G/AG/NG/R/2
Page 1

World Trade
Organization / RESTRICTED
G/AG/NG/R/2
15 August 2000
(00-3310)
Committee on Agriculture
Special Session

SUMMARY REPORT ON THE MEETING OF THE SPECIAL SESSION

HELD ON 29–30 JUNE 2000

Note by the Secretariat

  1. The Special Session of the Committee on Agriculture, which was established by the General Council to conduct the negotiations for continuing the reform process under Article 20 of the Agreement on Agriculture (WT/GC/M/53, paragraph 39 refers), held its second meeting on 2930June2000 on the basis of the agenda as set out in the convening airgram WTO/AIR/1331. The meeting was chaired by Ambassador Jorge Voto-Bernales of Peru.
  2. The present report provides a detailed summary of the Committee's discussions on substantive matters under the relevant agenda items and should be read in conjunction with the short factual report to the General Council on the meeting as a whole by the Chairman (G/AG/NG/2, copy attached). Unless otherwise stated, all references to documents refer to the G/AG/NG/- series. The following Members requested that copies of their statements be circulated: Argentina (NG/W/20), Australia (NG/W/21 and NG/W/21/Corr.1), Brazil (NG/W/22), Canada (NG/W/23), EC (NG/W/24), Grenada (NG/W/25), Hungary (NG/W/26), Japan (NG/W/27), Mauritius (NG/W/28 and NG/W/28/Add.1), New Zealand (NG/W/29), Norway (NG/W/30), Thailand (NG/W/31), the United States (NG/W/32) and India (NG/W/33).

item a: Introductory Statement by the Chairman

  1. With regard to the decision that progress in the negotiations be reported directly to the General Council on a regular basis (WT/GC/M/53, paragraph 3.1, refers), it was recalled that at the first Special Session it had been agreed for that meeting that a short factual report would be made to the General Council on the responsibility of the Chairman. This was on the understanding that the report, once circulated, could if necessary be amended to correct any errors of a factual nature (G/AG/NG/1, paragraph 4, refers). This arrangement was confirmed as a basis for the regular reports to the General Council, it being noted that the Chairman would outline the general content of his report in appropriate detail at the end of each Special Session.
  2. As regards the organization of the work of the Special Session, the Chairman noted that the basic arrangements should be orderly but reasonably pragmatic and flexible in order to facilitate participation generally, in particular by developing country Members and smaller delegations. The various submissions and proposals would be taken up under each agenda item in the order in which they had been circulated. Following the presentation of submissions and proposals there would be an opportunity for comments by other delegations. Thereafter, there would be an opportunity for other delegations to introduce and present additional submissions or proposals. Having regard to the need for pragmatism and flexibility, as appropriate, it would not be necessary for a submission or proposal to have been circulated prior to a Special Session in order for it to be introduced and presented. Delegations were nevertheless encouraged to circulate their proposals and submissions well in advance of meetings where this was possible. The Chairman also indicated that there would be full opportunity for delegations wishing to make general statements to do so under Agenda Item B, on the basis that Agenda Item C should be reserved, so far as possible, for the presentation and consideration of negotiating proposals as such.
  3. Finally, the Chairman noted that delegations would be able to have the full text of their statements circulated, with a minimum of delay, to all participants as working documents of the Special Sessions. Delegations who wished to have the full text of their statements circulated in this way were invited to so inform the Secretariat, if possible before the close of meetings, so that they could be mentioned in the Chairman's report and other delegations made aware of their availability.
  4. Bolivia, supported by Mexico, noted that it would greatly help their preparation for meetings if documents could be made available in all the working languages of the WTO as time was needed to examine them and to prepare comments. South Africa asked that it be given the opportunity to revert to different proposals and submissions at later meetings. The Secretariat noted that documents were translated as quickly as possible but as some proposals had been submitted immediately prior to the meeting it had not been possible to translate all submissions. In response to South Africa's question, the Chairman confirmed that Members would be given such opportunities at future meetings.

