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Europaudvalget 2005-06
EUU Alm.del Bilag 314
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JOB(06)/199

Committee on Agriculture

Special Session

DRAFT POSSIBLE MODALITIES ON AGRICULTURE

22 June 2006

Cover letter from the Chairman of the Committee on Agriculture, Special Session to the Chairman of

the Trade Negotiations Committee

Dear Mr Lamy,

I am sending to you in your capacity as TNC Chair, the attached document in line with the

discussions at the informal TNC of 30 May and your fax of 16 June to TNC participants.

It sets out draft Modalities for preparing the Schedules for the Agriculture negotiations. I

should stress that this document is not in a formal sense agreed by Members, even as a draft. But it is

intended to reflect in a balanced and accurate way the state of intensive discussions and reflection to

this point within the Special Session, consistent with the ground rules of our enterprise as laid down,

for instance, in TNC/1: "Chairpersons should reflect consensus, or where this is not possible,

different positions on issues." Of course, it is only the Members themselves that can establish

Modalities, and it is a matter for Members also as to what documentation they wish to adopt in

working to that end. That being the case, I forward this particular document in my capacity as Chair

of the Informal session on Agriculture to you as Chair of the TNC.

There should be no surprises therein. Indeed, it has long been the premise of our work that

this should not be the case. It has been clear that the draft that would emerge this week would be

unlikely to contain things Members have not seen or heard before, or things that Members would not

be able to work out for themselves. Members for their part have made it clear that they do not expect

invented "solutions" out of thin air, and even if they were to appear, they would serve no practical

purpose given that they emerge in a vacuum and are severed from any real emergent consensus or

convergence by Members themselves. They have made it just as clear that they see draft "Modalities"

as meaning precisely that: there is no basis to pick and choose among them. This is a "menu fixe" for

decision. It is no smorgasbord. Reflecting that approach, I foreshadowed in the Reference Paper

issued last week that: "unless or until there is such emergent consensus, one has to respect the

substantive positions of Members. Come that date, therefore, I will be issuing a document that does

so."

That is precisely the kind of document that is now attached.

It is not an elegant document. But it reflects the reality of where we are. When all is said and

done, where there are divergences, there are divergences. There is no point deluding oneself on that.

Indeed, it would be a profound error to do so. Apart from anything else, there will never be any

prospect of bridging differences if one does not have a sober and realistic view of them to begin with.

Brushing things under the carpet or wishing things were otherwise than they are is no way to resolve

differences. Dealing with them honestly and fairly can be the only way that has any chance of moving

us forward. I have not, therefore, attempted to invent solutions where none has so far emerged. To do

so would not only go against our agreed procedures but also against a Chair's more fundamental duty

to deal honestly and fairly with the Membership.

06-3054

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Page ii

A Chair's responsibilities also involve the responsibility, consistent with that duty of honesty

and fairness, to call things as they are seen in an effort to move the process forward. In my Reference

Papers and, indeed, through more informal processes, I provided some commentary of my own which

was aimed at suggesting where I thought particular efforts could and should be made. I have also

circulated separately to Members some personal reflections on where we stand. I stand by those

various comments, but I do not think it is appropriate now to elaborate further any such personal

views. They are on the record, and they served a purpose at the time – which was to try to promote

convergence. But we are beyond that point now. Having made my own comments, positions of

Members are what they are. The task here and now is above all to reflect that as fairly and honestly as

possible. At this crucial point in the negotiations it is more than ever important to confront the issues

squarely as they are without distraction or intrusion.

I can conclude only by confirming to you and participants that I remain committed to

facilitating convergence in every way possible in the time remaining to us. You may count on my

continued full support in your efforts as Chair of the TNC to move us forward over the crucial next

few days in particular.

Yours sincerely

Ambassador Crawford Falconer

Chairman

Committee on Agriculture, Special Session

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Page 1

DRAFT POSSIBLE MODALITIES ON AGRICULTURE



DEFINITIONS

Year in relation to the implementation period and to the specific commitments of a Member

refers to the calendar, financial or marketing year specified in the draft Schedules to be

submitted pursuant to the modalities.

The base period for supporting data is [1995] to [2000] unless otherwise stated [and [1999] to

[2001] for product-specific AMS caps].

The implementation period is [2008] to [ ] unless otherwise stated and [2008] to [ ] for

developing country Members unless otherwise stated.

Total value of agricultural production is defined as the gross value of all agricultural

production of basic products at farm gate prices. The value of production of a basic

agricultural product is the gross value of production of that basic product at farm gate prices.

Product coverage is as in Annex 1 of the Agreement on Agriculture with any appropriate

changes arising from HS2002 applying

mutatis mutandis.

Note: Members' draft Schedules should be based on HS2002 nomenclature to the extent

possible and disaggregated at the HS 6-digit level as a minimum. In the alternative,

Members should clearly indicate the version of the Harmonized System being used (E.g.

HS96).



Tropical products and products of particular importance to the diversification of production

from the growing of illicit narcotic crops (hereinafter referred to as tropical and diversification

products) are defined as those products listed in Annex F to this document.

Cotton is defined as HS headings 52.01 to 52.03: raw cotton, waste and cotton carded or

combed.

A recently acceded Member is a Member of the WTO that acceded [under Article 12 of the

Marrakesh Agreement Establishing the World Trade Organization].

"Non-product-specific support" means domestic support [provided in favour of agricultural

producers in general] [available generally to agricultural producers and not support that is

effectively only in favour of a few or specific commodities].

"Overall Trade-Distorting Domestic Support" means the sum of (i) the Final Bound Total

AMS plus (ii) permitted

de minimis

level expressed in monetary terms plus (iii) the Blue Box

level, and which is:



In general the definitions would remain as set out in Article 1 of the Agreement on Agriculture but

some changes are needed in order to reflect the new commitments which Members will make, the new

implementation period(s) and other factors.

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(i)

with respect to support provided during the base period (i.e. the "Base Overall Trade-

Distorting Domestic Support") and the maximum support permitted to be provided

during any year of the implementation period or thereafter (i.e. the "Annual" and

"Final Bound Overall Trade-Distorting Domestic Support Commitment Levels") as

specified in Section [ ], Part [ ] of a Member's Schedule; and

with respect to the level of support actually provided during any year of the

implementation period and thereafter (i.e. the "Current Overall Trade-Distorting

Domestic Support", calculated in accordance with the provisions of this Agreement

and with the constituent data and methodology used in the tables of supporting

material incorporated by reference in Part [ ] of the Member's Schedule.

(ii)

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II.

MARKET ACCESS

IERED

ORMULA FOR

ARIFF

EDUCTIONS

Basis for reductions

Subject to the provisions set out in sections B to H below, customs duties shall be reduced in

equal annual instalments from bound duty levels

using the tiered formula in paragraphs 2.3 and 2.4

below.

In order to place bound non-ad

valorem

tariffs in the appropriate band of the tiered formula,

Members shall follow the methodology to calculate

ad valorem

equivalents (AVEs), along with

associated provisions, set out in Annex A.

Tiered Formula

Members shall reduce bound duties in accordance with the following tiered formula:

(a)

(b)

(c)

(d)

Where the bound duty or

ad valorem

equivalent is greater than 0 and less than or

equal to [20-30] the reduction shall be [20-65] per cent;

Where the bound duty or

ad valorem

equivalent is greater than [20-30] per cent and

less than or equal to [40-60] per cent, the reduction shall be [30-75] per cent;

Where the bound duty or

ad valorem

equivalent is greater than [40-60] per cent and

less than or equal to [60-90] per cent, the reduction shall be [35-85] per cent]; and

Where the bound duty or

ad valorem

equivalent is greater than [60-90] per cent, the

reduction shall be [42-90] per cent [except for those Members with more than [ ] per

cent of tariff lines in the top tier who shall make a reduction of [ ] per cent].

[The average reduction in bound duties by developed country Members shall in any case be

[at least [ ] per cent [with additional tariff reductions beyond those otherwise required for any

particular band, if necessary, to achieve this objective]].]

Developing country Members shall reduce bound duties in accordance with the following

tiered formula:

(a)

(b)

Where the bound duty or

ad valorem

equivalent is greater than 0 and less than or

equal to [20-50] per cent, the reduction shall be [15-slightly less than 65] per cent;

Where the bound duty or

ad valorem

equivalent is greater than [20-50] per cent and

less than or equal to [40-100] per cent, the reduction shall be [20-slightly less than 75]

per cent;

Where the bound duty or

ad valorem

equivalent is greater than [40-100] per cent and

less than or equal to [60-150] per cent, the reduction shall be [25-slightly less than 85]

per cent; and

Where the bound duty or

ad valorem

equivalent is greater than [60-150] per cent, the

reduction shall be [30-slightly less than 90] per cent. [The maximum average

(c)

(d)

That is, all out-of-quota duties. In-quota tariffs shall be subject to commitments under paragraph 18.

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reduction in bound duties any developing country Member shall be required to

undertake is [ ] per cent. Should the above formula imply an average reduction of

more than [ ] per cent for a developing country Member, that developing country

Member shall have the flexibility to apply lesser reductions, at its discretion, so that

the average reduction is no more than [ ] per cent.]

[Developing country Members with ceiling bindings and homogeneous low bindings:

(a)

(b)

(c)

shall be subject to the overall average reduction only;

shall have the right to distribute their tariff lines across the lower tiers of the formula

on the basis of their own assessment of sensitivities; and

irrespective of the thresholds for the tiers to be agreed, shall not be required to

undertake the level of cuts required in the highest tiers.]

ARIFF

If, after the application of the tiered formula, a bound duty should be greater than [75-100] per

cent, it shall be reduced to that level. [Non-ad

valorem

bound duties shall be reduced by the amount

required to bring the

ad valorem

equivalent to this maximum level]. For developing country

Members, the maximum bound duty shall be [150] per cent.]

ENSITIVE

RODUCTS

Designation

[Each [developed] country Member shall have the right to designate up to [1-15] per cent of

[dutiable] tariff lines as "Sensitive Products". [Developing country Members shall have the right to

designate up to [50 per cent more than the absolute number of tariff lines designated by the developed

country having the highest number of such tariff lines] [ ] per cent of [dutiable] tariff lines] as

"Sensitive Products"].

Designation of such status shall be indicated by the symbol "SePs" in Column [ ] of Table 1,

Section 1 of the Member's draft Schedule. Each such product shall be subject to a combination of a

reduction in bound duties and an expansion of tariff quota for the product concerned or a

proportionate increase if the product is one of a number in a single bound tariff quota [unless a current

bound quota for the Sensitive Product concerned does not exist, in which case a Member [may] [shall]

apply the provisions under paragraph 3.10(b)(iii) below].

Treatment - Tariff Cut

Bound duties on products designated as Sensitive shall be reduced by no less than [20-70] per

cent of the reduction that would otherwise have been required by the tiered formula. Developing

country Members shall have the right to reduce bound duties on products designated as Sensitive by

no less than [ ] per cent of the reduction that would otherwise have been required by the tiered

formula. [Sensitive Products will not be subject to the tariff cap under paragraph B.6.]

Tariff Quota Expansion

10.

The basis for expansion of tariff quotas shall be [domestic consumption expressed in terms of

physical units] [current bound tariff quota volumes] [current imports [in the years [ ] to [ ]] of the

product concerned].

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(a)

Subject to the provisions set out in (b) below, expansion of the tariff quota for a

Sensitive Product shall be on a most-favoured-nation basis. The expansion shall be

[at least [6] per cent of domestic consumption or, for developing country Members,

less than two thirds of [6] per cent of domestic consumption. For developing country

Members, domestic consumption shall not include self-consumption of subsistence

production. Developing country Members shall be able to reduce existing bound

quotas to less than two thirds of [6] per cent of domestic consumption if the current

bound quota is greater than this quantity.]

[calculated according to the formula

∆Q

= 100*(0.45 – 0.5*(r

- r

)/ r

)

Where

∆Q

is the expansion in the tariff quota expressed as a percentage of current bound

tariff quota;

is the reduction in bound duty under the tiered formula;

is the reduction in bound duty for the sensitive product; and

the maximum deviation from the tiered formula as measured by (r

- r

)/ r

shall be

[80] per cent and the minimum deviation [20] per cent.

]

[calculated according to the formula

∆Q

= [∆Q

] + (T

– T

)*[S]

Where

∆Q

is the expansion in the tariff quota expressed as a percentage of domestic

consumption;

∆Q

is the base expansion of the tariff quota expressed as a percentage of

domestic consumption;

is the bound duty to be applied to the sensitive product;

is the bound duty as calculated under the tiered formula;

S is the Slope.

]

[calculated according to the formula

∆Q

= [0.8] * (r

- r

) * 100 / (1 + t

)

Where

∆Q

is the expansion in the tariff quota expressed as a percentage of current

imports;

is the reduction in bound duty under the tiered formula;

is the reduction in bound duty for the sensitive product; and

is the current bound duty or its

ad valorem

equivalent.

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]

(b)

In cases where:

(i)

[the existing bound tariff quota represents more than [ ] per cent of domestic

consumption the expansion in the tariff quota under (a) above shall be

adjusted by [ ]];

[current imports] [the existing bound tariff quota] represent[s] less than [ ] per

cent of domestic consumption, the expansion in the tariff quota under (a)

above shall be adjusted by [ ]];

there is no existing final bound tariff quota commitment for a Sensitive

Product the Member concerned [may choose to] [shall not] create a new tariff

quota, [provided that the tariff cut for the Sensitive Product shall be achieved

in a shorter implementation period. Alternatively, a Member may opt for a

longer implementation period for the full tariff cut required by the tiered

formula.][Developing country Members shall have the right to apply a lower

reduction in bound duties than would otherwise have been required under the

tiered formula over the implementation period, or a reduction in bound duties

of up to [55] per cent of that required by the tiered formula over a shorter

implementation period, or the reduction required by the tiered formula over a

longer implementation period or [ ]].

(ii)

(iii)

THER

SSUES

Tariff escalation

11.

[Should, after application of the tiered formula for tariff reductions, the bound duty on a

processed agricultural product be greater than the bound duty on the primary product, the bound duty

for the processed agriculture product shall be reduced by applying a factor of [1.3] compared to the

reduction which would otherwise have been required under the tiered formula.

12.

The list of primary products and their processed forms is yet to be determined, and will be

elaborated taking into account the provisional and illustrative elements in the proposals cited in

Annex B.]

13.

[Members shall implement an additional tariff cut of [ ] per cent on a list of tariff lines of

special interest to developing country Members for which:

(a)

(b)

(c)

tariff escalation is clearly identified and its calculation takes into account all the raw

materials processed into the end product;

tariff escalation is substantial; and

trade flows in the raw material are significant.]

14.

[When the bound duty on a processed agricultural product is greater than that of the relevant

primary product, and:

(a)

if the tariff lines for both products are in the same tier (except for the highest tier), the

bound duty for the processed tariff lines shall be reduced by the cut rate that would

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otherwise be applied for the tier immediately above, as long as the tariff rate on the

processed product will not fall below the tariff rate for the primary products.

(b)

if they both belong to the highest tier, the bound duty for the processed tariff lines

shall be subject to an additional reduction of [ ] per cent compared to the reduction

which would have been otherwise required under the tiered formula, as long as the

tariff rate on the processed product will not fall below the tariff rate for the primary

products.]

Commodities

15.

[In the event that adverse effects of tariff escalation were not to be eliminated via the tiered

formula for reductions in bound duties and such specific measures on tariff escalation as are provided

for, Members shall engage with commodity dependent producing country Members to ensure

satisfactory solutions.]

16.

[Provision shall be made for suitable procedures for negotiations on the elimination of non-

tariff measures affecting trade in commodities.]

Tariff simplification

17.

[All bound duties on agricultural products shall be expressed as simple

ad valorem

[or

specific] duties.] [While reductions in bound duties shall be made on the basis of existing bound

duties in whatever form they are currently expressed, highly complex forms of bound duties, such as

complex matrix tariffs [or compound tariffs] shall be simplified.] [Members undertaking such

simplification shall supply supporting data with their draft Schedules that demonstrates that the

simplified bound duty is representative of the original complex duty.]

(a)

18.

(b)

Tariff quotas

Bound in-quota duties

[Bound in-quota duties rates shall be [eliminated] [reduced by [ ] percent].]

Tariff quota administration

19.

The administration of bound tariff quotas shall be subject to the disciplines [to be developed

taking into account the provisional and illustrative proposals cited in Annex C].

Special Agricultural Safeguard

20.

[Article 5 of the Agreement on Agriculture shall expire [for developed country Members] [at

the [beginning] [end] of the implementation period] [at the end of the reform process].] [Members

shall have the right to apply the Special Safeguard Provisions of Article 5 of the Agreement on

Agriculture. Members shall reduce the number of tariff lines eligible for the SSG under the Uruguay

Round Agreement on Agriculture by [ ] per cent.]

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(a)

PECIAL AND DIFFERENTIAL TREATMENT

Special Products

Selection

21.

Each developing country Member shall have the right to self-designate [at least 20 per cent

of] [up to 5] tariff lines in the Member's Schedule as "Special Products"] [until the end of the

implementation period]. Such tariff lines shall be designated by the symbol "SP" in column [ ] of

Table 1 of Section 1 of its draft Schedule.

22.

[Designation shall be guided by the indicators listed in Annex D which are based on the

criteria of food security, livelihood security and/or rural development needs of individual developing

country Members.] [To be a candidate for designation as a "Special Product" [a product must be

produced domestically or be a close substitute of products produced domestically] [, [ ] per cent of

domestic consumption of the product must be met through domestic production; or the product must

represent more than [ ] per cent of agriculture GDP; or the product must contribute at least [ ] per cent

of the total nutritional value (dietary and calorific requirement) of the population].]

23.

[A tariff line shall not be designated as a "Special Product" if: [developing country Members

export more than [ ] per cent of world exports of that product; or more than [ ] of imports by the

Member concerned are imported from other developing country Members;] [the developing country

Member concerned is a net exporter; or if the developing country Member concerned exports the

product on a most-favoured-nation basis;] [the product is eligible for the Special Safeguard

Mechanism].]

24.

[Any product accordingly designated and notified as SP, whether in its natural unprocessed

form or in its processed forms, shall be presumed to meet at least one of the indicators given in

Annex D, either at the national or regional level, in the developing country Member concerned. A

product in any of its processed forms shall be deemed to be eligible for designation as SP if the

product in its natural unprocessed form is designated as SP. The right to self-designate any product as

SP shall not be questioned at any stage of the negotiating processes, including the processes for

verification of the Schedules of Members.] [To show compliance with the criteria, each developing

country designating a product as "SP" shall, [upon request] demonstrate, using appropriate indicators

how the product concerned meets the criteria of food security, livelihood security and rural

development.]

(b)

Treatment

25.

[No product designated as a Special Product shall be subject to [a cap on the bound duty

under paragraph B.6] [or to] [any new tariff quota commitment].]

