RESTRICTEDWORLD TRADE
ORGANIZATIONG/AG/NG/R/7
2 August 2001
(01-3837)
Committee on Agriculture
Special Session
SUMMARY REPORT ON THE SEVENTH MEETING OF THE SPECIAL SESSION
HELD ON 26-27 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 seventh such meeting took place on 26-27 March 2001 under the Chairmanship of Ambassador
Jorge Voto-Bernales of Peru.  As agreed in the work programme for the first phase of thenegotiations, this meeting included a stock-taking exercise of the first phase of the negotiations
(G/AG/NG/1, paragraph 6(b) refers).
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/7, copyattached, see Annex 2).  Unless otherwise stated, all references to documents refer to the G/AG/NG/-
series.
3. The agenda as contained in WTO/AIR/1504 was adopted.
ITEM A :  STOCK -TAKING ON THE FIRST PHASE OF THE NEGOTIATIONS UNDER ARTICLE 20 OF THE
AGREEMENT ON AGRICULTURE
(i) Statement by the Chairman
4. The Chairman recalled that the Uruguay Round Agreement on Agriculture and Members' related
commitments were the first steps in a longer-term re form process in agricultural trade, as recognized
in the Preamble and Article 20 of the Agreement on Agriculture.  During the first phase, Members had
been conducting negotiations under Article 20 on the continuation of the reform process in Special
Sessions of the Committee on Agriculture.  Considerable progress had been achieved with 44
negotiating proposals and three technical papers submitted by a total of 125 WTO Members.  Inaddition, the Secretariat had made available 27 background papers at the request of Members.  The
examination of the proposals and submissions had highlighted the wide range of interests and the
complexity of the issues involved.  Now that the participants' basic positions were on the table, the
more challenging work of the second phase could begin.  (A copy of the full text of the Chairman's
statement is attached, see Annex 1).
(ii) Statements by Members
5. The representatives of many countries indicated that the first phase had been fruitful, and
expressed satisfaction, in particular, about the high degree of participation.G/AG/NG/R/7
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6. The Czech Republic, Hungary, Iceland, Japan, Korea, Lithuania, Mauritius, Norway, Poland,
the Slovak Republic and Switzerland noted that the submissions and interventions made during the
first phase showed that there was a wide variety of country situations and that the negotiations would
have to take these into account.  Several represen tatives mentioned the special situations of small
island developing states, landlocked countries, transition economies, least-developed, developing and
developed countries and net food-importing developing countries.  The role of special and differentialtreatment for developing countries as an integral part of the negotiations was emphasized by ASEAN
and CARICOM countries, Colombia, Cuba, the Dominican Republic and Honduras, Ecuador, Egypt,
the European Communities, Iceland, India, Japan, Lithuania, Mexico, New Zealand, Panama, Peru,
Swaziland, Switzerland, Turkey and Venezuela.
7. Non-trade concerns and the variety of objectives of the agriculture sector were of concern to
ASEAN and CARICOM countries, Cyprus, the Czech Republic, the European Communities,
Hungary, Iceland, Japan, Korea, Lithuania, Mauritius, Norway, Poland, the Slovak Republic,Slovenia, Swaziland and Switzerland.
8. The Czech Republic, the European Communities, Hungary, Japan, Korea, Norway and
Switzerland indicated that they would prefer to cont inue the agriculture negotiations in the context of
a new broad round of negotiations.  In contrast, Bolivia, Cuba, the Dominican Republic, Honduras
and Venezuela stressed that the agriculture negotiations should be independent of the launch of a newround.
9. Switzerland (NG/W/155) stated that it wanted to pursue the reform process including all core
areas of export competition, domestic support and market access.  In the continuation of the reform
process, experiences from the implementation of the existing reduction commitments, including a
move to Green Box instruments, and the effects of these reduction commitments on world trade inagriculture would have to be taken into account.   Adequate instruments would need to be developed
to address non-trade concerns and special and differential treatment, as well as appropriate disciplines
for their implementation.  Progress was also needed on other important issues, such as the protection
of geographical indications, issues related to production methods and the internalization of all
production costs although this could be dealt with in other WTO bodies.
10. The representative of Hungary (NG/W/175)  indicated that, while guarding against
fragmentation of the multilateral disciplines, the diversity of agricultural situations world-wide should
find stronger reflection in the rules and disciplines on agricultural trade.  This relates equally to trade
and non-trade concerns.  Otherwise the agricultural trading system might become more market-
oriented but that did not mean it would be sufficiently fair.
11. The representative of the Philippines, speaking on behalf of ASEAN, referred to the proposal
contained in NG/W/55, which laid out ASEAN's objectives for special and differential treatment in
the negotiations.  In their view, the objective of the negotiations was to level the playing field in
agriculture trade;  accordingly, a Member's concessi ons should be linked to its contribution to trade
distortion.  It was noted that non-trade concerns should be addressed but among the concerns raised so
far food security should not be confused with food safety.
