RESTRICTED  WORLD TRADE  
ORGANIZATION  G/AG/R/44 
25 November 2005 
 (05-5605) 
Committee on Agriculture  
  
 
SUMMARY REPORT OF THE MEET ING HELD ON 22 SEPTEMBER 2005 
 
Note by the Secretariat
1 
  
1. The Committee on Agriculture held its forty-f ourth regular meeting on 22 September 2005.  
Following the resignation of the Chairman, Dr. Magdi  Farahat of Egypt, Mr. Christian Häberli of 
Switzerland was appointed Interim Chairman of the m eeting.  The agenda of the meeting, as set out  
in WTO/AIR/2651, was adopted, with the add ition of four notifications from Singapore 
(G/AG/N/SGP/12 to G/AG/N/SGP/15) to Section C of the Attachment to the convening airgram. 
P
ART I:  THE REVIEW PROCESS  
A. M ATTERS RELEVANT TO THE IMPLEMENTATION OF CO MMITMENTS UNDER THE REFORM 
PROGRAMME :  ARTICLE 18.6 
(a) Australia:  European Communities – Schedules of export subsidy reduction commitments  
2. As a follow-up to its enquiry at the March 2005 meeting, Australia sought clarification from 
the EC concerning the status of the EC Schedul e following enlargement on 1 May 2004 (G/AG/R/42, 
paragraphs 2-4 refer).  Australia noted that the EC currently has no Schedule for domestic support and 
export subsidy reduction commitments corresponding to  the EC-25.  Australia considered that 
Article XXIV:6 negotiations under the GATT were limited to Schedules of tariff concessions and 
there was no legal possibility for the EC-25 Schedu le to be negotiated under these provisions with 
respect to domestic support and e xport subsidy reduction commitments.  Australia was not aware that 
the EC had initiated negotiations to acquire le gal status in the WTO for such Schedules. 
3. The EC responded that since 1 May 2004 the EC- 15 Schedule applied to the EC-25, while the 
individual Schedules of the ten new member States of the EC had been withdrawn.  In effect, the EC-25 was currently respecting commitments that we re agreed for the EC-15.  The EC intended to 
submit a proposal for an EC-25 Schedule, for appr oval by Members, after the conclusion of the 
ongoing GATT XXIV:6 negotiations on tariff bindings .  This new Schedule would also reflect 
modified commitments for domestic support and expor t subsidies to adequately take account of the 
EC enlargement. 
(b) Canada:  Bolivarian Republic of Venezuel a – Import regime for meat of swine
 
4. Canada sought clarification from the Bolivarian Republic of Venezuela concerning its import 
regime for 'meat of swine' (HS item 0203).  Acco rding to the Bolivarian Republic of Venezuela's 
notification concerning imports subject to tariff quotas (G/AG/N/VEN/24), the tariff quota quantity for 'meat of swine' was 877 tonnes.  According to the Bolivarian Republic of Venezuela's import 
statistics, imports of 'meat of swine' for cal endar years 1999 to 2004 were 1,226.62 tonnes, 
292.79 tonnes, 179.82 tonnes, 41.60 tonnes, 0.08 tonnes and 15.8 tonnes, respectively.  Canadian 
                                                     
 
1 This document has been prepared under the Secret ariat's own responsibility and is without prejudice 
to the positions of Members or to their rights or obligations under the WTO. G/AG/R/44 
Page 2  
 
exports of 'meat of swine' during the 1999-2003 calendar years were zero.  Canada requested an 
explanation from the Bolivarian Republic of Venezuel a as to why the tariff quota fill rate was so low 
in recent years.  It also sought clarification re garding the purpose for which import permits were 
required for imports of 'meat of swine' and the re quirements associated with  the issuance of such 
import permits, including how they were granted, th e time line involved for their issuance, and the 
duration of the permits.  Canada requested the Bolivarian Republic of Venezuela to explain the 
criteria by which the decision to grant or reject an application for an import permit for 'meat of swine' 
was made. 
5. The Bolivarian Republic of Venezuela considered  that it would have been more appropriate 
for Canada to raise this matter in the SPS Committ ee where Canada had raised similar questions.  
With respect to low tariff quota utilisation, the Bolivarian Republic of Venezuela explained that over the last few years, the government had invested heavily in genetic im provements, which had led to an 
increase in domestic production of pig meat.  Conse quently, demand was now almost entirely met by 
domestic production.  Under the import regime for 'meat  of swine', as set out in the Customs Tariff of 
the Bolivarian Republic of Venezuela, the following was required:  (i) a sanitary import permit issued 
by the Ministry of Health and Social Developmen t; (ii) a sanitary certificate from the country of 
origin; and (iii) a sanitary permit issued by the Ministry of Agriculture and Land.  The Bolivarian 
Republic of Venezuela stressed that it did not re quire import licences for 'meat of swine'.  The 
Bolivarian Republic of Venezuela underlined its w illingness to continue the bilateral dialogue, with 
the objective of finding a mutually satisfactory solu tion to the differences concerning sanitary matters 
that existed between the two countries.   
6. Canada recognized that this matter had been raised in the SPS Committee but, in spite of 
years of discussion, the matter had not been resolv ed.  For its part, Canada would welcome further 
discussions with Venezuela in an effort to  find a solution to this matter.      
7. The United States shared the concerns ra ised by Canada regarding Venezuela's 
implementation of tariff quota commitments.  Th ere were several commodities for which US 
exporters faced difficulties in obtaining tariff quota li cences.  As a result, US exports of, for example, 
'meat of swine' had dropped to zero in 2004.  
(c) United States:  Turkey – Rice import regime
 
8. The United States sought clarification from Turk ey regarding its new import regime for rice 
to be implemented on 1 October 2005.  Since the expiration of the 'Import Quota and Tariff 
Contingent' mechanism on 31 July 2005, rice impo rts into Turkey had ceased.  The United States 
understood that the new import re gime included a domestic absorption requirement, coming into 
effect on 1 November 2005, whereby purchasers of domestic rice would be able to import rice at lower tariffs than buyers not purchasing domestic rice .  The United States requested Turkey to clarify  
how this regime was consistent with Turkey's WTO commitments.  
9. Turkey responded that the "Decision on Impl ementation of Tariff Quota on Importation of 
Some Forms of Rice" was issued in the Official  Gazette (No. 25935 dated 13 September 2005).  The 
tariff quota would enter into force from 1 Novemb er 2005 to 31 July 2006.  According to the 
Decision, tariff quotas for 300,000 tonnes of rice (or in  other forms equivalent to that amount) had 
been allocated to importers that purchased rice  from registered domestic producers, their co-
operatives and associations and from the Turkish Grai n Board (TMO).  These importers were entitled 
to import rice (or equivalent forms) at a lower tariff rate than Turkey's bound MFN rates.  G/AG/R/44 
 Page 3 
 
 
10. According to the Decision, the forms of rice, th eir applied tariff rates and the quantities to be 
imported are as follows: 
Form of produce  HS code  Tariff rates  Quantity  
 