26.

[Notwithstanding paragraphs 1 and 2 of Article 4 of the Agreement on Agriculture, in respect

of the total tariff lines covering agricultural products, at the duty level, designated as SP by a

developing country Member based on the guidance provided by the indicators listed in Annex [X], the

following treatment on bound import tariff rates shall apply:

(a)

At least [50] per cent of the aforementioned tariff lines will not be subject to any

tariff reduction commitment; Provided that, if any developing country Member is

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characterised by special circumstances

, an additional [15] per cent of the

aforementioned tariff lines will not be subject to any tariff reduction commitment;

(b)

(c)

[25] per cent other than those categorised in subparagraph (a) above, of the

aforementioned tariff lines will be subject to a reduction of [5] per cent; and

Each residual tariff line, other than those categorised in subparagraphs (a) and (b)

above, of the aforementioned tariff lines will be subject to a reduction of not more

than [10] per cent..]

27.

[Products designated as "Special Products" shall be subject to a reduction in bound duties of

[ ] per cent of the reduction that would otherwise have been applicable under the tiered formula for

reductions in bound duties or, in the case where a cap in the bound duty would otherwise have been

applied, the cap shall be [ ] per cent higher than would otherwise have been the case.]

28.

["Special Products" [currently subject to bound tariff quotas] shall be subject to tariff quota

expansion of [ ] per cent.]

(a)

Special Safeguard Mechanism

Selection

29.

Each developing country Member [shall have access to a Special Safeguard Mechanism for

all agricultural products] [shall have the right to designate up to [ ] [per cent of] tariff lines [at the HS

6-digit level] as "SSM" in column [ ] in Part I, Section I of its Schedule] [may designate as "SSM" in

its Schedule those products which have undertaken tariff reductions greater than [ ] per cent.

[Products designated as "Special Products" may not be designated as "SSM".]

(b)

Trigger and Remedy

30.

The quantity and price triggers under which the Special Safeguard Mechanism may be

invoked and the additional duties that may be charged are set out in Annex E.

Fullest liberalization of trade in tropical and diversification products

31.

[Tropical and diversification products are those listed in Annex F.] [A list of tropical products

shall be established on the basis of the indicative list of the Uruguay Round and shall not include

products produced in significant quantities in non-tropical countries. For Members identified as

operating the diversification of production from the growing of illicit narcotic crops, a list of products

of particular importance for diversification shall be established.]

32.

[Developed country Members shall reduce bound duties on tropical and diversification

products

(a)

[by the reduction applicable under paragraph A.2.3(d) above;

Special circumstances refer to situations where a developing country Member:

(a) had bound at least [25%] of its total tariff lines at a maximum import duty of [80%] at the start

of the implementation period;

(b) had undertaken ceiling binding commitments under the Uruguay Round;

(d) has any other structural difficulties in its agriculture sector.

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(b)

(c)

where such products are subject to tariff escalation, an additional reduction in bound

duties of 10 percentage points; and

[any bound in-quota duty shall be eliminated.]

33.

[Members shall reduce bound duties on tropical products according to the following

modalities:

(a)

(b)

[ ] per cent of tropical product tariff lines shall be reduced to [0];

[ ] per cent of tropical product tariff lines shall be reduced by the reduction foreseen

for the tier immediately above the one for the product in question in the tiered

formula;

bound duties on other tropical products shall be reduced by the reduction applicable

under the tiered formula.

(c)

34.

For diversification products, importing Members shall designate [ ] per cent of the tariff lines

on the above list and provide preferential access to the Members concerned for as long as an effective

diversification programme is in place.]

35.

[No tropical or diversification product listed in Annex F may be designated as a Sensitive

Product by a developed country Member.] [Tropical and diversification products may be declared as

Sensitive Products or as Special Products and be treated as such.]

Preference erosion

36.

In recognition of the importance of long-standing preferences, preference erosion [associated

with the products and markets listed in Annex G] shall be addressed by:

(a)

(b)

(c)

[[the preference granting Member] applying a lesser reduction of [ ] percent of the

appropriate reduction under the tiered formula;] [and] [or]

[[the preference granting Member] wherever relevant, eliminating any bound in-quota

duty] [and] [or]

[[the preference granting Member] implementing the tariff reduction over an

additional period of [ ] years [with the first year of the implementation deferred by [ ]

years]]; [and] [or]

[[the preference granting Member,] to the extent technically feasible, maintaining the

preference margin]; [and] [or]

[[the preference granting Member] providing improved market access opportunities

for non-preference-receiving products which are also of vital export interest to

preference receiving Members, to the extent possible]; [and] [or]

[[the preference granting Member] taking fully into account the issue of preference

erosion in designating Sensitive Products].

(d)

(e)

(f)

37.

[[Preference granting Member] [Members] shall provide targeted technical assistance,

including additional financial and capacity building assistance, to help address supply-side constraints

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and to promote the diversification of existing production in the territories of preference receiving

Members.]

ECENTLY

CCEDED

EMBERS

38.

[The implementation period for [developing] recently acceded Members shall be [2011] to

[three years after the end of the implementation period for other [developing country] Members ].]

[To the extent that the implementation period of commitments undertaken in acceding to the WTO

overlaps with the implementation period of commitments undertaken in association with these

modalities, the start of implementation of commitments undertaken in association with these

modalities shall begin [immediately] [[ ] years] after the end of implementation of accession

commitments.]

39.

[Recently acceded Members may reduce bound duties by [ ] per cent of the reduction that

would otherwise have been required by tiered formula] [and bound duties below [10] per cent in a

developing recently acceded Member shall be exempt from reduction].

40.

[Developing] [R][r]ecently acceded Members shall have the following additional flexibility

on the selection and treatment of Special Products: [ ]. And on sensitive products the following

additional flexibility [ ].]

41.

[Small low-income, recently acceded Members with economies in transition shall not be

required to undertake reductions in bound duties and shall have access to all instruments available to

other Members at the same level of development under Market Access.]

42.

EAST

-D

EVELOPED

OUNTRIES

Least-developed country Members are not required to undertake reductions in bound duties.

43.

Developed-country Members shall, and developing-country Members declaring themselves in

a position to do so should

(a)

Provide duty-free and quota-free market access on a lasting basis, for all products

originating from all LDCs by 2008 or no later than the start of the implementation

period in a manner that ensures stability, security and predictability.

Members facing difficulties at this time to provide market access as set out above

shall provide duty-free and quota-free market access for at least 97 per cent of

products originating from LDCs, defined at the tariff line level, by 2008 or no later

than the start of the implementation period. In addition, these Members shall take

steps to progressively achieve compliance with the obligations set out above, taking

into account the impact on other developing country Members at similar levels of

development, and, as appropriate, by incrementally building on the initial list of

covered products.

Developing-country Members shall be permitted to phase in their commitments and

shall enjoy appropriate flexibility in coverage.

Ensure that preferential rules of origin applicable to imports from LDCs are

transparent and simple, and contribute to facilitating market access.

(b)

(c)

(d)

The text of this paragraph is the "Decision on Measures in Favour of Least-Developed Countries" in

Annex F of the Hong Kong Ministerial Declaration (WT/MIN(05)/DEC).

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OTTON

44.

Developed country Members [and developing country Members [in a position to do so]] shall

give duty and quota free access for cotton exports from least-developed country Members from the

commencement of the implementation period.

45.

[Developing country Members that are not in a position to give duty- and quota-free access

for cotton exports from least-developed country Members undertake to facilitate imports of cotton

from the least-developed country Members from the commencement of the implementation period.]

46.

[Developed country Members [shall] [should] grant duty- and quota-free access for cotton

exports from developing country Members from the commencement of the implementation period.]

MALL

, V

ULNERABLE

CONOMIES

47.

Members with economies that, in the period [1999] to [2000], had an average share of

(a) world merchandise trade of no more than [0.16] per cent, (b) world trade in non-agricultural

products of no more than [0.10] per cent and (c) world trade in agricultural products of no more than

[0.40] per cent shall have the right to reduce bound duties by [ ] less than those that would otherwise

have been required under paragraph 4 above.

48.

Any Member meeting the criteria in paragraph 47 shall have the right to self-designate at least

[ ] per cent of tariff lines as Special Products based on criteria of food security, livelihood security and

rural development needs. Such Members shall not be required to undertake reductions in bound

duties, increase bound tariff quotas or be subject to a tariff cap] on these products.]

49.

[Developed country] Members shall provide enhanced improvements in market access for

products of export interest to Members with small, vulnerable economies.]

ONITORING AND

URVEILLANCE

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III.

(a)

DOMESTIC SUPPORT

INAL

OUND

OTAL

AMS: A T

IERED

ORMULA

Tiered reduction formula

Reductions in Final Bound Total AMS

50.

The Final Bound Total AMS shall be reduced in accordance with the following tiered

formula:

(a)

Where the Final Bound Total AMS is greater than US$25 billion, or the equivalent in

the monetary terms in which the binding is expressed, the reduction shall be [70-83]

per cent;

Where the Final Bound Total AMS is greater than US$15 billion and less than or

equal to US$25 billion, or the equivalents in the monetary terms in which the binding

is expressed, the reduction shall be [60-70] per cent;

Where the Final Bound Total AMS is less than or equal to US$15 billion, or the

equivalent in the monetary terms in which the binding is expressed, the rate of

reduction shall be [37-60] per cent.

(b)

(c)

51.

Developed country Members with high relative levels of Final Bound Total AMS [of at least

[40] per cent of the total value of agricultural production] shall undertake an additional reduction

[equal to at least half of the difference between the reduction rate specified in their tier and the

reduction rate specified in the higher tier].

(b)

Implementation period and staging

52.

The reductions in Final Bound Total AMS shall be implemented according to the following

schedule [ ].

(c)

Special and differential treatment

53.

The reduction in Final Bound Total AMS applicable to developing country Members with

Final Bound Total AMS commitments shall be [two thirds] of the reduction applicable under (a)50(c)

above. The reductions in Final Bound Total AMS shall be implemented according to the following

schedule [ ]. [Net food-importing developing country Members shall be exempt from reductions in

Final Bound Total AMS.]

54.

Developing country Members shall have continued access to the provisions of Article 6.2 of

the Agreement on Agriculture.

(d)

Other

55.

[As provided for under Article 18.4 of the Agreement on Agriculture, those cases where

[exchange rate fluctuations] [and inflation rates] have caused extraordinary situations shall be dealt

with separately and on a pragmatic case-by-case basis.]

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56.

RODUCT

-S

PECIFIC

AMS C

APS

Product-specific AMS caps

Product-specific AMS limits shall be set out in the Schedule of the Member concerned.

57.

Article 6.3 of the Agreement on Agriculture shall be amended to reflect the modalities with

respect to product-specific AMS caps by the addition of the following:

Ad Article 6.3:

A Member shall not exceed the product-specific AMS limits specified in its Schedule.

58.

The product-specific AMS limits specified in each Member's Schedule shall be the average

applied levels of such support provided during the base period [1995 to 2000] [1999 to 2001].

59.

[In cases where a product-specific AMS during the base period was below the

de minimis

level the Current AMS for such products shall not exceed [the

de minimis

level] [[ ] per cent of the

value of production of that product] and the limit for such products shall be denoted accordingly in the

Schedule.]

60.

Product-specific AMS caps shall be implemented [according to the following schedule [ ]].

Special and differential treatment

61.

[In the case of developing country Members, the Current AMS for individual products shall

not exceed the respective levels established by one of the following methods:

(a)

(b)

(c)

the average applied levels during the base period [1995 to 2000] or [1995 to 2004], as

may be selected by the Member concerned; or

[twice] the Member's product-specific

de minimis

level; or

[20] per cent of the Annual Bound Total AMS in any year.]

INIMIS

Reductions

62.

The

de minimis

levels pursuant to Article 6.4(a) of the Agreement on Agriculture shall be

reduced by [50] [80] [] per cent [or by such an amount as would be required to adjust to the rate of

cut of Overall Trade-Distorting Domestic Support if that is greater]. The new

de minimis

levels shall

[become effective from the beginning of the implementation period] [be phased in through equal

annual instalments over the implementation period].

63.

Special and differential treatment

Developing country Members:

(a)

(b)

that allocate almost all

de minimis

support for subsistence and resource-poor farmers;

with no AMS commitments[.] [; and]

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(c)

[net food-importing developing country Members.]

shall be exempt from reductions in

de minimis.

64.

For other developing country Members, the

de minimis

levels pursuant to Article 6.4(b) of the

Agreement on Agriculture shall be reduced by [ ] per cent [or by such an amount as would be required

to adjust to the rate of cut of Overall Trade-Distorting Domestic Support if that is greater]. For these

Members, the new

de minimis

levels shall [be phased in over a period[ ]].

65.

LUE

Basic criteria

Subject to the additional criteria set out below Article 6.5 shall be amended as follows:

Article 6.5

The value of the following direct payments shall be excluded from a Member's calculation of

its Current Total AMS:

(a) Direct payments under production-limiting programmes if:

(i)

(ii)

(iii)

(b) Direct payments that do not require production if:

(i)

(ii)

(iii)

such payments are based on fixed and unchanging bases and yields; or

livestock payments made on a fixed and unchanging number of head; and

such payments are made on 85 per cent or less of a fixed and unchanging base

level of production.

such payments are based on fixed and unchanging areas and yields; or

such payments are made on 85 per cent or less of a fixed and unchanging base

level of production; or

livestock payments are made on a fixed and unchanging number of head.

(a)

Additional criteria

Blue Box cap

66.

In addition to the criteria set out in paragraph 1.65 a Member shall not provide support under

Article 6.5 in excess of the amount as determined below. This will be expressed consistently in the

value-specific commitments set out in that Member's Schedule.

67.

The maximum permitted value of support under Article 6.5 shall not exceed [2.5] per cent of

the average total value of agricultural production during the base period. This limit will [apply from

the commencement of the implementation period][be reduced to [ ] per cent in accordance with the

following schedule [ ]].

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68.

In cases where a Member has placed an exceptionally large percentage of its trade-distorting

support [greater than [40] per cent during the base period] in the Blue Box, [the percentage reduction

in that support under Article 6.5 will equal the percentage reduction that the Member concerned will

make in the Final Bound Total AMS] [the limit under Article 6.5 shall be [ ] percent of the average

total value of agricultural production].

(b)

Other criteria

69.

[The value of support provided to an individual product under Article 6.5(a) shall not exceed

the average value of support provided to it during the period [ ]. [Members using such payments shall

demonstrate through notification that the production of the individual product in receipt of such

payments has not increased in relation to the period when the application of such payments was

decided.]]

70.

[The value of support provided to an individual product under Article 6.5(b) shall:

(a)

(b)

not exceed [ ] per cent of the value of the overall Blue Box cap; [and

not exceed [ ] per cent of the value of production of the product concerned in the

period [ ].]]

71.

[Direct payments under Article 6.5(b) that are based on compensating for a differential

between prices actually received as compared to a price benchmark [shall use a historical or specified

reference period] [and] [shall not compensate for more than [ ] per cent of the differential in prices.] ]

72.

[An increase in Blue Box support for any individual product beyond the limitations

determined under this Article shall be permissible where that amount does not exceed [[ ] per cent of]

a corresponding reduction in Current AMS support for the product(s) concerned.] [Where there was

no Current AMS support in the base period [ ] to [ ] for a particular product, an increase in Blue Box

support is permissible for that product where the support concerned does not exceed [ ] percent of

value of production and the overall Blue Box cap is still respected.]

73.

[Where more than [ ] per cent of the total value of agricultural production is derived from [ ]

basic agricultural products, the Member concerned shall have the flexibility to [ ].]

Special and differential treatment

74.

For developing country Members, the maximum permitted level for the value of support

under Article 6.5 shall not exceed [5] cent of the average total value of agricultural production in the

[base] period [from [ ] to [ ]].

Transparency Requirements

75.

[Members using direct payments under Article 6.5, shall for the products receiving such

payments, notify:

(a)

(b)

All parameters referring to any existing or additional criteria, at the time when the

programmes were established;

As from the first implementation year of the Doha Development Agenda, all those

parameters, such as base period, production levels, area planted, number of head, and

other parameters [to be completed] shall be notified at product-specific level.

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76.

No Blue Box payments shall be used until all notifications obligations above are complied

with timely and accurately.]

77.

Transparency of the Blue Box measures shall be increased through improved notification

requirements.

VERALL

EDUCTION OF

RADE

-D

ISTORTING

OMESTIC

UPPORT

: A T

IERED

ORMULA

Base level

78.

The Base Overall Trade-Distorting Domestic Support shall be the sum of (i) the Final Bound

Total AMS plus (ii) permitted

de minimis

level expressed in monetary terms plus (iii) the Blue Box

level expressed in monetary terms where;

(a)

(b)

the "Final Bound AMS" is the "Final Bound Commitment Level" as defined in

Article 1(h) of the Agreement on Agriculture;

for the purpose of this base level for reductions in Overall Trade-Distorting Domestic

Support, the permitted

de minimis

level is the annual average of the sum of a

Member's:

(i)

product-specific

de minimis

levels [for those products where the average

value of product-specific AMS support in the base period did not exceed the

de minimis

level] [for those products that did not receive AMS support in any

year of the base period]; and

non-product-specific

de minimis

levels in the base period [, for those years

for which non-product-specific AMS support was provided, the non-product-

specific

de minimis

level shall be deemed to be zero];

(ii)

as specified in Article 6.4 of the current Agreement on Agriculture [or the Protocol of

Accession of the Member concerned], expressed in monetary terms, during the base

period; and

(c)

for the purpose of this base level of reductions in Overall Trade-Distorting Domestic

Support, the Blue Box level is the higher of existing average Blue Box payments

during the base period and 5 per cent of the average total value of agricultural

production during the base period.

Tiered reduction formula

79.

The base level of Overall Trade-Distorting Domestic Support shall be reduced in accordance

with the following tiered formula:

(a)

Where the base level of Overall Trade-Distorting Domestic Support is greater than

US$60 billion, or the equivalent in the monetary terms in which the binding is

expressed, the reduction shall be [70-80] per cent;

Where the base level of Overall Trade-Distorting Domestic Support is greater than

US$10 billion and less than or equal to US$60 billion, or the equivalents in the

monetary terms in which the binding is expressed, the reduction shall be [53-75] per

cent;

(b)

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(c)

Where the base level of Overall Trade-Distorting Domestic Support is less than or

equal to US$10 billion, or the equivalent in the monetary terms in which the binding

is expressed, the rate of reduction shall be [31-70] per cent.

Implementation period and staging

80.

As the first instalment of the overall reduction, in the first year and throughout the

implementation period, the sum of all trade-distorting support shall not exceed 80 per cent of the base

level of Overall Trade-Distorting Domestic Support. As for the second and subsequent years of

implementation, the remaining reductions shall be implemented according to the following schedule

[ ].

Special and differential treatment

81.