12. Uruguay (NG/W/148) observed that it was cl ear from some Members' proposals that they
wanted to maintain or increase the discrimination suffered by agriculture in GATT and WTO during
the past 50 years.  Although special and differential treatment was important, improved market access
opportunities would do more to improve development prospects in developing countries.  He noted
that some Members appeared to believe that a balanced outcome required all agricultural interests of
all Members to be taken into account but the best wa y to take into account all Members' interests was
to base commitments on each country's comparative advantages.  He stated that proposals were
reasonable only if they aspired to place agriculture on an equal footing with other sectors in the WTO
system.  The objective of the negotiations was clearly defined in Article 20, and discussions shouldG/AG/NG/R/7
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thus focus on specific measures and necessary time-frames to reach these objectives.  Uruguay was
willing to negotiate reasonable time-frames to ma ke the reforms politically acceptable at national
levels, but wanted these negotiations to be the last stage in the integration of agriculture into WTO
rules.  Members' legitimate concerns should be addressed through transparent and well-directed
measures within the framework of the Agreement.  During the second phase, Uruguay wanted to
begin the process of identifying operative modalities.  Political commitments and a more precisedefinition of the negotiating mandate in agriculture were essential contributions to the launching of a
new round at the next Ministerial Conference.
13. The representative of the European Communities (NG/W/150) observed that during the first
phase it had become clear that there was no single position for all developing countries just as there
was no single position for developed countries.  Therefore, he suggested that the distinction between
developed and developing countries was not entirely  relevant in distinguishing between different
positions.  The EC was concerned about the tendency to measure the success of the Uruguay Round interms of exports because trade, both imports and exports, improved welfare and if all countries
wanted only to export and nobody wanted to import, there was no possibility for progress.
Furthermore, the central objective of GATT and WTO was to combat protectionism and to liberalize
trade although it had to be acknowledged that there were reasons why trade liberalization was
especially difficult in the agriculture sector.  Addressing these concerns would require moving beyonda textual analysis of Article 20.
14. Bolivia supported the statement made by Uruguay.  It regretted that some Members,
especially developed countries, had not shown the political will to advance the agriculture
negotiations.  The negotiating mandate was a result of the Uruguay Round, during which modest
initial liberalization in the agriculture sector had been accepted, with the promise of greaterliberalization six years later.
15. The representative of New Zealand (NG/W/153) identified common threads that could be
drawn from the proposals tabled in the first phase.  All proposals had been based on Article 20.  They
included consistent calls for tariff reductions, the rectification of the problems caused by tariff peaks
and tariff escalation, and improved tariff quota access.  Many proposals called for the elimination ofexport subsidies, and for reductions in trade-distorting domestic support.  In New Zealand's view the
first phase had shown that rational discussion of the different non-trade concerns was possible.  New
Zealand was optimistic about the scope for progress in the negotiations, which should not be affected
by the preparatory process for the next Ministerial Conference.
16. The representative of Norway summarized the current state of the negotiations.  He noted that
the negotiations were progressing according to the timetable agreed in March 2000 and that Members
had expressed genuine readiness to negotiate based on the mandate set out in Article 20.  A successful
outcome in the negotiations could only be reached by acknowledging that all Members, both
importers and exporters, had legitimate interests that should be taken into account.  He noted that
agricultural policy reform was a dynamic process that was affected by many factors, such as changes
in consumer preferences, and events, such as the recent BSE and foot-and-mouth disease crises.
These experiences should be taken into consideration, as they demonstrated the unique roleagriculture played in every society and the limitations of a pure market approach.  Future trade rules
should take into account the specificity of the agricultural sector as a producer of food and public
goods within a complex and site-specific biological production system.  He stressed that Green Box
measures alone would not be sufficient to address non-trade concerns.  There was a need for
flexibility in the multilateral trading system to sustain domestic agriculture required to safeguard non-trade concerns.  The challenge ahead would be to agree instruments that adequately safeguarded non-
trade concerns, including in low-potential areas, and, which were least trade distorting.  In Norway's
opinion, the upcoming Ministerial Conference shoul d not lead to changes in the agricultural
negotiating mandate.G/AG/NG/R/7
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17. The representative of Costa Rica recalled the proposals it had co-sponsored with other
members of the Cairns Group ( NG/W/11, 35, 54, 93), which had called for the elimination and
prohibition of all forms of export subsidies, stricter disciplines and substantial reductions in domestic
support, and increased market access through tariff reductions and improved disciplines on tariff
quota administration.  Costa Rica was also interested in export restrictions and in the development of
WTO disciplines on export credits.  Meeting these objectives would enhance developing countryparticipation in world trade and contribute to growth and development.  Costa Rica expressed concern
that some Members had presented initiatives which amounted to moving backwards in the agricultural
reform process and it felt that some developed countries were using developing country concerns to
protect their own interests, thereby denying the right of all Members to take advantage of their
comparative advantages.  In Costa Rica's view, the best development aid was a world market for
agricultural products free of the distortions caused by the intensive subsidy programmes of the
developed world.  Costa Rica was ready to discuss specific modalities in order to concretize theproposals made so far.
18. The representative of Brazil (NG/W/149) expressed concern at Members' reluctance to
discuss the mainstream topics of the Agreement on Agriculture at such a critical moment in the
reform process.  It was becoming increasingly difficult to refute criticisms regarding the capacity of
the negotiations to move forward.  Brazil had a specia l interest in agriculture;  thus if the mandated
negotiating process agreed during the last round moved in the right direction, Brazil was open to
broadening the scope of the negotiations.   Brazil saw the work programme for the second phase as a
bridge until the beginning of a new round.  If and when a new round had begun, the work programme
would have to be enlarged to pave the way for real reform in agriculture.
19. The representative of Korea (NG/W/160) indicated that the gaps in Members' views should
not be sources of discouragement;  a win-win nego tiation could only be achieved if it was based on a
full understanding of each participant's different situation and difficulties.  He stated that Members
should not be too idealistic or ambitious and should not try to go beyond Article 20 of the Agreement
on Agriculture.  This Article clearly stated that re form in the direction of the long-term objective was
an ongoing process.  New issues that had arisen since the Uruguay Round would have to be properlydealt with, such as consumer concerns on food safety, health, biotechnology and the environment.
