The texts reproduced here do not have the legal standing of the original documents which are entrusted and kept at the WTO Secretariat in Geneva.

> Preamble
> Article 1
> Article 2
> Article 3
> Article 4
> Article 5
> Article 6
> Article 7
> Article 8
> Article 9
> Article 10
> Article 11
> Article 12
> Article 13
> Article 14
> Article 15
> Article 16
> Article 17
> Article 18
> Article 19
> Article 20
> Article 21
> Annex 1
> Annex 2
> Annex 3
> Annex 4
> Annex 5
> Relationship with other WTO Agreements
> Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries (The “NFIDC Decision”)

> Analytical Index main page

XII. Article 11     back to top

A. Text of Article 11

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.

B. Interpretation and Application of Article 11

No jurisprudence or decision of a competent WTO body.

Part VI

XIII. Article 12     back to top

A. Text of Article 12

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 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.

B. Interpretation and Application of Article 12

1. Notification requirements

92.     With respect to notification requirements concerning export prohibitions and restrictions, see paragraphs 116–118 below.

Part VII

XIV. Article 13     back to top

A. Text of Article 13

Article 13: 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);

(footnote original) 4 “Countervailing duties” where referred to in this Article are those covered by Article VI of GATT 1994 and Part V of the Agreement on Subsidies and Countervailing Measures.

(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.

B. Interpretation and Application of Article 13

No jurisprudence or decision of a competent WTO body.

XV. Article 14     back to top

A. Text of Article 14

Article 14: Sanitary and Phytosanitary Measures

         Members agree to give effect to the Agreement on the Application of Sanitary and Phytosanitary Measures.

B. Interpretation and Application of Article 14

No jurisprudence or decision of a competent WTO body.

XVI. Article 15     back to top

A. Text of Article 15

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 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.

B. Interpretation and Application of Article 15

93.     At the Doha Ministerial Conference, a recommendation was adopted that “[u]rges Members to exercise restraint in challenging measures notified under the green box by developing countries to promote rural development and adequately address food security concerns”.(140)

94.     With respect to the notification obligation for developing countries, see paragraph 118 below.

95.     As regards the green box, see Annex 2, in Section XXIV below.

XVII. Article 16     back to top

A. Text of Article 16

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.(141)

2.     The Committee on Agriculture shall monitor, as appropriate, the follow-up to this Decision.

B. Interpretation and Application of Article 16

1. Article 16.1

(a) The Singapore Ministerial Conference

96.     In the light of the Committee’s discussions on the follow-up to the Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net-Food-Importing Developing Countries (NFIDC Decision), the Committee on Agriculture submitted the following recommendations for consideration by the Singapore Ministerial Conference, which were approved by Ministers:

“(i)     that, in anticipation of the expiry of the current Food Aid Convention in June 1998 and in preparation for the renegotiation of the Food Aid Convention, action be initiated in 1997 within the framework of the Food Aid Convention, under arrangements for participation by all interested countries and by relevant international organizations as appropriate, to develop recommendations with a view towards establishing a level of food aid commitments, covering as wide a range of donors and donable foodstuffs as possible, which is sufficient to meet the legitimate needs of developing countries during the reform programme. These recommendations should include guidelines to ensure that an increasing proportion of food aid is provided to least-developed and net food-importing developing countries in fully grant form and/or on appropriate concessional terms in line with Article IV of the current Food Aid Convention, as well as means to improve the effectiveness and positive impact of food aid;(142)

(ii)     that developed country WTO Members continue to give full consideration in the context of their aid programmes to requests for the provision of technical and financial assistance to least-developed and net food-importing developing countries to improve their agricultural productivity and infrastructure;

(iii)     that the provisions of paragraph 4 of the Marrakesh Ministerial Decision, whereby Ministers agreed to ensure that any agreement relating to agricultural export credits makes appropriate provision for differential treatment in favour of least-developed and net food-importing developing countries, be taken fully into account in the agreement to be negotiated on agricultural export credits;

(iv)     that WTO Members, in their individual capacity as members of relevant international financial institutions, take appropriate steps to encourage the institutions concerned, through their respective governing bodies, to further consider the scope for establishing new facilities or enhancing existing facilities for developing countries experiencing Uruguay Round-related difficulties in financing normal levels of commercial imports of basic foodstuffs.”(143)

(b) The Doha Ministerial Conference

97.     The Committee’s recommendations in the area of food aid in the context of the Marrakesh NFIDC Decision that were approved by the Doha Ministerial Conference provide as follows:

“(a)     that early action be taken within the framework of the Food Aid Convention 1999 (which unless extended, with or without a decision regarding its renegotiation, would expire on 30 June 2002) and of the UN World Food Programme by donors of food aid to review their food aid contributions with a view to better identifying and meeting the food aid needs of least-developed and WTO net food-importing developing countries;