Developing country [, and recently acceded] Members with no AMS Commitments shall not

be required to make commitments on reductions in Overall Trade-Distorting Domestic Support. [In

addition, net food-importing developing country Members shall also be exempt from commitments to

reduce Overall Trade-Distorting Domestic Support.]

82.

For [other] developing country Members [with AMS commitments], the applicable reduction

for Overall Trade-Distorting Domestic Support shall be [two thirds] [[ ] per cent] of the relevant rate

specified in paragraph 2.79(c) above.

83.

As the first instalment of the overall cut, in the first year and throughout the implementation

period, the sum of all trade-distorting support shall not exceed 80 per cent of the base level of Overall

Trade-Distorting Domestic Support. As for the second and subsequent years of implementation, the

remaining reductions shall be implemented according to the following schedule [ ].

Other

84.

Commitments relating to reductions in Overall Trade-Distorting Domestic Support shall apply

as a minimum overall commitment. If necessary, a Member shall be required to make additional

commitments on reductions or limits in Section A (Final Bound Total AMS), Section C (De

minimis)

and/or Section D (Blue Box) in order to achieve the appropriate reduction in Overall Trade-Distorting

Domestic Support.

REEN

85.

Annex 2 of the Agreement on Agriculture shall be amended as set out in Annex H of this

document.

OTTON

Reductions in Support for Cotton Production

86.

Trade-distorting domestic support for cotton shall be reduced by [ ] per cent more than the

reduction in Final Bound Total AMS [or Overall Trade-Distorting Domestic Support whichever is the

greater] and set out in Part [ ] of each Member's Schedule.

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87.

[AMS support for cotton shall be [eliminated] [reduced according to the following formula]

Rc = Rg + (100 – Rg) * 100

3 * Rg

Rc = Specific reduction applicable to cotton as a percentage

Rg = General reduction in AMS as a percentage

88.

This will be applied to the base value of support calculated as the arithmetic average of the

amounts notified by Members for cotton in supporting tables DS:4 from 1995 to 2000.]

89.

[The ceiling on Blue Box subsidies for cotton shall be [5 per cent of total Blue Box ceiling]

[one-third of [the ceiling on the Blue Box for agriculture as a whole] [the production value for cotton]

[the amount that would be otherwise determined respectively through application of paragraph

D.2(b)69 above and the "double trigger" approach specified in paragraph D.2(b)70(a) and (b) above.]]

Implementation

90.

The reductions for trade-distorting domestic support on cotton shall be implemented over a

period [which is one third of the implementation period] [according to the following schedule [ ]].

Special and Differential Treatment

91.

[Developing country Members shall have the following rates of reduction for trade-distorting

domestic support for cotton [ ] [, provided that the rate of reduction is no less than two thirds of that

specified in paragraph 1.86 above.]]

92.

[The relevant Blue Box cap for developing country Members [which are net producers and

exporters of cotton] shall be [ ]. The relevant Blue Box cap for cotton for developing country

Members shall be [ ].]

93.

[Developing country Members shall implement their reduction commitments for cotton over a

period of up to [ ] years.]

ECENTLY

CCEDED

EMBERS

94.

[The implementation period for [developing] recently acceded Members shall be [2011] to

[three years after the end of the implementation period for other [developing country] Members.]]

[To the extent that the implementation period of commitments undertaken in acceding to the WTO

overlaps with the implementation period of commitments undertaken in association with these

modalities, the start of implementation of commitments undertaken in association with these

modalities shall begin [immediately] [[ ] years] after the end of implementation of accession

commitments.]

95.

[Small, low-income, recently acceded Members with economies in transition shall not be

required to undertake reductions in Final Bound Total AMS [and] [or]

de minimis

level.]

96.

[In the case of such Members, investment subsidies and input subsidies generally available to

agriculture, interest subsidies to reduce the costs of financing as well as grants to cover debt

repayment shall be exempted from domestic support AMS commitments.]

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ONITORING AND

URVEILLANCE

97.

Procedures and notification requirements and formats shall be improved to ensure

transparency and enhance monitoring of domestic support measures. Details to be developed in the

context of horizontal modalities for monitoring and surveillance.

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IV.

EXPORT COMPETITION

ENERAL

ROVISIONS ON

XPORT

OMPETITION

98.

Nothing in the modalities on export competition can be construed to give any Member the

right to provide, directly or indirectly, support to exports of agricultural products in excess of the

commitments set out in Members' Schedules or in conflict with the terms of Article 8 of this

Agreement. Furthermore, nothing can be construed to imply any change to the obligations and rights

under Article 10.1 or to diminish in any way existing obligations under other provisions of the

Agreement on Agriculture or other WTO Agreements.

99.

The following provisions will give effect to the detailed modalities ensuring parallel

elimination of all forms of export subsidies and disciplines on all export measures with equivalent

effect pursuant to the July 2004 Agreed Framework and the Hong Kong Ministerial Declaration.

XPORT

UBSIDY

OMMITMENTS

100.

Developed country Members shall eliminate their export subsidies by the end of 2013. This

will be on the basis of annual budgetary outlay commitments being reduced by [ ] percent [and

quantity commitments being reduced by [ ] percent] in each year commencing 2008 to 2013, such that

a substantial part of the elimination of export subsidy commitments is achieved by 2010, the mid-

point of implementation for developed country Members.

101.

Developing country Members shall eliminate their export subsidies by the end of [ ]. This

will be on the basis of annual budgetary outlay commitments being reduced by [ ] percent [and

quantity commitments being reduced by [ ] percent] in each year commencing 2008 to [ ] such that a

substantial part of the elimination of export subsidy commitments is achieved by [ ], the mid-point of

implementation for developing country Members.

102.

In accordance with the Hong Kong Ministerial Declaration, developing country Members will

continue to benefit from the provisions of Article 9.4 of the Agreement on Agriculture for five years

after the end-date for elimination of all forms of export subsidies.

XPORT

REDITS

, E

XPORT

REDIT

UARANTEES OR

NSURANCE

ROGRAMMES

103.

Export credit, export credit guarantees or insurance programmes shall comply with the

detailed disciplines set out in Annex I.

104.

[Export financing support, which does not conform with the provisions of paragraph 3.4 of

Annex I, or which is provided in circumstances as may otherwise be allowable under Article 9 of this

Agreement, constitute export subsidies for the purposes of this Agreement and are therefore [subject

to specific export financing elimination commitments contained in Members' Schedules] [to be

prohibited by [ ] for developed country Members and [ ] for developing country Members] [to be

eliminated within the binding levels of Members' export subsidies elimination Schedules.]

105.

[The disciplines set out in Annex I, shall apply from the first day of the implementation period

of the Doha Round for developed country Members [and from [ ] for developing country Members].]

106.

[Over the respective implementation periods for developed and developing country Members,

the scope of permitted export financing instruments shall be reduced to only pure risk cover

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comprising export credit insurance or reinsurance and export credit guarantees according to the

following schedule [ ].]

GRICULTURAL

XPORTING

TATE

RADING

NTERPRISES

107.

Agricultural exporting state trading enterprises shall comply with the detailed disciplines set

out in Annex J.

108.

Members shall,

(a)

eliminate by [ ] [the end of 2013] for developed country Members, and by [ ] [the end

of [ ]] for developing country Members, [in accordance with the following timetable

[to be developed]] [in parallel with the elimination of export subsidies]:

(i)

those export subsidies, defined by Article 1(e) of the Agreement on

Agriculture, which are currently provided to or by an agricultural exporting

state trading enterprise, consistent with Members export subsidy

commitments and the provisions of Article 9.4 of the Agreement on

Agriculture;

government financing of exporting state trading enterprises, [including,

inter

alia],

preferential access to capital or other special privileges with respect to

government financing or re-financing facilities, borrowing, lending or

government guarantees for commercial borrowing or lending, at below

market rates; and

government underwriting of losses, either directly or indirectly, [including,

inter alia]

losses or reimbursement of the costs or write-downs or write-offs

of debts owed [to, or] by export state trading enterprises on their export sales.

(ii)

(iii)

(b)

[[prohibit] [phase-out] by [ ] [the end of 2013] [in parallel with the elimination of

export subsidies] the use of monopoly powers for such enterprises, after which

Members shall not restrict the right of any interested entity to export, or to purchase

for export, agricultural products.]

109.

The provisions of paragraph 108(b) for developing country Members shall be subject to the

provisions contained in paragraph 3.4(a) and (b) of Annex J.

110.

NTERNATIONAL

OOD

International food aid shall comply with the detailed disciplines set out in Annex K.

111.

[In-kind food aid shall be [phased out by the end of 2013 for developed country Members and

by end [ ] for developing country Members] [in accordance with the following timetable [ ]] [in

parallel with the elimination of export subsidies].]

112.

[The monetisation of in-kind food aid shall be phased out by the end of 2013 for developed

country Members and by end [ ] for developing country Members [in accordance with the following

timetable [ ]] [in parallel with the elimination of export subsidies].]

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OTTON

113.

All forms of export subsidies for cotton shall be eliminated by developed countries in 2006

[and developed countries concerned shall provide information on measures they have taken to

implement this [and their schedules of commitments shall be modified with effect from 31 December

2006.].]

114.

[All forms of export subsidies for cotton shall be eliminated by developing country Members

in 2007 [and developing country Members concerned shall provide information on measures they

have taken to implement this] [and their schedules of commitments shall be modified with effect from

31 December 2007].]

115.

[The extent to which disciplines and commitments for the parallel elimination of all forms of

export subsidies and disciplines on all export measures with equivalent effect for export credits,

agricultural exporting state trading enterprises and international food aid, apply to cotton and their

scheduling shall be specified in the lists of commitments.]

EXPORT PROHIBITIONS AND RESTRICTIONS

RTICLE

12.1

116.

[Article 12.1 of the Agreement on Agriculture shall be amended to include the measures set

out in Annex L.]

VI.

COMMODITY ARRANGEMENTS

NDERSTANDING ON THE

ROVISIONS OF

RTICLES

XX(

)

AND

XXXVIII

GATT 1994

117.

[An Understanding on the provisions of Articles XX(h) and XXXVIII of GATT 1994 is set

out in Annex M.]

VII.

[OTHER ISSUES]

ECTORAL

NITIATIVES

]

EOGRAPHICAL

NDICATIONS

]

IFFERENTIAL

XPORT

AXES

118.

The differential element of export taxes shall be eliminated by the end date for

implementation.]

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Page 24

Annex A

RAFT

UIDELINES FOR THE

ONVERSION OF FINAL BOUND NON

AD VALOREM

DUTIES

INTO

AD VALOREM

EQUIVALENTS

OBJECTIVE

There is general understanding amongst Members that construction of a tiered formula for

tariff reductions requires a common measurement device for converting the various types of non-ad

valorem

final bound tariffs to

ad valorem

equivalents ("AVEs"). These Guidelines are intended to

establish such a common methodology for the calculation, and subsequent submission, of AVEs for

the purposes of allocating tariffs to the various tiers to be established. The Guidelines are based on

the principles of practicality, comparability, simplicity, transparency and verifiability.

All Members with final bound non-ad

valorem

tariffs for agricultural products (as defined in

Annex 1 of the Agreement on Agriculture) in their WTO Schedules will apply these Guidelines for

converting their non-ad

valorem

tariffs into AVEs.

There are no preconditions to the tabling of data sets as a working basis. However, it should

be noted in this context that all tariff reductions will be made from Members' bound rates, as agreed in

paragraph 29 of the Framework Agreement. The issue of tariff simplification remains under

negotiation in accordance with paragraph 37 of the Framework Agreement.

A solution to the issue of the potential "overlap" in tariff cuts, which may be created at the

margins of the tariff bands, will need to be found.

While there is broad acceptance that Members are searching for the closest approximation

possible of the correct AVE (exact precision being unattainable), it should be noted that in the

consultations strong linkages have been made between providing Members "flexibility" and

"verification" procedures.

At the request of Members, the Secretariat will continue to provide advice on technical

matters, including technical assistance which may be necessary in the case of some developing

country Members for applying the methodology set out below.

II.

CONVERSION METHODOLOGY

The principal method for converting the final bound non-ad

valorem

duties into their

valorem

equivalents will be the unit value method based on IDB import data. This method will be

applied in accordance with the modalities outlined in Section A below.

An alternative conversion method will be applied to the extent that the unit value method

based on IDB import data is not appropriate or not practicable as determined in Section B below.

This text was first distributed as document number 2601 on 10 May 2005. The text and Members’

submissions of

ad valorem

equivalents of bound non

ad valorem

tariffs can be found on the Members’ website.

Secretariat notes TN/AG/S/11, S/11/Add.1 and S/11/Add.2 describe the incidence of final bound non-

ad valorem

duties in Members' WTO Schedules.

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Page 25

NIT

ALUE

ETHOD

ASED ON

IDB I

MPORT

ATA

Formula

The final bound non-ad

valorem

MFN duties specified in Members' Schedules will be

converted into their AVEs in accordance with the following formula:

AVE = (SP * 100)/(UV * XR)

AVE:

SP:

UV:

D VALOREM

EQUIVALENT

(per cent)

ONETARY

ALUE OF

UTY PER

NIT OF

MPORTS

MPORT

NIT

ALUE

where UV = V/(Q * C

)

V = value of imports

Q = quantity of imports

= conversion factor for quantity units, where

appropriate

XR: C

URRENCY

XCHANGE

ATE

, where appropriate

Parameters for the calculations

10.

The calculations will be based on total import flows with respect to the non-ad

valorem

tariff

item concerned. The result of the calculations must be closely representative of the true level of tariff

protection afforded by the non-ad

valorem

tariff.

11.

The calculations of AVEs will be made in terms of a weighted average for the period 1999-

2001. Any exchange rates and conversion factors that may be required for the calculations will relate

to, and be applied on, the raw data (i.e. value and/or quantity of imports) for the individual years of

this period prior to summing up the values or volumes for the three-year period for the purposes of

calculating the weighted averages. In other words, weighted averages for IDB import unit values and

world Comtrade import unit values will be calculated, for each tariff line concerned, in the following

manner: the import values registered during the three-year period 1999-2001 will be first summed up

and then divided by the sum of the import quantities registered during the same period.

12.

In the case of seasonal tariffs, a separate AVE will be calculated for each of the seasons.

Data requirements and sources

13.

The final bound non-ad

valorem

MFN duties will be sourced from the Consolidated Tariff

Schedules Database (CTS).

14.

The import values and import quantities will be sourced from the WTO Integrated Database

(IDB) at the most disaggregated tariff line level. The data necessary to calculate world import unit

values at the HS-six-digit level derived from the UN Commodity Trade Statistics Database

(Comtrade) can be downloaded from the password-protected Members' Web Site. In the following

paragraphs, these world import unit values will be referred to as "Comtrade unit values".

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LTERNATIVE

AVE C

ALCULATION

Specific situations covered

Missing data

15.

An alternative method for the calculation of AVEs to that outlined in Section A above will

apply in the following situations:



the IDB import data for the tariff line concerned are missing, or

the IDB import value for the tariff line concerned is, on weighted average of the 1999-2001

period, lower than US$ 2,500 or the equivalent in another currency, or

there are reporting or other errors in the IDB import data.

40/20 Filter

16.

An alternative method to that outlined in Section A above will also apply in any case where

the IDB-based AVE cannot be considered to reflect the true level of tariff protection afforded by the

non-ad

valorem

tariff. The "40/20 filter" is designed to systematically identify distorted IDB-based

AVEs using existing, publicly available data that all Members have access to. This filter will be

applied to all AVEs calculated on the basis of IDB import data in accordance with Section A above as

well as in the cases specified in paragraphs 22-24 below.

Step 1: Identification of distorted IDB import unit values

17.

The difference between the IDB import unit value and an estimated world import unit value is

the basis of the first step of the 40/20 filter. To run this filter Members shall:



Calculate the difference in per cent between (i) the weighted average 1999-2001 IDB import

unit values at the tariff line level

and (ii) the weighted average 1999-2001 Comtrade unit

values.

If the IDB import unit value exceeds the Comtrade unit value by more than 40%, the tariff

item is subject to Step 2.

Otherwise, the IDB AVE is directly used to allocate this item in the appropriate tier of the

tariff reduction formula to be established, and the item is not subject to Step 2.

Step 2: Relevance test

18.

An IDB import unit value that exceeds the Comtrade unit value by more than 40% does not

alone indicate whether a product should be subject to an alternative method of AVE calculation.

Calculation of AVEs is not an exact science. In the end, the tariff will be placed within the tiers of the

tariff reduction formula. Members are only attempting to identify those products, which are most

likely to move to a lower tariff reduction tier as a result of distorted import unit values. Therefore,

there should be no concern about an IDB import unit value that is 100% greater than the Comtrade

It should be noted that the majority of non-ad

valorem

tariffs is bound at the HS-eight-digit level. In

the event that a Member has bound its non-ad

valorem

tariffs at a more disaggregated (or more aggregated)

level, the IDB import unit values will be calculated at that more disaggregated (or more aggregated) level.

For the calculation of weighted averages, see paragraph 11 above.



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Page 27

unit value, if the resulting AVE is 3% using IDB data, rather than 6% using Comtrade data. Though

there is a 100% difference here, the absolute difference between the AVEs is low enough so as not to

warrant additional attention.

19.

The relevance test is designed to only identify tariff lines in which there is a large absolute

difference between the AVE calculated using IDB and the AVE calculated using Comtrade. To run

this test Members will:



Complete the calculation of AVEs using IDB import unit values.

Calculate AVEs using Comtrade unit values for those tariff lines identified in Step 1 as

requiring the Step 2 relevance test.

Subtract the IDB AVE from the Comtrade AVE.

If the resulting difference is greater than 20 percentage points then the tariff line is subject to

an alternative AVE calculation method as specified in paragraph 25 below. Otherwise, the

IDB AVE is used to allocate this item in the appropriate tier of the tariff reduction formula to

be established.

Other

20.

Sugar will be treated in accordance with the provisions of paragraph 26 below.

Alternative methods

21.

In any of the cases identified as a result of the provisions under in paragraphs 15 to 20 above,

the provisions of paragraphs 9 to 14 will be applied, subject to the following modifications.

Missing data

22.

In the case of missing data as specified in paragraph 15 above, Members may apply one of the

following alternative methods in place of the average 1999-2001 IDB import unit value, subject to

identification of the source of the data:

(i)

(ii)

(iii)

(iv)

extend the base period 1999-2001 by up to two years at either end;

use the IDB import unit value of a closely related tariff line;

use the IDB import unit value of the tariff line at issue of a near country; or

use the Comtrade unit value.

23.

Members should in principle use a consistent method across all tariff lines. Should the choice

vary in order to obtain the most representative price, Members shall specify for each such tariff line

which method was used.

24.

Except where option (iv) has been chosen, the provisions of paragraphs 16-19 above (40/20

filter) apply.

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Alternative treatment pursuant to the 40/20 filter

25.

