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AGREEMENT ON AGRICULTURE
Members,
Having decided to establish a basis for initiating a process of reform
of trade in agriculture in line with the objectives of the
negotiations as set out in the Punta del Este Declaration;
Recalling that the long-term objective as agreed at the Mid-Term
Review "is to establish a fair and market-oriented agricultural
trading system and that a reform process should be initiated through
the negotiation of commitments on support and protection and through
the establishment of strengthened and more operationally effective
GATT rules and disciplines";
Recalling further that "the above-mentioned long-term objective is to
provide for substantial progressive reductions in agricultural support
and protection sustained over an agreed period of time, resulting in
correcting and preventing restrictions and distortions in world
agricultural markets";
Committed to achieving specific binding commitments in each of the
following areas: market access; domestic support; export
competition; and to reaching an agreement on sanitary and
phytosanitary issues;
Having agreed that in implementing their commitments on market access,
developed country Members would take fully into account the particular
needs and conditions of developing country Members by providing for a
greater improvement of opportunities and terms of access for
agricultural products of particular interest to these Members,
including the fullest liberalization of trade in tropical agricultural
products as agreed at the Mid-Term Review, and products of particular
importance to the diversification of production from the growing of
illicit narcotic crops;
Noting that commitments under the reform programme should be made in
an equitable way among all Members, having regard to non-trade
concerns, including food security and the need to protect the
environment; having regard to the agreement that special and
differential treatment to developing countries is an integral element
of the negotiations, and taking into account the possible negative
effects of the implementation of the reform programme on
least-developed and net food-importing developing countries;
Hereby agree, as follows:
Part I
Article 1 - Definition of Terms
In this Agreement, unless the context otherwise requires:
(a) "Aggregate Measurement of Support" and "AMS" mean the annual
level of support, expressed in monetary terms, provided for an
agricultural product in favour of the producers of the basic
agricultural product or non-product-specific support provided in
favour of agricultural producers in general, other than support
provided under programmes that qualify as exempt from reduction
under Annex 2 to this Agreement, which is:
(i) with respect to support provided during the base period,
specified in the relevant tables of supporting material
incorporated by reference in Part IV of a Member's
Schedule; and
(ii) with respect to support provided during any year of the
implementation period and thereafter, calculated in
accordance with the provisions of Annex 3 of this Agreement
and taking into account the constituent data and
methodology used in the tables of supporting material
incorporated by reference in Part IV of the Member's
Schedule;
(b) "basic product" in relation to domestic support commitments is
defined as the product as close as practicable to the point of
first sale as specified in a Member's Schedule and in the related
supporting material;
(c) "budgetary outlays" or "outlays" include revenue foregone;
(d) "Equivalent Measurement of Support" means the annual level of
support, expressed in monetary terms, provided to producers of a
basic agricultural product through the application of one or more
measures, the calculation of which in accordance with the AMS
methodology is impracticable, other than support provided under
programmes that qualify as exempt from reduction under Annex 2 to
this Agreement, and which is:
(i) with respect to support provided during the base period,
specified in the relevant tables of supporting material
incorporated by reference in Part IV of a Member's
Schedule; and
(ii) with respect to support provided during any year of the
implementation period and thereafter, calculated in
accordance with the provisions of Annex 4 of this Agreement
and taking into account the constituent data and
methodology used in the tables of supporting material
incorporated by reference in Part IV of the Member's
Schedule;
(e) "export subsidies" refer to subsidies contingent upon export
performance including the export subsidies listed in Article 9 of
this Agreement;
(f) "implementation period" means the six-year period commencing in
the year 1995, except that, for the purposes of Article 13, it
means the nine-year period commencing in 1995;
(g) "market access concessions" include all market access commitments
undertaken pursuant to this Agreement;
(h) "Total Aggregate Measurement of Support" and "Total AMS" mean the
sum of all domestic support provided in favour of agricultural
producers, calculated as the sum of all aggregate measurements of
support for basic agricultural products, all non-product-specific
aggregate measurements of support and all equivalent measurements
of support for agricultural products, and which is:
(i) with respect to support provided during the base period
(i.e., the "Base Total AMS") and the maximum support
permitted to be provided during any year of the
implementation period or thereafter (i.e., the "Annual and
Final Bound Commitment Levels"), as specified in Part IV of
a Member's Schedule; and
(ii) with respect to the level of support actually provided
during any year of the implementation period and thereafter
(i.e., the "Current Total AMS"), calculated in accordance
with the provisions of this Agreement, including Article 6,
and with the constituent data and methodology used in the
tables of supporting material incorporated by reference in
Part IV of the Member's Schedule;
(i) "year" in (f) above and in relation to the specific commitments
of a Member refers to the calendar, financial or marketing year
specified in the Schedule relating to that Member.
Article 2 - Product Coverage
This Agreement applies to the products listed in Annex 1 to this
Agreement, hereinafter referred to as agricultural products.
Part II
Article 3 - Incorporation of Concessions and Commitments
1. The domestic support and export subsidy commitments in Part IV of each
Member's Schedule constitute commitments limiting subsidization and are
hereby made an integral part of the GATT 1994.
2. Subject to the provisions of Article 6 of this Agreement, a Member
shall not provide support in favour of domestic producers in excess of the
commitment levels specified in Section I of Part IV of its Schedule.
3. Subject to the provisions of paragraphs 2(b) and 4 of Article 9 of
this Agreement, a Member shall not provide export subsidies listed in
paragraph 1 of Article 9 in respect of the agricultural products or groups
of products specified in Section II of Part IV of its Schedule in excess of
the budgetary outlay and quantity commitment levels specified therein and
shall not provide such subsidies in respect of any agricultural product not
specified in that Section of its Schedule.
Part III
Article 4 - Market Access
1. Market access concessions contained in Schedules relate to bindings
and reductions of tariffs, and to other market access commitments as
specified therein.
2. Members shall not maintain, resort to, or revert to any measures of
the kind which have been required to be converted into ordinary customs
duties[1], except as otherwise provided for in Article 5 and Annex 5 hereof.
