RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/NG/R/6
2 August 2001
(01-3831)
Committee on Agriculture
Special Session
SUMMARY REPORT ON THE SIXTH MEETING OF THE SPECIAL SESSION
HELD ON 22-23 MARCH 2001
Note by the Secretariat
1. As agreed by the General Council at its meeting of 7-8 February 2000 the negotiations under
Article 20 of the Agreement on Agriculture on continui ng the reform process of agriculture trade were
conducted in a Special Session of the Committee on Agriculture (WT/GC/M/53 paragraph 39 refers).
The sixth such meeting took place on  22–23 March under the Chairmanship of Ambassador Jorge
Voto-Bernales of Peru.
2. The present report provides a detailed summary of the Committee's discussions on substantive
matters under the relevant agenda items and should be read in conjunction with the short factual
report to the General Council on the meeting as a whole by the Chairman (G/AG/NG/6, copy
attached).  Unless otherwise stated, all references to documents refer to the G/AG/NG/- series.
3. The agenda as contained in WTO/AIR/1502 was adopted.
NEGOTIATING PROPOSALS
(a) India: Proposals by India in the areas of:  (i)  Food Security, (ii)  Market Access,
(iii) Domestic Support,  and (iv)  Export Competition (NG/W/102)
4. The discussion of India's proposal had started during the Fifth Special Session (NG/R/5) and
had been suspended due to time constraints.  The discussion continued in the Sixth Special Session as
follows.
5. Australia appreciated the broad approach to reform in India's proposal and noted that, while it
focused on the special needs of developing countries, it highlighted the importance of trade in
agricultural products for these countries.  India's proposal outlined the frustration many developing
countries felt with the failure of the Uruguay Round reforms to lead to increased market access for
their exports and noted that this was linked to high levels of support and protection in some developed
countries.  Australia noted a number of similarities to the Cairns Group's positions.  In particular, theclear distinction between the multifunctional concerns of Europe and Japan and the legitimate non-
trade concerns of countries such as India.  Austra lia sympathized with the reasons for linking further
reform in developing countries to the continued distortions to trade caused by some developed
countries high levels of subsidies for production and export.  However, the majority of those
employed in agriculture in developing countries were also consumers and high tariffs and otherimport restrictions would harm efforts to make food more accessible and affordable.  International
reform in agriculture offered developing countries the strongest prospects for improving the
prosperity of rural societies and reducing the thre at of hunger and malnutrition.  Already developing
countries were increasingly trading with each other with roughly half their exports going to other
developing countries.  Therefore, dismantling trade barriers would contribute to food security andeconomic development in the developing world.G/AG/NG/R/6
Page 2
6. On behalf of Cuba, Honduras and the Dominican Republic the representative of Honduras
(NG/W/163), noted that India's proposal took into account many of the elements of "Development
Box" (see proposal NG/W/13).  Tariff reductions in developing countries had to be linked to reduced
distortions on domestic and export support in developed countries and the special safeguard should be
made available to all developing countries, regardless of the way tariff levels had been decided in the
Uruguay Round.  The idea that developing countries be exempted from the obligation to offerminimum access commitments was also supported.  On tariff quota administration, the thrust of
India's proposal regarding preferential tariff allocation to developing countries with a per capita
income lower than US$1,000 was appreciated but it was felt that the suggested threshold was not
appropriate.  Instead, it would be better to use an internationally accepted category such as the
medium-low income level used by the World Bank.  They also supported the general thrust of India's
proposal on domestic support and export subsidies, in particular the proposals related to the initial
down-payments during the year of 2001.
7. The Czech Republic noted the importance of developing country concerns.  The negotiations
should result in appropriate measures for special and differential treatment in order to ensure
development objectives were realized.  He also stated that all Members should be able to benefit from
the reform process and this included countries which had recently undergone, or were still in the
process of, transition to market economies.
8. In Korea's view, the difficulties faced by developing countries, and the special characteristics
of agriculture, were appropriately described in the Indian proposal. Korea shared a number of the
suggestions in the proposal, such as the need to take into account the impact of inflation on domestic
support reduction commitments.  The representative of Korea hoped that the realities facing net food-
importing developing countries and food exporting developing countries would be consideredsimultaneously in the future process.
9. Canada stated that the existing distortions in world agricultural trade had been caused by the
trade-distorting policies of some developed countries and these policies had to be reformed in order to
reduce distortions and improve market access.  However, reforms in developed countries should not
be offset by increased protectionism and other forms of trade distortion in developing countries.While Canada supported the complete elimination of export subsidies it noted that some of India's
ideas on special and differential treatment could lead to increases in export subsidies.  Canada was
also concerned by the suggestion that some policies could be exempted from reduction commitments,
such as those aimed at the promotion of poverty al leviation, rural development, rural employment and
diversification of agriculture.  The focus of reform had to be on measures taken by governments toaddress issues and exemptions from commitments were not justified because of particular policy
objectives.  On market access, Canada pointed out that one of the most important objectives of the
reform programme was to expand market access opportunities for all products in all markets and
noted that developing countries were increasingly becoming important export markets for other
developing countries.  Failing to address market access barriers in developing countries would
disadvantage other developing countries and would prevent them from achieving their objectives for
food security, growth and prosperity.  Nevertheless, Canada recognized the need for special anddifferential treatment to help adjust for open trade.
10. Japan stated that food security was a priority for all countries.  The diverse economic,
developmental and agricultural conditions in different developing countries meant it was important to
focus on those countries that faced serious difficulties in ensuring food security instead of giving
uniform flexibility to all developing countries.  Th e establishment of trade rules had to recognize the
co-existence of various types of agriculture and a simple division between developed and developing
countries would not achieve this recognition.  A substantial market access improvement in a uniform
manner would only benefit a few large exporting countries therefore it might be more appropriate to
maintain or increase the benefits of preferential tariffs.  On export competition, Japan stated that
stronger disciplines were needed for all export measures, including export restrictions and taxes, inG/AG/NG/R/6
Page 3
order to address the imbalance between the rights and obligations of food importing and exporting
countries and to maintain food security of food importing countries.
11. CARICOM stated that it was a group of net f ood-importing developing countries that held
broadly similar concerns in respect of food security to those put forward by India.  On domestic
support and export subsidies CARICOM supported many elements of India's proposals.  However, it
noted that the proposal did not refer to issues concerning special and differential treatment fordeveloping countries, particularly small developing economies, and their need for flexibility in the
negotiations.  Appropriate mechanisms for export expansion, domestic market stability, continued
access to food supplies were all important aspects and concerns for developing countries, particularly
so for small developing economies.  Furthermore, the proposal did not cover those smaller economies
that currently relied on preferential trading arrangements.  Yet CARICOM, among others, had
proposed that these issues be taken into account in the reform process.
12. The representative of Turkey  (NG/W/172) noted that th ere were many common points
between Turkey's and India's proposals in particular the strengthening special and differential
treatment provisions for developing countries.  The idea of a "Food Security Box" needed to be
considered in the context of reinforcing special and differential treatment.  Also, in light of the wide
usage of the Green Box, Turkey believed that Green Box measures deserved a detailed assessment to
determine their impact on trade and production, without any prejudice to Annex 2.  In general, India'sproposal correctly revealed the expectations of developing countries in terms of establishing fair,
world-wide competition in agricultural products and achieving a balance between the developed and
developing countries.
13. The representative of India (NG/W/176) appreciated the constructive observations made by
delegations, in particular with respect to their recognition of concerns related to food security and theneed for flexibility.  He stated that the Agr eement on Agriculture originated from the problems
associated with agricultural surpluses in a few developed countries but it was food deficits that most
concerned developing countries.  India reiterated the importance of food self-sufficiency for countries
with large agrarian populations such as India.  Wh ile much had been said about export subsidies and
domestic support, there were other, finer elements of inequity in the Agreement.  Under Article 7.2,only the major agricultural subsidizers had the flexibility of targeting high domestic support to their
sensitive products, but he claimed that Members without commitments had to stay below  de minimis
limits for each product.  The credibility of the reform process would hinge on how far the developed
countries would be able to reduce such imbalances and inequities rather than seeking reciprocity from
developing countries.  On the link between market access and domestic support, India stressed that to
view market access in isolation was not acceptable as it was often a function of domestic support and
export competition policies pursued by other countries.  It was not possible to protect farmers in India
from unfair competition until it was known, clearly, what commitments were to be made by countries
with high levels of subsidies. India was of the view that there was enough commonality between
Members to allow progress towards a level playing field in the international agricultural trade regime.
(b) Mali:  Malian Proposals on the Futu re Negotiations on Agriculture (NG/W/99)
14. The representative of Mali noted the importance of creating the right conditions for
sustainable growth and poverty reduction.  Agriculture was very important to Mali's economy, in
terms of its share of GDP, employment and exports, and it had considerable potential for expansion if
access to export markets could be improved.  Mali had identified four sectors with economic potential
and its proposal provided concrete ways in which this potential could be realized.  It proposed duty-
free admission of fruits and vegetables, livestock and meat products, hides and leather, rice and ofcotton originating from least-developed countries along with the elimination of export subsidies for
fruits, vegetables and rice, which were leading export items for many West African countries.  He
pointed out that Mali had the potential to supply the whole West African region with rice and
therefore it wanted export subsidies for rice abolished over the period 2001-2010 and, at the sameG/AG/NG/R/6
Page 4
time, to implement a production support programme to reduce import costs in order to encourage
regional integration.  At presented the cotton sector was going through a crisis in the sub-region and,
therefore, Mali wanted a substantial reduction of domestic supports in developed countries for cotton.
Mali also proposed the maintenance of the right of state trading enterprises in least-developed
countries to operate on the international market.
15. On behalf of MERCOSUR, Chile and Bolivia the representative of Paraguay, along with
Japan, New Zealand and Australia, stated that they understood Mali's economic policy objective to
alleviate poverty through trade and investment poli cies which promoted and increased the supply of
goods and services for exports as well as for the domestic market.  The representative of Paraguay
supported Mali's call for financial support from the international community for development of the
four agriculture sectors with economic potential provided other developing countries were not
prejudiced as a result.
16. Mexico supported Mali's proposal for the abolition of export subsidies in the fruit and
vegetables sector and noted that the abolition had been part of several other Members' proposals.
New Zealand, Australia, Colombia and South Africa a dded that the elimination and prohibition of all
forms of such trade-distorting policies should be on e of the main objectives of the current agricultural
negotiations.
17. New Zealand stated that in order to properly address domestic support issues commitments
had to be on a product-specific basis and it noted that Mali's submission included such a proposal for
cotton.  Concerning market access, New Zealand had also announced that it would provide free access
to all products originating from least-developed countries as of July 2001 and encouraged other
Members to take similar steps.
18. Australia (NG/W/166) noted that Mali and other current and potential rice exporters would
benefit from a significant reduction in market access barriers and domestic and export subsidies
applied to rice.  Australia also felt that Mali's approach was more consistent with the overall goals of
the WTO than some other proposals, including some that sought to deepen discriminatory preferential
arrangements.
19. South Africa (NG/W/168) supported Mali's proposal  and noted in particular that it proposed
substantially reductions in domestic support, elimination of export subsidies and improved market
access.  Along with Senegal and the Democratic Republic of Congo, South Africa stated that the
negotiations could only be successful if the objectives set out in Article 20 were addressed allowing
agriculture to fulfil its role in creating wealth in developing countries, a role which was currently
obstructed by trade distortions caused by some wealthy countries.
20. Senegal added that it supported the position of other developing countries concerning the need
to maintain existing preferential arrangements in favour of developing countries.  Senegal also noted
that despite considerable tariff reductions and duty-free access granted to products from developing
countries there were still considerable non-tariff barriers in place, in particular, those linked to
technical barriers to trade, sanitary and phytosanitary measures and rules of origin which would have
to be readjusted in favour of developing countries in order to allow effective access.
21. The United States also supported Mali's proposal for special treatment on market-access
commitments from developed and some developing countries for the least-developed countries.
Along with Canada, the United States also stated that their proposals on sectoral initiatives were
similar to the approach in Mali's proposal.  Canada added that a comprehensive approach would also
ensure that the products and sectors that Mali had identified would be addressed in the reform
package.  It pointed out that under Canada's existing market-access arrangements virtually allagricultural products from least-developed countries could now obtain duty-free treatment in the
Canadian market in parallel with more relaxed rules of origin.G/AG/NG/R/6
Page 5
22. The representative of Japan stated that Members should take into consideration the specific
situation of each developing country and establish agricultural trade rules that would allow the co-
existence of various types of agriculture.  He pointed out that Japan had announced last year that it
would implement tariff- and quota-free treatment fo r essentially all products originating in least-
developed countries.  In addition, Japan's negotiating proposal  proposed a wide range of flexibility to
commitments by developing countries on market access, domestic support and export disciplines witha view to enhance their food security and contribute to the economic development of least-developed
countries and their integration to the global economy.
23. The EC noted that through its "Everything But Arms" initiative, the Communities had already
complied with part of Mali's proposal as the initiat ive included the commodities referred to in the
proposal.  Concerning export subsidies, it pointed ou t that the EC had stated that it was prepared to
negotiate reductions in export subsidies provided other means of supporting exports were similarly
disciplined.  Finally, on domestic support for cotton, the Community did provide Amber Box supportto that product although it was only a minor producer and that the issue was on the agenda for further
discussions.
24. Switzerland noted that existing preferences already provided advantages and market access to
developing countries and that there had been recent initiatives by a number of Members for tariff- and
quota-free access and Switzerland hoped it would soon be in a position to announce a similarinitiative.  He also stated that progressive liberalization of agriculture which took account of measures
concerning non-trade concerns would allow the negotiations to move ahead in a way that could
address the specific needs of countries such as Mali.
25. The representative of Mali welcomed the statements by some Members concerning duty-free
access for products from least-developed countries and suggested other industrialized countries couldalso take concrete measures to speed up duty free admission of products from the least-developed
countries.
(c) Norway:  WTO Agriculture Negotiations (NG/W/101)
26. In presenting its proposal, Norway pointed out that while Article 20 represented an obligation
to continue the reform process, it should not necessarily be finalised by reaching the long-termobjective in the ongoing negotiations (NG/W/182).  In addition, under Article 20 the negotiations had
to take into account a number of factors including non-trade concerns.  Most of these concerns were
unique to agriculture and had characteristics of public goods that could justify government
intervention.  Furthermore, these public goods could only be provided jointly with agricultural
production.  Agriculture's special and multifunctional characteristics should be recognized and theywarranted continued special treatment of the agricult ural sector within the multilateral trading system
and Members should have flexibility in national policy design to maintain domestic production as this
was necessary to address domestic non-trade concerns.  For countries, such as Norway, which did not
have a comparative advantage in agriculture, it wa s necessary to have the right to use a combination
of policy measures that included the use of production-related measures.  Certain measures, such as
export competition measures, might not be necessary in the long term, provided non-trade concerns
could be safeguarded.  Norway also outlined the concrete proposals contained in its submission.
27. The EC noted that it had similar interests as Norway, in particular in the area of non-trade
concerns and agreed with many elements of the proposal, especially those concerning export
subsidies.  However, the EC had some reservations concerning the proposal that different
commitments should be applied to different types of domestic support.  They pointed out that support
was likely to become increasingly non-product specific and markets more open and interrelatedmaking it difficult to distinguish between support for products for domestic consumption and support
for products for export.  The EC agreed with Norway that the Peace Clause should be maintained
since it was the logical corollary of the specific nature of the Agreement on Agriculture.  The PeaceG/AG/NG/R/6
Page 6
Clause defined the conditions under which specific support measures were be to granted, and
therefore contributed to the enforcement of the agreed reduction commitments.
28. Japan stated that it supported the principle of co-existence of various types of agriculture that
was put forward in the proposal.  It also agreed  that the unique characteristics and functions of
agriculture had to be taken into account in the negotiations.  Japan supported many other elements in
the proposal including the need for flexibility in se tting tariffs on individual products, that the Blue
Box should be maintained, that disciplines on export competition measures should be strengthened
and that special and differential treatment provisions should be a compliment to, and not a substitution
of, general rules.  Japan and Korea noted the proposal that AMS commitments should be different for
products for domestic consumption compared to products for export.  Japan stated that this proposal
deserved further examination, and Korea that this would address correct imbalances between
Members without generating negative trade effects.
29. On behalf of CARICOM the representative of Barbados welcomed the proposal by Norway as
a meaningful contribution to the negotiating process, including its respect for the difficult
circumstances of developing countries and small developing countries.  CARICOM identified with
Norway on the importance of non-trade concerns, although they might differ on the manner in which
they wished to see these addressed in the Agr eement.  CARICOM supported the proposals that in
considering further tariff reductions, special attention should be accorded to exports of particularinterest to developing countries, and transparency in the administration of tariff quotas and stated that
Members should also consider ways to make preferential arrangements stable and predictable.  While
CARICOM believed that the special safeguard should  be used only by developing countries, they
agreed that there should be stricter disciplines on all forms of export competition and welcomed the
focus on special and differential treatment.
30. A number of countries with economies in transition to market orientation noted that Norway's
proposal recognized the unique challenges facing their agricultural sectors.  These included Estonia,
Latvia, Lithuania, Slovenia, Hungary, the Czech Republic and Croatia.
31. On behalf of Estonia, Latvia, Lithuania and Slovenia the representative of Latvia (NG/W/144)
supported Norway's proposals and referred to the market access proposal (NG/W/57) made by anumber of countries with economies in transition to market orientation.  That proposal had suggested
that the special safeguard clause should be extended to economies in transition for a limited number
of products during the reform process as this would help address the unique and temporary situation
in their agricultural sectors.  While these Member s could resort to provisions of the Agreement on
Safeguards, such measures were significantly more trade disruptive and longer lasting.   Moreover,without access to the special safeguard they had an incentive to maintain a higher level of applied
tariffs in order to reduce the effects of unforeseen  fluctuations of import prices or volumes.  The
special safeguard, on the other hand, was transparent, predictable and was less of an obstacle to trade
than other measures.
32. Slovenia (NG/W/145) added that it supported the idea that due consideration had to be given
to the different types of agricultural economies and different policy objectives in Member countries,
including with regard to non-trade concerns.  In the view of Slovenia, non-trade concerns could only
be addressed through an appropriate combination of policy measures.  On market access, Slovenia
supported the proposal for flexibility in allowing selective reduction commitments, which was of
particular importance for small net-importers such as Slovenia with a narrow product range.  Slovenia
also agreed with Norway on the necessity to maintain the Blue and Green Boxes.