The conversion of non-ad

valorem

duties, captured in the 40/20 filter, into their AVEs will be

calculated using the following weightings based on unit values of Comtrade and IDB data:

(a)

For HS Chapters 1 to 16, and the products in Annex 1 of the Agreement on

Agriculture in the HS Chapters beyond Chapter 24, a 82.5/17.5 (Comtrade/IDB)

weighting will apply.

For HS Chapters 17-24, a 60/40 (Comtrade/IDB) weighting will apply.

(b)

Other

26.

27.

For all tariff lines for raw and refined sugar, [world prices] [or other prices] will apply [ ].

DDITIONAL

ATA

EQUIREMENTS

The following provisions apply for the methods under both section A and section B above.

28.

Where technical conversion factors are necessary, these will be sourced from the FAO unless

they are already specified in the Schedule of the Member concerned.

29.

All import unit values/prices will be expressed on a c.i.f. basis. Where necessary, f.o.b./c.i.f.

conversion factors will be applied according to a methodology to be established.

30.

Where the conversion of the currency used to record import values is necessary, the exchange

rate to be used will be the annual average market exchange rate published in the

International

Financial Statistics

(IFS) by the International Monetary Fund (IMF).

Where the exchange rates are

unavailable from the

IFS Yearbook,

the rate of exchange to be used will be that duly published by the

competent authorities of the importing Member concerned and will reflect, as effectively as possible,

the current value of the currency in commercial transactions in terms of the currency of the country of

importation.

III.

MULTILATERAL VERIFICATION PROCEDURE

31.

In order to ensure transparency, the preliminary AVE calculations resulting from the

conversion methodology set out in Section II above will be subject to the multilateral verification

procedure set out below.

Submissions of AVE calculations

32.

Members will submit to the Secretariat their preliminary AVE calculations, including full

details of the constituent data, data sources and methods applied, using the annexed electronic

spreadsheet format.

Those tariff lines that have been identified by the procedures under paragraphs

15 to 20 above will be identified as such in order to allow particular scrutiny. The Secretariat will

post all submissions on the password-protected Members' WTO Web Site for the purposes of the

multilateral review.

In the country tables of the monthly editions of the

International Financial Statistics

the annual

average market exchange rate can be found in line "rf" of the exchange rates section.

To be distributed separately.

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Verification

33.

The verification process is to ensure that the AVE calculations have been performed in

accordance with these Guidelines [details to be developed.]

34.

Final lists of AVEs are to be submitted to the Secretariat within [ ] days following the

completion of the verification process. Upon receipt, the Secretariat will promptly post these

submissions on the password-protected Members' Web Site.

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Annex B

Tariff Escalation

Provisional Draft List of Primary and Processed Products

[

Bovine meat

Primary product

0102.90 Live bovine animals other than pure bred breeding

animals

Processed product

0201.10 – Meat of bovine animals, fresh or chilled;

Carcasses and half-carcasses

Meat of bovine animals, fresh or chilled.

0201.20 – Other cuts with bone in

0201.30 – Boneless

0202.10 – Meat of bovine animals, frozen; Carcasses and

half-carcasses

Meat of bovine animals, frozen.

0202.20 – Other cuts with bone in

0202.30 – Boneless

0206.10 – Edible offal of bovine animals, fresh or chilled

Edible offal of bovine animals, frozen.

0206.21 – Tongues

0206.22 – Livers

0206.29 – Other

0210.20 – Meat of bovine animals salted, in brine or dried

or smoked; Other, including edible flours and meals of

meat and meat offal

1602.50 – Prepared or preserved meat, meat offal or

blood of bovine animals

The list is that proposed by Canada in JOB(06)/166 and is included here provisionally only. The

ultimate list would need to be agreed specifically in accordance with the particular proposal adopted in the main

text.

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Swine meat

Primary product

Live Swine, other than pure-bred breeding animals

0103.91 Weighing less than 50 kg

0103.92 Weighing 50 kg or more

Processed product

0203.11 – Meat of swine, fresh or chilled; Carcasses and

half-carcasses

Meat of swine, fresh or chilled.

0203.12 – Hams, shoulders and cuts thereof, with bone in

0203.19 – Other

0203.21 – Meat of swine, frozen; Carcasses and half

carcasses

Meat of swine, fresh or chilled.

0203.12 – Hams, shoulders and cuts thereof, with bone in

0203.19 – Other

Meat of swine, frozen.

0203.22 – Hams, shoulders and cuts thereof, with bone in

0203.29 – Other

0206.30 – Edible offal of swine, fresh or chilled

Edible offal of swine, frozen.

0206.41 – Livers

0206.49 – Other

Meat of swine salted, in brine, dried or smoked; Edible

flours and meals of meat and meat offal

0210.11 – Hams, shoulders and cuts thereof, with bone in

0210.12 – Bellies (streaky) and cuts thereof

0210.19 – Other

Prepared or preserved meat, meat offal or blood of swine.

1602.41 – Hams and cuts thereof

1602.42 – Shoulders and cuts thereof

1602.49 – Other, including mixtures

Sheep meat

Primary product

0104.10 Live sheep

Processed product

0204.10 –Carcasses and half-carcasses of lamb, fresh or

chilled

0204.21 – Other meat of sheep, fresh or chilled;

Carcasses and half-carcasses

0204.30 – Carcasses and half-carcasses of lamb, frozen

Other meat of sheep, fresh or chilled.

0204.22 – Other cuts with bone in

0204.23 – Boneless

Other meat of sheep, frozen.

0204.42 – Other cuts with bone in

0204.43 – Boneless

Vegetables

Primary product

0701.90 – Potatoes, fresh or chilled; Other than seed

Processed product

0710.10 – Potatoes (uncooked or cooked by steaming or

boiling in water), frozen

2004.10 – Potatoes prepared or preserved otherwise than

by vinegar or acetic acid, frozen

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0702.00 – Tomatoes, fresh or chilled

Tomatoes prepared or preserved otherwise than by

vinegar or acetic acid.

2002.10 – Tomatoes, whole or in pieces

2002.90 – Other

2009.50 – Tomato juice, unfermented and not containing

added sugar or other sweetening matter

2103.20 – Tomato ketchup and other tomato sauces

Fruits

Primary product

0805.10 – Oranges, fresh or dried

Processed product

Orange juice, unfermented and not containing added

spirit, whether or not containing added sugar or

sweetening matter.

2009.11 – Orange juice, frozen

2009.12 – Orange juice, not frozen, of a Brix value not

exceeding 20

2009.19 – Other

Grapefruit juice, unfermented and not containing added

spirit, whether or not containing added sugar or

sweetening matter.

2009.21 – Of a Brix value not exceeding 20

2009.29 – Other

0806.20 – Grapes, dried

0813.30 – Apples, dried

Apple juice, unfermented and not containing added spirit,

whether or not containing added sugar or sweetening

matter.

2009.71 – Of a Brix value not exceeding 20

2009.79 – Other

Coffee

Primary Product

0901.11 – Coffee, not roasted: Not decaffeinated

0901.12 – Coffee, not roasted: Decaffeinated

Cereals

Primary Product

1001.10 – Durum Wheat

1001.90 – Wheat: Other

Processed Product

11.01 – Wheat or meslin flour

11.03.11 – Groats and meal, of wheat

11.03.20 – Pellets

1108.11 – Wheat starch

11.09 – Wheat gluten, whether or not dried

11.03.19 Groats and meal, of other cereals

11.03.20 Pellets

1104.19 – Rolled or flaked grains, of other cereals

1104.29 – Other worked grains, of other cereals

Malt, whether or not roasted

1107.10 – Not roasted

1107.20 – Malt, Roasted

Processed Product

0901.21 – Coffee, roasted: Not decaffeinated

2101.11 – Extracts, essences and concentrates

0901.22 – Coffee, roasted: Decaffeinated

2101.11- Extracts, essences and concentrates

0805.40 – Grapefruit, fresh or dried

0806.10 – Grapes, fresh

0808.10 – Apples, fresh

10.03 – Barley

The test for determining tariff escalation will require examination of national schedules with detail

beyond the 6 digit level.

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10.04 – Oats

11.03.19 Groats and meal, of other cereals

11.03.20 Pellets

Cereal Grains Otherwise Worked (for example, hulled,

rolled, flaked, pearled, sliced or kibbled), except rice of

heading

10.06; germ of cereals, whole, rolled, flaked or ground

1104.12 – Rolled or flaked grains: Of oats

1104.22 – Other worked grains: Of oats

Oilseeds

Primary Product

12.01 – Soya Beans, whether or not broken

Processed Product

Flours and meals of oil seeds or oleaginous fruits, other

than those of mustard:

1208.10 – Of soya bean

Soya bean oil and its fractions, whether or not refined, but

not chemically modified.

1507.10 – Crude oil, whether or not degummed

1507.90 – Other

1202.10 – Ground-nuts, not roasted or otherwise cooked,

whether or not shelled or broken: In shell

Ground-nuts, not roasted or otherwise cooked, whether or

not shelled or broken:

1202.20 – Shelled, whether or not broken

Flours and Meals of Oilseeds or oleaginous fruits, other

than those of mustard,

12.08.90 – Other than of soybeans

Ground-nut oil and its fractions, whether or not refined, but

not chemically modified.

1508.10 – Crude oil

1508.90 – Other

Fruit, nuts and other edible parts of plants, otherwise

prepared or preserved, whether or not containing added

sugar or other sweetening matter or spirit, not elsewhere

specified or included.

2008.11 – Ground nuts

Rape or colza seeds, whether or not broken

1205.10 – Low erucic acid rape or colza seed

1205.90 – Other

Flours and Meals of Oilseeds or oleaginous fruits, other

than those of mustard,

12.08.90 – Other than of soybeans

Rape, colza or mustard oil and fractions thereof, whether

or not refined, but not chemically modified.

- Low erucic acid rape or colza oil and its fractions:

1514.11 – Crude oil

1514.19 – Other

- Other:

1514.91 – Crude oil

1514.99 – Other

12.06 – Sunflower seeds, whether or not broken

Flours and Meals of Oilseeds or oleaginous fruits, other

than those of mustard,

12.08.90 – Other than of soybeans

Sunflower-seed, safflower or cotton-seed oil and fractions

thereof, whether or not refined, but not chemically

modified.

Sunflower-seed or safflower oil and fractions thereof:

1512.11 – Crude oil

1512.19 – Other

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1207.60 – Safflower seeds

Flours and Meals of Oilseeds or oleaginous fruits, other

than those of mustard,

12.08.90 – Other than of soybeans

Sunflower-seed, safflower or cotton-seed oil and fractions

thereof, whether or not refined, but not chemically

modified. Sunflower-seed or safflower oil and fractions

thereof:

1512.11 – Crude oil

1512.19 – Other

Other oil seeds and oleaginous fruits, whether or not broken

1207.10 – Palm nuts and kernels

Flours and Meals of Oilseeds or oleaginous fruits, other

than those of mustard,

12.08.90 – Other than of soybeans

Palm oil and its refractions, whether or not refined, but not

chemically modified

1511.10 – Crude oil

1511.90 – Other

Other oil seeds and oleaginous fruits, whether or not broken

1207.20 – Cotton seeds

Flours and Meals of Oilseeds or oleaginous fruits, other

than those of mustard,

12.08.90 – Other than of soybeans

Sunflower-seed, safflower or cotton-seed oil and fractions

thereof, whether or not refined, but not chemically

modified.

Cotton-seed oil and its fractions:

1512.21 – Crude oil, whether or not gossypol has been

removed

1512.29 – Other

Sugar

Primary product

1701.11 – Raw cane sugar, not containing added flavouring

or colouring matter

1701.12 – Raw beet sugar, not containing added flavouring

or colouring matter

Processed product

1701.91 – Cane or beet sugar containing added flavouring

or colouring matter

1701.99 – Cane or beet sugar, other than containing

added flavouring or colouring matter

1704 – Sugar confectionery (including white chocolate)

not containing cocoa

Cocoa

Primary product

1801.00 – Cocoa beans, whole or broken, raw or roasted

Processed product

1803.10 – Cocoa paste, not defatted

1803.20 – Cocoa paste, wholly or partly defatted

1805.00 – Cocoa powder, not containing added sugar or

other sweetening matter

1804.00 – Cocoa butter, fat and oil

Chocolate and other food preparations containing cocoa.

1806.10 – Cocoa powder, containing added sugar or other

sweetening matter

1806.20 – Other preparations in blocks, slabs or bars

more than 2 kg or liquid, paste, powder, granular or other

bulk form in containers or immediate packings of a content

exceeding 2 kg

1806.32 – Other, in blocks, slabs or bars, not filled

1806.90 – Other

][other]

This does not preclude the possible addition of additional products within Chapter 17 and 18 that can

be linked back to the primary product.

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Annex C

Provisional draft

Tariff Quota Administration

Tariff quota commitments shall be administered in a manner which is transparent and

predictable, and ensures that the market access opportunities represented by such commitments are

made fully and effectively available.

[In order to promote this,] Members shall administer tariff quotas in conformity with WTO

provisions, including through the following requirements:

(a)

A tariff quota commitment shall not be administered in a manner which [hinders]

[precludes] in any way the importation of any product or tariff line within the tariff

quota.

Members shall provide timely initial allocations of import licences and mechanisms

for re-allocation or tradability of tariff quota allotments to ensure that the annual tariff

quota quantity is imported within the quota year.

[Members shall not impose seasonal or other time limits on imports under tariff

quotas, including those created through delays arising from licensing and associated

procedures, which result in under-fill of the quota.]

Members shall not impose [additional] [unfavourable commercial] terms [or

requirements] which act to restrict [the importation of] products [eligible for

importation under a tariff quota, such as] [within the tariff quota commitment,

including] product specification requirements, domestic purchasing requirements,

non-viable quota allotments, [restrictions on quota allocation to] [denial of access to

quota allocations for] retail distributors and other end-users, restrictions on sales to

final consumers, or export or re-export requirements.

[Members shall not credit [allocations or] preferential [imports][tariff quota quantities

under] [post-Uruguay Round] bilateral and regional trade agreements against their

scheduled WTO tariff quota commitments.] [Members [shall] [may] credit

preferential imports, including existing preferential tariff quotas, against scheduled

WTO tariff quota commitments.]

Members shall publish [all relevant information] sufficiently in advance [of the

opening date for the tariff quota all relevant information] in relation to their

administration of tariff quota commitments, including information regarding

administrative requirements and procedures [,] [Through the year, information shall

be made readily available on] the contact details of importers to whom tariff quota

allocations have been attributed and current tariff quota fill rates. [For Members that

do not publish publicly available import statistics on tariff quota imports, detailed

import statistics for tariff quotas, by tariff line, shall be reported to the Committee on

Agriculture on an annual basis.]

(b)

(c)

(d)

(e)

(f)

This draft is a composite for provisional and discussion purposes derived from JOB(06)/168 and

JOB(06)/171.

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(g)

[No charges, deposits or other financial requirements shall be imposed, directly or

indirectly, on or in connection with the administration of tariff quota commitments or

with importation of tariff quota products other than as permitted under the GATT

1994.]

[Members shall not impose unfavourable commercial terms or requirements which

act to restrict products eligible for importation under a TRQ such as:

(i)

(ii)

(iii)

domestic purchasing requirements;

non-viable quota allotments; and

export or re-export requirements which restrict imports.]

(h)

(i)

[Members shall establish a mechanism of redistribution of unused licences in order to

ensure that the system is operating according to its intentions. Reallocated quota

shares must be valid until the end of the quota period in question.]

[Underfill Mechanism:

(a)

(b)

[If the tariff quota fill rate in any year falls below [85%]

the under-filled portion of

the tariff quota shall be added to the tariff quota quantity for the following year.

If fill rates are, in each year over a [two-year] period, less than [85] per cent

(excluding any additional amount added to the tariff quota under 3(a)), the out-of-

quota duty shall be reduced to the in-quota rate [until such time that annual imports

equal or exceed the volume specified in the Member's schedule]. Thereafter, the

Member shall adopt one of the following options for administering the tariff quota:

applied tariffs or licences on demand.]

[If fill rates are, in each year over a [two year] period, less than [80] per cent, the out-

of-quota duty shall be reduced to the in-quota rate until such time that imports equal

or exceed the volume specified in the Member's Schedule. Until imports equal or

exceed the volume specified in the Member's Schedule, the tariff quota shall be

operated on an applied tariff basis at the in-quota rate.

If the fill rate drops below [80] per cent in any subsequent [year], the out of quota

duty shall again be reduced to the in quota rate until imports equal or exceed the

volume specified in the Member's Schedule.]

[If the tariff quota fill rate for any two consecutive years falls below [75] per cent

each year, the tariff quota must be administered on a first-come, first-served basis the

following year.]]

(a)

(b)

(a)

Special and differential treatment

(a)

[Developed country Members shall accord special and differential treatment to

products from developing country Members in connection with the allocation of

expanded access under existing or new tariff quotas resulting from the negotiations

A quota fill rate shall be deemed to be below 85 per cent unless notified otherwise by the relevant

Member to the Committee on Agriculture.

As notified to the Committee on Agriculture by the relevant Member.

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under the Doha Development Agenda. For the purposes of Article XIII of GATT

1994, where a tariff quota has been allocated in full or in part among developing

country suppliers the individual country allocations shall be as specified in the

Schedule of the Member concerned; and any re-allocation of shortfalls shall be made

among the developing country suppliers concerned. Developed country Members

shall, on request, provide to the maximum extent possible advisory and marketing

assistance in order to facilitate imports from developing countries under tariff

quotas.]

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Annex D

Illustrative list of indicators for designation of Special Products

(i)

The product has been identified as a staple food or as part of the basic food basket of the

developing country Member concerned through laws and regulations, including

administrative guidelines.

(a)

A significant proportion of the domestic consumption of the product in its natural

unprocessed or processed form is met through domestic production in the developing

country Member concerned; or

Total domestic production of each food class (in terms of carbohydrates, fats and

proteins or any other food class) accounts for a significant proportion of the total

normative requirement of that food class in accordance with the dietary preferences in

the developing country Member concerned; or

The product contributes to a significant proportion of the total calorific intake per

capita per day.

A significant proportion of the total food expenditure, or of the total income, at the

household level in the developing country Member concerned is spent on the product;

A significant proportion of the total agricultural income at the household level in the

developing country Member concerned is derived from the production of the product.

(ii)

(b)

(c)

(iii)

(a)

(b)

(iv)

Domestic consumption of the product in the developing country Member is significant in

relation to total world exports of that product.

A significant proportion of total world exports of the product is accounted for by the largest

exporting country.

(a)

A significant proportion of the total domestic production of the product is produced

on farms or operational land holdings of twenty (20) hectares or of average farm size

of the developing country Member concerned or less in size; or

A significant proportion of the farms or operational land holdings producing the

product are of twenty (20) hectares or the average farm size of the developing country

Member concerned or less in size.