Paddy rice (1006.10, 1006.10.10 excluded) 20% 500,000 tonnes 
Brown rice (1006.20) 25% 400,000 tonnes 
Polished rice (1006.30) 43% 300,000 tonnes  
11. Turkey noted that for MFN imports outside the tariff quota regime, the bound rates would be 
applied as usual (34%, 36% and 45%, respectively) .  Importation on the basis of MFN tariffs was 
ongoing and not subject to import licences.  Turkey considered that its new import regimes for rice 
was in conformity with its WTO obligations. 
B. R
EVIEW OF NOTIFICATIONS  
(a) Notifications in respect of which questions have been raised in advance of the issuance of the 
convening airgram  
12. The Committee reviewed the following no tifications as listed in the agenda: 
 (i) relating to imports under tariff and ot her quota commitments (Table MA:2):  from 
Croatia (HRV/3), Panama (PAN/10), Romania (ROM/21) and Tunisia (TUN/34); 
 (ii) in the context of the special safeguard (Tables MA:3 to MA:5):  from Japan (JPN/112 
and JPN/113) and the Philippines (PHL/33);  
 (iii) in the context of domestic support commitments (Table DS:1):  from Armenia 
(ARM/5) and Brazil (BRA/22);  
 (iv) in the context of new or modified domestic support measures exempt from reduction 
(Table DS:2):  Australia (AUS/59); and  
 (v) in the context of export subsidy comm itments (Tables ES:1 to ES:3):  from Tunisia 
(TUN/33 and Corr.1). 
13. Specific points raised with respect to the notif ications listed above and the responses thereto 
are summarized in the Annex to this report. 
14. Brazil prefaced the review of its domestic support notification (G/AG/N/BRA/22) with the 
following general statement.  It noted that througho ut the agriculture negotiations and in particular 
during the negotiation of the July  package, Brazil had champion ed the cause for enhanced WTO 
monitoring and surveillance capacities regarding ag ricultural policies and the implementation of 
commitments in all three pillars.  Dispute settlement  panels had shown that Members did not abide by 
their Uruguay Round commitments.  Indeed, the initia tion of panel proceedings to clarify certain 
aspects was a sure indication that the monitoring sy stem required further improvement.  Brazil noted 
the following aspects of the Committee's review pro cess:  (i) the review was undertaken on the basis 
of notifications or through questions posed by Members;  (ii) seldom was the Secretariat required to 
prepare documents in order to assist Members in t hose discussions;  (iii) the quality of the debate 
rested on the capacity of Members to assess policies and practices put in place by the notifying Member;  (iv) counter-notifications were a rare ev ent;  and (v) the only action in relation to overdue 
notifications was the circulation of a list inform ing Members about the state of lateness, which 
constituted a very limited form of peer pressure. G/AG/R/44 
Page 4  
 
15. Brazil considered that this situation was ne gative for all Members and in particular for 
developing countries, since recourse to trade-distor ting support measures and to practices that affected 
export competition was limited to Members in a position to afford such measures.  The interests of 
developing country Members were, therefore, affect ed and would benefit from a more structured and 
informed discussion on the implementation of the provisions of the Agreement on Agriculture.  
16. Brazil announced that it would make proposals in  the agriculture negotiations to achieve 
greater transparency through improvements in mon itoring mechanisms and to ensure full compliance 
through improved surveillance mechanisms.  Brazil called on Members to update their notifications 
not only to comply with WTO obligations, but al so to facilitate the negotiating process through 
increased transparency. 
17. Canada agreed with Brazil regarding the importa nce of this matter for monitoring of existing 
and future commitments.  The EC was of the view  that changes to the review process should be 
addressed in the Doha Round.  For its part, the EC would use the current format for notifications to 
provide a maximum level of transparency. 
(b) Notifications subject to review in respect of wh ich no questions have been raised in advance 
of the issuance of the convening airgram  
18. The Committee took note of the following notificatio ns, which had been circulated in advance 
of the date on which the notice convening the present meeting was issued but in respect of which no 
questions had been raised by that date unde r the Committee's Working Procedures (G/AG/1): 
 (i) on the administration of tariff and other quota commitments (Table MA:1):  from 
Croatia (HRV/2); 
 (ii) relating to imports under tariff and ot her quota commitments (Table MA:2):  from the 
Former Yugoslav Republic of Macedonia (MKD/5), Morocco (MAR/21/Corr.2), and the Slovak Republic (SVK/47 and SVK/48); 
 (iii) in the context of the special safegua rd (Tables MA:3 to MA:5):  from Malaysia 
(MYS/16), the Slovak Republic (SVK/49), Chinese Taipei (TPKM/23 and TPKM/24) 
and Tunisia (TUN/35); 
 (iv) in the context of domestic support co mmitments (Table DS:1):  from Bangladesh 
(BGD/2), Guyana (GUY/14), Israel (ISR/37), Panama (PAN/11) and Singapore (SGP/12 and SGP/14);  
 (v) in the context of new or modified domestic support measures exempt from reduction 
(Table DS:2):  from Armenia (ARM/6);  and 
 (vi) on export subsidy commitments (Tabl es ES:1 to ES:3):  from Armenia (ARM/4), 
Georgia (GEO/6), Guyana (GUY/13), Israel (ISR/36), Jordan (JOR/6), Nicaragua (NIC/17), Singapore (SGP/13 and SGP/15) and Slovenia (SVN/30). 
(c) Notifications circulated or made available af ter the notice convening the meeting was issued
 
19. The following notifications were subject to prelim inary review and are to be reverted to at the 
next meeting for substantive review in accordan ce with paragraph 9 of the Committee's Working 
Procedures: 
(i) relating to imports under tariff and ot her quota commitments (Table MA:2): from 
Israel (ISR/39) and Panama (PAN/3/Corr.1);  G/AG/R/44 
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(ii) in the context of the special safeguard (Tables MA:3 to MA:5):  from Israel (ISR/38), 
Panama (PAN/12) and Thailand (THA/54); 
(iii) on domestic support commitments (Table  DS:1):  from the European Communities 
(EEC/38/Corr.1, EEC/49/Corr.1 and EEC/51/Corr.1) and The Gambia (GMB/1/Rev.1);  and 
(iv) on export subsidy commitments (Tables ES:1 to ES:3):  from The Gambia (GMB/3) 
and Thailand (THA/53). 
(d) Points concerning notifications raised at previous meetings
 
20. There was no discussion under this agenda item. 
(e) Counter-notifications under Article 18.7 of the Agreement  
21. The Committee took note that no counter-notifi cations had been received under Article 18.7 
of the Agreement. 
(f) Deferred replies to questions raised under the Review Process  
22. The EC stated that it had yet to reply to Ca nada's questions from the March and June 2005 
meetings concerning Regulation 2000/C28/02 in th e context of "payments for relief from natural 
disasters" (G/AG/R/42, p.15 and G/AG/R/43, p.14 refer).   At this stage, the EC could only indicate 
that the legislative aspects of the support measures re ferred to by Canada were being considered.  On 
the basis of this analysis, notifications may be revised.   
23. Following the September meeting, the Secretariat received deferred replies from Armenia 
regarding its Table DS:1 notification (G/AG/N/ARM/ 5).  These replies are included in Part I of the 
Annex to this report. 
(g) Overdue notifications  
24. The Committee took note that the Secretariat ha d made available a revised and updated room 
document, dated 21 September 2005, showing the cu rrent status of compli ance with notification 
obligations. 
25. Australia registered its long-standing concer ns that time-limits for submissions of 
notifications be improved and, in th is regard, welcomed the statement by Brazil.  Australia considered 
that it was important at this stage in the negotiations that major developed Members bring their notifications up-to-date.  Australia recognized that  overall the situation was improving, with Brazil's 
domestic support notifications being a step forward.  Australia also noted that there were a number of 
pending notifications, as indicated in the Secretariat's document.    
(h) Addenda to Table MA:1 notifications
 
