WORLD TRADE
ORGANIZATIONG/AG/NG/W/103
19 January 2001
(01-0341)
Committee on Agriculture
Special SessionOriginal:  English
WTO NEGOTIATIONS FOR CONTINUATION OF THE REFORM PROCESS
IN THE AGRICULTURAL SECTOR
Proposal by Poland
I.   INTRODUCTION.
The Agreement on Agriculture (AoA), achieved after long and difficult negotiations of the
Uruguay Round and implemented in 1995, has been a foundation for gradual reform of theagricultural sector.  The long-term objective of this reform is to create an environment for
development of a fair and market-oriented agricultural trading system.
All signatories of the WTO Agreement agreed also to undertake negotiations for continuation
of the reform process in agriculture.  The mandate for these negotiations can be found in fourparagraphs of Article 20 of the AoA.  The first three paragraphs of this Article constitute an obligation
to consider the following aspects in the course of further negotiations:
(a) the experience from implementing current commitments;
(b) the effects of current commitments on world trade in agriculture;
(c) non-trade concerns, special and differential treatment to developing country Members
and the objective to establish a fair and market-oriented agricultural trading system,and the other objectives and concerns mentioned in the preamble to this Agreement.
The fourth paragraph of Article 20 calls upon the WTO Members to undertake decisions what
further commitments are necessary to achieve those objectives.
It is fair, therefore, to observe that Article 20 of the AoA determines not only objectives for
negotiations but also contains a clear obligation to respect specific, enumerated above, elements
concerning the way to reach those objectives.  Poland believes that answers to a questions "where"
and "which way" determine the answer for the question "how" – which is in the center of this
negotiations.
Poland is convinced that the results of the Uruguay Round should be the starting point for
further negotiations and that a continuation of the reform process requires adherence to all above
mentioned paragraphs of the Article 20 of  AoA.
Poland attaches a special importance to a detailed analysis of the current situation in the
agricultural trade.  Statistics illustrating the actual position of every WTO Member on World trade
chart and experiences gained during six years of the implementation of the reform should be an
indispensable part of this analysis.  While embarking on new negotiations, the Members should have a
clear view which factors influencing the current trade must be taken into account during development
of modalities for future commitments.G/AG/NG/W/103
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The negotiations of the Uruguay Round were conducted in the framework of  "three pillars"
with recognition of the necessity of special an d differential treatment of developing and least-
developed countries.  It is evident that further progress of the reform and an increase of the scope of
concessions require that all concerns stemming from paragraphs: a, b and c of Article 20 of the AoA
should be taken in to account on equal basis.
II.   EXPORT SUBSIDIES
Export subsidies reduction commitments are among the most important achievements of the
UR negotiations and laid ground for the common exp ectation, that decreasing share of subsidized
products in the global market would successfully contribute to an improvement of the agricultural
trade.
A different forecasts, published shortly after completion of the UR predicted, for example, an
increase of prices for almost all important agricultural products (OECD, Agricultural Outlook:  1995
Edition).  The current statistics illustrate however, that prices were at the maximum level in years1995-1997 and declined since then (WTO, G/AG/W/42 Rev.3).
This situation is a reason for disappointment, especially for those Members who have
marginal share in world exports of agricultural products and who have a limited possibility to reduce
prices for their products because of specific conditions.
It can be also observed that reduction commitments in Article 9 of the AoA cover only six
categories of measures and do not exhaust all possibili ties of export support.  Rather weak and limited
impact of Article 10, aimed to prevent circumvention is yet another important factor contributing to
current situation.
Poland proposes:The WTO Members should undertake negotiations to establish complete list of all forms of
subsidies, including specific forms of food aid, export credits and State Trading Enterprises activities.
The WTO Members should undertake commitments  with regard to all forms of export
subsidies.
A further reduction of export subsidies should  be implemented according to the following
scheme:
• Initial, one step reduction by 36% of budgetary outlays for all forms of subsidies not
specified in Art. 9 of the AoA and by 21% of quantities exported with this form of
assistance.
• Further gradual reduction of all forms of export subsidies.
III.   DOMESTIC SUPPORT
Various elements of domestic agricultural policies applied by the WTO Members with the
aim to provide support for farmers are viewed as measures having a negative impact on trade but also
as positive factors, indispensable to maintain domestic agricultural sector.  Generally speaking,
implementation of domestic support commitments is carried by the Members in a timely fashion and
without greater controversy.G/AG/NG/W/103
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At the same time, it can be also observed that implementation of domestic support
commitments, apart from a generally positive side, caused also considerable reduction of financial
means available to producers of agricultural goods.
