Erosion1] 
Importing Member HS4 HS4 DESCRIPTION 
  Meat of Bovine Animals 
EC 0201 Meat of bovine animals, fresh or chilled 
EC 0202 Meat of bovine animals, frozen 
   
  Bananas 
EC 0803 Bananas, including plantains, fresh or dried. 
   
  Suga r 
EC and United States 1701 Cane or beet sugar and chemically pure sucrose, in solid form. 
EC and United States 1703 Molasses resulting from the extraction or refining of sugar 
   
  Other Fruits and Vegetables 
EC Ex 0804 Pineapples 
EC Ex 0806 Fresh grapes 
EC Ex 2005 Unshelled beans "Vigna spp., Phaseolus spp.", prepared or preserved 
otherwise than by vinegar or acetic acid (excl. frozen) 
EC Ex 2005 Vegetables and mixtures of vegetables, prepared or preserved 
otherwise than by vinegar, non-frozen (excl. preserved by sugar... 
EC Ex 2008 Pineapples, prepared or preserved, whether or not containing added 
sugar or other sweetening matter or spirit... 
EC Ex 2008 Citrus fruit, prepared or preserved, whether or not containing added 
sugar or other sweetening matter or spirit nes 
United States Ex 2009 Frozen orange juice, unfermented, whether or not containing added 
sugar or other sweetening matter (excl. containing spirit) 
EC Ex 2009 Grapefruit juice,  unfermented, Brix value > 20  at 20°C, whether or not 
containing added sugar or  other sweetening matter... 
   
  Beverages and Spirits 
EC Ex 2207 Undenatured ethyl alcohol, of actual alcoholic strength greater or equal 
to 80% 
EC Ex 2208 Rum and raffia 
 
                                                      
1 This list is derived from the WTO Staff Working Paper, "Non-Reciprocal Preference Erosion Arising 
From MFN Liberalization in Agriculture : What Are The Risks?" and included in the Chairman's reference paper 
on long-standing preferences and preference erosion (document number 3842). TN/AG/W/3 
Page 52  
 
  [Provisional Indicative List of Produc ts Relating to Long-Standing Preferences
2] 
HS4 
 HS4 Description 
 
0201 Meat of bovine animals, fresh or chilled 
0202 Meat of bovine animals, frozen 
0207 Meat and edible offal, of the poultry of heading No 0105, fresh, chilled or frozen 
0602 Other live plants (including their roots), cuttings and slips; mushroom spawn 
0603 Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh, 
dried, dyed, bleached, impregnated or otherwise prepared 
0703 Onions, shallots, garlic, leeks and ot her alliaceous vegetables, fresh or chilled 
0708 Leguminous vegetables, shelle d or unshelled, fresh or chilled 
0709 Other vegetables, fresh or chilled 
0710 Vegetables (uncooked or cooked by steaming or boiling in water), frozen 
0714 Manioc, arrowroot, salep, Jerusalem artichoke s, sweet potatoes and similar roots and tubers 
with high starch or inulin content, fresh, chilled, frozen or dried, whether or not sliced or in the 
form of pellets; sago pith 
0802 Other nuts, fresh or dried, whether or not shelled or peeled 
0803 Bananas, including plantains, fresh or dried 
0804 Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh or dried 
0806 Grapes, fresh or dried 
0807 Melons (including watermelons) and papaws (papayas), fresh 
0808 Apples, pears and quinces, fresh 
0810 Other fruit, fresh 
0813 Fruit, dried, other than that of headings 0801 to 0806; mixtures of nuts or dried fruits of this 
chapter 
0905 Vanilla 
1001 Wheat and meslin 
1002 Rye 
1006 Rice 
1102 Cereal flours other than of wheat or meslin 
1103 Cereal groats, meal and pellets 
1508 Ground-nut oil and its fractions, whether or not refined, but not chemically modified 
1511 Palm oil and its fractions, whether or not refined, but not chemically modified 
1513 Coconut (copra), palm kernel or babassu oil and fractions thereof, whether or not refined, but 
not chemically modified 
1701 Cane or beet sugar and chemically pure sucrose, in solid form 
1703 Molasses resulting from the extraction or refining of sugar 
1804 Cocoa butter, fat and oil 
1904 Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, 
corn flakes); cereals (other than maize (corn)) in  grain form or in the form of flakes or other 
worked grains (except flour, groats and meal), pre-cooked or ot 
2002 Tomatoes prepared or preserved otherwise than by vinegar or acetic acid 
2005 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, 
other than products of heading No 2006 
2008 Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not 
containing added sugar or other sweetening matter or spirit, not elsewhere specified or 
included 
                                                      
2 This list was submitted by the ACP Group in JOB(06)/204 of 21 June 2006.  TN/AG/W/3 
 Page 53 
 
 
  HS4 
 HS4 Description 
 
2009 Fruit juices (including grape must) and vegetable juices, unfermented and not containing added 
spirit, whether or not containing added sugar or other sweetening matter 
2101 Extracts, essences and concen trates, of coffee, tea or maté an d preparations with a basis of 
these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee 
substitutes, and extracts, essen ces and concentrates thereof 
2103 Sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and 
meal and prepared mustard 
2204 Wine of fresh grapes, including fortified wines; grape must other than that of heading No 2009 
2207 Undenatured ethyl alcohol of an alcoholic strength by volume of 80 % vol or higher; ethyl 
alcohol and other spirits, denatured, of any strength 
2208 Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 % vol; spirits, 
liqueurs and other spirituous beverages 
2309 Preparations of a kind  used in animal feeding 
2401 Unmanufactured to bacco; tobacco refuse 
2402 Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes 
 TN/AG/W/3 
Page 54  
 
  ANNEX H
* 
AGREEMENT ON AGRICULTURE:  ANNEX 2 
Running list of proposed changes to paragraphs 2 through 13 
Government Service Programmes 
 
General services (paragraph 2) 
(i) Add the following subparagraph (h), including  a footnote, to the existing paragraph 2: 
 (h) agrarian, land and institutional reform[, and any other programmes related to food and 
livelihood security and rural development, in  developing country Members,] including 
services related to such [reform and other] programmes. 1 
  Text of footnote 1:  Such reform and other programmes include, inter alia, settlement 
programmes, issuance of property titles, employment assurance, [provision of 
infrastructure,] nutritional security, poverty alleviation, soil conservation and resource 
management, and drought management and flood control.  
(ii) Add the following subparagraph (h ) to the existing paragraph 2:  
 (h) services relating to agrarian, land and institutional reform, food and livelihood security 
and rural development, including issuance of property titles, employment assurance, nutritional security, poverty alleviation, soil conservation and resource management, 
and drought management and flood control . 
(iii) Add the following subparagraph (h ) to the existing paragraph 2:  
 (h) Policies and services related to farmer settlement, land reform and the redress of 
historical land ownership structures in developing country Members.  These services 
may include the provision of infrastructu re, land rehabilitation, soil conservation and 
food security programmes to promote rural development and poverty alleviation  
 
Public stockholding for food security purposes
5 (paragraph 3)  
(i) Modify the existing footnote 5 as follows: 
  For the purposes of paragraph 3 of this Annex, governmental stockholding programmes 
for food security purposes in developing c ountries whose operation is transparent and 
conducted in accordance with officially publis hed objective criteria or guidelines shall be 
considered to be in conformity with th e provisions of this paragraph, including 
programmes under which stocks of foodstuffs  for food security purposes are acquired and 
released at administered prices, provi ded that the difference between the acqu isition price 
and the external reference price is accounted for in the AMS . 
(ii) Add text at the end of the existing footnote 5: 
  ... However, acquisition of stocks of foodstuffs  by developing country Members with the 
objective of supporting low-income or resource-poor producers shall not be required to 
be accounted for in the AMS.  
                                                      
* The following symbols have been used:   
1)  Italicised text in bold indicates proposed additions/rev isions and strike-out indicates proposed deletions of the 
relevant provisions of the Agreement on Agriculture. 
2)  Square-bracketed text indicates alternative proposals.   TN/AG/W/3 
 Page 55 
 
 
  Domestic food aid6 (paragraph 4)  
(i) Modify the existing footnote 5&6 as follows:  
  5&6 For the purposes of paragraphs 3 and 4 of this Annex, the acquisition of foodstuffs at 
subsidized prices when procured gen erally from low-income or resource-poor 
producers in developing country Members with  the objective of fighting hunger and 
rural poverty, as well as  the provision of foodstuffs at subsidized prices with the objective 
of meeting food requirements of urban and ru ral poor in developing countries on a regular 
basis at reasonable prices shall be considered to  be in conformity with the provisions of 
this paragraph.  
 