26. The Committee took note that the following Members administering tariff quotas had 
submitted the requisite Table MA :1 Addenda in accordance with the General Council Decision of 
December 2000 (paragraph 1.1 of WT/L/384 refers):   Australia, Canada, the Czech Republic, the 
EC-15, Hungary, Japan, Latvia, New Zealand, No rway, Slovenia, Switzerla nd, Thailand, and the 
United States.  The Interim Chairman urged tho se Members administering tariff quotas which had not 
yet done so to provide Addenda to their Table MA:1 notifications  in accordance with the General 
Council Decision in WT/L/384. G/AG/R/44 
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P
ART II:  OTHER MATTERS WITHIN THE PURVIEW OF THE COMMITTEE  
A. I MPLEMENTATION OF ARTICLE 10.2  OF THE AGREEMENT ON AGRICULTURE ON THE 
DEVELOPMENT OF INTERNATIONALLY AGREED DISC IPLINES TO GOVERN THE PROVISION  OF 
EXPORT CREDITS , EXPORT CREDIT GUARANTEES OR INSURANCE PROGRAMMES  
27. The Committee took note that this agenda item concerned the implementation of Article 10.2 
of the Agreement and the related provisions of the Marrakesh NFIDC Decision (G/AG/16, 
Section A).    
28. Argentina recalled its position that without prej udice to Article 10.1 of the Agreement on 
Agriculture, the establishment of additional and sp ecific disciplines on export credits, export credit 
guarantees or insurance programmes was an important pending implementation issue from the 
Uruguay Round.  Accordingly, Argentina requested that this matter be kept on the agenda of the 
Committee.  Argentina also noted that paragraph 28 of the report  G/AG/R/43 needed to be corrected 
since it refers to an incorrect Article of the Agreement (see G/AG/R/43/Corr. 2 dated 26 September 
2005). 
B. M ARRAKESH NFIDC  DECISION – PROPOSAL BY THE AFRICAN GROUP IN THE CONTEXT OF 
THE REVIEW OF ALL SPECIAL AND DIFFE RENTIAL TREATMENT PROVISIONS BY THE 
COMMITTEE ON TRADE AND DEVELOPMENT IN SPECIAL SESSION  
29. The Committee took note that Dr. Magdi Fara hat, as agreed at the June meeting of 
Committee, had submitted a Chairman's report on th is matter to the General Council (G/AG/20) and 
had also made a brief statement when introducing his re port at the General Council meeting on         
29 July 2005.  
C. T RANSITIONAL REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF ACCESSION OF THE 
PEOPLE 'S REPUBLIC OF CHINA (WT/L/432) 
30. The Committee held its fourth annual review unde r paragraph 18 of the Protocol of Accession 
of the People's Republic of China.  The United St ates had submitted questions and comments to China 
in advance of the meeting (G/AG/W/66).  
(a) Statement by China  
 31. In response to the advance questions and comme nts, China considered that the operation of 
the state-trading enterprises should be clear, ta king into account the information provided in the 
Working Party Report of China's accession, the exch anges that took place during previous years under 
the agenda item of the transitional review m echanism in various Committees, including this 
Committee, as well as China's notifications concerni ng state-trading enterprises.  There had been no 
major change in this regard since China's accessi on.  While China would seek to reinforce Members' 
understanding of the operation of state-trading enterp rises for grains, it asked Members to refrain from 
raising repetitive questions in this regard in the future. 
32. The Chinese government encouraged various diversified market entities, including state-
trading enterprises, and other non state-related ente rprises to participate and operate in the domestic 
grain market, which were now in full competition.   Grain prices were now set according to demand 
and supply of the market.  However, with regard to exports of grains, state-trading was maintained for 
considerations such as to ensure stable supply in  the domestic market, to protect the interests of 
consumers from being affected by drastic price fl uctuations in the international market, and to 
safeguard food security.  Lists of the products s ubject to import and export state-trading were 
negotiated and finalized during the course of China' s accession to the WTO, as contained in Annex 2 
of its Accession Protocol.  Unlike imports, there was no commitment with regard to any portion of  G/AG/R/44 
 Page 7 
 
 
exports being carried out by non-state-trading ente rprises.  The functions of various entities in the 
grain distribution chain included procurement, sale,  storage, transport, processing, importation and 
exportation.  Transaction activities further down the ma rketing chain reflected different roles of the 
entities, as well as the market supply and demand situation.  State-trading enterprises were independent legal persons responsib le for their own profits and losses.  Their decisions on whether 
and when to import or export were made according to market factors such as prices, and the supply 
and demand situation in both domestic and interna tional markets.  Other than their import and/or 
export state-trading status, compared with other entities, state-trading enterprises enjoyed no other 
preferences in regulation or taxation. 
33. Regarding the matter of value-added tax (VAT ), like many other Members, China did not 
levy VAT on sales of grains and other agricultura l products from farmers in China.  However, to 
ensure that the chain nature of the VAT was not inte rrupted by this exemption, China, like some other 
Members, allowed entities purchasing grains a deduction of a certain percentage of the purchasing price when calculating the VAT levied when selling the products.  This percentage was 13%, i.e., the 
current statutory VAT rate for agricultural products.  This applied to all enterprises.  When the grains 
were exported, VAT was rebated also at a rate of  13%.  The price used to calculate the amount of 
rebate, or the so-called "base price", was the price at which the export enterprises purchased the grains 
for export.  This purchase price was determined by  the market, and therefore varied according to 
changes of market conditions.  
34. China stated that the Railway Transportati on Construction Fund did not apply to corn, 
whether for domestic sales or export.  In the view of China, this was not a transportation discount as 
referred to in the questions and comments presented to China. 
35. With respect to tariff quotas, China stated that the allocation of the tariff quotas for 
agricultural products in 2006, as well as other rela ted procedures would be carried out according to 
the stipulations in the Interim Measures on the Administration of TRQ for Importation of Agricultural 
Products , as in previous years.  All the specific requirements would be published by way of ministry 
announcement and be available at the MOFCOM a nd NDRC website, as well as the China Foreign 
Trade and Economic Gazette, as usual. 
(b) Follow-up questions and comments by Members and China's responses thereto
 
 36. The United States considered that the transitiona l review mechanism continued to be a useful 
mechanism.  The United States saw it serving both China's interests and the interests of other 
Members.  This mechanism allowed Members to se ek clarifications and additional information from 
China on its policies and practices.  In other wo rds, it promoted the fundamental concept of 
transparency underlying the WTO Agreement.  Memb ers also could convey their expectations with 
regard to China's implementation of the various  WTO commitments that it made upon accession, and 
for China, it allowed China to explain its policies and practices in order to prevent misunderstandings 
that could lead to trade frictions.   
37. The questions of the United States had focussed on three areas:  STEs and how they operate, 
VAT policies in China and China's corn industry.  The United States had hoped to learn through these 
questions more about the role that STEs and VAT policies play in determining the domestic and 
export prices of agricultural commodities.  With respect to corn, the Un ited States had received 
numerous anecdotal reports from industry about how tr ade in corn was conducted, particularly with 
regard to the export price of corn.  Rather than  relying on anecdotes, the United States was seeking 
more information and facts from China to better unders tand the situation, and in this regard the United 
States looked forward to reviewing China's responses. G/AG/R/44 
Page 8  
 