Article 5 - Special Safeguard Provisions
1. Notwithstanding the provisions of Article II:1(b) of the GATT 1994,
any Member may take recourse to the provisions of paragraphs 4 and 5 below
in connection with the importation of an agricultural product, in respect of
which measures referred to in paragraph 2 of Article 4 have been converted
into an ordinary customs duty and which is designated in its Schedule with
the symbol "SSG" as being the subject of a concession in respect of which
the provisions of this Article may be invoked, if:
(i) the volume of imports of that product entering the customs
territory of the Member granting the concession during any year
exceeds a trigger level which relates to the existing market
access opportunity as set out in paragraph 4 below; or, but not
concurrently:
(ii) the price at which imports of that product may enter the customs
territory of the Member granting the concession, as determined on
the basis of the c.i.f. import price of the shipment concerned
expressed in terms of its domestic currency, falls below a
trigger price equal to the average 1986 to 1988 reference
price[2] for the product concerned.
2. Imports under current and minimum access commitments established as
part of a concession referred to in paragraph 1 above shall be counted for
the purpose of determining the volume of imports required for invoking the
provisions of sub-paragraph 1(i) and paragraph 4, but imports under such
commitments shall not be affected by any additional duty imposed under
either paragraph 4 or paragraph 5 below.
3. Any supplies of the product in question which were en route on the
basis of a contract settled before the additional duty is imposed under
sub-paragraph 1(i) above and paragraph 4 below shall be exempted from any
such additional duty provided that they may be counted in the volume of
imports of the product in question during the following year for the
purposes of triggering the provisions of sub-paragraph 1(i) in that year.
4. Any additional duty imposed under sub-paragraph 1(i) above shall only
be maintained until the end of the year in which it has been imposed, and
may only be levied at a level which shall not exceed one-third of the level
of the ordinary customs duty in effect in the year in which the action is
taken. The trigger level shall be set according to the following schedule
based on market access opportunities defined as imports as a percentage of
the corresponding domestic consumption[3] during the three preceding years
for which data are available:
(a) where such market access opportunities for a product are less
than or equal to 10 per cent, the base trigger level shall equal
125 per cent;
(b) where such market access opportunities for a product are greater
than 10 per cent but less than or equal to 30 per cent, the base
trigger level shall equal 110 per cent;
(c) where such market access opportunities for a product are greater
than 30 per cent, the base trigger level shall equal 105 per
cent.
In all cases the additional duty may be imposed in any year where the
absolute volume of imports of the product concerned entering the customs
territory of the Member granting the concession exceeds the sum of (x) the
base trigger level set out above multiplied by the average quantity of
imports during the three preceding years for which data are available and
(y) the absolute volume change in domestic consumption of the product
concerned in the most recent year for which data are available compared to
the preceding year, provided that the trigger level shall not be less than
105 per cent of the average quantity of imports in (x) above.
5. The additional duty imposed under sub-paragraph 1(ii) above shall be
set according to the following schedule:
(a) if the difference between the c.i.f. import price of the shipment
expressed in terms of the domestic currency (hereinafter referred
to as the "import price") and the trigger price as defined under
that sub-paragraph is less than or equal to 10 per cent of the
trigger price, no additional duty shall be imposed;
(b) if the difference between the import price and the trigger price
(hereinafter referred to as the "difference") is greater than 10
per cent but less than or equal to 40 per cent of the trigger
price, the additional duty shall equal 30 per cent of the amount
by which the difference exceeds 10 per cent;
(c) if the difference is greater than 40 per cent but less than or
equal to 60 per cent of the trigger price, the additional duty
shall equal 50 per cent of the amount by which the difference
exceeds 40 per cent, plus the additional duty allowed under (b);
(d) if the difference is greater than 60 per cent but less than or
equal to 75 per cent, the additional duty shall equal 70 per cent
of the amount by which the difference exceeds 60 per cent of the
trigger price, plus the additional duties allowed under (b) and
(c);
(e) if the difference is greater than 75 per cent of the trigger
price, the additional duty shall equal 90 per cent of the amount
by which the difference exceeds 75 per cent, plus the additional
duties allowed under (b), (c) and (d).
6. For perishable and seasonal products, the conditions set out above
shall be applied in such a manner as to take account of the specific
characteristics of such products. In particular, shorter time periods under
paragraph 1(i) and paragraph 4 may be used in reference to the corresponding
periods in the base period and different reference prices for different
periods may be used under paragraph 1(ii).
7. The operation of the special safeguard shall be carried out in a
transparent manner. Any Member taking action under paragraph 1(i) above
shall give notice in writing, including relevant data, to the Committee on
Agriculture as far in advance as may be practicable and in any event within
10 days of the implementation of such action. In cases where changes in
consumption volumes must be allocated to individual tariff lines subject to
action under paragraph 4, relevant data shall include the information and
methods used to allocate these changes. A Member taking action under
paragraph 4 shall afford any interested Members the opportunity to consult
with it in respect of the conditions of application of such action. Any
Member taking action under paragraph 1(ii) above shall give notice in
writing, including relevant data, to the Committee on Agriculture within 10
days of the implementation of the first such action or, for perishable and
seasonal products, the first action in any period. Members undertake, as
far as practicable, not to take recourse to the provisions of paragraph
1(ii) where the volume of imports of the products concerned are declining.
In either case a Member taking such action shall afford any interested
Members the opportunity to consult with it in respect of the conditions of
application of such action.
8. Where measures are taken in conformity with paragraphs 1 through 7
above, Members undertake not to have recourse, in respect of such measures,
to the provisions of Article XIX:1(a) and XIX:3 of the GATT 1994 or
paragraph 17 of the Agreement on Safeguards.
9. The provisions of this Article shall remain in force for the duration
of the reform process as determined under Article 20.
Part IV
Article 6 - Domestic Support Commitments
1. The domestic support reduction commitments of each Member contained in
Part IV of its Schedule shall apply to all of its domestic support measures
in favour of agricultural producers with the exception of domestic measures
which are not subject to reduction in terms of the criteria set out in this
Article and in Annex 2 to this Agreement. The commitments are expressed in
terms of Total Aggregate Measurement of Support and "Annual and Final Bound
Commitment Levels".
2. In accordance with the Mid-Term Review Agreement that government
measures of assistance, whether direct or indirect, to encourage
agricultural and rural development are an integral part of the development
programmes of developing countries, investment subsidies which are generally
available to agriculture in developing country Members and agricultural
input subsidies generally available to low-income or resource poor producers
in developing country Members shall be exempt from domestic support
reduction commitments that would otherwise be applicable to such measures,
as shall domestic support to producers in developing country Members to
encourage diversification from growing illicit narcotic crops. Domestic
support meeting the criteria of this paragraph shall not be required to be
included in a Member's calculation of its Current Total AMS.