Item B: Work within the Framework of Paragraphs (a), (b), (c) and (d) of Article 20 of the Agreement on Agriculture

  1. The representative of Brazil referred to background paper NG/S/6 on Agricultural Trade Performance by Developing Countries 1990-1998. He felt that the data, though correct, and the structure of the document gave a distorted picture of the development of trade since the Agreement on Agriculture came into effect. For a number of reasons, including the lack of data for 1999 and the relatively small increase in market share for exports of agricultural products from developing countries, the paper did not reflect actual developments. Furthermore, developed countries had continued to support and protect their agriculture sectors. Another information that reinforced the Brazilian perception that agricultural reform is necessary and urgent was the fact that developed countries' imports of agricultural products from developing countries grew less in the post-Uruguay Round period than in the preceding period. In proposing that the document be revised he suggested a number of additional elements that should be examined. (The full text of Brazil's statement is contained in NG/W/22.)
  2. Mexico also commented on document NG/S/6 noting that the definition of products used in the paper appeared to be different to that set out in Annex 1 of the Agreement on Agriculture. He noted that this could mean that different papers were using different definitions making cross-references difficult. In particular the paper on the effect of the reduction commitments on world trade (NG/S/11) gave some information on exports, imports and market share for different countries. In referring to NG/S/11 he suggested that an additional table would be useful showing combined trade to indicate the relative importance of each Member in total world trade. In NG/S/1 and NG/S/2 he noted that some of the descriptions of different measures concerning Mexico may need to be amended.
  3. The representative of Japan thanked the Secretariat for the work and asked for two additional papers. The first was a revision of a document prepared for the process of Analysis and Information Exchange "Studies on the Implementation and Impact of the Agreement on Agriculture on Developing Countries" (AIE/S7) but this time also taking into account studies on the impact on developed countries. The second request concerned Article 20(c) for a paper to show the elements of non-trade concerns, including those discussed in the AIE process and in the General Council. He made a number of comments relating to different Secretariat background papers including NG/S/11 on world trade, NG/S/6 on the trade performance of developing countries, NG/S/2 on Green Box measures, NG/S/7 and NG/S/8 on tariff quotas, NG/S/5 on export subsidies and NG/S/3 and NG/S/4 on the implementation of the Marrakesh Decision on least-developed and net food-importing developing countries. In his comments he noted that Japan was the world's largest net food-importing country with a significant proportion coming from developing countries. The dominance of a relatively small number of supplying countries and large fluctuations in supply due to policy and weather related factors meant security of supply was very important for food importing countries. He noted that the shift from trade-distorting Amber Box supports to less-distorting Green Box supports and suggested that this showed that many WTO Members were reforming their agricultural policies in line with greater liberalization. He also stressed the importance of the Blue Box as an aid to this process. On market access he noted that imports under tariff quotas were affected by a number of factors and further analysis may be needed and pointed out that data for imports under state-trading enterprises showed that they could be an effective way to implement tariff quotas. On export subsidies he suggested that not only should export subsidies be examined but also export credits, taxes and prohibitions/restrictions as all had the ability to distort trade. The decline in food aid in recent years was a matter of great concern and he noted that according to the OECD Japan was the largest aid donor in the field of agriculture contributing 38 per cent of total aid in 1996. (The full text of Japan's comments on the Secretariat papers can be found in NG/W/27.)
  4. On the development of world trade (NG/S/11) the representative of Turkey noted that the average rate of growth in total world trade in agricultural products had actually declined in the period 1995-1998 compared to 1992-1994. Even if the period 1995-1997 was taken, thereby excluding 1998 and the effect of the Asian crises, the rate of growth remained unchanged compared to 1992-1994. In addition, since 1995 the average share of fifteen selected countries, including Turkey, the EC, the United States and Japan had remained virtually unchanged compared to the early 1990s. In Turkey's opinion the Agreement on Agriculture had not brought the expected benefits. On the impact of the Agreement on developing countries (NG/S/6) he noted that the average annual growth rate of exports of agriculture products from developing countries had fallen compared to the pre-Uruguay Round period although if 1998 data were excluded the rate of growth had increased. However, in Turkey's opinion the increase in market share of 1 per cent for exports of agricultural products from developing countries was insignificant and other data gave inconclusive results. Some concern was expressed about the data for Europe and Japan which showed a decline in market share for imports with no change, or only small increases, for other developed countries. He noted that Turkey's share of total imports increased after the conclusion of the Uruguay Round while exports had decreased. The main reason for the unsatisfactory results included the tariffication process by developed countries that had resulted in increased protection, the reservation of the right to use the special safeguard and the misuse of tariff quotas resulting in low levels of imports under market access opportunities. On export subsidies, the paper NG/S/5 showed that five developed countries accounted for nearly all expenditure. He also stated that the special and differential treatment provisions should be formulated according to the development needs of developing countries.