38. The United States sought further clarification from China as to whether state-trading entities 
immediately re-sold their stocks or whether sometime s surplus stocks were held and, with respect to 
corn, whether there was any financial support at the provincial level. 
39. In response, China stated that due to time constraints it was unable to contact all STEs 
concerning the matter of stocks.  For the same reas on, it was unlikely that China would obtain further 
information for this meeting from more than 30 pr ovincial-level governments concerning the issue of 
support for corn raised by Members.  Nonetheless, China was willing to further discuss these matters 
with the United States. 
(c) Report to the Council for Trade in Goods
 
 
40. With respect to the Committee's report on the Tr ansitional Review to the Council for Trade in 
Goods, the Committee took note that the Interim Chai rman would submit a factual report on his own 
responsibility.  The report would make reference to all relevant documents su bmitted in the context of 
this review and make reference to the Secretaria t's Summary Report of this meeting reflecting the 
discussions held under this agenda item (G/AG/21). 
D. M ATTERS RAISED UNDER OTHER BUSINESS  
 (a) Annual Report to the Council for Trade in Goods
 
41. In line with the Committee's pr actice in the previous years,  the Committee took note that a 
short and factual draft report for the Council for Trade in Goods on the work undertaken by the 
Committee in the course of 2005 had been circulated  before this meeting, in order to facilitate 
consideration of this matter.  The Committee took note of the report and agreed that the report, 
updated as appropriate, would be s ubmitted to the General Council on the responsibility of the Interim 
Chairman (G/L/746 dated 26 September 2005). 
(b) Date of next meeting  
42. In response to the suggestion by the Chairp erson of the General Council and others, for 
reduced activity of the regular WTO bodies in the run-up to the Sixth Ministerial Conference, the 
Committee agreed to postpone its next (45th) meeti ng scheduled for November, to Friday 27 January 
2006.  On this basis, the airgram convening the regul ar meeting of the Committee in January would be 
issued on Tuesday 17 January 2006. 
(c) Provisional schedule of meetings for 2006  
43. According to the Committee's rules of procedures,  regular meetings of the Committee shall be 
held in March, September and November.  The Committee took note of the provisional schedule of 
meetings for 2006, on the basis that the dates fo r each regular meeting would continue to be 
confirmed at the preceding meeting of the Committee.  The question of whether there is a need for a 
regular meeting in June 2006 would be determ ined by the Chairman following the March 2006 
meeting in consultation with Members.  Moreover,  the following schedule may need to be re-visited 
in light of developments in the agriculture negotiations:  
Friday, 27 January 2006  
Thursday , 23 March 2006 [Thursday, 22 June 2006]  
 Thursday, 21 September 2006 
 Thursday, 23 November 2006  G/AG/R/44 
 Page 9 
 
 
ANNEX  
 
  Page  
 Review of notifications by the Committe e on Agriculture at the meeting on  
22 September 2005   
 
 (i) imports under tariff and other quota commitments (Table MA:2 ):  Croatia 
(HRV/3), Panama (PAN/10), Romania (ROM/21) and Tunisia (TUN/34); 10 
    
 (ii) use of the special safeguard (Tables MA:3 to MA:5 ):  Japan (JPN/112), Japan 
(JPN/113) and the Philippines (PHL/33); 12 
    
 (iii) domestic support commitments (Table DS:1 ):  Armenia (ARM/5) and Brazil 
(BRA/22);  14 
    
 (iv) new or modified domestic support measures exempt from reduction 
(Table DS:2) :  Australia (AUS/59); and 22 
    
 (v) export subsidy commitments (Tables ES:1 to ES:3) :  Tunisia (TUN/33 and 
Corr.1). 24 
    
    
    
    
   
 
 G/AG/R/44 
Page 10  
 
ANNEX
 
 
Review of notifications by the Committee on Ag riculture at the meeting on 22 September 2005 
 
Summary of specific points raised and responses thereto  
 
 
Table MA:2 Notifications 
 
Croatia   G/AG/N/HRV/3   Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
Australia – Australia is pleased that Croatia has 
generally shown good fill rates for its tariff quotas.    
What are the reasons for the low fill rates of the tariff 
quota for wheat and meslin in both 2001 and 2002? The production of cereals holds the highest share 
amongst the crops planted in Croatia.  In 2003 the 
production of wheat and co rn accounted for 55% of 
the total planted area.  Croatia is self-sufficient in 
terms of wheat production and is also an exporter of 
wheat and meslin. 
The production of wheat was 965,000 tonnes in 2001 
and 988,000 tonnes in 2002.  Estimated annual 
requirements in the Cr oatian wheat market are 
580,000 to 600,000 tonnes.  Total imports of wheat 
were 9,354 tonnes in 2001 and 7,861 tonnes in 2002.  
There was no further interest registered to import 
wheat and meslin by business operators, and 
therefore the fill rates might appear lower than 
expected. 
 
 
Panama   G/AG/N/PAN/10   Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
Australia – Australia notes that Panama recorded no 
imports during 2003 and 2004 under its tariff quotas on poultry meat and several dairy products.  
Panama's notification states th at this reflects a lack of 
buyers and/or sellers. 
Given that the tariff quotas on these products seem to 
be superfluous, does Panama intend to modify its 
tariff quota regime, or move  to a tariff-only regime, 
for those products during the Doha round? 
Follow-up comment by Australia  – As a general 
matter, Australia would like to draw attention to 
situations, not limited to Panama, where tariff quotas 
are of limited protectionist  value (on average, about 
half of Members' scheduled tariff quotas are 
inactive).  It is important that Members consider the 
long-term future of what was regarded as a 
transitional instrument in the Uruguay Round.   Australia's question invites Panama to advance its 
negotiating position for poultry meat and several dairy products in the context of the Doha Round. 
Although an interesting request, the negotiations on 
modalities for agriculture are currently under 
consideration and will be subject to a decision during 
the Ministerial Conference in Hong Kong.  Thus, 
once an agreement on modalities is reached, Panama 
will be able to address this issue at the appropriate 
time and venue. 
   G/AG/R/44 
 Page 11 
 
 
Romania   G/AG/N/ROM/21   Tariff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
United States –  Given that the tariff quota for beer is 
only 0.26% filled, could Romania explain the reason 
for this low tariff quota fill rate? The rate of utilization was determined by the existing 
conditions on the domestic market, namely: 
- a low level of requests for the utilization of the 
minimum access tariff quota for beer; 
- important investments in the area of breweries 
led to a decline of the internal prices and made 
the domestic products competitive on a market where consumers have lo w-to-medium incomes; 
and at the same time, there was a change in 
consumers' preferences with influence on internal demand; 
- developments in the economic situation, 
including in the breweries,  resulted in an increase 
in the national competitiveness both for the 
internal market and for export. 
 
 
Tunisia   G/AG/N/TUN/34   Ta riff Quota Fill (Table MA:2) 
Points raised by other Members  Response by Notifying Member 
United States –  Tunisia's tariff quota administration 
mechanism continues to be fairly complex.  Tunisia 
applies different quota allocation methods in assigning tariff quotas, including historical, first-
come, first-served, use of sub-quotas, or alternate 
combinations of these methods. 
Could Tunisia please explain how such measures are 
consistent with Article XIII of the GATT 1994 so 
that they do not restrict trade from certain importers 
and aim at a distribution of trade approaching what 
might be expected in the absence of such measures? Undertook to provide a response. 
 