3. A Member shall be considered to be in compliance with its domestic
support reduction commitments in any year in which its domestic support in
favour of agricultural producers expressed in terms of Current Total AMS
does not exceed the corresponding annual or final bound commitment level
specified in Part IV of the Member's Schedule.
4. (a) A Member shall not be required to include in the calculation of
its Current Total AMS and shall not be required to reduce:
(i) product-specific domestic support which would otherwise
be required to be included in a Member's calculation of its
Current AMS where such support does not exceed 5 per cent
of that Member's total value of production of a basic
product during the relevant year; and
(ii) non-product-specific domestic support which would otherwise
be required to be included in a Member's calculation of its
Current AMS where such support does not exceed 5 per cent
of the value of that Member's total agricultural
production.
(b) For developing country Members, the de minimis percentage under
this paragraph shall be 10 per cent.
5. (a) Direct payments under production-limiting programmes shall not be
subject to the commitment to reduce domestic support if :
(i) such payments are based on fixed area and yields; or
(ii) such payments are made on 85 per cent or less of the base
level of production; or
(iii) livestock payments are made on a fixed number of head.
(b) The exemption from the reduction commitment for direct payments
meeting the above criteria shall be reflected by the exclusion of
the value of those direct payments in a Member's calculation of
its Current Total AMS.
Article 7 - General Disciplines on Domestic Support
1. Each Member shall ensure that any domestic support measures in favour
of agricultural producers which are not subject to reduction commitments
because they qualify under the criteria set out in Annex 2 to this Agreement
are maintained in conformity therewith.
2. (a) Any domestic support measure in favour of agricultural producers,
including any modification to such measure, and any measure that
is subsequently introduced that cannot be shown to satisfy the
criteria in Annex 2 to this Agreement or to be exempt from
reduction by reason of any other provision of this Agreement
shall be included in the Member's calculation of its Current
Total AMS.
(b) Where no Total AMS commitment exists in Part IV of a Member's
Schedule, the Member shall not provide support to agricultural
producers in excess of the relevant de minimis level set out in
paragraph 4 of Article 6.
Part V
Article 8 - Export Competition Commitments
Each Member undertakes not to provide export subsidies otherwise than
in conformity with this Agreement and with the commitments as specified in
that Member's Schedule.
Article 9 - Export Subsidy Commitments
1. The following export subsidies are subject to reduction commitments
under this Agreement:
(a) The provision by governments or their agencies of direct
subsidies, including payments-in-kind, to a firm, to an industry,
to producers of an agricultural product, to a co-operative or
other association of such producers, or to a marketing board,
contingent on export performance.
(b) The sale or disposal for export by governments or their agencies
of non-commercial stocks of agricultural products at a price
lower than the comparable price charged for the like product to
buyers in the domestic market.
(c) Payments on the export of an agricultural product that are
financed by virtue of governmental action, whether or not a
charge on the public account is involved, including payments that
are financed from the proceeds of a levy imposed on the
agricultural product concerned or on an agricultural product from
which the exported product is derived.
(d) The provision of subsidies to reduce the costs of marketing
exports of agricultural products (other than widely available
export promotion and advisory services) including handling,
upgrading and other processing costs, and the costs of
international transport and freight.
(e) Internal transport and freight charges on export shipments,
provided or mandated by governments, on terms more favourable
than for domestic shipments.
(f) Subsidies on agricultural products contingent on their
incorporation in exported products.
2. (a) Except as provided in sub-paragraph (b), the export subsidy
commitment levels for each year of the implementation period, as
specified in a Member's Schedule, represent with respect to the
export subsidies listed in paragraph 1 of this Article:
(i) in the case of budgetary outlay reduction commitments, the
maximum level of expenditure for such subsidies that may be
allocated or incurred in that year; and
(ii) in the case of export quantity reduction commitments, the
maximum quantity of an agricultural product, or group of
such products, in respect of which such export subsidies
may be granted in that year.
(b) In any of the second through fifth years of the implementation
period, a Member may provide export subsidies listed in paragraph
1 above in a given year in excess of the corresponding annual
commitment levels in respect of the products or groups of
products specified in Part IV of the Member's Schedule, provided
that:
(i) the cumulative amounts of budgetary outlays for such
subsidies, from the beginning of the implementation period
through the year in question, does not exceed the
cumulative amounts that would have resulted from full
compliance with the relevant annual outlay commitment
levels specified in the Member's Schedule by more than 3
per cent of the base period level of such budgetary
outlays;
(ii) the cumulative quantities exported with the benefit of such
export subsidies, from the beginning of the implementation
period through the year in question, does not exceed the
cumulative quantities that would have resulted from full
compliance with the relevant annual quantity commitment
levels specified in the Member's Schedule by more than 1.75
per cent of the base period quantities;
(iii) the total cumulative amounts of budgetary outlays for such
export subsidies and the quantities benefiting from such
export subsidies over the entire implementation period are
no greater than the totals that would have resulted from
full compliance with the relevant annual commitment levels
specified in the Member's Schedule; and
(iv) the Member's budgetary outlays for export subsidies and the
quantities benefiting from such subsidies, at the
conclusion of the implementation period, are no greater
than 64 per cent and 79 per cent of the 1986-1990 base
period levels, respectively. For developing country
Members these percentages shall be 76 and 86 per cent,
respectively.
3 Commitments relating to limitations on the extension of the scope of
export subsidization are as specified in Schedules.
4 During the implementation period developing country Members shall not
be required to undertake commitments in respect of the export subsidies
listed in sub-paragraphs (d) and (e) of paragraph 1 above provided that
these are not applied in a manner that would circumvent reduction
commitments.
Article 10 - Prevention of Circumvention of Export Subsidy Commitments
1. Export subsidies not listed in Article 9(1) of this Agreement shall
not be applied in a manner which results in, or which threatens to lead to,
circumvention of export subsidy commitments; nor shall non-commercial
transactions be used to circumvent such commitments.
2. Members undertake to work toward the development of internationally
agreed disciplines to govern the provision of export credits, export credit
guarantees or insurance programmes and, after agreement on such disciplines,
to provide export credits, export credit guarantees or insurance programmes
only in conformity therewith.
