WORLD TRADE
ORGANIZATIONTN/AG/6
18 December 2002
(02-6943)
Committee on Agriculture
Special Session
NEGOTIATIONS ON AGRICULTURE
OVERVIEW
I. INTRODUCTION
1. Under the programme adopted by the Special Session of the Committee on Agriculture on
26 March 2002, the Chairman is required to prepare an overview paper on the negotiations on
agriculture as a basis for a comprehensive and substantive review of possible modalities, including
rules-related elements, to be conducted at a Special Session to be held on 22-24 January 2003
(TN/AG/1 refers).  In accordance with this mandate, the Chairman submits herewith this overview on
his own responsibility.
2. The paper is based on the work carried out during the series of formal and informal Special
Sessions of the Committee on Agriculture and related inter-sessional consultations conducted in
conformity with the mandate provided by Ministers at Doha and the programme thereunder as
adopted by the Special Session of the Committee on Agriculture on 26 March 2002.  Paragraphs 13
and 14 of the Ministerial Declaration adopted on 14 November 2001 provide:
"13. We recognize the work already undertaken in the negotiations initiated in
early 2000 under Article 20 of the Agreement on Agriculture, including the large
number of negotiating proposals submitted on behalf of a total of 121 Members.  We
recall the long-term objective referred to in the Agreement to establish a fair and
market-oriented trading system through a programme of fundamental reform
encompassing strengthened rules and specific commitments on support and protection
in order to correct and prevent restrictions and distortions in world agriculturalmarkets.  We reconfirm our commitment to this programme.  Building on the work
carried out to date and without prejudging the outcome of the negotiations we commit
ourselves to comprehensive negotiations aimed at:  substantial improvements in
market access;  reductions of, with a view to phasing out, all forms of export
subsidies;  and substantial reductions in trade-distorting domestic support.  We agreethat special and differential treatment for developing countries shall be an integral
part of all elements of the negotiations and shall be embodied in the Schedules of
concessions and commitments and as appropriate in the rules and disciplines to be
negotiated, so as to be operationally effective and to enable developing countries to
effectively take account of their development needs, including food security and ruraldevelopment.  We take note of the non-trade concerns reflected in the negotiating
proposals submitted by Members and confirm that non-trade concerns will be taken
into account in the negotiations as provided for in the Agreement on Agriculture.
"14. Modalities for the further commitments, including provisions for special and
differential treatment, shall be established no later than 31 March 2003.  Participantsshall submit their comprehensive draft Schedules based on these modalities no later
than the date of the Fifth Session of the Ministerial Conference.  The negotiations,TN/AG/6
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including with respect to rules and disciplines and related legal texts, shall be
concluded as part and at the date of conclusion of the negotiating agenda as a whole."
3. Keeping this mandate in mind, the purpose of the paper is to summarize the main features and
results of the work that has been carried out to date with a view to providing a basis for working
towards the establishment of modalities for the further commitments, including provisions for specialand differential treatment, by no later than 31 March 2003 as mandated by Ministers.
4. The main body of the paper contains a general assessment of the state of play in the
negotiations and identifies key issues which require immediate attention and work as there is an
urgent need for convergence.  This part of the paper has been prepared with the intention to help focus
further work.  It is not intended to limit the negotiations in any way, nor to remove from the table
proposals and inputs which are not referred to.  The tables in the Annex to this paper provide a fuller
picture of possible modalities as proposed by participants in the negotiations.  Both the main body ofthe paper and the Annex include, as an integral part of all elements of the negotiations, options and
proposals for special and differential treatment for developing countries.  Proposals related to non-
trade concerns and how to take them into account are also reflected, either explicitly or implicitly as
part of certain modalities for further reform.
5. The tables in the Annex present, issue by issue, relevant modality parameters in Column 1.  In
Column 2, preliminary working hypotheses are identified for a number of parameters based on the
Chair's assessment that there is already broad support, although not necessarily consensus, for a
particular modality.  As is evident from the tables, in many cases this column has been left blank.  In
Column 3, variations of, or additions to, the wo rking hypotheses are presented, reflecting specific
modalities proposed by participants.  In cases where no working hypotheses are identified, themodalities listed in Column 3 are presented as a basis for establishing modalities for the further
commitments within the mandated time-frame.
6. It should be noted that this paper aims at providing an overview rather than a compendium of
every input made by participants.  It does not claim to be exhaustive.  The paper is without prejudice
to the position of participants or to their in terpretation of WTO agreements, particularly the
Agreement on Agriculture, and is not intended to prejudge, in one way or another, the scope and
substance of the negotiations or their results.
II. GENERAL OBSERVATIONS
7. In the course of the informal and formal Special Sessions as well as consultations conducted
in conformity with the work programme adopted by the Committee on Agriculture on 26 March 2002,
participants have had the opportunity to propose and discuss in a comprehensive and substantive
manner possible modalities for further commitments, including rules-related elements.  They havegenerally used this opportunity in an engaged and constructive way.
8. Today, just over three months before these modalities are to be established, many proposals
are on the table, much technical work has been carried out and, in a general sense, the positions of the
various participants at this stage have emerged.  The work conducted in the Special Sessions and in
complementary technical consultations has produced substantial progress regarding some issues, suchas tariff quota administration and export credits.  With respect to some other issues, a trend towards an
emerging consensus has already become evident for some parameters (see Column 2 of the Annex).
9. Despite this progress, a substantial number of important issues remain outstanding.  Key
points include:
• There are still wide gaps in the positions among participants regarding fundamental aspects of
the further reform programme.  Thus, while participants have stressed their commitment toTN/AG/6
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the Doha mandate, including its timetable, there are still significant differences in the
interpretation of the level of ambition that is implied in the wording of paragraph 13 of the
Ministerial Declaration.
• While a number of participants have submitted fully-fledged possible modalities for further
commitments in the areas of market access, export competition and domestic support,
opponents of these proposals have not yet specified their counter-proposals at a corresponding
level of quantitative detail.  This has made it difficult to move the process forward.
• There are still differences in views, including views among developing countries, with regard
to appropriate provisions for special and differential treatment, although there is already
significant support for exempting least-developed countries from reduction commitments.
• Small island developing states and other vulnerable developing countries have proposed
modalities to address their specific problems.  Net food-importing developing countries have
called for the implementation of the Decision on Measures Concerning the Possible Negative
Effects of the Reform Programme on Least- Developed and Net Food -Importing Developing
Countries.  A group of transition economies is proposing special flexibility in their favour in
some areas, albeit for the most part flexibility of a transitory nature.  Likewise, newly-acceded
countries have made similar proposals, referring, inter alia, to paragraph 9 of the Doha
Ministerial Declaration.  Some of these participants are also making the point that their per
capita income is lower than that of certain de veloping countries and they suggest that the
question of eligibility to future S&D provisions should be made subject to objective economic
criteria.
• There are also still different views regarding the extent and the ways to take into account non-
trade concerns that have been raised in the negotiations, such as food security, livelihood andpoverty alleviation, rural development, protection of the environment, food safety, and animal
welfare.  In the context of the discussions on these matters, several developing countries have
made the point that their non-trade concerns are of a fundamentally different dimension than
those of developed countries.
• Finally, some participants have established a link between their willingness to move on
agriculture and the accommodation of their ambitions in other areas of the negotiations.
10. The efforts in this crucial phase benefit from the fact that much of the technical groundwork
has already been achieved.  What is now required is to concentrate on the key aspects, keeping inmind that the negotiations on agriculture do not end at the end of March 2003 and that there will be
time thereafter to address matters not directly required for the purpose of establishing draft Schedules
of further commitments.  Specific issues and questions which require immediate attention and work
include those which are highlighted in subsequent sections of this paper.
11. Participants are reminded that the time remaining for the establishment of modalities is
severely limited.  In view of the wide gaps in positions, this paper should signal the start of a new
phase in our operations.  In this phase, participants need to move beyond the restatement of well-
known national positions.  Therefore, in considerin g the following paragraphs, participants are urged
not simply to identify the option which corresponds to their position but to think creatively about
avenues for convergence.TN/AG/6
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III. MARKET ACCESS
12. In the area of market access, the negotiations have covered five issues:  tariffs, tariff quotas,
tariff quota administration, special safeguard measures, importing state trading enterprises, and other
market access issues.
Tariffs
13. The main outstanding issue in this area is the formula and quantitative targets for the further
tariff reductions that are to be applied.  A variety of proposals have been made in this regard.  The two
approaches commanding the widest support are (i) a harmonization formula for tariff reductions, and
(ii) the Uruguay Round formula.  As for the first approach, a Swiss formula with a coefficient of 25
has been proposed to be implemented over 5 years, subject to special and differential treatment for
developing countries (one version includes also a 50 per cent down-payment in the first year ofimplementation;  another version includes, as a second step, the elimination of all tariffs by a date to
be agreed).  Proponents of the Uruguay Round formula have not yet submitted figures for the average
and minimum rates of reductions that they would like to see applied for developed and developing
countries, respectively, nor for the length of the implementation period.
14. With a view to moving the negotiations on this  matter forward, participants should consider,
inter alia , the following questions:
(a) What scope is there to modify the specific proposals regarding the Swiss formula so
as to accommodate the need for flexibility, including flexibility to address non-trade
concerns, that has been stressed by other participants?
(b) What reduction rates and implementation period have proponents of the Uruguay
formula in mind?  What scope is there to modify the Uruguay Round formula so as to
accommodate the aspiration by other participants to harmonize tariff structures and to
address tariff peaks and tariff escalation?
(c) More generally, failing a consensus on eith er of these two approaches in the proposed
or a modified form, is there any other modality, whether in terms of somecombination of the two formulae or a di fferent, third formula, that could be
acceptable as a compromise?  What would be the details, including the reduction
rates and implementation period?
15. In considering these questions, the modalities for special and differential treatment provisions
have also to be addressed, drawing on the wide range of proposals on the table.  One issue is the
proposal to provide for a greater improvement of opportunities and terms of access for agricultural
products of particular interest to developing country participants.  Another issue is whether theformula to be applied for developing countries would be the same or some modified version of the
formula to be applied by other participants (or another formula).  Third, whatever the formula, there is
already wide support for special and differential treatment in the form of a longer implementation
period and lower cuts, but the details remain to be determined.  Other issues include whether, as
proposed by some developing country participants under the concept and as part of a DevelopmentBox, special and differential treatment should be extended to include (i) exemption from reduction
commitments for certain agricultural products which are of strategic importance in pursuing food
security, product diversification, rural development and employment, and poverty alleviation, and
(ii) flexibility to adjust, without compensation, low tariff bindings.
16. Finally, there is the question whether tariff forms should be simplified by allowing ad
valorem  tariffs, or ad valorem  and specific tariffs, only.TN/AG/6
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Tariff Quotas
Volume
17. Many, though not all participants consider the expansion of import volumes under existing
tariff quotas to be an essential element of the further market access commitments and several of them
have proposed specific modalities to this effect. This issue cannot be seen in isolation from the size of
the tariff reductions that are to be negotiated.  Key outstanding questions include:
(a) Whether the final bound tariff quota volumes as specified in Members' Schedules
shall be expanded by [x] per cent and, if so, what value for x would be appropriate?
or
(b) Whether import volumes under tariff quotas shall be expanded by an amount equal to
[y] per cent of domestic consumption in a recent representative period for the
respective product concerned and, if so, what value for y would be appropriate?  or
(c) Whether import volumes under tariff quotas shall be expanded to [z] per cent of
domestic consumption in a recent representative period for the respective product
concerned and, if so, what value for z would be appropriate?
Concrete proposals for the values of x, y, z as well as the implementation period are on the table.
18. There is also a proposal to update the base for minimum access tariff quotas by using the
latest domestic consumption data and to abolish additional access volumes due to delayed
tariffication.
19. Issues under special and differential treatment include (i) whether a lower rate of expansion
and a longer time-frame can be agreed, and (ii) whether a fixed share of the annual tariff quota
volume shall be reserved for small-scale or limited commodity exporters.
In-quota tariffs
20. The main issue is whether in-quota tariffs should be reduced to zero, as a number of
participants have proposed, or whether another formula should be applied, for example the same
formula as the one to be used for the reduction of out-of-quota tariffs.  Some participants consider that
in-quota tariffs should not be reduced at all, or, in the case of developing countries, should be
maintained at levels according to their devel opment, trade, food security and financial needs.
Tariff Quota Administration
21. Improvement of tariff quota administration is a widely shared objective.  Further technical
work is required to build on the progress made in this area , including with regard to special and
differential treatment.
Special Safeguard Measures
22. Participants have to decide whether the special safeguard provisions of Article 5 of the
Agreement on Agriculture should be eliminated and, if so, (i) whether with immediate effect upon
entry into force of the further market access commitments or by some future date, and (ii) whether for
all countries or only for developed countries.TN/AG/6
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23. Other or alternative questions are:
(a) In case Article 5 is to be maintained beyond the date of the entry into force of the
further market access commitments, whether the existing product coverage should be
maintained or modified and, if modified, for all countries or only for developing
countries?
(b) Whether, in the framework of special and differential treatment, a new safeguard
mechanism and/or countervailing measure for developing countries should be
established and, if so, for all agricultural products or for a limited number of products
such as strategic/food security/livelihood products?  Detailed possible modalities for
such provisions have been submitted.
(c) Whether a proposed Food Security Mechanism should be established?
(d) Whether a new safeguard mechanism for seasonal and perishable products should be
established, as proposed by some participants?
Importing STEs
24. Further technical work is required in this area, particularly regarding (i) strengthened
transparency and notification requirements, and (ii) possible other disciplines over and above and/orsupplementing existing WTO provisions, e.g. in respect of trading rights.  Some participants are not
convinced that there is a need to add to existing disciplines.
25. In the context of special and differential treatment, a key issue is whether and, if so, to what
extent or under what conditions developing countries would be exempted from any new disciplines.
Other Market Access Issues
Preferential schemes
26. Several participants have stressed the need for preferential schemes to remain predictable,
meaningful and secure and have proposed specific modalities to this effect.  Issues to be decidedinclude whether participants agree (i) to provide legal security for existing non-reciprocal preferential
trading arrangements, for example in the form of grandfathering , (ii) to maintain or improve the
margins of preference, for example by reducing developed countries' tariffs for products of export
interest to, and originating in, vulnerable countries by a maximum 15 per cent and by phasing out in-
quota tariffs, (iii) to provide longer implementation timeframes for tariff reductions affecting
traditional preferences in respect of products which are of vital export importance for developing
country beneficiaries of such preferences, (iv) to make preferential schemes binding commitmentsand, if so, which of these schemes, and/or (v) to extend to small island developing states the facility
currently available for LDCs that enables specia l WTO compatible market access arrangements with
developed countries on terms that do not require extension of reciprocal preferences.  There is also the
proposal to extend the scope of duty and quota free access for agricultural products in terms of
importing countries granting such access and/or beneficiaries.
27. In the discussions of proposals designed to address the specific situations or problems of
some developing country groupings, some other de veloping countries have raised the concern that
such differentiation results in further discrimination among developing countries.TN/AG/6
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Other issues
28. Specific proposals have also been submitted concerning:
(a) Geographical indications .  While some participants consider that their specific
proposals regarding geographical indications (protection of the right to use
geographical indications or designations of origin for agricultural products;  effectiveprotection against usurpation of names for agricultural products and foodstuffs;
consumer protection and fair competition) should be dealt with in the framework of
the negotiations on agriculture, other participants insist that the TRIPS Council is the
appropriate forum for pursuing this matter.
(b) Food safety .  While some participants consider that their specific proposals regarding
the clarification of issues linked to the precautionary principle/related to Article 5.7 of
the SPS Agreement should be dealt with in the framework of the negotiations onagriculture, other participants insist that  the SPS Committee is the appropriate forum
to address food safety issues.
(c) Labelling .  While some participants consider that their specific proposals regarding
improved consumer information and criteria and guidelines for the implementation of
mandatory labelling for food and agricultural products should be dealt with in theframework of the negotiations on agriculture, other participants insist that the TBT
Committee is the appropriate forum to address labelling issues.
(d) A group of developing countries has made the proposal for a commitment by
developed countries to earmark their technical and financial assistance, either in their
Schedules or by pooling resources, for the improvement of developing countries'capacity in the areas of SPS, TBT and Rules of Origin in cooperation with the
relevant standard-setting organizations and other agencies involved in trade-related
capacity building.
29. Further, there is the question whether the specific flexibility proposals in the area of market
access put forward, respectively, by transition economies and by newly-acceded countries areacceptable, either in the proposed or some amended form.
30. Finally, it should be noted that several participants have indicated their interest in negotiating
sectoral initiatives as a supplement to the improvements in market access resulting from the generally
applicable modalities to be established.
IV. EXPORT COMPETITION
31. In this area, the negotiations have covered export subsidies, export credits, food aid and
exporting state trading enterprises.  In addition, proposals to strengthen the existing provisions onexport restrictions, particularly with a view to taking account of food security concerns, have also
been addressed.
Export Subsidies
32. The main outstanding issues are to determine:
(a) The depth of the further reform in this area.   Several specific modalities have been
submitted that would result in a phasing out of budgetary outlays and quantity
commitments from the final bound levels as specified in Members' Schedules,
including, in one version, a down-payment of 50 per cent on the first day of theTN/AG/6
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implementation period.  There are also proposals to use again the Uruguay Round
formula, with proponents of this approach, however, not yet having proposed specific
reduction targets, except to indicate that relatively deeper cuts in budgetary outlays
could be a feature of further commitments.
(b) The implementation period for the further commitments.   Concrete proposals are on
the table as part of the phase-out modalities referred to above.
(c) Special and differential treatment.   What extra time for implementing the further
commitments would be accorded developing countries?  Can it be agreed that the
special and differential treatment provision of Article 9.4 of the Agreement on
Agriculture should be maintained until su ch time as the further commitments on
export subsidies are fully implemented?  What about proposals to modify/clarify the
scope of Article 9.4?  There is also a proposal to extend the flexibilities fordeveloping countries under Article 27 of the SCM Agreement to agricultural
products.
Export Credits
33. The establishment of strengthened disciplines for officially supported export credits, export
credit guarantees and insurance programmes is a widely shared objective.  Further technical work is
required to build on the progress made in this area with regard to a rules-based approach, including
special and differential treatment provisions, taking particularly into account paragraph 4 of the
Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform
Programme for Least-Developing and Net Food-Im porting Developing Countries and drawing on the
specific inputs that have been submitted.
34. There is also the proposal to make the subsidy component of any officially supported export
credits, export credit guarantee and insurance programmes subject to reduction in line with the
reduction of export subsidies.
Food Aid
35. Participants generally agree (i) that nothing in the WTO should hinder the delivery of food aid
in cases of real need ("genuine food aid"), and (ii) that the objective of WTO disciplines in this area is
to prevent food aid being used as an instrument of surplus disposal and circumvention of export
subsidy commitments.  Key questions include:
(a) Whether participants can agree on criteria for types of food aid which would be
deemed to be genuine food aid?
(b) Whether, as a wide range of participants propose, food aid should be given in fully
grant form only and, if so, whether this strengthened discipline should apply as from
the entry into force of the further commitments in agriculture or should be phased in
over a transitory period (a specific modality to this effect has been proposed)?