 
 
  
 
 G/AG/R/44 
Page 12  
 
Tables MA:3 to MA:5 notifications 
 
Japan    G/AG/N/JPN/112   Price- Based Special Safeguard (Table MA:4) 
Points raised by other Members  Response by Notifying Member 
Australia –  Despite previous requests, Japan has 
again provided insufficient information with regard 
to the activation of the price-based special safeguard. 
In accordance with the tran sparency requirements set 
out in Article 5.7 of the Agreement on Agriculture, 
could Japan provide information on the level of duty levied on the products (including the method of 
calculation)?  Japan has provided all the information on the special 
safeguard measures taken by Japan, in accordance 
with the format set out in G/AG/2.  Therefore, Japan 
believes that transparency of the measures has been 
sufficiently achieved. 
Follow-up comment by Australia  – Australia 
considers that commodity im port prices are "relevant 
data" in the application of the price-based special safeguard that Members are to provide in  accordance 
with Article 5.7 of the Agreement on Agriculture.  
Australia also requested a copy of the regulation 
referred to by Japan.   
Follow-up questions by United States  –  The United 
States share Australia's concerns in this matter and is 
seeking clarification from Japan as to why it has used 
a trigger price that is not based on the reference period 1986-88 and why only one year has been used 
in the calculation of the trigger price instead of three 
years?  Why was a f.o.b. price for inulin imports in 1993 used, rather than a c.i.f. price?  If no imports 
entered during the base period, how can the special 
safeguard be justified? Price-based SSG measures ar e applied in the form of 
imposing the additional duty to each individual 
shipment (cargo) whose importing price falls below the trigger price.  In order to avoid the disclosure of 
confidential information relating to commercial 
activities of particular traders, Japan has not officially 
published the import price and the amount of 
additional duty imposed on the shipment (cargo) even within Japan. 
The method to calculate the additional duty is 
provided in Article 7.4 of the Temporary Tariff 
Measures Law, which is totally consistent with 
Article 5.5 of the Agreement on Agriculture. 
 
 
Japan    G/AG/N/JPN/113   Volume-Based Special Safeguard (Table MA:3) 
Points raised by other Members  Response by Notifying Member 
Australia –  Australia notes that while the volume-
based safeguard on milk and cream (TL 0401.20-
190) appears to have been applied in accordance with 
Article 5.4 of the Agreement on Agriculture, it was nevertheless applied on an import volume which was 
barely half the level of imports in 2004.   
Could Japan explain its reasons for invoking this 
safeguard? 
Follow-up comment by Australia  –  Noted its interest 
in further discussing with Japan the circumstances of 
this special safeguard action.  The trigger level was calculated in accordance with 
Article 5.4 of the Agreement on Agriculture.  The 
volume-based SSG was invoked because the volume 
of imports during the year exceeds the trigger level.  Therefore, the measure in question is fully consistent 
with the Agreement on Agriculture. 
Invoking a volume-based SSG is to be judged by 
whether or not the volume of imports during any year 
exceeds a trigger level.  In calculating a trigger level, 
there is no reason to exempt  data of any year where 
there were no imports. 
 
  G/AG/R/44 
 Page 13 
 
 
Philippines    G/AG/N/PHL/33   Annual Summary of Special Safeguard Actions (Table MA:5) 
Points raised by other Members  Response by Notifying Member 
United States – Given the recent Supreme Court 
decision preventing the Philippines from 
implementing the Safeguard Measures Act and 
subsequent requests of the Departments of 
Agriculture and Trade to re verse that decision, could 
the Philippines update Members on the current status 
concerning the use of the Special Safeguard. The collection of SSG duties remains in effect while 
awaiting the decision of th e country's Supreme Court 
on the Motion for Reconsideration filed by the 
Philippine Office of the Solicitor General.  
Meanwhile, the only item on which an SSG duty is 
currently being imposed is imported chicken and 
chicken products under tariff heading 0207.1492 described as "other cuts and offal of fowls of the 
species Gallus domesticus, frozen." G/AG/R/44 
Page 14  
 
Table DS:1 Notifications 
 
Armenia   G/AG/N/ARM/5   Do mestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
Canada – Could Armenia provide additional 
information showing how the programmes notified 
under 'infrastructural services' (para. 2(g) of Annex 2) are for capital works only, and not for maintenance of 
infrastructure or operating costs? The measures under "infra structural services" in 
G/AG/N/ARM/5 were marked as capital expenditure 
in the Republic of Armenia state budget for 2004.  Nevertheless the item was reviewed to bring it in 
accordance with the Agre ement on Agriculture 
(G/AG/N/ARM/5/Rev.1). 
  
Brazil   G/AG/N/BRA/22   Do mestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
United States – Brazil has chosen to notify its 
domestic support in US dollars.  The Brazilian Real 
depreciated sharply throughout the period of these 
notifications (crop years 1999 – 2003), which has the 
effect of dampening incr eases in support when 
expressed in US dollars. 
Could Brazil provide the exchange rate it used? 
The currency historically used in notifications is that 
which is used in the original commitment Schedule. 
Why did Brazil decide to notify in dollars instead of 
Reals?  Please provide the same information in Reals 
in order for Members to accurately review Brazil's domestic support notification. A table with the exchange rates will be forwarded to 
the US delegation. 
Like many other developing countries in the recent 
past, Brazil has experienced acute inflationary 
periods, including hyper-inflation.  This problem was 
particularly serious in the period from 1986/88 until 
1994, when the "Plano R eal" was adopted.  This 
crucial period covers the base period for the 
implementation of domestic support commitments 
during the Uruguay Round.  In the base period, for example, inflation as m easured by the Amplified 
National Price Index – IPCA – reached, respectively, 
80%, 363% and 980% per year.  As a consequence, the remaining alternatives in order to present 
information in a more stable format were to use the 
currency in which Brazilian exports are traded or to 
resort to a price index.  There would be substantial 
complications resulting from the choice of one index 
among various existing price indices because of their erratic behaviour in situations of high inflation.  The 
ongoing debate on the review of the effects of 
inflation on domestic support commitments for those countries that have adopted their national currencies 
is a reflection of these difficulties.  In hindsight, 
Brazil's decision to adopt the US dollar in its 
Schedule of Commitments appears to be sound one.  
In order to maintain coherence with its original notification, Brazil has decided to continue the 
practice in its subsequent notifications.  G/AG/R/44 
 Page 15 
 