33. Hungary stated that recognizing the unique cha llenges of the economies in transition and the
need to address them via negotiated commitments was necessary to ensure rapid and substantial
progress in the negotiations.  Hungary agreed with the position that a sufficient degree of policy
flexibility was necessary since policy objectives and agricultural conditions varied considerablyG/AG/NG/R/6
Page 7
among Members.  It also supported a number of specific proposals, including continuation of the
special safeguard, preservation of the non-product-specific nature of the AMS commitments, annual
inflation-adjustment of domestic support commitments, a comprehensive approach to export
competition and extension of the Peace Clause.
34. The Czech Republic (NG/W/156) stated that it supported a number of the suggestions in
Norway's proposal, in particular the need to stri ke a balance between trade and non-trade concerns.
The Czech Republic believed that if the principles regarding non-trade concerns could be clarified,
Members would be more willing to consider limited tariff reductions on key agricultural products and
further increases in minimum access.  The Czech Republic was interested in studying the practical
implications of the proposal to divide the AMS into two categories.  It supported the position that
domestic support commitments should be subject to annual inflation adjustment and agreed that all
forms of export competition should receive the same treatment.
35. Croatia expressed support for the proposal, including its emphasis on non-trade concerns.   In
the view of Croatia, the principle of ensuring the co-existence of various types of agriculture was
important and it should be ensured that the functions of agriculture which a Member considered vital
were preserved.  Croatia also endorsed the statement made by Latvia on behalf of Estonia, Lithuania
and Slovenia concerning the special safeguard.
36. While welcoming Norway's proposal, a number of Members, including ASEAN, Australia,
New Zealand, Canada, Colombia, Costa Rica, Mercos ur, Bolivia, Chile, South Africa, India, the
United States and Guatemala expressed concerns regarding Norway's position or certain elements of
proposal.
37. ASEAN welcomed the proposal by Norway and its commitment to substantial progressive
reductions in support and protection (NG/W/180).  It also thanked Norway for the elements relating totreatment of developing countries.   However, ASEAN had serious concerns regarding some of the
proposals, including on non-trade concerns and multifunctionality, export competition, limited tariff
reductions on key agricultural products, the division of AMS commitments into two categories, the
preservation of the Blue Box and the extension of the Peace Clause.
38. Australia stated that it was disappointed wi th Norway's proposal (NG/W/166).  Australia
understood that Norway faced particular pressures domestically and that it could not be expected to be
at the forefront of agricultural trade reform but it appeared to have based its proposal on the idea that,
because it was not a competitive agricultural producer, the multilateral rules on agricultural trade
should be ineffective.  The proposal effectively suggested that any country could exempt itself from
reform on the ground that its agricultural sector was different.  Under this approach, wealthy countriescould continue to provide support and protection to their farmers while poorer countries lost out.
Australia did not accept that there was no other way for Norway to address its non-trade concerns
except by subsidizing agricultural production.  While many non-trade concerns were legitimate,
Members should examine ways to achieve these objectives that were effective and minimized
distortions to production and trade.  Australia stated that Norway had not done this and it had failed to
provide an objective assessment of the range of policy options available in relation to any specific
non-trade concerns that Norway might have.
39. New Zealand stated that Members had the right to address non-trade concerns in agriculture
and that these concerns had to be taken into account in these negotiations, but that appropriate
measures should take the form of transparent and targeted Green Box measures.  New Zealand was
not convinced that current production patterns and levels needed to be maintained in order to address
non-trade concerns, nor that non-trade concerns were as closely linked to agricultural production asset out in Norway's proposal.  Non-trade concerns coul d not be used as an excuse to offset differences
in production conditions and costs that existed between countries since comparative advantage,
including climatic advantages, was what trade was all about.  As in Norway, rural development wasG/AG/NG/R/6
Page 8
important in New Zealand but New Zealand pursued this objective in a non trade-distorting way
despite an international market distorted by measures such as those used by Norway.  New Zealand
did welcome Norway's proposals on export competiti on but its views differed on a number of other
subjects, including the proposal for the different categories of AMS commitments for products for the
domestic and export markets, which did not take into account that increased domestic production
reduced demand for imports and could have the same price-reducing effect on the world market assubsidized exports.
40. Canada stated that it was willing to study concrete, targeted, transparent and non trade-
distorting measures to address non-trade concerns in the continuation of the reform process but that it
could not accept that non-trade concerns or the special characteristics of agricultural production were
an excuse to maintain trade-distorting support and protection.  It supported New Zealand's statement
concerning the link between non-trade goals and agricultural production.  Furthermore, Canada could
not support the idea that support provided to products marketed domestically should be subject to lessstringent reduction commitments than support provided to products destined for export markets.
Canada wanted substantial reduction or elimination of all types of production and trade-distorting
domestic support.  With respect to the issues of concern for developing countries, a wide range of
developing countries had made the point that the most important contribution that could be made to
enable them to use trade as a means of development was substantial reform, elimination of exportsubsidies and other trade-distorting domestic support  and opening markets.  It was unfortunate that
Norway's proposal would make only a small contribution towards the meaningful reform sought by
developing countries.
41. Colombia stated that it could not accept that the reform process should dependent on the
concept of multifunctionality in a few wealthy countries (NG/W/161).  It noted that the proposal forlimited tariff reductions for key products showed Norw ay's lack of interest in advancing the reform
process.  The special safeguard which had only served to increase the level of protection in developed
countries should be made available exclusively to developing countries.   The proposals on domestic
support came as a surprise for Colombia since it s eemed that Norway intended to reverse the reforms
started in the Uruguay Round.  On the proposal to have different AMS commitments depending onthe destination of the product, Colombia felt that this would result in a lack of transparency and could
hurt trade in products of interest to developing countries.  Colombia endorsed the proposal for stricter
disciplines on export competition measures.  Finall y, Colombia did not support the extension of the
Peace Clause.
42. Costa Rica stated that the proposal was based on the idea that, because Norway's agricultural
sector was not competitive it should be excluded from multilateral disciplines.  However, Members
were not equally competitive in all sectors and yet they did not claim entire sectors should be
excluded from multilateral disciplines.   On the contrary, Costa Rica considered it fair that trade in
agricultural products be finally subject to the same rules as industrial products.  In the area of export
competition, the proposal fell short of expectations by making stricter disciplines conditional on
safeguarding non-trade concerns.  Costa Rica did not interpret Article 20 in the sense that there were
conditions for addressing any particular issue.  Costa Rica did not support maintenance of the BlueBox and extension of the Peace Clause, and felt that Norway was using the concerns of developing
countries to protect its own interests.   The best he lp that Norway could offer to developing countries
was a fundamental reform of the international trade in agricultural products which would allow
developing countries to export products in which they were competitive.
43. On behalf of Mercosur, Bolivia and Chile the representative of Paraguay, stated that these
countries did not agree that the reform process should not end in these negotiations.  These
negotiations should lead to the full integration of agriculture into the multilateral trading system
although reasonable timeframe for transition could be considered.  Areas other than agriculture also
had non-trade concerns yet they were not given special treatment in trade rules, furthermore, if the
specific situation of each country had to be taken into account then the negotiations would result in aG/AG/NG/R/6
Page 9
trading system tailor-made for each country.  This would mean the end of the multilateral system
based on the principles of equality, non-discrimination, national treatment and MFN treatment.  On
domestic support, the proposed division of the AMS into two parts was impossible to make.   It was
felt that there were some contradictions in the proposal.  Some examples included the proposal to
increase protection and safeguard domestic production while offering better market access
opportunities for developing countries and the establishment of an agricultural system sui generis  for
each country while ensuring that the general rules were defined in such a way as to take into account
the long-term interests of all Members.  Although Norway's policy objectives might be legitimate
what mattered was the measures to achieve these objectives.  It was stated that the solutions to
Norway's concerns could probably be found under domestic support and this could be discussed but it
was hoped that Norway would reconsider its pos ition in light of these and other arguments.
44. South Africa (NG/W/168) was concerned that th e proposal fell short of making a genuine
contribution towards substantial progressive reductions in protection and support (NG/W/168) andthat to protect and preserve seemed to be the major objective of Norway's proposal.  The proposals
concerning market access would lead to the protection of products in which developing countries had
a comparative advantage.  On domestic support, South Africa failed to see how the needs of
developing countries would be addressed if Members could decide freely for which products further
reforms might be appropriate.  South Africa agreed with Norway that the subsidy element of allexport competition measures should be treated equally and urged Norway to the join the call for the
elimination of export subsidies.
45. India noted that the proposal recognized the challenges facing developing countries and the
need for adequate flexibility in their policy de sign to foster domestic agricultural production
(NG/W/176). Norway had made an attractive prop osal that the AMS should be divided into two
categories and India looked forward to working w ith Norway on the methods of operationalizing this
concept.  India also appreciated Norway's proposal  on disciplining export competition measures.  On
the other hand, Norway's proposals contained some strategies for maintaining trade-distorting high
domestic support within agricultural sectors. For instance, the proposed flexibility for pursuing its
domestic support policies, including continuation of Blue Box and the Peace Clause, were indicativeof the desire to continue and perpetuate the trade distortions which existed in the global agricultural
trade.  These distortions caused more problems for developing countries than could be compensated
through special and differential treatment packages.
46. United States noted with interest Norway's contention that the size of the reductions in
support and protection should be determined by past experience.  According to statements made in theSpecial Sessions, some countries believed that the Agreement on Agriculture had disciplined and, in
some cases reduced, trade-distorting support and protection but other countries had stated that the
Agreement had not resulted in effective market access, had increased inequities between countries,
had not benefited developing countries, had not taken appropriate account of non-trade concerns or
the special characteristics of agriculture, had not improved food security and had not moved in the
direction of a fair and more market-oriented agri cultural trading system.  Some countries had even
stated that protection and support had increased under the Agreement.  It was not readily apparenthow Norway's proposal would address these concerns .  The United States were concerned with what
appeared to be Norway's attempt to justify trade- distorting measures in order to address non-trade
concerns.  This reasoning could frustrate the hopes of most Members that wanted a market-oriented
trading system.  The United States was concerned with Norway's proposed special treatment for
certain key agricultural products because inevitably one country's key agricultural product wasanother country's best opportunity to export.  The United States called on Norway to agree to the
proposition that other countries should not be negatively affected by measures used to address
non-trade concerns.  The question of how to address these concerns was where Members needed to
focus.  This was the area where Members needed to think outside the lines of traditional border
measures and production subsidies, recalling the basic obligation to reduce distortions to trade andincrease the market orientation of international agriculture.G/AG/NG/R/6
Page 10
47. Guatemala considered the optimal use of world resources could not be achieved if the
developed countries were privileged in the use of trade-distorting measures.  Guatemala wanted to
benefit from its comparative advantage in agriculture but would be unable to do so under Norway's
proposal.
48. Sri Lanka (NG/W/159) broadly shared the vi ew that Members, notably the developing
countries, should have sufficient policy flexibility to encourage domestic production and address non-trade concerns.  While Sri Lanka recognized that certain countries, such as Norway, were facing
adverse conditions in agriculture it was evident that developing countries were at a disadvantage vis-
à-vis developed countries in overcoming such difficulties.  Sri Lanka welcomed the proposal that
Members should be allowed to make only limited MFN tariff reductions on their key agricultural
products but this flexibility should be based on objective criteria, taking into account the different
measures already used by country concerned.  Sri Lanka also supported that tariff quota
administration should be equitable with preferential allocations for developing countries and that thespecial safeguard should be made available to all developing countries.   Sri Lanka felt that to divide
the AMS would be advantageous for developing countries which were trying to differentiate between
the trade-distorting support for export purposes and non trade-distorting support often provided for
enhancing domestic production. This was also in line with the situation in the goods sector.
49. Turkey (NG/W/172) stated that the negotiations were an opportunity to discuss and analyze
non-trade concerns in depth, with the aim of identifying elements and instruments to address them and
Norway's proposal contributed to this process.  However, non-trade concerns should not impede the
reform process and commitments of Members in this  respect.   The reform process should end with
the elimination of all trade-distorting measures.  Norway, by proposing to divide domestic support
measures into two categories depending on the final market, did not take into account that thedomestic market of one Member was the export market of another.  In addition, such division would
be difficult to monitor.  Norway's concerns regarding inflation adjustment of domestic support
commitments and the needs of developing countries in the area of domestic support were shared by
Turkey.
50. Norway thanked delegations which had expressed support for Norway's position that non-
trade concerns must be taken into account in these negotiations.  Norway noted that some Members
had stated that they did not accept the idea that agricultural production and certain non-trade
objectives were jointly produced, as had been reco gnized by the OECD.  Norway did not accept the
statement by the representative of Paraguay that Norway's proposal would lead to increased protection
and stated that it was committed to negotiating reduction of support and protection by all Members.
(d) Poland: WTO Negotiations for Continuation of the Reform Process in the Agricultural
Sector (NG/W/103)
51. The representative of Poland introduced the proposal stating that Poland took the perspective
of a net food-importing country with a large agricultural sector and an economy experiencing a
difficult transformation period.  Poland believed that the continuation of the reform process could
have an adverse impact on the ability of certain countries to pursue important economic and social
goals.  The aim of the negotiations should be to develop a framework in which non-trade concerns aswell as the diversity of agricultural systems would be recognized and preserved.   Several elements
contained in the proposal were highlighted by Poland, including the importance of reaching a
common understanding on the experience of implementation and the need to address all forms of
export supports.  He also stated that agriculture in Poland was facing a difficult period with declining
profitability and abandonment of farms which meant farm households needed assistance, notablythrough the introduction of Blue Box measures.  The proposal also suggested ways to improve overall
market access and the functioning of tariff quotas for the benefit of least-developed countries, net
food-importing developing countries and countries with transition economies.  In making the proposalG/AG/NG/R/6
Page 11
he also stated that special safeguard needed to be preserved in order to reduce disruptions in domestic
markets.
52. A number of countries agreed with many of the suggestions in the proposal by Poland
including that all forms of export supports had to be taken into account in the negotiations.  These
countries included the Czech Republic, Norway, Switzerland, the EC, Japan and Korea.
53. The Czech Republic (NG/W/156) also noted that  it could agree with many of the proposals
including continuation of the analysis of the implementation experience and the suggestions
concerning flexibility with respect to domestic support, the preservation of the special safeguard, and
the emphasis on non-trade concerns.
54. Norway (NG/W/182) stated that it agreed with Po land that all elements of Article 20 had to be
taken into account and that Members needed to learn from the implementation experience.  It also
supported the proposals to maintain the Blue Box and that further flexibility as regards further AMS
commitments should be considered.  Norway pointed out that it, too, had proposed preferentialallocation of tariff quotas and reiterated that the administration of tariff quotas should be transparent,
equitable and not put developing countries at a disadvantage, although it noted that tariff quotas
represented export opportunities, not export guarantees.  Whether these access opportunities translated
into increased exports depended on a number of factors including market conditions, consumer
preferences and supply side constraints.  Special and differential treatment was an essential element ofthe negotiations the aim of which should be to enable all Members to preserve the multifunctional role
of agriculture.
55. Switzerland recognized the special situation of countries in transition and was prepared to
consider ways in which they could be granted more flexibility.  Supporting the view that agriculture
was different from one country to the other, Switzerland stated that several aspects of the proposalcould be further elaborated at a later stage in the negotiations.
56. The EC also agreed that further progress on reform required all elements of Article 20 to be
taken into account on an equal basis.  It expressed an interest in the proposal that those forms of
export subsidies which had not been adequately disciplined should be subject to an initial reduction
similar to that applied to subsidies under Article 9.1 of the Agreement on Agriculture.  The EC agreedthat further AMS reductions should be based on bound levels and that the Blue and Green Boxes
should be maintained.  Furthermore, domestic support disciplines should enable Members to
implement farm policies which reflected their specific situation and needs although such measures
should be transparent, targeted and the least trade distorting possible and they should not be applied in
a protectionist manner.   On market access the Communities had also proposed an instrument similarto the special safeguard, and for clearer rules and disciplines on tariff quota administration.  The EC
welcomed Poland's intention to introduce appropriate measures in favour of developing countries
while recognizing that this entailed a particular ef fort for Poland.  The EC hoped that such initiative
would serve as a good example for other countries to follow, particularly the wealthiest among the
developing countries.
57. Japan stated that the Polish proposal was similar, in many aspects, to its own and that it hoped
this would contribute towards rules that would enable the co-existence of various types of agricultureand securing each Member's vital non-trade concerns.   Japan also expressed support for the proposal
to undertake a detailed analysis of the current situat ion in agricultural trade, as well as an examination
of the difficulties encountered by each Member in implementing the results of the Uruguay Round.
Like Poland, Japan stated that Article 20 was the basis for the negotiations.  Japan also appreciated
Poland's emphasis on the need to address developing countries' concerns.
58. Korea supported many elements of Poland's pr oposal which, it said, would contribute to the
adoption of a balanced approach in the negotiations.  In particular, Korea supported the idea ofG/AG/NG/R/6
Page 12
flexibility regarding the scope and pace of further AMS reductions, possible instruments to mitigate
the effects of declining profitability in the farming sector, the maintenance of the special safeguard,
the use again of the Uruguay Round tariff reduction formula and the proposal on non-trade concerns.
59. A number of countries, including India, Colombia, Mercosur, Bolivia, Chile, New Zealand,
Australia, ASEAN and the United States noted a number of the proposals made by Poland but stated
that it would not achieve the overall objective of substantial progressive reductions in support andprotection.
60. India stated that Poland's arguments appeared to be similar to those advanced by the EC and
that these arguments were essentially protectionist.  It pointed out that Poland had used the concept of
multifunctionality to support its proposal for flexibility in domestic support and market access.  While
India understood the concerns of economies in transition, it could not support this position.  India also
noted that while the proposal called for improving the administration of tariff quotas it did not cover
their expansion or abolition.  Overall it appeared that the market access proposals were effectivelyabout maintaining the status quo rather than continuing reform.
61. Colombia (NG/W/161) agreed that export subsidy reduction commitments were an important
achievement of the Uruguay Round but the objective in the negotiations should be their elimination.
Furthermore, additional disciplines were needed to ensure that domestic supports were not trade
distorting and therefore, Colombia wanted the Blue Box abolished and a more significant reduction intrade-distorting domestic support than could be achieved by repeating the Uruguay Round formula.