(c) Whether there should be a commitment not to reduce food aid volumes when prices
are high?
(d) Whether there should be a prohibition for recipient countries to re-export food aid?TN/AG/6
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(e) Whether a proposed international food stockholding system should be established as a
tool to deal with serious temporary food crises in developing countries, particularly
least-developed countries and net food-importing developing countries?
(f) What additional transparency requirements should be established in this area?
36. There are also proposals that food aid not in conformity with the new disciplines (i) should be
subject to the new export subsidy commitments (food aid involving concessional prices) or the new
export credit disciplines (food aid involving concessional loans), or (ii) should be prohibited.  The
importance of technical assistance to reduce long-term dependence on food aid has also been noted.
Exporting State Trading Enterprises
37. Further technical work is required in this area, particularly regarding (i) strengthened
transparency and notification requirements, and (ii) possible other disciplines over and above and/orsupplementing existing WTO provisions, e.g. with re spect to matters such as trading rights, price-
pooling and cross-subsidization.  Some participants consider that there is no need to add to the
existing disciplines.
38. In the context of special and differential treatment, a key issue is whether and, if so, to what
extent or under what conditions developing countri es would be exempted from any new disciplines.
Export Restrictions
39. Some participants consider that export restrictions and, in particular, export taxes are not part
of the negotiations on agriculture. In their view, these instruments serve as counter-measures for tariff
escalation in their export markets and, in case of export taxes, also as an important source ofgovernment revenue.  While not necessarily contesting the latter points, other participants have
submitted specific proposals to strengthen the existing disciplines under Article 12 of the Agreement
on Agriculture.  Outstanding issues include:
(a) Whether export restrictions shall be prohibited and, if so, (i) for all Members, or
(ii) for all Members except developing countries?
(b) Alternatively, whether export restrictions should be converted into export taxes and
subsequently bound in Members' Schedules and subjected to reduction commitments?
(c) Whether export taxes shall be prohibited and, if so, (i) for all Members except
developing countries, or (ii) for all Members except developing countries unless they
are net exporters of the foodstuffs concerned (an alternative special and differential
treatment proposal that has been submitted would allow developing countries to apply
an export tax subject to strict conditions)?
V. DOMESTIC SUPPORT
40. In domestic support, the negotiations have covered the Green Box, Article 6.2 of the
Agreement on Agriculture, the Blue Box and the Amber Box.
41. While some participants consider that the structure of the domestic support chapter of the
Agreement on Agriculture should remain as is, changes to the existing structure have also beensuggested, particularly proposals (i) to establish just one General Subsidies Box, (ii) to reduce the
number of Boxes to two, one for trade-distorting domestic support and another one for minimally or
non-trade-distorting support, and (iii) to differentiate reduction commitments under the Amber Box
depending on the export or domestic market orientation of the domestic production that is beingTN/AG/6
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supported.  There is also a proposal to establish an overall ceiling for all domestic support measures
other than those in conformity with the provisions of paragraphs 2, 3 and 4 of Annex 2 of the
Agreement on Agriculture.
Green Box42. There are three categories of proposals so far as possible changes in the provisions of
Annex 2 of the Agreement on Agriculture ("Green Box" ) are concerned:  (i) proposals to tighten the
Green Box provisions, including proposals to remove  certain direct payments from the Green Box or
to subject such payments to reduction commitments , (ii) proposals to enhance existing Green Box
provisions or  to add new types of programmes or payments under the Green Box, and (iii) proposals
to clarify certain provisions of Annex 2.  Key questions include:
(a) Whether, as proposed by some participants, a ceiling on either total or a group of
selected Green Box expenditures should be established and, if so, for all countries or
for developed countries only and at what level(s)?
(b) Whether, as proposed by some participants, certain direct payments should become
subject of reduction commitments and, if so, which of the direct payments proposed
to this effect should be subject to such discipline and what should be the reductionrate and implementation period?
(c) Which of the proposed amendments or additions to the provisions of Annex 2 of the
Agreement on Agriculture should be included so as to better address the needs and
cover the programmes of developing countries?
(d) Whether other proposed amendments or additions to the provisions of Annex 2 of the
Agreement on Agriculture should be included, such as compensatory payments for
higher animal welfare or other production standards or payments to address other
non-trade concerns?
Article 6.2 of the Agreement on Agriculture43. There is wide support among participants to maintain and enhance the provisions of
Article 6.2 of the Agreement on Agriculture.  A va riety of specific proposals have been submitted
with a view to broadening the scope of Article 6.2 (see relevant part of the Annex of this paper).
• Which of the proposed additions to Article 6.2 should be included?
Blue Box
44. There are essentially three fundamental questions so far as the Blue Box is concerned:
(a) Should Article 6.5 of the Agreement on Agriculture be retained as is?  or
(b) Should Article 6.5 be eliminated and, if so, with immediate effect upon entry into
force of the further commitments or by what other date?  or
(c) Should payments in conformity with the provisions of Article 6.5 be capped and/or
become subject to reduction commitments and, if so, what should be the reductionrate and implementation period?TN/AG/6
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Amber Box
45. The key outstanding issue is to decide on th e reduction method and target for further AMS
commitments.  There are essentially four types of specific proposals in this regard.  An example of the
first type is a formula to reduce the scheduled final bound AMS commitment to zero within 5 years,
subject to a 50 per cent down payment in the first year of implementation (developed countries).  Inone variant of this formula, the reduction comm itments would be on a product-specific basis and de
minimis support would be also reduced with a view towards its elimination within an agreed period of
time.  An example of the second type is a formula to reduce non-exempt domestic support (including
domestic support defined by the AMS and production-limiting support as defined by Article 6.5 of the
Agreement on Agriculture) to 5 per cent of the Member's average value of total agricultural
production in the base period 1996-98 within five years.  The formula also includes a provision to
eliminate all non-exempt domestic support by a date to be established in the negotiations.  Under thisformula, de minimis domestic support would not be included in the calculation of non-exempt
domestic support.  As for the third type, the use of the Uruguay Round formula has been proposed.
Under the fourth type, the Amber B ox would be split, as noted above, into two parts with separate
reduction commitments.  Special and differential treatment is an integral feature of most formulae
proposed.
46. With respect to the Amber Box, there are three key questions:
(a) Which of the above approaches should be retained and under what conditions in
terms of reduction rates, implementation period and the de minimis provisions?
(b) Whether or not the further reduction commitments should be made on a product-
specific basis?
(c) What specific flexibility provisions should be integrated in the form of special and
differential treatment for developing countries?  There is already wide support for
special and differential treatment in the form of a longer implementation period and
lower cuts, but the details remain to be determined.  Other issues include whether
developing countries should have the flexibility to aggregate product-specificdomestic support within de minimis levels?
47. Other issues raised in the Amber Box context include possible modalities (i) to improve the
AMS/EMS methodology (anti-circumvention provis ion; AMS calculation on the basis of a stable
currency/basket of currencies), and (ii) to streng then the transparency and notification requirements
for Amber Box measures.  The issue of adjustment for inflation has also been raised by some
participants, while other participants consider the existing provisions of Article 18.4 of the Agreement
on Agriculture to be sufficient.
48. Finally, there is the question whether the specific flexibility proposals in the area of domestic
support put forward, respectively, by a group of transition economies and a group of newly-acceded
countries are acceptable, either in the proposed or some amended form.
VI. LEAST-DEVELOPED COUNTRIES
49. The key issue is whether it can be agreed that in accordance with the provisions of the second
sentence of Article 15.2 of the Agreement on Agri culture, least-developed countries should not be
required to undertake reduction commitments in the areas of market access, export competition and
domestic support.  As noted in paragraph 9 above, there is significant support for such a modality.TN/AG/6
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VII. FINAL OBSERVATIONS
50. It is evident from this overview that, as matters stand, a major negotiating effort and
flexibility on all sides will be of the essence in order to be able to establish modalities within the
mandated time-frame.  Participants will recall that under the agreed work programme a first draft of
the modalities for further commitments is to be considered at the Special Session to be held on
24-28 February 2003.  This first draft and the subsequently established modalities must, of course,
faithfully reflect the mandate from Doha quoted in paragraph 2 above.  Efficient use of the limited
time available is essential.
51. The time has therefore come to take the political and operational decisions required which
will enable participants collectively to put togeth er a modalities package in accordance with the
mandate given by Ministers.  In working towards this end, the ground rule will continue to be that
nothing is agreed until everything is agreed, not least in view of the fact that there are linkagesbetween the areas of market access, export competition and domestic support and, indeed, with the
negotiations under the Doha Development Agenda as a whole.TN/AG/6
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ANNEXTN/AG/6
Page 14Tariffs
Working Hypotheses Variations/Additions
Product coverage As specified in Annex 1 of the Agreement on Agriculture. (i) Product coverage to be comprehensive with no a priori   exclusions.
Base rates All agricultural tariff lines to be reduced from the final bound rates
specified in Section I of Members' Schedules of concessions.(i) Tariffs shall be reduced from the applied rates on 1 January 2000, or from
the final bound rates specified in Members' Schedules, whichever islower.
(ii) Reduction commitments shall be defined on a non-aggregated, product-
specific, basis in accordance with the harmonized system nomenclature of
2002.
Formula/targets for
further commitments,
implementation period,staging
Harmonisation
formula(i) All developed countries' agricultural tariffs shall be reduced from their final
bound levels in 5 years by means of a Swiss formula with a coefficient of
25. A down-payment shall be made in the first year equivalent to 50 percent of the total cut. The remainder will be phased-in in equal annualinstalments over the remaining 4 years. Where an importing country
imposes additional levies, import charges, taxes or mark-ups, these are to
be added to the initial tariff and subject to the same reductioncommitments.
(ii) All agricultural tariffs except in-quota tariffs shall be reduced from applied
rates on 1 January 2000 or final bound levels, whichever is lower, in 5
years, by means of a Swiss formula with a coefficient of 25. Reductions
shall be made in equal annual instalments. Members shall agree toeliminate all agricultural tariffs by a date to be established in thesenegotiations.
(iii) Devel oped countries' agricultural tariffs shall be reduced in equal annual
instalments from their bound levels in a 6-year period commencing in
2005. A ceiling of 50 per cent  ad valorem  shall be defined. All tariff lines
exceeding 50 per cent shall first be reduced from their bound levels to thatceiling over 3 years. Further reductions will be then applied from Uruguay
Round final bound tariffs, or from the ceiling, whichever is lower, on thebasis of a 50 per cent simple average rate of reduction, with a minimumrate of reduction of 20 per cent per each tariff line.
(iv) A two-stage reduction process to apply to all agricultural tariff lines over a
5-year implementation period. Tariffs above a specific level (e.g. 30 percent) shall be reduced to that level. A harmonising formula shall then beapplied on the resulting tariffs. A Swiss formula with a coefficient of 25 can
be applied in both stages.TN/AG/6
Page 15Tariffs
Working Hypotheses Variations/Additions
Harmonisation
formula (cont'd)(v) All tariff lines where a single stage tariff exists to be subject to a formula
reduction resulting in a substantial reduction in tariffs and a greaterharmonization of tariff levels.  In addition:
(a) tariff escalation between primary and processed forms of the same
product shall be eliminated;
(b) any single stage tariff for which the final bound duty would be above
a certain threshold should be converted into a two-stage tariff, with a
specified quantity of duty free in-quota access to be provided;
(c) a formula approach to reduce single stage tariffs in equal annual
instalments could be supplemented by additional provisions toensure that the final outcome provides real market access
improvements. Options for such additional provisions include:
- establishing a maximum tariff binding for each single stage
tariff line at the end of the implementation period;
- establishing a minimum total reduction for each tariff line from
the original Uruguay Round base tariff, the total reduction being the
sum of Uruguay Round cuts plus those undertaken in thesenegotiations.
Uruguay Roundformula(i) All agricultural tariffs shall be reduced by means of the Uruguay Round
formula, with a minimum average reduction per tariff line and an averagereduction across all agricultural tariff lines [in equal annual instalments].
(ii) A Uruguay Round type of formula shall be used with specific flexibility
provisions applying to Members with transition economies.  Flexibility
provisions would include, inter alia :
(a) the establishment of  a minimum rate of reduction for each tariff line:
such reduction shall only apply where the bound rate is below a peak
level (to be defined);
(b) the application of lower, or selective tariff reductions on sensitive
items;
(c) exemption from further reduction in the case of low tariff bindings as
well as exemption from complying with an overall simple average
reduction commitment.TN/AG/6
Page 16Tariffs
Working Hypotheses Variations/Additions
Request/offer (i) Taking into account the provisions of paragraph 9 of the Doha Ministerial
declaration recognising the extensive market access commitmentsundertaken by Members in their accession process, recently-acceded
Members shall reduce their agricultural tariffs on the basis of a
request/offer approach, while, firstly, exempting from the reduction the lowtariffs and, secondly, allowing the selective reduction of the others. Thenew commitments shall not affect the implementation periods of the
commitments made during the accession negotiations, the level of tariff
reductions shall be lower, the implementation periods longer, and theimplementation of the new commitments extended or delayed. (i.e. somepause between the term of expiration of the transitional period for
accession’s commitments and the beginning of implementation periods for
new reduction commitments)
Other (i) Members shall adopt a request-and-offer procedure in order to reduce
tariff peaks and tariff escalation to [a level to be negotiated]. The results ofthese bilateral negotiations shall apply on an MFN basis.  Subsequently,the Uruguay Round formula shall be applied.
Supplementaryapproaches(i) The general tariff reduction modality may be supplemented by the
conclusion of sectoral initiatives. Members shall participate in sectoralinitiatives on a voluntary basis.
(ii) Members may engage in sectoral initiatives provided that these
complement, not substitute, the general tariff reduction formula. [Theresults of sectoral initiatives shall be implemented on an MFN basis.]
(iii) The general tariff reduction modality may be supplemented by a request-
and-offer procedure as a means to reach the average reduction on
products of mutual interest to Members.
(iv) The general tariff reduction modality shall not apply to [tariffied] [sensitive]
products. In this case, the concerned Members shall improve market
access opportunities in any of the following ways:
(a) by applying a limited tariff reduction on the products in question;
(b) by opening new [duty-free]/[low in-quota duty] tariff quotas.
(c) by expanding existing tariff quotas [by] [to] a certain percentage of
[final bound volumes]/[current domestic consumption].
(d) by seeking to achieve gradual improvements of access through
better administration of existing tariff quotas.TN/AG/6
Page 17Tariffs
Working Hypotheses Variations/Additions
Simplification of tariff
structures(i) All bound non- ad valorem  duties shall be converted into ad valorem
equivalents prior to the application of the tariff reduction modality.
(ii) Members shall express their tariff bindings [and their applied tariffs] in the
ways that they consider most appropriate
Variant 1:  […] provided that the level and the incidence of  protection
does not increase.
Variant 2:  [...] However, for the purposes of these negotiations, and with a
view to increasing transparency, draft offers shall reflect the real values of
concessions.
(iii) All non- ad valorem  tariffs to be simplified to ad valorem  equivalents.
Guidelines will be agreed on a conversion methodology.
(iv) Tariff bindings and applied tariffs to be denominated either on a specific or
ad valorem  basis. There shall be no compound, complex, or technical
tariffs.
(v) The share of non- ad valorem  duties shall not exceed 3 per cent of the
total number of agricultural tariff lines in Members' national tariff
nomenclatures.
Initial Negotiating
Rights (INRs)(i) The INRs resulting from request-offer procedures between Members shall
be registered in the Schedules on a tariff line basis, with a clear indication
of the countries involved in the concession and the level of INR at bilaterallevel.
(ii) A review clause shall apply to historical INRs as well as to INRs resulting
from the present negotiations.  This clause will allow Members to adapt
the final bound rates on a periodical basis, with a view to preserving theeconomic value of the INRs in question.
Geographicalindications(i) Geographical indications to be addressed in other fora, including the
TRIPS Council.
(ii) A mechanism to be put in place (a) to guarantee effective protection
against usurpation of names for agricultural products and foodstuffs;
(b) to protect the right to use geographical indications or designations of
origin;  and (c) to guarantee consumer protection and fair competitionaccording to the following lines:
Coverage: All agriculture and foodstuffs products that are designated by
geographical names already protected on a national basis in the WTOMember countries as geographical indications.  These products andnames should be significant in terms of trade.TN/AG/6
Page 18Tariffs
Working Hypotheses Variations/Additions
Geographical indications
(cont'd)Nature of protection: Members to notify a list containing geographical
names and products which are significant in terms of trade and which they
would like to protect against usurpation.  Names accepted by Members
and contained in the final list shall benefit from an enlarged and effective
multilateral protection against any kind of usurpation or unfair competitionor confusion of the consumer.
Publication: A final list containing protected names shall be published  to
facilitate the effective protection to other Members. Names may be addedto the initial list under the same procedure
S&D
Product coverage (i) Developing countries shall designate the primary agricultural products that
constitute the predominant staple in their traditional diet. Theseagricultural products shall not be subjected to the [market accessmodalities]/[reduction commitments.]
(ii) Developing countries shall have the flexibility to exclude from the tariff
reduction modalities any primary agricultural product in respect of whichone or more of the following conditions apply:
(a) the product in question is a predominant staple in the traditional diet
of the developing country [and is not exported];
(b) the exclusion of the product in question reflects a food security, rural
development, [product diversification] [poverty alleviation] concern;
(c) substantial trade liberalization has already been undertaken for the
product concerned, either as part of a structural adjustment
programme sponsored by a multilateral agency, or as part of theWTO accession process.
(iii) The products in respect of which new tariff bindings have been negotiated
under GATT XXVIII shall not be covered by these modalities.
(iv) Developing countries shall define a list of agricultural products that will be
subject to further reduction commitments.
Base rates (i) Developing countries shall be allowed to renegotiate the tariff bindings
that they consider to be low, taking into account food security concerns.[In such cases, [least-developed countries], [net food-importingdeveloping countries], [small island developing states], [landlocked
countries] [single commodity exporting countries] [small-scale agricultural
exporters] shall not be required to provide compensation for the upwardrevision of bindings on sensitive products. The relevant footnotes shall beindicated in respective schedules.]TN/AG/6
Page 19Tariffs
Working Hypotheses Variations/Additions
Reduction
formula(i) Least-developed countries to be exempt from undertaking
reduction commitments.(i) The [net food-importing developing countries] [countries with subsistence
farming] shall be exempt from further reduction commitments [during atransitional period .]
(ii) Developing countries to undertake lower reduction commitments
implemented over longer timeframes than developed countries.(ii) Tariff reductions for developing countries shall be implemented from final
bound tariffs in equal annual instalments over a 9-year period according tothe following schedule:
(a) initial tariffs falling in the range of 0-50 per cent inclusive shall be
reduced using the Swiss formula with a coefficient of 50;
(b) initial tariffs falling in the range 50-250 per cent shall be reduced by
50 per cent;
(c) initial tariffs that exceed 250 per cent shall be reduced to 125 per
cent.
(iii) Uruguay Round formula: Lower simple average cuts and lower minimum
average cut per product shall apply in the case of developing countries, inequal annual instalments.
Variant: The rate of reduction shall not exceed 10 per cent for sensitive
products which are essential for food security in vulnerable countries.1
The rates of reduction to be applied to products other than sensitive andvery sensitive (to be specified in a negative list) shall be equal to two-
thirds of those applicable to developed countries. Back-loading shall bepermitted in the case of sensitive products. The timeframe forimplementation shall be [10 years] [25 years for small developing
vulnerable agricultural exporters.