Direct payments to producers (paragraph 5) 
(i) Add text at the end of the first sentence and modify the second sentence of the existing 
paragraph 5 as follows: 
 (a) Support provided through direct payments (o r revenue foregone, including payments in 
kind) to producers for which exemption fro m reduction commitments is claimed shall 
meet the basic criteria set out in paragra ph 1 above, plus specific criteria applying to 
individual types of direct payment as set out in paragraphs 6 through 13 below.  Direct 
payments shall not be linked to production levels, including input levels therein.  When 
Members make such payments, they shall notify the base period and all other relevant 
criteria, as well the laws, regulations, and administrative decisions of such programmes 
made under this provision.  Further notific ations under paragraph 5(a) shall include 
regular and periodic information on how th e programmes under this  provision achieve 
the stated objectives.  
 (b) Where exemption from reduction is claimed for any existing or new type of direct 
payment other than those specified in paragr aphs 6 through 13, it shall conform to criteria 
(b) through  (e) in paragraph 6, in addition to the general criteria set out in paragraph 1. 
(ii) Modify the existing paragraph 5 as follows. 
  Support provided through direct payments (or revenue foregone, including payments in 
kind) to producers for which exemption fro m reduction commitments is claimed shall 
meet the basic criteria set out in paragraph 1 above, plus specific criteria applying to individual types of direct payment as set out  in paragraphs 6 through 13 below.  Where 
exemption from reduction is claimed for any exis ting or new type of direct payment other 
than those specified in paragraphs 6 through 13, it shall conform to criteria (b) through  (e) 
in paragraph 6, in addition to the genera l criteria set out in paragraph  1. 
(iii) Add text at the end of  the existing paragraph 5: 
  ...  On-going payments shall be based on activities in a defined, fixed and unchanging 
historical base period.  
(iv) Add subparagraph (c) and modify the existing paragraph 5 as follows: 
 (a)  Support provided through direct payments (o r revenue foregone, including payments in 
kind) to producers for which exemption fro m reduction commitments is claimed shall 
meet the basic criteria set out in paragra ph 1 above, plus specific criteria applying to 
individual types of direct payment as se t out in paragraphs 6 through 13 below .   
 (b) Where exemption from reduction is claimed for any existing or new type of direct 
payment other than those specified in paragr aphs 6 through 13, it shall conform to criteria 
(b) through (e) in paragraph 6, in addition to  the general criteria set out in paragraph 1.  TN/AG/W/3 
Page 56  
 
   (c)  Transparency and Reporting (to be developed) 
 
Decoupled income support (paragraph 6) 
(i) Modify the existing subparagraphs (a) and (e) and add a subparagraph (f) as follows: 
 (a) Eligibility for such payments shall be de termined by clearly-defined criteria such as
 of 
low levels of  income, status as a producer or landowner , factor use or production  
landholding and production level  in a notified , defined and fixed  and unchanging  base 
period.  Developing country Members who have not p reviously made use of this type of 
payment, and thus have not notified, shall not be precluded from establishing an 
appropriate base period7, which shall be fixed and unchanging and shall be notified . 
 (e) Land, labour, or any other factor of production shall not be required to be in 
"agricultural use" and no production shall be required in order to receive payments. 
 (f) Such payments shall not be made in conjunction with AMS support and support under 
Article 6.5, if the sum of such support, as appropriate8, exceeds X per cent of the annual 
value of production of a given product. 
  Text of footnote 7:  Developing country Members may no t have the capacity to fully 
assess the impact of innovation in their agric ultural policies.  Accordingly, the base 
period of a time-limited experimental or pilo t programme may not be taken as the fixed 
and unchanging base period for the purposes of this paragraph.  
 Note 8:  This is without prejudice to the fina l outcome of the negotiations of the amendment of 
Article 6.5. 
(ii) Modify the existing subparagraph (a) as follows: 
 (a) Eligibility for such payments shall be de termined by clearly-defined criteria such as 
income, status as a producer or landowner, fact or use or production level in a defined and 
fixed  and unchanging historical  base period.  
 
Government financial participation in income insurance and income safety-net programmes 
(paragraph 7) 
(i) Modify subparagraphs (a) and (b) as follows:  
 (a) Eligibility for such payments shall be dete rmined by an income loss, taking into account 
only income derived from agriculture, which exceeds 30 per cent of average gross income 
or the equivalent in net income terms (excl uding any payments from the same or similar 
schemes) in the preceding three-year peri od or a three-year average based on the 
preceding five-year period, excluding th e highest and the lowest entry, or in the case of a 
developing country Member, in accordance with specific criteria which shall be defined 
in national legislation9.  Any producer meeting this cond ition shall be eligible to receive 
the payments. 
  Text of footnote 9:  Includes administrative orders and regulations made by the 
designated competent authorities. 
 (b) The amount of such payments shall compensate only up to  for less than  70 per cent of the 
producer's income loss  in the year the producer beco mes eligible to receive this 
assistance.  In the case of a developing country Memb er, compensation shall only be up 
to a certain proportion of the producer's income which shall be defined in national 
legislation10.  TN/AG/W/3 
 Page 57 
 
 
    Text of footnote 10:  Includes administrative orders and regulations made by the 
designated competent authorities.  
(ii) Add two footnotes to the existing subparagraphs (a) and (b):  
 (a) Eligibility for such payments shall be determined by an income loss1, taking into account 
only income derived from agriculture, which exceeds 30 per cent of average gross income 
or the equivalent in net income terms (excl uding any payments from the same or similar 
schemes) in the preceding three-year peri od or a three-year average based on the 
preceding five-year period, excluding the high est and the lowest entry.  Any producer 
meeting this condition shall be e ligible to receive the payments. 
  Text of the footnote 1:   Developing country Members may determine the income loss on 
an aggregate basis of the agriculture sector as  a whole (i.e. not on an individual basis) 
at either a national or regional level.  
 (b) The amount of such payments shall compen sate for less than 70 per cent of the producer's 
income loss2 in the year the producer becomes e ligible to receive this assistance. 
  Text of footnote 2:   If developing country Members ha ve based the eligibility criteria in 
7(a) above on an aggregate basis of the agric ulture sector as a whole, the total amount 
of payments shall compensate for less than 70 per cent of the aggregate income loss of 
the agriculture sector as a whole.  
(iii) Modify the existing subparagraphs (a) and (b) as follows: 
 (a) Eligibility for such payments sha ll be determined by an income loss of the farm 
enterprise as a whole , taking into account only income derived from agriculture, which 
exceeds 30 per cent of the reference income, which is  average gross income or the 
equivalent in net income terms (excludi ng any payments from the same or similar 
schemes) in the preceding three  five-year period or a three-year average based on the 
preceding five-year period, excluding the high est and the lowest entry.  Any producer 
meeting this condition shall be e ligible to receive the payments from the government.   
 (b) The amount of such payments by governments  shall compensate for less than 70  per cent 
of the producer's income loss  in the year the producer beco mes eligible to receive this 
assistance raise the producer's income to no more than 70 per cent of the producer's 
reference income.  
(iv) Modify the existing subparagraphs (a), (b) and (c) as follows: 
 (a) Eligibility for such payments shall be dete rmined by an income loss, taking into account 
only income derived from agriculture, which exceeds 30 per cent of the reference 
income, which is  average gross income or the equivale nt in net income terms (excluding 
any payments from the same or similar schemes) in the preceding three  five-year period or 
a three-year average based on the preceding five-year period, excluding the highest and 
the lowest entry.  Any producer meeting this  condition shall be elig ible to receive the 
payments from the government.   
 (b) The amount of such payments by governments  shall in the year the producer is eligible 
to receive this assistance, raise the produ cer's income to no more than 70 per cent of 
the producer's reference income.  compensate for less than 70  per cent of the producer's 
income loss in the year the producer becomes eligible to receive this assistance.  
 (c) The amount of any such payments shall relate solely to income derived from agriculture of 
the farm enterprises' as a whole ; it shall not relate to the type or volume of production 
(including livestock units) undertaken by the pr oducer;  or to the prices, domestic or 
international, applying to such production; or to the factors of production employed.  TN/AG/W/3 
Page 58  
 