20. The representative of the United States remarked that the proposals tabled so far reflected a
lack of satisfaction with the Uruguay Round.  Every Member seemed to have a claim to be a victim of
the Agreement on Agriculture.  High ceiling bindings, high base levels for subsidies and marginal
reduction commitments had meant most, if not all, countries had been able to cushion adjustments andshield producers from market forces.  However, when it came to specific proposals nearly every
Member proposed to stick to the basic framew ork of the Uruguay Round Agreement on Agriculture.
The discussions had highlighted the main distortions facing international agricultural trade, including
high tariffs, large allowed levels of trade-distorting support under AMS ceilings, exceptions to
reduction commitments, continued allowances for export subsidies and lack of specific commitments
to address some distortionary measures.  The United States was pleased to see that, with few
exceptions, Members had identified ambitious reform proposals, and were ready to meet theircommitments to substantial reductions in support and protection; obligations all Members had
committed to undertake irrespective of development level, competitiveness and number of agricultural
functions.  The United States looked forward to the work of the second phase with a view to
establishing modalities resulting in substantial reform.
21. The representative of Japan (NG/W/165) ob served that a number of Members had shown
interest in the multifunctionality of agriculture and in non-trade concerns.  It was clear to all countries
that agriculture was more than the production of food and fibre.  The main issues in the current
negotiations were to secure multifunctionality and the policy measures needed to address it.  With
regard to negotiating proposals he noted that most of them had set forth the idea of strengthening rules
and disciplines on exports.  Regarding domestic support, Japan was encouraged by the fact that aG/AG/NG/R/7
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number of proposals called for maintaining the current framework of Green, Blue and Amber Boxes,
although some Members had made unrealistic proposals to radically change the current rules.  On
market access, some Members advocated progressive reductions while maintaining flexibility,
whereas others called for substantial reductions.  He stated that, only a limited number of large
exporting countries with favourable natural conditions had reaped the benefits of improved market
access resulting from the Uruguay Round Agreements, while other Members, especially smalldeveloping countries, had gained very little from trade liberalization and were faced with diminishing
margins of preference.  Many developing countries had made realistic proposals for their own tariff
reductions, which in Japan's view was important to ensure food security and agricultural development.
Nevertheless, Japan noted that it would not be appropriate to divide members into groups of
developed and developing countries since that would ignore the diversity in geographical and natural
conditions among Members.  Japan stressed that in the next phase of negotiations it was important to
conduct a process of clarification and elaboration of proposals which would constitute a solidfoundation for the agricultural trade rules for the 21
st century.
22. On behalf of Cuba, the Dominican Republic a nd Honduras (NG/W/163), the representative of
Honduras observed that some of the proposals from developed countries were a step backwards in the
liberalization process.  Some of the concepts that had been introduced, including multifunctionality
and non-trade concerns of developed countries, were only justifications to continue with thedistortions in the agriculture sector.  This was discouraging, as it showed a lack of political will in
these countries to achieve the elimination of export subsidies, which Cuba, the Dominican Republic
and Honduras judged to be the most distorting elem ent in the agricultural market.  Agriculture was
one of the few sectors negotiated during the Uruguay Round in which developing countries were
expected to obtain important benefits.  However, after five years of implementation of the Agreementon Agriculture, these benefits had not materialized.  For this reason the ongoing negotiations had to
result in a significant reform process.  The existing special and differential treatment provisions were
not adequate to level the playing field between developed and developing countries, and would have
to be strengthened.  The goals of Cuba, the Dominican Republic and Honduras for the negotiations
were described in more detail in the three proposals presented by a group of eleven developingcountries (NG/W/13, 14, 37 and Corr.1).
23. The representative of India (NG/W/177) noted that given the diversity in the development
levels of WTO Members, no single set of proposals could satisfy all countries' needs and aspirations.
Proposals had to go beyond national concerns and take account of other countries' development and
societal needs.  The proposals submitted in the first phase of the negotiations showed that there weresome areas where there was some convergence of views but in other areas more work was needed.
The proposals had also shown the sensitivities involv ed in agriculture, and the need to carry on the
reforms and remove the trade distortions caused by developed countries.  During the implementation
of the Agreement on Agriculture, developing countries had experienced the adverse effects of the
trade-distorting policies of developed countries.  The second phase of negotiations had to address
these distortions, and the ambiguities of the Agreement on Agriculture.  He underlined the need to
concretize special and differential treatment beyond best endeavour clauses.  Active participation ofdeveloping countries during the second phase had to be ensured through the arrangements of the
negotiating meetings and technical work by the Secretariat.
24. The representative of Guatemala regretted that liberalization of the agriculture sector had
made little progress since the Uruguay Round.  The concept of multifunctionality of agriculture was
becoming a threat to the principle of comparative advantage.  Given that no two countries haveidentical patterns of comparative advantages, Guatemala did not expect the world to become a level
playing field;  developing countries lacked the power to dismantle the web of trade barriers woven by
developed countries.  With the concept of multifunctionality, developed countries were promoting an
inefficient allocation of resources which Guatemala could not afford.  Guatemala was not calling for
greater equity or justice, as some other delegations had done, because these were subjective concepts,but instead for a more efficient allocation of material and human resources in all countries, regardlessG/AG/NG/R/7
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of their level of development.  Focusing on comparative advantages and removing artificial
advantages would automatically lead to greater equity and justice.