(b)     WTO Members which are donors of food aid shall, within the framework of their food aid policies, statutes, programmes and commitments, take appropriate measures aimed at ensuring: (i) that to the maximum extent possible their levels of food aid to developing countries are maintained during periods in which trends in world market prices of basic foodstuffs have been increasing; and (ii) that all food aid to least developed countries is provided in fully grant form and, to the maximum extent possible, to WTO net food-importing developing countries as well.”(144)

98.     The Committee’s recommendations in the area of technical and financial assistance in the context of aid programmes to improve agricultural productivity and infrastructure approved by the Doha Ministerial Conference provide:

“(a)     that developed country WTO Members should continue to give full and favourable consideration in the context of their aid programmes to requests for the provision of technical and financial assistance by least-developed and net food-importing developing countries to improve their agricultural productivity and infrastructure;

(b)     that, in support of the priority accorded by least-developed and net food-importing developing countries to the development of their agricultural productivity and infrastructure, the WTO General Council call upon relevant international development organisations, including the World Bank, the FAO, IFAD, the UNDP and the Regional Development Banks to enhance their provision of, and access to, technical and financial assistance to least-developed and net food-importing developing countries, on terms and conditions conducive to the better use of such facilities and resources, in order to improve agricultural productivity and infrastructure in these countries under existing facilities and programmes, as well as under such facilities and programmes as may be introduced.”(145)

99.     The Committee’s recommendations in the area of financing difficulties of imports of basic foodstuffs in the context of the Marrakesh NFIDC Decision that were approved by the Doha Ministerial Conference state:

“(a)     that the provisions of paragraph 4 of the Marrakesh Ministerial Decision, which provide for differential treatment in favour of least-developed and WTO net food-importing developing countries, shall be taken fully into account in any agreement to be negotiated on disciplines on agricultural export credits pursuant to Article 10.2 of the Agreement on Agriculture;

(b)     that an inter-agency panel of financial and commodity experts be established, with the requested participation of the World Bank, the IMF, the FAO, the International Grains Council and the UNCTAD, to explore ways and means for improving access by least-developed and WTO net food-importing developing countries to multilateral programs and facilities to assist with short term difficulties in financing normal levels of commercial imports of basic foodstuffs, as well as the concept and feasibility of the proposal for the establishment of a revolving fund in G/AG/W/49 and Add.1 and Corr.1. The detailed terms of reference, drawing on the Marrakesh NFIDC Decision, should be submitted by the Vice-Chairman of the WTO Committee on Agriculture, following consultations with Members, to the General Council for approval by not later than 31 December 2001. The inter-agency panel shall submit its recommendations to the General Council by not later than 30 June 2002.”

100.     In light of the above recommendation in the area of financing difficulties of imports of basic foodstuffs in the context of the Marrakesh NFIDC Decision an Inter-Agency Panel on Short-Term Difficulties in Financing Normal Levels of Commercial Imports of Basic Foodstuffs was established and detailed terms of reference of the Panel were approved by the General Council.(146)

(c) List of least-developed and net food-importing developing countries

101.     At its meeting of 21 November 1995, the Committee on Agriculture adopted a decision relating to the establishment of a list of WTO net food-importing developing countries, setting out the criteria for the inclusion.(147)

102.     The decision to establish this list was taken on the understanding that:

“[B]eing listed would not as such confer automatic benefits since, under the mechanisms covered by the Marrakesh Ministerial Decision, donors and the institutions concerned would have a role to play.”(148)

(d) Differential treatment within the framework of an agreement on agricultural export credits

103.     In 1997, the Singapore Ministerial Conference decided as follows:

“[T]he provisions of paragraph 4 of the Marrakesh Ministerial Decision, whereby Ministers agreed to ensure that any agreement relating to agricultural export credits makes appropriate provision for differential treatment in favour of least-developed and net food-importing developing countries, be taken fully into account in the agreement to be negotiated on agricultural export credits.”(149)

2. Article 16.2

(a) Notification requirements

104.     For notification requirements and formats concerning the follow-up to the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries, see paragraphs 116–118 below.

(b) Opportunities for consultation

105.     Paragraph 18 of the Organization of Work and Working Procedures of the Committee on Agriculture(150) states:

“There shall be an opportunity at any regular meeting of the Committee to raise any matter relating to the Decision on Measures concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries.”(151)

(c) Effectiveness

106.     At its meeting on 15 December 2000, the General Council decided that:

“The Committee on Agriculture shall examine possible means of improving the effectiveness of the implementation of the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries and report to the General Council at the second regular meeting of the Council in 2001.(152)”

107.     Pursuant to this mandate, the Committee on Agriculture submitted seven recommendations that were adopted by the Doha Ministerial Conference.(153) The recommendations concerned: (i) food aid; (ii) technical and financial assistance in the context of aid programmes to improve agricultural productivity and infrastructure; (iii) financing normal levels of commercial imports of basic foodstuff; and (iv) review of follow-up. See Section XXIX below.