  (v) Modify the existing subparag raphs (a) and (b) as follows: 
 (a) Eligibility for such payments shall be dete rmined by an income loss, taking into account 
only income derived from agriculture, which exceeds 30 per cent of the reference 
income, which is  average gross income or the equivale nt in net income terms (excluding 
any payments from the same or similar schemes) in the preceding three
 minimum five -
year period or a three-year average based on the preceding five-year period, excluding the 
highest and the lowest entry.  Any producer meeting this condition shall be eligible to 
receive the payments directly or indirectly from the government.   
 (b) The amount of such payments , directly or indirectly  from the government, shall,  shall 
compensate for less than 70  per cent of the producer's income loss  in the year the 
producer becomes eligible to receive this assistance contribute only up to 70 per cent of 
the producer's reference income . 
 
Payments (made either directly or by way of govern ment financial participation in crop insurance 
schemes) for relief from natural disasters (paragraph 8) 
(i) Modify subparagraphs (a) and (b) as follows: 
 (a) Eligibility for such payments shall arise only following a formal recognition by 
government authorities that a natural disaster or like disaster (including disease outbreaks, pest infestations, nuclear accidents, and war on territory of the Member concerned) has occurred or is occurring; and shall be de termined by a production loss which exceeds 
30 per cent of the average of production in th e preceding three-year period or a three-year 
average based on the preceding five-year period, excluding the highest and the lowest 
entry , or in the case of a developing country Member, in accordance with specific 
criteria which shall be defined in national legislation
11. 
  Text of footnote 11:  Includes administrative orders and regulations made by the 
designated competent authorities. 
 (b) Payments made following a disaster shall be  applied only in respect of losses of income, 
crop, livestock (including payments in connec tion with the veterinary treatment of 
animals), land or other production factors due to the natural disaster or other disaster  in 
question.  
(ii) Add a footnote to the existing subparagraph (a):  (a) Eligibility for such payments shall arise only following a formal recognition by 
government authorities that a natural disaster or like disaster (including disease outbreaks, 
pest infestations, nuclear accidents, and war on territory of the Member concerned) has occurred or is occurring; and sha ll be determined by a production loss
3 which exceeds 
30 per cent of the average of production in th e preceding three-year period or a three-year 
average based on the preceding five-year period, excluding the highest and the lowest 
entry .   
  Text of footnote 3:   Developing country Members may determine the production loss of 
the affected sector(s) or region(s) on an aggregate basis.  
(iii) Modify subparagraph (a) as follows: 
 (a) Eligibility for such payments shall arise only following a formal recognition by 
government authorities that a natural disaster or like disaster (including disease outbreaks, 
pest infestations, nuclear accidents, and war on territory of the Member concerned) has 
occurred or is occurring; and shall be de termined by a production loss which exceeds 
30 per cent of the average of production in th e preceding three-year period or a three-year 
average based on the preceding five-year period, excluding the highest and the lowest  TN/AG/W/3 
 Page 59 
 
 
  entry.  In the case of developing country Member s, payments for relief from natural 
disasters may be provided to producers when the estimated production loss is less than 
30 per cent of the average of production in the preceding three-year period or a three-year average based on the preceding five-year period. 
(iv) Add to the existing subparagraph (a) and modify the existing subparagraph (b) as follows: 
 (a) Eligibility for such payments shall arise: 
(i) In the case of direct payments related to disasters  only following a formal 
recognition by government authorities that a natural or like disaster (including disease outbreaks, pest infestations, nuclear acci dents, and war on the territory of the 
Member concerned) has occurred or is occurring;  and shall be determined by a 
production loss which exceeds 30 per cent of  the average of production in the 
preceding three
 five-year period or a three-year average based on the preceding 
five-year period, excluding the highest and the lowest entry. 
(ii)  In the case of government financial partic ipation in crop or production insurance 
schemes, eligibility for such payments sha ll be determined by a production loss 
which exceeds 30 per cent of the average of production in a period demonstrated to 
be actuarially appropriate.  
(iii)  In the case of the destruction of animal s or crops to control or prevent pests, 
diseases, disease-carrying organisms or disease-causing organisms named in national legislation or international st andards, the production loss may be less 
than the 30 per cent of the average of production referred to above.  
 (b) Payments made following a disaster shall be  applied only in respect of losses of income, 
crops , livestock (including payments in connec tion with the veterinary treatment of 
animals), land or other production factors due to the natural disaster in question. 
(v) Add to the existing subparagraph (a) and m odify the existing subparagraphs (b) and (d) as 
follows: 
 (a) Eligibility for such payments shall arise: 
(i) In the case of direct payments related to disasters  Eligibility for such payments shall 
arise  only following a formal recognition by government authorities that a natural or 
like disaster (including disease outbreaks, pest infestations, nuclear accidents, and war on the territory of the Member concerned) has occurred or is occurring;  and shall be determined by a production loss wh ich exceeds 30 per cent of the average of 
production in the preceding three
 five-year period or a three-year average based on 
the preceding five-year period, excluding the highest and the lowest entry.   
(ii) In the case of government financial par ticipation in crop insurance schemes, 
eligibility for such payments shall be determined by a production loss which 
exceeds 30 per cent of the average of produ ction in an actuarially appropriate 
period.  
(iii) In the case of the destruction of animal s or crops to control or prevent diseases 
named in legislation or international standards, the production loss may be less 
than the 30 per cent of the average of production referred to above. 
 (b) Payments made following a disaster  under Paragraph 8 shall be applied only in respect of 
losses of income, livestock (including payments in connection with the veterinary 
treatment of animals), land or other production factors or destruction of animals or crops  
due to the natural  disaster in question. 
 (d) Payments made during a disaster  under Paragraph 8 shall not exceed the level required to 
prevent or alleviate further loss as defined in criterion (b) above. TN/AG/W/3 
Page 60  
 
  (vi) Add to the existing subparagraph (a) and m odify the existing subparagraphs (b) and (d) as 
follows: 
 (a) Eligibility for such payments shall arise:  
(i) In the case of direct payments, eligibility shall arise, only following a formal 
recognition by government authorities that a natural or like disaster (including 
disease outbreaks, pest infestations, nuclear acci dents, and war on the territory of the 
Member concerned) has occurred or is occurring;  and shall be determined by a production loss which exceeds 30 per cent of  the average of production in the 
preceding minimum five-year   three
-year period or a three-year average based on the 
preceding five-year period, excluding the highest and the lowest entry. 
(ii) In the case of government financial participation in production insurance 
schemes, eligibility shall be determined by a production loss which exceeds 30 per 
cent of the average of production in a period that is actuarially appropriate.  
(iii) Where payments under this paragraph are made in respect of  the destruction of 
animals or crops to control or preven t a disease identified by an appropriate 
authority, may arise when the production loss is less than the 30 per cent of the 
average of production referred to in paragr aph 8(a)(i) or 8(a)(ii), as applicable.  
 (b) Payments made under this paragraph following a disaster  shall be applied only in respect 
of losses of income, livestock (including pa yments in connection with the veterinary 
treatment of animals), land or other production factors due to the natural disaster or 
destruction of animals or crops  in question. 
 (d) Payments made under this paragraph during a disaster  shall not exceed the level required 
to prevent or alleviate further loss  as defined in criterion (b) above. 
 