3. Any Member which claims that any quantity exported in excess of a
reduction commitment level is not subsidized must establish that no export
subsidy, whether listed in Article 9 or not, has been granted in respect of
the quantity of exports in question.
4. Members donors of international food aid shall ensure:
(a) that the provision of international food aid is not tied directly
or indirectly to commercial exports of agricultural products to
recipient countries;
(b) that international food aid transactions, including bilateral
food aid which is monetised, shall be carried out in accordance
with the FAO "Principles of Surplus Disposal and Consultative
Obligations" including, where appropriate, the system of Usual
Marketing Requirements (UMRs); and
(c) that such aid shall be provided to the extent possible in fully
grant form or on terms no less concessional than those provided
for in Article IV of the Food Aid Convention 1986.
Article 11 - Incorporated Products
In no case may the per unit subsidy paid on an incorporated
agricultural primary product exceed the per unit export subsidy that would
be payable on exports of the primary product as such.
Part VI
Article 12 - Disciplines on Export Prohibitions and Restrictions
1. Where any Member institutes any new export prohibition or restriction
on foodstuffs in accordance with paragraph 2(a) of Article XI of the GATT
1994, the Member shall observe the following provisions:
(i) the Member instituting the export prohibition or restriction
shall give due consideration to the effects of such prohibition
or restriction on importing Members' food security;
(ii) before any Member institutes an export prohibition or
restriction, it shall give notice in writing, as far in advance
as practicable, to the Committee on Agriculture comprising such
information as the nature and the duration of such measure, and
shall consult, upon request, with any other Member having a
substantial interest as an importer with respect to any matter
related to the measure in question. The Member instituting such
export prohibition or restriction shall provide, upon request,
such a Member with necessary information.
2. The provisions of this Article shall not apply to any developing
country Member, unless the measure is taken by a developing country Member
which is a net-food exporter of the specific foodstuff concerned.
Part VII
Article 13 - Due Restraint
During the implementation period, notwithstanding the provisions of
the GATT 1994 and the Agreement on Subsidies and Countervailing Measures
("Subsidies Agreement"):
1. Domestic support measures that conform fully to the provisions of
Annex 2 to this Agreement shall be:
(a) non-actionable subsidies for purposes of countervailing
duties[4];
(b) exempt from actions based on Article XVI of the GATT 1994 and
Part III of the Subsidies Agreement; and
(c) exempt from actions based on non-violation nullification or
impairment of the benefits of tariff concessions accruing to
another Member under Article II of the GATT 1994, in the sense of
Article XXIII:1(b) of the GATT 1994.
2. Domestic support measures that conform fully to the provisions of
Article 6 of this Agreement including direct payments that conform to the
requirements of paragraph 5 thereof, as reflected in each Member's Schedule,
as well as domestic support within de minimis levels and in conformity with
paragraph 2 of Article 6, shall be:
(a) exempt from the imposition of countervailing duties unless a
determination of injury or threat thereof is made in accordance
with Article VI of the GATT 1994 and Part V of the Subsidies
Agreement, and due restraint shall be shown in initiating any
countervailing duty investigations;
(b) exempt from actions based on Article XVI:1 of the GATT 1994 or
Articles 5 and 6 of the Subsidies Agreement, provided that such
measures do not grant support to a specific commodity in excess
of that decided during the 1992 marketing year; and
(c) exempt from actions based on non-violation nullification or
impairment of the benefits of tariff concessions accruing to
another Member under Article II of the GATT 1994, in the sense of
Article XXIII:1(b) of the GATT 1994, provided that such measures
do not grant support to a specific commodity in excess of that
decided during the 1992 marketing year.
3. Export subsidies that conform fully to the provisions of Part V of
this Agreement, as reflected in each Member's Schedule of Commitments, shall
be:
(a) subject to countervailing duties only upon a determination of
injury or threat thereof based on volume, effect on prices, or
consequent impact in accordance with Article VI of the GATT 1994
and Part V of the Subsidies Agreement, and due restraint shall be
shown in initiating any countervailing duty investigations; and
(b) exempt from actions based on Article XVI of the GATT 1994 or
Articles 3, 5 and 6 of the Subsidies Agreement.
Part VIII
Article 14 - Sanitary and Phytosanitary Measures
Members agree to give effect to the Agreement on Sanitary and
Phytosanitary Measures.
Part IX
Article 15 - Special and Differential Treatment
1. In keeping with the recognition that differential and more favourable
treatment for developing country Members is an integral part of the
negotiation, special and differential treatment in respect of commitments
shall be provided as set out in the relevant provisions of this Agreement
and embodied in the Schedules of concessions and commitments.
2. Developing countries shall have the flexibility to implement reduction
commitments over a period of up to 10 years. Least developed country
Members shall not be required to undertake reduction commitments.
Part X
Article 16 - Least-developed and Net Food-Importing Developing Countries
1. Developed country Members shall take such action as is provided for
within the framework of the Decision on Measures Concerning the Possible
Negative Effects of the Reform Programme on Least-developed and Net
Food-Importing Developing Countries.
2. The Committee on Agriculture shall monitor, as appropriate, the
follow-up to this Decision.
Part XI
Article 17 - Committee on Agriculture
A Committee on Agriculture shall be established.
Article 18 - Review of the Implementation of Commitments
1. Progress in the implementation of commitments negotiated under the
Uruguay Round reform programme shall be reviewed by the Committee on
Agriculture.
2. The review process shall be undertaken on the basis of notifications
submitted by Members in relation to such matters and at such intervals as
shall be determined, as well as on the basis of such documentation as the
MTO Secretariat may be requested to prepare in order to facilitate the
review process.
3. In addition to the notifications to be submitted under paragraph 2,
any new domestic support measure, or modification of an existing measure,
for which exemption from reduction is claimed shall be notified promptly.
This notification shall contain details of the new or modified measure and
its conformity with the agreed criteria as set out either in Article 6 or in
Annex 2 to this Agreement.
4. In the review process Members shall give due consideration to the
influence of excessive rates of inflation on the ability of any Member to
abide by its domestic support commitments.
5. Members agree to consult annually in the Committee on Agriculture with
respect to their participation in the normal growth of world trade in
agricultural products within the framework of the commitments on export
subsidies under this Agreement.