2]
(iv) In relation to formula (iii) on page 14: Developing countries shall reduce
their tariffs over a 10-year implementation period commencing in the year
2008. The rates of reduction shall be lower than, but no less than 50 per
cent of, the rate of reduction applied to developed countries' tariffs, i.e.
25 per cent simple average reduction with a minimum rate of reductionper tariff line of 10 per cent.
(v) The implementation period to start counting once developed country
Members have substantially reduced domestic support and eliminated
export subsidies.
(vi) Developing countries shall have the flexibility to select the most
appropriate formula taking into account their development needs.
                                                     
1 Defined by the proponents as: least-developed countries, net food-importing developing countries, small island developing stat es, landlocked countries and single commodity exporting
countries.
2 Defined by the proponents as developing countries which face specific geographical/structural/economic rigidities consequent o n very small size and physical constraints.TN/AG/6
Page 20Tariffs
Working Hypotheses Variations/Additions
Simplification of
tariff structures(i) Developing countries shall be encouraged to convert their non- ad valorem
tariffs into ad valorem  equivalents  and shall be given an adequate
timeframe for this purpose.
(ii) Developing countries shall not be required to convert their non- ad valorem
duties into ad valorem  equivalents.
Tropical products Developed country Members to take fully into account the particular
needs and conditions of developing country Members by providing thefullest liberalisation of trade in tropical products.(i) [Developed country] Members shall immediately grant duty-free and
quota-free MFN access to tropical products [whether in raw or inprocessed form] originating in developing countries.  To this effect:
Variant 1: a list of tropical products shall be established.
Variant 2: the list established by the Secretariat during the Uruguay
Round shall be used, with no a priori  exclusion.
(ii) Where the tropical product involved is a sensitive item, vulnerable
importing developing countries shall endeavour to achieve a maximumtariff rate of 15 per cent ad valorem  within a 5-year period.
Illicit narcotic
cropsDeveloped country Members to take fully into account the particular
needs and conditions of developing country Members by improving
opportunities and terms of access for products of particular importance
to the diversification of production from the growing of illicit narcoticcrops.(i) Developed countries shall immediately extend duty-free and quota-free
access to products originating in developing countries, and their
neighbouring countries, in the framework of their diversification
programmes aiming at eradicating the production of illicit narcotic crops.To this effect, a list of alternative products for diversification purposesshall be established.
Geographicalindications(i) Technical assistance to be provided to developing country Members to
assist them in drawing up (a) a list of agricultural products in respect of
which geographical indications are to be effectively protected, and
(b) their own regulatory programmes for the protection of geographicalindications.TN/AG/6
Page 21Tariff quotas
Working Hypotheses Variations/Additions
Base for further
commitmentsThe base levels for further commitments, for both in-quota tariffs and
tariff quota volumes, to be the final bound levels specified in Members'Schedules.(i) The tariff quota volumes shall be established on a disaggregated, product-
specific, basis.
(ii) [All] [new] tariff quota access opportunities shall be based on current
consumption patterns and data over a defined base period.
(iii) The base levels for in-quota duties shall be the rates applied on 1 January
2000 or the final bound levels, whichever is lower.
(iv) The tariff quotas which were established during the Uruguay Round in
accordance with the minimum access modalities shall be revised and setat a certain percentage of the actual domestic consumption of the product
in question. The base level of consumption shall be updated.
Tariff quota volume Scheduled tariff quotas to be expanded. (i) No tariff quota volume shall be reduced as a result of these modalities. In
particular, existing tariff quota volumes shall not be rolled back, even if the
consumption period is re-based.
(ii) The expansion of market access opportunities shall be based on:
[consumption data in a defined recent period] [a percentage increase from
final bound tariff quota volumes.]
(iii) The final bound tariff quota volumes shall be expanded by adding an
amount equal to 20 per cent of current domestic consumption of theproduct concerned over a 5-year im plementation period. A down-payment
equivalent to 50 per cent of the total volume expansion shall be made in
the first year. The remainder shall be phased-in in equal annual
instalments. Guidelines shall be established to ensure that domesticconsumption is measured accurately and consistently.
(iv) The final bound tariff quota volumes shall be expanded annually by 1 per
cent of base period (1986-88) domestic consumption of the product
concerned over a 6-year implementation period, in equal annualinstalments.
(v) The final bound tariff quota volumes shall be expanded to at least 5 per
cent of current domestic consumption of the product concerned in the
most recent period. Members wishing to retain or establish new tariffquotas shall be responsible for providing the data justifying the volume inrelation to the domestic consumption for the product concerned.
(vi) All tariff quota volumes shall be increased from final bound levels by a
minimum of 4 per cent per year over a 5-year period.TN/AG/6
Page 22Tariff quotas
Working Hypotheses Variations/Additions
Tariff quota volume
(cont'd)(vii) The tariff quota volumes for non-cereal crops shall be expanded to
8-10 per cent of domestic consumption.  The tariff quota volumes forcereals shall remain unchanged.
(viii) All tariff quota volumes in developed country markets shall be increased
from their final bound levels by 20 per cent over a 5-year period.
(ix) The tariff quota volumes which were established during the Uruguay
Round in accordance with the current access modalities shall not be
increased.
(x) Minimum access opportunities shall be based on the total consumption of
marketed agricultural products, i.e., total national consumption less on-farm consumption.
(xi) Tariff quota access for staple foods shall not be increased.
(xii) The access opportunities established for products under the special
treatment provisions of Annex 5 of the Agreement on Agriculture shall bereset to the same level of access as those products which were tariffied in
accordance with Article 4.2 of the Agreement on Agriculture.
(xiii) Minimum access opportunities shall be increased by 0.4 per cent annually
for non-staple commodities.
In-quota tariffs (i) Developed countries to phase-out all in-quota tariffs during a 5-year
implementation period.
(ii) Members to phase-out all in-quota tariffs from applied rates as of
1 January 2000 or final bound levels, whichever is lower, in equal annual
instalments, over a 5-year period.
(iii) All in-quota tariffs shall be reduced to an agreed ceiling. The reduction will
be phased over a 5-year implementation period in equal annualinstalments. The in-quota tariffs that are below the agreed ceiling shall
remain unchanged.
(iv) In-quota tariffs [shall be maintained] [shall not be reduced for sensitive
products.]
(v) The recently-acceded Members shall benefit from the same flexibilities as
specified under Tariffs section, Request/offer , item (i).TN/AG/6
Page 23Tariff quotas
Working Hypotheses Variations/Additions
Other matters (i) The approach for two-stage tariffs and tariff quotas shall address all of the
related elements through binding rules.  For example, in order to maintainthe right to have tariff quotas, Members would be required to:
- eliminate tariffs within quota;
- expand the size of all tariff quotas to 5 per cent of current
consumption in a recent period on a product basis;
- provide access for products on the same product basis; and
- make commitments on over quota tariffs which take into account the
extent of liberalization provided through the tariff quota.
(ii) Tariff-only regimes to apply at the end of the implementation period, with
the exception of those tariff quotas that are maintained by mutual consent
between developed and developing countries.
(iii) A specific tariff quota commitment may be phased out if:
- the rate of tariff quota utilisation (total imports expressed as a
percentage of the final access commitment) exceeds 110 per cent in
the most recent 3 years;
- a further tariff commitment is undertaken.
S&D
Tariff quota
volume(i) Developing countries shall expand tariff quota volumes from current
bound levels in equal annual instalments by adding an amount equal to14 per cent of current domestic consumption of the product concernedover a 9-year implementation period.
(ii) Developing countries maintaining tariff quotas shall not be required to
undertake further commitments.
Variant: The developing countries shall not be required to increase
[minimum access] tariff quotas where these concern staple crops.
(iii) The developing countries maintaining tariff quotas shall be exempted from
improving market access for the agricultural products that are subsidizedby developed countries.
In-quota tariffs (i) Developing countries to phase-out or reduce in-quota duties over a 9-year
implementation period.TN/AG/6
Page 24Tariff quotas
Working Hypotheses Variations/Additions
In-quota tariffs
(cont'd)(ii) [Consistently with paragraph 3 of GATT Article XXVIII bis] developing
countries shall have the flexibility to maintain their in-quota duty bindings
at levels that are consistent with their development, trade, food security,
and financial needs.
(iii) Tariff quota access opened for products of export interest to [, or
originating in,] [developing countries] [least-developed countries] shall beduty free.
Implementationperiod(i) Implementation by developing countries shall start once developed
countries have substantially reduced domestic support and eliminated
export subsidies.
(ii) Developing countries shall expand their tariff quota volumes over a 10-
year implementation period.TN/AG/6
Page 25Tariff quota administration
Working Hypotheses Variations/Additions
Principles Methods of tariff quota allocation shall be simple, practicable,
predictable, non-discriminatory and transparent.(i) Tariff quotas shall be administered in ways that [ensure] [encourage]
[facilitate] the full [realisation] [utilisation] of market access opportunities.
(ii) All methods of allocation shall enable business decisions to be based on
commercial considerations and shall not operate to restrict market access.
[The administrative decisions shall reflect as closely as possible those that
would be made under a tariff-only regime.]
(iii) The principles governing tariff quota administration shall be elaborated
based on (a) other relevant WTO agreements such as the ImportLicensing Agreement; (b) relevant WTO panel findings; and (c) the review
process undertaken by the Committee on Agriculture since 1995.
(iv) Government intervention shall be minimal and shall not constitute a
barrier to trade.
Administrationmethods(i) All methods of tariff quota administration to comply with GATT 1994, the
Agreement on Import Licensing Procedures, and Article 4.2 of theAgreement on Agriculture.  [There shall be no derogation from existing
GATT/WTO rules and disciplines].
(ii) Members have the right to administer their tariff quotas in the manner that
they find most appropriate provided that it is not inconsistent with thedisciplines to be established. There shall be no restriction on the choice ofmethods of tariff quota administration.
(iii) Members shall develop an indicative [illustrative] [non-exhaustive] list of
acceptable administration methods.
(iv) The use of auctioning as a method of tariff quota administration [shall
remain prohibited] [shall be explicitly permitted].
Terms and conditionsof access - Supplying
countriesAll increases in tariff quota volumes to be made available on an MFN
basis.(i) The allocation of [new] tariff quotas shall not discriminate among
supplying countries and shall be implemented on an MFN basis
[according to GATT Article XIII].
(ii) Existing country-specific allocations shall be phased-out in equal annual
instalments and tariff quota opportunities made progressively available onan MFN basis.  During the transition period, any unused country-specificallocation shall also be eliminated and made available on an MFN basis.
(iii) All country-specific allocations shall be replaced by transparent licensing
procedures based on historical trade flows [in a recent base period].
(iv) Existing [scheduled] country-specific allocations shall be maintained.TN/AG/6
Page 26Tariff quota administration
Working Hypotheses Variations/Additions
(v) Imports under existing or future preferential trade arrangements [shall not]
[shall] be counted against WTO [MFN] [minimum] market accessopportunities.Terms and conditions of
access - Supplyingcountries (cont'd)
(vi) Country allocations made under regional or bilateral trade initiatives may
be counted against Members' Uruguay Round minimum accesscommitments.
(vii) Imports from non-WTO Members [shall be] [shall not be] credited against:
Variant 1: scheduled [MFN] [minimum access] tariff quotas.
Variant 2: the expanded MFN portion of existing tariff quotas.
Variant 3:  new tariff quota commitments.
(viii) [A certain percentage] [a 20 per cent] [a 5 per cent] share of each
scheduled tariff quota shall be reserved for [new] [non-traditional]
suppliers [during a 6-month period]. [Unused country allocations shall beredistributed thereafter].
Terms and conditionsof access - ImportingcountriesNote:  Some or all of the proposals for modalities and/or rules-related elements
below could apply under Terms and conditions of access – Importing countries :
General Administrative conditions and formalities shall not operate in a manner
which prevents the full utilisation of scheduled tariff quotaopportunities.
Products (i) Sub-allocations to specific tariff lines within a tariff quota shall be
permitted in order to encourage the full utilisation of scheduled accessopportunities.
(ii) Sub-allocations to particular products where a tariff quota contains
different tariff lines shall be prohibited.
(iii) The products imported under tariff quota regimes must not be subsidised.
(iv) Seasonal restrictions [may be] [shall not be] applied on any agricultural
product.
Issuance andduration of tariff
quotaallocations/import licences(i) The tariff quota import licences must be issued to importers [sufficiently in
advance] [not less than 3 months before] [2 months before] the
commencement of the quota year and must be freely usable with effectfrom the beginning of that year.TN/AG/6
Page 27Tariff quota administration
Working Hypotheses Variations/Additions
(ii) Tariff quota allocations to importers shall be valid for the entire quota year. Issuance and
duration of tariffquota allocations/
import licences
(cont'd)(iii) The validity of import licences shall [be no less than 30 days] [generally be
sufficiently long to allow overseas suppliers every opportunity to ship the
product in question.] A mechanism shall be available to allow for
reasonable extensions.
(iv) In specific situations, such as severe and time-limited shortages on
domestic markets, the duration of import licences may be shorter.
Size of tariffquota allocations(i) The minimum size of the [tariff quota] [import licence] allocation assigned
to any quota holder should be economically viable and consistent with
[normal commercial practices] [international norms of commercial
shipment loads] for the product concerned. [Importing Members with smalldomestic markets shall not be subject to this requirement.]
(ii) Under the first-come, first-served method, the tariff quota volume [may be]
[may not be] subdivided into tranches over the quota year [provided that
the size of allocation is commercially viable] with a view to avoid theconcentration of imports at the start of the tariff quota year.
Eligibility ofimporters (i) Members shall not discriminate between importers.
(ii) Domestic producer groups and government-affiliated or controlled
importers shall not be eligible to receive tariff quota allocations.
(iii) A formula-based approach shall be adopted to enhance private sector
participation.
(iv) Applicants shall not be required to demonstrate evidence of past trading
performance to become eligible to tariff quota allocations.
Duties, fees,mark-ups(i) Administrative fees and expenses associated with the implementation of
tariff quotas shall be minimal.
(ii) Members shall ensure that tariff quota administration mechanisms do not
result in the importing governments receiving more than their scheduled
entitlements, in terms of tariffs, [and] other duties and charges [and mark-ups] as specified in schedules.
(iii) Mark-ups and duties shall not impede access to the importing market.TN/AG/6
Page 28Tariff quota administration
Working Hypotheses Variations/Additions
Other terms (i) Importers shall not be required to submit export certificates.
(ii) Importation under tariff quotas shall not be contingent upon compliance
with national content and domestic purchase requirements.
(iii) Imports for re-export [shall not be] [may be] counted against tariff quota
access commitments.
(iv) Imports under tariff quota regimes shall not be contingent upon end-use
specifications, or subject to unfavourable commercial terms, including
product specifications, pricing and packaging.
(v) Recourse to end-use specifications may be permitted in order to avoid
speculative applications.
Under-fill (i) The full realisation of tariff quota opportunities [shall] [shall not] be
mandatory.
(ii) Members shall ensure that tariff quotas are filled before imports may take
place at the out-of-quota tariff.
Enhancedtransparency(i) Under-fill situations shall be exclusively managed through enhanced
transparency and notification requirements.
Reallocation ofunused tariffquota sharesMembers to ensure that unused tariff quota portions are re-allocated in
a timely manner with a view to facilitating the realisation of scheduledmarket access opportunities.(i) Members shall ensure that after 8 months into the quota year, those
portions of tariff quotas not contracted for delivery are reallocated to otherimporters by the end of the quota year.
Variant 1:  The reallocation shall be made [no later than 9 months into the
tariff quota year] [within 8 months].
Variant 2: Any unused tariff quota shares shall be re-allocated to the
following quota year.
(ii) Re-allocated tariff quota shares must be used during the last quarter of
the tariff quota year in question [and subject to a lower in-quota duty].
(iii) Members shall develop a mechanism to address unused country-specific
allocations.
(iv) Unused country-specific allocations shall be reallocated after a 6-month
period. The re-distribution  process must be completed within 8 monthsinto the tariff quota year.TN/AG/6
Page 29Tariff quota administration
Working Hypotheses Variations/Additions
Reallocation of
unused tariff quotashares (cont'd)(v) Unfilled portions of tariff quotas shall be reserved in the next agreed
period of time for products originating in least-developed countries, netfood-importing developing countries and countries in transition.  The in-
quota duties shall be reduced by 50 per cent.
(vi) Tariff quota licences [must be fully] [shall not be] transferable between
importing firms.
Deposits,guarantees andpenalties(i) Importers [shall not] [may] be required to make security deposits as a
guarantee for the use of an import licence. [Such guarantees shall bereleased upon proof of importation].
(ii) Importers shall be free to return unused [quota allocations] [licences]
without penalty, sufficiently in advance of the end of the quota year so thatthese can be reallocated and used.  A penalty should apply to [quota][licence] holders who fail to use or return allocations.
(iii) Tariff quota allocations that are not fully used in any given quota year by
quota holders may be reduced in the following quota year.
Other measures (i) The following corrective measures shall be applied if simple average fill
rates register less than 50 per cent during 3 consecutive years:
- the corresponding tariff quota administration system shall be
[temporarily] replaced by a tariff-only regime;
- the applied out-of-quota duty shall be immediately lowered to the
level of the applied in-quota duty.
- any unused tariff quota quantities shall be transferred to the following
quota year's allocation.
(ii) Applications from importers shall be accepted on a continuous basis until
the entire tariff quota quantity is exhausted.
Transparency
requirements
Transparency Members to ensure that the relevant information is widely, publicly, and
timely communicated with a view to increasing transparency andpredictability in tariff quota  administration.(i) Members shall designate a government agency acting as a
contact/enquiry point responsible for all matters relating to tariff quotaadministration [and for responding promptly to any request forinformation].TN/AG/6
Page 30Tariff quota administration
Working Hypotheses Variations/Additions
Transparency
(cont'd)Variant:  The contact point shall be a government or private agency with
no direct or indirect material interest in the production, sale, export or
import of agricultural products being imported through tariff quota
systems.
(ii) All relevant information shall be published in a national official journal. In
addition,
Variant 1: Members shall establish a dedicated, publicly-accessible, tariff
quota administration Web site in order to disseminate all commerciallyrelevant information and regulations, with respect to some or all of thefollowing:
Variant 2: No Member shall maintain and administer a tariff quota unless a
publicly-available Web site is first established, along with any otherinformation that, if otherwise denied, might negatively affect tariff quota fillrates. The relevant information shall include some or all of the following:
- procedural requirements for the obtention and allocation or re-
allocation of quota licences (including regulations concerning notices of
application, eligibility criteria and decision-making criteria, applicationprocesses, allocation methods, timing and deadlines, list of competentnational authorities with phone numbers, E-mail addresses for each tariff
quota programme);
- current status of imports under individual tariff quotas to be
published at regular intervals (including tariff quota imports and fill rateson a tariff line basis; tariff treatment; country allocations; quota allocation
dates; validity period of licences);
- details of persons, commercial enterprises or other bodies to whom
right to import under individual tariff quotas has been attributed orre-allocated, including quota quantities per quota holder, mailing, fax and
E-mail addresses.
