WORLD TRADE
ORGANIZATIONG/AG/NG/W/105
5 February 2001
(01-0547)
Committee on Agriculture
Special SessionOriginal:  French
PROPOSAL BY MOROCCO
INTRODUCTION
Agriculture plays an important role in Morocco's economy, accounting for some 18 per cent
of GDP and providing an income for half of the population, i.e. about 13 million people.  More than
80 per cent of the active rural population works in the agricultural sector.
Among the features characterizing Moroccan agriculture are its concentration in the high
rainfall areas, the small size of farms and insufficient capital investment.  Thus, only 10 per cent of
the agricultural area in use is irrigated, and 70 per cent of farms are smaller than five hectares.
Combined with these factors, the increase in the frequency of widespread droughts has
contributed to the vulnerability of the rural sector as reflected in low income and an increasing driftfrom the land as well as a growing dependance on imports.  Meanwhile exports have increased at a
lower rate.
This situation has led to a sharp deterioration in the agricultural balance and made it more
difficult to solve the problem of food security.
Morocco, which fully adheres to the principles of trade liberalization, considers that it is
essential to take account, in the ongoing consultations, of the specific nature of the developing
economies.
To that end, it would like to share with the other Member countries the following comments
and proposals on market access, domestic support, export subsidies and non-trade concerns.
MARKET ACCESS
Although the negotiations had held out the hope of a simple regime based exclusively on
import duties, tariffs other than ad valorem  appear to be common.  Import regimes are more complex,
involving, inter alia , the notion of entry price and the application of variable duties.  Moreover,
processed goods are subject to tariff escalation that often acts as a deterrent.
These practices constitute a major obstacle to exports, particularly for countries which do not
grant domestic subsidies or export subsidies.
Furthermore, as long as the distorting effects of domestic support and export subsidies persist,
it is difficult to foresee any further tariff concessions.
The safeguard clauses, for their part, require procedures that are so complex and costly that
they are seldom used by the developing countries.G/AG/NG/W/105
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We therefore propose:
For the developed countries:
• An easing of border protection through a more substantial and rapid
dismantling of tariffs;
For the developing countries, in the framework of special and differential treatment
(SDT):
• A transitional period (the duration of which remains to be defined) during which
the dismantling of tariffs can be suspended;
• a more marked asymmetry between the developed and the developing countries
than during the first stage of dismantling;
• greater flexibility in the preconditions for introducing a safeguard clause.
DOMESTIC SUPPORT
GREEN BOX
While it is true that all of the communications  on this subject reflect a common will to review
certain procedures for implementing the various types of subsidy in this category, on certain basic
points, notably the reduction in the amount of the subsidies, opinions remain divided.
Indeed, given the very high level of the subsidies sometimes granted in this category by
certain Member countries, it is difficult to see how the trade impact on other countries can be anything
but negative.
We therefore propose:
• That the measures included in this box be redefined (eliminate the measures
which create trade distortions);
• that upper limits be imposed for these measures when they have a negative
impact;
• that new provisions be introduced in the SDT category that take account of the
particular conditions prevailing in the developing countries (these provisionscould be developed later).
AGGREGATE MEASURE OF SUPPORT
It should be recalled that the amounts bound by the developing countries are insignificant in
comparison to those bound by certain developed countries, for example the EU, the United States, etc.
The excessive amounts granted by certain countries constitute a serious obstacle to both production
and exports in the developing countries.  Morocco therefore hopes that reductions will be real, and not
based on the bound rates.
Furthermore, the developing countries, whose means are in fact very limited, should be
accorded greater flexibility in the distribution of subsidies.G/AG/NG/W/105
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We therefore propose:
For the developed countries:
• A reduction of 10 per cent of the amounts effectively granted during the first
year;
• a further annual reduction during the impl ementation period with a view to the
final elimination of the subsidies;
• a 50 per cent reduction, if not the complete elimination, of the de minimis
threshold.
For the developing countries:
• A rise in the AMS level  or at least no commitment to reducing the AMS.
BLUE BOX
This category of subsidies, used by two countries only, creates distortions and should
therefore eventually be eliminated.  However, since the amounts granted in this category are
significant for certain countries, the adjustment co uld take place through progressive, but substantial
reductions.
We therefore propose:
The elimination, over a period of five years, of blue box subsidies.
EXPORT SUBSIDIES
The export sectors of the countries without any production support or export support are
increasingly faced with a plethora of production subsidies, export subsidies and premiums for removal
from production granted by other countries, in particular the developed countries, in order to revive
their local market.  As a result, Moroccan exports have been penalized in competing markets and
diversification in other markets has been impeded.
We therefore propose:
• The elimination in the long term of subsidies in this category;
• limitation of the amounts granted by product type during the dismantling phase.
NON-TRADE CONCERNS
The arguments developed by the proponents of the multifunctionality approach are based on
the agricultural realities in different countries, but realities which apply more to the developing
countries and least-developed countries.  Indeed, there are many such countries for which agriculture
is the main economic activity, employing 50 per cent or more of the active population and
conditioning other associated activities.  Moreover, for many developing countries that are netimporters of basic food products, the agricultural sector provides a significant share of the foreign
exchange needed to cover imports.G/AG/NG/W/105
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Thus, logically it is in these countries that agriculture needs greater flexibility in order to:
- Ensure a rural development that can boost the entire economy and maintain social
stability, a prerequisite to political stability;
- ensure food security by supporting domestic production;- maintain agricultural activities and a balanced population throughout the territory;- preserve nature and biodiversity.
These countries, whose budget is often heavily burdened, notably with foreign debt servicing,
do not have the capacity to finance these support measures.
We therefore propose:
• The building of solidarity between the developed countries and the developing
countries which could be given concrete form by creating a world fund fed bythe developed countries for the purpose of financing this multifunctionality;
• for the developing countries, supporting the multifunctionality of agriculture
without this solidarity would boil down to accepting the increase, to their
detriment, of the trade distortions for agricultural products caused by alreadyexisting subsidies.  Their production would unquestionably suffer from the
impact of this added competition.
This situation would help to undermine the theory of comparative advantage and would
even be contrary to the long-term objectives of the Final Act of the Uruguay Round, i.e., inter
alia, "… to establish a fair and market oriented agricultural trading system …".
OTHER PROVISIONS HAVING AN IMPACT ON AGRICULTURAL NEGOTIATIONS:
ANTI-DUMPING AND SAFEGUARD MEASURES
During the implementation period, Morocco had to deal with a number of imports at prices
which had no economic significance.  These imports affected certain domestic production sectors by
generating a loss of revenue.  The farmers concerned therefore need to be protected from imports at
distorted or dumped prices.  Generally speaking, the developing countries whose economies are based
on agriculture cannot wait until a domestic industry is seriously affected to apply a particular
safeguard.
It should be stressed, in this connection, that most of the developing countries cannot afford
the reinforced monitoring and control structures that would be required.
Thus, while awaiting, in the long term, the development of an undistorted trading
system, Morocco would like to see a number of specific tools introdu ced for the developing
countries to compensate for the dumping they currently have to face.  These measures must be
easy to apply.
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