WORLD TRADE  
ORGANIZATION  TN/AG/GEN/16 
20 April 2006 
 
 (06-1808) 
Committee on Agriculture 
Special Session  Original:   English 
 
  
COMMUNICATION FROM SMALL LOW-INCOME ECONOMIES IN TRANSITION,  
RECENTLY ACCEDED TO THE WTO  
 
Proposal by Armenia, the Kyrgyz Republic and the Republic of Moldova
 
 
 
BACKGROUND 
 1. The agriculture sector, like in many devel oping countries and other small and vulnerable 
economies, is a crucial pillar of  economic development of our c ountries, which are all small low-
income countries in transition, also being recen tly acceded Members (RAMs).  The recovery and 
development of the agricultural sector and its econom ic viability remains an absolute political and 
economic priority for our countries.  From our  experience of economic transformation from the 
central planned economy to a market economy during the last 15 years, it becomes obvious that 
governments in transition economies have to play a cruc ial role in assisting farmers in their efforts to 
attain efficiency and competitiveness of reformed domestic agricultural production.  Leaving farmers 
fully exposed to the sheer play of market forces, as this painful experience amply demonstrates, is 
clearly not an option since this would destroy th e domestic agricultural sector and create a massive 
unemployment and major social problems.   
 
2. Our concerns and proposals were expressed in the formal submission to the Special Session 
of the Committee on Agriculture (document TN/AG/ GEN/10 and Corr.1, dated 29 June and 6 July 
2005).  Since we have not yet received any meaningful reaction from other Members, we would like to stress once more the basic elements of our position as follows.  
3. The objective economic indicators clearly show that the level of development of our 
economies is comparable to low-income devel oping countries and other vulnerable economies. 
Armenia, the Kyrgyz Republic and the Republic of  Moldova are all landlocked.  Such geographical 
handicap causes additional difficulties in our economies a nd trade.  Our participation in world trade is 
quite insignificant.  According to available trade st atistics for recent years, our share in world total 
exports is between 0.004 % - 0.01 % for each of the three countries.  The monthly average salary in 
the agricultural sector is very low.  For example,  for Armenia in 2004, this indicator constituted about 
US$ 45, for the Kyrgyz Republic - US$ 26 and for th e Republic of Moldova - US$ 51.  In practical 
terms, we are talking here about extreme poverty levels and subsistence agriculture.  
 
4. The exports of the low-income economies in tr ansition are oriented to a limited number of 
markets.  The possibility of export diversificati on is conditioned by a rather concentrated export 
structure.   5. Also, it is important to remind that, for known hi storical reasons, small low-income countries 
in transition had joined the multilateral trading system very recently by accepting an unprecedently 
high level of obligations and commitments as a resu lt of their accession to the WTO, in particular TN/AG/GEN/16 
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  with regard to market access in goods, including ag riculture products, with a much higher degree of 
liberalization manifested in the level of applied tariff rates than the vast majority of other WTO 
Members.  For the same historical reasons, the sm all low-income countries in transition had entered 
the international scene also quite recently and t hus had very limited opportunities for obtaining 
international recognition of their actual developm ent levels in accordance with the established 
political realities and processes, which had been formed without participation of these countries.    
 6. Agricultural tariffs of our countries are bound at very low levels (simple average is 12.7%). 
This is much lower than respective bindings of de veloped countries, about 3.4 times lower compared 
to the Uruguay Round average final bound tariffs of developing country Members and more than 
6 times compared to the LDCs.  
  7. The small low-income countries in transition ha ve neither the right to invoke the Special 
Safeguards - SSGs (as a result of their accession terms), nor are they indicated yet as potential beneficiaries of a future Special Safeguard Mechanism (SSM) or Special Products. 
  
8. In the area of domestic support, our countries have had to set their de minimis  levels at 5%, 
instead of 10% for developing countries.  This de minimis  limit provides our countries with the 
absolute minimally acceptable level of flexibility and should be retained, if not increased.   
 9. Furthermore, our countries were not granted access to flexibilities provided to developing 
countries under Article 6.2 of the Agreement on Agri culture, i.e. exclusion of investment subsidies 
generally available to agriculture and input subsid ies generally available to  low-income and resource-
poor producers from the Aggregate Measurement of Support (AMS) calculation.  10. Armenia, the Kyrgyz Republic and the Repub lic of Moldova have bound export subsidies at 
zero.  Furthermore, our countries do not have other measures affecting export competition such as 
export credits and trade distorting practices by exporting State Trading Enterprises.  11. These Members sincerely believe that the propos al below is in line with the long-term 
objective of the agricultural reform process as it would help in their efforts to establish and 
consolidate a market-oriented domestic agricultural sector by partly alleviating the extreme burdens 
associated with such a process and would allow to find and benefit from their comparative advantages 
in agriculture.    
 
PROPOSAL  
Flexibility provisions for small low-income countries in transition  
12. Based on paragraph 58 of the Hong Kong Ministerial Declaration
1 (WT/MIN(05)/DEC) and 
paragraph 47, Annex A of the July 2004 Framework2,  these Members, which are also RAMs, shall 
have recourse to the following special provisions, in  recognition of their extensive and comprehensive 
agricultural commitments already made upon accession: 
 
  
                                                     
 
1  WT/MIN(05)/DEC: "We recognize the special s ituation of recently-acced ed Members who have 
undertaken extensive market access commi tments at the time of accession.  This situation will be taken into 
account in the negotiations." 
 2   WT/L/579, 2 August 2004: "The particular  concerns of recently  acceded Members will be 
effectively addressed through specific flexibility provisions." 
  TN/AG/GEN/16 
 Page 3 
 
 
   
Market Access  
 
- Members with small low-income economies in transition shall not be required to undertake 
new reduction commitments in market access,  in view of their substantially lower 
agricultural applied and bound tariffs. 
  
- These Members shall have the right to use all in struments that would be available to other 
Members, at the same level of development,  including those designed to protect vulnerable 
and subsistent farmers such as special sa feguard mechanism and special products.  
 
Domestic support  
 
- Members with small low-income countries in transition shall not be requested to make 
further commitments on reductions in Total AMS levels, their Total AMS support being 
basically at de minimis  level of 5 %.  Upon a substan tiated request, other Members shall 
give positive consideration to a time-bound increase of de minimis  limits up to 10% for 
Members with small low-income countries in transition.   
 
- In the case of such Members, investment subsidies and input subsidies generally available 
to agriculture, interest subsidi es to reduce the costs of financing as well as grants to cover 
debt repayment shall be exempted fro m domestic support AMS commitments.   
 
 
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