This bears several different implications, for example: one of the almost immediate effects of
decline in production profitability is a restriction or resignation from production.  Since, this process
cannot be left unattended; governments are looking for various elements of domestic policies to meet
challenges stemming from this new situation.
In Poland, where implementation of the Uruguay Round commitments coincides with the
period of systemic transformation, the problem of production decline in agriculture is exceptionally
intense.  On the other hand, because of great significance of this sector for a reasons of employmentand because of the fact that it supports livelihood of a large part of the population, any measures in
this area should be approached very carefully.  An additional problem is stemming directly from the
pioneering character of changes undertaken in the transformation process and is linked to the lack of
experiences in this area and difficulties with preparation of evaluation of the impact of various
transition measures.
For these reasons, a certain flexibility is necessary, as far as the scope and pace of further
reduction of the AMS levels specified in Members schedules is concerned.
It is also indispensable to assure the possibility to implement appropriate measures to mitigate
effect of profitability decline for every Member.
Poland is prepared to undertake negotiations for further reduction of bound, specified in the
schedules, levels of the AMS according to the UR formula.
Poland proposes to assure the right of every Member to introduce and maintain “blue box”
payments.
IV.   MARKET ACCESS
The market access commitments were developed, generally speaking, in the strict connection
with results of negotiations in the other pillars.  The negotiators chose a formulas of current and
minimum market access opportunities and tariffication with the gradual reduction of border protection
with the aim to assure, first of all, a continuation of the existing trade relations and then to enlarge
access to the most protected markets.
Even first analyses made in this area were far from enthusiastic.  There was quite a common
concern that those commitments would not meaningfully improve situation of exporters from
countries with a small share in the world trade.  A significant number of quotas reserved for specific
countries and a great flexibility in administration of the quotas opened for all exporters, were not
considered as positive elements for entrance of new suppliers into certain markets.
Today, after six years of implementation of the reform, we can observe that statistics of
imports and exports of agricultural products (e.g . G/AG/NG/S/11) confirm thos e concerns.  The world
exports of agricultural products are executed to a large extend by a limited number of countries.  The
deepening of the trade deficit is yet another cause of disappointment and concern in many othercountries.
Poland believes that current negotiations should bring solutions leading to a more balanced
world trade. This would facilitate the increase of trade share for even greater number of the WTOG/AG/NG/W/103
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Members and prevent on the one hand a further concentration of exports and, on the other hand,
increase of trade deficit.
Poland proposes:
WTO Members should undertake negotiations with the aim to improve access to current
access quotas and minimum access quotas.
For unused parts of current and minimum access quotas Members should agree to reduce
tariff rates by 50%. These parts of quotas would be open to products originating in least developed
countries and net importers among developing countries and among countries in transition.
Further reduction of final bound tariffs would be conducted according to the formula adopted
in the Uruguay Round.
Article 5, which is an integral part of the AoA, will not be renegotiated.
V.   NON-TRADE CONCERNS.
The continuation of the reform process could have a negative impact on ability of specific
countries to pursuit internal economic and social polices in the areas where involvement of the stateplays a significant role.  On the other hand, diversity of types of agriculture among the WTO
Members would create necessity for various adaptation measures.  The aim of the negotiators should
be to develop the framework which would ensure all the WTO Members that those functions of their
agriculture of vital interest to them, could be preserved.
Following functions of agriculture should be recognized:
• Food security
• Maintenance of appropriate living standards in the rural areas
• Maintenance of appropriate levels of production in the sectors of special importance
to the whole economy of the Members.
• Environment protection.
• Preservation of historical and cultural heritage.
Poland propose:.
The WTO Members recognize the right to protect vital elements of the internal policies
directly linked to the NTC.  The WTO Members agree that they have the right to pursue these policies
and for that purpose a certain flexibility in the im plementation of selected commitments in the areas
of domestic support and market access, depending on specific situation of the Members, would beallowed.
VI.   SPECIAL AND DIFFERENTIAL TREATMENT.
Poland considers special and differential treatment as an indispensable element of
negotiations and continuation of the reform process.G/AG/NG/W/103
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In Poland’s view, it is essential to provide an opportunity for the least developed and many
developing countries to apply a flexible approach while undertaking new commitments and to benefit
from preferential treatment in the market access arrangements in other countries at the same time.
Poland is ready to participate in all activities to assess current, dissatisfying situation of the least
developed countries and to develop appropriate measures.
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