Part
V: Article 8 back to top
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.
Part
V: Article 9 back to top
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 cooperative 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 subparagraph (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
in respect of the agricultural product, or group of products, concerned; and
(ii)
in the case of export quantity reduction commitments, the maximum
quantity of an agricultural product, or group of 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
subparagraphs (d) and (e) of paragraph 1 above, provided that these are not
applied in a manner that would circumvent reduction commitments.
Part V: Article
10 back to top
Prevention of Circumvention of Export
Subsidy Commitments
1.
Export subsidies not listed in paragraph 1 of Article 9 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 monetized, 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.
Part V: Article
11 back to top
Incorporated Products
1.
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
back to top
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 GATT 1994, the Member
shall observe the following provisions:
(a)
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;
(b)
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
back to top
Due Restraint
During
the implementation period, notwithstanding the provisions of GATT 1994 and the
Agreement on Subsidies and Countervailing Measures (referred to in this Article
as the
“Subsidies Agreement”):
(a) domestic
support measures that conform fully to the provisions of Annex 2 to this
Agreement shall be:
(i)
non-actionable subsidies for purposes of countervailing duties(4);
(ii)
exempt from actions based on Article XVI of GATT 1994 and Part III
of the Subsidies Agreement; and
(iii)
exempt from actions based on non-violation nullification or impairment of
the benefits of tariff concessions accruing to another Member under Article II
of GATT 1994, in the sense of paragraph 1(b) of
Article XXIII of GATT 1994;
(b) 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:
(i)
exempt from the imposition of countervailing duties unless a
determination of injury or threat thereof is made in accordance with Article VI
of GATT 1994 and Part V of the Subsidies Agreement, and due restraint shall
be shown in initiating any countervailing duty investigations;
(ii)
exempt from actions based on paragraph 1 of Article XVI of 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
(iii)
exempt from actions based on non-violation nullification or impairment of
the benefits of tariff concessions accruing to another Member under Article II
of GATT 1994, in the sense of paragraph 1(b) of Article XXIII of GATT
1994, provided that such measures do not grant support to a specific commodity
in excess of that decided during the 1992 marketing year;
(c) export
subsidies that conform fully to the provisions of Part V of this Agreement,
as reflected in each Member’s Schedule, shall be:
(i)
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 GATT 1994 and Part V of the Subsidies
Agreement, and due restraint shall be shown in initiating any countervailing
duty investigations; and
(ii)
exempt from actions based on Article XVI of GATT 1994 or Articles 3,
5 and 6 of the Subsidies Agreement.
Part
VIII: Article 14
back to top
Sanitary and Phytosanitary Measures
Members
agree to give effect to the Agreement on the Application of
Sanitary and Phytosanitary Measures.
Part
IX: Article
15 back to top
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 country Members 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 back to top
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 back to top
Committee
on Agriculture
A Committee on Agriculture is hereby established.
Part
XI: Article 18
back to top
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 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.
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.
Part
XI: Article 19
back to top
Consultation and Dispute Settlement
The provisions of Articles XXII and XXIII of GATT 1994, as
elaborated and applied by the Dispute Settlement Understanding, shall apply to
consultations and the settlement of disputes under this Agreement.
Part
XII: Article
20 back to top
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:
(a)
the experience to that date from implementing the reduction commitments;
(b)
the effects of the reduction commitments on world trade in agriculture;
(c)
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
(d)
what further commitments are necessary to achieve the above mentioned
long-term objectives.
Part
XIII: Article
21 back to top
Final Provisions.
1.
The provisions of GATT 1994 and of other Multilateral Trade Agreements in
Annex 1A to the WTO Agreement 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
back to top
1.
This Agreement shall cover the following products:
|
(i)
|
HS
Chapters 1 to 24 less fish and fish products, plus*
|
|
(ii)
|
HS
Code
|
2905.43
|
(mannitol)
|
|
|
HS
Code
|
2905.44
|
(sorbitol)
|
|
|
HS
Heading
|
33.01
|
(essential
oils)
|
|
|
HS
Headings
|
35.01
to 35.05
|
(albuminoidal substances, modified starches, glues)
|
|
|
HS
Code
|
3809.10
|
(finishing
agents)
|
|
|
HS
Code
|
3823.60
|
(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 the
Application of Sanitary and Phytosanitary Measures.
*The
product descriptions in round brackets are not necessarily exhaustive.
Annex
2: Domestic
Support – The Basis for Exemption from The Reduction Commitments back to top
1.
Domestic support measures for which exemption from the reduction
commitments is claimed shall meet the fundamental requirement that they have no,
or at most minimal, trade-distorting effects or effects on production.
