Proposal for a COUNCIL DECISION establishing the position to be taken by the European Union within the General Council of the World Trade Organization on the Philippines' request for a WTO waiver to extend the special treatment for rice
Date: 2012-06-15
Institutions: European Commission
Subjects: Philippines, World Trade Organisation, rice, tariff exemption

EUROPEAN COMMISSION 

Brussels, 15.6.2012  
COM(2012) 293 final 

2012/0154 (NLE) 

Proposal for a 

COUNCIL DECISION 

establishing the position to be taken by the European Union within the General Council 
of the World Trade Organization on the Philippines' request for a WTO waiver to 
extend the special treatment for rice 

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EXPLANATORY MEMORANDUM 

1. 

OBJECTIVE OF THE PROPOSAL 

The objective of this proposal is to establish the position to be taken by the European Union 
within  the  General  Council  of  the  World  Trade  Organization  (WTO)  on  the  Philippines’ 
request for a WTO waiver to extend the special treatment for rice from 1 July 2012 until 30 
June 2017 and thus allow the European Union to support this waiver request. The request is 
likely to be on the agenda of the WTO General Council meeting scheduled for July 2012.  

2. 

LEGAL BASIS OF THE PROPOSAL 

Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides that 
when  a  decision  having  legal  effect  needs  to  be  taken  in  a  body  set  up  by  an  international 
agreement, the Council, on a proposal from the Commission or the High Representative of the 
Union for Foreign Affairs and Security Policy, shall adopt a decision establishing the position 
to  be  adopted  on  the  Union’s  behalf.  The  granting  of  a  waiver  to  allow  the  Philippines  to 
extend  the  special  treatment  for  rice  from  1  July  2012  until  30  June  2017  falls  under  this 
provision as the decision is taken in a body set up by an international agreement (the WTO 
General Council or Ministerial Conference) affecting the rights and obligations of the EU.  

3. 

SCOPE OF THE PROPOSAL 

The  Commission  will  be  authorised  to  take  a  position  on  behalf  of  the  EU  to  support  the 
Philippines’  request  for  a  WTO  waiver  to  extend  the  special  treatment  for  rice  from  1  July 
2012 until 30 June 2017.  

On 20 March 2012 the Philippines presented a waiver request in the WTO from its obligations 
under Articles 4.2 and paragraphs 8, 10 of Annex 5 of the Agreement on Agriculture and from 
the  Philippines’  commitment  under  the  “Extension  Agreement”  in  order  to  allow  the 
Philippines  to  continue  special  treatment  for  rice,  with  an  increase  in  market  access  as 
specified  in  paragraph  3  and  Annex  A  of  the  draft  Waiver  decision  from  1  July  2012  –  30 
June  2017.  This  request  was  preceded  by  a  notification  made  on  22  November  2011  to  the 
Committee  on  Agriculture,  whereby  the  Philippines  initiated  the  negotiations  with  WTO 
Members  that  have  “substantial  interest”  in  rice  (under  the  HS  chapter  10.06)  in  order  to 
extend  its  special  treatment  for  rice.  Such  Members  were  asked  to  communicate  their 
intention  to  participate  in  the  negotiations  until  21  January  2012  (60  days  after  the 
notification).  

The  Philippines  mention  as  justification  for  the  waiver  that  it  is  addressing  a  non-trade 
concern related to food security, stressing that special treatment will allow the Philippines to 
prepare  its  farmers  for  liberalisation  by  use  of  support  programmes  for  farmers  to  improve 
competitiveness.  

The  requested  waiver  is  limited  in  scope  to  allow  the  Philippines  to  continue  the  special 
treatment  for  rice  (classified  under  the  Chapter  10.06  of  the  HS)  from  1  July  2012  until  30 
June 2017. Pursuant to the waiver request, during this period the Philippines shall provide a 
minimum market access (MMA) for rice, to be increased annually each year (to be specified 
in  the  annex  to  the  waiver  based  on  the  results  of  ongoing  negotiations  with  interested 

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Members). Also the annual and final reduction of in-quota tariff of rice shall be agreed with 
these Members as of 1 July 2012, providing country – specific quotas for these countries.  

The requested waiver would be the second extension of the special treatment, currently valid 
until  30  June  2012.  The  Philippines  were  initially  provided  with  special  treatment  for  rice 
upon the entry into force of the WTO Agreement in 1995, with an implementation period of 
10 years (pursuant to paragraph 1 and 1(d) of Annex 5 of the Agreement on Agriculture, and 
as reflected in the Philippines’ Goods Schedule LXXV, Part I, Section I B (on tariff quotas for 
agricultural products)). The  first  extension  of  the  special  treatment  was  made  during  2004  - 
2007 by modifying its schedule LXXV (pursuant to section B of Annex 5 of the Agreement 
on  Agriculture)  after  concluding  negotiations  with  Members  (3  countries  received  country 
specific quotas: Australia, China and Thailand). On 8 February 2007, a final, certified copy of 
the PHL modified schedule LXXV (WT/LeT/562) was distributed to Members.  