Structural adjustment assistance provided  through investment aids (paragraph 11) 
(i) Modify the existing subparagraph (b) as follows:  (b) The amount of such 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 any year after a fixed and unchanging base period, other than as provided for under 
criterion (e) below.  Developing country Members who have not previously [made use of 
this type of payment, and thus have not notif ied] [notified the usage of this type of 
payment], shall not be precluded from establishing an appropriate base period [
12, 
which shall be fixed and unchanging and shall be notified].  
  Text of footnote 12:  Developing country Members may not have the capacity to fully 
assess the impact of innovation in their agric ultural policies.  Accordingly, the base 
period of a time-limited experimental or pilo t programme may not be taken as the fixed 
and unchanging base period for the purposes of this paragraph. 
(ii) Add at the end of subparagraph (a) and modify the existing subparagraph (b) as follows: 
 (a) ... Such structural disadvantages must be clearly defined. 
 (b) The amount of such payments in any given year shall not be related to, or based on, the 
type or volume of production, [ the use of factors of production, ] or inputs into the 
production  (including livestock units) undertaken by the producer in any year after a 
fixed and unchanging historical the base period, other than as provided for under 
criterion (e) below.  The base period shall be notified.  
  TN/AG/W/3 
 Page 61 
 
 
  Payments under environmental programmes (paragraph 12)  
(i) Add the following subparagraph (c ) to the existing paragraph 12: 
 (c) The conditions spelt out in paragraphs 12 (a) and (b) above shall not apply to payments 
made by developing country Members. 
(ii) Modify the existing subparagraph (b) as follows:  (b) The amount of payment shall be lim ited to the extra costs or loss of inco
me involved in 
complying with the government programme an d not be related to or based on the 
volume of production. 
 
Payments under regional assistance programmes (paragraph 13)  
(i) Add text at the end of subparagraph (a) a nd modify the existing subparagraph (b) as follows: 
 (a) ... Developing country Members shall be exempted from the condition that 
disadvantaged regions must constitute a cl early designated contiguous geographical 
area with a definable economic and administrative identity . 
 (b) The amount of such 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 
any year after the fixed and unchanging historical  base period , which shall be notified,  
other than to reduce that production.  Developing country Members who have not 
previously made use of this type of payment, and thus have not notified, shall not be 
precluded from establishing an appropriate base period13, which shall be fixed and 
unchanging and shall be notified. 
  Text of footnote 13:  Developing country Members may not have the capacity to fully 
assess the impact of innovation in their agric ultural policies.  Accordingly, the base 
period of a time-limited experimental or pilo t programme may not be taken as the fixed 
and unchanging base period for the purposes of this paragraph. 
(ii) Add text at the end of subparagraph (a) a nd modify the existing subparagraphs (b) and (f) as 
follows: 
 (a) ... Developing country Members will be exempt from the condition that the 
disadvantaged region be a clearly designat ed contiguous geographical area with a 
definable economic and administrative identity . 
 (b) The amount of such 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 
any year after the fixed and unchanging historical  base period , which shall be notified,  
other than to reduce that production.  Developing country Members should not be 
precluded from utilizing this kind of payment in the future in the event that no base 
period was notified.  An appropriate base period which shall be fixed and unchanging and shall be established and notified. 
 (f) The payments shall be limited to the extra costs or loss of income involved in undertaking 
agricultural production (including livestock production)  in the prescribed area. 
(iii) Add text at the end of the existing subparagraph (a) as follows:  (a) ... Developing country Members shall be exempted from the condition that 
disadvantaged regions must constitute a cl early designated contiguous geographical 
area with a definable economic and administrative identity . TN/AG/W/3 
Page 62  
 
  (iv) Modify the existing subparagraph (b) as follows: 
 (b) The amount of such 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 any year after the fixed and unchanging historical  base period , which shall be notified,  
other than to reduce that production.  TN/AG/W/3 
 Page 63 
 
 
  ANNEX I 
POSSIBLE NEW ARTICLE 10.2  OF THE AGREEMENT ON AGRICULTURE  
EXPORT CREDITS , EXPORT CREDIT GUARANTEES OR INSURANCE PROGRAMMES  
1. General Provisions  
1. Subject to the provisions of this Article, Memb ers shall not, directly or indirectly, provide 
support or enable support to be provided for, or in connection with, the financing of exports of 
agricultural products, including the credit and other risks associated therewith [, otherwise than on 
market related terms and conditions].  Each Me mber accordingly undertakes not to provide export 
financing support otherwise than in conformity wi th this Article [and with the commitments as 
specified in Members schedules]. 
2. Forms and Providers of Export Financing Support Subject to Discipline 
2. For the purpose of this Article, the term "export financing support" includes any of the 
following forms of support for, or in connection with, the financing of exports of agricultural 
products:  
(a) direct financing support, comprising direct cr edits/financing, refinancing, and interest 
rate support; 
(b) risk cover, comprising export credit insurance or reinsurance and export credit 
guarantees; 
(c) government-to-government credit agreements  covering the imports of agricultural 
products exclusively from the creditor country under which some or all of the risk is undertaken by the government of the exporting country;  and 
(d) any other form of governmental export credit support, direct or indirect, including 
deferred invoicing and forei gn exchange risk hedging. 
3. The provisions of this Article shall apply to ex port financing support pr ovided by or on behalf 
of the following entities, hereinafter referred to as "export financing entities", whether such entities 
are established at the national or at the sub-national level: 
(a) government departments, agencies, or statutory bodies; 
(b) any financial institution or entity engaged in export financing in which there is 
governmental participation by way of equi ty, provision of loans or underwriting of 
losses; [and] 
(c) [agricultural export state trading enterprises;  and] 
(d) any bank or other private financial, cred it insurance or guarantee institution which 
acts on behalf of or at the direction of governments or their agencies. 
3. Terms and Conditions 
4. Export financing support shall be provided in c onformity with terms and conditions set out 
below.  Such conforming export financing support [shall be deemed to comply with paragraph 1 
above.] [shall not be deemed not to be an export s ubsidy for the purposes of this Agreement or of any TN/AG/W/3 
Page 64  
 