108.     In its report submitted to the General Council on 4 July 2003, the Committee on Agriculture stated that it would continue to explore options and solutions within the framework of the Marrakesh NFIDC Decision to address short-term difficulties of LDCs and WTO NFIDCs in financing commercial imports of basic foodstuffs.(154) Pursuant to this the Committee further considered a pending proposal by the WTO Africa Group regarding the NFIDC Decision that was referred to the Committee by the Chairman of the General Council in the context of the review of all special and Differential treatment provisions by the Committee on Trade and Development in Special Session. (155)

109.     In the report of 4 July 2003 the Committee on Agriculture, while examining the possible means of improving the Effectiveness of the implementation of paragraph 5 of the Marrakesh NFIDC Decision, forwarded the following recommendations for approval by the General Council:

“(a)     that in the context of the current review of the Poverty Reduction and Growth Facility and the Compensatory Financing Facility of the IMF, WTO Members, in their capacity as members of the IMF, consider the concerns by LDCs and WTO NFIDCs concerning short-term difficulties in financing commercial imports of basic foodstuffs; and

(b)     that the General Council invite the World Bank and other relevant international organizations to report on the feasibility and effectiveness of commodity price risk management instruments for use by LDCs and WTO NFIDCs as part of strategies to address short-term difficulties in financing commercial imports of basic foodstuffs, in particular during phases of rising world market prices; and

(c)     that, building on the work already undertaken, including the WTO roundtable of 19 May 2003, the Committee will continue to explore, as a matter of priority and on the basis of proposals submitted by Members, options and solutions within the framework of the Marrakesh NFIDC Decision to address short-term difficulties of LDCs and WTO NFIDCs in financing commercial imports of basic foodstuffs.”(156)

110.     The annual monitoring exercise on the follow-up to the NFIDC Decision as a whole was undertaken at the November meeting of the Committee, on the basis, inter alia, of Table NF:1 notifications by donor Members as well as contributions by the observer organizations.(157)

XVIII. Article 17     back to top

A. Text of Article 17

Article 17: Committee on Agriculture:

A Committee on Agriculture is hereby established.

B. Interpretation and Application of Article 17

1. Committee on Agriculture

(a) Terms of reference

111.     At its meeting on 31 January 1995 the General Council adopted the following terms of reference for the Committee on Agriculture:

“The Committee shall oversee the implementation of the Agreement on Agriculture. The Committee shall afford members the opportunity of consulting on any matter relating to the implementation of the provisions of the Agreement.”(158)

(b) Rules of procedure

112.     At its meeting of 22 May 1996, the Council for Trade in Goods adopted the rules of procedure for the Committee on Agriculture.(159)

(c) Activities

113.     With respect to the initiation of the further negotiations on agriculture in February 2000, see paragraph 125 below.

XIX. Article 18     back to top

A. Text of Article 18

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 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.

B. Interpretation and Application of Article 18

1. Article 18.2

(a) Review procedure

(i) General

114.     At its first meeting on 27–28 March 1995, the Committee on Agriculture adopted the Organization of Work and Working Procedures.(160) The Committee decided, inter alia, that it:

“Shall meet at regular intervals to review progress in the implementation of the Uruguay Round reform programme under Article 18:1 and 2 of the Agreement (the ‘review process’) and generally to carry out such other tasks as are provided for in the Agreement or which may be required to be dealt with.”(161)

(ii) Transitional Review Mechanism under Paragraph 18 of the Protocol of Accession of the People’s Republic of China

115.     In accordance with the mandate of paragraph 2 of the Organization of Work and Working Procedures adopted by the Committee on Agriculture, the Committee was also to periodically review China’s progress with regard to its commitments under the Agreement of Agriculture, as stated in the Transitional Review Mechanism of the Protocol of the Accession of the People’s Republic of China.(162) At its regular meeting held on 23 September 2004(163) the Committee on Agriculture held its third annual Transitional Review under the Protocol of the Accession of the People’s Republic of China, and submitted a report to the Council of Trade in Goods on China’s transitional review.(164)

(b) Notification requirements

(i) General

116.     At its meeting on 8 June 1995, the Committee on Agriculture adopted a document setting out the requirements and formats for notifications under Article 18:2 and other relevant provisions of the Agreement on Agriculture.(165) The document covers five areas: market access(166), domestic support(167), export subsidies(168), export prohibitions and restrictions(169), and the follow-up to the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries.(170) In 1995, the Committee also adopted a list of “significant exporters”. Those Members with significant exporters status are required to notify annually their total exports in respect of the products identified on the list.(171)

117.     In its report of 19 November 2004 to the General Council on the regular meetings of the Committee on Agriculture, the, status of Member notifications issued for 1999–2003 as well as the outstanding notifications for the implementing years 1995–1998 were laid out.(172)

(ii) Developing countries

118.     In the context of the General Council’s consideration of implementation-related issues and concerns, the General Council decided, inter alia:(173):