- advance notice regarding any changes relating to administration of
tariff quotas; consultative process with stakeholders on prospectivechanges to rules and procedures; right of appeal process foradministrative rulings.
(iii) The establishment of a Web site shall not be a mandatory requirement.TN/AG/6
Page 31Tariff quota administration
Working Hypotheses Variations/Additions
Notifications Members to submit annual notifications to the Committee on
Agriculture.(i) Any changes in the administration of tariff quotas should be notified within
30 days and contain the following information: quota allocation dates,licence delivery dates, means of publicizing and assessing information,
eligibility criteria, licence application processing periods, identity of licence
holders, procedures for making changes to tariff quota regimes and formonitoring tariff quota utilisation.  In addition, Members should reply within30 days to any request for information by other Members.
(ii) For the first-come, first-served method of tariff quota administration, there
should be an advance notification indicating the forecasted date of closingof the tariff quota.
S&D
Principles (i) The general and specific rules on tariff quota administration shall apply to
all Members, whether they are developed or developing countries.
Administration
methods(i) Tariff quota administration to be on the basis of a first-come, first-served,
basis provided that a specific percentage is allocated to net food-importing
developing countries.
Terms andconditions ofaccess -
Supplying
countries(i) A preferential tariff quota allocation to be reserved to [least-developed
countries][net food-importing developing countries][developing countrieshaving less than US$1,000 per capita income] in both developed and
developing countries' markets. [The preferential allocation shall be subject
to a preferential in-quota tariff duty.]
Variant: For each tariff line, a minimum of 5 per cent of the total bound
annual volume to be reserved for imports from small-scale3 and limited
commodity exporters4. In addition, a list of products of export interest shall
be prepared based on requests from Members eligible to "small scale" or"limited commodity exporter" status. Importing Members to open new tariffquota access representing 0.5 per cent of domestic consumption covering
all the listed products.
                                                     
3 Defined by the proponents as developing countries whose export share of the product concerned in the world market is less than  3.25 per cent.
4 Defined by the proponents as developing countries where one or a few commodities account for the bulk of agricultural exports.TN/AG/6
Page 32Tariff quota administration
Working Hypotheses Variations/Additions
Terms and
conditions ofaccess -
Supplying
countries (cont'd)(ii) When a tariff quota is established for a commodity on which [small island
developing states and least-developed countries] [small vulnerabledeveloping agricultural exporters
5] are dependent and have traditionally
enjoyed duty free preferences, they will be assigned duty-free tariff quota
shares according to their historical share of the market.
(iii) [A certain percentage] [all] of the volume expansion in [minimum access]
tariff quotas shall be allocated to [developing] [vulnerable6] countries.
(iv) No preferential allocation of an existing tariff quota, MFN or not, either in
part or whole, shall be set aside for developing countries.
(v) Longer transitional phase-out for the elimination of preferential country-
specific allocations in favour of least-developed and other developing
country suppliers.
(vi) The country-specific allocations established during the Uruguay Round in
favour of developing countries shall be maintained [during the on-goingreform process.]
(vii) Where country-specific allocations are made in favour of developing
countries, these shall be in addition to, not subtracted from, existing MFNtariff quotas.
(viii) All tariff quotas for small-scale or limited commodity exporters that are
unused after 6 months into the quota year shall be made available to
other exporters on an MFN basis.
(ix) Where additional access, granted within the context of S&D treatment,
cannot be achieved, the importing Member could identify technical
assistance that might facilitate the export potential of the developing
country in question.
(i) To counter the adverse effects of import surges on low- or resource-poor
farmers, developing country Members shall have the flexibility to apply
seasonal restrictions temporarily on food security crops.Terms and
conditions of
access -Importers(ii) Taking into account their particular trade, development and financial
needs, developing country Members shall be allowed to apply domestic
purchase, or local content, requirements when allocating tariff quotas.
                                                     
5 Defined by the proponents as developing countries which face specific geographical/structural/economic rigidities consequent o n very small size an physical constraints.
6 Vulnerable countries are defined by the proponents as: least-developed countries, net food-importing developing countries, sma ll island developing states, landlocked countries and single
commodity exporting countries.TN/AG/6
Page 33Tariff quota administration
Working Hypotheses Variations/Additions
Terms and
conditions ofaccess – Importers
(cont'd)(iii) Due account shall be taken of the inherent constraints of the [vulnerable7
countries] [small supplying states] in respect of inter alia , shipment loads,
remoteness [and land-locked situations] [and the need for adequatepredictability].
Transparencyrequirements(i) Importing developing countries shall not be tied by costly and
cumbersome administrative and reporting procedures as a result of
enhanced transparency and notification requirements.
(ii) Enhanced transparency and notification requirements shall apply
indistinctly to all Members, in particular where tariff quotas are managed
by import state trading enterprises.
(iii) Members shall consider providing technical assistance to developing
countries facing technical difficulties to maintain the infrastructurenecessary to ensure transparency (e.g. Web site, enquiry point).
Underfill (i) Unfilled portions of tariff quotas shall be reserved in the next agreed
period of time for products originating in least-developed countries, netfood-importing developing countries and countries in transition.  To this
effect, in-quota duties shall be reduced by 50 per cent.
                                                     
7 Vulnerable countries are defined by the proponents as: least-developed countries, net food-importing developing countries, sma ll island developing states, landlocked countries and single
commodity exporting countries.TN/AG/6
Page 34Special safeguard measures
Working Hypotheses Variations/Additions
Article 5 of the
Agreement onAgriculture(i) The provisions of Article 5 of the Agreement on Agriculture shall cease to
apply for developed country Members. Coverage shall not be extended toother countries or products.
(ii) The provisions of Article 5 of the Agreement on Agriculture shall be
maintained for the duration of the reform process.
(iii) Some or all of the following amendments to be introduced:
(a) The reference period used for the determination of trigger prices
shall be updated to reflect current market conditions. The referenceperiod shall be the three most recent calendar years for which
statistical data are available;
(b)  The calculation of the additional duty shall be simplified to enhance
transparency, for example, through a uniform proportional additionalcharge;
(c) Where products whose bound tariff rates are below a certain level (to
be negotiated), a minimum additional duty (to be negotiated) shall beapplied when the volume-based safeguard is triggered;
(d) The notification requirements relating to trigger prices and trigger
volumes shall be strengthened.
(iv) The [right to invoke the provisions]/[product coverage] of Article 5 of the
Agreement on Agriculture shall be extended to :
Variant 1: all [other countries] [transition economies] [newly-acceded
Members];
Variant 2: all the products [which were tariffied during the Uruguay
Round];
Variant 3:  all the agricultural tariff lines in respect of which a specified
percentage reduction commitment has been undertaken;
Variant 4:  [fruit and vegetables, and other] perishable and seasonal
products.  [The safeguard shall apply in accordance with the specificproduction period of domestic seasonal or perishable produce].TN/AG/6
Page 35Special safeguard measures
Working Hypotheses Variations/Additions
Other measures (i) Members shall introduce a new safeguard measure for perishable and
seasonal products based on price- or quantity-related triggers.
(ii) A Food Security Mechanism (FSM) shall be available to all WTO
Members. It shall be applicable to (a) primary staple foods, on an
automatic basis, and (b) other commodities, under certain clearly definedcriteria. FSM products shall be eligible for the safeguard mechanism to beagreed; exempt from further tariff reduction or lesser reduction schemes;
exempt from further tariff quota expansion; and no additional disciplines
shall be imposed on state trading entities that only import FSMcommodities.  The FSM ceases to apply, and cannot be reverted to, if thecommodity in question becomes a net- exported product.
S&D
Article 5,Agreement on
Agriculture(i) To be extended to [all developing] [least-developed] [vulnerable
8]
countries [and developing countries which undertake further reduction
commitments] for [all products] [products which are essential to food
security].
(ii) To be extended to developing countries and least-developed countries to
enable the WAEMU member States to bring the short-term import tax
(TCI) into conformity with WTO rules.  In addition, the trigger levels
(quantities or prices) could be determined annually by the countriesconcerned, on the basis of their domestic consumption and production(quantities for the previous year) or their domestic production costs
(prices).
(iii) To be maintained for developing country Members with current SSG rights
[until the imbalances in the use of domestic support and export subsidiesare corrected.] [Developing countries th at are net-exporters of agricultural
commodities shall relinquish the right to invoke Article 5 of the Agreement
on Agriculture for the products concerned].
Balancing
mechanism
addressing thelinkagesbetween the
three pillars(i) Developing and least-developed countries may impose an additional duty,
to be defined, to protect their agricultural industries from the harm from
trade-distorting export subsidies and/ or trade-distorting domestic support
measures.
                                                     
8 Vulnerable countries are defined by the proponents as: least-developed countries, net food-importing developing countries, sma ll island developing states, landlocked countries and single
commodity exporting countries.TN/AG/6
Page 36Special safeguard measures
Working Hypotheses Variations/Additions
Balancing
mechanismaddressing the
linkages between
the three pillars(cont'd)(ii) A balancing mechanism linking the commitments in the three pillars shall
be integrated into the tariff reduction modality based on a formula toconvert trade-distorting support and export subsidies into their tariff
equivalents. Developing countries may apply the resulting additional
duties at any time throughout the implementation period on products fromdeveloped countries that are subsidised.
Other measures (i) Developing countries to have access to a new [simple] [and transparent]
mechanism to protect their domestic markets against import surges [forproducts that are designated as "strategic products for development"] [for
crops that are essential for food security].
Variant 1: The safeguard is invoked when the volume of imports during
any year exceeds the volume trigger level in the previous 3 years by 5 per
cent, or if the difference between the c.i.f. import price of a shipment and
the trigger price is more than 5 per cent of the trigger level. Volume-based
(respectively, price-based) trigger to be the average imports (c.i.f. price) ofthe 3 lowest years over the last 6 years. Action: quantitative restrictions (aquota which shall not be less than the trigger volume) or additional duties
(not exceeding 100 per cent) may be imposed for a period not exceeding
1 year.
Variant 2:  Any developing country may invoke the Special Safeguard
Mechanism (SSM) if the volume of imports in a year represents a certainpercentage of the average import level ov er the last three years; or but not
concurrently, if the c.i.f. import price of a shipment falls below a trigger
price equal to the average c.i.f. value of the product concerned over thelast 3 years or the average domestic price in the year in which themeasure is invoked. Additional duties or quantitative restrictions may be
imposed for 1 year, subject to extension if similar conditions prevail.
Imports from other developing countries shall not be affected unlesscertain import share criteria are met. All agricultural products shall be
covered by the SSM if in conformity with the conditions laid out. Members
availing themselves of this mechanism undertake not to have recourse to
certain provisions contained in GATT Article XIX and the Agreement onSafeguards.TN/AG/6
Page 37Special safeguard measures
Working Hypotheses Variations/Additions
Other measures
(cont'd)(ii) A transitional Special and Differential Countervailing Measure (SDCM)
shall be introduced as part of Article 15 of the Agreement on Agriculture.On the basis of a simplified procedure in the investigation, as contained in
Part V of the Agreement on Subsidies and Countervailing Measures,
importing developing country Members shall be entitled to applycountervailing duties on developed countries' exports when the existenceof a subsidy has been established on the basis of schedules, notifications
or lack thereof, or DSB findings. There shall be no requirement to prove
injury or existence of a causal link between the subsidised imports and thealleged injury.
(iii) Developing countries shall have access to an import relief mechanism to
be used in response to fluctuations in world prices or significant import
surges. The safeguard shall be confined to a limited range of productsand circumstances.
Variant 1: The new safeguard shall be set in the context of substantial
market access improvements and be part of a package of targeted andappropriate special and differential treatment measures. It shall only beavailable where imports are subsidised or benefit from domestic supportand where there is domestic production of the product concerned.
Protection shall take the form of an additional duty only, and limitations
shall be placed on the duration of safeguard action.
Variant 2: Developing countries which have agricultural bindings below a
specified level may invoke the new safeguard mechanism if the
international price of the product concerned drops by a specified
percentage below a trigger level, defined as the 3-year average importprice. An additional duty shall be imposed for a maximum 1-year durationand only while the import price of the shipment concerned remains below
the 3-year average trigger level.  The related provisions shall be of a
transitory nature and remain into force until all export subsidies and trade-distorting support are eliminated.
(iv) A farmer income trigger mechanism shall be automatically triggered when
a sudden import surge causes farmers’ income to drop or the income
growth rate falls below a certain threshold level.TN/AG/6
Page 38Importing state trading enterprises
Working Hypotheses Variations/Additions
Scope of entities to
which additional /improved disciplineswould be applicableStrengthened disciplines to apply to state trading enterprises.
(i) As per paragraph 1 of the Understanding on the Interpretation of
Article XVII and the related illustrative list (document G/STR/4).
(ii) The applicable disciplines shall be different for importing and for exporting
state trading enterprises.
Specific disciplines (i) The modalities to be established shall be without prejudice to Members'
rights and obligations under GATT Article XVII and the related
Understanding.
(ii) Special rights and [single desk] privileges of importing state trading
enterprises shall be prohibited.
(iii) Members shall not restrict the right of any interested entity to import, or to
purchase for import, agricultural products.
(iv) The legal status and the special rights and privileges of import monopolies
shall not be affected by these modalities if their business activities areconducted in accordance with the requirements of GATT Article XVII.
(v) The state trading enterprises which are engaged in commercial activities
[whether importation or exportation] shall not be responsible for carryingout domestic regulatory functions, such as administration of tariff quotas,setting [and enforcement] of technical, sanitary/phytosanitary, or qualitystandards.
(vi) Issue of single desk buyer or seller to be discussed when the negotiations
on the Interaction between Trade and Competition Policy are completed inthe relevant WTO forum.
Specific disciplines -Tariff quotas(i) State trading entities having responsibility for managing [WTO] tariff
quotas to be subject to the same general rules and disciplines governingtariff quota administration.
(ii) The right to import which is in the first instance allocated to a state trading
entity shall be transferred to private tr aders in case of under-utilisation of
the tariff quota concerned over a certain period.
(iii) Import rights shall be transferred to private entities if tariff quotas register
fill rates below 50 per cent over a 3-year period. The applied out-of-quota
duty shall be reduced to the in-quota level. Where out-of-quota imports
are occurring but the tariff quota is not filled, any unused quantity shall berolled-over to the following importing period.TN/AG/6
Page 39Importing state trading enterprises
Working Hypotheses Variations/Additions
Specific disciplines - Tariff
quotas (cont'd)(iv) Members shall implement any of the following two proposals, depending
upon which results in a greater share of direct imports. Members shallincrease the share of direct imports under tariff quotas through entities
other than import state trading enterprises:
(a) to 30 per cent upon implementation of this Agreement, increasing to
50 per cent through phased commitments made in equal annualinstalments over a 5-year period, or
(b) by 20 per cent from the levels in effect in implementation of this
Agreement, in equal annual instalments over a 5-year period.
Transparency /
notification
requirementsTransparency to be enhanced. (i) Members maintaining an importing state trading enterprise shall respond
within 30 days to requests by other Members for information regarding
that state trading enterprise.  Such requests may relate to specificinformation on a transaction basis, including inter alia, quantity, source ofimports, and contract specifications identified by end-users.
(ii) Members undertake to notify, on an annual basis, the following
information with respect to imports of agricultural products by state tradingenterprises: the volume, price and origin of imports; the domestic salesprice; the basic elements of the annual business plans made by state
trading enterprises in connection with imports.
(iii) Importing state trading enterprises shall not be required to provide
transaction specific information on a mandatory basis.
S&D (i) Importing state trading enterprises which fulfill rural development and food
security objectives shall continue to play a positive role in developingcountries.
(ii) There should be no additional disciplines other than those specified in
GATT Article XVII and the Understanding on the Interpretation of GATT
Article XVII in respect of state trading enterprises of single commodityexporters.
9
(iii) The disciplines shall be differentiated for developing countries which are
net-food importers, importers of staple foods [and small island developing
states].
                                                     
9 Defined by the proponent as developing countries for which the bulk of agricultural exports comprises one or two commodities.TN/AG/6
Page 40 Other market access issues
Working Hypotheses Variations/Additions
Preferential schemes
Preferential
margins(i) Where tariff rates under preferential trade regimes are lower than MFN
rates for products of substantial export interest to, and originating in,vulnerable
10 countries, the rates of reduction applied by developed
countries shall not exceed 15 per cent.
(ii) Preference-giving Members shall maintain the preferential margins [in
nominal terms].
(iii) Agricultural producers in developing countries, shall be adequately
compensated for the continuing erosion of preference margins.
Tradepreferences(i) Members to improve the transparency, stability, and predictability of
existing [reciprocal] [non-reciprocal] [GSP schemes] [preferential trade
arrangements]. These will become binding commitments in the framework
of the Agreement on Agriculture.
Variant 1: Members shall elaborate the principles governing  the
imposition of conditions and granting of benefits under [GSP schemes]
[reciprocal and non-reciprocal preferences]. Compliance with these
principles will be examined in the framework of the Agreement onAgriculture.
Variant 2:  The facility currently available to least-developed countries that
enables special WTO compatible market access arrangements withdeveloped countries, on terms that do not require the extension ofreciprocal preferences, shall be extended to small vulnerable agriculturalexporters.
11
(ii) New or enhanced preferences to be made over and above the terms and
conditions of existing preferential market access.
                                                     
10 Defined by the proponents as: least-developed countries, net food-importing developing countries, small island developing stat es, landlocked countries and single commodity exporting
countries.
11 Defined by the proponents as developing countries which face specific geographical/structural/economic rigidities consequent o n very small size an physical constraints.TN/AG/6
Page 41Other market access issues
Working Hypotheses Variations/Additions
Trade preferences
(cont'd)(iii) Developed countries [and the more advanced among developing
countries] shall enhance the market access opportunities in favour of[least-developed countries] [net food-importing countries] [land-locked
countries] [small island developing states] [African countries] [small
vulnerable agricultural exporters
12] [vulnerable countries13], for example in
terms of duty-free or low-duty tariff quota access to products originating in,or of export interest to, these countries.
Variant 1: To this effect, a list of agricultural products that are produced
and exported on a commercial basis shall be elaborated.
Variant 2:  A list of such products shall be bound in developed
[developing] countries' Schedules.
Variant 3 : The list of agricultural products of export interest to African
countries shall comprise those products that are essential for productdiversification; and/or “dynamic” products showing a high growth potentialin world markets and would provisionally include: cotton, sisal, hemp and
other  textile crops, hides and skins, tobacco, oilseeds, coffee and
products thereof, tea and products thereof, cocoa and products thereof,fresh and processed fruit and vegetables, and cassava.
(iv) Preferential trade arrangements shall not have a negative impact on
developing countries which are not a party to such arrangements.
Food safety (i) Food safety issues to be addressed in other fora, including the SPS
Committee.