25. The representative of Cyprus (NG/W/158) indicated that his country's experience over the
past six years showed that trade liberalization led to tangible benefits.  At the same time, agriculture
was a very sensitive sector related to important societal concerns.  Therefore, Cyprus supported a
gradual process of reform with sufficient time for the necessary adjustments.  A balance had to befound between trade and non-trade concerns.
26. The representative of Australia (NG/W/167) highlighted the reform-related themes that had
emerged from the first phase of negotiations.  First, there was a relatively broad consensus that export
subsidies should be eliminated.  Second, there was a recognition that high levels of support in some
developed countries were having an adverse impact elsewhere, particularly in developing countries,
and many had proposed that support had to be cut.  Third, there was a recognition that agricultural
market access conditions were extremely poor compared to other sectors, and that this adverselyaffected agricultural exporters, particularly developing countries that tended to rely more heavily on
agricultural exports.  Australia recognized that some proposals had not been ambitious, and had
emphasized the need to recognize multifunctionality but some clear themes had emerged with respect
to this concept.  In Australia's view, all countries had non-trade concerns, but while some countries
wanted to use multifunctionality to avoid or limit policy reform, other countries had argued that non-trade concerns could be addressed with policies wh ich caused only minimal distortions to agricultural
production and trade.  The key was to find a way to take non-trade concerns into account without
letting them obstruct the negotiations.  Finally, Australia noted that progress in the second phase of
negotiations would have a big effect on the outcome of the Qatar Ministerial Conference.
27. Canada indicated that the first phase had served to define objectives and clarify concerns, thus
setting the stage for the second phase.  While Members differed in the desired speed and extent of
reform and the priority attached to specific elements, there was a clear endorsement of the framework
established in the Uruguay Round.  Many countries had indicated that the last round had not gone far
enough to level the playing field, and that trade-distorting subsidies and market access barriers needed
to be substantially reduced.  Significant progress should be made in the second phase with or withouta broader round of negotiations, althoug h Canada clearly preferred the former.
28. The representative of Poland stated that the challenge for the next phase of the negotiations
was to find a way to secure the continuation of the reform process while taking into account all trade
and non-trade concerns raised by Members, and allowing the coexistence of different styles of
agriculture.
29. Paraguay was optimistic about the possibilities of making progress in the negotiations.  It was
essential that the basic problems to be addressed, such as market access, export competition and
domestic support be studied in detail.  In these discussions, non-trade concerns could be taken into
account.  It noted that special and differential treatment was important, and should not discriminate
between developing countries.
30. The representative of South Africa (NG/W/169) was encouraged by Members' recognition of
the special needs of developing countries, particular ly the need to fully participate in international
trade.  In the second phase, needs would have to be concretized into solutions.  The sooner developing
countries, especially African countries, were allowed to realize their comparative advantages, the
sooner they could broaden their export base, address poverty, promote economic growth and
development and ensure their integration into th e multilateral trading system.  This would create
larger markets from which all Members could benefit.
31. The representative of Chile noted that many countries wanted all types of export subsidies
eliminated and a substantial reduction in domestic support.  Chile also welcomed the manyG/AG/NG/R/7
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constructive proposals on special and differential treatment and on non-trade concerns such as poverty
elimination and food security.  Chile was concerned that some proposals were not in favour of
advancing the reform process, or tried to incorporate new topics not related to the mandated
negotiations.  This seemed to be an effort to introduce greater protectionism and additional distorting
measures.  Chile looked forward to establishing specific modalities for reform during the second
phase of negotiations.
32. Peru indicated that market access opportunities for agricultural products from developing
countries had to be improved, including tropical and/or Andean products, and products which formed
part of programmes for substitution of illicit crops.  With respect to domestic support, developing
countries' legitimate concerns regarding food security, rural development and poverty alleviation had
to be taken into account.  Peru had made great efforts to guarantee access to food in the poorest areas
of the country.  Peru understood food security as sufficient availability of food in a country, and the
access of the population to this food and its best use.  This objective could only be achieved in astable, predictable and transparent trading environment with equal opportunities for free competition.
Peru proposed concrete measures for net food-importing countries, such as extending the
implementation time-frames for tariff reduction commitments, providing adequate technical and
financial assistance, permitting higher levels of domestic support for agricultural development and
supporting access of products from net food-importing countries to developed country markets.  Peruhoped that in the second phase of negotiations the liberalization of international agricultural trade
would be advanced through substantial reductions in distorting domestic support measures, and
through the elimination of export subsidies.
33. After analyzing the proposals tabled so far, th e representative of Mexico observed that all
except four of them dealt with special and differential treatment, mostly in relation to the topics ofmarket access, domestic support and export competition.  Most Members seemed to propose an
elimination or substantial reduction of export subsidies.  Likewise, many proposals supported a
reduction of domestic support, especially in developed countries.  Mexico emphasized the links
between the three main subjects of the negotiations;  market access negotiations thus depended on the
results of the negotiations on domestic support and export subsidies.
34. The representative of the Czech Republic (NG/W/157) emphasized that because of the variety
of country situations, most subjects raised in proposals were too complex to be considered as north-
south issues, issues between exporters and importers or between free traders and subsidizers.  The
Czech Republic was committed to substantial results in all areas of the negotiation on the condition
that a proper balance between trade and non-trade concerns was maintained.  Due account would haveto be taken of the specific challenges of the countries which had undergone unprecedented
transformations of their agricultural sectors and maintained low levels of subsidization and protection.