  of the WTO Agreements nor shall such support be deemed a non-commercial transaction for the 
purposes of Article 10.1 of the Agreement on Agricu lture.]  [Furthermore, support in the form of 
export credit insurance, reinsurance or guarantees sha ll not be provided in respect of export financing 
contracts whose terms and conditions are not otherw ise in conformity with the provisions of this 
paragraph.] 
(a) Maximum repayment term:   The maximum repayment term of a supported export 
credit, the period beginning at the starting point of credit
3 and ending on the 
contractual date of the final paymen t, shall be no more than 180 days[4] [without 
exception.][except for: 
(i) breeding stock; for which the maximum repayment period shall be [36] 
months; 
(ii) agricultural vegetable reproduction material, for which the maximum 
repayment period shall be [12] months; 
(iii) all agricultural products exported to least-developed and net food-importing 
developing countries (as set out in paragraph 7.12), for which the maximum 
repayment period shall be [36] months; and  
(iv) all agricultural products to developi ng country Members under exceptional 
circumstances (as set out in paragraph 7.13), in which case the maximum repayment period shall be [36] months.] 
(b) Payment of interest:   Interest shall be payable.  "Interest" excludes premiums and 
other charges for insuring or guaranteeing supplier or financial credits, banking fees 
or commissions relating to the export cred it, and withholding taxes imposed by the 
importing country. 
(c) Minimum interest rate:   The applicable Libor (London Interbank Offered Rate) for 
the currency in which the credit is denomina ted (not inclusive of and separate from 
risk-premium reflective of, as the case may be, the buyer/commercial, 
country/political and sovereign credit risks cove red) plus [a fixed margin of [ ] basis 
points] [an appropriate margin sufficient]  to cover the cost of extending such 
financing (e.g. administrative or transaction costs) shall be applicable in respect of [direct financing support] [export financi ng support] and in respect of invoiced 
amounts benefiting from deferred paym ent under an export contract. 
(d) Premiums in respect of coverage of risks of non-repayment under direct 
financing support, export credit guarantees or export credit insurance/reinsurance:   Premiums
[5] shall be charged, sha ll [be market-based] [or] 
[be risk-based], [not undercut private market  pricing], [and shall be adequate to cover 
operating costs[6] and losses[7]over a period of [ ]] [and shall ensure that the 
                                                      
3 The "starting point of a credit" shall be [no later than the weighted mean date or actual date of the 
arrival of the goods in the recipient country for a cont ract under which shipments are made in any consecutive 
six-month period] [the date of the contract of sale for the purposes of export] [the date of export]. 
4 [In case of non-payment within the agreed re-payment period the exporter shall be entitled to claim 
indemnification from the export cred it agency only within a fixed peri od of time which shall not exceed [ ] 
months.] 
5 Premiums shall be defined as [ ] 
6 Operating costs shall be defined as [ ] 
7 Operating losses shall be defined as [ ]  TN/AG/W/3 
 Page 65 
 
 
  programme or part of the programme whic h is subject to the provisions of these 
disciplines is self-financing as defined in paragraph 3.4(g)].  Premiums shall be expressed in percentages of the outstanding principal value of the credit and shall be payable in full [at the date of issuance of cover] [or] [no later than the end if the month following the month in which the expor ts are made].  Premium rebates shall 
not be accorded.   
(e) Risk sharing:   Cover provided in the form of [export credit insurance, reinsurance or 
export credit guarantees] [export financing sup port] shall not exceed [ ] per cent of 
the value of a transaction. 
(f) Foreign exchange risk:   Export credits, export credit insurance, export credit 
guarantees, and related financia l support shall be provided in freely traded currencies.  
Foreign exchange exposure deriving from cred it that is repayable in the currency of 
the importer shall be fully hedged, such that  the market risk and credit risk of the 
transaction to the supplier/lender/guarantor is not increased.  The cost of the hedge shall be incorporated into and be in a ddition to the premium rate determined in 
accordance with this paragraph. 
(g) Self-Financing:   Export financing support progra mmes or parts thereof which are 
subject to the provisions of this Article sh all be self-financing.  Self-financing shall 
be considered as the ability of such progra mmes, or parts thereof, to operate in a 
manner by which the premiums charged cover all operating costs and losses over a 
period of [1-15] years.  [For this purpo se, the providers of export financing support 
shall keep separate accounting of the pr ogrammes covered by this Article according 
to appropriate accounting standards [set out  in Annex ... to be developed].]   
(h) [Loss preventative measures:   [In the event of an impending or actual default, the 
export credit financing entity may employ  loss preventative measures to minimize 
losses.  Immediate debt recovery efforts are preferred.  Where immediate debt 
recoveries are not practicable, other loss preventative measures may include a 
multilateral pari passu , rescheduling of debt or a bilateral restructuring of debt.  Other 
than as may be agreed in multilateral pari passu , rescheduled debt, debts with respect 
to which less than [ ] per cent of principa l has been recovered in [ ] years shall be 
considered as unrecoverable to the exte nt of such unrecovered amount.  Such 
unrecovered amounts and any debt forgiven ess provided to the obligor shall be 
considered a loss to the export credit financi ng entity.] [Other than may be agreed  
multilaterally, pari passu  rescheduling debt arrangements, debts shall not be 
rescheduled or otherwise restructured in a manner that results in circumvention of the 
terms and conditions of  this paragraph.]] 
(i) [Financing calculations:   For the purpose of determin ing whether a loan guarantee 
by a government in connection with an agricultural export confers a benefit, any 
comparison of the amount that the firm receiving the government guaranteed loan and the amount that the firm would pay on a comparable commercial loan absent the 
government guarantee or insured loans must be made on a direct one-to-one comparison basis.  The terms and conditions must be for the same or equal for each of:  tenor; form of repayment obligation; credit rating of obligor; risk rating of 
country; and the time period within which th e loan is offered.  In addition, the 
difference between the two amounts shall be  adjusted for any difference in fees.] TN/AG/W/3 
Page 66  
 
  4. Non-conforming Financing Support 
5. Export financing support, which does not conform w ith the provisions of paragraph 3.4 of this 
Article or which is provided in circumstances as ma y otherwise be allowable under Article 9 of this 
Agreement, hereinafter referred to  as "non-conforming export financi ng", constitute export subsidies 
for the purposes of this Agreement and are therefore,  [subject to specific export financing elimination 
commitments contained in Members’ Schedules] [to be prohibited by [ ]] [to be eliminated within the 
binding levels of Members' export subsidies elimination Schedules]. 
5. Implementation 
6. [The following additional and specific disciplines shall be phased in from the first day of the 
implementation period of the Doha Round: [ ].] 
7. [Over the implementation period the scope of pe rmitted export financing instruments shall be 
reduced to only pure risk cover comprising export credit insurance or reinsu rance and export credit 
guarantees according to the following timetable [ ].] 
6. Other Issues 
8. Members who operate export fina ncing programmes in accordance with the provisions of this 
Article [, excluding least-developed country Members, ] shall comply with the following transparency 
requirements: 
(a) [on the day of the entry into force of these provisions, Members concerned shall 
submit a notification concerning that Memb er's export financing programmes, export 
financing bodies and other related matters in the years [ ] to [ ] in  accordance with the 
format specified in Annex [to be developed] hereto;   
(b) After the entry into force of this Agreem ent the notification under paragraph 6.8(a) 
shall be updated at the beginning of each subsequent year; 
(c) At not less than [ ] monthly intervals Members shall submit a notification to the 
Committee on Agriculture in which deta ils are provided of export financing 
commitments entered into in accordance with  the format specified in Annex [to be 
developed] hereto.  For each export fina ncing programme, the notification shall 
include accounting information referred to under the self-financing provisions 
indicating whether the programme was se lf-financing during the previous year; 
(d) A Member whose export financing programmes are not in conformity with the 
disciplines and the self-financing principle shall provide the Committee on Agriculture information on any corrective action taken or envisaged to bring the 
programme back into conformity.] 
 (a) [no later than three months after the entry in to force of this Article each Member shall 
notify the Committee on Agriculture of any export financing support entity that exceeds the maximum repayment term of 180 days and is not covered by the 
exceptions in paragraph 3.4(a).  Failure to notify shall result in prohibition of use of 
such programmes;  TN/AG/W/3 
 Page 67 
 