(ii) The application of precaution under Article 5.7 of the SPS Agreement
shall be clarified in the following manner:
- measures shall be proportionate and no more trade restrictive than is
required to achieve the appropriate level of protection determined by
Members;
- measures shall not be discriminatory;
- the goal should be to achieve consistency in the application of the
level of protection that Members consider to be appropriate in similar
situations;
                                                     
12 See previous footnote.
13 Defined by the proponents as: least-developed countries, net food-importing developing countries, small island developing stat es, landlocked countries and single commodity exporting
countries.TN/AG/6
Page 42Other market access issues
Working Hypotheses Variations/Additions
Food safety (cont'd) - there shall be a prior need to examine the constant benefits and
costs of action and lack of action. This examination must considerwhether another measure, less trade-restrictive, is reasonably
available;
- measures, although provisional, could be maintained on certain
conditions, notably because scientific data remain incomplete,imprecise, or inconclusive. However, the maintenance of the
measures should take account of the development of scientific
knowledge. Hence, there should be re-evaluation of the data and themeasures as new scientific information is obtained.
- measures shall be based upon scientific evidence coming from
qualified sources, but not necessarily that of the majority of the
scientific community.
(iii) Article 5.7 of the SPS Agreement shall be interpreted in line with the
relevant Appellate Body Decisions14
S&D - Foodsafety(i) Members shall provide technical assistance to developing countries in the
context of the SPS Agreement.
(ii) Members shall promote access by de veloping countries to knowledge and
technical infrastructures needed to ensure compliance with food safetystandards in developed country markets.
(iii) Clear provisions to address the difficulties encountered by developing
countries in the context of the SPS Agreement, in particular in relation to
non-tariff barriers taking the form of sanitary measures.
Labelling (i) Mandatory labelling to be addressed in other fora, including the TBT
Committee.
(ii) Members shall develop a common understanding, interpretation or
guidance, on the criteria and guidelines for the implementation ofmandatory labelling requirements for food and agricultural products.
                                                     
14 See relevant sections of EC - Measures concerning meat and meat products  (Hormones), AB-1997-4,  as well as the decision taken by the Appellate Body on  Japan - Measures affecting
agricultural products , AB-1998-8.TN/AG/6
Page 43Other market access issues
Working Hypotheses Variations/Additions
Geographical
indications(i) Geographical indications to be addressed in other fora, including the
TRIPS Council.
(ii) The protection afforded by Article 23 of the TRIPS Agreement to the
geographical indications of wines and spirits shall be extended to all
agricultural products.TN/AG/6
Page 44Export subsidies
Working Hypotheses Variations/Additions
Policy coverage of
further commitmentsThe policy coverage of further commitments shall be the export
subsidies specified in Article 9.1 of the Agreement on Agriculture.(i) No new forms of export subsidies other than those listed in Article 9.1 of
the Agreement on Agriculture shall be introduced.
(ii) The policy coverage set out in Article 9.1 shall be maintained depending
on the treatment of other types of export supports such as export credits,
insurance and guarantee schemes and support which can be given by
export state trading enterprises.
(iii) The policy coverage set out in Article 9.1 shall be extended to cover
domestic support measures for specific products which meet the followingcriteria:
- measures classified as price-linked compensatory payments;  and
- more than {Y} per cent of products benefiting from the measures
above is exported.
(iv) Article 9.1(d) shall be clarified regarding some forms of export promotion
permitted under this provision.
Product specificity ofcommitmentsThe product specificity of commitments, for both quantity and
budgetary outlays, shall be as specified in Members' Schedules with
respect to final bound levels.(i) Commitments shall apply to all products or group of products,  including
processed products, where exports of such products are subsidised
through practices in Article 9.1 of the Agreement on Agriculture.
Base levels The base levels for commitments, for both quantity and budgetary
outlays, shall be the final bound levels as specified in Members'
Schedules.(i) Base levels can be adjusted depending on the results of the negotiations
on other forms of export support.
(ii) More representative current base levels may need to be defined for some
countries, particularly countries with economies in transition.
(iii) The base level for the staging of further commitments in developed
countries shall be the average actual subsidy level for the years 1995-
2000 or the bound level for the year 2000, whichever is lower.
Formula/targets for
further commitments,
implementation period,staging(i) Budgetary and quantitative reductions of 50% from final bound levels as
specified in Schedules from the first day of implementation followed by
equal annual reductions leading to elimination and prohibition after three[to five] years for developed countries and [six] [five to seven] years fordeveloping countries.
(ii) Scheduled outlays and quantity commitments shall be reduced to zero
through equal instalments over five years, with special and differentialtreatment for developing countries.TN/AG/6
Page 45Export subsidies
Working Hypotheses Variations/Additions
(iii) Export subsidies shall be reduced using the Uruguay Round approach.
There shall be no down payments.
(iv) Reduction commitments (to zero) shall be implemented over a six-year
period commencing  in the year 2005, in equal annual instalments.Formula/targets for further
commitments,implementation period,
staging (cont'd)
(v) In addition to budgetary outlays and quantity commitments, reduction
commitments (in equal instalments) shall also be established on the unitvalue for each category of export subsidies as defined in the Uruguay
Round.  The base level to be used shall be 64% of the average unit value
of export subsidy during the base period 1986 to 1990.
(vi) Domestic support measures that have the same effect as export subsidies
shall be reduced according to the formula for export subsidy reductions to
be worked out in the negotiations.  Reductions shall start from 64% of the
budgetary outlay and 79% of the quantities benefiting from such supportin the base period 1986-1990.
(vii) In the case that Members shall agree to an overall export subsidy
reduction of [X] percent, for a specific product or product group a Member
may choose to  reduce the export subsidy by a lower rate than the agreedoverall percentage export subsidy reduction agreed, provided that theMember undertakes a corresponding above-average reduction, multiplied
by a factor of [Y] and measured on a value and volume basis, on another
product or product group.
(viii) For incorporated products as defined in Article 9.1(f) of the Agreement on
Agriculture, reduction commitments shall be undertaken on a non-
aggregated basis for budgetary outlays.
(ix) The degree of product aggregation shall be related to the extent of the
reductions: the deeper the cuts, the larger the product aggregates.
(x) It shall be provided that, for equity, no Member is constrained to grant
export subsidies during the implementation period for reduction
commitments on all forms of export subsidies.
S&D (i) The exemptions for developing countries under Article 9.4 for the
transport and marketing subsidies set out in Article 9.1(d) and (e)
of the Agreement on Agriculture shall be extended.(i) Article 9.4 of the Agreement on Agriculture shall be continued [and
amended to include export assistance schemes usually provided by
developing countries][but with a clear end date].
(ii) Developing countries shall benefit of a longer time-frame (smaller
annual cuts) for implementing their further export subsidy
commitments.(ii) Developing countries' exemptions shall be extended to Article 9.1(a), (b),
(c) and (f) in cases of unforeseen circumstances, for developmental
objectives and for food security purposes. Alternatively, developing
countries shall be afforded a more general exemption for subsidies underArticle 9.1(a) to (c) of the Agreement on Agriculture.TN/AG/6
Page 46Export subsidies
Working Hypotheses Variations/Additions
S&D (cont'd) (iii) Least-developed countries shall not be required to make further
commitments on export subsidies.(iii) If general export subsidies are to be  permitted in other Member countries,
then equivalent provisions to those of Article 27 and Annex VII of theAgreement on Subsidies and Countervailing Measures, or some other
flexibility, shall be incorporated to the Agreement on Agriculture for
developing countries with GDP per capita of less than $1,000.
(iv) Until a developing country reaches a certain stage of export
competitiveness (3.25% of world trade of the products concerned) the
support provided by that developing country to subsistence products and
certain other crops should not be subject to commitments (as set out inthe SCM Agreement).
(v) Developing country Members shall stage further reduction commitments
from the final bound levels established as a result of the Uruguay Round,
with the flexibility to implement commitments over a ten-year periodcommencing in the year 2008.
(vi) Any new commitments through any instrument in market access,
domestic support, and export subsidies for developing countries shall be
no more than half of the commitments of developed countries.
(vii) Reductions in export subsidies, with a view of phasing out, by developed
countries for products of export interest to developing countries shall be
completed between September 2003 and 1 January 2005.
(viii) No exports shall be allowed to least-developed countries, vulnerable
countries in transition and NFIDCs for agricultural products supported byexport competition instruments where such products or their direct
substitutes are produced in the importing country unless such exports and
type of export instruments are explicitly approved by importing Membersand notified by both importing and exporting Members.
(ix) There shall be lower reduction percentages or no reduction in respect of
quantities and outlays of products destined to LDCs and NFIDCs.
(x) There shall be prefixing of export refund rates for products destined to
LDCs and NFIDCs.
Other issues (i) The provisions of Article 13(c) shall cease to apply as per Article 1(f) of
the Agreement on Agriculture.
(ii) Article 13(c) of the Agreement on Agriculture shall continue to apply to
export subsidies provided by any developing country Member that fully
conform with the provisions of Part V of the Agreement on Agriculture (as
revised by the present modalities), as reflected in each Member'sSchedule.TN/AG/6
Page 47Export subsidies
Working Hypotheses Variations/Additions
Other issues (cont'd) (iii) Commitments on export subsidies may not be negotiated to limit the
scope of subsidies on exports of agricultural products as regardsindividual or regional markets.TN/AG/6
Page 48 Export Credits, Insurance and Guarantees
Working Hypotheses Variations/Additions
General approach Disciplines shall be established for export credits, export credit
insurance and guarantee programmes.(i) Export credits that comply with the agreed disciplines shall be deemed to
be in conformity with the provisions of the Agreement on Agricultureregarding export competition.  Export credits that do not comply with theserequirements shall be counted against each Member's export subsidies
reduction commitments as indicated in its Schedule, or otherwise
prohibited.
(ii) The subsidy element implicit in export credits, insurance and guarantees
schemes shall be determined and subject to reduction commitmentscomparable to those that will apply to export subsidies [X per cent in
outlays/values and Y per cent in volumes].
(iii) Export credit commitment levels for each year of the implementation
period shall be specified in a Member's Schedule (based on a pastreference period).  This will be expressed as :
- in the case of budgetary outlays, the maximum level of granted
amounts for export credit that may be allocated or incurred in thatyear in respect of the agricultural product or group of productsconcerned;  and
- for export quantity reduction commitments, the maximum quantity of
an agricultural product or group of products in respect of whichexport credits may be granted in that year.
(iv) Members  shall undertake the gradual reduction of the values and volumes
of agricultural exports with the notification of the base period data for
exports under government risk coverage, from which annual percentagereductions shall be made. For Members without baseline data, the basisof commitments could be the average values and volumes of exports of
major agricultural products in a preceding, multi-year reference period.  A
low common cap shall be agreed upon, expressed as a percentage shareof these reference value and volume figures, which will be the maximumpermitted starting levels of exports with the governments' coverage of
non-commercial risks.  These limits would be reduced annually by the
same percentages as applicable for export subsidy outlay and volumecommitments.
(v) Members shall consider maintaining the export credit provisions.TN/AG/6
Page 49Export Credits, Insurance and Guarantees
Working Hypotheses Variations/Additions
Measures to be
coveredAll officially supported export cr edits, guarantees and insurance
programmes shall be covered by the disciplines.(i) Any support given by or on behalf of governments in respect of export
credit, credit guarantee, loan and insurance programmes, including directcredit, refinancing, and interest rate support, and all other forms of
government involvement – direct and indirect.  This includes support
provided by special institutions controlled by and/or acting under theauthority of governments.
(ii) An officially supported export credit is any export credit transaction in
which the government (at a national or subnational level) undertakes
some or all of the credit risk or the cost of providing credit, including butnot limited to financing, interest rate support and export credit insuranceand guarantees.
(iii) The measures to be covered are those set out in the Illustrative List of
Export Subsidies in item (j) and the first paragraph of item (k) in the SCMAgreement with a wider scope covering other types of institutions thatprovide credits with the help of governments.
(iv) Except to the extent provided under Article 10.4 under the Uruguay Round
Agreement on Agriculture,  Members shall be prohibited from using export
credit, export credit guarantee and export credit insurance programmesthat do not meet the provisions of this Article.
Forms of support to besubject to disciplinesThe disciplines shall cover any transaction where the government
takes part or all of the risk, pays support or foregoes revenue.  This willinclude supply of credit, direct credits, financing and refinancing, and
guarantees.(i) Any officially supported export credit activities carried out by and/or
extended to any actors with no exceptions.
(ii) Disciplines shall apply to all forms of official support including direct
credits/financing; refinancing; interest-rate support; export credit insurance
and guarantees; deferred invoicing; and any other form of involvement,direct or indirect, by providers of official support.
(iii) Export credits shall only cover the needs of LDCs or NFIDCs and
products directly related to food security.
Providers of support to
which disciplines
would be applicableGovernment or special institutions controlled by and/or acting on the
authority of governments also comprising state trading enterprises
involved in providing officially supported export credits, including the
grant of export credits shall be covered by the disciplines.(i) Providers of official support to be subject to disciplines include:
- 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 ofloans or underwriting of losses;TN/AG/6
Page 50Export Credits, Insurance and Guarantees
Working Hypotheses Variations/Additions
Providers of support to
which disciplines wouldbe applicable (cont'd)- any governmental or non-governmental enterprises, including
marketing boards, which have been granted exclusive or specialrights or privileges, including statutory or constitutional powers, in the
exercise of which or by virtue of which they influence through their
purchases or sales the level or direction of exports;  and
- any bank or other private financial institution which acts on behalf of
or at the direction of governments or their agencies.
(ii) All officially supported export credit transactions carried out by and/or
extended to all actors with no exceptions, including, but not limited to,support granted by national and sub-national governments, their agenciestotally or partially controlled by them or by bodies outside the government
acting under a governmental mandate, fulfilling a government mandate, or
due to delegation of governmental powers.
Maximum/ minimum
terms/conditions that
may be provided orsupportedNote:  Maximum or minimum terms or conditions that could apply to export
credits and/or related instruments include some or all of the following:
General Commercial terms shall be the principal bench mark for any
maximum or minimum terms or conditions that will be applicableto export credits, export credit insurance and guarantee
schemes.
Effective
expenditure(i) The annual effective expenditure to cover trade distortive export credits,
based on historical performance, shall be subject to the same reduction
commitments that will apply to export subsidies.
Quantitiescovered by
credits(i) A maximum quantity of an agricultural product, or group of products,
based on historical performance shall be established, in respect of which
such trade distortive export credits may be granted in a year.  Thesequantities shall be subject to the same reduction commitments that willapply to export subsidies.
Maximumrepaymentterms(i) The maximum repayment terms shall be 180 days or less, for a large
majority of products with limited exceptions in the case of products thatare comparable to capital goods e.g. breeding animals, vegetable
reproduction material, or some agricultural exports that were of a capital
nature. Those exceptions shall be able to qualify for longer repaymentperiods, but in no case exceeding three years.TN/AG/6
Page 51Export Credits, Insurance and Guarantees
Working Hypotheses Variations/Additions
Repayment term (i) The repayment term shall be the period beginning at the starting-point of
export financing  and ending on the contractual date of the final payment;
(ii) For breeding cattle, where the repayment terms exceed one year:
- up front cash payments, of at least 15 per cent;  and
- repayment of principal and interest shall be made regularly and
equally, not later than six months after the starting-point of credit.
Insurancepremium(i) Premium shall be charged, shall be risk-based and shall not be
inadequate to cover long-term operating costs and losses in accordancewith international obligations. Consequently, the accumulated cash flow,
premium income plus recoveries minus operating costs and claims paid
should break even over a rolling period of years to be determined.
(ii) Premiums shall be expressed in percentages of the principal value of the
credit; and premiums shall be paid in full at date of issuance and shall not
be financed.
Repayment of
principal(i) The principal sum shall be repaid no later than 180 days after the starting-
point of export financing.
(ii) Where repayment terms exceed 180 days, agricultural capital goods
repayment shall cover both interest charges and principal.
Payment ofinterest(i) Interest shall be paid no later than 180 days after the starting-point of
export financing.
Starting-point of
credit(i) The starting-point of credit shall be [not later than] the date of arrival, or if
more than one shipment is involved, the weighted mean date of arrival, in
the recipient country of the goods exported and financed with the exportcredit [for a contract under which shipments are made in any consecutivesix months period].
(ii) The starting-point of export financing shall not be later than the actual
date of shipment of the goods to the recipient country.
Ending date ofcredit(i) The ending date of credit shall be the date of the last instalment payment
of the export credit by the debtor (covering both principal and interest).TN/AG/6
Page 52Export Credits, Insurance and Guarantees
Working Hypotheses Variations/Additions
Validity period of
credit(i) The terms and conditions of officially supported export credits made
available to exporters or importers shall have a maximum validity period of{X} months.
(ii) Credit terms and conditions (e.g., interest rates for official financing
support and all risk-based terms and conditions) offered for an individualexport credit or line of credit shall not be fixed for a period exceeding sixmonths without payment of the premium.
Minimuminterest rates(i) A benchmark shall be established for the minimum interest rate that can
benefit from support. This benchmark shall be defined as commercial
interest rates or the opportunity cost of capital to the government.
(ii) Interest rates offered for official financing support shall not be below the
actual costs of borrowing for the funds so employed (including costs offunds if capital was borrowed on international markets in order to obtain
funds of the same maturity and other credit terms denominated in the
same currency as the export credit), plus a risk-based spread reflective ofprevailing market conditions.
If the repayment term is above a period to be determined, a Member
providing official financing support would need to apply the minimum
interest rates in conformity with the arrangements on guidelines forofficially supported export credits as referred to in Annex 1 of the SCMAgreement (Item k, para.2). The Member shall apply the relevantcommercial interest reference rates.
(iii) Interest rates applied to export credits shall not be lower than the
"minimum reference interest rate".  A "minimum reference interest rate"will be established on the basis of an internationally accepted financialmarket rate (i.e., the London Interbank Offered Rate, LIBOR), plus a
premium (i.e. 100 or 200 basis points).
For the determination of the minimum interest rate, interest shall exclude:
- Any payment by way of premium or other charge for insuring or
guaranteeing supplier or financial credits. Where official support is
provided by means of direct credit(s) or refinancing, the premium
may either be added to the face value of the interest rate or be aseparate charge. In such a case, both components are to bespecified separately in the export credit, credit guarantee or
insurance program documentation. Otherwise, it shall be presumed
that the export credit guarantee or insurance cost is included in thecredit interest, for the purpose of determining the observance of theconditions for minimum interest rates;TN/AG/6
Page 53Export Credits, Insurance and Guarantees
Working Hypotheses Variations/Additions
Minimum interest
rates (cont'd)- Any other payment by means of banking fees or commissions
relating to the export credit other than a bank charge calculatedaccording to the credit or guarantee term or that is payable
throughout the repayment term;  and
- Withholding taxes levied by the importing Member.
Cash payments (i) In the case of any repayment terms of more than 180 days, a minimum
cash payment shall be required at or before the starting point of credit,calculated as [fifteen per cent] [a percentage] of the total amount of thecontract/shipment value, excluding interest, to be paid by or on behalf of
the importer.
Risk sharing/
Coverage(i) Officially supported export  credit granted by one, or more, WTO Members,
(where there is no cash payment) should only cover up to a certain
percentage of the value of the transaction (to be negotiated).
Rebates (i) Rebates in any form shall be explicitly prohibited.
Foreign
exchange risk(i) Export credits, export credit guar antees, export credit insurance, 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 notincreased. The cost of the hedge shall be incorporated into and be inaddition to the premium rate determined.