“Members shall ensure that their tariff rate quotas regimes (TRQs) are administered in a transparent, equitable and non-discriminatory manner. In the context, they shall ensure that the notifications they provide to the Committee on Agriculture contain all the relevant information including details on guidelines and procedures on the allotment of TRQs. Members administering TRQs shall submit addenda to their notifications to the Committee on Agriculture (Table MA:1) by the time of the second regular meeting of the Committee in 2001. The understanding was that this decision should not place undue new burdens on developing countries (WT/GC/M/62, paragraph 14, refers).”(174)

2. Article 18.5

(a) Annual consultations

119.     According to the Committee’s Organization of Work and Working Procedures(175), these consultations are to be undertaken at the November meetings of the Committee.(176) In practice, these annual consultations have been based on annually updated statistical background notes provided by the Secretariat.(177)

120.     Data is made available on not only those members who have made export subsidy reduction commitments(178) with respect to a particular product, but also Members that have been identified in the list of “significant exporters” for the purpose of the Committee’s notification requirements on export subsidy commitments. Those Members and Observers have also been included who have emerged as major exporters for a particular product during the period covered.

3. Article 18.6

121.    In respect of the review process envisaged under Article 18.6, the Organization of Work and Working Procedures of the Committee(179) states, inter alia:

“A Member raising a matter relevant to the implementation commitments under Article 18:6, may request the Member to which the matter in question relates, through the Chairperson of the Committee, to provide in writing specific information, or an explanation of the relevant facts or circumstances, regarding the matter that has been raised. The role of the Chairperson shall be to ensure that there are reasonable grounds for the request and that as far as possible-duplication and unduly burdensome requests are avoided. The information or explanation thus requested should normally be provided to the Committee by the Member to which the request is addressed within 30 days.”(180)

4. Article 18.7

(a) Counter notifications

122.     The Organization of Work and Working Procedures(181) states, inter alia, that “counter notifications, shall be considered by the Committee at the earliest opportunity.”(182)

XX. Article 19     back to top

A. Text of Article 19

Article 19: 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.

B. Interpretation and Application of Article 19

123.     The following table lists the disputes in which panel and/or Appellate Body reports have been adopted where the provisions of the Agreement on Agriculture were invoked:

Part XII

XXI. Article 20     back to top

A. Text of Article 20

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:

(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.

B. Interpretation and Application of Article 20

1. Decision of the Singapore Ministerial Conference

124.     The Singapore Ministerial Conference decided as follows:

“Bearing in mind that an important aspect of WTO activities is a continuous overseeing of the implementation of various agreements, a periodic examination and updating of the WTO Work Programme is a key to enable the WTO to fulfil its objectives. In this context, we endorse the reports of the various WTO bodies. A major share of the Work Programme stems from the WTO Agreement and decisions adopted at Marrakesh. As part of these Agreements and decisions we agreed to a number of provisions calling for future negotiations on Agriculture, …. We agree to a process of analysis and exchange of information, where provided for in the conclusions and recommendations of the relevant WTO bodies, on the Built-in Agenda issues, to allow Members to better understand the issues involved and identify their interests before undertaking the agreed negotiations and reviews. We agree that: the time frames established in the Agreements will be respected in each case.”(183)

2. Decision to launch negotiations on agriculture

125.     At its meeting of 7 and 8 February 2000, the General Council decided to launch a new negotiation round on agriculture, stating as follows:

“[U]nder Article 20 of the Agreement on Agriculture, Members had agreed that negotiations for continuing the reform process would be initiated one year before the end of the implementation period, i.e. 1 January 2000. […] However, a number of procedural matters remained to be settled before the work could start in practice. In this regard, and in the light of wide and intensive consultations with and among Members on the structure of the negotiations, [the Chairman] proposed that the negotiations be conducted in the Committee on Agriculture meeting in Special Sessions. Progress in the negotiations would be reported directly to the General Council on a regular basis.”(184)

Part XIII

XXII. Article 21     back to top

A. Text of Article 21

Article 21: 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.

B. Interpretation and Application of Article 21

126.     In EC — Bananas III, the Panel rejected the European Communities argument that Articles 4.1 and 21.1 of the Agreement on Agriculture provided a justification for an inconsistency of the European Communities import scheme for bananas with Article XIII of GATT 1994.(185) The Appellate Body agreed with the Panel, stating:

“The preamble of the Agreement on Agriculture states that it establishes ‘a basis for initiating a process of reform of trade in agriculture’ and that this 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’. The relationship between the provisions of the GATT 1994 and of the Agreement on Agriculture is set out in Article 21.1 of the Agreement on Agriculture:

…

Therefore, the provisions of the GATT 1994, including Article XIII, apply to market access commitments concerning agricultural products, except to the extent that the Agreement on Agriculture contains specific provisions dealing specifically with the same matter.