35. Panama stressed the importance of political will on the part of all Members to integrate
agriculture into WTO disciplines.  In particular, this political will would be needed for special and
differential treatment for developing countries, reductions of domestic support, the elimination of
export subsidies, and market access.  Trade distortions in agriculture caused much damage to
developing countries for whom agriculture often pl ayed a crucial role in dealing with poverty and
unemployment, and would have to be eliminated.
36. The representative of Mauritius (NG/W/179) shared the view of the European Communities
that there was no more a single developed nor a single developing country position.  All countries had
legitimate trade and non-trade concerns which had to be attended to;  this was demonstrated by the
variety of different interest groups involved in the negotiations.  Mauritius had participated in threesubmissions, the first with 26 other countries representing a wide variety of positions on non-trade
concerns (NG/W/36);  the second together with eigh t small island developing states (NG/W/97);  and
the third as part of the African Group (NG/W/142).  In addition, Mauritius had submitted a
comprehensive proposal (NG/W/96), where it had highlighted its inherent constraints as a small islandG/AG/NG/R/7
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developing state dependent upon preferential trade agreements.  Mauritius had also drawn attention to
issues and Agreements closely linked to the negotiations on agriculture, namely geographical
indications and the SPS Agreement, while the African Group's paper refered to TBT issues.  A
meaningful outcome to the negotiations would have to take into account these related issues and
Agreements.  Mauritius stated that its purpose was to create an environment which would facilitate
access, enhanced productivity and target niche markets.  It also emphasized that agriculture was vitalfor small island developing states like Mauritius, and played a very important multifunctional role.  In
Mauritius' view, an equitable outcome did not imply a level playing field, nor a one-size-fits-all
approach.  Instead, an equitable outcome would be one which addressed the constraints of low
potential areas, the vulnerability of small island developing and landlocked countries, as well as the
burden imposed by the Uruguay Round on developing countries generally, but more particularly on
net food-importing and least-developed countries.
37. The Slovak Republic highlighted the broad spectrum of views and expectations expressed in
the proposals, based on countries' agricultural policies, structure, difficulties, geographical conditions
and experiences from the implementation of the results of the Uruguay Round.  During the first phase,
Members had expressed their readiness to continue the negotiation progress under Article 20, but they
had also presented a wide diversity of concerns.  The Slovak Republic believed that further
negotiations would take into account each Member's right to seek balanced benefits from thecontinuation of the reform process.  Therefore, all Members' concerns had to be taken into
consideration, and all Members had to show understandi ng and a spirit of compromise.  In particular,
the needs of developing and transition economies had to be taken into account, as well as the
specificity of agriculture in different countries.
38. The representative of Venezuela (NG/W/171) stressed that it was necessary to revise the
current structure of the Agreement on Agriculture, in particular to deal with the tendency of
developed countries to increase agricultural support.  In the context of continuing strong distortions in
international markets Venezuela would find it difficult to accept further commitments in tariff
reductions.  Venezuela was concerned about the limited scope of special and differential treatment
proposed by some Members, including proposals to deal with it on a case-by-case basis and with afocus on technical assistance.  This limited approach to special and differential treatment contrasted
with some Members' aspirations related to non-trad e concerns, which included horizontal provisions
without time-limits.  Many of these proposals basically advocated the maintenance of the existing
inequities of the Agreement.  The experience gained  from implementation showed that more than just
longer transition periods and technical assistance would be required to allow developing countries tointegrate effectively into international agricultural tr ade.  The current negotiations thus had to lead to
special and differential treatment provisions that allowed countries like Venezuela to promote the
strengthening of its agricultural sector and to be able to defend its market in the case of disloyal
competition, including that derived from agricultural subsidies in developed countries.
39. Iceland supported many of the issues raised in the proposals by the EC, Switzerland and
Norway especially the long-term objective of substantial progressive reductions in support and
protection resulting in fundamental reform.  Theref ore, Iceland suggested that gradual progress was
needed rather than radical refo rm with non-trade concerns and special and differential treatment
addressed as horizontal issues integral to each of the Agriculture Agreement's three pillars.  Icelandic
agriculture's objective remained to provide a secure supply of safe, quality food simultaneously with a
range of very important public goods.  Iceland would continue to emphasize sound production
methods, animal welfare, food security and safety and the need for instruments to address these issuesmeaningfully, whether in terms of market access or domestic support.  A flexible formula approach to
tariff reductions was needed with scope for improving the disciplines governing tariff quotas and the
transparency of their administration.  On domestic support, the need to address non-trade concerns in
targeted, transparent and minimally trade-distorting ways should be taken into account.  However,
Green Box measures were unlikely to suffice in all cases and production linked subsidies might benecessary.  If the AMS was to be reduced, the rules and disciplines of the Green and Blue Boxes hadG/AG/NG/R/7
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to be maintained and a mechanism was needed for inflation adjustment of domestic support
commitments.  On export competition, Iceland was of the view that this topic should be addressed in a
rigorous and comprehensive fashion, not simply in terms of export subsidies and, given the right
circumstances, Iceland could consider elimination of export supports.
40. The representative of Egypt expressed his belief that the second phase should address all the
issues of concern to Members as specified in Articles 15, 16 and 20 of the Agreement on Agriculture,as well as in proposals.  Therefore, the negotiations should focus on progressively reducing current
tariff levels, providing enhanced market access opportunities for developing countries, and on phasing
out trade-distorting forms of support, particularly in the field of export competition, with special and
differential treatment as an integral part of all elements of the negotiations.  Three issues should be
discussed at each future meeting, one related to each of the three pillars of the negotiations, in
addition to a fourth issue under the umbrella of non-trade concerns.  It was also necessary to have a
preliminary understanding of the number of phases in the negotiations, and a definition of the natureof each phase.