Market access opportunities had to be opened for products of export interest to developing countries
and tariff quotas had to be expanded.  However, improved market access was linked to eliminating
trade-distorting subsidies which meant progress in both areas was needed.  While non-trade concerns
could be accommodated it was essential that the measures used to address them were non trade-distorting, although developing countries needed greater flexibility in all the areas under negotiation
in order to be able to address rural employment and food security issues.
62. On behalf of MERCOSUR, Bolivia and Chile the representative of Paraguay pointed out that
Article 20 listed a number of factors that had to be taken into account while negotiating the objective
of substantial progressive reductions in support and protection.  Achieving this objective meantreducing subsidies and improving market access as soon as possible.  While supporting Poland's
proposal that all forms of export supports should be disciplined, he stated that they should be
eliminated and not merely reduced.  Reducing support and protection meant that the special safeguard
and the Blue Box should be eliminated and he pointed out that the current rules already gave
sufficient flexibility to policy makers to develop appropriate instruments to address non-tradeconcerns in ways that did not distort trade.  In order to address the objectives of Article 20 the
proposals on market access, should have included substantial tariff reductions, including the
elimination of tariff escalation and tariff peaks.
63. New Zealand considered that once substantial cuts had been applied to all tariffs, tariff quotas
had been expanded and stricter disciplines on tariff quota administration had been established,
Poland's proposal to cut tariffs on unused portions of minimum access quotas would be worth
examining, if necessary.  New Zealand agreed that all forms of export competition should beexamined but stated that all forms should be eliminated and not simply reduced.  Poland's opening
offer to cut domestic support by 20 per cent was welcomed but deeper cuts would be necessary for all
forms of trade-distorting domestic support on a product-specific basis.  While non-trade concerns
could be addressed it should be done with measures that were non trade distorting.
64. Australia (NG/W/166) agreed that better di sciplines on-export subsidies were needed but
pointed out that the Cairns Group proposal on export competition was more ambitious, calling for the
elimination and prohibition of all forms of export subsidies.  Although the proposal to further reduce
AMS levels was appreciated Australia was opposed to the retention of the Blue Box whichG/AG/NG/R/6
Page 13
perpetuated both production and trade-distorting instruments.  Poland's commitment to undertake
negotiations to improve access under tariff quotas and the call for further reductions of final bound
tariffs was welcomed.  Australia opposed the maintenance of Article 5 for developed countries
although it believed that the special safeguard could be preserved for developing countries to assist
them with agricultural reform and to counter th e impact of subsidized competition.  Australia
reiterated that non-trade concerns could be pursued with measures that were non trade- andproduction-distorting.  Poland's views on LDCs and developing countries were welcomed.   In the
view of Australia, the best way to improve market access was through reduced support and protection
in developed countries.
65. On behalf of ASEAN, the representative of Malaysia (NG/W/180) stated that the proposal
would not deliver effective reform in agricultural trade.  While the negotiations should take non-trade
concerns into account they also had to achieve the objective of achieving a fair and market oriented
agricultural trading system and some of the proposals, such as maintaining the Blue Box, wereinconsistent with that objective.  ASEAN agreed that all forms of subsidized export competition
should be discussed but urgent attention was needed to address them.  The current disciplines were
skewed in favour of those countries which were largely responsible for causing distortions and these
countries should not be allocated minimum access opportunities, especially into the markets of non
trade-distorting producing countries.  ASEAN note d that least-developed countries and net food-
importing developing countries were unable to develop their production potential due to the trade-
distorting measures used by other countries and unless these measures were removed they would be
unable to avail of Poland's proposal on market access for least-developed and net food-importing
developing countries.
66. The United States noted that the proposal stated that the results of the Uruguay Round had led
to imbalances in agricultural trade but pointed out that this was inconsistent with the proposal to
repeat the Uruguay Round formulas for reducing support and protection.  The Blue Box and the
special safeguard were transitional measures that allowed Members to adapt to the reform process and
address conditions that existed at the time when the Agreement on Agriculture was negotiated.  As
Members had now gained experience with the reform process, such transitional measures should beeliminated.  While recognizing that agricultural systems were diverse among Members, the United
States reiterated that non-trade concerns should be addressed in ways that had no, or at most a
minimal, trade-distorting effect.
67. Poland thanked delegations for their comments a nd stated that it was prepared to discuss the
specific elements of its proposal as the negotiations progressed.
(e) Argentina, Brazil, Paraguay and Uruguay (MERCOSUR), Bolivia, Chile and Colombia:
State Trading Enterprises (NG/W/104 + Corr.1)
68. The representative of Paraguay stated that more elaborate rules and disciplines were needed to
reduce and regulate the activities of governmental and non-governmental enterprises, including
marketing boards with monopoly rights on specific imports and exports in particular of processed
agricultural goods.  The proposal did not question the legitimacy of state trading enterprises but rathersought to limit the possibility that these enterprises could be used to evade market access and export
subsidies commitments.
69. A number of Member countries welcomed the proposal, including the Czech Republic, the
European Communities, Peru, the United States, Korea, Japan, Hungary and Brazil.  Japan and Korea
added that a careful review of the differences between exporting and importing state tradingenterprises was necessary in terms of objectives and direct effects on international trade.  In addition
the representative of Korea pointed out that unlike exporting state trading enterprises, importing state
trading enterprises were currently obliged to disclose their operation details as a part of notificationsG/AG/NG/R/6
Page 14
on the administration of tariff rate quotas and hoped that these types of differences would be
appropriately reflected in the relevant discussions.
70. The United States and Korea stated that they were interest in working with the countries
tabling the proposal, as well as other Members with similar concerns, to develop disciplines that were
needed to cover state trading enterprises.  Japan noted that it had proposed the establishment of
disciplines obliging countries to notify the amounts and prices of exports by exporting state tradingenterprises along with the procurement price of th eir export in the domestic market with a view of
enhancing transparency and predictability. The Japanese proposal also included rules prohibiting
governmental financial assistance to exporting state trading enterprises.
71. The European Communities supported the proposal and noted that it was important to ensure
that state trading enterprises were not allowed to circumvent WTO rules, particularly those on tariff
and export subsidy commitments.
72. The representative of Peru stated that the activities of governmental and non-governmental
enterprises and marketing boards with monopoly import and export rights distorted agricultural trade
and affected rural poverty, food security, unemployment and abandonment of rural land.  Therefore,
Peru believed that Article 9.1 of the Agreement on Agriculture should cover topics related to state
trading enterprises so that these were covered by the rules of the WTO with the aim of reducing
distortions and related negative effects.
73. Hungary (NG/W/174) and Brazil supported the view that the current disciplines on state
trading enterprises were inadequate and did not ensure that purchases and sales of such enterprises
were solely made in accordance with commercial considerations, as required by GATT Article XVII.
This was of particular concern in the context of agricultural reform, since commitments in the area of
market access and export competition could easily be circumvented through the activities of suchenterprises.  Hence, there was a need to review th e current rules on state trading enterprises in general.
The review should focus on enterprises which benefited from monopoly import/export rights since
they did offer the greatest potential for trade distortion while the need for such privileges seemed to be
rather difficult to justify.
74. CARICOM noted that there might be clear evidence, in some cases, of the trade-distorting
nature of state trading enterprises but in other inst ances, the existence of such an enterprises did not
mean markets were being distorted.  In fact, the operation of state trading enterprises in some
developing countries existed largely as part of the institutional infrastructure for marketing and
transportation in those countries where they were often needed to address market failures, or in some
smaller economies the absence of a real market.  These cases had to be considered in a different wayto export state trading enterprises in developed countries where the probability of market distortion
was greater.  CARICOM and Mauritius also pointed out that there were circumstances, particularly
among small island developing states and smaller economies, where monopolies emerged on the basis
of sound economic rationale.  This, too, had to be considered in discussing the strengthening of
disciplines in the area of state trading enterprises.  A more thorough approach was needed to
distinguish between operations that were genuinely trade distorting and others that might be
maintained by some developing countries.  Finally stricter disciplines on state trading enterprises hadto be accompanied by an examination of the operation of private corporations which often resulted in
equal if not greater levels of trade distortions for developing countries agricultural markets.
75. Canada, supported by Australia (NG/W/166) and New Zealand, noted that WTO rules
allowed for the establishment and the maintenance of state trading enterprises and those rules already
disciplined their activities.  There were many different types of state trading enterprises which playeda variety of roles in agricultural markets where the degree of competition varied widely.  Australia
and New Zealand pointed out that it was important to consider the trade effects of state trading
enterprises on a case-by-case basis and any additional disciplines should target those trade effects.G/AG/NG/R/6
Page 15
Canada further noted that no WTO Member had yet made a case showing that state trading enterprises
were trade distorting on the basis of their status as state trading enterprises alone.  Furthermore, the
proposal failed to provide any evidence of real tr ade problems or distortions in world markets arising
from the activities of state trading enterprises.  New Zealand added that the distinctions made by some
Members between import and export state trading enterprises were inappropriate and inconsistent
with empirical data.  Finally, Canada pointed out that if the concern was the potential for monopolisticenterprises to distort trade, any new disciplines that dealt with the perceived market powers of such
enterprises would logically have to apply to all enti ties, public or private, with similar market power.
76. The representative of Mexico stated that any negotiations that might be held on the issue of
state trading enterprises should be restricted to state trading enterprises in agriculture.
(f) Morocco:  Proposal by Morocco (NG/W/105)
77. Morocco reaffirmed its commitment to opening agricultural markets and stated that it wanted
the negotiations to result in progressive liberalization and balanced results that would enable countriesto use their comparative advantages.  Since the Agreement on Agriculture came into effect, Morocco
had seen its agricultural trade balance deteriorate.  One reason for this deterioration had been the
imposition in some traditional markets of barriers to Morocco's exports of horticultural products.
Morocco had tried to diversify into new export markets but faced competition from products whose
export or production was subsidized.  Therefore, Morocco supported any attempt to reduce tariffssubstantially, to reduce and eliminate AMS levels and to phase-out export subsidies.  It noted that
some forms of supports currently classified in the Green Box could distort trade.  Therefore, while
Morocco supported the concept of the Green Box, it wanted the criteria examined to ensure only
supports that complied with the criteria of no, or at most minimal, trade distortion were so classified.
Non-trade concerns, such as rural development, food security, the environment and biodiversity wereimportant to developing countries, but many developing countries did not have the resources to
address such concerns.  Therefore, Morocco reiterated the statement it had made in Paris in December
2000 at a conference on non-trade concerns organised by the French authorities.  This statement had
suggested that in order to promote solidarity between developed and developing countries the
developed countries should create a fund to support multifunctionality of agriculture in developingcountries and Morocco stated that a working group could be set up to examine this proposal.  While
calling for reductions in support and protection Morocco stated that developing countries should get
the opportunity to benefit from reductions in support levels before they started reducing tariffs.
78. A number of countries stated that they agreed with many elements of the Moroccan proposal.
Colombia, Thailand, the United States, Australia, New Zealand, Turkey and Canada supported theproposal that export subsidies should be eliminated.  Colombia, the United States, ASEAN and
Australia also stated that the exemption from reduction commitments under the Blue Box should be
removed and ASEAN, Australia and New Zealand stated that AMS levels should be substantially
reduced and eventually eliminated.  To ensure that it covered only non, or minimally, trade-distorting
supports, Colombia, ASEAN, Australia, New Zealand, Turkey and Canada agreed that there should
be a review of the criteria for Green Box supports.
79. Turkey (NG/W/172) stated that it supported the view that tariff reductions would be difficult
while high levels of trade-distorting subsidies and export supports continued.  It also noted the
similarities that existed between its proposal and that of Morocco, such as the proposal by Morocco
that AMS supports should be eliminated while Turkey was proposing a reduction to  de minimis  levels
and that tariffs should be in ad valorem  form.
80. India (NG/W/176) noted that the proposal showed the specificity of agriculture in developing
countries and the difficulties these countries were facing.  It stated that while developing countries
waited for an undistorted agricultural trading system they should have access to mechanisms to
compensate them for dumping.G/AG/NG/R/6
Page 16
81. Korea stated that it supported the proposal that developing countries should have flexibility to
address non-trade concerns such as food security, rural development, balanced distribution of
population and bio-diversity.  India supported the ba sic principles underlying the proposal and stated
that it had a number of elements in common with India's proposal.  In the long term India also wanted
an undistorted trading system, but in the meantime the Moroccan proposal clearly set out why special
tools were needed by developing countries to compensate for the distortions caused by othercountries.
82. While the United States supported some elements of the proposal and recognized developing
countries' concerns it stressed that all countries had to take part in the reform process, which meant it
had reservations concerning any suspension of tariff reductions or any increase in AMS levels for any
group of countries.
83. Colombia (NG/W/161) stated that a formula should be developed to remove imbalances in
market access with new commitments based on bound tariffs so that those Members that hadunilaterally liberalized were not punished.  Multifunctionality and non trade-concerns should not be
used to justify protectionism and distortion by developed countries but should be addressed in ways
that did not distort trade.
84. On behalf of ASEAN (NG/W/180), the representa tive of Thailand stated that its agricultural
sector had much in common with Morocco's as both were based on small scale farmers.  ASEAN
agreed that developed countries should reduce thei r market access barriers by more than developing
countries and that developing countries should have some flexibility through a type of special
safeguard to deal with import surges and unfair competition from subsidized exports.  While countries
should be able to address legitimate non-trade concerns they should do so in non trade-distorting
ways.
85. The Czech Republic (NG/W/156) noted the proposal  to simplify tariff systems but pointed out
that there were practical limits to simplification.  It also pointed out that, while it respected the needs
of developing countries under special and differential treatment, other groups of countries also had
specific needs that needed attention, such as countries with economies in transition.  While the Czech
Republic accepted that a review of the Green Box might be needed, it pointed out that excessivelyrigid criteria could undermine the purpose of the Green Box.
86. As a net food-importing country Japan appreciated the importance attached to food security in
the proposal and supported the role of domestic production in achieving the optimal level of food
security.  Japan pointed out that its proposal  had included suggestions concerning developing
countries' border measures, domestic supports and export subsidies.  However, any specialconsideration for developing countries should depend on each country's level of development and the
difficulties it faced in supplying food.  While Japan understood the desire for better market access it
stated that this would benefit only a few large efficient producers and a new approach might be
needed.  Japan agreed that the use of safeguards under the Agreement on Safeguards was cumbersome
and should be simplified but suggested that this should apply to developed as well as developing
countries.  Finally, it noted that concerns related to a multifunctional agriculture applied to both
developed and developing countries and stated that Members needed to consider how developingcountries with few resources could address their non-trade concerns.
87. Australia (NG/W/166) noted that the proposal co rresponded in many ways to those of the
Cairns Group, including reductions in tariffs, simplif ication of tariff forms and a special safeguard for
developing countries to help them in the reform process and to counter subsidized imports.  In fact,
the Cairns Group proposals had gone further in recommending that the special safeguard should beavailable only to developing countries.  Australia noted that there was a need to distinguish between
the legitimate non-trade concerns of developing countries and the use of the concept of
multifunctionality to avoid reform.G/AG/NG/R/6
Page 17
88. The EC stated that its proposal was in the direction of meeting Morocco's concerns.
However, market access improvements could not be restricted to developed countries as further trade
would contribute to economic growth in all countrie s.  All Members should reduce tariffs from their
bound levels with appropriate special and differential treatment for developing countries.  It pointed
out that the EC's proposal had suggested a review of the  de minimis  clause for developing countries
and suggested that this might be useful to assist them in addressing their non-trade concerns.However, the EC did not accept that reductions were necessary for Green Box supports as these could
be no more than minimally trade distorting.  The EC could accept reductions in Amber Box supports
and export subsidies but only on condition that all forms of export competition were addressed, such
as export credits, state trading enterprises and the abuse of food aid.  Finally the EC stated that
multifunctionality was not a reason to increase support and protection but stated that it was a
recognition of the special characteristics of agriculture and concerned both developed and developing
countries.
89. Argentina supported the need for developed countries to eliminate their trade distorting
domestic supports and export subsidies and noted the relationship between these subsidies and the
possibility for developing countries to continue tariff reductions.  While accepting this linkage
Argentina suggested that the proposed remedies could have negative consequences for other
developing countries.  Not reducing subsidies or using a special safeguard type of instrument wouldaffect non-subsidizing exporters as well as other countries.  An alternative was to use countervailing
duties but under the Agreement on Subsidies and Countervailing Measures but this required proof of
injury and a causal link between the subsidized impor ts and the injury.  Argentina suggested that, in
view of the high levels of subsidies affecting agricu ltural trade, developing countries should be able to
use a special mechanism allowing them to impose countervailing duties on imports of products whoseproduction or export had been subsidized without having to prove injury or a causal link to the import.
90. New Zealand agreed that ways could be examined to give developing countries flexibility
while they moved in the direction of liberalization.  It also suggested that domestic support
commitments could be made more effective by applying AMS reductions on a product specific basis.
However, New Zealand did not see the benefit of increasing AMS limits for developing countries asmany did not have the financial resources to use such flexibility.
91. Canada stated that it could support some elements of the proposal particularly reductions in
tariff escalation to improve export opportunities for processed food products.  While tariffs should be
reduced Canada also highlighted other market access issues including the size and administration of
tariff quotas and in-quota tariff rates.  On domestic support Canada wanted all forms oftrade-distorting subsidies reduced to de minimis levels in all countries.  Canada was also concerned
with some of the elements of the special and differential treatment proposals and stated that these
should not result in a reversal of reforms.  However, it was prepared to examine transitionary
measures to address imports of products whose production or export had been subsidized.
92. Norway (NG/W/182) supported the view that it was essential to take into account the specific
nature of developing economies and could accept a number of specific proposals such as the need to
consider products of interest to developing countries in making market-access commitments and theneed to extend the special safeguard to developing countries.  Norway could also accept stricter
disciplines on export subsidies, provided other forms of export support were treated equally and non-
trade concerns were met, the introduction of new special and differential treatment provisions in the
Green Box and an increase in de minimis levels for developing countries.  Non-trade concerns were
particularly relevant for developing countries and they needed the flexibility to support production inorder to address some of these concerns, although Norway understood that many lacked the financial
ability to provide such supports.  However, the proposal did not fully take account of the different
production systems in different developed countries some of which produced only for their home
market and faced difficult production situations where agriculture was only possible with state
involvement and support.G/AG/NG/R/6
Page 18
93. Morocco noted the comments made by delegations and pointed out that, in proposing a
suspension of tariff reductions it was not suggesting that the reform process should not continue.