6. The review process shall provide an opportunity for Members to raise
any matter relevant to the implementation of commitments under the reform
programme as set out in this Agreement.
7. Any Member may bring to the attention of the Committee on Agriculture
any measure which it considers ought to have been notified by another
Member.
Article 19 - Consultation and Dispute Settlement
The provisions of Articles XXII and XXIII of the GATT 1994, as
elaborated and applied by the Understanding on Rules and Procedures
Governing the Settlement of Disputes, shall apply to consultations and the
settlement of disputes under this Agreement.
Part XII
Article 20 - Continuation of the Reform Process
Recognizing that the long-term objective of substantial progressive
reductions in support and protection resulting in fundamental reform is an
ongoing process, Members agree that negotiations for continuing the process
will be initiated one year before the end of the implementation period,
taking into account:
- the experience to that date from implementing the reduction
commitments;
- the effects of the reduction commitments on world trade in
agriculture;
- non-trade concerns, special and differential treatment to
developing country Members, and the objective to establish a fair
and market-oriented agricultural trading system, and the other
objectives and concerns mentioned in the preamble to this
Agreement; and
- what further commitments are necessary to achieve the above
mentioned long-term objectives.
Part XIII
Article 21 - Final Provisions
1. The provisions of the GATT 1994 and of other Multilateral Trade
Agreements in Annex 1A to the MTO shall apply subject to the provisions of
this Agreement.
2. The Annexes to this Agreement are hereby made an integral part of this
Agreement.
ANNEX 1
PRODUCT COVERAGE
1. This Agreement shall cover the following products:
(i) HS Chapters 1 to 24 less fish and fish products, plus
(ii) HS Code 29.05.43 (mannitol)
HS Code 29.05.44 (sorbitol)
HS Heading 33.01 (essential oils)
HS Headings 35.01 to 35.05 (albuminoidal substances,
modified starches, glues)
HS Code 38.09.10 (finishing agents)
HS Code 38.23.60 (sorbitol n.e.p.)
HS Headings 41.01 to 41.03 (hides and skins)
HS Heading 43.01 (raw furskins)
HS Headings 50.01 to 50.03 (raw silk and silk waste)
HS Headings 51.01 to 51.03 (wool and animal hair)
HS Headings 52.01 to 52.03 (raw cotton, waste and cotton
carded or combed)
HS Heading 53.01 (raw flax)
HS Heading 53.02 (raw hemp)
2. The foregoing shall not limit the product coverage of the Agreement on
Sanitary and Phytosanitary Measures.
ANNEX 2
DOMESTIC SUPPORT: THE BASIS FOR EXEMPTION FROM
THE REDUCTION COMMITMENTS
1. Domestic support policies for which exemption from the reduction
commitments is claimed shall meet the fundamental requirement that they have
no, or at most minimal, trade distortion effects or effects on production.
Accordingly, all policies for which exemption is claimed shall conform to
the following basic criteria:
(i) the support in question shall be provided through a
publicly-funded government programme (including government
revenue foregone) not involving transfers from consumers; and,
(ii) the support in question shall not have the effect of providing
price support to producers;
plus policy-specific criteria and conditions as set out below.
Government Service Programmes
2. General services
Policies in this category involve expenditures (or revenue foregone)
in relation to programmes which provide services or benefits to agriculture
or the rural community. They shall not involve direct payments to producers
or processors. Such programmes, which include but are not restricted to the
following list, shall meet the general criteria in paragraph 1 above and
policy-specific conditions where set out below:
(i) research, including general research, research in connection with
environmental programmes, and research programmes relating to
particular products;
(ii) pest and disease control, including general and product-specific
pest and disease control measures, such as early warning systems,
quarantine and eradication;
(iii)training services, including both general and specialist training
facilities;
(iv) extension and advisory services, including the provision of means
to facilitate the transfer of information and the results of
research to producers and consumers;
(v) inspection services, including general inspection services and
the inspection of particular products for health, safety, grading
or standardization purposes;
(vi) marketing and promotion services, including market information,
advice and promotion relating to particular products but
excluding expenditure for unspecified purposes that could be used
by sellers to reduce their selling price or confer a direct
economic benefit to purchasers; and
(vii)infrastructural services, including: electricity reticulation,
roads and other means of transport, market and port facilities,
water supply facilities, dams and drainage schemes, and
infrastructural works associated with environmental programmes.
In all cases the expenditure shall be directed to the provision
or construction of capital works only, and shall exclude the
subsidized provision of on-farm facilities other than for the
reticulation of generally-available public utilities. It shall
not include subsidies to inputs or operating costs, or
preferential user charges.
3. Public stockholding for food security purposes[5]
Expenditures (or revenue foregone) in relation to the
accumulation and holding of stocks of products which form an integral
part of a food security programme identified in national legislation.
This may include government aid to private storage of products as part
of such a programme.
The volume and accumulation of such stocks shall correspond to
predetermined targets related solely to food security. The
process of stock accumulation and disposal shall be financially
transparent. Food purchases by the government shall be made at
current market prices and sales from food security stocks shall
be made at no less than the current domestic market price for the
product and quality in question.
4. Domestic food aid[6]
Expenditures (or revenue foregone) in relation to the provision
of domestic food aid to sections of the population in need.
Eligibility to receive the food aid shall be subject to
clearly-defined criteria related to nutritional objectives. Such
aid shall be in the form of direct provision of food to those
concerned or the provision of means to allow eligible recipients
to buy food either at market or at subsidized prices. Food
purchases by the government shall be made at current market
prices and the financing and administration of the aid shall be
transparent.
5. Direct payments to producers
Support provided through direct payments (or revenue foregone,
including payments in kind) to producers for which exemption from reduction
commitments is claimed shall meet the basic criteria set out in paragraph 1
above, plus specific criteria applying to individual types of direct payment
as set out in paragraphs 6 to 13 below. Where exemption from reduction is
claimed for any existing or new type of direct payment other than those
specified in paragraphs 6 to 13, it shall conform to criteria (ii) to (v) of
paragraph 6 in addition to the general criteria set out in paragraph 1.
6. Decoupled income support
(i) Eligibility for such payments shall be determined by
clearly-defined criteria such as income, status as a producer or
landowner, factor use or production level in a defined and fixed
base period.
(ii) The amount of such payments in any given year shall not be
related to, or based on, the type or volume of production
(including livestock units) undertaken by the producer in any
year after the base period.