41. Colombia (NG/W/162) highlighted the range of proposals presented during the first phase,
varying from those that seemed to be taking a step  backwards, to the most ambitious ones with the
objective of total and definitive liberalization of the agriculture sector.  The challenge for the
multilateral trading system was to ensure that the curr ent negotiations resulted in a level playing field
and a more equitable and market-oriented agriculture sector.  Colombia noted that in the first phase of
negotiations most proposals expressed a clear desire for reform and liberalization in the agriculture
sector, with the objective of reducing distortions.   It pointed out that one of the WTO Members that
most protected and supported agriculture was willing  to negotiate but some others had suggested new
negotiating topics outside the scope of the Agreemen t which appeared to be an attempt to introduce
distorting elements.
42. Swaziland (NG/W/155) noted that in the first phase Members had debated and listened to the
views of small developing countries.  Some of the critical issues that had emerged from the first phase
of negotiations included special and differential treatment as an integral part of the work programme
and the difficulties facing small, least-developed, land-locked and island developing countries.  Thesecond phase of negotiations would have to find an efficient and equitable solution to these issues.
Integrating these countries into the global trading system would not be possible if existing benefits
under preferential arrangements were lost.  Preferential market arrangements had to be treated in an
imaginative, innovative and flexible manner.  Although the preference margin would be eroded over
time the negotiations needed to take into account the linkages that existed between preferentialbenefits and the support levels prevailing in the developed countries granting those preferences.  A
compromise had also to be found to deal with the different types of non-trade concerns that were
important to different countries.  Finally, Swaziland expressed its hope that the momentum generated
in phase one of the negotiations would not be lost as a result of the Qatar Ministerial Conference.
43. The representative of Turkey (NG/W/173) stated that the Agreement on Agriculture had
failed to create equitable market access conditions for developing countries.  These countries had
identified their implementation problems, and hi ghlighted the need to strengthen special and
differential treatment.  Turkey's willingness to proceed with future tariff reductions would be
positively affected by developed countries' reductions in export subsidies and domestic support.
44. Argentina (NG/W/181) stated that the Uruguay Round had resulted in uneven benefits and
had made little progress towards opening agricultural markets and making them truly competitive.
Balanced benefits could only be achieved if agricultural liberalization advanced and the commitmentsand disciplines to be respected by subsidizing countries were strengthened.  In Argentina's view, the
Qatar Ministerial Conference had to lead to a more specific and concrete commitment to liberalize
agricultural trade than that contained in Article 20, which was open to different interpretations.  The
provisional programme for the second phase thus had to incorporate the results of the preparations andG/AG/NG/R/7
Page 10
outcome of the Qatar meeting.  In Argentina's view, during the second phase of negotiations Members
faced two tasks.  The first task was technical and consisted of translating the proposals of the first
phase into a menu of options leading to the adoption of new rules and commitments.  The second was
a political task to create areas of consensus by reducing the differences between different proposals.
Argentina hoped that the sequence of topics no t yet included in the work programme would be
decided in May 2001.  Since a large number of countries seemed to be in favour of eliminating alltypes of export subsidies, Argentina proposed beginning with this topic.  While Argentina was
flexible regarding the sequence of topics to be discussed, a logical order should be maintained;  thus
rules should be negotiated first before moving on to discuss exceptions or derogations.
45. In Kenya's view the success of the negotiations did not depend on the launching of a new
round of comprehensive negotiations, but rather on whether they dealt with the developmental needs
and concerns of developing countries.  The negotiations should thus address improved market access
for products of export interest to developing countries, the removal of trade distorting measures andthe improvement of special and differential treatment, with a view to fostering agricultural
productivity, food security, rural employment and poverty alleviation.  There was no reason to assume
that the effects of agricultural trade liberalization would be substantially different if the process was
overloaded by new conditions that were not part of the Uruguay Round package.
46. The representative of Slovenia saw some common positions between the widely different
proposals submitted in the first phase.  Regarding non-trade concerns, Slovenia noted that due
consideration had to be given to different national agricultural policies based on specific economic,
geographic and cultural backgrounds.  Different non-trade concerns, including the provision of public
goods, needed to be addressed.  Slovenia had begun a significant shift in its agricultural policy,
including the introduction of direct payments on area and headage bases.  Like other transitioneconomies, Slovenia needed a flexible approach in the form of longer transition periods for Blue Box
payments, with Green Box payments as a final goal.  Slovenia also supported the maintenance of the
special safeguard mechanism to ease possible negative effects of sudden unforeseen fluctuations.  The
agriculture negotiations should examine the application of special safeguards as an instrument
available to all Members, complementary to the Agreement on Safeguards which envisaged moretrade-disruptive and longer-lasting measures.
47. The representative of Grenada, on behalf  of CARICOM countri es (NG/W/151), drew
attention to the adjustment imperatives of small de veloping countries that continued to be dependent
on trading preferences.  CARICOM was eager to see more concrete work in the second phase of the
negotiations on issues such as preferential trading arrangements, non-trade concerns and domesticsupport.  The ambitions of CARICOM countries were contained in their negotiating proposal
(NG/W/100).  Effective participation by CARICOM countries depended on the acceptance of special
and differential treatment as a fundamental guiding principle of the negotiations.  As net food-
importing developing countries, the CARICOM countri es had open markets and had to ensure that no
debilitating non-tariff barriers were erected against their exports.  During stage two, the need for
substantial progress in the negotiations had to be balanced with the need to ensure the participation of
small developing countries with limited negotiating capital.