(v)

(vi)

(b)

(vii)

A significant proportion of the producers engaged in the production of the product are low

income, resource poor or are subsistence farmer or disadvantaged producers.

(a)

(b)

A relatively high absolute number of people are dependent on the product; or

A significant proportion of the total agricultural population or rural labour force is

employed in the production of the product.

(viii)

(ix)

(x)

A significant proportion of the gross arable land is under cultivation of the product.

A significant proportion of the domestic production of the product, including a product

produced from livestock is produced in drought-prone or hilly or mountainous regions.

A significant proportion of the domestic production of the product is produced by vulnerable

populations such as tribal communities, ethnic groups, women, aged people, or

disadvantaged producers.

(xi)

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(xii)

The productivity per worker or per hectare of the product in the developing country Member

is relatively low as compared to either the average productivity in the world or the highest

productivity level achieved in any country.

A relatively low proportion of the product is processed in the developing country Member as

compared to the world average.

The product contributes to improving the living standards of the rural population directly and

through its linkages to non-farm rural economic activities, including handicrafts and cottage

industries or any other form of rural value addition.

A significant proportion of the total value of agricultural production or agricultural GDP or

agricultural income is contributed to by the product.

A significant proportion of the customs tariff revenue is derived from the product in a

developing country Member.

(a)

(b)

A significant proportion of the agricultural income or agricultural production is

derived from the production of the livestock product(s), or

A significant proportion of the agricultural population or rural labour is employed in

the production of the livestock product(s).

(xiii)

(xiv)

(xv)

(xvi)

(xvii)

(xviii) The product in respect of which product-specific AMS has been notified by any other

Member and which has been exported by that notifying Member during any year of the

implementation period of the Uruguay Round.

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Annex E

Draft

Special Safeguard Mechanism for Developing Country Members

Notwithstanding the provisions of paragraph 1(b) of Article II of GATT 1994 or of Article 4

of this Agreement, any developing country Member may take recourse to the imposition of an

additional duty in accordance with the provisions of paragraphs 4 and 5 below in connection with the

importation of any agricultural product [which is designated in its Schedule with the symbol "SSM"]

if:

(a)

the quantity of imports of that product entering the customs territory of that

developing country Member [during any year] exceeds a trigger level equal to

[130 per cent of] the average yearly quantity of imports [on a most-favoured-nation

basis] for the [36 month] period preceding the year of importation for which data are

available [or 130 per cent of the average yearly import quantity on a most-favoured-

nation basis for the base period of [ ] to [ ], whichever is the greater] (hereinafter

referred to as the "average import volume")[.] [and domestic prices are declining.]

[and unit import value of trade on a most-favoured-nation basis are declining relative

to the base period.]

[Where there are no, or minimal, levels of imports in the base period or the most

recent three-year period for which data are available, [ ] per cent of domestic

consumption of the product shall be used as a proxy for "average import volume".

Where historical trade patterns have been disrupted due to historical circumstances,

an alternative representative base period shall be used];

or, but not concurrently:

(b)

the c.i.f. import price, expressed in terms of the developing country Member's

domestic currency, at which a shipment

of imports of that product enters the customs

territory of that developing country Member during any year (hereinafter referred to

as the "import price"), falls below a trigger price equal to [70 per cent of] the average

[monthly price

] [annual price] for that product [on a most-favoured-nation basis] [for

the most recent three-year period preceding the year of importation for which data are

available] [for the previous 36 month period] [or 70 per cent of the average price of

imports of that product on a most-favoured-nation basis for the base period of [ ] to

[ ], whichever is the greater] (hereinafter referred to as the "average [import]

[monthly] price")[.] [and imports are increasing.]

[Provided that, where the developing country Member's domestic currency has at the

time of importation depreciated by at least 10 per cent over the preceding 12 months

against the international currency or currencies against which it is normally valued

the import price shall be computed using the average exchange rate of the domestic

A shipment shall not be considered for purposes of this subparagraph or paragraph 5 unless the

volume of the product included in that shipment is within the range of normal commercial shipments of that

product entering into the customs territory of that developing country Member.

The trigger price used to invoke the provisions of this subparagraph shall, in general, be based on the

average monthly c.i.f. unit value of the product concerned, or otherwise shall be based on a price that

appropriately reflects the quality of the product and its stage of processing. The trigger price shall, following its

initial use, be publicly disclosed and available to the extent necessary to allow other Members to assess the

additional duty that may be levied.

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JOB(06)/199

Page 41

currency against such international currency or currencies for the three-year period

referred to above.]

Imports under any [bound] tariff quota shall be counted for the purpose of determining the

volume of imports required for invoking the provisions of subparagraph 1(a) and paragraph 4, but

imports within such [bound] tariff quota shall not be affected by any additional duty imposed under

either subparagraph 1(a) and paragraph 4 or subparagraph 1(b) and paragraph 5 below.

Any shipments of the product in question which have been contracted and were en route after

completion of custom clearance procedures in the exporting country before the additional duty is

imposed either under subparagraph 1(a) and paragraph 4 or under subparagraph 1(b) and paragraph 5

shall be exempted from any such additional duty, provided that:

(a)

the volume of such shipments may be counted in the volume of imports of the

product in question during the following year for the purposes of triggering the

provisions of subparagraph 1(a) in that year; or

the price of any such shipment may be used during the following year in determining

the average [import] [monthly] price trigger for the purposes of triggering the

provisions of subparagraphs 1(b) in that year.

Any additional duty imposed under subparagraph 1(a) shall be maintained [for no

more than 12 months after it has been imposed] [only until the end of the year in

which it has been imposed]. [If, import quantities are such that an additional duty

under subparagraph 1(a) is applicable in two consecutive years the additional duty in

the second year shall be two thirds that applicable in the first year. If, import

quantities are such that an additional duty under subparagraph 1(a) is applicable in

three consecutive years the additional duty in the third year shall be one third that

applicable in the first year. No additional duty under subparagraph 1(a) may be

imposed until [ ] years have passed after the third consecutive year of application of

additional duties.

An additional duty imposed under subparagraph 1(a) may only be levied at levels that

do not exceed [20 per cent of the current bound duty.] [those specified in the

following schedule:

(i)

(ii)

where the level of imports during a year does not exceed 105 per cent of the

average import volume, no additional duty may be imposed;

where the level of imports during a year exceeds 105 per cent but does not

exceed 110 per cent of the average import volume, the maximum additional

duty that may be imposed shall not exceed 50 per cent of the bound tariff or

40 percentage points, whichever is higher;

where the level of imports during a year exceeds 110 per cent but does not

exceed 130 per cent of the average import volume, the maximum additional

duty that may be imposed shall not exceed 75 per cent of the bound tariffs or

50 percentage points, whichever is higher; and

where the level of imports during a year exceeds 130 per cent of the average

import volume, the maximum additional duty that may be imposed shall not

exceed 100 per cent of the bound tariff or 60 percentage points, whichever is

higher.]]

(b)

(a)

[(b)

(iii)

(iv)

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[(b)

An additional duty under subparagraph 1(a) may be invoked if imports over the

previous six months are [ ] per cent greater than imports over the same six months

period in the preceding twelve months.

Any additional duty under subparagraph 1(a) and 1(b) above shall not exceed [ ] per

cent of the difference between the Final Bound Rate of duty of the Uruguay Round

and the current Bound Rate in the developing country Member's Schedule. Least-

developed country Members may apply an additional duty of [ ].]

[(a)

Any additional duty imposed under subparagraph 1(b) may be assessed either on a

shipment-by-shipment basis or on an

ad valorem

basis for a duration of no more than

12 months as defined in subparagraph 5(b) below.

In the event that the additional duty is assessed on that product:

(i)

(ii)

on a shipment-by-shipment basis, the additional duty shall not exceed the

difference between the import price of each shipment and the trigger price;

on an

ad valorem

basis, the additional duty shall not exceed the difference

between the import price of the shipment and the trigger price referred to in

subparagraph 1(b) above, expressed as a percentage of that import price;

provided that if at least two subsequent shipments are at import prices that are

5 per cent or more lower than the trigger price referred to in subparagraph

1(b), the developing country Member may shift to the imposition of

additional duty on a shipment-by-shipment basis as set out in subparagraph

5(b)(i) above.]

(b)

[(a)

An additional duty under subparagraph 1(a) may be invoked if the average domestic

prices over the previous [ ] months are [ ] per cent lower than the average domestic

prices over the same six month period in the preceding twelve months.

Any additional duty under subparagraph 1(a) and 1(b) above shall not exceed [ ] per

cent of the difference between the Final Bound Rate of duty of the Uruguay Round

and the current Bound Rate in the developing country Member's Schedule. Least-

developed country Members may apply an additional duty of [ ].]

Any additional duty under subparagraph 1(b) shall apply on a shipment-by-shipment

basis according to the following schedule:

(i)

(ii)

no additional duty may be applied if the import price is less than 20 per cent

below the trigger price defined in subparagraph 1(b);

an additional duty of up to 15 per cent of the difference between the import

price and the trigger price may be applied if the import price is more than

20 per cent but less than, or equal to, 30 per cent below the trigger price;

an additional duty of up to 20 per cent of the difference between the import

price and the trigger price may be applied if the import price is more than

30 per cent but less than, or equal to, 40 per cent below the trigger price;

(b)

[(a)

(iii)

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(iv)

an additional duty of up to 25 per cent of the difference between the import

price and the trigger price may be applied if the import price is more than

40 per cent but less than, or equal to, 50 per cent below the trigger price;

an additional duty of up to 30 per cent of the difference between the import

price and the trigger price may be applied if the import price is more than

50 per cent below the trigger price.

(v)

[The trigger levels under paragraphs 1(a) may be decreased by [20] per cent and under

paragraph 1(b) may be reduced by [20] per cent and the additional duty under subparagraphs 1(a) and

1(b) may be increased by [20] per cent for products the export of which was subsidized by a

developed country Member.]

[Any additional duty under subparagraphs 1(a) or 1(b) shall not exceed [ ] per cent of the

difference between the bound duty applicable in [2007] and the current bound duty.]

For perishable and seasonal products, the conditions set out above shall be applied in such a

manner as to take account of the specific characteristics of such products. In particular, shorter time

periods under subparagraph 1(a) and paragraph 4 may be used in reference to the corresponding

period in the three-year period referred to in subparagraph 1(a) and different trigger prices for

different periods may be used under subparagraph 1(b).

The operation of the special safeguard shall be carried out in a transparent manner. Any

developing country Member taking action under subparagraph 1(a) above shall give notice in writing,

indicating the tariff lines affected by the measure and including relevant data to the extent available,

to the Committee on Agriculture as far in advance as may be practicable and in any event within 30

days of the implementation of such action. A developing country Member taking action under

paragraph 4 shall afford any interested Members the opportunity to consult with it in respect of the

conditions of application of such action. Any developing country Member taking action under

subparagraph 1(b) above shall give notice in writing, indicating the tariff lines affected by the

measure and including relevant data to the extent available, to the Committee on Agriculture within

30 days of the implementation of the first such action or, for perishable and seasonal products, the

first action in any period. Developing country Members undertake, as far as practicable, not to take

recourse to the provisions of subparagraph 1(b) where the volume of imports of the products

concerned are declining. In either case a developing country Member taking such action shall afford

any interested Members the opportunity to consult with it in respect of the conditions of application of

such action.

10.

Where measures are taken in conformity with paragraphs 1 through 7 above, Members

undertake not to have recourse, in respect of such measures, to the provisions of paragraphs 1(a) and 3

of Article XIX of GATT 1994 or paragraph 2 of Article 8 of the Agreement on Safeguards.

[11.

No developing country Member shall take recourse to measures under Article 5 in respect of

any product on which it has imposed additional duties pursuant to the provisions of this Article.]

[12.

This Article shall expire [ ].]

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Annex F

Draft [Indicative List of ]

Tropical Agricultural Products and Products of Particular Importance to the Diversification of

Production from the Growing of Illicit Narcotic Crops

HS4

0602

0603

0604

HS4 DESCRIPTION

Other live plants (including their roots), cuttings and slips; mushroom spawn.

Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh,

dried, dyed, bleached, impregnated or otherwise prepared.

Foliage, branches and other parts of plants, without flowers or flower buds, and grasses, mosses and

lichens, being goods of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed,

bleached, impregnated or otherwise prepared.

Potatoes, fresh or chilled.

Tomatoes, fresh or chilled.

Other vegetables, fresh or chilled.

Vegetables provisionally preserved (for example, by sulphur dioxide gas, in brine, in sulphur water

or in other preservative solutions), but unsuitable in that state for immediate consumption.

Dried leguminous vegetables, shelled, whether or not skinned or split.

Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers

with high starch or inulin content, fresh, chilled, frozen or dried, whether or not sliced or in

the form of pellets; sago pith.

Coconuts, Brazil nuts and cashew nuts, fresh or dried, whether or not shelled or peeled.

Other nuts, fresh or dried, whether or not shelled or peeled.

Bananas, including plantains, fresh or dried.

Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh or dried.

Citrus fruit, fresh or dried.

Melons (including watermelons) and papaws (papayas), fresh.

Other fruit, fresh.

Fruit and nuts, uncooked or cooked by steaming or boiling in water, frozen, whether or not

containing added sugar or other sweetening matter.

Fruit and nuts, provisionally preserved (for example, by sulphur dioxide gas, in brine, in sulphur

water or in other preservative solutions), but unsuitable in that state for immediate consumption.

Fruit, dried, other than that of headings Nos. 08.01 to 08.06; mixtures of nuts or dried fruits of this

Chapter.

Peel of citrus fruit or melons (including watermelons), fresh, frozen, dried or provisionally

preserved in brine, in sulphur water or in other preservative solutions.

Coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes

containing coffee in any proportion.

Tea, whether or not flavoured.

Pepper of the genus Piper; dried or crushed or ground fruits of the genus Capsicum or of the

genus Pimenta.

Vanilla.

Cinnamon and cinnamon-tree flowers.

Cloves (whole fruit, cloves and stems).

Nutmeg, mace and cardamoms.

Seeds of anise, badian, fennel, coriander, cumin or caraway; juniper berries.

Ginger, saffron, turmeric (curcuma), thyme, bay leaves, curry and other spices.

Flour, meal and powder of the dried leguminous vegetables of heading No. 07.13, of sago or of

roots or tubers of heading No. 07.14 or of the products of Chapter 8.

0701

0702

0709

0711

0713

0714

0801

0802

0803

0804

0805

0807

0810

0811

0812

0813

0814

0901

0902

0904

0905

0906

0907

0908

0909

0910

1106

This list is derived from that included in JOB(06)/129 by Bolivia, Colombia, Costa Rica, Ecuador,

Guatemala, Nicaragua, Panama and Peru. The items in bold are also found in the Indicative List of Tropical

Products used in the Uruguay Round.

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HS4

1108

1202

1203

1207

1208

1211

HS4 DESCRIPTION

Starches; inulin.

Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken.

Copra.

Other oil seeds and oleaginous fruits, whether or not broken.

Flours and meals of oil seeds or oleaginous fruits, other than those of mustard.

Plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery,

in pharmacy or for insecticidal, fungicidal or similar purposes, fresh or dried, whether or not

cut, crushed or powdered.

Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh, chilled, frozen or dried,

whether or not ground; fruit stones and kernels and other vegetable products (including unroasted

chicory roots of the variety Cichorium intybus sativum) of a kind used primarily for human

consumption, not elsewhere specified or included.

Lac; natural gums, resins, gum-resins and oleoresins (for example, balsams).

Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other

mucilages and thickeners, whether or not modified, derived from vegetable products.

Vegetable materials of a kind used primarily for plaiting (for example, bamboos, rattans,

reeds, rushes, osier, raffia, cleaned, bleached or dyed cereal straw, and lime bark).

Vegetable materials of a kind used primarily as stuffing or as padding (for example, kapok,

vegetable hair and eel-grass), whether or not put up as a layer with or without supporting

material.

Vegetable materials of a kind used primarily in brooms or in brushes (for example,

broomcorn, piassava, couch-grass and istle), whether or not in hanks or bundles.

Vegetable products not elsewhere specified or included.

Fats of bovine animals, sheep or goats, other than those of heading No. 15.03.

Fats and oils and their fractions, of fish or marine mammals, whether or not refined, but not

chemically modified.

Wool grease and fatty substances derived therefrom (including lanolin).

Soya-bean oil and its fractions, whether or not refined, but not chemically modified.

Ground-nut oil and its fractions, whether or not refined, but not chemically modified.

Palm oil and its fractions, whether or not refined, but not chemically modified.

Sunflower-seed, safflower or cotton-seed oil and fractions thereof, whether or not refined, but not

chemically modified.

Coconut (copra), palm kernel or babassu oil and fractions thereof, whether or not refined, but

not chemically modified.

Other fixed vegetable fats and oils (including jojoba oil) and their fractions, whether or not

refined, but not chemically modified.

Animal or vegetable fats and oils and their fractions, partly or wholly hydrogenated, inter-

esterified, re-esterified or elaidinised, whether or not refined, but not further prepared.

Margarine; edible mixtures or preparations of animal or vegetable fats or oils or of fractions of

different fats or oils of this Chapter, other than edible fats or oils or their fractions of heading No.

15.16.

Animal or vegetable fats and oils and their fractions, boiled, oxidised, dehydrated,

sulphurised, blown, polymerised by heat in vacuum or in inert gas or otherwise chemically

modified, excluding those of heading No. 15.16; inedible mixtures or preparations of animal or

vegetable fats or oils or of fractions of different fats or oils of this Chapter, not elsewhere

specified or included.

Glycerol, crude; glycerol waters and glycerol lyes.

Vegetable waxes (other than triglycerides), beeswax, other insect waxes and spermaceti,

whether or not refined or coloured.

Degras; residues resulting from the treatment of fatty substances or animal or vegetable waxes.

Cane or beet sugar and chemically pure sucrose, in solid form.

Molasses resulting from the extraction or refining of sugar.

Cocoa beans, whole or broken, raw or roasted.

Cocoa shells, husks, skins and other cocoa waste.

1212

1301

1302

1401

1402

1403

1404

1502

1504

1505

1507

1508

1511

1512

1513

1515

1516

1517

1518

1520

1521

1522

1701

1703

1801

1802

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Page 46

HS4

1803

1804

1805

1806

1903

2001

2004

2005

2006

2007

2008

2009

2101

2103

2208

2305

2306

2401

2402

2403

3203

3301

5001

5202

HS4 DESCRIPTION

Cocoa paste, whether or not defatted.

Cocoa butter, fat and oil.

Cocoa powder, not containing added sugar or other sweetening matter.

Chocolate and other food preparations containing cocoa.

Tapioca and substitutes therefore prepared from starch, in the form of flakes, grains, pearls,

siftings or in similar forms.

Vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic

acid.

Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen, other than

products of heading No. 20.06.

Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other

than products of heading No. 20.06.

Vegetables, fruit, nuts, fruit-peel and other parts of plants, preserved by sugar (drained, glacés

or crystallised).