(iii)The amount of such payments in any given year shall not be
related to, or based on, the prices, domestic or international,
applying to any production undertaken in any year after the base
period.
(iv) The amount of such payments in any given year shall not be
related to, or based on, the factors of production employed in
any year after the base period.
(v) No production shall be required in order to receive such
payments.
7. Government financial participation in income insurance and income
safety-net programmes
(i) Eligibility for such payments shall be determined by an income
loss, taking into account only income derived from agriculture,
which exceeds 30 per cent of average gross income or the
equivalent in net income terms (excluding any payments from the
same or similar schemes) in the preceding three-year period or a
three-year average based on the preceding five-year period,
excluding the highest and the lowest entry. Any producer meeting
this condition shall be eligible to receive the payments.
(ii) The amount of such payments shall compensate for less than 70 per
cent of the producer's income loss in the year the producer
becomes eligible to receive this assistance.
(iii)The amount of any such payments shall relate solely to income;
it shall not relate to the type or volume of production
(including livestock units) undertaken by the producer; or to
the prices, domestic or international, applying to such
production; or to the factors of production employed.
(iv) Where a producer receives in the same year payments under this
paragraph and under paragraph 8 below (relief from natural
disasters), the total of such payments shall be less than 100 per
cent of the producer's total loss.
8. Payments (made either directly or by way of government financial
participation in crop insurance schemes) for relief from natural disasters
(i) Eligibility for such payments shall arise only following a formal
recognition by government authorities that a natural or like
disaster (including disease outbreaks, pest infestations, nuclear
accidents, and war on the territory of the Member concerned) has
occurred or is occurring; and shall be determined by a
production loss which exceeds 30 per cent of the average of
production in the preceding three-year period or a three year
average based on the preceding five-year period, excluding the
highest and the lowest entry.
(ii) Payments made following a disaster shall be applied only in
respect of losses of income, livestock (including payments in
connection with the veterinary treatment of animals), land or
other production factors due to the natural disaster in question.
(iii)Payments shall compensate for not more than the total cost of
replacing such losses and shall not require or specify the type
or quantity of future production.
(iv) Payments made during a disaster shall not exceed the level
required to prevent or alleviate further loss as defined in
criterion (ii) above.
(v) Where a producer receives in the same year payments under this
paragraph and under paragraph 7 above (income insurance and
income safety-net programmes), the total of such payments shall
be less than 100 per cent of the producer's total loss.
9. Structural adjustment assistance provided through producer retirement
programmes
(i) Eligibility for such payments shall be determined by reference to
clearly-defined criteria in programmes designed to facilitate the
retirement of persons engaged in marketable agricultural
production, or their movement to non-agricultural activities.
(ii) Payments shall be conditional upon the total and permanent
retirement of the recipients from marketable agricultural
production.
10. Structural adjustment assistance provided through resource retirement
programmes
(i) Eligibility for such payments shall be determined by reference to
clearly-defined criteria in programmes designed to remove land or
other resources, including livestock, from marketable
agricultural production.
(ii) Payments shall be conditional upon the retirement of land from
marketable agricultural production for a minimum of 3 years, and
in the case of livestock on its slaughter or definitive permanent
disposal.
(iii)Payments shall not require or specify any alternative use for
such land or other resources which involves the production of
marketable agricultural products.
(iv) Payments shall not be related to either the type or quantity of
production or to the prices, domestic or international, applying
to production undertaken using the land or other resources
remaining in production.
11. Structural adjustment assistance provided through investment aids
(i) Eligibility for such payments shall be determined by reference to
clearly-defined criteria in government programmes designed to
assist the financial or physical restructuring of a producer's
operations in response to objectively demonstrated structural
disadvantages. Eligibility for such programmes may also be based
on a clearly-defined government programme for the reprivatization
of agricultural land.
(ii) The amount of such payments in any given year shall not be
related to, or based on, the type or volume of production
(including livestock units) undertaken by the producer in any
year after the base period other than as provided for under (v)
below.
(iii)The amount of such payments in any given year shall not be
related to, or based on, the prices, domestic or international,
applying to any production undertaken in any year after the base
period.
(iv) The payments shall be given only for the period of time necessary
for the realization of the investment in respect of which they
are provided.
(v) The payments shall not mandate or in any way designate the
agricultural products to be produced by the recipients except to
require them not to produce a particular product.
(vi) The payments shall be limited to the amount required to
compensate for the structural disadvantage.
12. Payments under environmental programmes
(i) Eligibility for such payments shall be determined as part of a
clearly-defined government environmental or conservation
programme and be dependent on the fulfilment of specific
conditions under the government programme, including conditions
related to production methods or inputs.
(ii) The amount of payment shall be limited to the extra costs or loss
of income involved in complying with the government programme.
13. Payments under regional assistance programmes
(i) Eligibility for such payments shall be limited to producers in
disadvantaged regions. Each such region must be a clearly
designated contiguous geographical area with a definable economic
and administrative identity, considered as disadvantaged on the
basis of neutral and objective criteria clearly spelt out in law
or regulation and indicating that the region's difficulties arise
out of more than temporary circumstances.
(ii) The amount of such payments in any given year shall not be
related to, or based on, the type or volume of production
(including livestock units) undertaken by the producer in any
year after the base period other than to reduce that production.
(iii)The amount of such payments in any given year shall not be
related to, or based on, the prices, domestic or international,
applying to any production undertaken in any year after the base
period.
(iv) Payments shall be available only to producers in eligible
regions, but generally available to all producers within such
regions.
(v) Where related to production factors, payments shall be made at a
degressive rate above a threshold level of the factor concerned.
(vi) The payments shall be limited to the extra costs or loss of
income involved in undertaking agricultural production in the
prescribed area.
ANNEX 3
DOMESTIC SUPPORT: CALCULATION OF AGGREGATE MEASUREMENT OF SUPPORT
1. Subject to the provisions of Article 6, an Aggregate Measurement of
Support (AMS) shall be calculated on a product-specific basis for each basic
product (defined as the product as close as practicable to the point of
first sale) receiving market price support, non-exempt direct payments, or
any other subsidy not exempted from the reduction commitment ("other
non-exempt policies"). Support which is non-product specific shall be
totalled into one non-product-specific AMS in total monetary terms.