  5. The representative of Argentina noted that he was not in a position to comment in detail on the Secretariat background papers as more time was needed to examine and analyse them. However, following a preliminary examination he stated that Argentina supported the comments made by Brazil on the paper on the trade performance of developing countries (NG/S/6). On the papers on export credits (NG/S/12 and NG/S/12/Add.1) he was disappointed to find that the tables in NG/S/12 did not provide the same data on export credits as they did on export subsidies. He hoped that the Secretariat would be able to expand the papers and to break down the tables in NG/S/12/Add.1, that showed the total value of exports that benefited from export credits, in the same way as the tables presented in NG/S/12. Referring to the request from Japan for a background paper on non-trade concerns and Japan's suggestion that this paper should draw on the data provided in the process of Analysis and Information Exchange he stated that this was acceptable only if the paper was simply a compilation of the issues raised by Members and no more.
  6. The representative of Australia stated that the papers provided by the Secretariat showed just how little had really been done to achieve the objective of fundamental reform of agricultural trade. On the paper on export subsidies (NG/S/5) he noted that well over 90 per cent of the value of export subsidies was provided by only a few Members and that the flexibility permitted under Article 9.2 of the Agreement on Agriculture meant some Members had increased their use of these supports. The papers on domestic support (NG/S/1, NG/S/1/Corr.1, NG/S/2, NG/S/12 and NG/S/12/Add.1) were of limited use because some Members had not made their notifications but data from other sources suggested that support levels were now back to where they had been before the conclusion of the Uruguay Round. For market access (NG/S/7 and NG/S/8) he noted that the opening of market access opportunities had not been very successful and he was disappointed to see that fill rates had actually been declining in recent years. A close examination of the reasons for these low fill rates was necessary and this examination would have to take into account administration of tariff quotas. As for possible future work he suggested that more information on bound versus applied tariffs was needed as well as market access information with respect to products of interest to developing countries.
  7. On behalf of CARICOM the representative of Grenada supported Brazil in its comments on the paper on the trade performance of developing countries (NG/S/6) and he pointed out that there was only weak causality between trade liberalization and trade. With regard to future work based on NG/S/6 he suggested that information on trade under preferential agreements would be useful as would information on the rates of growth in trade for raw and processed products. A separate study on bound versus applied tariffs for products of exporting interest to developing countries would also be useful. (The full text of Grenada's comments is contained in NG/W/25).
  8. Korea noted that in the paper on Green Box measures (NG/S/2) the data showing expenditure in terms of US dollars was useful for comparison purposes. However, a proper understanding of the data needed to take account of the effects of changes in exchange rates including the dramatic fluctuations in some countries in 1997 and 1998. The paper on the trade performance of developing countries (NG/S/6) contained some useful information but the concentration on export performance did not give the full picture. It was also necessary to examine the agriculture trade balance or the terms of trade, including data on imports of agriculture commodities. Korea noted that developing countries were in reality a series of sub-groups with different characteristics. For the paper on domestic support (NG/S/1), the fact that expenditure in most countries was well below commitment levels was noted, although it was also pointed out that there were wide variations in expenditure relative to commitment levels as well and Korea stressed that these developments were taking place against a background of reducing commitment levels. It was suggested that the Secretariat should prepare a paper on non-trade concerns as this was one of the factors listed under Article 20 that had to be taken into account during the negotiations. In fact non-trade concerns had already been discussed in the first Special Session and in the AIE process. The paper could draw on the submissions made in the preparatory process for the Seattle Ministerial and the Chairman's reports to the Committee on Agriculture on the AIE process.
  9. The representative of Norway stated that his delegation would consider Article 20, paragraphs (a) to (d), in light of the background papers prepared by the Secretariat and Norway's experience of implementing the Agreement on Agriculture. He stated that the Agreement had contributed towards improving stability on the world market and suggested that the binding of tariffs, export subsidies and domestic support arising from the Agreement had increased attention in each country on support policies and improved transparency through schedules and notifications. He noted that for Norway imports had increased by 23 per cent since 1995 and the domestic support and export subsidy commitments were binding constraints. While welcoming the papers on the Marrakesh Decision on least-developed and net food-importing developing countries (NG/S/3 and NG/S/4) and noting that the new Food Aid Convention had come into force, he also noted that this new Convention included reduced commitments. However, he stated that aid should be targeted and should not be a disincentive to domestic production. He stressed the importance of financial and technical assistance as a way to assist integration into the international trading system and noted that developed, and some better off developing countries, could contribute by improving market access. Although the paper on the trade performance of developing countries (NG/S/6) contained some useful data he would like to see information on specific countries, especially those who had gained or lost market share. (The full text of Norway's comments is contained in NG/W/30.)
  10. The representative of the EC noted that Article 20 required an examination of the impact of the commitments undertaken in the Uruguay Round and suggested that a comprehensive review of non-trade concerns was needed as had taken place in the AIE process. In the paper on Green Box supports (NG/S/2) he suggested that the increased use of Green Box subsidies should be a welcome development as these supports were, at most, minimally trade distorting.