 
  (b) Each Member operating a non-conforming export financing support entity shall 
annually notify the Committee on Agriculture, at the beginning of each subsequent year, all relevant data; 
(c) Each Member shall annually notify the Committee on Agriculture, at the beginning of 
each subsequent year, of the following information for each entity providing export 
financing support.  If funds are provided in a foreign currency other than the 
Member's national currency, then the repaymen t and interest shall be converted to the 
Member's national currency using prevailing ma rket exchange rates at the time funds 
are received.  The notifications shall include the following data: 
(i) the value of all direct financing support comprising direct credits, refinancing 
and interest rate support granted, including any government-to-government 
transactions the value of all risk cove r extended in the form of export credit 
insurances, reinsurance and export credit guarantees, including any government-to-government transactions; a nd the value of all other support, 
including, but not limited to, deferred i nvoicing and foreign exchange risk 
hedging; 
(ii) the total amount of funds from all sources including national accounts used to 
pay claims and the total amount of re imbursements of funds to such sources 
including national accounts in respect of such claims; 
(iii) the total amount of revenue earned fro m premiums charged and interest 
earned; and  
(iv) the total amount of operating costs, losses, and the amount of debt forgiven 
and written off.  
(d) If a Member's annual notification for any export financing support entity, for three 
consecutive years, reflects that the total amount of revenue earned from premiums charged and interest earned on premium reve nue is less than the total of operating 
costs and losses, then the Member shall pr ovide a narrative statement to explain the 
progress towards self-sustaining activity in th e next year's report including specific 
actions to increase premiums, reduce risk  exposure, reduce operating costs and/or 
recover losses.] 
7. Special and Differential Treatment 
9. [Developing countries providers of export credits  shall be eligible to benefit from the 
following elements: 
(a) [Non-conforming export fina ncing support, as defined in paragraph 4.5, shall be 
[subject to specific export financing elimination commitments contained in developing country Members' Schedules]  [be prohibited by [ ] for developing 
countries] [be eliminated within the binding  levels of developing country Members' 
export subsidies elimination Schedules];] 
(b) [The specific disciplines set out in paragraph 5.6][The following additional and 
specific disciplines] shall be  phased in from [ ]: ;] TN/AG/W/3 
Page 68  
 
  (c) [The provisions of paragraph 5.7, sha ll be implemented according to the following 
timetable [ ];] 
(d) [The maximum repayment period under para graph 3.4(a) shall be no more than [ ] 
days;] 
(e) [The minimum interest rate as provided for under paragraph 3.4(c) may be adjusted to 
take into account withholding taxes on international borrowings and additional 
borrowings for capital required to conform to  Basel II norms.  Such elements shall 
not be considered export subsidies for the purpose of this Article;] 
(f) [The premiums charged in accordance w ith paragraph 3.4(d) may be market-based 
and premium rebates may be provided for under the following circumstances [ ];] 
(g) [With respect to the risk sharing provisions contain in paragraph 3.4(e), 100 per cent 
of the value of the transaction may be cove red in the form of [export credit insurance, 
reinsurance or export credit guara ntees] [export financing support];] 
(h) [As an exception to the provisions of pa ragraph 3.4(f), developing country Members 
may hedge in non-freely traded currencies;] 
(i) [The self-financing period contained in paragraph 3.4(g) for developing countries 
shall be [at least] [ ] years;] 
(j) [For the purpose of paragraph 3.4(h) , when warranted by genuine financial 
difficulties the rescheduling of debt should be on the same terms and conditions as 
those for commercial tenders in order to prevent or curtail planned defaults.]] 
10. [Developing country Members shall benefit from a grace period of three years after the entry 
into force of this Agreement before being required to comply with the provisions under 
paragraph 6.8.]  
11. [Export financing entities in developing country Members which have the objective of 
preserving domestic price stability or ensuring food security shall be exempt from the provisions of 
paragraph 6.8 of this Article.]  
12. Least-developed countries and net food-importing developing countries as listed in 
G/AG/5/Rev.8 shall be accorded differential and more favourable treatment comprising: [ ]. 
13. In exceptional circumstances which can not be ad equately covered otherwise by international 
food aid, commercial export credits or preferentia l international financing facilities, Members may 
provide,  
 [in respect of exports to developing an d least-developed country Members, where it 
has been confirmed by [ ] that commercial export credits are not available, and where 
the absence of export credits would preclude trade, ad hoc temporary government financing arrangements to underwrite agricu ltural export credits that shall comply 
with the terms and conditions in paragraph 4, notwithstanding that they [may charge 
risk-based premiums, rather than market -based premiums], [and need not be self-
financing].  Members shall provide ex ante notifications [to be developed] for such 
government financing.] 
 [more favourable terms for export financ ing support in respect of exports to 
developing country Members experiencing em ergency situations may be provided in  TN/AG/W/3 
 Page 69 
 
 
  accordance with this paragraph.  Notwith standing the terms and conditions of 
paragraph 3.4, export financi ng support provided pursuant to  this paragraph shall be 
deemed conforming export financing support.   An emergency is defined as a sudden, 
significant and unusual deterioration in a developing country Member's economy and 
in its ability to finance current imports of  basic foodstuffs, and which may have far 
reaching consequences such as social depriva tion or unrest.  In the event of such an 
emergency the importing developing c ountry Member concerned may request 
exporting Members to provide more favour able export financing terms than are 
otherwise permissible under this Article.  The importing developing country Member 
concerned shall notify the Committee on Agri culture in writing of the circumstances 
which are considered to justify more fa vourable terms than are permitted under the 
relevant provisions of this Ar ticle, together with details of  the products concerned, so 
as to provide an opportunity for other interested exporting Members to consider responding to the request.  Where commitments  are made to provide more favourable 
credit terms and conditions in response to such a request, details of the committed 
terms and conditions shall be notified by the exporting Member or Members 
concerned to the Committee on Agriculture.  The maximum repayment term permitted under this exception shall not exceed [36] months.] 
14. [Members shall ensure that, in the event that exceptional circumstances provided for under 
the preceding paragraph arise, actions will be taken st rictly consistent with the terms and conditions of 
that paragraph so as not to undermine or circ umvent their export subsidy commitments and 
obligations under this Agreement.]  TN/AG/W/3 
Page 70  
 
  ANNEX J 
P
OSSIBLE NEW ARTICLE 10 BIS OF THE AGREEMENT ON AGRICULTURE  
AGRICULTURAL EXPORTING STATE TRADING ENTERPRISES  
 
1. Members shall ensure that agricultural expor ting state trading enterprises are operated in 
conformity with the provisions specified below and, subject to these provisions, in accordance with 
Article XVII, the Understanding on the Interpretation of Article XVII and other relevant provisions of 
GATT 1994, the Agreement on Agriculture and other WTO agreements. 
1. Entities 
2. For the purpose of this Article, an agricultura l exporting state trading enterprise shall be 
considered to be : 
Any governmental or non-governmental enterpri se, including a marketing board, which has 
been granted [or which enjoys de facto  as a result of its governmental or quasi-governmental 
status] exclusive or special rights [or] privile ges [or advantages with respect to exports of 
agricultural products], including statutory or constitutional powers, in the exercise of which 
the enterprise influences through their export sales the level or direction of agricultural 
exports. 
 