 
Brazil   G/AG/N/BRA/22   Do mestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
United States (cont'd) Contrary to what is implied in the US question, 
denomination in US dollars does not affect the data 
presented.  As all values presented in the notifications 
are below the de minimis  level, in case the monetary 
value of the support were underestimated, this 
underestimation would also apply in relation to the 
value of agricultural pro duction.  The currency 
adopted will therefore be neutral in its effects. 
Although different exchange rate regimes have been 
adopted in Brazil over the years, since January 1999 
– the period covered by the notifications – the 
Brazilian exchange rate has been determined by the 
market and fluctuates freely.  Nevertheless, depreciation of the "Real" during the period covered 
by the notifications was the outcome of market crises 
and had nothing to do with artificial mechanisms to stimulate production and exports of any sectors.  The 
recent appreciation of the "Real" confirms that the 
dynamics of exchange rates are determined by market 
forces.  In summary, there is no systematic bias in 
Brazil's exchange rate policies towards devaluing the 
national currency. 
Green Box 
European Communities – Green Box support shows a 
steady decline of spending le vels over the years.  The 
decline is particularly important for:  
• General Services (vii), Infrastructural 
Services  
• General Services (viii), Agrarian 
Organisation 
• Public stockholding for security purposes 
Could Brazil indicate the reason(s) for the reduced 
expenditure in these categories of the Green Box? As the main policy instrument at its disposal, Brazil 
values Green Box measures, particularly those classified under paragraphs 2 to 4.  Nevertheless, 
Brazil had to reduce budgetary expenditures under such programmes in light of budgetary constraints 
due to the implementation of strict fiscal policies in 
recent years, a fundamen tal component of the 
Brazilian stabilization effort.  In relation to cuts in 
expenditures under the heading "Public stockholding 
for food security purposes", an additional effect derives from changes in policy due to further 
liberalization of agricultural markets.  There was a 
reduced need for large and costly stocks of foodstuffs in view of the positive impacts derived from 
increased agricultural trade within MERCOSUR.  
United States – Public Stockholding for Food 
Security Purposes  
Brazil notes "These expenditures are necessary to 
cover the difference between the market price of the 
stocks and their acquisition price plus charges".  But Annex 2, paragraph 3 states that "Food purchases 
made by the government shall be made at current 
market prices ...". 
Could Brazil explain how the public stockholding 
scheme operates and how it is consistent with 
Annex 2 criteria? The Brazilian notification is in line with the 
provisions of footnote 5 of Annex 2 to the effect that 
in developing countries governmental stockholding 
programmes for food security purposes is to be 
considered in conformity with paragraph 3 of Annex 2 if the stocks are acquired and released at 
administered prices, provided that the difference 
between the acquisition price and the external reference price is accounted for in the AMS.  
Therefore, the support prov ided in the acquisition of 
foodstuffs at the administered price is included in Supporting Table DS:5. G/AG/R/44 
Page 16  
 
Brazil   G/AG/N/BRA/22   Do mestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
United States (cont'd) 
Government Agricultural Insurance Programme  
Could Brazil please provide more information on this 
programme? 
Is this programme notified under Annex 2,  
paragraph 7? The only Government Agricultural Insurance 
Program available duri ng the period of this 
notification was the PROAGRO programme.  This 
programme was notified under Annex 2, paragraph 7.  
The notification includes only the monetary values 
spent in accordance with budgetary figures. 
Regional Development Programmes  
Could Brazil provide more information on these 
programmes, describing what  they are and how they 
work? As shown in this notification, since 1996 Brazil has  
not notified any programme that could be considered 
under the heading "Regional Development Program". 
Article 6.2 
United States – Could Brazil explain which specific 
programmes are covered by the categories of 
Production Credit and Investment Credit?   In terms of production credit, the programmes 
PRONAF and PROCERA, both of which are for low-
income producers, were notified. 
In terms of investment credit, the programmes 
PRONAF, PROCERA, PROEST, BNDES, Banco da 
Terra, Constitutional Fund s (FCO, FNE and FNO), 
FINAME, Cocoa Recovering Program, and 
Mandatory Resources were notified. 
For example, where are the various programmes financed by the BNDES notified? All BNDES-financed programmes were included in 
the notifications: MODERFROTA, PROSOLO, 
SISVARZEA, PROPASTO, PROFRUTA, 
PRODEFRUTA, PROAZEM, PROIRRIGA, PRODEAGRO, MODERAGRO, MODERINFRA 
and PRODECOOP. 
How is the subsidy element of these various credit 
programmes calculated? The implicit subsidy fo r each programme was 
calculated through the difference between the interest 
rate for each programme and the benchmark interest 
rate, taking into account all the parameters of each programme. 
What benchmark interest rate is used? The SELIC rate was used as the benchmark interest 
rate, which is the Central Bank basic rate.  This rate 
has been used since Brazil's first notification.  The 
decision to use it as a pr oxy for the benchmark was 
adopted at that stage by an  intra-departmental group 
involving all Ministries concerned. 
Which credit programmes are covered under the debt 
rescheduling category? The debt rescheduling programme covers PRONAF, 
PROCERA, PRODECER III, Constitutional Funds 
(FCO, FNE and FNO), BNDES, FINAME, Cocoa 
Recovering Program, Coffee Fund (FUNCAFE), and the Mandatory Resources. 
How do they compare to those reported under the 
non-product-specific categor y and what criteria are 
used to distinguish how they are classified? They were classified as non-product specific because 
the criteria for eligibility for rescheduling was the 
programme under which the loan was taken, rather 
than the products grown by farmers.  G/AG/R/44 
 Page 17 
 
 
Brazil   G/AG/N/BRA/22   Do mestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
United States (cont'd) 
What method was used to estimate the subsidy 
element of the debt reschedulings? The implicit subsidy was calculated through the 
difference between the interest rate of each 
programme as originally conceived and the 
conditions set out in the law authorizing the debt 
rescheduling. 
Canada – Could Brazil provide additional information regarding the programmes 
MODERFROTA and AGREGAR, including where 
these programmes are reported in this notification, the amount of support under each, and how these 
amounts were estimated? The MODERFROTA programme is a BNDES credit 
line, while AGREGAR is an  investment credit line 
under the PRONAF programme. 
Both MODERFROTA and PRONAF investment 
programmes were notified under Article 6.2. 
Brazil calculated the implicit subsidy for each 
programme through the difference between the 
interest rate for each pr ogramme and the benchmark 
interest rate (SELIC), taking into account all the 
parameters of each programme. 
The table below shows the amount of credit and 
estimated support under each programme. 
Amount of credit (US$ '000) Programme 
 1999 2000 2001 2002 2003 
PRONAF 
Investment 87.397 162.015 172.337 196.395 265.885 
MODERFROTA 0 557.775 717.482 933.618 617.521
Amount of estimated support (US$ '000) Programme 
 1999 2000 2001 2002 2003 
PRONAF 
Investment 13.966 67.528 71.640 85.255 126.508 
MODERFROTA 0 48.415 61.488 97.190 83.859
Follow-up question from Canada  – Why does the 
effective rate of subsidization differ between 
MODERFROTA with AGREGAR?  Is the difference 
in the ratio between the "amount of the estimated 
support" and the "amount of credit" due to differences in the subsidized interest rates or other 
parameters of the programmes? Response by Brazil – The specific conditions of the 
programmes differ, including the length of the credit 
(repayment period). 
Follow-up question from Chinese Taipei – Did Brazil 
use a benchmark interest rate that was constant 
throughout the implementation years?  Response by Brazil  – Brazil has used one benchmark, 
the SELIC rate, but this rates fluctuates over the 
years.  The SELIC is a good proxy of the basic 
interest rate prevailing in Brazil. G/AG/R/44 
Page 18  
 
