WORLD TRADE
ORGANIZATIONG/AG/NG/W/138
19 March 2001
(01-1372)
Committee on Agriculture
Special SessionOriginal:  Spanish
PROPOSAL BY MEXICO FOR THE NEGOTIATIONS ON AGRICULTURE
IN THE WORLD TRADE ORGANIZATION (WTO)
INTRODUCTION
1. The Uruguay Round contributed to improving the terms and conditions governing
international agricultural trade.  It established a basis for initiating a process of reform with the
ultimate objective of achieving a fair and market-oriented agricultural trading system through the
negotiation of substantial progressive reductions in agricultural support and protection and the
establishment of strengthened and more operationally effective GATT rules and disciplines.
2. Although the Uruguay Round resulted in substant ial commitments to the further opening up
of markets through tariff reductions and tariffication of certain non-tariff measures, and to reducing
market distortions through substantial progressive reductions in domestic support and export
subsidies, the long-term objective as agreed at the Mid-Term Review of the Uruguay Round can only
be attained by continuing this reform process.
3. Mexico considers that the reform process should continue in accordance with Article 20 of
the WTO Agreement on Agriculture;   in other words, in order to attain their long-term objective, the
negotiations should take account, inter alia , of the experience to date from implementing the
reduction commitments;  the effects of the reduction commitments on world trade in agriculture;
special and differential treatment to developing country members, and the objective to establish a fair
and market-oriented agricultural trading system, and the other objectives and concerns mentioned in
the preamble to the Agreement on Agriculture;  and what further commitments are necessary toachieve the long-term objectives.
4. With respect to subparagraphs (a) and (b) of Article 20 of the Agreement on Agriculture,
Mexico would like to highlight its experience with the effects of competing with products from more
developed countries, which generally make use of the entire range of subsidies.  The market
distortions caused by these subsidies have resulted in artificially low international prices, to thedetriment of producers' profitability.
5. The Uruguay Round favoured a proportional and differential reduction in tariff protection
levels and subsidy and domestic support levels, depending on the level of development of the
economies.
6. However, market distortions are still being caused by the developed countries, since the
developing countries account for a considerably smaller share of subsidies.  The actual use of
subsidies depends more on the financial capacity of a country than on its contractual commitments.
As a result, the developing countries have seen their agricultural development hampered.  If this
difference in the application of subsidies is allowed to prevail, then the equity we are trying to achieve
in trade will disappear completely.G/AG/NG/W/138
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7. In the light of the above considerations and in accordance with the procedures laid down
during the special session of the Committee on Agriculture of March 2000, Mexico would like to
submit, for consideration by the other WTO Members, the following ideas on the modalities to be
applied and the objectives to be pursued in respect of market access, domestic support, export
competition and special and differential treatment during the current agricultural negotiations.
EXPORT COMPETITION
Subsidies
8. The negotiations should result in an agr eement to eliminate export subsidies within a
time-frame to be determined.
9. Should it not be possible to reach an agreement on the immediate elimination of export
subsidies, the first step towards achieving that final objective would be to apply the system used
during the Uruguay Round, i.e:
(a) Developed countries :  reduction by [X%] of budgetary expenditures and by [Y%] of
quantities exported, starting with the Uruguay Round final levels, within a period to
be determined.
(b) Developing countries :  reduction by substantially less than [X%] of budgetary
expenditures and by [substantially less than Y%] of quantities exported, starting with
the Uruguay Round final levels, within a period to be determined, but longer than the
period provided for developed countries.
10. These reductions:
(a) Must involve a given number of equal annual amounts, excluding the possibility of
exceeding the maximum commitment levels with respect to budgetary expenditures
and quantities exported, in absolute terms in both cases, for each year.
(b) must be applied as from the termination of the Uruguay Round reduction period.
11. Export subsidy disciplines must be improved, inter alia  in order to prevent the subsidy margin
of a product from being used to raise or exceed the ceiling established for the products derived
therefrom.
12. Disciplines should be established to regulate  the activities of state trading companies to
ensure that their operations do not cause distortions in international agricultural trade.