2. Disciplines 
3. In order to ensure the elimination of trade- distorting practices with respect to agricultural 
exporting state trading enterprises as described above, Members shall:  
(a) eliminate by [ ] [the end of 2013] for devel oped country Members, and by [ ] [the end 
of [ ] ] for developing country Members [i n accordance with the following timetable 
[to be developed] ] [, in parallel with  the elimination of export subsidies]: 
(i) those export subsidies, defined by Article 1(e) of the Agreement on 
Agriculture, which are currently provided  to or by an agricultural exporting 
state trading enterprise, consistent with Members export subsidy 
commitments and the provisions of Article 9.4 of the Agreement on Agriculture; 
(ii) government financing of exporting stat e trading enterprises, [including, inter 
alia], preferential access to capital or other special privileges with respect to 
government financing or re-financi ng facilities, borrowing, lending or 
government guarantees for commercial borrowing or lending, at below 
market rates;  and 
(iii) government underwriting of losses, either directly or indirectly, [including] 
losses or reimbursement of the costs or write-downs or write-offs of debts owed [to, or] by export state trading enterprises on their export sales.  
(b) [Ensure that the use of monopoly powers by  such enterprises is not exercised in a 
manner which, either de jure  or de facto , [effectively] circumvents, or threatens to 
circumvent, the provisions set out in para graphs 1 and 2.3(a) above [, it being 
understood also that where the use of such powers would, to all practical intents and 
purposes, amount to a difference in form rather than substance from introduction or maintenance of an export subs idy per se, such use is prohibited.]  [[Prohibit] [Phase- TN/AG/W/3 
 Page 71 
 
 
  out] by [ ] [the end of 2013] the use of monopoly powers for such enterprises, after 
which Members shall not restrict the right of  any interested entity to export, or to 
purchase for export, agricultural products.] 
3. Special and Differential Treatment 
4. [Notwithstanding paragraph 2.3 (b) above 8: 
(a) agricultural state trading enterprises in developing country and least-developed 
country Members which enjoy special privile ges to preserve domestic consumer price 
stability and to ensure food security will be permitted to maintain or use monopoly 
powers for agricultural exporting [until [ ]] to the extent that they would not be otherwise inconsistent with other provis ions of this Agreement and other WTO 
Agreements; [and]  
(b) [where a developing or least-developed count ry Member has an agricultural exporting 
state trading enterprise with export monopol y powers, that enterprise may continue 
also to maintain or use those powers [un til [ ]] even if the purpose for which that 
enterprise has such privileges could not be deemed to be characterised by the 
objective: "to preserve domestic consumer price stability and to ensure food security".  
Such an entitlement, however, would be pe rmissible only for such an enterprise 
whose share of world exports of the agricu ltural product or products concerned is less 
than [ ] per cent, such that the entity's share of world exports of the product or 
products concerned does not exceed that leve l in [ ] consecutive years, and to the 
extent that the exercise of those monopoly powers is not otherwise inconsistent with 
other provisions of this Agreem ent and other WTO Agreements.]] 
4. Monitoring and Surveillance 
5. Any Member that maintains an agricultural e xporting state trading enterprise shall notify [to 
the Committee on Agriculture] [on an annual basis] relevant informa tion regarding the enterprise's 
operations.  This will, consistent  with standard WTO practice and normal commercial confidentiality 
considerations, require timely and transparent pr ovision of information on any and all exclusive or 
special rights [or] privileges [or advantages] gran ted to such enterprises within the meaning of 
paragraph 1 above sufficient to ensure effective tran sparency.  This will include [acquisition costs and 
export sales on a transaction-by-transaction basis .  Members shall notify any benefits, not otherwise 
notified under other WTO disciplines, that accrue to  a state trading export enterprise from any special 
financial privileges.  At the request of any Me mber, a Member maintaining a state trading export 
enterprise shall provide any specific information re quested concerning all operations relating to the 
enterprise’s export sales of agricultural products.] [the product exported, the volume of the product 
exported, the export price and the export destination.] 
                                                     
 
8 This would only apply in the event that the second option in that sub-paragraph was agreed. 
Otherwise this foreshadowed provision would be redundant. TN/AG/W/3 
Page 72  
 
  ANNEX K 
 
P
OSSIBLE NEW ARTICLE 10.4  OF THE AGREEMENT ON AGRICULTURE  
INTERNATIONAL FOOD AID 
 
1. Members reaffirm their commitment to maintain an adequate level of international food aid 
(hereinafter referred to as food aid9), to take account of the interests of food aid recipients and to 
ensure that the disciplines contained hereafter do not unintentionally impede the delivery of food aid 
provided to deal with emergency situations. 
1. General Provisions 
2. Members shall ensure that all food aid transactions are provided in conformity with the 
following provisions: 
(a) they are needs-driven; 
(b) they are provided in fully [or, in the event of an exceptional situation, less than fully] 
grant form; 
(c) they are not tied directly or indirectly to commercial exports of agricultural products 
or of other goods and services; 
(d) they are not linked to the market development objectives of donor Members; and 
(e) agricultural products provided as food aid shall not be commercially re-exported. 
Non-commercial re-exportation is permissible, but only where, for logistical reasons 
and in order to expedite the provision of  emergency food aid for another [affected] 
[country] in an emergency [humanitarian] situati on, this occurs as an integral part of a 
food aid transaction initiated by a relevant United Nations agency, [relevant regional 
or international intergovernmental agency  or organization,] [or non-governmental 
humanitarian organization or private charitable body]. 
3. The provision of food aid shall take fully into  account local market conditions of the same or 
substitute products.  [Members sha ll refrain from providing in-kind food aid in situations where this 
would create, or would risk to create an adverse e ffect on local or regional production of the same or 
substitute products.]  Members are encouraged to  procure food aid from local or regional sources to 
the extent possible [, provided that the availabilit y and prices of basic foodstuffs in these markets are 
not unduly compromised]. 
                                                      
 9  Unless otherwise specified, the term food aid is used to refer to both in-kind and cash-based food aid donations.   TN/AG/W/3 
 Page 73 
 
 
  2. Safe Box for Emergency Food Aid 
4. To ensure that there is no unintended impediment to the provision of food aid during an 
emergency [humanitarian] situation[10], food aid provided under such circumstances shall be exempt 
from the provisions of paragraph[s] [ ] , provided that there has been: 
(a) a declaration of an emergency by the [a ffected] [recipient] country [, or, the 
Secretary-General of the United Nations]; and 
(b) an assessment of need undertaken by [a c ountry][,] a relevant United Nations agency, 
including the World Food Programme and the United Nations Consolidated Appeals Process;  the International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies [, a relevant regional or 
international  intergovernmental agency or organization, a non-governmental 
humanitarian organization or private charitable body working in collaboration with the recipient government]; and 
(c) an emergency appeal from [a country][,] a relevant United Nations agency, including 
the World Food Programme and  the United Nations Consolidated Appeals Process;  
the International Committee of the Red Cro ss and the International Federation of Red 
Cross and Red Crescent Societies [, a relevant regional or international  
intergovernmental agency or organization, a non-governmental humanitarian organization or private charitable body work ing in collaboration with the recipient 
government]. 
5. [A notification will be required on an ex-post basis by donors [and the relevant international 
agency or organization] in orde r to ensure transparency.]  
6. [Recognising that there can be exceptional circum stances such that to wait for an emergency 
appeal as described in paragraph 2.4 above would result in an unaccep table delay in the provision of 
food aid, food aid may be provided in response to an  urgent request from the country concerned.  In 
such cases, the donor Member shall notify the Comm ittee on Agriculture no later than [ ] after the 
provision of such aid.  [Food aid provided under th is paragraph shall be limited to the period of the 
immediate aftermath of the emergency, and ther eafter shall be subject to the provisions of 
                                                     