Jams, fruit jellies, marmalades, fruit or nut purée and fruit or nut pastes, being cooked

preparations, whether or not containing added sugar or other sweetening matter.

Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not

containing added sugar or other sweetening matter or spirit, not elsewhere specified or

included.

Fruit juices (including grape must) and vegetable juices, unfermented and not containing added

spirit, whether or not containing added sugar or other sweetening matter.

Extracts, essences and concentrates, of coffee, tea or maté and preparations with a basis of

these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee

substitutes, and extracts, essences and concentrates thereof.

Sauces and preparations therefore; mixed condiments and mixed seasonings; mustard flour and meal

and prepared mustard.

Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 % vol.; spirits,

liqueurs and other spirituous beverages.

Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting

from the extraction of ground-nut oil.

Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting

from the extraction of vegetable fats or oils, other than those of heading No. 23.04 or 23.05.

Unmanufactured tobacco; tobacco refuse.

Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes.

Other manufactured tobacco and manufactured tobacco substitutes; "homogenised" or

"reconstituted" tobacco; tobacco extracts and essences.

Colouring matter of vegetable or animal origin (including dyeing extracts but excluding animal

black), whether or not chemically defined; preparations as specified in Note 3 to this Chapter based

on colouring matter of vegetable or animal origin.

Essential oils (terpeneless or not), including concretes and absolutes; resinoids; extracted

oleoresins; concentrates of essential oils in fats, in fixed oils, in waxes or the like, obtained by

enfleurage or maceration; terpenic by-products of the deterpenation of essential oils; aqueous

distillates and aqueous solutions of essential oils.

Silk-worm cocoons suitable for reeling

Cotton, not carded or combed

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Annex G

[Draft List of Products Relating to Long-standing Preferences and Preference Erosion

]

Importing Member

HS4

0201

0202

HS4 DESCRIPTION

Meat of Bovine Animals

Meat of bovine animals, fresh or chilled

Meat of bovine animals, frozen

Bananas

Bananas, including plantains, fresh or dried.

Sugar

Cane or beet sugar and chemically pure sucrose, in solid form.

Molasses resulting from the extraction or refining of sugar

Other Fruits and Vegetables

Pineapples

Fresh grapes

Unshelled beans "Vigna spp., Phaseolus spp.", prepared or preserved

otherwise than by vinegar or acetic acid (excl. frozen)

Vegetables and mixtures of vegetables, prepared or preserved

otherwise than by vinegar, non-frozen (excl. preserved by sugar...

Pineapples, prepared or preserved, whether or not containing added

sugar or other sweetening matter or spirit...

Citrus fruit, prepared or preserved, whether or not containing added

sugar or other sweetening matter or spirit nes

Frozen orange juice, unfermented, whether or not containing added

sugar or other sweetening matter (excl. containing spirit)

Grapefruit juice, unfermented, Brix value > 20 at 20°C, whether or not

containing added sugar or other sweetening matter...

Beverages and Spirits

Undenatured ethyl alcohol, of actual alcoholic strength greater or equal

to 80%

Rum and raffia

0803

EC and United States

1701

1703

United States

Ex 0804

Ex 0806

Ex 2005

Ex 2008

Ex 2009

Ex 2207

Ex 2208

This list is derived from the WTO Staff Working Paper, "Non-Reciprocal Preference Erosion Arising

From MFN Liberalization in Agriculture: What Are The Risks?" and included in the Chairman's reference paper

on long-standing preferences and preference erosion (document number 3842).

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[Provisional Indicative List of Products Relating to Long-Standing Preferences

]

HS4

0201

0202

0207

0602

0603

0703

0708

0709

0710

0714

HS4 Description

Meat of bovine animals, fresh or chilled

Meat of bovine animals, frozen

Meat and edible offal, of the poultry of heading No 0105, fresh, chilled or frozen

Other live plants (including their roots), cuttings and slips; mushroom spawn

Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes, fresh,

dried, dyed, bleached, impregnated or otherwise prepared

Onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled

Leguminous vegetables, shelled or unshelled, fresh or chilled

Other vegetables, fresh or chilled

Vegetables (uncooked or cooked by steaming or boiling in water), frozen

Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers

with high starch or inulin content, fresh, chilled, frozen or dried, whether or not sliced or in the

form of pellets; sago pith

Other nuts, fresh or dried, whether or not shelled or peeled

Bananas, including plantains, fresh or dried

Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh or dried

Grapes, fresh or dried

Melons (including watermelons) and papaws (papayas), fresh

Apples, pears and quinces, fresh

Other fruit, fresh

Fruit, dried, other than that of headings 0801 to 0806; mixtures of nuts or dried fruits of this

chapter

Vanilla

Wheat and meslin

Rye

Rice

Cereal flours other than of wheat or meslin

Cereal groats, meal and pellets

Ground-nut oil and its fractions, whether or not refined, but not chemically modified

Palm oil and its fractions, whether or not refined, but not chemically modified

Coconut (copra), palm kernel or babassu oil and fractions thereof, whether or not refined, but

not chemically modified

Cane or beet sugar and chemically pure sucrose, in solid form

Molasses resulting from the extraction or refining of sugar

Cocoa butter, fat and oil

Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example,

corn flakes); cereals (other than maize (corn)) in grain form or in the form of flakes or other

worked grains (except flour, groats and meal), pre-cooked or ot

Tomatoes prepared or preserved otherwise than by vinegar or acetic acid

Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen,

other than products of heading No 2006

Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not

containing added sugar or other sweetening matter or spirit, not elsewhere specified or

included

0802

0803

0804

0806

0807

0808

0810

0813

0905

1001

1002

1006

1102

1103

1508

1511

1513

1701

1703

1804

1904

2002

2005

2008

This list was submitted by the ACP Group in JOB(06)/204 of 21 June 2006.

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HS4

2009

2101

HS4 Description

Fruit juices (including grape must) and vegetable juices, unfermented and not containing added

spirit, whether or not containing added sugar or other sweetening matter

Extracts, essences and concentrates, of coffee, tea or maté and preparations with a basis of

these products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee

substitutes, and extracts, essences and concentrates thereof

Sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and

meal and prepared mustard

Wine of fresh grapes, including fortified wines; grape must other than that of heading No 2009

Undenatured ethyl alcohol of an alcoholic strength by volume of 80 % vol or higher; ethyl

alcohol and other spirits, denatured, of any strength

Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 % vol; spirits,

liqueurs and other spirituous beverages

Preparations of a kind used in animal feeding

Unmanufactured tobacco; tobacco refuse

Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes

2103

2204

2207

2208

2309

2401

2402

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ANNEX H

AGREEMENT ON AGRICULTURE: ANNEX 2

Running list of proposed changes to paragraphs 2 through 13

Government Service Programmes

General services (paragraph 2)

(i)

Add the following subparagraph (h), including a footnote, to the existing paragraph 2:

(h) agrarian, land and institutional reform[, and any other programmes related to food and

livelihood security and rural development, in developing country Members,] including

services related to such [reform and other] programmes.

Text of footnote 1:

Such reform and other programmes include, inter alia, settlement

programmes, issuance of property titles, employment assurance, [provision of

infrastructure,] nutritional security, poverty alleviation, soil conservation and resource

management, and drought management and flood control.

(ii)

Add the following subparagraph (h) to the existing paragraph 2:

(h) services relating to agrarian, land and institutional reform, food and livelihood security

and rural development, including issuance of property titles, employment assurance,

nutritional security, poverty alleviation, soil conservation and resource management,

and drought management and flood control.

(iii) Add the following subparagraph (h) to the existing paragraph 2:

(h) Policies and services related to farmer settlement, land reform and the redress of

historical land ownership structures in developing country Members. These services

may include the provision of infrastructure, land rehabilitation, soil conservation and

food security programmes to promote rural development and poverty alleviation

Public stockholding for food security purposes

(paragraph 3)

(i)

Modify the existing footnote 5 as follows:

For the purposes of paragraph 3 of this Annex, governmental stockholding programmes

for food security purposes in developing countries whose operation is transparent and

conducted in accordance with officially published objective criteria or guidelines shall be

considered to be in conformity with the provisions of this paragraph, including

programmes under which stocks of foodstuffs for food security purposes are acquired and

released at administered prices, provided that the difference between the acquisition price

and the external reference price is accounted for in the AMS.

(ii)

Add text at the end of the existing footnote 5:

...

However, acquisition of stocks of foodstuffs by developing country Members with the

objective of supporting low-income or resource-poor producers shall not be required to

be accounted for in the AMS.

The following symbols have been used:

1) Italicised text in bold indicates proposed additions/revisions and strike-out indicates proposed deletions of the

relevant provisions of the Agreement on Agriculture.

2) Square-bracketed text indicates alternative proposals.

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Domestic food aid

(paragraph 4)

(i)

Modify the existing footnote 5&6 as follows:

5&6

For the purposes of paragraphs 3 and 4 of this Annex,

the acquisition of foodstuffs at

subsidized prices when procured generally from low-income or resource-poor

producers in developing country Members with the objective of fighting hunger and

rural poverty, as well as

the provision of foodstuffs at subsidized prices with the objective

of meeting food requirements of urban and rural poor in developing countries on a regular

basis at reasonable prices shall be considered to be in conformity with the provisions of

this paragraph.

Direct payments to producers (paragraph 5)

(i)

Add text at the end of the first sentence and modify the second sentence of the existing

paragraph 5 as follows:

(a)

Support provided through direct payments (or revenue foregone, including payments in

kind) to producers for which exemption from reduction commitments is claimed shall

meet the basic criteria set out in paragraph 1 above, plus specific criteria applying to

individual types of direct payment as set out in paragraphs 6 through 13 below.

Direct

payments shall not be linked to production levels, including input levels therein. When

Members make such payments, they shall notify the base period and all other relevant

criteria, as well the laws, regulations, and administrative decisions of such programmes

made under this provision. Further notifications under paragraph 5(a) shall include

regular and periodic information on how the programmes under this provision achieve

the stated objectives.

(b)

Where exemption from reduction is claimed for any existing or new type of direct

payment other than those specified in paragraphs 6 through 13, it shall conform to criteria

(b) through (e) in paragraph 6, in addition to the general criteria set out in paragraph 1.

(ii)

Modify the existing paragraph 5 as follows.

Support provided through direct payments (or revenue foregone, including payments in

kind) to producers for which exemption from reduction commitments is claimed shall

meet the basic criteria set out in paragraph 1 above, plus specific criteria applying to

individual types of direct payment as set out in paragraphs 6 through 13 below. Where

exemption from reduction is claimed for any existing or new type of direct payment other

than those specified in paragraphs 6 through 13, it shall conform to criteria (b) through (e)

in paragraph 6, in addition to the general criteria set out in paragraph 1.

(iii) Add text at the end of the existing paragraph 5:

...

On-going payments shall be based on activities in a defined, fixed and unchanging

historical base period.

(iv)

Add subparagraph (c) and modify the existing paragraph 5 as follows:

(a)

Support provided through direct payments (or revenue foregone, including payments in

kind) to producers for which exemption from reduction commitments is claimed shall

meet the basic criteria set out in paragraph 1 above, plus specific criteria applying to

individual types of direct payment as set out in paragraphs 6 through 13 below.

(b)

Where exemption from reduction is claimed for any existing or new type of direct

payment other than those specified in paragraphs 6 through 13, it shall conform to criteria

(b) through (e) in paragraph 6, in addition to the general criteria set out in paragraph 1.

(c)

Transparency and Reporting (to be developed)

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Decoupled income support (paragraph 6)

(i)

Modify the existing subparagraphs (a) and (e) and add a subparagraph (f) as follows:

(a) Eligibility for such payments shall be determined by clearly-defined criteria such as

low levels of

income, status as a producer or landowner, factor use or production

landholding and production

level in

notified,

defined and fixed

and unchanging

base

period.

Developing country Members who have not previously made use of this type of

payment, and thus have not notified, shall not be precluded from establishing an

appropriate base period

, which shall be fixed and unchanging and shall be notified.

(e)

Land, labour, or any other factor of production shall not be required to be in

"agricultural use" and

no production shall be required in order to receive payments.

(f)

Such payments shall not be made in conjunction with AMS support and support under

Article 6.5, if the sum of such support, as appropriate

, exceeds X per cent of the annual

value of production of a given product.

Text of footnote 7:

Developing country Members may not have the capacity to fully

assess the impact of innovation in their agricultural policies. Accordingly, the base

period of a time-limited experimental or pilot programme may not be taken as the fixed

and unchanging base period for the purposes of this paragraph.

Note 8: This is without prejudice to the final outcome of the negotiations of the amendment of

Article 6.5.

(ii)

Modify the existing subparagraph (a) as follows:

(a) Eligibility for such payments shall be determined by clearly-defined criteria such as

income, status as a producer or landowner, factor use or production level in a defined and

fixed

and unchanging historical

base period.

Government financial participation in income insurance and income safety-net programmes

(paragraph 7)

(i)

Modify subparagraphs (a) and (b) as follows:

(a) Eligibility for such payments shall be determined by an income loss, taking into account

only income derived from agriculture, which exceeds 30 per cent of average gross income

or the equivalent in net income terms (excluding any payments from the same or similar

schemes) in the preceding three-year period or a three-year average based on the

preceding five-year period, excluding the highest and the lowest entry,

or in the case of a

developing country Member, in accordance with specific criteria which shall be defined

in national legislation

. Any producer meeting this condition shall be eligible to receive

the payments.

Text of footnote 9:

Includes administrative orders and regulations made by the

designated competent authorities.

(b) The amount of such payments shall compensate

only up to

for less than 70 per cent of the

producer's income loss in the year the producer becomes eligible to receive this

assistance.

In the case of a developing country Member, compensation shall only be up

to a certain proportion of the producer's income which shall be defined in national

legislation

Text of footnote 10:

Includes administrative orders and regulations made by the

designated competent authorities.

(ii)

Add two footnotes to the existing subparagraphs (a) and (b):

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Page 53

(a) Eligibility for such payments shall be determined by an income loss

, taking into account

only income derived from agriculture, which exceeds 30 per cent of average gross income

or the equivalent in net income terms (excluding any payments from the same or similar

schemes) in the preceding three-year period or a three-year average based on the

preceding five-year period, excluding the highest and the lowest entry. Any producer

meeting this condition shall be eligible to receive the payments.

Text of the footnote 1:

Developing country Members may determine the income loss on

an aggregate basis of the agriculture sector as a whole (i.e. not on an individual basis)

at either a national or regional level.

(b) The amount of such payments shall compensate for less than 70 per cent of the producer's

income loss

in the year the producer becomes eligible to receive this assistance.

Text of footnote 2:

If developing country Members have based the eligibility criteria in

7(a) above on an aggregate basis of the agriculture sector as a whole, the total amount

of payments shall compensate for less than 70 per cent of the aggregate income loss of

the agriculture sector as a whole.

(iii) Modify the existing subparagraphs (a) and (b) as follows:

(a) Eligibility for such payments shall be determined by an income loss

of the farm

enterprise as a whole,

taking into account only income derived from agriculture, which

exceeds 30 per cent of

the reference income, which is

average gross income or the

equivalent in net income terms (excluding any payments from the same or similar

schemes) in the preceding three

five-year

period or a three-year average based on the

preceding five-year period, excluding the highest and the lowest entry. Any producer

meeting this condition shall be eligible to receive the payments

from the government.

(b) The amount of such payments

by governments

shall compensate for less than 70 per cent

of the producer's income loss in the year the producer becomes eligible to receive this

assistance

raise the producer's reference income to no more than 70 per cent of the

producer's reference income.

(iv)

Modify the existing subparagraphs (a), (b) and (c) as follows:

(a) Eligibility for such payments shall be determined by an income loss, taking into account

only income derived from agriculture, which exceeds 30 per cent of

the reference

income, which is

average gross income or the equivalent in net income terms (excluding

any payments from the same or similar schemes) in the preceding three

five-year

period or

a three-year average based on the preceding five-year period, excluding the highest and

the lowest entry. Any producer meeting this condition shall be eligible to receive the

payments

from the government.

(b) The amount of such payments

by governments

shall

in the year the producer is eligible

to receive this assistance, raise the producer's income to no more than 70 per cent of

the producer's reference income.

compensate for less than 70 per cent of the producer's

income loss in the year the producer becomes eligible to receive this assistance.

derived from agriculture of

the farm enterprises' as a whole;

it shall not relate to the type or volume of production

(including livestock units) undertaken by the producer; or to the prices, domestic or

international, applying to such production; or to the factors of production employed.

(v)

Modify the existing subparagraphs (a) and (b) as follows:

(a) Eligibility for such payments shall be determined by an income loss, taking into account

only income derived from agriculture, which exceeds 30 per cent of

the reference

income, which is

average gross income or the equivalent in net income terms (excluding

any payments from the same or similar schemes) in the preceding three

minimum five-

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JOB(06)/199

Page 54

year period or a three-year average based on the preceding five-year period, excluding the

highest and the lowest entry. Any producer meeting this condition shall be eligible to

receive the payments

directly or indirectly from the government.

(b) The amount of such payments,

directly or indirectly from the government, shall,

shall

compensate for less than 70 per cent of the producer's income loss in the year the

producer becomes eligible to receive this assistance

contribute only up to 70 per cent of

the producer's reference income.

Payments (made either directly or by way of government financial participation in crop insurance

schemes) for relief from natural disasters (paragraph 8)

(i)

Modify subparagraphs (a) and (b) as follows:

(a) Eligibility for such payments shall arise only following a formal recognition by

government authorities that a natural disaster or like disaster (including disease outbreaks,

pest infestations, nuclear accidents, and war on territory of the Member concerned) has

occurred or is occurring; and shall be determined by a production loss which exceeds

30 percent of the average of production in the preceding three-year period or a three-year

average based on the preceding five-year period, excluding the highest and the lowest

entry,

or in the case of a developing country Member, in accordance with specific

criteria which shall be defined in national legislation

Text of footnote 11:

Includes administrative orders and regulations made by the

designated competent authorities.

(b) Payments made following a disaster shall be applied only in respect of losses of income,

crop,

livestock (including payments in connection with the veterinary treatment of

animals), land or other production factors due to the natural disaster

or other disaster

question.

(ii)

Add a footnote to the existing subparagraph (a):

(a) Eligibility for such payments shall arise only following a formal recognition by

government authorities that a natural disaster or like disaster (including disease outbreaks,

pest infestations, nuclear accidents, and war on territory of the Member concerned) has

occurred or is occurring; and shall be determined by a production loss

which exceeds

30 percent of the average of production in the preceding three-year period or a three-year

average based on the preceding five-year period, excluding the highest and the lowest

entry.

Text of footnote 3:

Developing country Members may determine the production loss of

the affected sector(s) or region(s) on an aggregate basis.

