HUNGARY - EXPORT SUBSIDIES IN RESPECT OF AGRICULTURAL PRODUCTS
Document: Request for the Establishment of a Panel by Argentina
Date: 10 January 1997
Document codes: WT/DS35/7
Complainant: Argentina, Australia, Canada, New Zealand, Thailand, U.S.
Respondent: Hungary
Third parties: Canada, Japan, Thailand, Uruguay
Dispute stage: Panel
Agreements cited: Art. 3.3, Part V  Agriculture

HUNGARY - EXPORT SUBSIDIES IN RESPECT OF
AGRICULTURAL PRODUCTS

Request for the Establishment of a Panel by Argentina

The following communication, dated 9 January 1997, from the Permanent Mission of Argentina
to the Permanent Mission of Hungary and to the Dispute Settlement Body, is circulated at the request
of that delegation.

The Government of the Republic of Hungary is providing export subsidies with respect to
agricultural products not specified in Hungary’s Schedule ("Schedule") annexed to the Marrakesh Protocol
to the General Agreement on Tariffs and Trade 1994 ("GATT 1994"), and with respect to agricultural
products specified in its Schedule Hungary is providing export subsidies in excess of the specified
budgetary outlay and quantity commitment levels. Accordingly, these subsidies appear to be inconsistent
with the Agreement on Agriculture, including but not limited to Article 3.3, Article 8, and Article 9.2.
The citations under Hungarian law for these subsidies include Act VI of 1993 on the Organization of
Agricultural Markets ("1993 Act") and other relevant provisions.

Pursuant to the 1993 Act and the Joint Decree of the Minister of Finance and the Minister
of Industry and Trade No. 38/1994 (XII.30.) PM-IKM on Export Subsidies for Agricultural and Food
Products, as amended (translation attached to ), Hungary provided subsidies in 1995
with respect to agricultural products not specified in Section II of Part IV of its Schedule, and in excess
of the budgetary outlay and quantity commitment levels specified in Hungary’s Schedule. Hungary
acknowledged in the Committee on Agriculture in September 1995 that its agricultural export subsidy
programme was inconsistent with its WTO export subsidy commitments (, para 15). Pursuant
to the 1993 Act and Joint Decree No. 45/1995 (XII.29) of the Minister of Agriculture, the Minister
of Finance and the Minister of Industry and Trade, both sets of circumstances continued in 1996.

In a communication dated 27 March 1996 (circulated as WT/DS35/1), the Government of
Argentina requested consultations with the Government of Hungary pursuant to Article 4 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU") and Article 19
of the Agreement on Agriculture (to the extent that it relates to Articles XXII of the GATT 1994)
regarding the export subsidies that the Government of Hungary provides with respect to agricultural
products. Consultations were held on 3 May 1996, and on several occasions thereafter, but did not
result in a resolution of the dispute.

Accordingly, the Argentine Republic respectfully requests the establishment of a panel to examine
this matter in light of the Agreement on Agriculture and to find that Hungary’s export subsidies on
agricultural products are inconsistent with Hungary’s obligations under that Agreement and nullify
or impair benefits accruing directly or indirectly to Argentina under the Agreement.

The Argentine Republic asks that this request be placed on the agenda for the next meeting
of the Dispute Settlement Body, and that the panel be established with standard terms of reference as
set out in Article 7 of the DSU.