Instead it was pointing out that at present supports for production and exports meant the agricultural
trade balance of developing countries was being negatively affected and these countries should be
able to take advantage of the dismantling of these distortions for a few years before they began
reducing their tariffs.
(g) Turkey: WTO Negotiations on Agriculture (NG/W/106)
94. In presenting its proposal, Turkey highlighted that export subsidies should be eliminated or
substantially reduced, food aid be provided in accordance with Article 10.4 of the Agreement and
concrete steps be undertaken towards the development of internationally agreed disciplines on export
credits (NG/W/172).  On domestic support, Turkey proposed the reduction or elimination of domestic
supports above de minimis  levels, an increase of the ceiling for developing countries and application
of de minimis  ceiling on an aggregate basis rather than on a product basis.  Turkey also supported the
continuation of the Green Box with clear definitions and a set of rules consistent with the spirit and
the letter of the Agreement.  On market access, Turkey could consider further tariff reductions,
provided export subsidies and domestic support measures were substantially reduced or eliminated.
Turkey was also prepared to consider new disciplines on tariff quota administration, although it
supported the elimination of tariff quotas through the expansion of quota volumes and reduction of in-quota and out-of-quota tariffs.  The special safeguard should be either eliminated, or a similar
mechanism made available to developing countries as part of strengthened special and differential
treatment provisions.  With fulfilment of the objectives of the reform process that would result in the
elimination of export subsidies and domestic support over de minims  levels, the Peace Clause would
be redundant.  On non-trade concerns, Turkey was concerned that new measures would be introduced
which might hinder further liberalization in countries highlighting this issue.
95. The Philippines, on behalf of ASEAN, (NG/W/180) welcomed the proposal, which in many
respects mirrored ASEAN's proposal in NG/W/55.  ASEAN shared the view that export subsidies
should be eliminated and supported the call for disciplines on export credits to be developed on an
urgent basis to fulfil the mandate in Article 10.2 of the Agreement.  Its position on non-trade concernsresembled Turkey's approach to this issue.  AS EAN was of the firm view that non-trade concerns
should not be used to justify exemptions from substantive commitments in support and subsidies, nor
perpetuate trade-distorting policies.
96. Sri Lanka (NG/W/159) noted that the proposal covered many of the issues addressed in the
proposals submitted by a group of developing countries that included Sri Lanka (NG/W/13, 14 and 37and Corr.1) and stated that a purely market-orientated approach would not fully address the problems
and constraints of developing countries.  Sri Lanka noted that the proposal addressed the problems of
small land holdings in many developing countries and pointed out that tariffs were the only instrument
available to protect agriculture against export subsidies and domestic support provided by developed
countries.  These concerns justified a cautious and flexible approach to reducing tariffs in developing
countries, taking into account food security concerns and the sensitivity of key products.  Sri Lanka
agreed that the special safeguard should be elimin ated for developed countries but stated that there
should be a safety mechanism for developing countries as part of special and differential treatment.  It
also supported Turkey's proposals with respect to the  de minimis  provisions.  While Sri Lanka agreed
that the  provisions of Article 10.4 of the Agreement on Agriculture set fourth the requirements for
international food aid, it also stressed the importance of making operational the Marrakesh NFIDC
Decision.
97. India (NG/W/176) agreed that the credibilit y of the reform process depended on how far
developed countries were prepared to reduce existing imbalances and inequities.  It noted that the
market access proposal would exempt some key agricultural products from reduction commitments
for developing countries and pointed out that this was similar to India's proposal on a Food SecurityG/AG/NG/R/6
Page 19
Box.  India also agreed that for developed countries the de minimis  clause was meaningless, in the
context of their high levels of domestic support, and should therefore be eliminated.  On the other
hand for developing countries the  de minimis  provision should be applied on an aggregate and not on
a product specific basis.  On non-trade concerns, India shared the view that although
multifunctionality in agriculture was important, it should not be used as an escape clause by
developed countries to avoid further liberalization in export subsidies, domestic support and marketaccess.
98. Colombia (NG/W/161) also agreed that better market access in developing countries should
be linked to the elimination of export subsidies and trade-distorting domestic support.  Colombia did
not, however, support the proposal that only support above  de minimis  levels be reduced or
eliminated since this would perpetuate certain levels of trade-distorting domestic support.  The
de minimis  provision should only be available as part of special and differential treatment.  Moreover,
Colombia did not consider it to be helpful to raise the de minimis  ceiling since the majority of
developing countries would not be able to make use of such flexibility.
99. Canada noted that that the credibility of the reform process would, to a large extent, depend
on how far the negotiations would be able to reduce imbalances and inequities.  However, Canada
was concerned with the proposal that developing countries should be able to identify key products to
be exempted from further reductions or reduced at minimal rates.  Liberalization needed to apply toall products, in all markets, in order to reduce inequities and disparities in market access.  Canada
agreed that sectoral liberalization initiatives should not be a substitute for more comprehensive
liberalization.   On export competition, Canada shared Turkey's concerns about the negative impact of
export subsidies and agreed that there should be WTO disciplines on export credit practices for
agricultural products to eliminate the export subsidy element.  On food aid, Canada was of the viewthat there was a need to ensure that food aid met the needs of recipients, was granted in fully grant
form and did not circumvent export subsidy commitments.  Canada also agreed that non-trade
concerns should not be an excuse to avoid or delay liberalization.
100. The Czech Republic (NG/W/156) noted that many issues raised by Turkey were relevant to
all Members and not only developing countries.  The Czech Republic considered that the negotiationsshould address existing non-tariff measures and other practices, which made the import regimes of
many countries extremely complex.  While the Czech Republic could not support the proposal that the
special safeguard be eliminated, it was open to discuss improvements and the possibility of making it
available to all WTO Members.  It agreed that all measures that distorted export competition should
be disciplined and treated in the same way although complete elimination might not be possible.
101. The representative of New Zealand noted that several elements of the proposal were similar to
those from the Cairns Group.  While New Zealand agreed that export subsidies should be eliminated,
they should be eliminated for all products and for all Members.  While Members should be able to
address their non-trade objectives this should not be at the expense of further liberalization.  Like
Turkey, New Zealand had doubts about sectoral initiatives because they might be used to evade
overall tariff reductions.  New Zealand also agreed that fulfilment of the objectives of the reform
process would mean that the Peace Clause would become redundant and therefore it should not be leftto expire.  On special and differential treatment New Zealand suggested that it should be examined
from the perspective of improving the export potential for all countries, all countries had to participate
in further reform in order to gain greater economic opportunities and assist in development, in
particular, since trade among developing countries was increasing.
102. The United States noted the similarities between its proposals and the one presented by
Turkey, such as the elimination of the special safeguard and export subsidies, the improvement of
tariff quota administration and substantial reductions in trade-distorting support while maintaining
non trade-distorting support.  However, the United States also noted that the reforms proposed for
developing countries were less ambitious, for example, the suggestion that developing countriesG/AG/NG/R/6
Page 20
should have the flexibility of applying no, or minimal, tariff reductions to some key products.  These
negotiations must result in comprehensive reform in market access, export competition, and domestic
support for all products in all countries in order to be effective and beneficial.  The United States
believed a modest or selective approach to reform would frustrate attempts to reach an agreement and
could frustrate attempts to build a market-orientated agricultural trading system.
103. Australia (NG/W/166) supported many of the elements in the proposal which highlighted the
need for fundamental reform of agriculture and the importance of appropriately targeted special and
differential treatment for developing countries.  Australia agreed that tariff peaks and escalation had to
be addressed, tariff structures simplified and subsidies for production and export reduced substantially
or eliminated.  However, increasing the de minimis  level for developing countries might not be useful
as many developing countries did not have the resources to apply subsidies to this level.  Australia
also pointed out that food self-sufficiency did not gi ve food security.  While Australia agreed that the
credibility of the reform process hinged on how seriously the highly protectionist developed countrieswere about genuine liberalization, Australia was convinced that real progress would only be made
with the full participation of the WTO membership, taking into account special and differential
treatment for developing countries as an integral part of the negotiations.  It was important to keep in
mind that roughly half of all agricultural exports from developing countries went to other developing
countries. Australia noted that the proposal stated that the negotiations should not result in measuresthat could be used to avoid further liberalization either by selective reductions of tariffs or measures to
address non-trade concerns.
104. Japan shared the view that a purely market-oriented approach might not be fully compatible
with conditions in developing countries and it stated that only a limited number of large exporting
countries with favourable natural conditions had benefited from the Uruguay Round.   In order toallow all Members to benefit from the outcome of the current negotiations more consideration had to
be given to the needs of developing countries.  On market access, Japan supported flexibility for
developing countries but stated that all developing countries should not be treated in a uniform
manner because of the large diversity between them.  What was needed was a system which would
benefit those countries that faced real difficulties in attaining food security.  Japan was willing toconsider with Members that did not have access to the special safeguard, ways to solve this problem.
Japan also hoped that its proposed new safeguard mechanism for seasonable and perishable products
would address some of the concerns of developing countries against rapid increases in imports.  Both
developing and developed countries had their own non-trade concerns and Japan was willing to make
efforts with other Members to establish agricultural trade rules under which non-trade concerns of allMembers would be duly respected.
105. Norway (NG/W/182) stated that the proposa l emphasized the specificity of Turkey's
agricultural sector and the challenges facing developing countries and noted that Turkey considered a
purely market-oriented approach to be impracticable for agriculture in developing countries.  Norway
supported the extension of the special safeguard to developing countries that did not currently have
the right to use it.  Overall adequate flexibility for domestic policy-makers was needed, although work
in the area should proceed on the principle that measures that could be taken were the least trade-distorting possible.
106. While the EC was sympathetic to concerns of Members like Turkey, they believed that these
concerns could be met under Article 20, notably non-trade concerns and special and differential
treatment, without creating a different set of rules for different groups of countries.  Market access
opportunities for developing countries were needed in order to encourage development.  However, theEC disagreed with Turkey that the special safeguard should be eliminated since it was an important
part of the process of tariff reductions.  Howeve r, the EC had suggested in its own proposal that a
revision of the de minimis  limits for developing countries could be considered.  Non-trade concerns,
including multifunctionality, were important for developed, as well as developing, countries.  On the
Peace Clause, the EC recalled their position as set out in the discussion of Norway's proposal above.G/AG/NG/R/6
Page 21
107. Argentina supported the position put forward in the proposal linking tariff reductions in
developing countries and reductions in subsidies in developed countries.  While this did not imply
maintaining or extending the special safeguard, Ar gentina was prepared to consider instruments to
moderate the impact of subsidies, for example through countervailing or compensatory measures on
products from countries which had not given up production-related or export-related subsidies.
Argentina sought clarification with respect to the proposal by Turkey that the  de minimis  ceiling be
applied on "an aggregate basis" since this was already provided for under the current non-product-
specific de minimis  provisions of the Agreement.
108. Brazil supported the statements by New Zealand, Argentina and Australia and agreed with the
proposed elimination of tariff peaks and tariff escalation.   Brazil also shared the view that specific and
complex tariffs resulted in non-transparent tariff regimes which impaired market access opportunities.
109. Korea had views similar to Turkey's and could support a number of proposals, including those
on tariff reductions, treatment of inflation and non-trade concerns.  However, it did not agree with theproposals concerning the special safeguard and tariff quota administration.
110. Turkey thanked delegations for their comments and highlighted its position that tariff
reductions could be negotiated depending on the progress achieved in the reduction of domestic
support and export subsidies in developed countries.
(h) Egypt:  Comprehensive Proposal by the Arab Republic of Egypt to the WTO
Negotiations on Agriculture (NG/W/107/Rev.1)
111. In introducing the proposal, the representative from Egypt stressed that the time had come to
integrate trade in agricultural products into the multilateral trading system.  Egypt's proposal was
based on a number of basic requirements:  (i) all Members should benefit from the outcome of the
negotiations, although this might be to varying degrees, with due consideration given to the trade anddevelopmental needs of developing and least-developed countries;  (ii) each Member had to be able to
realize its comparative advantage under a system of fair competition and a level playing field;  and
(iii) while agriculture was part of the economic and social fabric of all Members, overly protecting the
sector would only weaken it.  Egypt noted that despite the fact that a large number of developing
countries, least-developed countries and small island developing states were net food-importers, mostof them had a forward-looking outlook focused on market access.  Egypt stressed that it was
important that all countries mobilize the political will to expeditiously finalize the negotiations and
that delaying tactics would have far ranging negative repercussions on all.
112. A number of countries shared many of the points made by Egypt, including MERCOSUR,
Bolivia, Chile, ASEAN, Venezuela, Brazil, Sri Lanka, the Dominican Republic, Cuba, Honduras andIndia.  MERCOSUR, Bolivia, Chile, ASEAN, Vene zuela, Colombia, Brazil, Dominican Republic,
Honduras and Cuba stressed the importance of special and differential treatment for developing
countries.  MERCOSUR, Bolivia and Chile, shared th e basic points and objectives set out in Egypt's
proposal and they were open to discussing the proposed ideas in respect of assisting net food-
importing developing countries to overcome any difficulties they might face.
113. On behalf of ASEAN, the representative of Indonesia (NG/W/180) supported a number of
elements of the proposal, particularly, for developed countries to substantially reduce domesticsupport on a disaggregated basis and the phasing out of all export subsidization over an agreed period
of time.  Like Egypt, ASEAN believed that the special and differential treatment provisions of the
Agreement on Agriculture had to enable developing countries to make trade reforms, promote fairness
and to facilitate development goals.  Therefore, ASEAN supported Egypt's initiative to operationalize
the Marrakesh Decision by creating, inter alia , an effective mechanism to address food import
concerns.G/AG/NG/R/6
Page 22
114. Venezuela (NG/W/170) agreed with many aspects of the proposal.  A main objective of the
negotiations should be to make operational the provisions on special and differential treatment in a
way which would give developing countries more flexibility to support their own agricultural sectors
and improve their competitiveness.  On market access, it stated that elimination of the special
safeguard for developing countries was not advisable during the reform process but that it should be
kept as a form of special and differential treatment for developing countries.  On export subsidies,Venezuela noted the importance of addressing the issue of export credits under Article 10.2 within the
Committee on Agriculture.  Venezuela emphasized the importance of technical assistance aimed at
strengthening the production capacity of developing countries.  This kind of technical assistance
would target the difficulties many developing countries faced in improving technology and
infrastructure.
115. The representative of Colombia (NG/W/161) shar ed Egypt's view that getting a level playing
field was one of the main objectives of the negotiations.  Colombia agreed to several of the basicpoints contained in the proposal and noted the similarity with some of the Cairns Group's proposals.
Colombia noted that the idea to create an international fund was an important one that needed detailed
study.
116. Brazil supported the idea that all forms of trade and production-distorting subsidies should be
eliminated.  Removing subsidies and the distortions they caused would help create the necessarypreconditions for an increased opening of markets through reductions of tariff levels.  Brazil also
requested that the Green Box be reviewed in order to make the existing criteria comply with the
fundamental requirement that trade measures be non, or at least minimally, trade or production
distorting.  On special and differential treatment, Brazil was ready to explore policies that could help
attain the legitimate development needs of some Memb ers.  The objective of this was to correct the
development deficit of the Agreement on Agriculture, while observing the objectives in Article 20 and
of the reform process itself.
117. Sri Lanka (NG/W/159) supported the basic principles underlying the proposal, in particular
that all Members should benefit from the negotiations, that agriculture should be integrated into the
multilateral trading system and agreed on the need to make the NFIDC Decision operational.  Netfood-importing countries needed access to food and finance in times of high prices but, due to
conditionalities, least-developed countries and net food-importing developing countries had been
unable to use the existing facilities of multilateral agencies.  Therefore, Sri Lanka supported the
proposal to create a fund to support net food-importing developing countries and least-developed
countries to enable them to purchase their food requirements on the open market.  On market access,Sri Lanka believed that further reform was best achieved through a formula approach and agreed with
Egypt's proposal that tariff reductions by developed countries should be from applied rates, while
developing countries should make reductions from bound rates.  Furthermore, there needed to be
room for limited flexibility for those countries with low tariffs.  On the special safeguard, Sri Lanka
did not agree that the Agreement on Safeguards was enough to enable Members to protect their local
markets from a sudden surge of imports and suggested that a simplified special agricultural safeguard
was needed.  Sri Lanka agreed that the special and differential treatment provisions needed to bestrengthened, made more concrete and more specific, and that all such provisions should be discussed
within the context of the three main pillars of agricultural trade liberalization.
118. On behalf of the Dominican Republic, Cuba and Honduras, the representative of the
Dominican Republic (NG/W/163) stated that Egyp t's proposal contained many elements of the
"Development Box" which had been part of the proposal (NG/W/13) they had made along with a
number of other developing countries.  While they could agree with some of the elements proposed in
the sections on market access, domestic support and export subsidies, they did not accept that the
Safeguards Agreement gave enough protection against subsidized imports.  While the Dominican
Republic shared, in general, the arguments on special and differential treatment, it was noted that as
long as trade distortions continued in developed country markets, developing countries would not beG/AG/NG/R/6
Page 23
in a position to reduce their tariffs.  Furthermore, tariff reductions in developed countries should be
based on applied tariffs while any reductions that developing countries made should be from bound
rates.
119. India (NG/W/176) agreed that su bstantial reductions were needed in tariffs and other barriers
such as specific duties, references prices, minimum entry prices and variable levies in developed
countries.  Likewise, India agreed on the need for greater flexibility for developing countries to re-evaluate and adjust their tariff schedules to overcome negative effects of cheap subsidized agricultural
imports.  Consequently, India welcomed the call for substantial reduction by developed countries in
their domestic support as well as a review of Anne x 2 measures.  India supported Egypt's proposal on
the improvement of special and differential treatment for developing countries, including the
provision of greater flexibility for the subsidization of agricultural exports, consistent with Article 27
and Annex 7 of the Agreement on Subsidies and C ountervailing Measures.  India looked forward to
working with Egypt on strengthening special and diffe rential provisions in the context of the three
main pillars of trade liberalization for fuller integration of agriculture into the multilateral trading
system.
120. The representative of Argentina noted that Egypt had stressed the need for developing
countries to overcome the negative effects of cheap subsidized agricultural imports and suggested that
instead of flexibility to adjust tariff schedules or extending the special safeguard to all agriculturalproducts the problem itself should be targeted.  To raise tariffs or extend the special safeguard to all
products would affect all imports, not only those from subsidized producers or exporters.  He pointed
out that Morocco had proposed (NG/W/105) that developing countries should be able to use special
tools and Argentina believed that these tools had to be developed during the ongoing negotiations as
part of the special and differential treatment for developing countries.  A possible option would be toenable developing countries to apply countervailin g measures without needing to prove either injury
nor the causal link between the subsidized imports and the injury.  Developing countries would only
need to prove the existence of a subsidy related to the production or the exportation of a given
product.  Argentina was willing to cooperate with Egypt, Morocco and other interested countries in
developing such mechanisms.
