International Dairy Agreement [*]
Done at: Marrakesh
Date enacted: 1994-04-15
In force: 1995-01-01
The Parties to this Agreement,
Recognizing the importance of milk and dairy products to the economy of many countries[1]in terms of production, trade and consumption;
Recognizing the need, in the mutual interests of producers and consumers, and of exporters and importers, to avoid surpluses and shortages, and to maintain prices at an equitable level;
Noting the diversity and interdependence of dairy products;
Noting the situation in the dairy products market, which is characterized by very wide fluctuations and the proliferation of export and import measures;
Considering that improved cooperation in the dairy products sector contributes to the attainment of the objectives of expansion and liberalization of world trade, and the implementation of the principles and objectives concerning developing countries agreed upon in the Tokyo Declaration of Ministers dated 14 September 1973;
Determined to respect the principles and objectives of the General Agreement on Tariffs and Trade 1994[2]and, in carrying out the aims of this Agreement, effectively to implement the principles and objectives agreed upon in the said Tokyo Declaration;
Hereby agree as follows:
[1] |
In this Agreement and in the Annex thereto, the term "country" is deemed to include the European Communities as well as any separate customs territory Member of the World Trade Organization. |
[2] |
This provision shall apply only among Parties that are Members of the World Trade Organization. |
Article I
Objectives
The objectives of this Agreement shall be, in accordance with the principles and objectives agreed upon in the Tokyo Declaration of Ministers dated 14 September 1973,
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to achieve the expansion and ever greater liberalization of world trade in dairy products under market conditions as stable as possible, on the basis of mutual benefit to exporting and importing countries; |
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to further the economic and social development of developing countries. |
Article II
Product coverage
1. |
This Agreement applies to the dairy products sector. For the purpose of this Agreement, the term "dairy products" is deemed to include the following products, as defined in the Harmonized Commodity Description and Coding System ("Harmonized System") established by the Customs Co-operation Council[3]:
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2. |
The International Dairy Council, established under paragraph 1(a) of Article VII (hereinafter referred to as "the Council"), may decide that the Agreement is to apply to other products in which dairy products referred to in paragraph 1 have been incorporated, if it deems their inclusion necessary for the implementation of the objectives and provisions of this Agreement. |
[3] |
For those Parties which have not yet implemented the Harmonized System, the following Customs Co-operation Council Nomenclature applies with respect to Article II of this Agreement and Article 1 of the Annex: CCCN Milk and cream, fresh, not concentrated or sweetened 04.01 Milk and cream, preserved, concentrated or sweetened 04.02 Butter 04.03 Cheese and curd 04.04 Casein ex 35.01 |
Article III
Information and market monitoring
1. |
Each Party shall provide regularly and promptly to the Council the information required to permit the Council to monitor and assess the overall situation of the world market for dairy products and the world market situation for each individual dairy product. |
2. |
Developing country Parties shall furnish the information available to them. In order that these Parties may improve their data collection mechanisms, developed Parties, and any developing Parties able to do so, shall consider sympathetically any request to them for technical assistance. |
3. |
The information that the Parties undertake to provide pursuant to paragraph 1, according to the modalities that the Council shall establish, shall include data on past performance, current situation and outlook regarding production, consumption, prices, stocks and trade, including transactions other than normal commercial transactions, in respect of the products referred to in Article II, and any other information deemed necessary by the Council. Parties shall also provide information on their domestic policies and trade measures, and on their bilateral, plurilateral or multilateral commitments, in the dairy sector and shall make known, as early as possible, any changes in such policies and measures that are likely to affect international trade in dairy products. The provisions of this paragraph shall not require any Party to disclose confidential information which would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of particular enterprises, public or private. |
4. |
The Secretariat of the World Trade Organization (hereinafter referred to as "the Secretariat"), shall draw up, and keep up to date, an inventory of all measures affecting trade in dairy products, including commitments resulting from bilateral, plurilateral and multilateral negotiations. |
Article IV
Functions of the International Dairy Council and cooperation between the Parties
1. |
The Council shall meet in order to:
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2. |
If after an evaluation of the world market situation and outlook, referred to in paragraph 1(a), the Council finds that a serious market disequilibrium, or threat of such a disequilibrium, which affects or may affect international trade, is developing for dairy products in general or for one or more products, the Council will proceed to identify, taking particular account of the situation of developing countries, possible solutions for consideration by governments. |
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3. |
Depending on whether the Council considers that the situation defined in paragraph 2 is temporary or more durable, the measures referred to in paragraph 2 could include short-, mediumor long-term measures to contribute to improve the overall situation of the world market. |
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4. |
When considering measures that could be taken pursuant to paragraphs 2 and 3, due account shall be taken of the special and more favourable treatment to be provided for developing countries, where this is feasible and appropriate. |
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5. |