Other issues relating tomaximum/ minimum
terms/conditions that
may be provided orsupported(i) Other measures, forms of support and other policies to be covered by
maximum or minimum terms or conditions include:  marketing windows,
national interest accounts administration, revolving credit, indirect and
direct support, the financial practices of exporting state trading enterprisesin this area, such as delayed invoicing, and transparency.
(ii) Maximum/minimum terms/conditions that may be provided or supported
shall be based on the draft OECD Sector Understanding on export credits
in agriculture.
(iii) All officially supported export cred its, credit guarantees or insurance
programs not complying with any of the terms or conditions shall be
prohibited.TN/AG/6
Page 54Export Credits, Insurance and Guarantees
Working Hypotheses Variations/Additions
Transparency/
NotificationrequirementsExport credits, insurance and guarantees shall be subject to
notification requirements.(i) Within ninety days of the entry into force of this agreement, a Member
shall notify any program that it maintained before the entry into force ofthis agreement. A Member shall not maintain programmes that were not
so notified.
No later than the next semi-annual reporting date, a Member shall notify
the terms and conditions of any new programmes and any exclusive orspecial rights or privileges, including statutory or positional powers
granted, implemented after the beginning of the implementation period of
this agreement.   Failure to notify shall result in the prohibition of use.
(ii) A notification shall be required before a new credit, insurance or
guarantee programme is introduced as well as notifications on actual use
of such programmes to show compliance with commitments. Notifications
will be needed before changes are allowed to existing programmes.
(iii) Members shall report annually on all officially-supported export credits
with repayment terms of more than 180 days.  Reporting shall be value-
aggregated by detailing destination country, product group and repayment
terms.
(iv) Notifications shall be required:
- In respect to forms and providers of support as per agreed
definitions;
- In respect of terms afforded to LDCs and NFIDCs;
- On agreements reached between exporters and importing LDCs and
NFIDCs; and
- On methodologies used to determine the "appropriate commercial
market benchmark rates".TN/AG/6
Page 55Export Credits, Insurance and Guarantees
Working Hypotheses Variations/Additions
S&D Special and differential treatment shall be extended to developing
countries, especially in favour of least-developed and net food-importing developing countries in accordance with paragraph 4 of the
Decision on Measures Concerning the Possible Negative Effects of the
Reform Programme on Least-Developed and Net Food-ImportingDeveloping Countries.
Maximum/minimumterms/conditions
that may be
provided orsupportedMaximum or minimum terms or conditions that could apply to export credits
and/or related instruments include some or all of the following:
Maximumrepaymentterms(i) Maximum repayment terms shall be not less than a year for non-capital
goods and two years or more for capital goods.
(ii) In recognition of the Marrakesh NFIDC Decision, an additional repayment
term of three months shall be granted for cereals and cereal preparations,
oilseeds and oilseed products.  In the event of a sudden and significantdeterioration in an importing nation's economy, which may haveconsequences such as social deprivation or unrest, as recognized by the
World Food Programme (WFP) or FAO, an exporting Member can be
authorized to consider any request for more generous terms, providedthat this does not displace commercial  sales nor distort market practices
under specified conditions, and that it raises no objections from other
Members.
(iii) The maximum repayment term of thirty months for developing countries
shall begin at the starting point of export financing and end on thecontractual date of the final payment.
Credit termsandconditions(i) Food aid shall only be provided in fully-grant form, and not even partially
on credit terms.
Minimuminsurance
premium(i) Allowance shall be made for exports to least-developed and net food-
importing developing countries where risks are higher.TN/AG/6
Page 56Export Credits, Insurance and Guarantees
Working Hypotheses Variations/Additions
Minimum
interest rates(i) Minimum interest rates shall be lower than commercial market benchmark
rates and prefixed as from date of entry into force of credit facility andvalid for the duration of the repayment period.
Currencyparity(i) Currency Parity shall be prefixed as from date of entry into force of credit
facility and valid for the duration of the repayment period.
Minimumcashrequirement(i) There shall be no minimum cash requirement in the case of any
repayment terms of more than 180 days.
Risk sharing/coverage(i) Risk sharing requirements and the cash payment requirement could be
waived in the case of LDCs and NFIDCs.
Repayment ofcapital(i) The principal sum (cash payment deduction not applicable, minimum cash
requirement refers) shall be repayable in equal, regular … instalments
starting not later than six months after the starting point of the credit;
(ii) The principal sum shall be repaid in equal and regular instalment not less
frequently than annually with the first payment due no later than twelvemonths after the starting point of credit.
Payment ofinterest(i) Regarding the payment of interest:
- it shall be at the time of payment of capital o
r at intervals to be
agreed between the parties concerned;
- it shall be on the basis of reducing balance or any means acceptable
to the parties concerned;  and
-" i n t e r e s t "  excludes premiums and other charges for insuring or
guaranteeing supplier or financial credits, banking fees or
commissions, and withholding taxes imposed by the importing
country.
(ii) Interest shall be paid not less frequently than annually, with the first
payment to be made no later than twelve months after the starting point of
export financing.
Risk sharing
and premiums(i) No payment of premium or any other related charge by importer either
directly or indirectly;
(ii) All risks borne, and adequately covered, by exporter.TN/AG/6
Page 57Export Credits, Insurance and Guarantees
Working Hypotheses Variations/Additions
Other Issues
relating to S&D(i) Developing country Members shall be entitled to delay the implementation
of any rules and disciplines applicable to the provision of export credits,export credit guarantees or insurance programmes for [five] years.
Member countries will examine whether the rules/disciplines shall be
applicable to developing countries at a review of the implementation of thecommitments at the end of the [fifth] year.
(ii) Elements included in the Marrakesh Ministerial Decision on Measures
Concerning the Possible Negative Effects of the Reform Programme on
LDCs and Net Food-Importing Developing Countries (NFIDCs), includingan establishment of a revolving fund, shall be implemented before therules/disciplines on export credits, ex port credit guarantees or insurance
programmes enter into force.
(iii) The type of instruments used, the volume of food covered shall be
mutually agreed between importing LDCs and NFIDCs and exportingcountries and shall be notified to the Committee on Agriculture.
(iv) Members which rely on export credits with government risk coverage as a
way of providing food aid, shall switch to aid practices in fully grant form,in conformity with the disciplines to be established during the negotiations.
(v) The development needs of exporting developing countries shall be taken
into account as regards flexibility, possibly similar to that given under
Article 9.4 of the Agreement on Agriculture,  to use export credit,insurance or guarantee schemes to promote their exports.
(vi) Export credits shall not be used to apply political pressure to net food-
importing developing countries, especially because exports credits for
imports of food products affect food security.
(vii) The situation of countries with problems to pay in hard currency shall be
taken into account as regards flexibility.TN/AG/6
Page 58 Food Aid
Working Hypotheses Variations/Additions
General approach /
Types of food aidcoveredThe objective of WTO disciplines in this area shall be to prevent
circumvention of export subsidy commitments by addressing onlygovernment to government aid (programme food aid), leaving the rulesand commitments on emergency and project food aid to the
responsibility of the relevant international organisations.(i) The WTO rules shall address all types of food aid.
(ii) Disciplines shall exclude bona fide food aid defined as food aid which is
demand driven and where demand is established by the competentinternational organizations, given completely in grant form, and is not tied
to commercial operations.
Concessionality (i) Food aid shall be [generally] given in grant form only.
(ii) Concessional food aid implemented in response to appeals from relevant
international organizations to ensure a necessary amount of food aidpursuant to the Marrakesh Decision shall be allowed.
(iii) Schedules of Members who are food aid donors shall limit the monetary
value of any non-grant food aid as a percentage of total food aid to the
average for the years 2000-2002.  This amount shall be bound andreduced in equal steps by a total of [X] per cent during the implementationperiod.  Non-grant food aid reduced in this way shall be replaced by food
aid in grant form in equal amounts.
Specific disciplines (i) All food aid shall fully respect the provisions of Article IX(e)(i) of the FAC,
which require that provision of food aid not be tied directly or indirectly,
formally or informally, explicitly or implicitly, to commercial exports of
agricultural products or other goods and services to recipient countries.
(ii) Food aid shall result in additional consumption and not affect domestic
production in the recipient country. In addition, provisions shall be
developed to ensure increased triangular food aid transactions and local
purchases.
(iii) There shall be a commitment not to reduce food aid volumes when prices
are high.
(iv) Members' Schedule of commitments shall include commitments under the
Food Aid Convention. Furthermore, aid levels shall be bound in Members'Schedules and shall not be reduced nor be subjected to export taxes orrestrictions.
(v) Concessions given pursuant to Article IX(a)(iii) of the Food Aid
Convention 1999 shall not be subjected to reduction commitments under
the Agreement on Agriculture nor be considered as circumvention ofexport competition commitments.TN/AG/6
Page 59Food Aid
Working Hypotheses Variations/Additions
Specific disciplines
(cont'd)(vi) For non-grant food aid or food aid which does not comply with the
disciplines, future export subsidy and export credit disciplines shall apply.
(vii) Food aid shall be allowed [in kind or in cash] [in kind only].
(viii) Food aid that does not meet the criteria of bona fide food aid and that is in
the form of concessional loans shall be treated under export creditdisciplines.  Food aid with concessional prices shall be treated as anexport subsidy.  Alternatively, food aid that does not meet the criteria can
be prohibited.
(ix) A substantial share of  FAC aid shall be in financial terms. Reduction of
food aid in kind shall be compensated by aid in financial terms. Thereduction rate of aid in kind shall correspond to that applied to export
subsidies or export credits.
(x) Article 10 of the Agreement on Agriculture shall be changed as follows
(changes are in bold/italics ):
A new paragraph inserted:
10(3) bis.The following international food aid transactions shall be
deemed to be genuine food aid that is not surplus disposal and does
not circumvent export subsidy disciplines:
(a) cash food aid provided in response to appeals from the united
nations or other international or regional agencies;
(b) in-kind food aid provided for emergencies in response to
appeals from the united nations or other international orregional agencies;
(c) project or programme food ai d provided through the world food
program or other internationa l or regional agencies;  and
(d) food aid provided in cash without requiring to be purchased
from the donor country (i.e. cash food aid, not in-kind food aid).
Article 10.4 amended:
10.4.Members donors of international food aid shall ensure :
(a) that the provision of international food aid is not tied directly or
indirectly to commercial exports of agricultural products or other
goods or  services  to recipient countries;TN/AG/6
Page 60Food Aid
Working Hypotheses Variations/Additions
Specific disciplines
(cont'd)(b) that international food aid transactions shall be carried out in
accordance with the FAO "Principles of Surplus Disposal andConsultative Obligations", including, where appropriate, the systemof Usual Marketing Requirements (UMRs).  In consultation with
the food and agriculture organisation (FAO)-consultative sub-committee on surplus disposal (CSSD), the committee onagriculture shall be issued copies of CSSD documents in order
to be informed on a regular basis of objections to food aid
transactions in the CSSD ; and
(d) that recipient countries agree that international food aid is not
re-exported in any form; and
(e) that the programs or policy pa rameters of food aid programs
are notified annually to the committee on agriculture of theWTO. Food aid transactions shall also be notified annually tothe committee on agriculture covering the recipient, the channel
and type of food aid, the type of product, amount shipped,
source of product and month of shipment.
A new paragraph added:
10.5. Any operation that does not comply with any provision of paras
4 and 5 (here 3 bis and 4) of article 10 shall be prohibited."
(xi) All non-targeted food aid shall be treated as commercial exports
according to export subsidy commitments.
(xii) Final individual recipients of food aid shall receive food aid freely or in
exchange for work (food-for-work). Food aid cannot be sold on the local
market.
(xiii) Any food aid in kind beyond the FAC minimum commitments should only
be given according to pre-established criteria and upon the request of UN
Organisations such as the Office for the Co-ordination of Humanitarian
Assistance (OCHA), World Food Programme (WFP) and the HighCommissioner for Refugees. Such requests shall as appropriate be basedon forecasts undertaken by FAO's Global Information and Early WarningSystem (GIEWS) and/or other independent agencies.
(xiv) All donor countries shall be obliged to undertake an analysis of the
recipient country's markets.  This requirement shall be added to thePrinciples on Surplus Disposal in addition to Usual MarketingRequirements (UMRs).  Existing standards in other bodies regarding
displacement of commercial sales shall be examined to ensure non-
circumvention.TN/AG/6
Page 61Food Aid
Working Hypotheses Variations/Additions
Transparency/
NotificationrequirementsAll food aid shall be notified to the Committee on Agriculture. (i) ES:1 notification requirements shall be strengthened to inclu de more
detailed food aid reports such as those submitted to the FAO's CSSD(including on recipient countries, tonnage, commodities, type of
programme and Usual Marketing Requirements (UMRs)).  Counter-
notifications shall be allowed.
(ii) Food aid quantities and values shall be notified by both donor and
recipient countries, including product coverage, information on
destinations, origins (e.g. local procurement, if applicable), terms of
delivery (e.g. bona fide), cash/kind.
(iii) If aid is not notified and if it does not comply with the rules of the
responsible international organisations then it should be treated as an
export subsidy.
(iv) Concessional sales shall be notified as export subsidies.
(v) Food aid in the form of credits shall be notified as export credits under
new disciplines to be established.
S&D (i) An international food stockholding system shall be put in place to deal
with serious temporary crises in developing countries, in line with theMarrakesh NFIDC Decision.  Food aid shall be based on the following
principles:
- donations shall be based on appeals from WFP and FAO to ensure
real humanitarian objectives;
- flexibility shall be needed to cover both grant and concessional aid;
and
- a stockpile shall be established by earmarking part of donor
countries' normal stocks based on estimates of need by theresponsible international agencies.
(ii) NFIDCs shall have access to food aid and financial  funds during periods
of crisis using agreed upon mechanisms which do not adversely affectneither donors nor recipient Members.
(iii) Technical assistance shall be provided to reduce long-term dependence
on food aid.
(iv) There shall be compensation to exporting developing countries that are
adversely affected by surplus disposal in the guise of food aid by requiringdonors to procure products from other developing countries, as
international food aid organizations do.TN/AG/6
Page 62 Export State Trading Enterprises
Working Hypotheses Variations/Additions
Scope of entities to
which disciplineswould be applicable(i) The scope of entities to which disciplines will be applicable shall be as in
GATT Article XVII, with the focus being on export state trading enterprises(STEs).
(ii) The illustrative list of STEs developed by the Working Party on State
Trading Enterprises shall be deemed relevant.
(iii) The disciplines shall focus on STEs involved in export sale which have,
directly or indirectly, a significant share of a respective Member’s totalexports of a particular product.
Specific Disciplines (i) The disciplines shall cover exclusive rights and privileges, price pooling,
cross subsidisation, exclusive export or domestic purchase rights,government financial support and export credit activities of STEs.
(ii) Disciplines shall be developed: to prohibit government assistance; to
establish minimum volumes of exports; and to set commitments onminimum stocks and contributions in cash or in kind to international foodaid organisations to ensure the food security of importing countries.
(iii) The rules in Article XVII of GATT and in the Agreement on Agriculture
shall be deemed sufficient.
(iv) Members shall not restrict the right of any interested entity to export or to
purchase for export, agricultural products.
(v) Export [STE] monopolies shall be eliminated.
(vi) No special financing privileges (both direct or indirect) from a government
to an export enterprise, including government grants, loans, loanguarantees or underwriting of operational costs and/or export creditguarantees shall be granted.
(vii) Disciplines shall apply equally to STEs and to private sector enterprises.
Transparency/
Notification
requirementsNotification requirements shall be established to enable other
Members to assess compliance of STEs with the disciplines applying
to exporting STEs.(i) Any Member that has an export STE shall provide annual notifications
including initial and subsequent acquisition costs incurred and export
prices of products exported or sold  for export on a transaction-specific
basis.  Any Member can request the Member maintaining an export statetrading enterprise for agriculture to provide specific information concerningall operations relevant to the export of agricultural products.TN/AG/6
Page 63Export State Trading Enterprises
Working Hypotheses Variations/Additions
Transparency/ Notification
requirements (cont'd)(ii) Quarterly notification requirements shall be made an integral part of the
Agreement for all export state trading enterprises.  Notifications shallcover the volume and average price of exports to respective trade
partners, average procurement prices  and average domestic sales prices,
and volume of domestic production.  A notification table can include thename of the state trading enterprise, the name of the product and its HScode, the destination of exports, etc.  State trading enterprises will also be
required to notify elements in their annual plans relating to the volume and
value of imports and/or exports, or, if applicable, that the annual plan doesnot contain such information.
(iii) The existing notification requirements in Article XVII of GATT and the
Agreement on Agriculture shall be deemed sufficient.
(iv) Transparency requirements shall apply equally to STEs and to private
sector enterprises.
S&D (i) STEs in developing countries exporting any product constituting less than
a certain percentage (5 per cent) of world trade shall be exempt fromdisciplines.
(ii) STEs in developing countries which contribute to food security shall be
exempt from disciplines.TN/AG/6
Page 64Export Restrictions
Working Hypotheses Variations/Additions
Export restrictions:
Specific disciplines(i) Export restrictions shall be prohibited for all Members except developing
countries.
(ii) Export restrictions shall not be part of the negotiations.
(iii) Following consultations with other Members, export restrictions and/or
prohibitions shall be quantified and converted into export taxes, these
taxes shall be bound in Members' Schedules and subject to reductioncommitments.
(iv) An exemption shall be made to a general prohibition on export restrictions
in cases of agreed UN sanctions or under Article XX of GATT.
(v) Members shall be informed before restrictions are introduced.  Prior
notification and consultation shall be mandatory when export restrictionsare imposed on the products to be covered by these disciplines.  Outsideof this coverage, current disciplines in Article 12 of the Agreement on
Agriculture shall be applied.
(vi) When exporting countries face an emergency need to adjust export
volume, a short-term export restriction shall be allowed until thecompletion of domestic procedure to impose export taxes, in order to
ensure the food security of these countries:
- Member who intends to take this measure shall consult with other
Members who have a 10 percent share or more as an exportdestination during the preceding three years;
- the period of the export restriction shall not exceed one month;  and
- {X} per cent of domestic production shall be exempt from this
restriction during implementation.
(vii) Article 12 of the Agreement on Agriculture shall be changed as follows
(changes are in bold/ italics ):
Article 12.1 amended:
12.1 Where any Member maintains or institutes any new export
prohibition or restriction on foodstuffs in accordance with paragraph 2(a)of Article XI of GATT 1994, the Member shall observe the following
provisions:
(a) the Member maintaining or  instituting the export prohibition or
restriction shall give due consideration to the effects of suchprohibition or restriction on importing Members' food security;TN/AG/6
Page 65Export Restrictions
Working Hypotheses Variations/Additions
Export restrictions:
Specific disciplines(cont'd)(b) the Member maintaining any ex port prohibition or restriction
shall so notify the Committee on Agriculture, supplyinginformation on elements such as the nature and duration of the
said measure, and shall hold consultations, upon request, with
any Member having a substantial interest as an importer withrespect to any matter relating to the measure in question.
A new paragraph added:
12.3. In no circumstances shall any Member impose or maintainembargoes on foodstuffs and/or items associated with agriculturalproduction, particularly in respect of net food-importing developingcountries.
Export taxes:Specific Disciplines(i) Export taxes shall not be part of the negotiations. Export taxes are not
export subsidies nor are they export restrictions or prohibitions as they arenot mentioned in Part VI of the Agreement on Agriculture and this
distinction is confirmed by Article XI of GATT.