121. Korea supported the idea that the results of the negotiations had to benefit all Members.
However, it felt that certain elements of the proposal, particularly in respect of market access,
presented the exporters' point of view and did not consider the concerns of net food-importing
developing countries.  Korea stated that some developing countries were experiencing difficulties in
implementing their commitments under the current system and it did not consider it desirable to makeradical changes to the basic framework of the Agreement on Agriculture.  The goal of Article 20 was
to continue the reform process and not necessarily  to complete it in the current negotiations.
122. The United States welcomed the strong endorsement of the WTO and agricultural reform
contained in Egypt's proposal and stated that the basic objectives outlined in Egypt's proposal were a
good basis for the negotiations.  While the United States shared many of Egypt's objectives on market
access, the United States was concerned with Egypt's proposal that developing countries be given the
flexibility to adjust tariff schedules as this could be understood as giving developing countriespermission to go backwards on reform, something that was not in any country's interest.  The United
States appreciated the difficulties faced by net food-importing developing countries and looked
forward to a practical discussion on possible implic ations of the reform process for these countries.
123. New Zealand supported the principles and objectives underlying Egypt's proposal, and, in
particular, agreed with the suggestion to phase out of all forms of export subsidization over an agreedperiod of time.  New Zealand also wanted substantial reduction in tariffs and to see them in
ad valorem  terms only.  On domestic support, New Zealand was also of the view that such support
should be granted on a disaggregated, product-by- product basis.  New Zealand supported Egypt's
proposal that developing countries should have greater flexibility to increase domestic support withinG/AG/NG/R/6
Page 24
the framework of the Green Box.  International co-operation to assist rural development and food
security programs in developing countries should also be improved and New Zealand was prepared to
look at other elements of the Marrakesh Decision.
124. The representative of Canada also supported the basic objective of a level playing field in
agricultural trade.  On market access, Canada supported Egypt's proposals and pointed out that it had
suggested that tariff quota volumes should provide duty free access to developing countries equal to acommon minimum percentage of current consumption on a product basis.   While Canada noted the
importance of distinguishing between distorting and non-distorting support but pointed out that
excessive levels of support technically classified  as non trade-distorting could affect production and
trade.  For this reason Canada had suggested that an overall cap be established for all types of support,
including the Green Box.  Canada agreed with Egypt's call for the phasing out of all forms of export
subsidization as soon as possible.
125. The EC stated that demands for excessive reductions in tariffs would increase the complexity
of the negotiations.  While the Communities agreed with the need to improve tariff quota
administration, they could not accept the elimination of the special safeguard which was less trade-
distorting than the measures that could be used under the Agreement on Safeguards.  Neither the
Green and Blue Box measures were necessarily product specific which made it inconsistent to apply
commitments on a disaggregated basis to Amber Box supports.  The EC did not rule out anexamination of the rules applicable to all forms of  support but a distinction had to be made between
measures with a significant effect on trade and production and those covered by the Green and Blue
Boxes, which had a lesser impact.  On export competition, the European Communities recalled its
position in favour of strong disciplines on all specific forms of export competition including export
credits, the abuse of food aid and state trading enterprises.
126. The representative of Australia (NG/W/166) agreed with many elements in the proposal.
While Australia shared a common goal with Egypt on market access, Australia noted that Egypt was
seeking reductions by developed country Members from applied rates, rather than bound rates.
Australia was concerned that such a departure from the accepted practice of negotiating on the basis
of bound rates would punish those countries which had unilaterally liberalized.  In respect of thecreation of a fund for the support of net food-importing developing countries and least developed
countries, Australia was going to seek further information from Egypt on exactly what was intended.
Also, Australia would be seeking further information on the proposal to increase the level of technical
and financial assistance for net food-importing developing countries and least-developed countries.
Australia shared Egypt's view that the special and differential provisions of the Agreement onAgriculture needed to be strengthened and expanded.
127. Although Norway (NG/W/182) agreed that trad e could be a powerful engine for growth in
agriculture, increasing welfare was not only about economic growth.  The best way to exploit welfare-
enhancing effects of agricultural trade was by recognizing the specific characteristics of the
agricultural sectors in different countries.  Non-trade concerns of a multifunctional agriculture had to
be taken into account in the reform process;  the approach could not be "one-size-fits-all", but had to
be broader.  In particular, proper attention had to be paid to the less favourable production conditionsand narrow product range that certain countries, for climatic and other reasons, were facing.
128. The representative of Japan shared Egypt's view that any agreement reached had to benefit all
Members.  Although there was a need to pay special attention to developing countries, treating them
all in a uniform way was not appropriate as there were wide diversities among developing countries.
Japan noted that Egypt was of the view that the comparative advantage was one of the main pillars ofthe trading system, but Japan believed that, in view of non-trade concerns and the coexistence of
various forms of agriculture in different countries, trade in agricultural products could not be
discussed only from the perspective of comparative advantages.   On the specifics, the special
safeguard mechanism had to be maintained as it had been part of the tariffication process.  JapanG/AG/NG/R/6
Page 25
stated that net food-importing developing countries and least developed countries still faced
difficulties in respect of food security and noted that it had proposed that a new international stock-
holding mechanism was necessary for ensuring food security of developing countries.  On special and
differential treatment, while Egypt proposed that greater flexibility be given to developing countries
within the framework of the Green Box, Japan stated  that Green Box measures in all countries should
continue to be exempt from reduction commitments.  Moreover, certain flexibility could be given todeveloping countries for Amber Box measures necessary for their development needs.
129. The representative of Turkey (NG/W/172) note d that Egypt's proposal correctly highlighted
the problems facing developing countries.  Turkey shared the view that market access of agricultural
exports of interest to developing countries had to be improved in line with their development and
growth.  Elimination of specific duties, reference prices, minimum entry prices and the determination
of all tariffs on an ad valorem  basis were among the issues to which Turkey attached importance.
Furthermore, Turkey supported not only the establishment of a new discipline on tariff quotaadministration but also the elimination of all tariff quotas over a specific period of time.  Turkey
supported the elimination of the special safeguard provision.  Regarding export subsidies and
domestic support, Turkey was of the view that fair market conditions had to be established between
WTO Members.
130. In thanking delegations for their comments, the representative of Egypt reiterated his
country's commitment, as a developing country and a net food-importer, to continue the reform in the
agricultural trading system.
(i) Nigeria:  WTO Negotiation s on Agriculture (NG/W/130)
131. In introducing its proposal, Nigeria stated that the Agreement on Agriculture did not take into
account the weaker position and specific constraints facing developing countries.  The Agreement hadnot brought about any significant reduction in border protection or an increase in access to protected
markets.  The farmers in the countries of wealthy countries continued to be heavily subsidized and
protected from international competition, and in the Uruguay Round negotiations with developing
countries outside the Cairns Group had had a limited impact.  Nigeria's expectations in the ongoing
negotiations were to ensure equity and fairness in international trade in agriculture through theelimination of trade-distorting practices, while addressing the development concerns of developing
countries and the existing imbalances in the Agreement.  Nigeria also outlined its specific proposals in
the areas of market access, domestic support, export subsidies, SPS measures, special and differential
treatment, food security, as well as competition and related transparency for multinational enterprises.
132. A number of countries noted similarities between the Nigerian proposal and those that they
had submitted.  These countries hoped to be able to work with Nigeria in removing inequities and
imbalances in the Agreement on Agriculture.  These countries included India, Sri Lanka, Honduras,
Cuba and the Dominican Republic,
133. India (NG/W/176) found the proposals in re lation to disciplines on international market
structures and competition in agriculture to ensure food security in developing countries very
interesting.  India shared Nigeria's concerns on food security in developing countries and fully
supported its concrete suggestions for action in the new negotiations.
134. Sri Lanka (NG/W/159) expected the ongoing negotiations would ensure equity and fairness in
international trade in agriculture through the elimination of trade-distorting practices, while
addressing development concerns and the existing imbalances in the Agreement.  Sri Lanka supported
notably the specific proposals with respect to the de minimis  provisions, special and differential
treatment, and a number of proposals concerning food security.G/AG/NG/R/6
Page 26
135. On behalf of Honduras, Cuba and the Domini can Republic, the representative of Honduras
endorsed, in particular, the proposals on special and differential treatment and food security
(NG/W/163).  These countries believed that an agreement must be reached on concrete action in
favour of the net food-importing developing countries.
136. A number of other countries supported specific elements of Nigeria's proposal.  Colombia
(NG/W/161) agreed, in particular, with the proposal to continue to exempt measures allowed todeveloping countries from being challenged under the Subsidies Agreement.  Otherwise special and
differential treatment would be ineffective.  Mauritius (NG/W/178) stated that the proposal
concerning SPS measures was relevant to most developing countries and reiterated that the
negotiations in agriculture would be incomplete if  they were not accompanied by flexibility in the
application of SPS measures, as well as improvements in respect of geographical indications.
Mauritius intended to further explore the proposals concerning special and differential treatment, food
security, competition, and state-trading enterprises.
137. On behalf of CARICOM the representative of Jamaica supported the general thrust of the
proposal and some specific elements.  CARICOM agr eed that the rules contained in the Agreement
did not take into account the weaker position and specific constraints faced by developing countries in
the new global economy and that privileges afforded to the developed countries needed to be
addressed.  The rules needed to be re-balanced towards more emphasis on development issues.CARICOM was committed to working with the broa d WTO membership to introduce balance and
equity into the international tr ading system for agriculture and welcomed the proposals on market
access and the need to introduce disciplines on multinational and state-trading enterprises.  In
addition, an Article 5 type mechanism for use by developing countries to defend against dumped and
subsidized imports was important.
138. Canada welcomed Nigeria's proposal and noted that in the area of tariff quotas it had made
similar proposals and looked forward to exploring these proposals in more detail in the next phase of
the work programme.  For Canada, it was important that these negotiations resulted in a signficant
improvement in real and useable market access for products subject to tariff quotas.  Canada was
concerned about the proposal that limitations on domestic support and export subsidies for countrieswith no domestic support and export subsidy commitments be removed.   In the view of Canada,
fairness and equity would be achieved through the removal of trade-distorting subsidies and the
elimination export subsidies, as well as the impr ovement of market access.  Developing countries
most of all would be the beneficiaries of such a result.
139. The United States welcomed Nigeria's proposal.  The United States considered that proposals
calling for reforms in developed countries, but loopholes and exceptions for developing countries
were not a tenable basis for conducting the negotiations.  The objective of the United States for these
negotiations was to increase the market orientation of world agricultural trade by reducing protection
and support.  The United States supported Nigeria's expectations that these negotiations increase
equity and fairness in international agricultural tr ade, including by means of reforms by developed
countries.  To reach this goal, the United States believed that agricultural reform must address
distortions in all countries for all products, taking into account the special needs of developingcountries and non-trade concerns of all countries.  The United States looked forward to working with
Nigeria on developing an agreement that was beneficial for all countries.
140. Japan supported Nigeria's proposals concerning food security and stated that a certain degree
of self-sufficiency was required for food security.  Japan agreed that concrete actions with respect to
the problems of net food-importing countries should be discussed.   Japan also believed that givingflexibility to all developing countries in a uniform manner would not be appropriate, given the
diversity among developing countries.G/AG/NG/R/6
Page 27
141. The EC agreed that domestic support measures that promoted the sustainability of rural areas
and addressed the food security concerns of developing countries were of great importance.  These
concerns could be addressed through a revision of the de minimis  clause for developing countries.
Food aid could also help to contribute to food security, provided it was given in a way which did not
displace domestic agriculture. The EC recognized the need to avoid the use of SPS measures as
disguised forms of trade protection, but genuine concerns about food safety could not be ignored.  Inorder to fully benefit from the expansion of world trade, developing countries should be given
significant trade preferences by developed countries and the wealthiest developing countries.  The EC
also believed that the Uruguay Round formula for ta riff reductions allowed for sufficient flexibility in
lowering tariffs.
142. New Zealand agreed that significantly improved market access was needed to enable
developing countries to realize their economic goals.  New Zealand was fully in favour of providing
special and differential treatment to developing countries to help them achieve their legitimatedevelopmental goals.  Nevertheless, New Zealand believed that food security had more to do with a
well functioning international trading system than the illusion of self-sufficiency.  On export
competition, New Zealand shared Nigeria's concern about the crippling effect that export subsidies
were having on developing country industries.  New Zealand proposed that countries should commit
to the total abolition of all forms of export subsidies which would constitute a concrete sign ofMembers' collective commitment to advancing the economic situation in developing countries.
143. Australia (NG/W/166) stated that Nigeria's proposal  clearly showed the apparent failure of the
Agreement on Agriculture to deliver the expected benefits.  Australia shared Nigeria's determination
that these negotiations should eliminate the highly trade-distorting practices that continued to shield
so many farmers from fair market competition and, in turn, discriminated against the large portion ofthe world's population that depended on agriculture for its welfare.  Australia strongly supported
developing countries in their pursuit of growth and poverty reduction through trade and it was
interested in Nigeria's proposal for transparency information on agricultural markets, in particular, the
operations of international multinational companies.
144. Nigeria thanked delegations for their comments.  Nigeria reiterated that it considered the
Agreement on Agriculture to be unbalanced and without a development perspective, although
agriculture was of paramount importance for developing countries, especially in Africa.  Nigeria also
appreciated the diverse nature of agriculture among Members and considered that a purely market-
based approach might not be appropriate.  Nigeria expressed the hope that in these negotiations the
concerns and proposals of the developing countries would be taken seriously.
(j) Democratic Republic of Congo:  Negotiating Proposal (NG/W/135)
145. The Democratic Republic of Congo was seeking improved access to markets and less
competition from subsidized production in other countries in the negotiations.  At present, access to
different markets varied considerably and the current negotiations should result in improvements and
should harmonize tariff forms.  Therefore, the Democratic Republic of Congo proposed the
simplification and greater transparency of tariff systems, substantial reductions in tariffs and tariff
peaks by developed countries, the abolition of other border protection measures, including the specialsafeguard on agricultural products from developing countries, and improved technical and financial
assistance for developing countries.  It also suggested that, in cases of force majeure , such as war or
natural disasters, some flexibility should be considered for implementation of commitments.  In the
area of domestic support, the Democratic Republic of Congo believed it was necessary to improve the
criteria for the Green Box so as to give support to farmers with minimal trade distortions.  Thepossibility for least-developed countries to provide supports above de minimis  levels should also be
considered.  It stated that all forms of export subsidies should be reduced to zero in order to improve
competitive positions in agricultural trade.  On the issue of non-trade concerns, a particular concern of
the Democratic Republic of Congo was food security.G/AG/NG/R/6
Page 28
146. A number of countries pointed to similarities between their proposals and that of the
Democratic Republic of Congo.  Australia (NG/W/ 166), New Zealand, South Africa (NG/W/168) and
Colombia agreed with a number of elements in the proposal, such as the need to simplify tariffs and to
address tariff peaks and escalation.  On domestic support, Australia and New Zealand noted that the
Cairns Group had proposed a review of the Green Box to ensure all such domestic support met the
fundamental requirements of being non, or at most minimally, trade-distorting.  On domestic support,
Australia and Argentina pointed out that they want ed to see trade-distorting support eliminated.
Australia, Canada, New Zealand, South Africa and Argentina pointed out that the Cairns Group had
also proposed the elimination and prohibition of al l forms of export subsidies for all agricultural
product.  Regarding non-trade concerns, Australia and South Africa noted that the Cairns Group
believed that Members had every right to pursue their non-trade concerns through policies that had at
most minimal effects on trade and production and that the difference between the non-trade concerns
of developing countries and developed countries had to be reflected in the policies which were used.Finally, Australia and Colombia (NG/W/161) stated that that effective special and differential
treatment provisions that addressed the concerns of developing countries were central to the
negotiations.
147. Canada and New Zealand agreed that food aid should be given in fully grant form.  Canada
also shared an interest in improving the Green Box.  Moreover, Canada had called for disciplines onthe use of export restrictions and export taxes so that Members who sourced some or all of their food
needs from the world market would find it to be a reliable source of supply.
148. New Zealand stated that special and differential treatment provisions were needed to enable
developing countries to address their legitimate and varied needs such as agricultural and rural
development and food security and poverty eradication.  The Cairns Group had proposed a number ofmeasures to address such concerns including enhanced Green Box provisions for developing countries
that addressed their specific needs with regard  to food security, rural development and poverty
eradication.  In  addition a differentiated AMS formula for developing countries, including
 de minimis  provisions and exceptions for investment and input subsidies had been proposed by the
Cairns Group.  Moreover, New Zealand had announced that it would provide free access to allproducts originating from least developing countries from July 2001 onwards, including fisheries and
forestry products mentioned in the proposal by the Democratic Republic of Congo.
149. The United States also supported the proposals to simplify tariff systems, for the substantial
reduction of tariffs and tariff peaks, the improvement of the Green Box and the elimination of export
subsidies and the special safeguard.  The United States and Switzerland stated that it looked forwardto working with the Democratic Republic of Congo in developing ways to meet its non-trade concerns
in a non trade-distorting manner.
150. Japan and the EC stated that market forces alone might not be sufficient in all cases to address
non-trade concerns.  Furthermore, some of the issues raised in the proposal, such as, rural
development, food security and environmental protection, were important concerns for both
developing and developed countries and should be taken into account in the negotiations with due
consideration to the specific situation of each country.  On special and differential treatment, Japannoted that it had proposed that developing countries should be given flexibility in each of the areas of
the Agreement on Agriculture and, with Mauritius (NG/W/178), stated that effective special and
differential treatment provisions that addressed the concerns of developing countries were central to
the negotiations.
