WORLD TRADE
ORGANIZATIONWT/GC/W/177
4 May 1999
(99-1804)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
Negotiations on Agriculture
Domestic Support
Communication from Australia
The following communication, dated 30 April 1999, has been received from the Permanent
Mission of Australia.
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1. Australia submitted the Cairns Group Vision Statement in WT/GC/W/156 which sets out the
Group’s objectives for the agriculture negotiations.  The following specific proposal is consistent with
that Statement and is presented for consideration in the preparatory process.
2. Proposal
2. That, as part of the agriculture negotiations, Members agree to major reductions in domestic
support for all agricultural products, resulting in the elimination of all trade distorting domestic
subsidies with only non-distorting forms of support permitted thereafter.
3. Background
3. Levels of support to agriculture in OECD countries remain at very high levels, with
US$280 billion in total transfers to agriculture in 1997 in these countries.  Many of the support
measures being used, especially by developed countries, fall into the AMS or bluebox categories and
are trade and production distorting.  Such domestic support policies have negative effects on trade andagricultural policies.  The high levels of support encourage overproduction and are the root cause of
problems that emerge on world markets.
4. The Uruguay Round placed limits on the level of AMS support which can be provided and
these levels are being reduced by 20 per cent.  Only 28 Members have AMS support subject to
reduction.  Developed country Members account for around 90 per cent of that support.  So-called“bluebox” subsidy measures, which have only been  used by five WTO Members, remain uncapped.
The elimination of all such trade distorting domestic support for all agricultural products is required in
order to meet the objectives of establishing a fair  and market-oriented agriculture trading system and
of correcting and preventing distortions in world agriculture markets.  It is consistent with the
objective of putting trade in agricultural goods on the same basis as trade in other goods.
5. Members will still be permitted to provide non-trade distorting support to their agricultural
producers to pursue objectives including improvements in infrastructure, research and training,
income support, disaster relief, investment and the environment.
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