(iii) Modify subparagraph (a) as follows:

(a) Eligibility for such payments shall arise only following a formal recognition by

government authorities that a natural disaster or like disaster (including disease outbreaks,

pest infestations, nuclear accidents, and war on territory of the Member concerned) has

occurred or is occurring; and shall be determined by a production loss which exceeds

30 percent of the average of production in the preceding three-year period or a three-year

average based on the preceding five-year period, excluding the highest and the lowest

entry.

In the case of developing country Members, payments for relief from natural

disasters may be provided to producers when the estimated production loss is less than

30 per cent of the average of production in the preceding three-year period or a three-

year average based on the preceding five-year period.

(iv)

Add to the existing subparagraph (a) and modify the existing subparagraph (b) as follows:

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Page 55

(a) Eligibility for such payments shall arise:

(i)

In the case of direct payments related to disasters

only following a formal

recognition by government authorities that a natural or like disaster (including

disease outbreaks, pest infestations, nuclear accidents, and war on the territory of the

Member concerned) has occurred or is occurring; and shall be determined by a

production loss which exceeds 30 per cent of the average of production in the

preceding three

five-year

period or a three-year average based on the preceding

five-year period, excluding the highest and the lowest entry.

(ii)

In the case of government financial participation in crop or production insurance

schemes, eligibility for such payments shall be determined by a production loss

which exceeds 30 per cent of the average of production in a period demonstrated to

be actuarially appropriate.

(iii)

In the case of the destruction of animals or crops to control or prevent pests,

diseases, disease-carrying organisms or disease-causing organisms named in

national legislation or international standards, the production loss may be less

than the 30 per cent of the average of production referred to above.

(b) Payments made following a disaster shall be applied only in respect of losses of income,

crops,

livestock (including payments in connection with the veterinary treatment of

animals), land or other production factors due to the natural disaster in question.

(v)

Add to the existing subparagraph (a) and modify the existing subparagraphs (b) and (d) as

follows:

(a)

Eligibility for such payments shall arise:

(i)

In the case of direct payments related to disasters

Eligibility for such payments shall

arise only following a formal recognition by government authorities that a natural or

like disaster (including disease outbreaks, pest infestations, nuclear accidents, and

war on the territory of the Member concerned) has occurred or is occurring; and

shall be determined by a production loss which exceeds 30 per cent of the average of

production in the preceding three

five-year

period or a three-year average based on

the preceding five-year period, excluding the highest and the lowest entry.

(ii) In the case of government financial participation in crop insurance schemes,

eligibility for such payments shall be determined by a production loss which

exceeds 30 per cent of the average of production in an actuarially appropriate

period.

(iii) In the case of the destruction of animals or crops to control or prevent diseases

named in legislation or international standards, the production loss may be less

than the 30 per cent of the average of production referred to above.

(b) Payments made following a disaster

under Paragraph 8

shall be applied only in respect of

losses of income, livestock (including payments in connection with the veterinary

treatment of animals), land or other production factors

or destruction of animals or crops

due to the natural disaster in question.

(d) Payments made during a disaster

under Paragraph 8

shall not exceed the level required to

prevent or alleviate further loss as defined in criterion (b) above.

(vi) Add to the existing subparagraph (a) and modify the existing subparagraphs (b) and (d) as

follows:

(a) Eligibility for such payments shall arise:

(i)

In the case of direct payments, eligibility

shall arise, only following a formal

recognition by government authorities that a natural or like disaster (including

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Page 56

disease outbreaks, pest infestations, nuclear accidents, and war on the territory of the

Member concerned) has occurred or is occurring; and shall be determined by a

production loss which exceeds 30 per cent of the average of production in the

preceding

minimum five-year

three-year period or a three-year average based on the

preceding five-year period, excluding the highest and the lowest entry.

(ii) In the case of government financial participation in production insurance

schemes, eligibility shall be determined by a production loss which exceeds 30 per

cent of the average of production in a period that is actuarially appropriate.

(iii) Where payments under this paragraph are made in respect of the destruction of

animals or crops to control or prevent a disease identified by an appropriate

authority, may arise when the production loss is less than the 30 per cent of the

average of production referred to in paragraph 8(a)(i) or 8(a)(ii), as applicable.

(b) Payments made

under this paragraph

following a disaster shall be applied only in respect

of losses of income, livestock (including payments in connection with the veterinary

treatment of animals), land or other production factors due to the natural disaster

destruction of animals or crops

in question.

(d) Payments made

under this paragraph

during a disaster shall not exceed the level required

to prevent or alleviate further loss as defined in criterion (b) above.

Structural adjustment assistance provided through investment aids (paragraph 11)

(i)

Modify the existing subparagraph (b) as follows:

(b) The amount of such payments in any given year shall not be related to, or based on, the

type or volume of production (including livestock units) undertaken by the producer in

any year after

a fixed and unchanging

base period, other than as provided for under

criterion (e) below.

Developing country Members who have not previously [made use of

this type of payment, and thus have not notified] [notified the usage of this type of

payment], shall not be precluded from establishing an appropriate base period [

which shall be fixed and unchanging and shall be notified].

Text of footnote 12:

Developing country Members may not have the capacity to fully

assess the impact of innovation in their agricultural policies. Accordingly, the base

period of a time-limited experimental or pilot programme may not be taken as the fixed

and unchanging base period for the purposes of this paragraph.

(ii)

Add at the end of subparagraph (a) and modify the existing subparagraph (b) as follows:

(a) ...

Such structural disadvantages must be clearly defined.

(b) The amount of such payments in any given year shall not be related to, or based on, the

type or volume of production, [the

use of factors of production,] or inputs into the

production

(including livestock units) undertaken by the producer in any year after

fixed and unchanging historical

the base period, other than as provided for under

criterion (e) below.

The base period shall be notified.

Payments under environmental programmes (paragraph 12)

(i)

Add the following subparagraph (c) to the existing paragraph 12:

made by developing country Members.

(ii)

Modify the existing subparagraph (b) as follows:

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Page 57

(b) The amount of payment shall be limited to the extra costs or loss of income

involved in

complying with the government programme and not be related to or based on the

volume of production.

Payments under regional assistance programmes (paragraph 13)

(i)

Add text at the end of subparagraph (a) and modify the existing subparagraph (b) as follows:

(a)

...

Developing country Members shall be exempted from the condition that

disadvantaged regions must constitute a clearly designated contiguous geographical

area with a definable economic and administrative identity.

(b) The amount of such payments in any given year shall not be related to, or based on, the

type or volume of production (including livestock units) undertaken by the producer in

any year after the

fixed and unchanging historical

base period,

which shall be notified,

other than to reduce that production.

Developing country Members who have not

previously made use of this type of payment, and thus have not notified, shall not be

precluded from establishing an appropriate base period

, which shall be fixed and

unchanging and shall be notified.

Text of footnote 13:

Developing country Members may not have the capacity to fully

assess the impact of innovation in their agricultural policies. Accordingly, the base

period of a time-limited experimental or pilot programme may not be taken as the fixed

and unchanging base period for the purposes of this paragraph.

(ii)

Add text at the end of subparagraph (a) and modify the existing subparagraphs (b) and (f) as

follows:

(a)

...

Developing country Members will be exempt from the condition that the

disadvantaged region be a clearly designated contiguous geographical area with a

definable economic and administrative identity.

(b) The amount of such payments in any given year shall not be related to, or based on, the

type or volume of production (including livestock units) undertaken by the producer in

any year after the

fixed and unchanging historical

base period,

which shall be notified,

other than to reduce that production.

Developing country Members should not be

precluded from utilizing this kind of payment in the future in the event that no base

period was notified. An appropriate base period which shall fixed and unchanging and

shall be established and notified.

(f)

The payments shall be limited to the extra costs or loss of income involved in undertaking

agricultural production

(including livestock production)

in the prescribed area.

(iii) Add text at the end of the existing subparagraph (a) as follows:

(a) ...

Developing country Members shall be exempted from the condition that

disadvantaged regions must constitute a clearly designated contiguous geographical

area with a definable economic and administrative identity.

(iv)

Modify the existing subparagraph (b) as follows:

(b) The amount of such payments in any given year shall not be related to, or based on, the

type or volume of production (including livestock units) undertaken by the producer in

any year after the

fixed and unchanging historical

base period,

which shall be notified,

other than to reduce that production.

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Page 58

NNEX

OSSIBLE

RTICLE

10.2

OF THE

GREEMENT ON

GRICULTURE

XPORT

REDITS

, E

XPORT

REDIT

UARANTEES OR

NSURANCE

ROGRAMMES

General Provisions

Subject to the provisions of this Article, Members shall not, directly or indirectly, provide

support or enable support to be provided for, or in connection with, the financing of exports of

agricultural products, including the credit and other risks associated therewith [, otherwise than on

market related terms and conditions]. Each Member accordingly undertakes not to provide export

financing support otherwise than in conformity with this Article [and with the commitments as

specified in Members schedules].

Forms and Providers of Export Financing Support Subject to Discipline

For the purpose of this Article, the term "export financing support" includes any of the

following forms of support for, or in connection with, the financing of exports of agricultural

products:

(a)

(b)

(c)

direct financing support, comprising direct credits/financing, refinancing, and interest

rate support;

risk cover, comprising export credit insurance or reinsurance and export credit

guarantees;

government-to-government credit agreements covering the imports of agricultural

products exclusively from the creditor country under which some or all of the risk is

undertaken by the government of the exporting country; and

any other form of governmental export credit support, direct or indirect, including

deferred invoicing and foreign exchange risk hedging.

(d)

The provisions of this Article shall apply to export financing support provided by or on behalf

of the following entities, hereinafter referred to as "export financing entities", whether such entities

are established at the national or at the sub-national level:

(a)

(b)

government departments, agencies, or statutory bodies;

any financial institution or entity engaged in export financing in which there is

governmental participation by way of equity, provision of loans or underwriting of

losses; [and]

[agricultural export state trading enterprises; and]

any bank or other private financial, credit insurance or guarantee institution which

acts on behalf of or at the direction of governments or their agencies.

(c)

(d)

Terms and Conditions

Export financing support shall be provided in conformity with terms and conditions set out

below. Such conforming export financing support [shall be deemed to comply with paragraph 1

above.] [shall not be deemed not to be an export subsidy for the purposes of this Agreement or of any

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Page 59

of the WTO Agreements nor shall such support be deemed a non-commercial transaction for the

purposes of Article 10.1 of the Agreement on Agriculture.] [Furthermore, support in the form of

export credit insurance, reinsurance or guarantees shall not be provided in respect of export financing

contracts whose terms and conditions are not otherwise in conformity with the provisions of this

paragraph.]

(a)

Maximum repayment term:

The maximum repayment term of a supported export

credit, the period beginning at the starting point of credit

and ending on the

contractual date of the final payment, shall be no more than 180 days

[4]

[without

exception.][except for:

(i)

(ii)

(iii)

breeding stock; for which the maximum repayment period shall be [36]

months;

agricultural vegetable reproduction material, for which the maximum

repayment period shall be [12] months;

all agricultural products exported to least-developed and net food-importing

developing countries (as set out in paragraph 7.12), for which the maximum

repayment period shall be [36] months; and

all agricultural products to developing country Members under exceptional

circumstances (as set out in paragraph 7.13), in which case the maximum

repayment period shall be [36] months.]

(iv)

(b)

Payment of interest:

Interest shall be payable. "Interest" excludes premiums and

other charges for insuring or guaranteeing supplier or financial credits, banking fees

or commissions relating to the export credit, and withholding taxes imposed by the

importing country.

Minimum interest rate:

The applicable Libor (London Interbank Offered Rate) for

the currency in which the credit is denominated (not inclusive of and separate from

risk-premium reflective of, as the case may be, the buyer/commercial,

country/political and sovereign credit risks covered) plus [a fixed margin of [ ] basis

points] [an appropriate margin sufficient] to cover the cost of extending such

financing (e.g. administrative or transaction costs) shall be applicable in respect of

[direct financing support] [export financing support] and in respect of invoiced

amounts benefiting from deferred payment under an export contract.

Premiums in respect of coverage of risks of non-repayment under direct

financing

support,

export

credit

guarantees

export

credit

[5]

insurance/reinsurance:

Premiums shall be charged, shall [be market-based] [or]

[be risk-based], [not undercut private market pricing], [and shall be adequate to cover

(c)

(d)

The "starting point of a credit" shall be [no later than the weighted mean date or actual date of the

arrival of the goods in the recipient country for a contract under which shipments are made in any

consecutive six-month period] [the date of the contract of sale for the purposes of export] [the date of

export].

[In case of non-payment within the agreed re-payment period the exporter shall be entitled to claim

indemnification from the export credit agency only within a fixed period of time which shall not exceed

[ ] months.]

Premiums shall be defined as [ ]

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Page 60

operating costs

[6]

and losses

[7]

over a period of [ ]] [and shall ensure that the

programme or part of the programme which is subject to the provisions of these

disciplines is self-financing as defined in paragraph 3.4(g)].

Premiums shall be

expressed in percentages of the outstanding principal value of the credit and shall be

payable in full [at the date of issuance of cover] [or] [no later than the end if the

month following the month in which the exports are made]. Premium rebates shall

not be accorded.

(e)

Risk sharing:

Cover provided in the form of [export credit insurance, reinsurance or

export credit guarantees] [export financing support] shall not exceed [ ] per cent of

the value of a transaction.

Foreign exchange risk:

Export credits, export credit insurance, export credit

guarantees, and related financial support shall be provided in freely traded currencies.

Foreign exchange exposure deriving from credit that is repayable in the currency of

the importer shall be fully hedged, such that the market risk and credit risk of the

transaction to the supplier/lender/guarantor is not increased. The cost of the hedge

shall be incorporated into and be in addition to the premium rate determined in

accordance with this paragraph.

Self-Financing:

Export financing support programmes or parts thereof which are

subject to the provisions of this Article shall be self-financing. Self-financing shall

be considered as the ability of such programmes, or parts thereof, to operate in a

manner by which the premiums charged cover all operating costs and losses over a

period of [1-15] years. [For this purpose, the providers of export financing support

shall keep separate accounting of the programmes covered by this Article according

to appropriate accounting standards [set out in Annex ... to be developed].]

[Loss

preventative measures:

[In the event of an impending or actual default, the

export credit financing entity may employ loss preventative measures to minimize

losses. Immediate debt recovery efforts are preferred. Where immediate debt

recoveries are not practicable, other loss preventative measures may include a

multilateral

pari passu,

rescheduling of debt or a bilateral restructuring of debt. Other

than as may be agreed in multilateral

pari passu,

rescheduled debt, debts with respect

to which less than [ ] per cent of principal has been recovered in [ ] years shall be

considered as unrecoverable to the extent of such unrecovered amount. Such

unrecovered amounts and any debt forgiveness provided to the obligor shall be

considered a loss to the export credit financing entity.] [Other than may be agreed

multilaterally,

pari passu

rescheduling debt arrangements, debts shall not be

rescheduled or otherwise restructured in a manner that results in circumvention of the

terms and conditions of this paragraph.]]

[Financing

calculations:

For the purpose of determining whether a loan guarantee

by a government in connection with an agricultural export confers a benefit, any

comparison of the amount that the firm receiving the government guaranteed loan and

the amount that the firm would pay on a comparable commercial loan absent the

government guarantee or insured loans must be made on a direct one-to-one

comparison basis. The terms and conditions must be for the same or equal for each

of: tenor; form of repayment obligation; credit rating of obligor; risk rating of

country; and the time period within which the loan is offered. In addition, the

difference between the two amounts shall be adjusted for any difference in fees.]

(f)

(g)

(h)

(i)

Operating costs shall be defined as [ ]

Operating losses shall be defined as [ ]

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Non-conforming Financing Support

Export financing support, which does not conform with the provisions of paragraph 3.4 of this

Article or which is provided in circumstances as may otherwise be allowable under Article 9 of this

Agreement, hereinafter referred to as "non-conforming export financing", constitute export subsidies

for the purposes of this Agreement and are therefore, [subject to specific export financing elimination

commitments contained in Members’ Schedules] [to be prohibited by [ ]] [to be eliminated within the

binding levels of Members' export subsidies elimination Schedules].

Implementation

[The following additional and specific disciplines shall be phased in from the first day of the

implementation period of the Doha Round: [ ].]

[Over the implementation period the scope of permitted export financing instruments shall be

reduced to only pure risk cover comprising export credit insurance or reinsurance and export credit

guarantees according to the following timetable [ ].]

Other Issues

Members who operate export financing programmes in accordance with the provisions of this

Article [, excluding least-developed country Members,] shall comply with the following transparency

requirements:

(a)

[on the day of the entry into force of these provisions, Members concerned shall

submit a notification concerning that Member's export financing programmes, export

financing bodies and other related matters in the years [ ] to [ ] in accordance with the

format specified in Annex [to be developed] hereto;

After the entry into force of this Agreement the notification under paragraph 6.8(a)

shall be updated at the beginning of each subsequent year;

At not less than [ ] monthly intervals Members shall submit a notification to the

Committee on Agriculture in which details are provided of export financing

commitments entered into in accordance with the format specified in Annex [to be

developed] hereto. For each export financing programme, the notification shall

include accounting information referred to under the self-financing provisions

indicating whether the programme was self-financing during the previous year;

A Member whose export financing programmes are not in conformity with the

disciplines and the self-financing principle shall provide the Committee on

Agriculture information on any corrective action taken or envisaged to bring the

programme back into conformity.]

(b)

(c)

(d)

(a)

[no later than three months after the entry into force of this Article each Member shall

notify the Committee on Agriculture of any export financing support entity that

exceeds the maximum repayment term of 180 days and is not covered by the

exceptions in paragraph 3.4(a). Failure to notify shall result in prohibition of use of

such programmes;

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(b)

Each Member operating a non-conforming export financing support entity shall

annually notify the Committee on Agriculture, at the beginning of each subsequent

year, all relevant data;

Each Member shall annually notify the Committee on Agriculture, at the beginning of

each subsequent year, of the following information for each entity providing export

financing support. If funds are provided in a foreign currency other than the

Member's national currency, then the repayment and interest shall be converted to the

Member's national currency using prevailing market exchange rates at the time funds

are received. The notifications shall include the following data:

(i)

the value of all direct financing support comprising direct credits, refinancing

and interest rate support granted, including any government-to-government

transactions the value of all risk cover extended in the form of export credit

insurances, reinsurance and export credit guarantees, including any

government-to-government transactions; and the value of all other support,

including, but not limited to, deferred invoicing and foreign exchange risk

hedging;

the total amount of funds from all sources including national accounts used to

pay claims and the total amount of reimbursements of funds to such sources

including national accounts in respect of such claims;

the total amount of revenue earned from premiums charged and interest

earned; and

the total amount of operating costs, losses, and the amount of debt forgiven

and written off.