151. The EC stated that it had recently adopted the "Everything but Arms" (EBA) initiative which
would extend duty-free access to its market for all agricultural products exported from least-
developed countries.  On export competition the European Communities noted that Congo called for a
reduction in all form of export subsidization and agreed that this was the right way to proceed,
although the timeframe proposed seemed ambitious.G/AG/NG/R/6
Page 29
(k) Kenya:  Negotiating Proposal (NG/W/136)
152. Kenya stated that its proposal outlined the areas which should be addressed if a balanced
agreement was to be reached.  Kenya had complied with its commitments in agriculture but the results
had been disappointing.  Growth remained low and food security had not improved, food imports had
increased and had displaced farmers from the domestic market, while the international market
remained out of reach for most of Kenya's products.  Poor performance of the agricultural sector hadcontributed to weak economic performance and debt problems.  The Kenyan proposal included a
number of specific recommendations:
(i) Substantial improvements in market access for products of interest to developing countries,
including a focus on reducing tariff peaks and escalation on such products;
(ii) reducing tariffs generally would erode the value of tariff preferences which meant that the
negotiations should take account of the adjustment costs some countries would face;
(iii) all forms of trade-distorting subsidies in developed counties should be eliminated and during
the implementation period developing countries should have access to a special countervailing
duty when domestic production in, or exports fr om, developing countries were affected by
subsidised production or exports from developed countries;
(iv) a development box should be established which developing countries could use to address
concerns such as high dependency on food imports, the need to increase agricultural
productivity, food security, the need to protect small farmers and poverty alleviation;
(v) a mechanism should be established for technical and financial assistance to developing
countries to meet the SPS standards of developed countries;
(vi) the Peace Clause should not be extended beyond its expiry date;
(vii) all food exports should comply with international standards a nd should not be sold on the
international markets;  and
(viii) finally, Kenya wanted to see the Marrakesh Decision on least-developed and net food-
importing developing countries made an integral part of the Agreement on Agriculture.
153. A number of countries supported many elements of the Kenyan proposal and noted
similarities with their own proposals and positions .  The Dominican Republic, Honduras, Cuba, India,
Sri Lanka and Nigeria noted that Kenya's proposal for a Development Box was similar to their
proposals for a Development or Food Security Box.  Along with Swaziland, they also supported the
proposal that all forms of trade-distorting subsidies should be abolished and that developing countries
should not be required to make further improvements to market access until this had been achieved.Nigeria also wanted significant improvements in market access and supported strengthened special
and differential treatment.
154. On behalf of the Dominican Republic, Honduras and Cuba the representative of the
Dominican Republic (NG/W/163) supported the establ ishment of a technical and financial assistance
mechanism to help the developing countries meet inte rnational sanitary standards, as well as concrete
measures to implement the Marrakesh Ministerial Decision.
155. India (NG/W/176) stated that its analysis of the implementation experience was similar to that
of Kenya.  The results of the Uruguay Round Agreement on Agriculture had been disappointing -
neither helping agriculture nor food security in developing countries.  India shared Kenya's statement
that the negotiations should take account of these concerns and bring equity and fairness toG/AG/NG/R/6
Page 30
agricultural trade.  In addition to the removal of all forms of trade-distorting subsidies in developed
countries, India also stated that the Peace Clause should be abolished.
156. Sri Lanka (NG/W/159) supported many elements of the proposal including the definition of
products of interest to developing countries an d the erosion of preferences.  It too wanted a
mechanism established to ensure technical and financial assistance to developing countries to meet
SPS standards and regulations in developed country markets.  While agreeing that the Peace Clauseshould not be extended, Sri Lanka stated that domestic support measures by developing countries
should be non-actionable when taken within the fr amework of a Food Security or Development Box,
under Article 6.2 of the Agreement or under the Marrakesh Ministerial Decision.
157. Swaziland (NG/W/146) stated that the proposal highlighted the difficulties caused by erosion
of tariff preferences as general tariffs were reduced a factor that would have to be taken into account
in the negotiations.  Swaziland also supported Kenya's proposal that special and differential treatment
should aim at filling the gap between developed countries and developing countries in terms of supplycapacity, economic development and financial resources.
158. Mauritius supported Kenya in its proposal to minimize the adjustment costs resulting from the
erosion of preferential market access (NG/W/178).  In this regard, Mauritius stated that large
exporters should show restraint so that products originating from, and vital for, small vulnerable
economies could continue to find markets.  It pointed out that developing countries with limitedbudgetary resources could not afford to use Annex 2 measures and, for these countries, border
measures and tariff preferences represented an important instrument to fulfil vital development
objectives.  Mauritius considered the Peace Clause to be an important part of the reform process and,
rather than be left to expire, should be expanded to cover measures needed to achieve the socio-
economic objectives of small island developing states, least-developed countries and net food-importing developing countries.  As a net food-importing small island developing state, Mauritius
supported the proposal by Kenya concerning net food-importing developing countries.
159. Japan stated that the implementation of the Agreement on Agriculture had not brought the
expected benefits to most developing countries, including Kenya.  Japan supported the proposal to
examine possible measures to address development issues, dependency on food imports, the need toincrease agricultural productivity, food security, the need to protect small farmers and poverty
alleviation.  However, Members should not be di vided into two groups, developed and developing,
with two completely different sets of rules as different countries, at different stages of development,
could have similar concerns.  Japan welcomed the proposal that WTO members should identify
measures that were relevant to their development concerns so that appropriate special and differentialtreatment provisions could be developed.  Concerning the difficulties that developing countries had
with the SPS Agreement, Japan stated  that technical assistance at bilateral and multilateral levels was
essential and Japan would continue its efforts in this regard.  Japan supported work on ways to
enhance the effectiveness of the Marrakesh Decision but, referring to the proposal submitted by a
group of developing countries including Kenya on the implementation of the Decision (G/AG/W/49),
Japan stated that a distinction should be made between implementation and negotiation issues.
160. The EC agreed that the negotiations should take into account the situation of developing
countries and should ensure that they would benefit from world trade.  Opting out of further
agricultural trade liberalization would not improve development but would only serve to limit
possibilities for wealth creation, although there may be a need for some derogations for some fragile
developing countries.  The EC recognized that the erosion of tariffs preferences was a serious
concern, but pointed out that Article 20 referred to reform as a long-term process which meant tariffprotection should be reduced gradually and, therefore, the scope to grant preferences would remain.
161. Canada noted that many countries believed that the Uruguay Round Agreement on
Agriculture had not gone far enough.  It pointed out that the Secretariat background paper on productsG/AG/NG/R/6
Page 31
and markets of interest to developing countries (NG/S/14) had shown that developing countries were
interested in exporting a wide variety of products to a wide variety of developed and developing
countries.  In fact, the majority of the markets identified by developing countries were in other
developing countries.  Therefore, the negotiations should lead to improvements in market access for
all agricultural and food products, in all markets.  Canada recognized the difficulties which could arise
from the erosion of tariff preferences and stated that the negotiations would need to address thequestion of transition during the implementation of  reform.  However, preferences by definition
benefitted some countries at the expense of other countries, often those in similar circumstances.
Members needed to ensure that measures designed to ease the transition for Members now benefitting
from preferences did not continue to prolong th e disadvantage faced by other Members who were
outside preferential arrangements.  Canada supported the proposal to eliminate all forms of export
subsidies.
162. United States noted that the proposal highlighted Kenya's disappointing experience with the
results of the Uruguay Round.  The United States wanted to work towards ending the distortions that
existed in the world agricultural trading system and stated that all countries should liberalize although
special and differential treatment would be required for developing countries.  Some of these
proposals might be achievable and the United States looked forward to further discussions in this area
on practical approaches that were mutually beneficial.
163. New Zealand expressed an interest in examining some of the market access proposals and the
issues concerning current tariff preferences and possible mechanisms for dealing with subsidized
exports.  New Zealand was prepared to study Kenya's ideas concerning a development box and to
discuss ways to improve the provisions and implementation of the Marrakesh Decision on least-
developed and net food-importing developing countries.
164. Australia (NG/W/166) had also been disappointed with the results of the Agreement on
Agriculture and stated that the negotiations had to result in reducing distortions caused by some
developed countries.  However, reform could not be restricted only to developed countries.  Improved
trade opportunities would facilitate the efforts of developing countries to achieve growth and poverty
reduction although special and differential treatment for developing countries would remainimportant.  Preferential market access arrangements were not a key to achieving the long-term
objective of establishing a fair and market-oriented agricultural trading system.  The main problem
remained the high levels of support and protection mainly provided by some developed countries and
lower levels of protection and support would significantly increase the range of opportunities for
developing countries.  This process would reduce the reliance of developing countries on preferentialarrangements.  Australia agreed that food security was of vital importance and was prepared to
explore the idea of a development box.
165. Colombia agreed that one of the main objectives of these negotiations should be a substantial
improvement of market access for products of interest to developing countries (NG/W/161).  This
should not only include currently exported products bu t also products with a growth potential that had
been retarded due to tariff peaks and escalation.  Colombia supported linking better market access to
the elimination of trade-distorting subsidies.  The Peace Clause should be eliminated and the GreenBox adapted to include measures for pursuing de velopment objectives.  Furthermore, commitments
should be negotiated with respect to food aid for net food-importing developing countries and
mechanisms to ensure technical assistance.
166. Kenya thanked Members for their comments and constructive suggestions to improve its
proposal.  Kenya also noted that growth in agricult ural productivity and competitiveness would be the
prime requirement for Kenya's fuller integration into the global economy.  An improvement in
agricultural competitiveness would not only be critical for maintaining and enhancing agricultural
exports but was also essential for improving food security.G/AG/NG/R/6
Page 32
(l) Senegal:  Agriculture Trade Negotiations in the WTO – Preliminary Positions of Senegal
(NG/W/137)
167. Senegal stated that its objective in the nego tiations was to ensure that agriculture could
contribute towards economic and social development and improving food security.  Multilateral
disciplines could play an important role in achieving these objectives provided they took into account
the concerns of fragile economies.  On market ac cess, it highlighted the importance of maintaining
preferential arrangements and called on developed countries to improve market access for products
from least-developed countries.  To enable least-developed countries to avail of these opportunities,
current rules of origin might need to be improved and technical assistance was needed to meet
standards in export markets.  Developing countries also needed access to the special safeguard for
products destined for domestic consumption.  Senegal supported substantial progressive reductions of
export subsidies and disciplines on all types of export assistance while access to basic foodstuffs by
net food-importing developing countries should not be  negatively affected.  On domestic support, it
required flexibility to provide supports and it also proposed the establishment of a special agricultural
investment fund to assist development.
168. A number of countries, including New Zealand, Australia and Canada supported some
elements of the proposal but were concerned by some other elements such as revisiting tariff
commitments or the discriminatory nature of some preferential arrangements.  Australia pointed outthat preferences should be made available to all developing countries and New Zealand noted that
consideration was needed for historical preferential arrangements in the context of reducing support
and protection as set out in Article 20.  New Zealand and Canada stated that they were prepared to
look at issues surrounding the Marrakesh Ministerial Decision and agreed that that food aid should not
negatively affect agricultural production systems of developing countries. New Zealand alsoexpressed an interest in the idea of looking at "verifiable economic indicators".
169. Australia also noted that in some cases developing countries might require access to
appropriate special safeguard measures.  Australia recognized that Members had every right to pursue
non-trade concerns through non trade-distorting policies including the concerns of food security, rural
development and poverty alleviation raised in Senegal's proposal.   Australia strongly supporteddeveloping countries in their pursuit of growth and poverty reduction through trade and the
development of the agricultural sector.
170. Canada hoped that Senegal would join it and many others in calling for the complete
elimination of all forms of export subsidies.  It noted that the proposal highlighted the importance of
improving access to knowledge and technical infrastructure and promoting long-term adjustment andreform of production and marketing systems in developing countries.  This could be achieved by
effective and targeted technical assistance or mechanisms that helped developing countries build the
capacity for taking advantage of the opportunities provided by the multilateral trading system.
171. The United States agreed that export subsidies should be reduced and was prepared to
consider the proposals for special and differential treatment.  The United States also looked forward to
working with Senegal and other Members on practical approaches to increase the market orientation
of world agricultural trade.
172. The EC welcomed the proposal as an attempt to integrate developing countries into the
liberalization process.  The EC was prepared to examine the possibility of giving more security to the
preferences granted to developing countries and maintaining protection for the most fragile
developing countries in order to give time for adaptation.  The EC supported Senegal's position that
export subsidies should be reduced progressively and it was open to discuss mechanisms to avoid anynegative consequences from this process for net food-importing developing countries.  It noted that
exporting Members appeared to feel that the Uruguay Round had failed to have a major impact on
trade or prices, while net importing countries felt that their import bills had increased.  The ECG/AG/NG/R/6
Page 33
considered that measures to promote the sustainable vitality of rural areas and the food security
concerns of developing countries could be addressed through a revision of the de minimis  clause for
developing countries.  The EC also agreed that food aid should be granted in a way which did not
disrupt local markets.
173. A number of countries, including Japan, Norway and Switzerland agreed with the statement
in the proposal that a trade-centred approach in th e negotiations was not sufficient to address some
concerns, such as food security.  Switzerland also supported the proposal for substantial progressive
reductions of export subsidies and expressed interest in Senegal's proposals on special and differential
treatment, particularly the idea of basing transition periods on "objectively verifiable economic
indicators".
174. Japan also noted the reference to the multifunct ional role of agriculture and the statement that
government involvement was justified in order to secure such functions.  While Japan supported a
detailed examination of the conditions and stages of economic development of each country in orderto address individual needs of developing countries, Members could not be divided mechanically into
two groups of developed and developing countries with completely different rules applying to each
group.  Japan also referred to the proposal by sixtee n developing countries, including Senegal, to the
Committee on Agriculture on the implementation of the Marrakesh Ministerial Decision
(G/AG/W/49) and suggested that this proposal should be seriously considered by the Committee.
175. Norway (NG/W/182) agreed there was a need to ensure adequate flexibility for Senegal and
other developing countries to address food security, rural development and poverty, and to have
access to a special safeguard.  Like the EC, Norway also stated that food aid should not distort
production in developing countries and should be provided in fully grant form.
176. Mauritius observed that Senegal's proposal demonstrated again the variety of agricultural
systems (NG/W/178) in differen t countries.  The proposal underlined the idea of regional
complementarity which should be taken into account in future work and the need for preferential trade
agreements.  In addition it showed that developing countries needed to safeguard their domestic
production systems which underpinned the socio-economic fabric of many developing countries.
Mauritius supported the view of Senegal in respect of the necessity to establish a mechanism toprevent an adverse impact of the reduction of subsidies on the availability of basic foodstuffs
necessary for the food security of LDCs and net food-importing developing countries.  In this context,
Mauritius welcomed the cautious and pragmatic approach on export competition and the proposals on
special and differential treatment.
177. Senegal thanked delegations for their comments.  In its proposal Senegal had been guided by
the idea of progressive trade reform aimed at achieving a fair and market-oriented agricultural trading
system since, as reflected in the Marrakesh Ministerial Decision, an abrupt elimination of export
subsidies could have an adverse impact on food security for some countries.  Senegal also highlighted
that technical and financial assistance would be requ ired to help developing countries adjust to the
future reform programme.
(m) Mexico:  Proposal for the Negotiati ons on Agriculture in the WTO (NG/W/138)
178. Mexico noted that its comprehensive proposal took into account consultations held with
interested sectors in the country, including non-governmental sectors.  The Uruguay Round had
contributed to an improvement in international trade in agriculture and the reform process had to
continue in order to meet the long-term objective set out in Article 20.  The proposal reflected the fact
that the principle pillars of the Agreement on Agriculture were all related and, as a result, Mexico's
position on market access would depend on progress in the areas of domestic support and exportcompetition.  Mexico wanted all forms of export support eliminated within a specified time-frame.
On domestic support, the Green Box should be maintained in its current form while Amber BoxG/AG/NG/R/6
Page 34
supports should be reduced substantial and reduction commitments applied to the Blue Box.  It was
proposed that the Peace Clause be a permanent obligation for developed countries vis-à-vis imports
from developing countries.  The tariff negotiations should depend directly on the degree of market
distortion with reductions negotiated from bound rates.  Mexico called for a clear definition of non-
trade concerns and noted that if instruments to deal with such concerns were developed they would
have to comply with the following criteria: (i) non trade-distorting; (ii) not create obstacles to trade;
and (iii) not affect the balance of concessions or commitments that were bound in the WTO.  Special
and differential treatment was important both with  respect to the negotiating procedures themselves
and would have to be reflected in the results of the negotiations.
179. A number of countries supported many elements of the proposal, including Venezuela,
Malaysia, Thailand, the Philippines, Colombia, the United States, Ecuador, Chile, Bolivia, Ecuador,
New Zealand, Brazil and Canada.  Some members of the Cairns Group noted similarities between
their proposals and some aspects of Mexico's proposal.  Venezuela, Malaysia, Thailand, thePhilippines, Colombia and Ecuador agreed with the linkage made by Mexico between commitments
on improved market access and on reductions in trade distortion caused by support levels in other
countries.  Along with the United States and New Zealand, they also supported the proposal to
eliminate export subsidies.  Venezuela and Canada supported the proposal that there should be an
overall limit to the total value of domestic supports and Canada also noted that it too had suggestedthat there should be an overall limit on domestic support (see proposal NG/W/92).  The United States,
Ecuador and New Zealand agreed that geographical indications, labelling and SPS issues should be
dealt with in other fora.
180. Venezuela (NG/W/170) stressed the importance of complying with Article 10:2 regarding the
adoption of disciplines for export credits, guarantees and insurance schemes in order to preventcircumvention of export subsidy commitments.  On domestic support, substantial reductions in
support levels were needed and, in addition, it was necessary to revise the criteria in Annex 2 to
ensure that only those measures that were really non, or minimally, trade-distorting, were covered.
Nevertheless, such a review had to permit the inclusion of programmes and measures which were
aimed at promoting the institutional capacity of de veloping countries in their agricultural sectors.
Furthermore, Venezuela believed that special and differential treatment had to be addressed in a
horizontal manner in the negotiations.
181. On behalf of Malaysia, Thailand and the Philippines, the representative of the Philippines
stated that the objective of a fair and market-oriented agricultural trade system could not be achieved
if trade-distorting support in developed countries persisted.  They shared Mexico's approach ondomestic support and attached similar importance to special and differential treatment and stressed the
need for substantive progress in reduction and elimination of trade-distorting support for achieving
progress on market access.
182. Colombia (NG/W/161) supported the proposal for a substantial down-payment from
developed country Members and stated that disciplines for state-trading enterprises also had to be
developed.  On the Peace Clause, Colombia did not believe, in principle, that it should be extended
beyond 2003.  Amber and Blue Box support should be eliminated and not just reduced and Green Boxrevised to ensure only non trade-distorting support was covered.  Colombia noted the proposals
concerning modalities for special and differential treatment and suggested that such modalities should
also incorporate de minimis  levels and Green Box measures aimed at addressing issues of food
security, rural development and poverty alleviation.  Colombia pointed out that agricultural markets
were already distorted and suggested that any market access improvements should depend on theelimination of, or substantial reduction in, support in developed countries.  Moreover, tariff quotas
had to be as transparent as possible so to avoid discrimination between suppliers.