 
10 [For the purpose of this Article, an em ergency [humanitarian] situa tion is defined as an urgent situation in which 
there is clear evidence that an event or series of events ha s occurred which causes human suffering or imminently threatens 
human lives or livelihoods and which the government concerned has not the means to remedy: and it is a demonstrably 
abnormal event or series of events which products dislocation in the life of a community on an exceptional scale.  The event 
or series of events may comprise one or a combination of the following: 
(i) sudden calamities such as earthquakes, floods, locust infe stations and similar unforeseen 
disasters; 
(ii) human-made emergencies resulting in an influx of refugees, or the internal displacement of 
populations, or in the suffering of  otherwise affected populations; 
(iii) food scarcity conditions owing to slow-onset ev ents such as drought, crop failures, pests and 
diseases that result in an erosion of the capac ity of communities and vulnerable populations to 
meet their food needs; 
(iv) severe food access or availability conditions  resulting from sudden economic shocks, market 
failure or economic collapse that result in an erosion of the capacity of communities and 
vulnerable populations to meet their food needs; and 
(v) a complex emergency for which the government of the affected coun try or the Secretary-
General of the United Nations  has requested the support of the World Food Programme.] 
 TN/AG/W/3 
Page 74  
 
  paragraph 2.4.]  In such circumstances, an ex-post declaration of appeal by an organization or agency 
listed in paragraph 2.4 above  shall be deemed to be in conformity with that paragraph.]  
7.  The provision of food aid in conformity with paragraph 2.4 [,2.5 and 2.6] may be provided 
for [as long as necessary] [as long as the emergency lasts] [a period of [ ] months, after which the 
continuation of such food aid un der the Safe Box shall be] subject to an assessment of continued 
genuine need as a result of the initial onset of the emergency.  The assessment of continued need shall 
be conducted by [the triggering or ganization or agency] [or] [in co-operation with] [the recipient 
country]. 
8. ["Cash-based" food aid that is conformity with the other provisions of this Agreement will be 
included in the safe box and be presumed to be in conformity with Article 10.1 of the Agreement on 
Agriculture.]  
3. Disciplines for Food Aid in Non-emergency Situations 
9. [In addition to the provisions of paragraphs  1.2 and 1.3, in-kind food aid provided in 
situations other than defined in para graphs 2.4 [, 2.5 and 2.6], shall be: 
(a) [based on an assessment of need [by an  identified multilateral third party 
organization, including humanitarian non-g overnmental organizations working in 
partnership with specialized United Nati ons agencies] [in accordance with the 
following [ ]]; 
(b) targeted to an identified vulnerable population group;  and 
(c) provided to address specific developmental objectives or nutritional requirements.] 
[phased out by the end of 2013 for developed country Members and by [ ] [the end of [ ]] for 
developing country Members [in accordance with the following timetable [ ]] [in parallel with the 
elimination of export subsidies].]    10. [The monetisation of in-kind food aid shall be [prohibited] [phased-out] by [ ] [the end of 
2013] for developed country Members and by [ ] [the  end of [ ] ] for developing country Members [in 
accordance with the following timetable [ ]] [in para llel with the elimination of export subsidies].]  
[The monetisation of in-kind food aid shall be prohibited except where is it necessary to fund 
activities that are directly related to the delivery of the food aid to the recipient[,] [or for the 
procurement of agricultural inputs].  Such monetis ation shall be carried out under the auspices of a 
relevant United Nations agency and the recipien t government.] ]  [Food aid may be monetised to 
implement food security activities, targeted to chro nic and acute food insecure populations.  For this 
purpose, Member donors shall prepare for those r ecipients in which monetisation will occur a 
commercial import requirement (CIR).  The CIR sha ll include a market analysis to show that the 
monetisation of the commodity in the recipient c ountry will not result in a disincentive to or 
interference with the commercial import trends or create a disincentive to domestic production.  The 
CIR shall include: 
(a) rationale for monetisation; 
(b) proposed mechanics of the monetisation – commodity selection and methods of sales; 
(c) utilisation of monetised proceeds; and 
(d) plan for safeguarding the monetised proceeds.]  TN/AG/W/3 
 Page 75 
 
 
  11. [Non-emergency in-kind food aid provided in conf ormity with the provisions of paragraphs 
1.2, 1.3 and 3.9 shall not be considered to cause commercial displacement and therefore not 
circumvent Members' export subsidy commitments.] 
12. Food aid donor Members shall be required to notify to the Committee on Agriculture, on an 
annual basis, the following data [ ].  TN/AG/W/3 
Page 76  
 
  ANNEX L 
E
XPORT PROHIBITIONS AND RESTRICTIONS  
[POSSIBLE AMENDMENT TO ARTICLE 12.1  OF THE AGREEMENT ON AGRICULTURE11] 
 
 
1. [In order to strengthen the existing disciplin es on export prohibitions and restrictions of 
Article XI of GATT 1994, Article 12 of the Agreemen t on Agriculture shall be modified to include 
the following elements: 
 
(a) [Existing prohibitions or restrictions in Members territories shall be notified to the 
Committee on Agriculture within 90 days  of the coming into force of these 
provisions. 
(b) As provided in paragraph 7 of Article 18 of the Agreement on Agriculture, any 
Member may bring to the attention of th e Committee on Agriculture such measures 
which it considers ought to have b een notified by another Member. 
(c) As of day one of the implementation period, a term of one year shall be established 
for the elimination of those export prohibitions  or restrictions in foodstuffs and feeds. 
(d) The above is proposed notwithstanding that, any Member instituting export 
prohibitions or restrictions and the aff ected importing Member may agree to set a 
term exceeding one year, as long as the term agreed on is not in excess of 18 months.  Notice shall be given to the Committee on Ag riculture of the agreement reached in 
this respect. 
(e) A Member instituting those measures shall gi ve notice of the causes that justify its 
keeping it. 
(f) A biannual surveillance mechanism sha ll be established in the Committee on 
Agriculture for the observance of obligations  described in subparagraphs (c) and (d).] 
 
                                                     
 
11 Proposal submitted by the G-20 in JOB(06)/147 of 18 May 2006 is included here for illustrative 
purposes only at this point.  TN/AG/W/3 
 Page 77 
 
 
  ANNEX M 
[COMMODITY ARRANGEMENTS  
UNDERSTANDING ON THE PROVISIONS OF ARTICLES XX( H) AND XXXVIII  OF GATT  199412] 
 
1. [The term "arrangements" in Article XXXV III of GATT 1994 is unde rstood to cover both: 
(a) Commodity agreements of which all inte rested producing and consuming countries 
are parties;  and 
(b) Agreements of which only commodity-dependent producing countries are parties. 
Such producers' agreements may be negotiate d by the producing countries themselves or 
adopted after negotiations undertaken under the au spices of UNCTAD or International Commodity 
Organizations.  They may be negotiated on an inte rnational or regional basis and may provide for 
participation of associations of producers.] 
2. [The exception provided by Article XX( h) which permits member countries or 
intergovernmental commodity agreements, to apply export restrictions and other measures that may 
not be consistent with the rules of GATT, provided that they are necessary for the attainment of their 
objectives, shall also apply to the agreements in  which commodity-dependent  producing countries 
only participate.] 
3. [It shall [further] be reaffirmed that the ex isting rules permitting countries to impose taxes on 
exports for the attainment of development and other objectives, including those relating to the 
stabilization of prices of primary commodities, shall also apply to export taxes levied in pursuance of 
such agreements.] 
4. [Technical and financial assistance shall be  provided to commodity dependant exporting 
countries to assist them in the diversification a nd periodic review of developments in the world 
commodity markets and their impact on their economies.] 
__________ 
 
 
                                                      
12 This text is based on a proposal received from the African Group (TN/AG/GEN /18 of  7 June 2006).