Any Party may raise before the Council any matter[4]affecting this Agreement, inter alia, for the same purposes provided for in paragraph 2. Each Party shall promptly afford adequate opportunity for consultation regarding such matter affecting this Agreement. |
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6. |
If the matter affects the application of the specific provisions of the Annex, any Party which considers that its trade interests are being seriously threatened and which is unable to reach a mutually satisfactory solution with the other Party or Parties concerned may request the Chairman of the Committee established under paragraph 2(a) of Article VII, to convene a special meeting of the Committee on an urgent basis so as to determine as rapidly as possible, and within four working days if requested, any measures which may be required to meet the situation. If a satisfactory solution cannot be reached, the Council shall, at the request of the Chairman of the Committee, meet within a period of not more than fifteen days to consider the matter with a view to facilitating a satisfactory solution. |
[4] |
It is confirmed that the term "matter" in this paragraph includes any matter which is covered by Multilateral Trade Agreements annexed to the Agreement Establishing the World Trade Organization, in particular those bearing on export and import measures. |
Article V
Food aid and transactions other than normal commercial transactions
1. |
The Parties agree:
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2. |
Donated exports, exports destined for relief purposes or welfare purposes, and other transactions which are not normal commercial transactions shall be effected in accordance with Article 10 of the Agreement on Agriculture. The Council shall cooperate closely with the FAO Consultative Sub-Committee on Surplus Disposal. |
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3. |
The Council shall, in accordance with conditions and modalities that it will establish, upon request, discuss and consult on all transactions other than normal commercial transactions and other than those covered by the Agreement on Subsidies and Countervailing Measures. |
Article VI
Annex
Without prejudice to the provisions of Articles I to V, the products listed below shall be subject to the provisions of the Annex:
Milk powder and cream powder, excluding whey powder |
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Milk fat |
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Certain cheeses |
Article VII
Administration
1. |
International Dairy Council
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2. |
Committee on Certain Milk Products
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Article VIII
Final provisions
1. |
Acceptance
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2. |
Entry into force
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3. |
Validity This Agreement shall remain in force for three years. The duration of this Agreement shall be extended for further periods of three years at a time, unless the Council, at least eighty days prior to each date of expiry, decides otherwise. |
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4. |
Amendment Except where provision for modification is made elsewhere in this Agreement, the Council may recommend an amendment to the provisions of this Agreement. The proposed amendment shall enter into force upon acceptance by all Parties. |
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5. |
Relationship between the Agreement and the Annex and Attachments The following shall be deemed to be an integral part of this Agreement, subject to the provisions of paragraph 1(b):
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6. |
Relationship between the Agreement and Other Agreements Nothing in this Agreement shall affect the rights and obligations of Parties under the General Agreement on Tariffs and Trade and the WTO Agreement.[6] |
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7. |
Withdrawal
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8. |
Deposit Until the entry into force of the WTO Agreement, the text of this Agreement shall be deposited with the Director-General to the Contracting Parties to GATT who shall promptly furnish a certified copy thereof and a notification of each acceptance thereof to each Party. The texts of this Agreement in the English, French and Spanish languages shall all be equally authentic. This Agreement, and any amendments thereto, shall, upon the entry into force of the WTO Agreement, be deposited with the Director-General of the WTO. |
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9. |
Registration This Agreement shall be registered in accordance with the provisions of Article 102 of the Charter of the United Nations. |
[5] |
For the purpose of this Agreement, the term "government" is deemed to include the competent authorities of the European Communities. |
[6] |
This provision shall apply only among Parties that are Members of the WTO or GATT. |
Done at Marrakesh this fifteenth day of April nineteen hundred and ninety-four.
Annex on certain milk products
Article 1
Product coverage
1. |
This Annex applies to:
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Field of application |
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2. |
For each Party, this Annex is applicable to exports of the products specified in paragraph 1 manufactured or repacked inside its own customs territory. |
Article 2
Pilot products
The minimum export prices established under Article 3 shall be established with respect to the pilot products of the following specifications:
a. |
Designation: Skimmed milk powder Milk fat content: less than or equal to 1.5 per cent by weight Water content: less than or equal to 5 per cent by weight |
b. |
Designation: Whole milk powder Milk fat content: 26 per cent by weight Water content: less than or equal to 5 per cent by weight |
c. |
Designation: Buttermilk powder[7]Milk fat content: less than or equal to 11 per cent by weight Water content: less than or equal to 5 per cent by weight |
d. |
Designation: Anhydrous milk fat Milk fat content: 99.5 per cent by weight |
e. |
Designation: Butter Milk fat content: 80 per cent by weight |
f. |
Designation: Cheese |
Packaging:
In packages normally used in the trade, of a net content by weight of not less than 25 kgs. or 50 lbs., except for cheese, of 20 kgs. or 40 lbs., respectively, as appropriate.
Terms of sale:
F.o.b. from the exporting Party or free-at-frontier exporting Party.
By derogation from this provision, reference points for the Parties listed in Attachment A may be as provided therein.
Prompt payment against documents.