183. The United States noted Mexico's commitment to the reform process.  Overall, the United
States agreed with the proposal to substantially reduce all trade-distorting support and that theG/AG/NG/R/6
Page 35
negotiations should result in a substantial reduction in differences in support between Members.
However, it is disappointed with Mexico's cautious approach to tariff reductions and suggested that
reductions should be based on applied rather than bound tariff rates.  It pointed out that the United
States had called for reductions in trade-distorting domestic support that addressed disparities in
support between different countries and it had also proposed comprehensive tariff cuts to maximise
market access opportunities for all Members.
184. The representative of Chile stated that it was particularly valuable to have certain modalities
regarding liberalization in the proposal, as these would be considered in the second phase.  On the
Peace Clause, Chile stated that developing countries could not be obliged to comply with it in the
same way as developed countries.
185. Bolivia stated that special and differential treatment for developing countries was an integral
part of negotiations.  However, any provisions in favour of developing countries could not be
discriminatory by favouring some developing countries  but not others.  It also stated that no country
should be able to distort markets as such distortions would hurt small countries, like Bolivia.
186. Ecuador noted that the proposal promoted trade liberalization for agriculture with a view to
integrating developing countries into the trading system in a manner that reflected the mandate of
Article 20.  It was clear from Mexico's proposal that the main problem in trade and agriculture was
not in market access or other types of non-trade concerns, but resulted from the existence of highlevels of production and export subsidies.  Ecuador agreed with Mexico's approach to domestic
support but noted that a review of the Green Box should be considered in order to accommodate
concerns of developing countries.  On the Blue Box, there was a need for a maximum ceiling and
reduction commitments.
187. The representative of New Zealand was particularly interested in the idea of starting the
period leading to the elimination of export subsidies from the point of termination of the Uruguay
Round reduction period.  This proposal could provid e a form of down-payment as had been suggested
in the Cairns Group proposal.  While New Zealand noted the link made by Mexico between improved
market access and trade distortions caused by subsidies in some developed countries, it also pointed
out that improving market access should take place at the same time as domestic subsidies werereduced.
188. Brazil noted that the proposal not only presented modalities for further negotiations but also
tried to bridge differences between positions in the agriculture negotiations.  On the specifics, Brazil
shared Mexico's reference to the elimination of ex port subsidies and agreed entirely with the call for
immediate implementation of Article 10.2 of the Agreement on Agriculture.
189. A number of other delegations noted some elements of Mexico's proposal but did not agree
with many of the points it raised.  The EC, the Czech Republic, … stated that a Peace Clause was a
necessary complement to continued reform as it  helped to enable countries to comply with
commitments in order to keep the protection offered by such a clause.  The Slovak Republic and the
Czech Republic stated that Mexico's proposal seemed to go beyond Article 20 in suggesting export
subsidies should be eliminated.  Article 20 referred to the long-term objective of reform through
substantial, progressive reductions in support and protection.  While the Slovak Republic and theCzech Republic agreed that reduction commitments on export competition might be needed, other
measures, such as export credits, export guarantees and state-trading enterprises, also needed to be
included.  The EC and the Czech Republic supported the proposal that the Green Box should be
preserved although they noted that a review of the criteria could be considered and the EC added that
this should also apply to the Blue Box.
190. The representative of the EC stated that further liberalization and expansion of trade
contribute to sustained economic growth.  However, a request and offer type procedure could overlyG/AG/NG/R/6
Page 36
complicate the process and the Uruguay Round formula was much more direct and had clear
advantages, such as being comprehensive and giving Members some flexibility in applying tariff
reductions.  In respect of geographical indications, which formed part of the market access area, the
EC pointed out that its aim was to protect products for which highly reputable names had been
established did not face unfair trade practices.  On food safety, the EC wanted to see an expansion of
trade in agricultural products, but it was also necessary to ensure that health was not compromised inthe process.
191. On domestic support, the Slovak Republic agreed on the need to maintain the Green and Blue
Boxes and supported further non-discriminatory reductions in the Amber Box support.  For tariffs,
however, a flexible approach which took into account economic necessity was needed.  The Slovak
Republic stated that the Mexican proposal acknowledged non-trade concerns and referred to the Note
on Non-Trade Concerns (NG/W/36/Rev.1) which developed the concept.
192. The representative of the Czech Republic (NG/W/156) stated that that rules regarding non-
trade concerns had to be discussed before embarking on a discussion of modalities for further
domestic support reductions.  On market access, the Czech Republic was only prepared to consider
the Uruguay Round approach to tariff reductions as long as it took into account the specificities of
economies in transition.  The Czech Republic did not agree that geographical indications fell outside
of the existing mandate.  This was an integral part of the objective of establishing a fair and market-oriented agricultural trading system.  Finally, on non-trade concerns, the Czech Republic welcomed
the readiness of Mexico to clarifying their definition and to address possible instruments for
employing such measures.
193. Japan supported the proposal to strengthen disciplines on export state trading enterprises and
the establishment of disciplines on export credits.  On domestic support, Japan agreed that the GreenBox should be preserved and reduction of support should be based on total AMS.  Any tariff
reductions that might be agreed should be from bound rates.  Flexibility was needed in the choice of
the operation mechanism for tariff quotas according to the situation of the individual importing
country.  Japan considered that the special and differential measures proposed in each area of
commitments warranted thorough consideration and was willing to discuss these with the aim of
ensuring that each developing country could address its difficulties in light of its individual stage of
development and specific situation.
194. The representative of Mexico thanked Members for their comments.  He confirmed that
Mexico's position in respect of Article 10.2 was that export credit negotiations be conducted in the
WTO.  He reiterated that Mexico also considered SPS issues important but considered that that theseissues should be addressed under the SPS Agreement.  On the Peace Clause, Mexico was of the view
that it should become a permanent obligation for exports from developed to developing countries, that
is, developing countries should be able defend themselves against subsidized imports which caused
injury to the domestic industry.  He confirmed that Mexico's position on the elimination export
subsidizes was in respect of all Members, developed and developing alike.
(n) MERCOSUR (Argentina, Brazil, Paraguay a nd Uruguay), Bolivia, Chile, Costa Rica,
Guatemala, India and Malaysia:  Export Credits for Agricultural Products (NG/W/139and G/AG/W/50)
195. In introducing the proposal Brazil noted that Article 10.2 of the Agreement on Agriculture
required Members to undertake negotiations to develop disciplines on export credits, guarantees and
insurance programmes.  The sponsors of the proposal suggested that such disciplines should be
developed in the WTO so that all interested parties w ould be able to participate.  This issue concerned
an undertaking given in the Uruguay Round and, therefor, it concerned implementation.  On this basis
the proposal was to be submitted to the Committee on Agriculture which had been entrusted by the
General Council with the task of addressing a number of implementation related issues.  Brazil notedG/AG/NG/R/6
Page 37
that fourteen of the proposals that had been subm itted in the negotiations had raised the need for
disciplines on export credits, guarantees and insurance programmes.  The aim of most of these
proposals, and of the one being introduced, was to remove the subsidy element from such schemes
while taking account of the needs of developing countries.  The proposal included a number of
elements including the definition of officially supported schemes, a list of forms of export credits, the
terms and conditions of use and the need for transparency.  A reference had also been madeconcerning special and differential treatment for exporting and importing developing countries in line
with the Marrakesh Decision on least-developed and net food-importing developing countries.
196. A number of countries supported the proposal including Venezuela, Guatemala, Thailand,
Canada, Mexico, Philippines, Malaysia, New Zealand, the European Communities, Norway,
Venezuela, Mexico, Colombia, Argentina, Australia and Hungary.  Venezuela (NG/W/170),
Colombia, Thailand, the Philippines and Malaysia agreed that the development of disciplines on
export credits, guarantees and insurance programmes was an outstanding issue from the UruguayRound and such disciplines should be developed within the WTO.  Guatemala noted that export
credits added to a country's debts particularly if foreign exchange fluctuations meant the lending
currency appreciated against the domestic currency.  Therefore, specific consideration should be
given in the negotiations to the distortions caused by monetary or foreign exchange policies.  Mexico
noted some similarities between this proposal and its own and stated that it would examine the new
proposal.
197. Thailand noted that the issue of disciplines on export credits, guarantees and insurance
programmes had been under discussion in other fora for some time without reaching a conclusion.  It
was now time to bring the discussions into the WTO and to include special and differential treatment
provisions.
198. New Zealand noted that a considerable amount of technical work was needed in this area and
hoped that this would be undertaken in the Second Phase of the negotiations.  Canada, New Zealand
and Australia stated that their aim was to see th e subsidy element of these programmes eliminated.
Canada noted that it had been a co-sponsor to a paper that dealt with export credit programmes.  The
list of elements to be considered in the development of disciplines on export credit programmes thatwas included in the proposal was a good starting-point for developing effective disciplines.  Australia
hoped noted that negotiations on disciplines on export credits, guarantees and insurance programmes
were ongoing in the OECD and hoped that these could be successfully concluded.
199. Switzerland noted the wide support for the proposal and that the issue of disciplines on export
credits, guarantees and insurance programmes re lated to a commitment made in the Uruguay Round.
It was hoped that Members could take into account as a useful input the work done in other
international fora on this issue.
200. United States noted that despite the commitment in Article 10.2 of the Agreement on
Agriculture disciplines on export credits, guarantees and insurance programmes had not been
implemented.   While negotiations had been underw ay for some time in the OECD these had not been
successfully concluded, although it that this could still be achieved.  The United States had tried to
ensure that the negotiations had reflected the Marrakesh Decision on least-developed and net food-importing developing countries.
201. Mauritius noted that it too wanted a clarification of terms, such as "officially supported export
credits" used in the rules affecting exports cred its.  While welcoming the proposal Mauritius was
concerned about restrictions that might affect net food-importing developing countries.
202. The representative of Japan stated that there should be multilateral disciplines developed for
export credits, guarantees and insurance programmes.  However, these disciplines should not affect
genuine food aid which was necessary to alleviate food shortages and improve food security.  InG/AG/NG/R/6
Page 38
addition other export related measures also needed to be strengthened such as export prohibitions,
taxes and other restrictions in order to have some balance between measures affecting importers and
those affecting exporters.
203. Argentina noted that there were no specific disciplines on export credits and Article 10.2
remained unimplemented.  However, Article 10.1 clearly showed that export credits, export
guarantees, export insurance schemes or other measures could not be used to circumvent exportsubsidy commitments.  It went on to state that until Article 10.2 had been implemented export credits
and guarantees should not be used to assist expor ts of products not covered by the export subsidy
commitments of Member countries.
204. Brazil stated that it looked forward to working with others on developing disciplines on
export credits, guarantees and insurance programmes.  The work done in other organisations could be
used as an input to the negotiations in the WTO.
(o) Jordan:  WTO Agriculture Negotiations (NG/W/140)
205. In introducing its proposal, Jordan (NG/W/147) stated that the policy challenge facing it,
almost one year after joining the WTO, was how to help domestic producers adjust to competition
from abroad.  Jordan was unable to use some provis ions in the Agreement on Agriculture, such as the
special safeguard provision, and it noted that its applied tariffs were low and much closer to bound
rates than in most other countries.  Market access is a key element of reform process and it proposed aformula to achieve convergence of applied tariffs, although any tariff reduction should depend on
existing applied rates and newly acceding countries should have access to the special safeguard.
Jordan also proposed that all forms of export supports should be eliminated and disciplines on export
credits, insurance and credit guarantees should be developed.  While proposing the continuation of the
Green Box, Jordan wanted the criteria to be re viewed to ensure it covered only non-distorting
supports.  Similarly, it stated that the Blue Box could be a useful mechanism to enable countries to
shift to less distorting forms of support but should be subject to reduction commitments leading to
eventual elimination.  It stated that the adjustment of negative product-specific support figures against
positive non product-specific AMS support figures should be allowed.  All measures taken by
developing countries for poverty alleviation, rural development, rural employment and desertreclamation should be exempted from any reduction commitments.  Under special and differential
treatment, Jordan wanted an export promotion programme established to provide technical assistance
to developing countries to increase their market access capacity and capabilities.  Finally, Jordan
stated that its main non-trade concerns were the protection of the environment and landscape, poverty
alleviation and the protection of social and cultural heritages and added that, although it shared theidea that market forces alone were insufficient to address non-trade concerns, Jordan was in favour of
developing measures to address non-trade c oncerns in minimally trade-distorting ways.
206. A number of countries supported certain elements of the Jordanian proposal, including
Switzerland, Japan, the Slovak Republic, Norway (NG/W/182), Mauritius and the EC.  Switzerland
supported the establishment of an export promotion programme and hoped that the negotiations would
develop ways to address non-trade concerns in ways that minimiszed trade distortion.  Japan, the
Slovak Republic, Norway and Switzerland support ed maintaining the Green and Blue Boxes and
stated that the special safeguard should be kept, and a new safeguard mechanism established.
Mauritius, supported by Norway, noted that there was a clear call for an approach which satisfied the
concerns of all countries as opposed to a "one-size-fits-all" approach.  However, they did not agree
with the proposal to reduce tariffs from applied rates.
207. Japan pointed out that it had proposed (NG/W/91) a safeguard mechanism which
corresponded to the seasonal and perishable nature of agricultural products.  Japan also believed that
the fact that olive tree farming in Jordan play ed an important role in its economy, society and
environment was good example of the importance of the multifunctionality of agriculture for bothG/AG/NG/R/6
Page 39
developing and developed countries.  Japan, support ed by Norway, noted that the negotiations had to
take into account the important roles played by agriculture in different countries.
208. The representative of the Slovak Republic stated that, in some respects, Jordan's proposal
went beyond Article 20 of the Agreement on Agriculture as it called for the elimination of export
subsidies and the Blue Box.  On the other hand, the Slovak Republic agreed that export subsidy
disciplines should cover all forms of official supports for exports including food aid and state-tradingenterprises. On the issue of tariff reductions, the Slovak Republic supported Jordan's proposal for a
flexible approach which ought to take into account the economic necessities and already low levels of
protection in some Member States.
209. Mauritius (NG/W/178) welcomed the section on special and differential treatment where
issues of concern similar to those of small island developing states were listed.  These issues included
concern for small farmers that represented an important segment of agricultural production.  Mauritius
also supported the section on non-trade concerns which showed that agriculture was undertaken inhigh and low potential areas.
210. The EC and the Slovak Republic agreed with many of the proposals on domestic support,
including the examination of the Green Box criteria and the maintenance of the Blue Box.  The EC
also stated that the domestic support provisions should give developing countries room to address
issues such as sustainable viability of rural areas and food security.  On non-trade concerns, the ECand the Slovak Republic stated that they had to be taken into account in the negotiations.  However,
they did not agree to the elimination of subsidies and pointed out that Article 20 referred to
progressive reductions in support.  On market acc ess, the EC also supported the idea that a tariff
reduction formula would be useful pointed to the merits of the Uruguay Round formula.
211. A number of other countries supported those aspects of the proposal that they felt promoted
rapid liberalization.  New Zealand, the United States, Mexico, Australia and Canada supported the
proposal to eliminate export subsidies and New Zealand, Mexico, Australia and Canada also
supported the proposal to develop disciplines on export credits.  Canada stated that identifying the
subsidy element of all forms of export supports would be a key element of the negotiations. On
domestic support, New Zealand, the United States and Canada supported many of the specificproposals, especially treating Blue Box measures in the same manner as other trade-distorting
supports.  Canada, the United States and Australia st ated that they too were seeking a review of Green
Box criteria to ensure that it included supports that had at most a minimal production or trade-
distorting effect.
212. The United States stated it was interested in market access proposals, especially as regarded
the differences between applied and bound rates of duty. The United States fully supported the
position of Jordan to undertake tariff reduction from applied rates.
213. New Zealand and Australia were interested in  examining some of the issues raised under
market access.  New Zealand noted, however, that it wanted to see the special safeguard eliminated
and it opposed the use of quantitative restrictions, furthermore, general safeguards and anti-dumping
were already covered by other parts of the WTO sy stem.  New Zealand noted that the Cairns Group
had proposed a maximum tariff rate and suggested that might be better than using weighted averageswhich could still permit wide range of tariff rates.  Finally, New Zealand believed that Members had
to consider carefully how non-trade concerns coul d be taken into account within the framework of
substantial progressive reductions in support and protection.
214. Canada and Australia noted that Jordan had called for all measures taken by developing
countries for poverty alleviation, rural development, rural employment, desert reclamation, anddiversification of agriculture to be exempted from any reduction commitments.  They suggested that
Jordan consider non trade-distorting ways to achieve those objectives.G/AG/NG/R/6
Page 40
215. Jordan (NG/W/147) thanked delegations for their comments and stated that it had joined the
WTO in order to take advantage of trade opportunities, but felt that some flexibility with some
sensitive products in newly acceded countries was necessary to assist them with their reform process.
(p) African Group:  Joint Proposal on the Negotiations on Agriculture (NG/W/142)
216. On behalf of the African Group, Zimbabwe noted the importance of agriculture in the
economies of African countries.  However, development prospects were poor due to a number ofreasons including high levels of protection and subsidies for production and export in developed
countries.  Agriculture in Africa had to be modernized to facilitate development, improve food
security and reduce poverty.  For many African countries, tariffs were the only viable trade policy
instrument to protect domestic production as fiscal constraints meant subsidies could not be used.
Therefore, tariff reductions in agriculture were linked to substantial reductions in subsidies in
developed countries.  It pointed out that special and differential treatment was a horizontal issue
affecting all areas and appropriate provisions were needed to address the concerns of developingcountries generally, and least-developed countries, land-locked countries and small island developing
states.  It suggested that the special and differential treatment provisions of related Agreements should
be made compulsory while those of the Agreement on Agriculture could be re-examined and
enhanced.  It went on to highlight a number of other aspects of the proposal including tariff
reductions, preferences, market access for least-developed countries and reduction, with a view toelimination, of export subsidies.  He also raised a number of implementation related issues including
the negotiations on disciplines on export credits and the operationalization of the Marrakesh Decision.