For  the  EU  (rice  industry),  the  waiver  request  does  not  pose  economic  concerns  since  the 
EU’s export of rice to the Philippines is less than 10 tonnes per year (according to COMEXT), 
without  significant  variation.  As  there  was  no  reason  to  expect  an  increase,  the  EU  had  not 
expressed  interest  to  enter  into  negotiations  with  the  Philippines  as  a  Member  with 
“substantial interest”.  

The Philippines’ current MMA is 350.000 metric tonnes (MT), with an in-quota rate of 40%. 
Besides  its  MMA,  the  Philippines  import  an  additional  2  million  MT,  of  which  Vietnam 
(74%), Thailand (19%) and Pakistan (7%) are the main suppliers (source: Global Trade Atlas 
(GTA), year 2010).  

The  EU  is  a  net  rice  importer,  covering  some  40%  of its  needs  from  imports.  The 
consumption is increasing (slowly). Whilst the production is rather stable, the EU imports will 
also increase. EU exports are around 100-120 000 tonnes per year (the last two years were a 
bit higher due to record production) without any potential for tendency-like increase. The EU 
exports are mainly shipped to nearby locations (mainly to Turkey). It hardly exports any rice 
to Asia and especially not to Southern Asia, which are the major rice producing regions of the 
world. 

The  Philippines  aims  to  finalise  the  negotiations  with  interested  members  and  adopt  the 
waiver latest at the General Council meeting in July 2012.  

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2012/0154 (NLE) 

Proposal for a 

COUNCIL DECISION 

establishing the position to be taken by the European Union within the General Council 
of the World Trade Organization on the Philippines' request for a WTO waiver to 
extend the special treatment for rice 

THE COUNCIL OF THE EUROPEAN UNION,  

Having regard to the Treaty on the Functioning of the European Union, and in particular the 
first subparagraph of Article 207(4), in conjunction with Article 218(9) thereof,  

Having regard to the proposal from the European Commission,  

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

Pursuant to paragraph 1 and 1(d) of Annex 5 of the Agreement on Agriculture, and as 
reflected  in  the  Philippines’  Goods  Schedule  LXXV,  Part  I,  Section  I  B  (on  tariff 
quotas for agricultural products) the Philippines were provided with special treatment 
for  rice  upon  the  entry  into  force  of  the  WTO  Agreement,  with  an  implementation 
period of 10 years. 

Pursuant to paragraph 8 of Annex 5 of the Agreement on Agriculture, the Philippines 
extended  the  special  treatment  for  rice  from  01  July  2005  to  30  June  2012  by 
modifying its Schedule LXXV, certified by the WTO Secretariat on 8 February 2007. 

Pursuant  to  paragraph  5.1  of  the  Certification  of  Modifications  and  Rectifications  to 
Schedule LXXV, any continuation of special treatment after 30 June 2012 for rice was 
set  to  be  contingent  on  the  outcome  of  the  Doha  Development  Agenda  (DDA) 
negotiations,  providing  an  alternative  special  mechanism.  However,  the  DDA 
negotiations have not yet been concluded.  

The Philippines notified the Committee on Agriculture of the WTO on 22 November 
2011 about its intentions to enter into negotiations with Members that have substantial 
interests in the products concerned for continuation of the special treatment on rice.  

Article  IX  paragraphs  3  and  4  of  the  Marrakesh  Agreement  establishing  the  World 
Trade  Organization  (WTO  Agreement)  set  out  the  procedures  for  the  granting  of 
waivers concerning the Multilateral Trade Agreements in Annex 1A or 1B or 1C to the 
WTO Agreement and their annexes.  

On 20 March 2012 the Philippines requested a waiver in the WTO from its obligations 
under Articles 4.2 and Section B of Annex 5 of the Agreement on Agriculture in order 
to provide special treatment for rice from 1 July 2012 – 30 June 2017 in accordance 
with the Philippines' waiver request.  

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(7) 

(8) 

The EU is a net importer of rice. The granting of this waiver would thus be of minimal 
economic and trade importance to the Union.  

It is appropriate, therefore, to establish the position to be taken by the Union within the 
WTO General Council to support this waiver request, 

HAS ADOPTED THIS DECISION:  

Article 1 

The  position  to  be  taken  by  the  European  Union  within  the  General  Council  of  the  World 
Trade  Organization  is  to  support  the  Philippines’  waiver  request  to  extend  the  special 
treatment  for  rice  from  1  July  2012  until  30  June  2017  in  accordance  with  the  terms  of  the 
waiver request.  

This position shall be expressed by the Commission.  

Article 2 

This Decision shall enter into force on the day of its adoption.  

Done at Brussels,  

For the Council 
The President 

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