(c)

(ii)

(iii)

(iv)

(d)

If a Member's annual notification for any export financing support entity, for three

consecutive years, reflects that the total amount of revenue earned from premiums

charged and interest earned on premium revenue is less than the total of operating

costs and losses, then the Member shall provide a narrative statement to explain the

progress towards self-sustaining activity in the next year's report including specific

actions to increase premiums, reduce risk exposure, reduce operating costs and/or

recover losses.]

Special and Differential Treatment

[Developing countries providers of export credits shall be eligible to benefit from the

following elements:

(a)

[Non-conforming export financing support, as defined in paragraph 4.5, shall be

[subject to specific export financing elimination commitments contained in

developing country Members' Schedules] [be prohibited by [ ] for developing

countries] [be eliminated within the binding levels of developing country Members'

export subsidies elimination Schedules];]

[The specific disciplines set out in paragraph 5.6][The following additional and

specific disciplines] shall be phased in from [ ]: ;]

(b)

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(c)

(d)

(e)

[The provisions of paragraph 5.7, shall be implemented according to the following

timetable [ ];]

[The maximum repayment period under paragraph 3.4(a) shall be no more than [ ]

days;]

[The minimum interest rate as provided for under paragraph 3.4(c) may be adjusted to

take into account withholding taxes on international borrowings and additional

borrowings for capital required to conform to Basel II norms. Such elements shall

not be considered export subsidies for the purpose of this Article;]

[The premiums charged in accordance with paragraph 3.4(d) may be market-based

and premium rebates may be provided for under the following circumstances [ ];]

[With respect to the risk sharing provisions contain in paragraph 3.4(e), 100 per cent

of the value of the transaction may be covered in the form of [export credit insurance,

reinsurance or export credit guarantees] [export financing support];]

[As an exception to the provisions of paragraph 3.4(f), developing country Members

may hedge in non-freely traded currencies;]

[The self-financing period contained in paragraph 3.4(g) for developing countries

shall be [at least] [ ] years;]

[For the purpose of paragraph 3.4(h), when warranted by genuine financial

difficulties the rescheduling of debt should be on the same terms and conditions as

those for commercial tenders in order to prevent or curtail planned defaults.]]

(f)

(g)

(h)

(i)

(j)

10.

[Developing country Members shall benefit from a grace period of three years after the entry

into force of this Agreement before being required to comply with the provisions under

paragraph 6.8.]

11.

[Export financing entities in developing country Members which have the objective of

preserving domestic price stability or ensuring food security shall be exempt from the provisions of

paragraph 6.8 of this Article.]

12.

Least-developed countries and net food-importing developing countries as listed in

G/AG/5/Rev.8 shall be accorded differential and more favourable treatment comprising: [ ].

13.

In exceptional circumstances which can not be adequately covered otherwise by international

food aid, commercial export credits or preferential international financing facilities, Members may

provide,

[in respect of exports to developing and least-developed country Members, where it

has been confirmed by [ ] that commercial export credits are not available, and where

the absence of export credits would preclude trade, ad hoc temporary government

financing arrangements to underwrite agricultural export credits that shall comply

with the terms and conditions in paragraph 4, notwithstanding that they [may charge

risk-based premiums, rather than market-based premiums], [and need not be self-

financing]. Members shall provide ex ante notifications [to be developed] for such

government financing.]

[more favourable terms for export financing support in respect of exports to

developing country Members experiencing emergency situations may be provided in

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accordance with this paragraph. Notwithstanding the terms and conditions of

paragraph 3.4, export financing support provided pursuant to this paragraph shall be

deemed conforming export financing support. An emergency is defined as a sudden,

significant and unusual deterioration in a developing country Member's economy and

in its ability to finance current imports of basic foodstuffs, and which may have far

reaching consequences such as social deprivation or unrest. In the event of such an

emergency the importing developing country Member concerned may request

exporting Members to provide more favourable export financing terms than are

otherwise permissible under this Article. The importing developing country Member

concerned shall notify the Committee on Agriculture in writing of the circumstances

which are considered to justify more favourable terms than are permitted under the

relevant provisions of this Article, together with details of the products concerned, so

as to provide an opportunity for other interested exporting Members to consider

responding to the request. Where commitments are made to provide more favourable

credit terms and conditions in response to such a request, details of the committed

terms and conditions shall be notified by the exporting Member or Members

concerned to the Committee on Agriculture. The maximum repayment term

permitted under this exception shall not exceed [36] months.]

14.

[Members shall ensure that, in the event that exceptional circumstances provided for under

the preceding paragraph arise, actions will be taken strictly consistent with the terms and conditions of

that paragraph so as not to undermine or circumvent their export subsidy commitments and

obligations under this Agreement.]

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ANNEX J

OSSIBLE NEW

RTICLE

BIS

OF THE

GREEMENT ON

GRICULTURE

GRICULTURAL

XPORTING

TATE

RADING

NTERPRISES

Members shall ensure that agricultural exporting state trading enterprises are operated in

conformity with the provisions specified below and, subject to these provisions, in accordance with

Article XVII, the Understanding on the Interpretation of Article XVII and other relevant provisions of

GATT 1994, the Agreement on Agriculture and other WTO agreements.

Entities

For the purpose of this Article, an agricultural exporting state trading enterprise shall be

considered to be :

Any governmental or non-governmental enterprise, including a marketing board, which has

been granted [or which enjoys

de facto

as a result of its governmental or quasi-governmental

status] exclusive or special rights [or] privileges [or advantages with respect to exports of

agricultural products], including statutory or constitutional powers, in the exercise of which

the enterprise influences through their export sales the level or direction of agricultural

exports.

Disciplines

In order to ensure the elimination of trade-distorting practices with respect to agricultural

exporting state trading enterprises as described above, Members shall:

(a)

eliminate by [the end of 2013] for developed country Members, and by [ ] for

developing country Members [, in parallel with the elimination of export subsidies]:

(i)

those export subsidies, defined by Article 1(e) of the Agreement on

Agriculture, which are currently provided to or by an agricultural exporting

state trading enterprise, consistent with Members export subsidy

commitments and the provisions of Article 9.4 of the Agreement on

Agriculture;

government financing of exporting state trading enterprises, [including,

inter

alia],

preferential access to capital or other special privileges with respect to

government financing or re-financing facilities, borrowing, lending or

government guarantees for commercial borrowing or lending, at below

market rates; and

government underwriting of losses, either directly or indirectly, [including]

losses or reimbursement of the costs or write-downs or write-offs of debts

owed [to, or] by export state trading enterprises on their export sales.

(ii)

(iii)

(b)

[Ensure that the use of monopoly powers by such enterprises is not exercised in a

manner which, either

de jure

de facto,

[effectively] circumvents, or threatens to

circumvent, the provisions set out in paragraphs 1 and 2.3(a) above [, it being

understood also that where the use of such powers would, to all practical intents and

purposes, amount to a difference in form rather than substance from introduction or

maintenance of an export subsidy per se, such use is prohibited.] [[Prohibit] [Phase-

out] by [ ] [the end of 2013] the use of monopoly powers for such enterprises, after

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which Members shall not restrict the right of any interested entity to export, or to

purchase for export, agricultural products.]

Special and Differential Treatment

[Notwithstanding paragraph 2.3 (b) above

(a)

agricultural state trading enterprises in developing country and least-developed

country Members which enjoy special privileges to preserve domestic consumer price

stability and to ensure food security will be permitted to maintain or use monopoly

powers for agricultural exporting [until [ ]] to the extent that they would not be

otherwise inconsistent with other provisions of this Agreement and other WTO

Agreements; [and]

[where a developing or least-developed country Member has an agricultural exporting

state trading enterprise with export monopoly powers, that enterprise may continue

also to maintain or use those powers [until [ ]] even if the purpose for which that

enterprise has such privileges could not be deemed to be characterised by the

objective: "to preserve domestic consumer price stability and to ensure food security".

Such an entitlement, however, would be permissible only for such an enterprise

whose share of world exports of the agricultural product or products concerned is less

than [ ] per cent, such that the entity's share of world exports of the product or

products concerned does not exceed that level in [ ] consecutive years, and to the

extent that the exercise of those monopoly powers is not otherwise inconsistent with

other provisions of this Agreement and other WTO Agreements.]]

(b)

Monitoring and Surveillance

Any Member that maintains an agricultural exporting state trading enterprise shall notify [to

the Committee on Agriculture] [on an annual basis] relevant information regarding the enterprise's

operations. This will, consistent with standard WTO practice and normal commercial confidentiality

considerations, require timely and transparent provision of information on any and all exclusive or

special rights [or] privileges [or advantages] granted to such enterprises within the meaning of

paragraph 1 above sufficient to ensure effective transparency. This will include [acquisition costs and

export sales on a transaction-by-transaction basis. Members shall notify any benefits, not otherwise

notified under other WTO disciplines, that accrue to a state trading export enterprise from any special

financial privileges. At the request of any Member, a Member maintaining a state trading export

enterprise shall provide any specific information requested concerning all operations relating to the

enterprise’s export sales of agricultural products.] [the product exported, the volume of the product

exported, the export price and the export destination.]

This would only apply in the event that the second option in that sub-paragraph was agreed.

Otherwise this foreshadowed provision would be redundant.

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ANNEX K

OSSIBLE

RTICLE

10.4

OF THE

GREEMENT ON

GRICULTURE

NTERNATIONAL

OOD

Members reaffirm their commitment to maintain an adequate level of international food aid

(hereinafter referred to as food aid

), to take account of the interests of food aid recipients and to

ensure that the disciplines contained hereafter do not unintentionally impede the delivery of food aid

provided to deal with emergency situations.

General Provisions

Members shall ensure that all food aid transactions are provided in conformity with the

following provisions:

(a)

(b)

(c)

(d)

(e)

they are needs-driven;

they are provided in fully [or, in the event of an exceptional situation, less than fully]

grant form;

they are not tied directly or indirectly to commercial exports of agricultural products

or of other goods and services;

they are not linked to the market development objectives of donor Members; and

agricultural products provided as food aid shall not be commercially re-exported.

Non-commercial re-exportation is permissible, but only where, for logistical reasons

and in order to expedite the provision of emergency food aid for another [affected]

[country] in an emergency [humanitarian] situation, this occurs as an integral part of a

food aid transaction initiated by a relevant United Nations agency, [relevant regional

or international intergovernmental agency or organization,] [or non-governmental

humanitarian organization or private charitable body].

The provision of food aid shall take fully into account local market conditions of the same or

substitute products. Members shall refrain from providing in-kind food aid in situations where this

would create, or would risk to create an adverse effect on local or regional production of the same or

substitute products. Members are encouraged to procure food aid from local or regional sources to the

extent possible, provided that the availability and prices of basic foodstuffs in these markets are not

unduly compromised.

Unless otherwise specified, the term food aid is used to refer to both in-kind and cash-based food aid donations.

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Safe Box for Emergency Food Aid

To ensure that there is no unintended impediment to the provision of food aid during an

emergency [humanitarian] situation[

], food aid provided under such circumstances shall be exempt

from the provisions of paragraph[s] [ ] , provided that there has been:

(a)

(b)

a declaration of an emergency by the [affected] [recipient] country [, or, the

Secretary-General of the United Nations]; and

an assessment of need undertaken by [a country][,] a relevant United Nations agency,

including the World Food Programme and the United Nations Consolidated Appeals

Process; the International Committee of the Red Cross and the International

Federation of Red Cross and Red Crescent Societies [, a relevant regional or

international intergovernmental agency or organization, a non-governmental

humanitarian organization or private charitable body working in collaboration with

the recipient government]; and

an emergency appeal from [a country][,] a relevant United Nations agency, including

the World Food Programme and the United Nations Consolidated Appeals Process;

the International Committee of the Red Cross and the International Federation of Red

Cross and Red Crescent Societies [, a relevant regional or international

intergovernmental agency or organization, a non-governmental humanitarian

organization or private charitable body working in collaboration with the recipient

government].

(c)

[A notification will be required on an ex-post basis by donors [and the relevant international

agency or organization] in order to ensure transparency.]

[Recognising that there can be exceptional circumstances such that to wait for an emergency

appeal as described in paragraph 2.4 above would result in an unacceptable delay in the provision of

food aid, food aid may be provided in response to an urgent request from the country concerned. In

such cases, the donor Member shall notify the Committee on Agriculture no later than [ ] after the

provision of such aid. [Food aid provided under this paragraph shall be limited to the period of the

immediate aftermath of the emergency, and thereafter shall be subject to the provisions of

[For the purpose of this Article, an emergency [humanitarian] situation is defined as an urgent situation in which

there is clear evidence that an event or series of events has occurred which causes human suffering or imminently threatens

human lives or livelihoods and which the government concerned has not the means to remedy: and it is a demonstrably

abnormal event or series of events which products dislocation in the life of a community on an exceptional scale. The event

or series of events may comprise one or a combination of the following:

(i)

(ii)

(iii)

sudden calamities such as earthquakes, floods, locust infestations and similar unforeseen

disasters;

human-made emergencies resulting in an influx of refugees, or the internal displacement of

populations, or in the suffering of otherwise affected populations;

food scarcity conditions owing to slow-onset events such as drought, crop failures, pests and

diseases that result in an erosion of the capacity of communities and vulnerable populations to

meet their food needs;

severe food access or availability conditions resulting from sudden economic shocks, market

failure or economic collapse that result in an erosion of the capacity of communities and

vulnerable populations to meet their food needs; and

a complex emergency for which the government of the affected country or the Secretary-

General of the United Nations has requested the support of the World Food Programme.]

(iv)

(v)

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paragraph 2.4.] In such circumstances, an ex-post declaration of appeal by an organization or agency

listed in paragraph 2.4 above shall be deemed to be in conformity with that paragraph.]

The provision of food aid in conformity with paragraph 2.4 [,2.5 and 2.6] may be provided

for [as long as necessary] [as long as the emergency lasts] [a period of [ ] months, after which the

continuation of such food aid under the Safe Box shall be] subject to an assessment of continued

genuine need as a result of the initial onset of the emergency. The assessment of continued need shall

be conducted by [the triggering organization or agency] [or] [in co-operation with] [the recipient

country].

["Cash-based" food aid that is conformity with the other provisions of this Agreement will be

included in the safe box and be presumed to be in conformity with Article 10.1 of the Agreement on

Agriculture.]

Disciplines for Food Aid in Non-emergency Situations

[In addition to the provisions of paragraphs 1.2 and 1.3, in-kind food aid provided in

situations other than defined in paragraphs 2.4 [, 2.5 and 2.6], shall be:

(a)

[based on an assessment of need [by an identified multilateral third party

organization, including humanitarian non-governmental organizations working in

partnership with specialized United Nations agencies] [in accordance with the

following [ ]];

targeted to an identified vulnerable population group; and

provided to address specific developmental objectives or nutritional requirements.]

(b)

(c)

[phased out by the end of 2013 for developed country Members and by end [ ] for developing country

Members [in accordance with the following timetable [ ]] [in parallel with the elimination of export

subsidies].]

10.

[The monetisation of in-kind food aid shall be phased-out by the end of 2013 for developed

country Members and by end [ ] for developing country Members [in accordance with the following

timetable [ ]] [in parallel with the elimination of export subsidies].] [The monetisation of in-kind food

aid shall be prohibited except where is it necessary to fund activities that are directly related to the

delivery of the food aid to the recipient[,] [or for the procurement of agricultural inputs]. Such

monetisation shall be carried out under the auspices of a relevant United Nations agency and the

recipient government.] [Food aid may be monetised to implement food security activities, targeted to

chronic and acute food insecure populations. For this purpose, Member donors shall prepare for those

recipients in which monetisation will occur a commercial import requirement (CIR). The CIR shall

include a market analysis to show that the monetisation of the commodity in the recipient country will

not result in a disincentive to or interference with the commercial import trends or create a

disincentive to domestic production. The CIR shall include:

(a)

(b)

(c)

(d)

rationale for monetisation;

proposed mechanics of the monetisation – commodity selection and methods of sales;

utilisation of monetised proceeds; and

plan for safeguarding the monetised proceeds.]

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11.

[Non-emergency in-kind food aid provided in conformity with the provisions of paragraphs

1.2, 1.3 and 3.9 shall not be considered to cause commercial displacement and therefore not

circumvent Members' export subsidy commitments.]

12.

Food aid donor Members shall be required to notify to the Committee on Agriculture, on an

annual basis, the following data [ ].

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ANNEX L

XPORT

ROHIBITIONS AND

ESTRICTIONS

OSSIBLE

MENDMENT TO

RTICLE

12.1

OF THE

GREEMENT ON

GRICULTURE

]

[In order to strengthen the existing disciplines on export prohibitions and restrictions, Article

12 of the Agreement on Agriculture will be modified to include to the following elements:

(a)

[Existing prohibitions or restrictions in Members territories shall be notified to the

Committee on Agriculture within 90 days of the coming into force of these

provisions.

As provided in paragraph 7 of Article 18 of the Agreement on Agriculture, any

Member may bring to the attention of the Committee on Agriculture such measures

which it considers ought to have been notified by another Member.

As of day one of the implementation period, a term of one year shall be established

for the elimination of those export prohibitions or restrictions in foodstuffs and feeds.

The above is proposed notwithstanding that, any Member instituting export

prohibitions or restrictions and the affected importing Member may agree to set a

term exceeding one year, as long as the term agreed on is not in excess of 18 months.

Notice shall be given to the Committee on Agriculture of the agreement reached in

this respect.

A Member instituting those measures shall give notice of the causes that justify its

keeping it.

A biannual surveillance mechanism shall be established in the Committee on

Agriculture for the observance of obligations described in subparagraphs (c) and (d).]

(b)

(c)

(d)

(e)

(f)

Proposal submitted by the G-20 in JOB(06)/147 of 18 May 2006 is included here for illustrative

purposes only at this point.

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ANNEX M

OMMODITY

RRANGEMENTS

NDERSTANDING ON THE

ROVISIONS OF

RTICLES

XX(

)

AND

XXXVIII

GATT 1994

]

[The term "arrangements" in Article XXXVIII of GATT 1994 is understood to cover both:

(a)

(b)

Commodity agreements of which all interested producing and consuming countries

are parties; and

Agreements of which only commodity-dependent producing countries are parties.

Such producers' agreements may be negotiated by the producing countries themselves or

adopted after negotiations undertaken under the auspices of UNCTAD or International Commodity

Organizations. They may be negotiated on an international or regional basis and may provide for

participation of associations of producers.]

[The exception provided by Article XX(h) which permits member countries or

intergovernmental commodity agreements, to apply export restrictions and other measures that may

not be consistent with the rules of GATT, provided that they are necessary for the attainment of their

objectives, shall also apply to the agreements in which commodity-dependent producing countries

only participate.]

[It shall [further] be reaffirmed that the existing rules permitting countries to impose taxes on

exports for the attainment of development and other objectives, including those relating to the

stabilization of prices of primary commodities, shall also apply to export taxes levied in pursuance of

such agreements.]

__________

This text is based on a proposal received from the African Group (TN/AG/GEN/18 of 7 June 2006).