(ii) Export restrictions and taxes are linked to food security and distort
international trade, and therefore shall be an integral part of thenegotiations.
(iii) Export taxes shall be prohibited for all Members except developing
countries. Bound rates of export taxes for all agricultural products basedon risks and other factors obtained from past experiences shall beestablished in Members' schedules and subject to a progressive reduction
of 36 per cent + {X}
 per cent during the implementation period. Exports up
to {X}  per cent of the average volume of production during the preceeding
3 years shall be exempted from export taxes.
(iv) Article XI of GATT refers to export taxes as a form of non-prohibited
export restriction, hence compliance shall be ensured with the basic
principles on prohibition of quantitative restrictions.
S&D (i) Developing countries shall be excluded from the disciplines to be
established except developing countries which are net exporters of the
foodstuffs concerned.TN/AG/6
Page 66Export Restrictions
Working Hypotheses Variations/Additions
S&D (cont'd) (ii) In some circumstances developing countries shall be allowed to use
export restrictions and taxes to address food security concerns or othercommercial and marketing policy objectives.
(iii) Developing country Members shall only be allowed to apply an export tax
in conformity with the following provisions:
- the export tax shall apply to all agricultural products;
- the export tax shall be applied at a uniform rate across all agricultural
products;
- the export tax shall be applied without modification for a period of at
least one year; any subsequent modification shall apply for a periodof at least one year from the date of such modification;  and
- any developing country Member applying, proposing or modifying an
export tax shall supply such information to the Committee onAgriculture prior to its application or modification.
(iv) Developing countries shall be afforded access to an equivalent of an
export safeguard allowing them to introduce restrictions or taxes in certain
emergency situations.
(v) No commitments other than notification shall be expected under this
heading from LDCs and, in justified cases, from other developing
countries and vulnerable economies in transition.  Article 12 of the
Agreement on Agriculture shall be adjusted accordingly.  Any Memberfalling in these categories and applying, proposing or modifying exportrestrictions or export taxes shall supply such information to the Committee
on Agriculture prior to its application or modification.
(vi) There shall be no export taxes or export restrictions on food destined for
LDCs and NFIDCs.TN/AG/6
Page 67Green Box15
Working Hypotheses Variations/Additions
General disciplines
(paragraph 1)Maintain the basic criteria as per paragraph 1 of Annex 2. (i) The basic criterion in paragr aph 1(b) of Annex 2 to be modified to provide
that the support in question shall not have the effect of providing productionsupport or price support to producers.
Measures exemptedfrom reductioncommitments
Public stockholding for
food security purposes
(paragraph 3)Maintain the criteria and conditions as per paragraph 3 of A nnex 2. (i) F ood purchases by the government to be allowed to be made at
administered prices.
(i) Maintain the existing criteria and conditions in paragraph 5. Direct payments toproducers
(paragraph 5)(ii) Add to the existing paragraph 5:
All base periods shall be notified.  [These direct payments] [Such a
direct payment] shall be based on activities in a fixed andunchanging historical base period.
(iii) For direct payments to producers, all base periods (i.e. 1986-88) should
be notified and payments should be time limited.
(i) Maintain the existing criteria and conditions in paragraph 6. Decoupled incomesupport(paragraph 6)(ii) Modify the existing subparagraph (a) and add new subparagraph (e bis):
(a) Eligibility for such payments shall be determined by clearly-defined
criteria such as income, status as a producer or landowner, factoruse or production level in a defined, fixed and unchanging
historical  base period.
(e bis)  Payments [to individual producers] shall be available for no
more than three years and shall not be renewed.
                                                     
15 In this and the following tables:
Italicised text in bold indicates additions/revisions and strike-out indicates deletions of the relevant provisions of the Agre ement on Agriculture.
Square-bracketed text indicates alternative proposals.
{  } indicates that the number in brackets remains to be determined.TN/AG/6
Page 68 Green Box
Working Hypotheses Variations/Additions
Government financial
participation in income
insurance and incomesafety-net programmes(paragraph 7)(i) Maintain the existing criteria and conditions in paragraph 7.
(ii) 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, whichexceeds 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 to 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 conditionshall be eligible to receive the payments from the government.
(b) The amount of such payments by governments shall restore a
producer’s income to no more than 70 per cent of incomederived by that producer from agriculture in the averaging
period used to trigger eligibility for payment.   c o m p e n s a t e  f o r
less than 70 per cent of the producer’s income loss in the year the
producer becomes eligible to receive this assistance .
(c) The amount of any such payments shall relate solely to income
derived from agriculture of the farm enterprise 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 thefactors of production employed.
(iii) 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 a certain proportion  30 per cent of average gross income
or the equivalent in net income terms (excluding any payments from
the same or similar schemes) , which shall be clearly defined in
national legislation  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.
(b) The amount of such payments shall compensate for less than a
certain proportion  70 per cent  of the producer's income loss ,
which shall be clearly defined in national legislation,  in the year
the producer becomes eligible to receive this assistance.
(iv) The minimum income loss criterion of 30 per cent in paragraph 7(a) of
Annex 2 to be lowered [and the maximum compensation criterion of
70 per cent in paragraph 7(b) of Annex 2 to be raised].TN/AG/6
Page 69Green Box
Working Hypotheses Variations/Additions
Payments (made either
directly of by way ofgovernment financial
participation in crop
insurance schemes) forrelief from naturaldisasters
(paragraph 8)(i) Maintain the existing criteria and conditions in paragraph 8.
(ii) Add to the existing subparagraph (a) and modify the existing
subparagraphs (b) and (d) as follows:
(a) Eligibility for such payments shall arise:
- in the case of disasters  only following …
- 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.
- in the case of the destruction of animals or crops to
control or prevent diseases named in national legislation or
international standards, the production loss may be less than
the 30 per cent of the average production referred to above.
(b) Payments made following a disaster  under paragraph 8 shall be
applied only in respect of losses of income, livestock (includingpayments in connection with the veterinary treatment of animals),
land or other production factors due to the natural disaster or
destruction of animals or crops  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.
(iii) Add to the existing subparagraph (a):
(a) Eligibility for such payments shall arise :
- in the case of disasters,  only following …
- in the case of government financial participation in crop
insurance schemes, eligibility for such payments shall bedetermined by a loss which exceeds 30 per cent of the average
productive capability insured in an averaging period which
reflects the actual experience of that Member for  suchinsurance.
- in the case of the destruction of animals or crops to
control or prevent diseases 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 in thefirst indent  above.   
(iv) The minimum production loss criterion of 30 per cent in paragraph 8(a) of
Annex 2 to be lowered.TN/AG/6
Page 70Green Box
Working Hypotheses Variations/Additions
(v) The production loss measured in terms of three-year averages as per
paragraph 8(a) of Annex 2 to be reviewed.Payments (made either
directly of by way ofgovernment financial
participation in crop
insurance schemes) forrelief from natural
disasters
(paragraph 8) (cont'd)(vi) Modify the existing subparagraph (a) as follows:
(a) 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 the level to be clearly defined in national legislation
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, excluding the highest and the lowest entry .
(i) Maintain the existing criteria and conditions in paragraph 9.
(ii) Modify the existing subparagraph (b) as follows:
(b) Payments shall be conditional upon the total and permanent
retirement of the recipients from marketable agricultural production
and shall be time limited.Structural adjustment
assistance provided
through producerretirement programmes(paragraph 9)
(iii) Modify the existing subparagraph (b) as follows:
(b) Payments shall be conditional upon the total and permanent
retirement of the recipients from marketable agricultural production
or lending of land for a longer period than {X} years .
Structural adjustment
assistance provided
through resource
retirement programmes(paragraph 10)(i) Maintain the existing criteria and conditions in paragraph 10.
(ii) Add at the end of the existing subparagraph (d):
Payments shall be time limited.
(iii) The minimum retirement period in paragraph 10(b) of Annex 2 to be
reduced to one year.TN/AG/6
Page 71Green Box
Working Hypotheses Variations/Additions
Structural adjustment
assistance providedthrough investment
aids (paragraph 11)(i) Maintain the existing criteria and conditions in paragraph 11.
(ii) Add at the end of the existing subparagraph (a), modify the existing
subparagraph (b), and add new subparagraph (b bis) 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 [ or inputs into the
production ] (including livestock units) undertaken by the producer in
any year after a fixed and unchanging historical the
 base period,
other than as provided for under criterion (e) below.
[(b bis)  The amount of such payments in any given year shall not be
related to, or based on, the use of factors of production in any
given year after the base period. ]
Payments under
environmental
programmes(paragraph 12)(i) Maintain the existing criteria and conditions in paragraph 12.
(ii) Modify the existing subparagraphs (a) and (b) as follows:
(a) Eligibility for such payments shall be determined as part of a clearly-
defined government environmental or conservation programme andbe dependent on the fulfilment of specific conditions under the
government programme. including conditions related to production
methods or inputs.
(b) The amount of payment shall be less than the extra costs
involved in complying with the government programme and notbe related to or based on the volume of production .  limited to
the extra costs or loss of income involved in complying with the
government programme.
(iii) Modify the existing subparagraph (b) as follows:
(b) The amount of payment shall be limited to the following:
- the extra costs or , loss of income involved in complying with the
government programme ;  or
- the minimum amount to compensate for the provision of
any environmental benefits which shall be clearly defined in
national legislation.
(iv) Landscape payments should be considered under paragraph 12.TN/AG/6
Page 72Green Box
Working Hypotheses Variations/Additions
Payments under
regional assistanceprogrammes
(paragraph 13)(i) Maintain the existing criteria and conditions in paragraph 13.
(ii) 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.
(iii) A clear definition of "disadvantaged area" as referred to in paragraph
13(a) of Annex 2 to be established. The average poverty level ofdeveloping country Members set by the World Bank (i.e. daily per capitaincome less than US$1) to be used as the criterion.
(iv) Criteria to be established for defining a particular region as less favoured,
marginal or disadvantaged. Flexibility to be given to provide support tosuch regions to maintain and improve their traditional production systemsand the environment. The extent of such regions expressed aspercentage of the national territory of a Member to be limited by a de
minimis  clause, varied by climatic zone with S&D for developing countries.
Add new paragraphs (i) New categories in the Green Box should not be added.
Exempt measures for
countries in transition(i) Countries in transition shall be temporarily exempted from reduction
commitments with respect to subsidies such as investment subsidies and
input subsidies generally available to agriculture, interest rate subsidies to
reduce the costs of financing and grants to cover debt repayment.
Animal welfare
payments(i) Payments to compensate additional costs of complying with higher
standards for animal welfare to be allowed.
Paymentscompensating for extra
costs accruing fromhigher productionstandards(i) Eligibility for such payments shall be determined as part of a clearly-
defined government programme designed to address non-producer
concerns such as consumer and societal demands and be dependent onthe fulfilment of specific conditions related to production methods orinputs.
Paymentscompensating for extracosts accruing from
higher food safety
standards(i) Extra costs arising from higher than international food safety standards to
be compensated by Green Box support.TN/AG/6
Page 73Green Box
Working Hypotheses Variations/Additions
Payments to maintain
domestic productioncapacity of staple
crops for food security
purposes(i) (a) Eligibility for such payments shall be determined by reference to
clearly defined criteria in government programmes designed toprovide support for the producers of staple crops.
(b) Total production of the crop shall account for no less than {X} per
cent of the total value of agricultural production and;
- Total consumption of such crop shall account for no less than
{Y} per cent of the total domestic consumption of agricultural
products in terms of calorie intake; or
- Total export of such crop shall account for no less than {Z}
per cent of the total export of a particular country.
(c) The amount of payment shall be limited to the minimum to maintain
domestic production capacity of such crop in that particular country.
Payments to smallscale family farms for
the purpose ofmaintaining ruralviability and cultural
heritage(i) (a) Eligibility for such payments shall be determined by reference to
clearly defined criteria in government programmes designed to
provide support for small scale family farms.
(b) Small scale farms shall be defined in national legislation, taking into
account such factors as total annual sales, share of hired farm
labour, off farm income, etc.
(c) The amount of such payment shall be limited to the minimum level
for continued existence of such farms based on the purpose ofmaintaining rural viability and cultural heritage.
(d) The payment shall not mandate or in any way designate the
agricultural products to be produced by the recipients.TN/AG/6
Page 74Green Box
Working Hypotheses Variations/Additions
(i) Maintain the status quo (i.e. no capping or any other limitation on Green
Box expenditures).Other disciplines
Limits to
Green Box
expenditures(ii) Measures meeting the criteria of the subsequent paragraphs to be
[subject to reduction commitments jointly or severally] [eliminated]:
Paragraph 5, 6, 7 and 11 of Annex 2.
(iii) A cap to be established in respect of:
Variant 1:  Total Green Box expenditures [for developed countries].
Variant 2:  Direct payments in Annex 2.
Variant 3:  Payments under paragraphs 5, 6 and 7 of Annex 2 for
developed countries.
Variant 4:  Domestic support of all types, including Amber support, Blue
Box support and Green Box direct payments to producers, but excluding
measures meeting criteria for paragraphs 2, 3, and 4 of Annex 2.
Variant 5:  Domestic support of all types, including Amber Box support,
Blue Box support and Green Box support, at 10 per cent of the value of
total agricultural production.
Non-actionability ofGreen Box measures(i) Measures meeting Annex 2 criteria to be non-actionable for the purpose
of countervailing duties.
Transparency/
Notification
requirements(i) Transparency, notification and review mechanisms to be strengthened to
ensure programmes meet the criteria in Annex 2.TN/AG/6
Page 75Green Box
Working Hypotheses Variations/Additions
S&D
Payments (made either
directly of by way of
government financial
participation in cropinsurance schemes) forrelief from natural
disasters
(paragraph 8)(i) Modify the existing subparagraph (a) and add new paragraph 8 bis 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, nuclearaccidents, and war on territory of the Member concerned) has
occurred or is occurring; and , in a developed country Member ,
shall be determined by a production loss which exceeds 30 percent
of the average of production in the preceding three-year period or athree-year average based on the preceding five-year period,
excluding the highest and the lowest entry .  A developing country
Member may provide a disaster relief to producers when the
estimated production loss exceeds 10 percent of the precedingyear.
8 bis  Payments for rehabilitation of production capacity after natural
disasters
Such payments may be provided to agricultural producers in
developing countries to facilitate the recovery of the productioncapacity which has been damaged by an officially recognized natural
or like disaster.
(ii) Eligibility for payments made by any developing country Member under
paragraph 8(a) of Annex 2 of the Agreement on Agriculture shall bedetermined by a production loss of a proportion of the average of
production in the preceding three-year period, to be determined in national
legislation.
(iii) The threshold levels of production or income loss set out for payments
made for relief from natural disasters under paragraph 8 of Annex 2
should not apply to developing countries.
Public stockholding for
food security purposes
(paragraph 3)(i) Paragraph 3 of Annex 2 to be revised to address the difficulties of
developing countries in meeting the condition that the volume and
accumulation of food security stocks shall correspond to "predetermined
targets".TN/AG/6
Page 76Green Box
Working Hypotheses Variations/Additions
Public stockholding for
food security purposes(paragraph 3) (cont'd)(ii) Modify the existing footnote 5 to paragraph 3 of Annex 2 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  guidance  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 .
Government financial
participation inincome insurance
and income safety-
net programmes(paragraph 7)(i) Eligibility for payments made by any developing country Member under
paragraph 7 of Annex 2 of the Agreement on Agriculture shall bedetermined by an income loss of a proportion of the average gross
income or the equivalent in net income terms, to be determined in national
legislation.
Payments underregional assistanceprogrammes(paragraph 13)(i) Paragraph 13(a) of Annex 2 to be revised to reflect the fact that in some
developing countries there are no regions that constitute "a clearlydesignated contiguous geographical area with a definable economic andadministrative identity".
(ii) The requirement of paragraph 13(d) of Annex 2 that payments under
regional assistance programme shall be available only to producers ineligible regions shall be waived for developing countries. Developingcountries shall be allowed to target such assistance to predominantly low-
income and resource-poor producers in the concerned region pursuant to
national poverty reduction strategies.
(iii) Add new subparagraph (f bis) in paragraph 13:
(f bis) The criteria set out in (b), (c), and (e) of this paragraph do not
apply to a developing country Member.
Exempt measures
for developing
countries(i) Any support provided by any developing country Member in respect of an
agricultural product whose productivity in that country is less than the
world average (as determined by FAO), and exports of that product
represent less than 3.25 per cent of world trade of that product for fiveconsecutive calendar years, shall be deemed to have no, or at mostminimal, trade-distorting effects or  effects on production and hence be
excluded from any domestic support calculation.TN/AG/6
Page 77Green Box
Working Hypotheses Variations/Additions
Exempt measures for
developing countries(cont'd)(ii) Spending by any developing country Member on transportation costs for
food security and staple crops from surplus to deficit parts of the countryshall be excluded from any domestic support calculation.
(iii) Government measures of assistance, whether direct or indirect, to
encourage agricultural and rural development, rural employment, foodsecurity, poverty alleviation, and diversification of agriculture shall becomean integral part of Annex 2 of the Agreement on Agriculture.
(iv) Policy measures specified below shall be an integral part of Annex 2 of
the Agreement on Agriculture:
(a) Investment subsidies which are generally available to agriculture in
developing country Members;
(b) Agricultural input subsidies whether in cash or in kind, generally
available to low-income and resource poor producers in developingcountry Members;
(c) Domestic support to producers in developing country Members to
encourage diversification from the growing of illicit narcotic crops, or
those whose non-edible or non-drinkable products, being lawful, arewidely recognised as harmful for human health.
(v) Create additional specification of cr iteria for non-trade-distorting support
by developing countries in the areas of:  investment and infrastructure,
domestic marketing systems, risk management, conservation andproductivity enhancement.
(vi) Add new paragraph for payments for supporting production capacities of
the basic foodstuff considered as the main national product (wheat, rice
and livestock – sheep, horses) with the objective of product security.
These reserves can be utilized solely for domestic consumption and not
for export.  These products can be sold at administered prices allowed to
the developing, least-developed and vulnerable transition economies.
(i) Developing country Members shall retain the flexibility to provide support
under paragraphs 5, 6, 7 and 11 of Annex 2.Limits toGreen Box
expenditures(ii) Developing countries shall be exempt from a cap established in respect of
[total Green Box expenditures] [domestic support of all types].TN/AG/6
Page 78Article 6.2
Working Hypotheses Variations/Additions
Scope and criteria Maintain [and broaden] the existing Article 6.2 exceptions for
developing countries.(i) Modify the existing paragraph 2 of Article 6 as follows:
In accordance with the Mid-Term Review Agreement … to encourage
diversification from growing illicit narcotic crops , or those whose non-
edible or non-drinkable products, be ing lawful, are widely recognized
as harmful for human health .  Domestic support …
(ii) The following government measures, whether direct or indirect, to
encourage food security, agricultural and rural development, and productdiversification are an integral part of the development programmes ofdeveloping countries, and should be exempt from the reduction
commitments.