217. A number of members of the African Group, incl uding Swaziland, Namibia, Nigeria, Zambia,
Egypt, Kenya, Senegal, Nigeria and Mauritius supported the statement by Zimbabwe and stated that
the proposal was a pragmatic approach to a very complex situation.  Swaziland hoped that the AfricanGroup's proposals would contribute meaningfully towards the development of a continent with the
provision of meaningful market access.  Kenya and Senegal noted that the proposal was similar in
many ways to the proposals from a group of developing countries (NG/W/13, 14 and 37).  Nigeria
emphasized the elimination of tariff peaks and escalation and the special safeguard for developing
countries.  Mauritius (NG/W/178) highlighted a number of features in the proposal and stated that the
paper highlighted the diversity and complexity of agriculture in Africa which included developing
countries, least-developed countries, small island developing states, land-locked countries and net
food-importing developing countries.  The paper demonstrated the need for preferences for Africa and
underscored the need to reinforce these preferences.  Finally, the concerns of the least-developed and
net food-importing developing countries, many of wh ich were in Africa, had to be promptly and
adequately addressed.
218. A number of other developing countries also welcomed and supported many elements of the
proposal.  Sri Lanka, India (NG/ W/176) and Cuba welcomed the proposal from the African Group
which reflected the difficult situation faced by agriculture in that region.  They noted that the proposal
put forward a series of measures that were, in many cases, in line with other proposals that had been
submitted by a group of developing countries (NG/W/13, 14 and 37) mainly in the area of market
access, as well as regarding the implementation of the Marrakesh Agreement for the least-developedcountries and net food-importing developing countries.  Sri Lanka, the Philippines and CARICOM
particularly supported the proposals to reduce and eliminate tariff peaks and tariff escalation,
providing credits for autonomous liberalization and developing a special agricultural safeguard
mechanism for developing countries as an S&D measure.  Sri Lanka and CARICOM fully endorsed
the proposals on the Marrakesh Decision and others related to least-developed and net food-importingdeveloping countries including the creation of an inter-agency revolving fund to assist the least-
developed and net food-importing developing countries  meet their food import needs.  Sri Lanka also
supported the proposals on export competition and domestic support.G/AG/NG/R/6
Page 41
219. The Philippines supported the importance of special and differential treatment in view of
establishing equitable and fair competition where structural conditions across countries were different.
While it shared the proposal's objectives with respect to export subsidies, the Philippines stated that
export competition issues should be dealt with in a comprehensive manner.  Finally, the Philippines
noted its agreement with many of the proposals on domestic support issues and look forward to
working with the African Group as the negotiations proceeded.
220. New Zealand, Canada and the United States agreed with the African Group that special and
differential treatment was a concern that had to be addressed in the negotiations and stated that they
looked forward to working towards developing operational and concrete special and differential
measures.  New Zealand recognized that legitimate non-trade concerns such as poverty alleviation and
food security, had to be taken into account for developing countries.  On market access, New Zealand
and Canada stated that tariff peaks and tariff escalation should be substantially reduced and eventually
eliminated.  New Zealand also noted that it had announced that it would provide free access to allproducts from least developing countries from July 2001 and Canada pointed out that virtually all
agricultural products from least-developed countries could now obtain duty free treatment in the
Canadian market in parallel with more relaxed rules of origin.
221. New Zealand understood the rationale linking liberalization of market access and reductions
in trade-distorting support.  However, it sugge sted that work should proceed simultaneously in
reducing both market access barriers and also export and domestic subsidies in all countries.  On
export competition, New Zealand and Canada supported proposal, particularly the elimination of
export subsidies and the development of disciplines on export credits.  New Zealand and Canada
welcomed the proposal to review and tighten Green B ox criteria and were also ready to look at issues
surrounding the Marrakesh Decision and the need to ensure that food aid did not negatively affectagricultural systems in developing countries.
222. The EC noted that its comprehensive proposal responded to many of the concerns mentioned
in the African Group proposal.  However, it stated that there was an imbalance between the proposal
on export subsidies and the proposal on other forms of export support.  As regarded tariffs, the EC
had shown its commitment to open its market totall y to products originating from the least-developed
countries through the "Everything but Arms" initiative.  However, the erosion of tariff preferences by
reductions in MFN tariffs was an issue that had been mentioned in other proposals.  The EC had also
suggested in its comprehensive proposal additional flexibility for developing countries through higher
de minimis  limits and the reduction in Amber Box limits.  It was also prepared to consider examining
the details of the Blue and the Green Boxes.  However, the question of a revolving fund seemed to beoutside the scope of the negotiations although the EC did recognize the need for appropriate and
reliable food aid provisions.
223. Norway (NG/W/182) noted the need for rules and disciplines governing trade in agriculture to
promote development and recognized the problems of the agriculture sector in Africa.  On the
question of developed countries giving tariff-free and quota-free market access for exports of least-
developed countries, Norway pointed out that it already provided such market access for essentially
all products.  The representative of Norway stated the need for greater policy coherence for allpartners not only international financial institutions, but also in Members own bilateral programmes.
Like the EC, Norway also recognized the need for appropriate and reliable food aid provisions.
224. The United States stated that it was seeking substantial reductions in tariffs and in achieving
an open free trading system.  In the area of export competition, the United States noted that it too had
proposed the elimination of export subsidies and asked for further elaboration regarding the provisionto enhance or strengthen the exemptions for developing countries in Article 9.4 of the Agreement on
Agriculture.  On domestic support, the United States  agreed that the criteria and rules linked to the
Green Box needed to be reviewed.G/AG/NG/R/6
Page 42
(q) Namibia:  Proposal in the Areas of: (i) Market Access, (ii) Domestic Support, (iii) Export
Competition, and (iv) Non-Trade Concerns (NG/W/143)
225. Namibia stated that its agricultural sector had been substantially liberalized with few
remaining trade-distorting domestic support measures.  The agricultural marketing boards that had
previously administered procurement and prices of  sensitive products had been abolished.   Although
in land area Namibia was a large country, it had a small economy and population and manycharacteristics of a small developing country.  Namibia's priorities included the reduction and
eventual elimination of tariff peaks and escalation, transitional periods to adjust to the erosion of
preferential access, and uniform internationally accepted SPS rules with technical assistance on SPS
measures.  On domestic support, it proposed th e gradual elimination of trade-distorting domestic
support, with some revision of  de minimis provisions for countries whose rates were currently
negative or zero, and quantification and discipline measures on Green Box expenditures.  All types of
export competition measures should be treated equally and food aid should be procured only fromdeveloping countries.  Non-trade concerns should be addressed in a transparent manner.  Furthermore,
any future provisions to enhance the food security of the rural poor should allow for flexibility.
226. South Africa, Swaziland and Zimbabwe supported  many elements of the proposal and noted
the similarity with the African Group proposal and South Africa (NG/W/168) also noted similarities
with the Cairns Group's proposals.
227. South African also noted that, as in Namibia, the development of agriculture in the rural areas
of South Africa was of paramount importance for economic development and poverty alleviation.  It
also had to accommodate a dual structure of co mmercial and small-scale farming in agricultural
policies.  South Africa fully supported Namibia's proposal for the elimination of trade-distorting
support.
228. Swaziland stated that it would prefer a reduction rather than elimination of export subsidies in
the long-term and suggested that these were inter-linked with trade preferences and that therefore a
reasonable time for adjustment was required.   Finding appropriate solutions in this regard were a
challenge to Members in these negotiations.
229. Zimbabwe specifically supported the proposals concerning tariff peaks and escalation.  In
relation to SPS measures, Zimbabwe stated that minimum acceptable standards should be established
on which SPS standards should be based.  The area of tariff preferences could be treated as part of
special and differential treatment.  Zimbabwe agreed with the proposal calling for substantial
progressive reductions of trade-distorting domestic  support and stated that the Blue Box should be
reviewed.  Zimbabwe also supported that food aid be provided in fully grant form.
230. On behalf of CARICOM the representative of Grenada noted that the proposal was a positive
contribution to the negotiations and aimed at achieving a reduction in the general level of distortions.
CARICOM also wanted to see a reduction and gradual elimination of tariff peaks and escalation and
noted that this was another proposal which addressed the essential need for a period of adjustment for
erosion of tariff preferences.  CARICOM also suppo rted a number of other elements of the proposal
such as reductions in domestic support and export subsidies, and that addressing non-trade concerns
should not increase trade distortions.
231. Canada, New Zealand, the United States and Mexico supported some elements of the
proposal.  Canada and New Zealand noted that, as part of the Cairns Group proposal on export
competition (NG/W/11) they had proposed the abolit ion of all forms of export subsidies and, as part
of the Cairns Group proposal on domestic support ( NG/W/35), they had proposed reductions in trade-
distorting domestic support, including the Blue Box.  The United States noted that it too had proposed
elimination of the Blue Box (NG/W/15) and stated that non-trade concerns should be addressed in aG/AG/NG/R/6
Page 43
transparent, targeted and non trade-distorting manner.  Mexico also noted that its proposal
(NG/W/138) had also stated that export subsidies should be abolished.
232. Canada added that it was seeking improved market access for all agricultural products.  This
meant a broader outlook was necessary as, in some cases, high tariffs were the issue, while for others
tariff quotas applied, and the size and administration of these tariff quotas were the key constraints to
address.  Canada also agreed that food aid should be provided in fully grant form and, with NewZealand, stated that care should be taken to avoid undermining local markets.  Canada agreed that
transparent measures were needed to address non-trade concerns but sought to ensure that the
measures did not distort production or trade.
233. New Zealand agreed that tariff peaks and escalation required urgent attention.  New Zealand
did not, however, favour a revision of AMS commitments where they were currently zero as many
countries could not afford the expense of providing AMS support.
234. In the view of Mexico, it was vitally important to define the concept of non-trade concerns
and to see to it that instruments addressing these concerns were non trade-distorting, did not become
trade barriers and did not undermine concessions and commitments.
235. In relation to the proposal on non-trade concerns, Switzerland stated that it would be difficult
to negotiate a broad definition of non-trade concerns for the purpose of binding commitments.
Switzerland considered that the risk of abuse could be addressed by identifying instruments thatcovered non-trade concerns which were transparent and least trade-distorting.
236. The EC stated that each country should have the right to decide its appropriate level of SPS
protection, as set out in the SPS Agreement itself.  The EC believed that tariff reductions should be
made on a progressive basis by all Members without prejudice to the possible need for greater
flexibility for the most fragile members and taking account of the need for preferences for somecountries.  While the EC was prepared to examine the Blue and Green Boxes, it stated that they
should not be eliminated.  The EC welcomed Namibia's interest in non-trade concerns and agreed that
measures designed to deal with non-trade concerns should be transparent and minimally trade-
distorting.
237. Norway (NG/W/182) agreed that food aid should not cause distortions nor displace domestic
production.  In relation to non-trade concerns, it observed that the proposal appeared to limit the scope
of Article 20 by suggesting a cap on domestic support.  Solutions for non-trade concerns should be
sought within mutually agreed rules and disciplines, and not be seen as permission to all countries to
do as they want.
238. Namibia thanked Members for their comments and was ready to further discuss its proposals
with interested Members.G/AG/NG/R/6
Page 44
TECHNICAL SUBMISSIONS
(a) Argentina:  Technical Submission Concerning Legitimate Non-Trade Concerns
(NG/W/88)
239. In introducing its submission, Argentina noted that the paper's focus was on identifying non-
trade concerns which Argentina considered to be compatible both with the objectives of the
negotiations and the principle of not adversely affecting the interests of other countries.  Argentinabelieved that environmental protection, rural poverty and unemployment were legitimate non-trade
concerns.  However, trade-distorting domestic support, export competition measures and closed
market policies were inappropriate ways of addressing these concerns as they damaged other
countries and hindered their efforts to address the same issues.
240. Peru stated that existing distortions in agricultural trade were a major cause for the increase in
rural poverty in developing countries since distorted prices hindered them to compete.  Tariff
escalation was another fundamental concern for developing countries which undermined efforts todiversify and create a solid industrial base and which condemned them to the status of commodity
exporters.   In the view of Peru, food security was another legitimate non-trade concern.
241. Japan suggested that the concept of trade distortion should be clarified in the negotiations.
While Japan accepted that the rules on export subsidies might be strengthened it pointed out that they
should also be improved for other export measures, such as export restrictions and prohibitions, andexport taxes.  This would help to redress the imbalance in the rules applied to importing and exporting
countries.  Since poverty in rural areas and the resulting migration to urban areas were caused by
various social, economic and political factors, Japan considered it too simplistic to emphasize tariff
escalation as a cause.  Under certain circumstances price supports and trade-distorting subsidies could
increase production and have adverse effects on the environment.  However, it was also true that pricesupport enabled disadvantaged regions to maintain agricultural production activities and this brought
environmental benefits, such as preventing land erosion and preserving rural landscape.  Such
functions of agriculture were closely related to, and could not be separated from, agricultural
production.
242. The EC stated that although the submission might be read as a critique of the concept of non-
trade concerns, the EC viewed it as a demonstration that non-trade concerns were universal and
applied in low support exporting countries as well as in importing countries.  The EC's approach to
this vital topic was to pursue trade concerns in a way which was minimally trade-distorting.  In any
event, there was a need to see non-trade concerns not as an obstacle, but as the key to arrive at a
generally satisfactory outcome of these negotiations.
243. Mauritius observed that Argentina's submission raised fundamental issues regarding non-
trade concerns.   In its view, non-trade concerns had to be part of the future work of the negotiations.
Mauritius also considered that the instruments to be  used to address such concerns would differ from
country to country in view of their specificities and diversity, and no single measure would be suitable
for all countries.
244. The United States stated that it hoped that during the second phase of the negotiations, all
Members would identify their non-trade concerns in agriculture and that the Committee would be ableto identify the adequate instruments with which they could be addressed.
245. Venezuela welcomed Argentina's submission as a valuable contribution by putting non-trade
concerns in the proper perspective for these negotiations (NG/W/170).  Venezuela agreed that some of
the most serious problems relating to non-trade concerns could be resolved by correcting current
distortions to agricultural trade and that legitimate non-trade concerns were those which could bepursued by Members consistently with the objective of establishing a fair and market-orientedG/AG/NG/R/6
Page 45
agricultural trading system.  Venezuela also supported the view that due consideration should be
given to the effects of the reform process on developing countries.  Rural poverty, unemployment and
environmental protection were legitimate non-trade concerns and it added food security.
246. Norway (NG/W/182) recognized that agricultural policies might have spill-over effects on
trading partners.  However, spill-over effects might be caused not only by high-support countries but
by low-support countries as well, since the latter might affect the ability to address non-trade concernsin high-support countries.  There might thus be important trade-offs between trade concerns and non
trade concerns within and between countries that called for careful attention.  In accordance with
Article 20, it was important to find a balance between different interests in the continuation of the
reform process.
247. India stated that food and livelihood security were fundamental non-trade concerns in
developing countries.  It also observed that the strategies for addressing non-trade concerns in
developed and developing countries might differ in view of the resource constraints faced bydeveloping countries.G/AG/NG/R/6
Page 46
ANNEX
SIXTH SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
(G/AG/NG/6)
Report by the Chairman, Ambassador Jorge Voto-Bernales, to the General Council
1. The Special Session of the Committee on Agriculture, which was established by the General
Council to conduct the negotiations for continuing the reform process under Article 20 of the
Agreement on Agriculture (WT/GC/M/53, paragraph 39 refers), held its sixth meeting on
22-23 March 2001.
2. The agenda as set out in WTO/AIR/1502 was adopted.
3. The following new or additional proposals for continuing the reform process were presented
and/or examined at the meeting:  (i) a proposal by India on "Negotiations on WTO Agreement on
Agriculture" (NG/W/102);  (i i) a proposal by Norway on "WTO Agriculture Negotiations"
(NG/W/101);  (iii) a proposal by Poland on "WTO Negotiations for Continuation of the Reform
Process in the Agricultural Sector" (NG/W/103);  (iv) a proposal by MERCOSUR, Chile, Colombia
and Bolivia on "State Trading Enterprises" (NG/W/104 and Corr.1);  (v) "Proposal by Morocco"
(NG/W/105);  (vi) a pr oposal by Turkey on "WTO Agriculture Negotiations" (NG/W/106 and
Corr.1);  (vii) "Comprehensive Proposal by the Arab Republic of Egypt to the WTO Negotiations on
Agriculture" (NG/W/107/Rev.1);  (viii) "Malian Proposals for the Future Negotiations on
Agriculture" (NG/W/99);  (ix) "WTO Negoti ations on Agriculture - Proposal by Nigeria"
(NG/W/130);  (x) "Negotiating Proposals by th e Democratic Republic of the Congo" (NG/W/135);
(xi) a proposal by Kenya on "WTO Negotiations on Agriculture" (NG/W/136);  (xii) "Agricultural
Trade Negotiations in the WTO –  Preliminary Positions of Senegal" (NG/W/137);  (xiii) "Pr oposal
by Mexico for the Negotiations on Agriculture in the World Trade Organization (WTO)"
(NG/W/138);  (xiv) a proposal by MERCOSUR, Bolivia, Chile, Costa Rica, Guatemala, India andMalaysia on "Export Credits for Agricultural Products" (NG/W/139);  (xv) a proposal by Jordan on
"WTO Agriculture Negotiations" (NG/W/140);  (xvi ) "WTO African Group:  Joint Proposal on the
Negotiations on Agriculture" (NG/W/142), and (xv ii) a proposal by  Namibia on "WTO Negotiations
on Agriculture" (NG/W/143).  In addition, a tech nical submission by Argentina on "Legitimate Non-
Trade Concerns" (NG/W/88) was considered and a submission on "WTO Negotiations onAgriculture" (NG/W/141) was made available by Croatia.
4. It was noted that the Special Session had completed its consideration of all the proposals and
technical submissions that had been tabled in the course of the first  phase of the negotiations.
5. A number of the statements made at this meeting are to be circulated in the series
G/AG/NG/W/- at the request of the delegations concerned.  These statements will be listed in an
addendum to this report in due course.  Statements made at the previous (fifth) Special Session but
circulated after the appearance of the Chairman's report on that meeting (G/AG/NG/5) are:  Lithuania(NG/W/127);  Poland (NG/W/128);  Dominican Republic, Honduras, Cuba and El Salvador
(NG/W/129);  Hungary on behalf  of Albania, Bulgaria, Croatia, the Czech Republic, Estonia,
Georgia, Hungary, the Kyrgyz Republic, Latvia, Lithuania, Romania, the Slovak Republic and
Slovenia (NG/W/131);  Hungar y (NG/W/132);  Venezuela (NG/W/133);  and the Czech Republic
(NG/W/134).
_________