Accordingly, all measures for which exemption is claimed shall conform to
the following basic criteria:
(a)
the support in question shall be provided through a publicly-funded
government programme (including government revenue foregone) not involving
transfers from consumers; and,
(b)
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:
(a)
research, including general research, research in connection with
environmental programmes, and research programmes relating to particular
products;
(b)
pest and disease control, including general and product-specific pest and
disease control measures, such as early-warning systems, quarantine and
eradication;
(c)
training services, including both general and specialist training
facilities;
(d)
extension and advisory services, including the provision of means to
facilitate the transfer of information and the results of research to producers
and consumers;
(e)
inspection services, including general inspection services and the
inspection of particular products for health, safety, grading or standardization
purposes;
(f)
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
(g)
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 through 13 below. Where
exemption from reduction is claimed for any existing or new type of direct
payment other than those specified in paragraphs 6 through 13, it shall
conform to criteria (b) through (e) in paragraph 6, in addition to the
general criteria set out in paragraph 1.
6.
Decoupled income support
(a)
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.
(b)
The amount of such payments in any given year shall not be related to, or
based on, the type or volume of production (including livestock units)
undertaken by the producer in any year after the base period.
(c)
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.
(d)
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.
(e)
No production shall be required in order to receive such payments.
7. Government financial participation in income insurance and income
safety-net programmes
(a)
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.
(b)
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.
(c)
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.
(d)
Where a producer receives in the same year payments under this paragraph
and under paragraph 8 (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
(a)
Eligibility for such payments shall arise only following a formal
recognition by government authorities that a natural or like disaster (including
disease outbreaks, pest infestations, nuclear accidents, and war on the
territory of the Member concerned) has occurred or is occurring;
and shall be determined by a production loss which exceeds 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.
(b)
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.
(c)
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.
(d)
Payments made during a disaster shall not exceed the level required to
prevent or alleviate further loss as defined in criterion (b) above.
(e)
Where a producer receives in the same year payments under this paragraph
and under paragraph 7 (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
(a)
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.
(b)
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
(a)
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.
(b)
Payments shall be conditional upon the retirement of land from marketable
agricultural production for a minimum of three years, and in the case of
livestock on its slaughter or definitive permanent disposal.
(c)
Payments shall not require or specify any alternative use for such land
or other resources which involves the production of marketable agricultural
products.
(d)
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
(a)
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.
(b)
The amount of such payments in any given year shall not be related to, or
based on, the type or volume of production (including livestock units)
undertaken by the producer in any year after the base period other than as
provided for under criterion (e) below.
(c)
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.
(d)
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.
(e)
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.
(f)
The payments shall be limited to the amount required to compensate for
the structural disadvantage.
12. Payments under environmental programmes
(a)
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.
(b)
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
(a)
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.
(b)
The amount of such payments in any given year shall not be related to, or
based on, the type or volume of production (including livestock units)
undertaken by the producer in any year after the base period other than to
reduce that production.
(c)
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.
(d)
Payments shall be available only to producers in eligible regions, but
generally available to all producers within such regions.
(e)
Where related to production factors, payments shall be made at a
degressive rate above a threshold level of the factor concerned.
(f)
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 back to top
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
agricultural product 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 agricultural 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 basic agricultural product concerned.
Measures directed at agricultural processors shall be included to the
extent that such measures benefit the producers of the basic agricultural
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 basic
agricultural product concerned in a net exporting country and the average c.i.f.
unit value for the basic agricultural 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 measures, including input subsidies and other measures
such as marketing-cost reduction measures: the
value of such measures 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 subsidized 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 back to top
1.
Subject to the provisions of Article 6, equivalent measurements of
support shall be calculated in respect of all basic agricultural 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 basic agricultural
products as close as practicable to the point of first sale receiving market
price support and for which the calculation of the market price support
component of the AMS is not practicable. For
those basic agricultural 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 basic agricultural products falling under paragraph 1 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 through 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 basic
agricultural product concerned. Measures
directed at agricultural processors shall be included to the extent that such
measures benefit the producers of the basic agricultural products.
Specific agricultural levies or fees paid by producers shall reduce the
equivalent measurements of support by a corresponding amount.
Annex
5: Special Treatment with Respect to Paragraph 2 of Article 4 back to top
Section
A
1.
The provisions of paragraph 2 of Article 4 shall not apply with
effect from the entry into force of the WTO 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 I-B of Part I of a Member’s Schedule annexed to the
Marrakesh 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 I-B 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.
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 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
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. 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 paragraph 2
of Article 4 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 paragraph 2 of Article 4 shall also not apply with
effect from the entry into force of the WTO 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), as they apply to the products
concerned, are complied with:
(a)
minimum access opportunities in respect of the products concerned, as
specified in Section I-B 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
10th year. Thereafter, the level of
minimum access opportunities resulting from this formula in the 10th year shall
be maintained in the Schedule of the developing country Member concerned;
(b)
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 after the end of the 10th year
following the beginning of the implementation period shall be initiated and
completed within the time-frame of the 10th 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
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 is not to be
continued beyond the 10th 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 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:
(a)
shall primarily be established at the four-digit level of the HS;
(b)
shall be established at the six-digit or a more detailed level of the HS
wherever appropriate;
(c)
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:
(a)
appropriate average c.i.f. unit values of a near country;
or
(b)
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.
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