2. Subsidies under paragraph 1 shall include both budgetary outlays and
revenue foregone by governments or their agents.
3. Support at both the national and sub-national level shall be included.
4. Specific agricultural levies or fees paid by producers shall be
deducted from the AMS.
5. The AMS calculated as outlined below for the base period shall
constitute the base level for the implementation of the reduction commitment
on domestic support.
6. For each basic product, a specific AMS shall be established, expressed
in total monetary value terms.
7. The AMS shall be calculated as close as practicable to the point of
first sale of the product concerned. Policies directed at agricultural
processors shall be included to the extent that such policies benefit the
producers of the basic products.
8. Market price support: market price support shall be calculated using
the gap between a fixed external reference price and the applied
administered price multiplied by the quantity of production eligible to
receive the applied administered price. Budgetary payments made to maintain
this gap, such as buying-in or storage costs, shall not be included in the
AMS.
9. The fixed external reference price shall be based on the years 1986 to
1988 and shall generally be the average f.o.b. unit value for the product
concerned in a net exporting country and the average c.i.f. unit value for
the product concerned in a net importing country in the base period. The
fixed reference price may be adjusted for quality differences as necessary.
10. Non-exempt direct payments: non-exempt direct payments which are
dependent on a price gap shall be calculated either using the gap between
the fixed reference price and the applied administered price multiplied by
the quantity of production eligible to receive the administered price, or
using budgetary outlays.
11. The fixed reference price shall be based on the years 1986 to 1988 and
shall generally be the actual price used for determining payment rates.
12. Non-exempt direct payments which are based on factors other than price
shall be measured using budgetary outlays.
13. Other non-exempt policies, including input subsidies and other
policies such as marketing cost reduction measures: the value of such
policies shall be measured using government budgetary outlays or, where the
use of budgetary outlays does not reflect the full extent of the subsidy
concerned, the basis for calculating the subsidy shall be the gap between
the price of the subsidised good or service and a representative market
price for a similar good or service multiplied by the quantity of the good
or service.
ANNEX 4
DOMESTIC SUPPORT: CALCULATION OF EQUIVALENT MEASUREMENT OF SUPPORT
1. Subject to the provisions of Article 6, equivalent measurements of
support shall be calculated in respect of all products where market price
support as defined in Annex 3 exists but for which calculation of this
component of the AMS is not practicable. For such products the base level
for implementation of the domestic support reduction commitments shall
consist of a market price support component expressed in terms of equivalent
measurements of support under paragraph 2 below, as well as any non-exempt
direct payments and other non-exempt support, which shall be evaluated as
provided for under paragraph 3 below. Support at both national and
sub-national level shall be included.
2. The equivalent measurements of support provided for in paragraph 1
shall be calculated on a product-specific basis for all products as close as
practicable to the point of first sale ("basic products") receiving market
price support and for which the calculation of the market price support
component of the AMS is not practicable. For those basic products,
equivalent measurements of market price support shall be made using the
applied administered price and the quantity of production eligible to
receive that price or, where this is not practicable, on budgetary outlays
used to maintain the producer price.
3. Where products falling under paragraph 1 above are the subject of
non-exempt direct payments or any other product-specific subsidy not
exempted from the reduction commitment, the basis for equivalent
measurements of support concerning these measures shall be calculations as
for the corresponding AMS components (specified in paragraphs 10 to 13 of
Annex 3).
4. Equivalent measurements of support shall be calculated on the amount
of subsidy as close as practicable to the point of first sale of the product
concerned. Policies directed at agricultural processors shall be included
to the extent that such policies benefit the producers of the basic
products. Specific agricultural levies or fees paid by producers shall
reduce the equivalent measurements of support by a corresponding amount.
ANNEX 5
SPECIAL TREATMENT UNDER ARTICLE 4:2
Section A
1. The provisions of Article 4:2 of this Agreement shall not apply with
effect from the entry into force of this Agreement to any primary
agricultural product and its worked and/or prepared products ("designated
products") in respect of which the following conditions are complied with
(hereinafter referred to as "special treatment"):
(a) imports of the designated products comprised less than 3 per cent
of corresponding domestic consumption in the base period
1986-1988 ("the base period");
(b) no export subsidies have been provided since the beginning of the
base period for the designated products;
(c) effective production restricting measures are applied to the
primary agricultural product;
(d) such products are designated with the symbol "ST-Annex 5" in
Section IB of Part I of a Member's Schedule annexed to the
Uruguay Round (1994) Protocol as being subject to special
treatment reflecting factors of non-trade concerns, such as food
security and environmental protection; and
(e) minimum access opportunities in respect of the designated
products correspond, as specified in Section IB of Part I of the
Schedule of the Member concerned, to 4 per cent of base period
domestic consumption of the designated products from the
beginning of the first year of the implementation period and,
thereafter, are increased by 0.8 per cent of corresponding
domestic consumption in the base period per year for the
remainder of the implementation period.
2. At the beginning of any year of the implementation period a Member may
cease to apply special treatment in respect of the designated products by
complying with the provisions of paragraph 6 below. In such a case, the
Member concerned shall maintain the minimum access opportunities already in
effect at such time and increase the minimum access opportunities by 0.4 per
cent of corresponding domestic consumption in the base period per year for
the remainder of the implementation period. Thereafter, the level of
minimum access opportunities resulting from this formula in the final year
of the implementation period shall be maintained in the Schedule of the
Member concerned.
3. Any negotiation on the question of whether there can be a continuation
of the special treatment as set out in paragraph 1 above after the end of
the implementation period shall be completed within the time-frame of the
implementation period itself as a part of the negotiations set out in
Article 20 of this Agreement, taking into account the factors of non-trade
concerns.
4. If it is agreed as a result of the negotiation referred to in
paragraph 3 above that a Member may continue to apply the special treatment,
such Member shall confer additional and acceptable concessions as determined
in that negotiation.
5. Where the special treatment is not to be continued at the end of the
implementation period, the Member concerned shall implement the provisions
of paragraph 6 below. In such a case, after the end of the implementation
period the minimum access opportunities for the designated products shall be
maintained at the level of 8 per cent of corresponding domestic consumption
in the base period in the Schedule of the Member concerned.