…

In our view, Article 4.1 does more than merely indicate where market access concessions and commitments for agricultural products are to be found. Article 4.1 acknowledges that significant, new market access concessions, in the form of new bindings and reductions of tariffs as well as other market access commitments (i.e. those made as a result of the tariffication process), were made as a result of the Uruguay Round negotiations on agriculture and included in Members’ GATT 1994 Schedules. These concessions are fundamental to the agricultural reform process that is a fundamental objective of the Agreement on Agriculture.”(186)

XXIII. Annex 1     back to top

A. Text of Annex 1

Annex 1: Product Coverage

1.     This Agreement shall cover the following products:

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.

B. Interpretation and Application of Annex 1

No jurisprudence or decision of a competent WTO body.

XXIV. Annex 2     back to top

A. Text of Annex 2

Annex 2: Domestic Support: The Basis for Exemption from the Reduction Commitments

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)

(footnote original) 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.

         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)

(footnote original) 5 & 6 For 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.

         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.

B. Interpretation and Application of Annex 2

No jurisprudence or decision of a competent WTO body.

XXV. Annex 3     back to top

A. Text of Annex 3

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 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.

B. Interpretation and Application of Annex 3

127.     In Korea — Various Measures on Beef, the Panel and the Appellate Body addressed Korea’s argument that its method for calculation of domestic support was justifiable because it was based upon “the constituent data and methodology used in the tables of supporting material incorporated by reference in Part IV of the Member’s Schedule”, although it was not consistent with the methodology set out in Annex 3 to the Agreement on Agriculture. See paragraphs 3–5 above.

128.     Further, in Korea — Various Measures on Beef, the Appellate Body agreed with the Panel that in determining its market price support for beef, Korea had used the quantity of cattle actually purchased, in contravention of paragraph 8 of Annex 3. The Appellate Body stated:

“We share the Panel’s view that the words ‘production eligible to receive the applied administered price’ in paragraph 8 of Annex 3 have a different meaning in ordinary usage from ‘production actually purchased’. The ordinary meaning of ‘eligible’ is ‘fit or entitled to be chosen’.(187) Thus, ‘production eligible’ refers to production that is ‘fit or entitled’ to be purchased rather than production that was actually purchased. In establishing its program for future market price support, a government is able to define and to limit ‘eligible’ production. Production actually purchased may often be less than eligible production.”(188)

XXVI. Annex 4     back to top

A. Text of Annex 4

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 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.

B. Interpretation and Application of Annex 4

No jurisprudence or decision of a competent WTO body.

XXVII. Annex 5     back to top

A. Text of Annex 5

Annex 5: Special Treatment with Respect to Paragraph 2 of Article 4

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.

B. Interpretation and Application of Annex 5

No jurisprudence or decision of a competent WTO body.

XXVIII. Relationship with other WTO Agreements     back to top

A. SCM Agreement

129.     The Appellate Body, in Canada — Dairy and US — FSC, referred to the SCM Agreement, in defining the term “subsidy” under the Agreement on Agriculture. See paragraph 6 above.(189)

130.     Also, the Appellate Body, in US — FSC, referred to the SCM Agreement, in interpreting the concept of export contingency under the Agreement on Agriculture. See paragraph 9 above.(190)

XXIX. Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries (The “NFIDC Decision”)     back to top

A. Text of the Decision

1.     Ministers recognize that the progressive implementation of the results of the Uruguay Round as a whole will generate increasing opportunities for trade expansion and economic growth to the benefit of all participants.

2.     Ministers recognize that during the reform programme leading to greater liberalization of trade in agriculture least-developed and net food-importing developing countries may experience negative effects in terms of the availability of adequate supplies of basic foodstuffs from external sources on reasonable terms and conditions, including short-term difficulties in financing normal levels of commercial imports of basic foodstuffs.

3.     Ministers accordingly agree to establish appropriate mechanisms to ensure that the implementation of the results of the Uruguay Round on trade in agriculture does not adversely affect the availability of food aid at a level which is sufficient to continue to provide assistance in meeting the food needs of developing countries, especially least-developed and net food-importing developing countries. To this end Ministers agree:

(i)     to review the level of food aid established periodically by the Committee on Food Aid under the Food Aid Convention 1986 and to initiate negotiations in the appropriate forum to establish a level of food aid commitments sufficient to meet the legitimate needs of developing countries during the reform programme;

(ii)     to adopt guidelines to ensure that an increasing proportion of basic foodstuffs is provided to least-developed and net food-importing developing countries in fully grant form and/or on appropriate concessional terms in line with Article IV of the Food Aid Convention 1986;

(iii)     to give full consideration in the context of their aid programmes to requests for the provision of technical and financial assistance to least-developed and net food-importing developing countries to improve their agricultural productivity and infrastructure.

4.     Ministers further agree to ensure that any agreement relating to agricultural export credits makes appropriate provision for differential treatment in favour of least-developed and net food-importing developing countries.