48. Ecuador recalled that it had supported the proposals presented by the Cairns Group
(NG/W/11, 35, 54, 93).  In Ecuador's view the new phase of negotiations had to concentrate on
studying the proposals presented, especially with respect to improved market access conditions,
substantial reductions in domestic support, the elimination of export subsidies and effective special
and differential treatment for developing countries.  Ecuador expressed concern that some Memberswere trying to introduce elements to evade the commitments they had made in the Uruguay Round.
During phase two, Members' trade and non-trade concer ns would have to be examined in light of the
three pillars of the Agreement on Agriculture, within the agreed structure, and without getting side-
tracked from the fundamental objective of the negotiations:  achieving freer, less distorted and more
equitable agriculture trade within GATT disciplines.G/AG/NG/R/7
Page 11
49. Pakistan was interested in further liberalization through the mandated negotiations.  Pakistan
had fulfilled its Uruguay Round obligations, yet it had not received the promised benefits.  Thus
Pakistan expected the negotiations to rectify the situation.  Together with other developing countries,
Pakistan had submitted several proposals (NG/W/13, 14, 37 and Corr.1), and was willing to further
elaborate on its concerns.  The work programme for the second phase had to reflect the interests and
priorities of developing countries, including effective and binding special and differential treatment,removal of the present imbalances in the Agreemen t, and making up for the developmental deficit in
the Agreement.
50. The representative of Lithua nia (NG/W/152) indicated that  although not yet a Member,
Lithuania had participated in the first stage of negotiations to express its position through joint
proposals with other transition economies (NG/W/ 56, NG/W/57) and throug h a written submission
(NG/W/127).  Lithuania recognized the benefits of  substantial progressive reductions in agricultural
support and protection in the long run, but noted that a single model for further reforms in agriculturaltrade was hardly possible.  The specificity of countries in transition had to be taken into account
because of the particular situation of agriculture in these countries as a result of ongoing structural
reforms.  Lithuania called for flexibility in market access and domestic support for transition
economies, and especially for consideration of the commitments recently made during the accession
negotiations.
I
TEM B:  ORGANIZATION OF FUTURE WORK
51. The Chairman recalled that at its first meeting in March 2000, the Special Session of the
Committee on Agriculture had adopted a work programme for the first phase of the negotiations (the
full statement by the Chairman is attached in Annex 1).  As the discussions under the stock-taking
item of the agenda had indicated, this first phase of the negotiations had been satisfactorily completedand it now remained to adopt a work programme for the next phase of the Article 20 negotiations.  On
the basis of an intensive process of informal consultations held since the February 2001 Special
Session meeting, the Chairman proposed the work programme contained in NG/7 (copy attached in
Annex 2) be adopted.
52. Before putting the work programme for adoption, the Chairman clarified that the list of trade
and non-trade issues for the first two or three meet ings was not exhaustive.  Other issues would be
taken up at subsequent meetings, so that all issues would be covered under the work programme for
the second phase of the negotiations.  He also indicated that the proposed schedule of meetings had
been adjusted to allow for six Special Sessions until March 2002.  In response to suggestions,
arrangements would be made for longer rather than shorter sessions, depending on availability ofconference rooms.  Subject to confirmation, the planned dates for the upcoming informal meetings
would be 21-23 May and 23-27 July 2001.
53. The Committee adopted the work programme as proposed.
54. The representative of Brazil noted that the work programme fell short of Brazil's expectations.
Yet, for the sake of progress and of maintaining the momentum of the negotiations Brazil had joined
the consensus.  It emphasized that with this work programme, the Committee was not rewriting
Article 20, nor prejudging the scope of the negotiations or setting priorities or a hierarchy, but settingan agenda for further work based on Members' proposals.
55. India also stated that it would have preferred to see many more things to be included in the
work programme, but accepted it for the sake of consensus.  Supported by Egypt, Grenada, the
Dominican Republic and ASEAN, India indicated that in order to maintain the integrity of Article 20,
the third bullet point of the work programme regarding special and differential treatment should referspecifically to developing country Members.G/AG/NG/R/7
Page 12
56. The representatives of Egypt and Grenada appreciated the reduction in the number of special
sessions.  Egypt urged the Chairman to be quite illustrative of the discussions in the informal meetings
when reporting to the formal meeting.  This woul d allow small delegations to have a summary of the
informal meetings.
57. The representative of the Dominican Republic, speaking also on behalf of Cuba and
Honduras, noted that it would be very difficult to accept any additional meetings.  The threedelegations had been flexible in accepting the number of meetings proposed, and had hoped that
developed countries would also be flexible when it came to the number of meetings on
implementation problems.  Although they would have preferred a work programme centered around
the three pillars of the Agreement on Agriculture, they had joined the consensus since the list of topics
was not exhaustive and did not set priorities.  Agriculture was one of the few sectors where
developing countries enjoyed a comparative advantage.  Yet five years after the conclusion of the
Agriculture Agreement, they had not obtained th e expected benefits.  Nevertheless, developed
countries had not shown the political will to reso lve the implementation problems of other Uruguay
Round Agreements.  The three delegations recalled their stance that before a new round of
negotiations was started implementation problems should be resolved.
I
TEM C:  O THER BUSINESS , INCLUDING DATE AND TIME OF NEXT SPECIAL SESSION
58. No items were raised under other business.  The next informal meeting was planned for
21-23 May 2001.