[7] |
Derived from the manufacture of butter and anhydrous milk fat. |
Article 3
Minimum prices
Level and observance of minimum prices
1. |
Each Party shall take the steps necessary to ensure that the export prices of the products defined in Article 2 shall not be less than the minimum prices applicable under this Annex. If the products are exported in the form of goods in which they have been incorporated, Parties shall take the steps necessary to avoid circumvention of the price provisions of this Annex. |
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2. |
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3. |
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Adjustment of minimum prices |
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4. |
If the products actually exported differ from the pilot products in respect of the fat content, packaging or terms of sale, the minimum prices shall be adjusted so as to protect the minimum prices established in this Annex for the products specified in Article 2 of this Annex, according to the following provisions: |
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Milk fat content:
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5. |
By derogation from the provisions of paragraphs 1 to 4, a Party may, under the conditions defined below, export or import, as the case may be, skimmed milk powder and buttermilk powder for purposes of animal feed at prices below the minimum prices provided for in this Annex for these products. A Party may make use of this possibility only to the extent that it ensures that the products exported or imported are subjected to the processes and control measures which will be applied in the country of export or destination so as to ensure that the skimmed milk powder and buttermilk powder thus exported or imported are used exclusively for animal feed. These processes and control measures shall have been approved by the Committee and recorded in a register established by it.[11]A Party wishing to make use of the provisions of this paragraph shall give advance notification of its intention to do so to the Committee which shall meet, at the request of any Party, to examine the market situation. The Parties shall furnish the necessary information concerning their transactions in respect of skimmed milk powder and buttermilk powder for purposes of animal feed, so that the Committee may follow developments in this sector and periodically make forecasts concerning the evolution of this trade. |
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6. |
Special conditions of sales |
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7. |
Parties undertake, within the limit of their institutional possibilities, to ensure that practices such as those referred to in Article 4 do not have the effect of directly or indirectly bringing the export prices of the products subject to the minimum price provisions below the agreed minimum prices. |
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8. |
Transactions other than normal commercial transactions |
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9. |
The provisions of paragraphs 1 to 6 shall not be regarded as applying to donated exports or to exports destined for relief purposes or food-related development purposes or welfare purposes, provided these have been notified to the Council as provided for in Article V of the Agreement. |
[8] |
As defined in Article 2(c) of this Annex. |
[9] |
See Attachment B , "Schedule of Price Differentials According to Milk Fat Content". |
[10] |
See Article 2 of this Annex. |
[11] |
See Attachment C, "Register of Processes and Control Measures". It is understood that exporters would be permitted to ship skimmed milk powder and buttermilk powder for animal feed purposes in an unaltered state to importers which have had their processes and control measures inserted in the Register. In this case, exporters shall so inform the Committee. |
Article 4
Provision of information
In cases where prices in international trade of the products covered by Article 1 are approaching the minimum prices mentioned in paragraph 2(b) of Article 3, and without prejudice to the provisions of Article III of the Agreement, Parties shall notify to the Committee all the relevant elements for evaluating their own market situation and, in particular, credit or loan practices, twinning with other products, barter or three-sided transactions, refunds or rebates, exclusivity contracts, packaging costs and details of the packaging, so that the Committee can make a verification.
Article 5
Obligations of exporting Parties
Exporting Parties agree to use their best endeavours, in accordance with their institutional possibilities, to supply on a priority basis the normal commercial requirements of developing importing Parties, especially those used for food-related development purposes and welfare purposes.
Article 6
Cooperation of importing Parties
1. |
Parties which import products covered by Article 1 undertake in particular:
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2. |
Paragraph 1 shall not apply to imports of skimmed milk powder and buttermilk powder for purposes of animal feed, provided that such imports are subject to the measures and procedures provided for in paragraph 5 of Article 3. |
Article 7
Derogations
1. |
Upon request by a Party, the Committee shall have the authority to grant derogations from the provisions of paragraphs 1 to 5 of Article 3 in order to remedy difficulties which observance of minimum prices could cause certain Parties. The Committee shall take a decision on such a request within three months from the date of the request. |
2. |
The provisions of paragraphs 1 to 4 of Article 3 shall not apply to exports, in exceptional circumstances, of small quantities of natural unprocessed cheese which would be below normal export quality as a result of deterioration or production faults. Parties exporting such cheese shall notify the Secretariat in advance of their intention to do so. Parties shall also notify the Committee quarterly of all sales of cheese effected under this provision, specifying in respect of each transaction the quantities, prices and destinations involved. |
Article 8
Emergency action
Any Party which considers that its interests are seriously endangered by a country not bound by this Annex can request the Chairman of the Committee to convene an emergency meeting of the Committee within two working days to determine and decide whether measures would be required to meet the situation. If such a meeting cannot be arranged within the two working days and the commercial interests of the Party concerned are likely to be materially prejudiced, that Party may take unilateral action to safeguard its position, on the condition that any other Parties likely to be affected are immediately notified. The Chairman of the Committee shall also be formally advised immediately of the full circumstances of the case and shall call a special meeting of the Committee at the earliest possible moment.
[*] |
Annex 4(c) of the WTO Agreement. This Agreement was terminated in 1997. |