5.     Ministers recognize that as a result of the Uruguay Round certain developing countries may experience short-term difficulties in financing normal levels of commercial imports and that these countries may be eligible to draw on the resources of international financial institutions under existing facilities, or such facilities as may be established, in the context of adjustment programmes, in order to address such financing difficulties. In this regard Ministers take note of paragraph 37 of the report of the Director-General to the CONTRACTING PARTIES to GATT 1947 on his consultations with the Managing Director of the International Monetary Fund and the President of the World Bank (MTN.GNG/NG14/W/35).

6.     The provisions of this Decision will be subject to regular review by the Ministerial Conference, and the follow-up to this Decision shall be monitored, as appropriate, by the Committee on Agriculture.

B. Interpretation and Application of the Decision

1. Paragraph 3

(a) Paragraphs 3(i) and (ii)

131.     In accordance with the mandate in paragraphs 3(i) and (ii), the Doha Ministerial Conference adopted the following recommendations, submitted by the Committee on Agriculture(191):

“(a)     That early action be taken within the framework of the Food Aid Convention 1999 (which unless extended, with or without a decision regarding its renegotiation, would expire on 30 June 2002) and of the UN World Food Programme by donors of food aid to review their food aid contributions with a view to better identifying and meeting the food aid needs of least-developed and WTO net food-importing developing countries;

(b)     WTO Members which are donors of food aid shall, within the framework of their food aid policies, statues, programmes and commitments, take appropriate measures aimed at ensuring: (i) that to the maximum extent possible their levels of food aid to developing countries are maintained during periods in which trends in world market prices of basic foodstuffs have been increasing; and (ii) that all food aid to least developed countries is provided in fully grant form and, to the maximum extent possible to WTO-net food-importing developing countries as well.”(192)

(i) Extension of the Food Aid Convention

132.     With regard to the recommendation in paragraph (a) above, which noted that the Food Aid Convention,1999, was due to expire on 30 June 2002, the meeting of the Food Aid Committee in December 2002, agreed in principle to a two-year extension of the Convention from 1 July 2003. The further extension of the Convention to 30 June 2005 was decided by the Food Aid Committee at its Session on 23 June 2003.(193)

(b) Paragraph 3(iii)

133.     The mandate in paragraph 3(iii) was developed by the following two recommendations on Technical and Financial Assistance in the Context of Aid Programmes to Improve Agricultural Productivity and Infrastructure, adopted at the Doha Ministerial Conference:

“(a) … developed country WTO Members should continue to give full and favourable consideration in the context of their aid programmes to requests for the provision of technical and financial assistance by least-developed and net food-importing developing countries to improve their agricultural productivity and infrastructure;

(b) … in support of the priority accorded by least-developed and net food-importing developing countries to the development of their agricultural productivity and infrastructure, the WTO General Council call upon relevant international developed organisations, including the World Bank, the FAO, IFAD, the UNDP and the Regional Development Banks to enhance their provision of, and access to, technical and financial assistance to least-developed and net food-importing developing countries, on terms and conditions conducive to the better use of such facilities and resources, in order to improve agricultural productivity and infrastructure in these countries under existing facilities and programmes, as well as under such facilities and programmes as may be introduced.”(194)

2. Paragraph 4

134.     In relation to paragraph 4, the Doha Ministerial Conference adopted the following recommendation:

“(a)     that the provision of paragraph 4 of the Marrakesh Ministerial Decision, which provide for differential treatment in favour of least-developed and WTO net food-importing developing countries, shall be taken fully into account in any agreement to be negotiated on disciplines on agricultural export credits pursuant to Article 10.2 of the Agreement on Agriculture;”(195)

3. Paragraph 5

(a) The Inter-Agency Panel

135.     In relation to paragraph 5 and in order to counter the difficulties in financing normal levels of commercial imports of basic foodstuff faced by certain developing countries, Members at the Doha Ministerial Conference adopted the recommendation, submitted by the Committee on Agriculture, to establish an Inter-Agency Panel on Short-Term Difficulties in Financing Normal Levels of Commercial Imports of Basic Foodstuffs (“Inter-Agency Panel”):

“(b)     That an inter-agency panel of financial and commodity experts be established, with the requested participation of the World Bank, the IMF, the FAO, the International Grains Council and the UNCTAD, to explore ways and means for improving access by-least-developed and WTO net food-importing developing countries to multilateral programs and facilities to assist with short term difficulties in financing normal levels of commercial imports of basic foodstuffs, as well as the concept and feasibility of the proposal for the establishment of a revolving fund in G/AG/W/49 and Add.1 and Corr.1. The detailed terms of reference, drawing on the Marrakesh NFIDC Decision, should be submitted by the Vice-Chairman of the WTO Committee on Agriculture, following consultations with Members, to the General Council for approval by not later than 31 December 2001. The inter-agency panel shall submit its recommendation to the General Council by not later than 30 June 2002.”(196)

