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