Brazil   G/AG/N/BRA/22   Do mestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
Amber Box 
European Communities – Supporting Table DS:5 
shows a steady reduction of the minimum support 
prices (applied administered  p r i c e ,  c o l u m n  4 )  f o r  
most of the commodities.  In 2002/03 these prices 
are, expressed in US$, abou t half of the level notified 
for 1995.  For example, the price for soybeans 
decreased from US$151.37 in 1995 to US$58.01 in 
2002/2003. 
Could Brazil explain the reason(s) for this decline? In view of trade liberali zation taking place in Brazil 
during the 1990s, pa rticularly with the 
implementation of MERCOSUR, price support 
mechanisms are increasin gly losing importance. 
Traditional minimum prices have been replaced by more modern mechanisms that are simultaneously 
more market oriented and targeted.  Sporadic 
government interventions – usually limited in volume and by the availability of budgetary funds decided in 
advance – based on the old policies may take place in 
remote areas in order to address market failures or as alternatives for the purchase of production by small 
farmers.  In the case of exported commodities, price 
support policies have become irrelevant since the 
amount of resources is minimal in relation to the 
value of production. 
In Supporting Table DS:5 the EC notes the variability 
over time of the levels of eligible production notified 
in column 6.  
Could Brazil explain how the eligible production for 
this type of support is established? As a general rule, minimum prices for all the 
products are set well below market prices, and the 
budgeted amounts for it cover only a small fraction of 
the production.  The fluctuations over time of the 
levels of production covered results from different market price levels, the type of instrument used, and 
the budget available at the time.  Limited purchases 
of foodstuffs to replenish public stocks are another 
source of fluctuation of eligible production. 
Follow-up question by the European Communities  – 
Could Brazil assess the impact of the relatively small 
levels of support on total production levels? Response by Brazil –  The amounts of support 
involved is so minimal relative to total production 
that their effect can effectively be disregarded. 
United States – Product-Specific AMS: Market Price 
Support  
In Supporting Table DS:5, is the same external 
reference price used for both the minimum price 
support and Contract Option Acquisition?   
 The Contract Option Acquisition price and the 
minimum price are equivalent over time.  The Minimum Price is the price at the moment of the 
harvest and the Contract Option Acquisition is the 
Minimum Price adjusted for storage costs up to the 
point in time in which the product is sold, normally in 
the off-season.  Therefore, as a rule, the price for the 
Contract Option Acquisition tends to be a little higher than the minimum price. 
How is the external reference price determined? At the moment of the presentation of the Brazilian 
Schedule of Commitments in 1995, it was established 
that the external reference price for exported products 
would be the historical FOB price minus 
transportation cost; and fo r imported products, the 
historical CIF price plus transportation cost.  Both 
decisions were in accordance  with the multilaterally 
agreed methodology.   G/AG/R/44 
 Page 19 
 
 
Brazil   G/AG/N/BRA/22   Do mestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
United States (cont'd) 
Could Brazil explain why the only 'support' notified 
under the Minimum Support Price programme appears to be negative? 
 This occurs because Brazil usually sets the minimum 
price well below the international reference price, as 
determined by the methodology, since Brazil 
normally does not support prices above international 
prices in order to stimulate production. 
Other Product-Specific Support  
Could Brazil explain the "production cost 
equalization for sugar"?  The United States notes no payments were reported for 2002/03. This support programme was provided either directly 
to the producers or through centralized cooperatives.  
This aid was granted through economic policy 
measures aimed at supporting production and commercialization, benefiting more than 17,000 cane 
growers only in the Northeast Region.  It was  limited 
to the period from Nove mber 1998 to December 
2001.  The programme was not reported for 
2002/2003 because it was no longer in place. 
What specific credit progra mmes are included under 
Production and Marketing Credit? Constitutional Funds (FCO, FNE and FNO), Cocoa 
Recovering Program, Coffee Fund (FUNCAFE), and 
the Mandatory Resources, but only for products in which a minimum (or administrative) price was 
established.  Although the budget for this kind of 
credit is not allocated by product, Brazil has preferred 
to adopt a more conservative approach and 
considered it to be product-specific since farmers 
may feel induced to produce such products. 
How is the subsidy element of these various credit programmes calculated?   The implicit subsidy for the programme was 
calculated through the difference between the applied 
interest rate for each pr ogramme and the benchmark 
interest rate, taking into account all the parameters of 
each program. 
What benchmark interest rate is used? As already explained above, SELIC it was used as 
benchmark interest rate. 
What criteria are used to distinguish these credit 
programmes from those notified under Article 6.2 
criteria? Under Article 6.2, Brazil notified only the production 
credit programs PRONAF, PROCERA and PROGER 
that are exclusively addressed to low-income 
resource poor farmers, as identified in Brazilian 
legislation. 
Non-Product-Specific AMS  
Could Brazil please identify which, if any, 
programmes are notified under this category? Under Non-Product-Specific AMS, Brazil has 
notified its debt rescheduling programme and all 
marketing credit for products for which no 
administrative prices were set.  Also notified is the 
production credit for products for which no administrative prices are se t, excluding those under 
PRONAF and PROCERA programs which are 
notified under Article 6.2.  Since none of those credits was allocated by pr oduct, and are available for 
producers in general, they fall within the non-
product-specific criteria. G/AG/R/44 
Page 20  
 
Brazil   G/AG/N/BRA/22   Do mestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
United States (cont'd) 
What criteria are used to distinguish these credit 
programmes from those notified under Article 6.2 criteria? The programmes above are av ailable to producers in 
general, while the credit programs PRONAF, 
PROCERA and PROGER are exclusively addressed 
to low-income or resource-poor farmers, in 
accordance with the parame ters set out in the 
Brazilian legislation.  Furthermore, debt rescheduling 
for debts incurred under PRONAF and PROCERA programmes were, likewise, notified under 
Article 6.2. 
Which credit programmes are covered under the debt 
rescheduling category?   The debt rescheduling covers all programmes under 
the National System of Rural Credit. 
How do they compare to those reported under 
Article 6.2 and what criteria are used to distinguish how they are classified? The only programmes of debt rescheduling notified 
under Article 6.2 were those referring to rescheduling of debts under the programmes destined to low-
income and resource-poor farmers.  All other 
remaining rescheduling programmes were notified 
under Non-Product-Specific AMS. 
What method was used to estimate the subsidy 
element of the debt reschedulings? As explained above, the implicit subsidy for each 
programme was calculated through the difference 
between the interest rate for each programme and the benchmark interest rate, taking into account all the 
parameters of each program. 
European Communities – "Debt rescheduling" is 
notified both under S&D programmes and in the 
Non-Product-Specific Amber Box.  
Could Brazil explain the difference between the two 
notification items? The distinction results from the fact that low-income, 
resource-poor farmers have defaulted on their 
obligations in relation to the PRONAF and 
PROCERA programmes, notified under Article 6.2.  As a consequence, Brazil considered it more accurate 
and transparent to identify precisely the amounts due 
to different types of farmers, i.e. family farmers, on the one hand, and commercial farmers, on the other 
hand.   
In order to calculate the amount of support notified 
under the item "Debt rescheduling", Brazil identified 
the credit programmes that benefit producers 
classified as "low-inc ome or resource-poor 
producers" and the remaining farmers.  The support 
estimated in these programs was notified under S&D programs and the remaining support under "Non-
Product-Specific Amber Box".  G/AG/R/44 
 Page 21 
 
 
Brazil   G/AG/N/BRA/22   Do mestic Support (Table DS:1) 
Points raised by other Members  Response by Notifying Member 
United States – Other Programmes  
The notifications do not have any reference to the 
various internal taxes, including the ICMS, COFINS, 
PIS.  The United States un derstands that these taxes 
are waived on products that are exported.   
Is the waiver only available if the product is 
exported, i.e. the benefit is contingent on export?  If 
so, are these waivers reported as export subsidies? Brazil's decision not to notify such waivers as export 
subsidies is based on: 
(i) Footnote 1 of the Agreement on Subsidies and 
Countervailing Measures that reads "In accordance 
with the provisions of Article XVI of GATT 1994 
(Note to Article XVI) and the provision of Annexes I 
through III of this Agreement, the exemption of an exported product from duties or taxes borne by the 
like product when destined for domestic consumption 
or remission of such duties or taxes in amounts not in excess of those which have accrued, shall not be 
deemed to be a subsidy"; 
(ii) Item h, Annex I "Illustrative list of Export 
Subsidies" of the Agreement on Subsidies and 
Countervailing Measures in view of the fact that the 
quoted taxes are classified as indirect taxes in accordance with footnote 58. 
It is to be noted that until 1996, these indirect taxes 
were only charged to agricultural products and raw 
materials.  Law Kandir, approved in 1996, has ended 
the discrimination against agricultural products and 
raw materials.  After that date, all Brazilian exports were treated evenly. 
 