136.     In accordance with the recommendations adopted by the Doha Ministerial Conference, the General Council at its meeting on 19 and 20 December 2001 adopted the following terms of reference for the Inter-Agency Panel within the framework of the NFIDC Decision:(197)

“1.     To examine the terms and conditions of existing facilities of the international financial institutions (namely: IMF and the World Bank) to which the least-developed and WTO net food-importing developing countries could have recourse in order to address short-term difficulties in financing normal levels of commercial imports of basic foodstuffs, principally cereals, rice, basic dairy products, pulses, vegetable oils and sugar, during periods of rising world prices for such basic foodstuffs, including, as appropriate, other relevant sources of concessional financing; this examination shall take into account, inter alia, such submissions as may be submitted to the Panel by least-developed and WTO net food-importing developing countries, donors and the relevant international financial institutions, by no later than end March 2002;

2.     To examine the concept and feasibility of the proposal for the establishment of a revolving fund in documents G/AG/W/49 and Add.1 and Corr.1, together with any further elaboration of those proposals as may be submitted to the Panel by the sponsoring Members concerned before the end of March 2002;

3.     In the light of its review and examination under paragraphs (1) and (2) above and having regard to the Marrakesh NFIDC Decision, to make such recommendations for the consideration of the WTO General Council as the Panel considers appropriate regarding: ways and means for improving access by least-developed and WTO net food-importing developing countries to multilateral programmes and facilities to assist with short-term difficulties in financing normal levels of commercial imports of basic foodstuffs;

4.     In carrying out its task the Panel may consult with such bodies or institutions as it considers appropriate;

5.     The Panel shall submit its report and recommendations to the WTO General Council by no later than 30 June 2002.”(198)

137.     The Inter-Agency Panel submitted its report to the General Council on 28 June 2002.(199) In its Report, the Inter-Agency Panel made four recommendations:

“[C]oncerning ways and means for improving access by LDCs and NFIDCs to multilateral programme and facilities to assist with short-term difficulties in financing normal levels of commercial imports of basic foodstuffs:

(a)     that in the context of the impending review of the CFF of the IMF, consideration be given by member governments to

(i)     extending the product coverage of the facility to cover all basic foodstuffs,

(ii)     clarifying access in the context of an existing arrangement with the IMF,

(iii)     providing a greater degree of automaticity without requiring an IMF-supported programme,

(iv)     reviewing the procedures and timeliness of disbursements, as well as encouraging governments to come forward with purchase requests;

(b)     that in the light of the limited potential usefulness of an ex-post revolving fund to support food imports in time of need, the feasibility of an ex-ante financing mechanism aimed at food importers be explored;

(c)     that the terms of reference of the Diagnostic Trade Integration Studies to be undertaking in the context of the Integrated Framework include, as appropriate and if requested by the beneficiary country, the items of

(i)     food security implications of trade development strategies,

(ii)     availability of, and access to, adequate financing, in particular by the private sector, to support food imports;

(d)     that strategies of commodity price risk management from the perspective of developing country food importers be addressed by the Commodity Price Risk Management Group of the World Bank.”(200)

138.     At its meeting on 15 October 2002 the General Council approved these four recommendations, with the amendments proposed by the Committee on Agriculture:

“[W]ith regard to the recommendations in Paragraphs 168 (a), (c) and (d), that the General Council authorize him, as Chairman [of the General Council], to write to the IMF, World Bank and the Integrated Framework Agencies requesting them to review the Panel report as it related to the issue within their competence. Finally, with regard to the recommendation in Paragraph 168 (b), he proposed that the General Council approve to the recommendation of the Committee on Agriculture that the question on feasibility of an ex-ante financing mechanism aimed at food importers be pursued by Committee, on the understanding that a proposal regarding the establishment of an ex-ante financing mechanism would be submitted by the WTO net food-importing developing countries, and follow-up report concerning the discussion of the proposal be submitted to the General Council following the regular meeting of the Committee in November.”(201)

Footnotes:

140. WT/MIN(01)/17, para. 2.1. back to text
141. The Decision adopted by the Ministerial Conference at Marrakesh is referenced in Section XXIX of this Chapter. back to text
142. The Food Aid Convention 1999 was adopted under the auspices of the United Nations on 24 March 1999. It provisionally entered into force on 1 July 1999 for an initial duration of three years. At that stage it was agreed to extend the Convention by one year and it was subsequently further extended to 30 June 2005 (Footnote not in the original document.) back to text
143. G/L/125, adopted by the Singapore Ministerial Conference, WT/MIN(96)/DEC, para. 13. back to text
144. G/AG/11, Section B-I. back to text
145. G/AG/11, Section B-II. back to text
146. G/AG/12. back to text
147. G/AG/3. The decision settled on two criteria for the selection of the Members which became beneficiaries of the measures provided for in the decision:
     “a) Least developed countries as recognised by the Economic and Social Council of the United Nations.”
      Under the first criterion, 48 least-developed countries defined as such by the United Nations are automatically contained in the list. Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Cape Verde, Central African Republic, Chad, Comoros, Democratic Republic of Congo (formerly Zaire), Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea Bissau, Haiti, Kiribati, Lao People’s Democratic Republic, Lesotho, Liberia, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Samoa, Sao Tome and Principe, Sierra Leone, Solomon Islands, Somalia, Sudan, Togo, Tuvalu, Uganda, United Republic of Tanzania, Vanuatu, Yemen and Zambia.
     “b) Any developing country Member of the WTO which was a net importer of basic foodstuffs in any three years of the most recent five-year period for which data are available and which notifies the Committee of its decision to be listed as a Net Food-Importing Developing Country for the purpose of the decision”
     The list currently includes the following countries: Barbados, Botswana, Côte d’Ivoire, Cuba, Dominica, Dominican Republic, Egypt, Gabon, Honduras, Jamaica, Jordan, Kenya, Mauritius, Morocco, Namibia, Pakistan, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Senegal, Sri Lanka, Trinidad and Tobago, Tunisia and Venezuela. G/AG/5/Rev.7. back to text
148. G/AG/R/4, para. 17. back to text
149. G/L/125. No such agreement has been reached as of 30 June 2001. back to text
150. With respect to the adoption of the document, see para. 114 of this Chapter. back to text
151. G/AG/1, para. 18. back to text
152. WT/L/384, para. 1.2. back to text
153. WT/MIN(01)/17, para. 2.2; G/AG/11. back to text
154. G/AG/16, para.4. back to text
155. TN/CTD/W/3/Rev.2, para.52. back to text
156. G/AG/16, para.19 back to text
157. G/L/719, para.7. back to text
158. These terms of reference are those agreed by the Sub-Committee on Institutional, Procedural and Legal Matters of the Preparatory Committee for the World Trade Organization at its meeting on 7 October 1994 (PC/IPL/1, WT/L/43) (17 February 1995). back to text
159. G/C/M/10, section 1(i). The text of the adopted rules of procedure can be found in G/L/142. back to text
160. G/AG/R/1, para. 4. The text of the adopted document can be found in G/AG/1. back to text
161. G/AG/1, para. 2. back to text
162. WT/L/432, para.18. back to text
163. Summary Report by the Secretariat of the September 2003 meeting: G/AG/R/36. back to text
164. G/AG/19. back to text
165. G/AG/R/2, para. 2. The text of the adopted document can be found in G/AG/2. back to text
166. G/AG/2, pp. 2–11. back to text
167. G/AG/2, pp. 12–23. back to text
168. G/AG/2, pp. 24–30. back to text
169. G/AG/2, pp. 31–32. back to text
170. G/AG/2, pp. 33–34. back to text
171. G/AG/2/Add.1. back to text
172. G/L/719. back to text
173. Document G/AG/11. back to text
174. WT/MIN(01)/17, para. 2.4. back to text
175. With respect to the adoption of the document, see para. 114 of this Chapter. back to text
176. G/AG/1, para. 17. back to text
177. G/AG/W/32 and Revisions. A revised note was issued by the Secretariat in November 2003. (G/AG/W/32/Rev.6 and Rev.7) back to text
178. G/AG/2/Add.1. back to text
179. With respect to the adoption of the document, see para. 114 of this Chapter. back to text
180. G/AG/1, para. 12. back to text
181. See para. 114 of this Chapter. back to text
182. G/AG/1, para. 11. back to text
183. WT/MIN(96)/DEC, para. 19. back to text
184. WT/GC/M/53, para. 12. back to text
185.  Panel Report on EC — Bananas III, para. 7.127. back to text
186. Appellate Body Report on EC — Bananas III, paras. 155–156. back to text
187. (footnote original) The Concise Oxford English Dictionary, (Clarendon Press, 1995), p. 438. back to text
188. Appellate Body Report on Korea — Various Measures on Beef, para. 120. back to text
189. See also Appellate Body Report on US — FSC (Article 21.5 — EC), paras. 187–196. back to text
190. See also Appellate Body Report on US — FSC (Article 21.5 — EC), paras. 187–196. back to text
191. Document G/AG/11. back to text
192. WT/MIN(01)/17, para. 2.2. back to text
193. G/AG/16. back to text
194. WT/MIN(01)/17, para. 2.2. The text of the adopted recommendations can be found in G/AG/11. back to text
195. WT/MIN(01)/17, para. 2.2. The text of the adopted recommendation can be found in G/AG/11. back to text
196. WT/MIN(01)/17, para. 2.2. The text of the adopted document can be found in G/AG/11. back to text
197. WT/GC/70, (para. j). back to text
198. G/AG/12 and WT/GC/M/72, paragraphs 61–63. back to text
199. G/AG/13/WT/GC/62. back to text
200. G/AG/13, para. 168. back to text
201. WT/GC/M/76, paras. 63 and 64. back to text