13. Article 10.2 of the Agreement on Agriculture should be implemented immediately in the
framework of the negotiations in order to establis h internationally agreed disciplines to govern the
provision of export credits, export credit guarantees or insurance programmes.
14. The provisions governing special and differential treatment for developing countries with
respect to export subsidies should be maintained and improved.  Special and differential treatment
should also be applied to the disciplines agreed upon under Article 10.2.
Peace clause
15. The Peace Clause should be turned into a permanent obligation for the developed countries
with respect to imports from the developing countries.G/AG/NG/W/138
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DOMESTIC SUPPORT
Green box
16. The stability of the programmes being implemented by many Members, in particular
developing country Members, in conformity w ith the results of the Uruguay Round Agreements,
should not be affected.
17. The green box should be maintained, and hence, the provisions relating to those domestic
support measures in favour of agricultural producers that are not subject to a reduction commitment
because they conform to the criteria set forth in Annex 2 of the Agreement on Agriculture, as well as
the said Annex 2 criteria, should remain unchanged.
Amber box
18. The reduction in the Aggregate Measure of Support (AMS) should be as substantial as
possible.
19. Given that it is the amber box domestic support measures that most distort production and
trade, reductions should considerably exceed those applied during the Uruguay Round.
20. These reductions should be greater in the developed countries, where such instruments are
used more extensively, than in the developing countries.
Blue box
21. Contrary to what was agreed in the Uruguay Round, the amounts allocated to blue box
programmes should be reduced at an accelerated pace.
Provisions on special and different treatment
22. The provisions on special and differential treatment for developing countries with respect to
domestic support should be maintained and improved.
23. The measures adopted under Article 6.2 of the Agreement on Agriculture should not be
subject to countervailing measures.
MARKET ACCESS
24. The modalities for negotiating tariffs depend directly on the degree of market distortion
resulting from domestic subsidies and export subsidies in international trade.
25. The lack of an agreement providing for the elimination or substantial reduction of export
subsidies and the substantial reduction of domestic support not covered by the green box would mean
that with respect to market access, each Member would be able to decide on a case-by-case basis how
far it was willing to go in view of its own situation and the situation of the international market.  If
this were the case, then tariff and tariff quota negotiations would have to follow the requests andoffers procedure.
26. On the other hand, an agreement allowing for the elimination or substantial reduction of
export subsidies and a substantial reduction of domestic support not covered by the green box would
help Members to agree on multilaterally applied modalities for negotiating the reduction of tariffsG/AG/NG/W/138
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resulting from the Uruguay Round.  In that case, the tariff negotiations could take place according to
modalities similar to those applied during the Uruguay Round.
27. In the tariff negotiations:
(a) The bound levels should be used as the base rate;
(b) reductions should be applied as from the end of the Uruguay Round relief period
agreed;
(c) the importing party shall be responsible for the administration of tariff quotas if it so
decides.
28. Geographical indications, trade names and labelling do not fall within the mandate of the
negotiations on agriculture.
SANITARY AND PHYTOSANITARY MEASURES29. Sanitary and phytosanitary measures should continue to be addressed under the Agreement on
the Application of Sanitary and Phytosanitary Measures, which has proven to be an appropriate
instrument for the purpose.
NON–TRADE CONCERNS30. We must define clearly what these are.  Such instruments as may be agreed upon in this
respect must not have any distorting effects, create barriers to trade, or otherwise affect concessions
and/or commitments bound in the WTO.
SPECIAL AND DIFFERENTIAL TREATMENT FOR THE DEVELOPING COUNTRIES31. In addition to the above-mentioned provisions on special and differential treatment for the
developing countries, the negotiation procedures agreed upon and the actual results of those
negotiations must contain such provisions on special and differential treatment for developing
countries as are needed by them, inter alia , to stimulate their agricultural sector, to promote rural
development, to combat poverty and to bring down rural unemployment rates.
FINAL REMARKS
32. Mexico reserves the right to expand upon or modify the proposals contained in this document.
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