ITEM D :  CHAIRMAN 'S OUTLINE OF HIS REPORT TO THE GENERAL COUNCIL
59. The Chairman outlined the general content of the report he would be making to the General
Council (NG/7, attached).
60. The Committee congratulated the Chairman on his leadership during the first phase of
negotiations and thanked him for his excellent work.G/AG/NG/R/7
Page 13
ANNEX 1
SEVENTH SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
26–28  March 2001
Statement by the Chairman
on the First Phase of the Negotiations on Agriculture
Ambassador Jorge Voto-Bernales
This meeting is the seventh Special Session and marks the end of the first phase of the
negotiations.  As was agreed in March last year at the first Special Session, we must now take stock of
the progress made so far in the negotiations.
The Uruguay Round Agreement on Agriculture and the related commitments in each
Member's WTO Schedule of commitments were the first steps in a longer term reform process in
agricultural trade as recognized in the Preamble and Article 20 of the Agreement.  Article 20 required
that the negotiations on continuing the reform programme be initiated one year before the end of theimplementation period.
For the past twelve months the Committee on Agriculture meeting in Special Session has
been negotiating the continuation of the reform process as required by Article 20 of the Agreement on
Agriculture and in accordance with the decision of the General Council in February 2000.
In my view a great deal of progress has been achieved under the work programme established
in March last year for the first phase of the negotiations.  It is important of course that this momentum
is sustained into and throughout the next phase of the negotiations.
In all, 44 negotiating proposals and 3 technical papers have been submitted by a total of 125
WTO Member countries covering the different issues related to agriculture trade that are of major and
fundamental interest and importance to the participating countries concerned.  In addition the
Secretariat has made available 27 background papers at the request of Members in order to facilitate
the negotiating process.
The examination of these proposals and submissions has been both detailed and intensive.
This I am sure has contributed to heightening our appreciation of the wide range of interests involved,
as well as the complexity of many of the issues which will have to be addressed in more detail in the
next phase of the Article 20 negotiations.
In a sense the first phase of the negotiations, although it has involved a great deal of work in
capitals and in the Special Session meetings, has been relatively straight forward.  Its importance lies
in the fact that the basic positions of participants are now on the table.  The next phase will represent
the beginning of a more challenging process.
At your request I have conducted extensive informal consultations on how the second phase
of the Article 20 negotiations should be structured and organized.  I would like to thank all
delegations for their contributions and assistance in this regard.  I am encouraged to believe that the
draft work programme under consideration constitutes a finely balanced basis for the next phase of the
negotiations.
I would now like to open the floor for Members to make their respective statements in the
context of the stock-taking exercise.G/AG/NG/R/7
Page 14
ANNEX 2
SEVENTH SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
(G/AG/NG/7)
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 seventh meeting on
26-27 March 2001.
2. The agenda as set out in WTO/AIR/1504 was adopted.
3. In the course of the stock-taking exercise undertaken at this meeting in accordance with
paragraph 6(b) of G/AG/NG/1, a number of general statements were made in which participants
outlined, inter alia, their respective views regarding the 47 negotiating proposals and other
submissions which had been presented and examined in the course of the first phase of thenegotiations, as well as with respect to the organisation of the further work of the negotiations.  It was
generally agreed that the first phase of the negotiations for continuing the reform process had been
satisfactorily completed.  The statements made in the context of the stock-taking exercise and the
related discussion will be fully reflected as appropriate in the detailed summary report of the meeting
to be prepared by the Secretariat.
4. The Committee adopted the following work programme for the second phase of the
negotiations for continuing the reform process under Article 20 of the Agreement on Agriculture:
• Nature and scope of  Work Programme:  work in depth on all issues and options for policy reform
set out in Members' proposals, with further elaboration as appropriate.
• Basis of work:  Article 20, negotiating proposals submitted by Members and their additional
elaborated proposals.
• Special and differential treatment is an integral part of all elements of the negotiations.
• Organisation of Work Programme:  work to be conducted in informal and formal meetings of the
Special Sessions;  Chair to prepare reports on the informal meetings and prepare annotatedagendas ahead of the meetings.
• Sequencing of Work Programme and Timetable:  three Special Session meetings to be held back-
to-back with the regular meetings of the Committee on Agriculture in September and December2001 and in March 2002 (each of these Special Sessions would convene informally and conclude
with short formal meetings), plus three inform al Special Session meetings in May and July 2001
and in February 2002.  Any additional meetings would be scheduled by the Chair after
consultations with Members.
• Review of progress of the negotiations shall take place in the formal March 2002 meeting.G/AG/NG/R/7
Page 15
Without prejudice to Article 20, which details the objective of the negotiations and the factors to be
taken into account, the Chair recommends the following list of trade and non-trade issues drawn from
Members' proposals for the first two/three meetings:
Tariff quota administration
Tariffs
Amber BoxExport subsidies
Export credits
State trading enterprises
Export restrictions
Food security
Food safety
Rural development
The foregoing work programme is adopted without prejudice to the decisions that may be taken at the
fourth Ministerial Conference.
5. In adopting this work programme it was noted, with regard to the list of trade and non-trade
issues for the first two or three meetings, that this  listing was not exhaustive and that other issues will
be taken up in the subsequent meetings, so that all issues will be covered as appropriate under the
work programme for the second phase of the negotiations.
6. 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.
7. Subject to confirmation the planned dates for the informal meeting in May would be
21-23 May;  and for the informal meeting in July, 23-27 July.
_________