 
 
 G/AG/R/44 
Page 22  
 
Table DS:2 Notifications 
 
Australia    G/AG/N/AUS/59   New or Modified Domestic Support (Table DS:2) 
Points raised by other Members  Response by Notifying Member 
Canada – Could Australia provide additional 
information regarding the following programmes: 
Dry Season 2002 Assistance Scheme, 2004 Pastoral 
Dry Season Assistance Scheme, and the Fire 
Recovery Assistance Scheme.  Specifically, how do 
these programmes meet all the specific criteria of 
Annex 2, paragraph 8, including the production loss 
required in order to be eligible for a payment and the 
years used to measure the average historic production? Dry Season 2002 Assistance Scheme
 
Assistance under this Western Australian 
Government administered scheme was available to 
Western Australian farmers severely affected by 
ongoing drought conditions.  In order to be eligible 
for assistance under this scheme, farmers had to meet a number of strict criteria, amongst which were 
production losses of at leas t 70%.  This level of loss 
clearly exceeds the requirement s of paragraph 8(a) of 
Annex 2 of the Agreement of Agriculture.  The 
production loss was measured against production 
levels immediately preceding the natural disaster.   
Limits placed on the amount of payment per farmer 
(up to $A6,000) under this scheme, meant that the 
scheme also met the requirements of Annex 2, paragraph 8(b) to (e) of the Agreement of 
Agriculture.  In addition the total cost of this scheme 
is small amounting to only $A676,000. 
 2004 Pastoral Dry Season Assistance Scheme  
Payments under this Western Australian Government 
administered scheme were only available to farmers 
who were located within declared areas of severe drought under the Australian Government's 
Exceptional Circumstances relief programme.  
Australia gave a detailed response to the Committee on Agriculture in September 2001 on how 
Exceptional Circumstances payments meet the 
criteria of paragraph 8 (see G/AG/R/28, page 15)   
In summary, to be eligible for exceptional 
circumstances assistance, th e impact of the event on 
production must be rare, severe and prolonged.  Production losses significantly higher than the 30% 
threshold are required before the impact of an event 
would be considered severe.  In addition, production 
losses of this magnitude are also required to occur 
less than once in 20 to 25 years for the area.  The 
production loss was measured against production 
levels immediately preceding the natural disaster.   
The relatively small amount of payments overall 
($A26,536) and the nature of the payments (the 
waiving of some Western Australian Government 
fees) meant that payments under this scheme also met the requirements of Annex 2, paragraph 8(b) to (e) of 
the Agreement of Agriculture.  G/AG/R/44 
 Page 23 
 
 
Australia    G/AG/N/AUS/59   New or Modified Domestic Support (Table DS:2) 
Points raised by other Members  Response by Notifying Member 
Canada (con'td) Fire Recovery Assistance Scheme  
The 2003 and 2004 wild fires caused significant 
production loss in affected regions.  To be eligible for 
natural disaster relief under this Western Australian 
Government administered scheme, applicants must 
have sustained significant damage to their property.  
The damage caused by these fires was so severe that production losses were well in excess of the 30% 
production loss required under Annex 2, paragraph 
8(a) of the Agreement of Agriculture.  The production loss was measured against production 
levels immediately preceding the natural disaster.   
The relatively small amount of payments overall 
($A29,821) and limits placed on the amount of 
payment per farmer (up to $A1,000) under this 
scheme, meant that the scheme also met the requirements of Annex 2, paragraph 8(b) to (e) of the 
Agreement of Agriculture. 
Canada notes that the Table DS:2 notification for the Sugar Industry Reform Program (SIRP) 2004 – 
Decoupled Income Support states that "No specified 
level of production is required to qualify for the 
payment."  No "specified" level of production implies that production is indeed  required to receive a 
payment.   
Would Australia please confirm that no production is 
required to receive payments under this programme, 
as stipulated in Annex 2, paragraph 6(e)? As set out in the Table DS:2 notification the Sugar 
Industry Reform Program (SIRP) 2004 – Decoupled 
Income Support was made up of two components, a 
welfare payment and a one-off grant to sustain 
industry reform.  The eligibility for the welfare payment was based on a strict income and asset test 
as specified in paragraph 6(a) and the payment was 
consistent with Australian Government unemployment benefits.  The eligibility for the 
payment of the one-off grant component was based 
on average production levels in a defined and fixed base period prior to the scheme's announcement.  
Neither component was related to production levels 
after the base year, ‘no production was required to receive the payment' as specified in paragraph 6(e). 
The Sugar Reform Program (SIRP) 2004 – 
Decoupled Income Support seems almost identical to the Sugar Industry Assist ance Package – Decoupled 
Income Support notified in  G/AG/N/AUS/44.  The 
eligibility criteria for both programmes require that 
"the recipient must have been a sugar cane producer 
for two years prior to lodgi ng the claim."  Since the 
Assistance Package came into effect in September of 
2000 and the Reform Progra m came into effect in 
March of 2004, a different base period applied for the second programme.   
Would Australia please explain how this meets the 
requirement in Annex 2, paragraph 6(a) that 
eligibility for payments be determined by criteria "in 
a defined and fixed base period"? The 2000 and 2004 support programmes provided to 
the Australian sugar industry were treated as separate programmes.  It was appropriate to use a different 
base period for the 2004 programme as around 90 per cent of the support provided in the 2004 programme 
was of a different nature and purpose to that provided 
in the 2000 programme: namely a one-off grant to assist with a transition phase to reform.  The only 
similarity between both programmes was a welfare 
payment, based on a strict income and asset test, which was consistent with Australian unemployment 
benefits.  In this case, a different base period was still 
warranted because there was a distinct time break between the expiry of the welfare payments under 
one programme and the commencement under the 
other.  In addition, it would not have made any sense in basing the 2004 payments on a base year applying 
prior to 2000, as any producers who had left the 
industry after the 2000 programme had expired would then have been eligib le to receive the payment. G/AG/R/44 
Page 24  
 
Table ES:1 to ES:3 Notifications 
 
Tunisia   G/AG/N/TUN/33 and Corr.1   Export Subsidies (Tables ES:1 and ES:3) 
Points raised by other Members  Response by Notifying Member 
United States – Could Tunisia describe in more detail 
the cost-reduction measures qualified as 'direct 
payments' for tomato double concentrate and wine?  Please explain how these are in accordance with 
Article 9.1(d) and (e). Undertook to provide a response. 
Regarding subsidies for wine exports, of the total 
value listed, what is the value pertaining to direct 
payments and what is the value for freight? Undertook to provide a response. 
 
 
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