6. Border measures other than ordinary customs duties maintained in
respect of the designated products shall become subject to the provisions of
Article 4:2 of this Agreement with effect from the beginning of the year in
which the special treatment ceases to apply. Such products shall be subject
to ordinary customs duties, which shall be bound in the Schedule of the
Member concerned and applied, from the beginning of the year in which
special treatment ceases and thereafter, at such rates as would have been
applicable had a reduction of at least 15 per cent been implemented over the
implementation period in equal annual instalments. These duties shall be
established on the basis of tariff equivalents to be calculated in
accordance with the guidelines prescribed in the attachment hereto.
Section B
7. The provisions of Article 4:2 of this Agreement shall also not apply
with effect from the entry into force of this Agreement to a primary
agricultural product that is the predominant staple in the traditional diet
of a developing country Member and in respect of which the following
conditions, in addition to those specified in paragraph 1(a) through 1(d)
above, as they apply to the products concerned, are complied with:
- minimum access opportunities in respect of the products
concerned, as specified in Section IB of Part I of the Schedule of the
developing country Member concerned, correspond to 1 per cent of base
period domestic consumption of the products concerned from the
beginning of the first year of the implementation period and are
increased in equal annual instalments to 2 per cent of corresponding
domestic consumption in the base period at the beginning of the fifth
year of the implementation period. From the beginning of the sixth
year of the implementation period, minimum access opportunities in
respect of the products concerned correspond to 2 per cent of
corresponding domestic consumption in the base period and are
increased in equal annual instalments to 4 per cent of corresponding
domestic consumption in the base period until the beginning of the
tenth year. Thereafter, the level of minimum access opportunities
resulting from this formula in the tenth year shall be maintained in
the Schedule of the developing country Member concerned.
- appropriate market access opportunities have been provided for in
other products under this Agreement.
8. Any negotiation on the question of whether there can be a continuation
of the special treatment as set out in paragraph 7 above after the end of
the tenth year following the beginning of the implementation period shall be
initiated and completed within the time-frame of the tenth year itself
following the beginning of the implementation period.
9. If it is agreed as a result of the negotiation referred to in
paragraph 8 above that a Member may continue to apply the special treatment,
such Member shall confer additional and acceptable concessions as determined
in that negotiation.
10. In the event that special treatment under paragraph 7 above is not to
be continued beyond the tenth year following the beginning of the
implementation period, the products concerned shall be subject to ordinary
customs duties, established on the basis of a tariff equivalent to be
calculated in accordance with the guidelines prescribed in the attachment
hereto, which shall be bound in the Schedule of the Member concerned. In
other respects, the provisions of paragraph 6 above shall apply as modified
by the relevant special and differential treatment accorded to developing
country Members under this Agreement.
Attachment to Annex 5
Guidelines for the Calculation of Tariff
Equivalents for the Specific Purpose Specified in
Paragraphs 6 and 10 of this Annex
1. The calculation of the tariff equivalents, whether expressed as ad
valorem or specific rates, shall be made using the actual difference between
internal and external prices in a transparent manner. Data used shall be for
the years 1986 to 1988. Tariff equivalents:
(i) shall primarily be established at the four-digit level of the HS;
(ii) shall be established at the six-digit or a more detailed level of
the HS wherever appropriate;
(iii)shall generally be established for worked and/or prepared
products by multiplying the specific tariff equivalent(s) for the
primary agricultural product(s) by the proportion(s) in value
terms or in physical terms as appropriate of the primary
agricultural product(s) in the worked and/or prepared products,
and take account, where necessary, of any additional elements
currently providing protection to industry.
2. External prices shall be, in general, actual average c.i.f. unit
values for the importing country. Where average c.i.f. unit values are not
available or appropriate, external prices shall be either:
(i) appropriate average c.i.f. unit values of a near country; or
(ii) estimated from average f.o.b. unit values of (an) appropriate
major exporter(s) adjusted by adding an estimate of insurance,
freight and other relevant costs to the importing country.
3. The external prices shall generally be converted to domestic
currencies using the annual average market exchange rate for the same period
as the price data.
4. The internal price shall generally be a representative wholesale price
ruling in the domestic market or an estimate of that price where adequate
data is not available.
5. The initial tariff equivalents may be adjusted, where necessary, to
take account of differences in quality or variety using an appropriate
coefficient.
6. Where a tariff equivalent resulting from these guidelines is negative
or lower than the current bound rate, the initial tariff equivalent may be
established at the current bound rate or on the basis of national offers for
that product.
7. Where an adjustment is made to the level of a tariff equivalent which
would have resulted from the above guidelines, the Member concerned shall
afford, on request, full opportunities for consultation with a view to
negotiating appropriate solutions.
1. These measures include quantitative import restrictions, variable import
levies, minimum import prices, discretionary import licensing, non-tariff
measures maintained through state trading enterprises, voluntary export
restraints and similar border measures other than ordinary customs duties,
whether or not the measures are maintained under country-specific
derogations from the provisions of the GATT 1947, but not measures
maintained under balance-of-payments provisions or under other general,
non-agriculture-specific provisions of the GATT 1994 or of the other
Multilateral Trade Agreements in Annex 1A to the MTO.
2. The reference price used to invoke the provisions of this sub-paragraph
shall, in general, be the average c.i.f. unit value of the product
concerned, or otherwise shall be an appropriate price in terms of the
quality of the product and its stage of processing. It shall, following its
initial use, be publicly specified and available to the extent necessary to
allow other Members to assess the additional duty that may be levied.
3. Where domestic consumption is not taken into account, the base trigger
level under (a) below shall apply.
4."Countervailing duties" where referred to in this Article are those
covered by Article VI of the GATT 1994 and Part V of the Agreement on
Subsidies and Countervailing Duties.
5. For the purposes of paragraph 3 of this Annex, Governmental stockholding
programmes for food security purposes in developing countries whose
operation is transparent and conducted in accordance with officially
published objective criteria or guidelines shall be considered to be in
conformity with the provisions of this paragraph, including programmes under
which stocks of foodstuffs for food security purposes are acquired and
released at administered prices, provided that the difference between the
acquisition price and the external reference price is accounted for in the
AMS.
5 & 6For the purposes of paragraphs 3 and 4 of this Annex, the provision of
foodstuffs at subsidized prices with the objective of meeting food
requirements of urban and rural poor in developing countries on a regular
basis at reasonable prices shall be considered to be in conformity with the
provisions of this paragraph.