(a) investment subsidies whether or not provided to targeted producers
or products;
(b) input subsidies, whether or not provided to targeted producers or
products;
(c) support to encourage diversification from growing illicit narcotic crops
as well as such crops that are licit but are harmful as determined by(for instance WHO) to human health e.g. tobacco;
(d) subsidies to marketing costs (e.g. internal transport, post-harvest
storage, agricultural cooperativ es, product quality improvement),
whether or not provided to ta rgeted producers or products.
Products that are exported and that are obtaining at least 3.25 per cent of
the world market share are excluded from the list of eligible products for
the domestic support measures mentioned above.
(iii) Further flexibility to be made available to developing countries, either in
the framework of Article 6.2 or a Development Box, to pursue their
legitimate development needs, including food security, rural development
and poverty reduction strategies by exempting from reductioncommitments:
(a) programmes, including those listed below, targeted at low-income
and resource-poor producers using clear and objective criteria:TN/AG/6
Page 79Article 6.2
Working Hypotheses Variations/Additions
Scope and criteria (cont'd) - agricultural input subsidies, whether in cash or kind;
- product-specific support;- government subsidies for concessional loans through
established credit institutions or for the establishment of regional and
community credit cooperatives;
- capacity building measures with the objective of enhancing
the competitiveness and marketing of low-income and resource poor
producers;
- government transportation subsidies for agricultural products
and farm inputs [to remote areas];
- government assistance in helping establish and operate
agricultural cooperatives;
- on-farm employment subsidies for families of low-income and
resource-poor producers;
- government sponsoring of savings instruments to reduce
year-to-year variations in farm incomes.
(b) support to increase domestic production of staple crops for domestic
consumption;
(c) marketing support programmes and programmes aimed at
compliance with quality as well as sanitary and phytosanitary
regulations.
(iv) Members shall establish additional criteria to exempt support measures
which are essential to development and food security objectives, facilitate
the development of targeted programs to increase investment and
improve infrastructure, enhance domestic marketing systems, helpfarmers manage risk, encourage conservation measures, and increaseproductivity of subsistence producers.
(v) Exemptions should include payments for food security, poverty reduction,
and horizontal and vertical diversification of agricultural production.
(vi) When support is provided by a developing country, in respect of a crop
whose productivity in that country is less than the world average (asdetermined by FAO) if the product is destined for domestic market, and ifthe production is destined for export market and the export component of
that product represents less than 3.25 per cent of world trade of that
product for two consecutive years, those measures provided for thoseproducts shall automatically be deemed to be measures that areexempted and fall within the purview of Article 6.2.TN/AG/6
Page 80Article 6.2
Working Hypotheses Variations/Additions
Scope and criteria (cont'd) (vii) The possible expansion of Article 6.2 provisions should target LDCs and
low-income countries, irrespective of their status as developing countries.
(viii) Special rights and privileges and flexibilities in the fulfilment of obligations
given to different categories of countries shall be enjoyed by all Members
that fulfil the objective criteria and/or economic indicators underlying such
categorisation.
Transparency/Notificationrequirements(i) Developing country Members that maintain agricultural development
programmes and implement them through their national legislation orregulations or acclamations to pursue objectives, such as for foodsecurity, poverty alleviation, rural development, rural employment anddiversification of agriculture shall notify such programmes to the
Committee of Agriculture on a regular basis. Any new or modified support
measures for which exemption from reduction is claimed shall be notifiedpromptly.TN/AG/6
Page 81Blue Box
Working Hypotheses Variations/Additions
Concept/
Other disciplines(i) The exemption contained in Article 6.5 to be eliminated.
(ii) Blue Box payments to be reduced from the average level notified over
1995-2001 to zero over five years for developed countries. [Developedcountries to commit to] a reduction of 50 per cent in the first year of
implementation to be followed by equal cuts over the following years to
reach zero.
(iii) Blue Box support in developed countries shall be eliminated within three
years with a 50 per cent reduction in the first year and 25 per cent annualreduction for the next two years.
(iv) Maintain the concept of the Blue Box as per Article 6.5(a).
(v) The Blue Box to be continued without any cap.
Criteria (i) Maintain the criteria regarding "production limiting" and with respect to
conditions as stipulated in subparagraphs (i) to (iii) of Article 6.5(a).
Transparency/
Notification
requirements(i) Notification requirements to be established which are similar to those
currently in place for Amber Box measures.
S&D (i) Blue Box payments to be reduced from the average level notified over
1995-2001 to zero over nine years for developing countries. [Developed
countries to commit to] a reduction of 50 per cent in the first year ofimplementation to be followed by equal cuts over the following years toreach zero.TN/AG/6
Page 82Amber Box
Working Hypotheses Variations/Additions
Base levels The base level for reductions shall be the final bound commitment
levels as per Part IV Section I of Members’ Schedules.(i) The starting-point for new non-prod uct-specific and product-specific
commitments to be the final bound Total AMS level. Product commitmentswould be defined by the specificity in Members’ Current AMS notifications.There would also be a non-product-specific category where that currently
appears in Members’ notifications.
Base levels for product-specific reduction commitments would be linked to
the (currently aggregated) final bound AMS commitment.  Eachsubsidised product would be allocated a share of the total final boundAMS commitment level based on the actual product share in, for example,
2000-2001. Where a Member has Blue Box support, it shall be taken into
account in the allocation of the share of the final bound AMS betweenproducts.  Developing countries could be permitted to undertake reductioncommitments on groups of products, or be allowed to allocate a share of
the final bound AMS level that could be used for new products.
(ii) The base level for the staging of further commitments shall be the
average actual support level for the years 1995-2000 or the bound levelfor the year 2000, whichever is lower.
(iii) An average of support levels over a representative three-year period to be
used, provided that the period is not chosen to maximise support levels.
Calculation methodology
of AMS/EMS
Eligible
production/appliedadministered price(i) Maintain the calculation methodology of the AMS and EMS as per Annex
3 and 4, respectively.
(ii) To prevent circumvention of domestic support reduction commitments, the
AMS methodology should be improved in two specific ways:
(a) The term "quantity of production eligible to receive" (paragraph 8 of
Annex 3) to be clearly understood to include all marketable
production that receives, directly or indirectly, supported pricesignals, including (but not limited to) through governmentintervention purchasing;  and
(b) where a WTO Member has abolished an "applied administered
price" (paragraph 8 of Annex 3), yet similar levels of supportcontinue to be provided to producers through any other measure;that is, no effective policy reform has actually occurred, then that
Member be required to use a representative domestic market price
in lieu of the applied administered price in the calculation of themarket price support element of the AMS.
The starting point for new reductions on domestic support should be
rectified accordingly where adjustments of either of the above have been
employed since the establishment of Uruguay Round commitmentschedules.TN/AG/6
Page 83Amber Box
Working Hypotheses Variations/Additions
Product-/non-product-
specific support(i) Non-product-specific support to be defined by requiring that crop
specificity be established and that such measures in any given year notbe related to or based on the type of volume of production, prices
(domestic or international) and factors of production.
(ii) Disciplines to be strengthened to avoid product-specific support from
being improperly classified as non-product-specific support.
Inflation adjustment (i) Maintain the provisions of Article 18.4 of the Agreement.
(ii) Countries with excessive rates of inflation to be given flexibility to apply
different methods of calculation.  A uniform stable currency or a basket of
currencies to be used to notify domestic support.
(iii) Inflation and currency depreciation [in developing countries] should be
taken into account.
(iv) Monetary domestic support commitments should be subject to annual
inflation adjustments.
(v) Inflation adjustments of domestic support commitments should not be
allowed.
(i) The Uruguay Round formula to be used [to reduce  the Total AMS by {X}
per cent from the final bound commitment level]. The Total AMScommitment to be maintained at the aggregate level.Specificity of furthercommitments/reduction method/targetfor further commitments/
implementation
period/staging(ii) The final bound AMS commitment currently in Members’ Schedules to be
reduced to zero [on a product-specific disaggregated basis] over five
years for developed countries.  [Developed countries to commit to] areduction of 50 per cent in the first year of implementation to be followedby equal cuts over the following years to reach zero.
(iii) Members shall simplify domestic support disciplines into two categories:
- exempt support, as defined by criteria-based measures that have no,
or at most minimal, trade-distorti ng effects or effects on production;
and
- non-exempt support, as defined by the Aggregate Measurement of
Support (AMS) and production-limiting support as defined in Article
6.5 of the Agreement on Agriculture.TN/AG/6
Page 84Amber Box
Working Hypotheses Variations/Additions
Specificity of further
commitments/reduction method/target for
further commitments/
implementationperiod/staging (cont'd)Non-exempt support shall be subject to annual reduction commitments
specified in Members’ schedules.  The allowed level of non-exemptsupport shall be reduced from the Member’s final bound AMS ceiling to 5
per cent of the Member’s average value of total agricultural production in
the base period of 1996-1998 through equal annual reductioncommitments over a five-year period.  Members whose final bound AMSis less than 5 per cent shall maintain their ceiling for non-exempt support
at the final bound AMS level.  In the calculation of non-exempt support, a
Member shall not include domestic support that is consistent with theprovisions of Article 6.4 of the Agreement on Agriculture.
In addition to the reduction modality described above, Members shall
agree to eliminate all non-exempt domestic support by a date to be
established in these negotiations.
(iv) The Total AMS of developed country Members shall be bound and further
reduced.  The ceiling of Total AMS of these countries shall be set in terms
of their total value of agricultural production in the previous year.  Amber
Box and Blue Box support in developed countries shall be eliminatedwithin three years, with a 50 per cent reduction in the first year and 25 percent annual reduction for the next two years.  Developed countries shall
make reduction commitments on an aggregate and product-specific basis.
(v) The Total AMS shall be reduced on a product-specific basis to zero over
[four years] [a six-year period commencing in the year 2005], in equalannual instalments.  Developed country Members shall commit to a 50 per
cent down-payment of the total reduction target over the first year of the
implementation period.
(vi) Reduction commitments to be undertaken on a product-specific basis,
resulting in reduction of all trade-distorting support, in the Amber Box, theBlue Box and Annex 2 (paragraphs 5, 6, and 7), to  the de minimis  level at
the end of the implementation period.
(vii) The AMS should be maintained as an aggregate measurement and not be
turned into a product-specific commitment.  Further AMS reductioncommitments should be differentiated according to export orientation.
The home-market oriented AMS should be subject to a reduction of {X}
per cent, while the export-oriented AMS should be subject to a reductionof {Y} per cent (X<Y), based on available production and export statisticsof a given base year.  Reduction commitments should be implemented in
equal instalments over {X} years.TN/AG/6
Page 85Amber Box
Working Hypotheses Variations/Additions
Specificity of further
commitments/reduction method/target for
further commitments/
implementationperiod/staging (cont'd)(viii) Reductions of trade-distorting domestic support to be made on a
disaggregated basis, including a substantial down-payment in the firstyear of implementation, with the remaining trade-distorting domestic
support to be reduced on the basis of two different schedules.  For
products benefiting from trade-dist orting domestic support that were
exported (i.e., defined as products from countries whose share of theinternational market in those particular products is greater than 3 per cent)
support to be phased out in three equal annual reductions leading to
elimination.  Reductions of trade-distorting domestic support on productsnot exported or whose share of international market is not greater than 3per cent, to be subject to a longer implementation period.
(ix) Disciplines concerning domestic support measures that are variable in
relation to market prices, e.g. deficiency payments, should bestrengthened.  Such aids for products of which a substantial proportion isexported should be subject to the same reduction commitments as export
subsidies.
(x) Export-enhancing domestic support such as price pooling and
compensatory payments, including deficiency payments, applied tocommodities destined for export should be subject to additional disciplines
similar to those applied to export subsidies.
(xi) There should be only two categories of support:  Green and Amber
Boxes.  All trade distorting domestic support should be substantiallyreduced on an aggregate and product specific basis. An initial substantial
reduction of the Total AMS between 50-70 per cent should be made,
followed by annual reductions.  With respect to product-specificcommitments, reductions should be at least 40-50 per cent of the averagevalues of the last three years of the Uruguay Round implementation.
Reductions should be implemented over three years for developed
countries.
(xii) Further reduction commitments for recently-acceded Members should be
undertaken from the bound levels of the AMS and the following flexibilitiesfor reduction commitments should be granted: i) the level of the AMS
reduction should be lower than for developed countries; ii) there should be
longer implementation periods for the new commitments; and, iii)implementation of the new commitments should be delayed (i.e. thereshould be some pause between the end of implementation of accession
commitments and the beginning of implementation of new reduction
commitments).TN/AG/6
Page 86Amber Box
Working Hypotheses Variations/Additions
Specificity of further
commitments/reduction method/target for
further commitments/
implementationperiod/staging (cont'd)The specific drafting proposal for modalities in the area of the Amber Box
is as follows:
Taking into account the provisions of paragraph 9 of the Doha Ministerial
Declaration, the recently-acceded Members shall reduce their AMS level
by {…} per cent, during {…} years of the implementation period, startingafter the {…} years of entry into force of the Doha Development Agendaresults.
De minimis  provisions (i) Maintain the de minimis  provisions as per Article 6.4(a).
(ii) The de minimis  provision to be eliminated for developed countries.
(iii) The de minimis  support provisions as provided for in Article 6.4(a) for
developed countries shall be reduced [with a view towards its elimination
within an agreed period of time].  The de minimis  provisions to be retained
for developing countries.
(iv) Reduce both product-specific and non-product-specific de minimis  of
developed countries to 2.5 per cent at the beginning of the implementation
period, subject to eventual elimination of this provision within a period ofno longer than three years.
(v) Article 6.4(a)(i) and (ii) should be suspended until such time as the
domestic support levels of all Members come down to the de minimis
level.
(vi) Exclude export-enhancing domestic support measures from applying de
minimis  provisions.
Other disciplines (i) Members shall engage in negotiations on further reform commitments
beyond the basic modalities on a sector-specific basis, such as deepertariff reductions, product-specific limits on trade-distorting domestic
support, and other commitments to more effectively address the trade-
distorting practices in the affected commodity sectors.
(ii) In pursuing the reform of domestic support, Members need to consider the
effects of reduction commitments on the value of trade preferences for
small vulnerable countries.TN/AG/6
Page 87Amber Box
Working Hypotheses Variations/Additions
S&D
Base levels(i) The base level for the staging of further commitments shall be the
average actual support level for the years 1995-2000 or the bound levelfor the year 2000, whichever is lower.  Developing country Members shall
stage further reduction commitments from the final bound levels
established as a result of the Uruguay Round.
Specificity of furthercommitments/reductionmethod/target for
further commitments/
implementationperiod/staging(i) Least-developed country Members should not be required to
make further commitments.
(ii) Developing country Members should be provided flexibility in
terms of longer implementation periods and lower reduction
rates.
(iii) …(i) Developing countries should be allowed to make further commitments on
an aggregated basis.
(ii) The final bound AMS commitment currently in Members’ Schedules to be
reduced to zero [on a product-specific disaggregated basis] over five
years for developed countries and nine years for developing countries.
[Developed countries to commit to] a reduction of 50 per cent in the firstyear of implementation to be followed by equal cuts over the followingyears to reach zero.
(iii) Developing countries to be exempt from making a down-payment in the
first year of implementation.
(iv) The Total AMS shall be reduced on a product-specific basis to zero over a
six-year period commencing in the year 2005, in equal annual
instalments.  Developed country Members shall commit to a 50 per cent
down-payment of the total reduction target over the first year of theimplementation period.  Developing country Members shall have theflexibility to maintain commitments at the aggregate level inclusive of
support under the de minimis  level, to implement reduction commitments
over a ten-year period commencing in the year 2008, and to apply lower
reduction commitments provided that the reduction is no less than half ofthat specified for developed countries.
(v) There should be only two categories of support:  Green and Amber
Boxes.  All trade distorting domestic support should be substantially
reduced on an aggregate and product specific basis. An initial substantialreduction of the Total AMS between 50-70 per cent should be made,followed by annual reductions.  With respect to product-specific
commitments, reductions should be at least 40-50 per cent of the average
values of the last three years of the Uruguay Round implementation.Reductions should be implemented over six years for developingcountries.
(vi) Any new commitments for developing countries should be no more than
half of the commitments of developed countries.TN/AG/6
Page 88Amber Box
Working Hypotheses Variations/Additions
(vii) Lesser commitments shall apply to developing countries, economies in
transition and recently acceded countries.
(viii) [Greater reductions] [Substantial reduction of domestic support] to be
made on products of export interest to [LDCs] [developing countries].Specificity of further
commitments/reduction method/target
for further commitments/
implementationperiod/staging (cont'd)
(ix) LDCs should be allowed to increase their non-product-specific support by
an equivalent amount when in the calculation of their AMS domesticsupport prices were found to be lower than the external reference price,
showing negative product-specific support.  Since many LDCs had
negative product-specific AMS, such countries should be accorded duecredit by way of excluding specific food security expenditures from AMScalculations.
De minimis  provisions (i) Retain the existing de minimis  provisions in Article 6.4(b) for developing
countries.
(ii) Developing country Members shall have the flexibility to aggregate
[domestic support within the de minimis  level] [non-product-specific
support with product-specific support below the de minimis  level]
(iii) As long as the reduction commitments on trade-distorting domestic
support are based on the Aggregate Measurement of Support (AMS),
developing countries should be allowed to aggregate the values of
product-specific de minimis that may then be allocated to support selected
products.
(iv) The de minimis  level for developing countries should be increased to 15
per cent.
(v) The de minimis  level shall be raised to {X} per cent for [low-income]
developing countries [and transition countries].
Inflation adjustment (i) Special consideration to be given to problems of excessive rates of
inflation in developing countries, including a possibility of expressingcommitments in agreed currencies or a basket of currencies.TN/AG/6
Page 89Other Domestic Support Issues
Working Hypotheses Variations/Additions
Peace Clause (i) The provisions of Article 13(a) and (b) shall cease to apply as per Article
1(f) of the Agreement on Agriculture.
(ii) The provisions of GATT 1994 and of other Multilateral Trade Agreements
in Annex 1A to the WTO Agreement shall not apply to subsidies
consistent with the provisions of the WTO Agreement on Agriculture and
the commitments made as a result of the Reform Process of trade inagriculture.
S&D (i) Any domestic support measure implemented by any developing country
Member that fully conforms with the provisions of Article 6.2 and Annex 2
of the Agreement on Agriculture, as well as domestic support within the de
minimis  level shall be:
(a) non-actionable subsidy for purposes of countervailing duties;
(b) exempt from actions based on Article XVI of GATT 1994 and Part III
of the Subsidies Agreement;  and
(c) exempt from actions based on non-violation nullification or
impairment of the benefits of tariff concessions accruing to another
Member under Article II of GATT 1994, in the sense of paragraph1(b)  of Article XXIII of GATT 1994.
(ii) Support measures provided by developing countries within the de minimis
level,  the existing Annex 2, the framework of a revised Green Box, the
existing Article 6.2 or within the framework of an expanded Article 6.2aimed at food security, poverty alleviation, rural development, ruralemployment and diversification of agriculture shall be exempted from any
action under Article XVI of GATT 1994, the Agreement on Subsidies and
Countervailing Measures and be exempted from actions based onnon-violation nullification or impairment, in the sense of paragraph 1 (b) ofArticle XXIII of GATT 1994.
(iii) Members shall not challenge the me asures provided under Article 6.2 of
the Agreement on Agriculture by developing countries.
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