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WTA /WTO and GATT Uruguay 1994

© WTO Multilateral

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World Trade Agreement 1994 (establishing the WTO and including GATT Uruguay 1994)

   1

ANNEX 1A: Agreement on Trade In Goods

   244

3. Agreement on Agriculture

   360

3. Agreement on Agriculture

 
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3. Agreement on Agriculture

  361

Members,

  362

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;

  363

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";

  364

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";

  365

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;

  366

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;

  367

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;

  368

Hereby agree, as follows:

  369


Part I

 
  370


Article 1 - Definition of Terms

 
  371

In this Agreement, unless the context otherwise requires:

  372

(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:

  373

(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

  374

(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;

  375

(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;

  376

(c) "budgetary outlays" or "outlays" include revenue foregone;

  377

(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:

  378

(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

  379

(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;

  380

(e) "export subsidies" refer to subsidies contingent upon export performance including the export subsidies listed in Article 9 of this Agreement;

  381

(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;

  382

(g) "market access concessions" include all market access commitments undertaken pursuant to this Agreement;

  383

(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:

  384

(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

  385

(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;

  386

(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.

  387


Article 2 - Product Coverage

 
  388

This Agreement applies to the products listed in Annex 1 to this Agreement, hereinafter referred to as agricultural products.

  389


Part II

 
  390


Article 3 - Incorporation of Concessions and Commitments

 
  391

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.

  392

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.

  393

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.

  394


Part III

 
  395


Article 4 - Market Access

 
  396

1. Market access concessions contained in Schedules relate to bindings and reductions of tariffs, and to other market access commitments as specified therein.

  397

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, except as otherwise provided for in Article 5 and Annex 5 hereof.

  398


Article 5 - Special Safeguard Provisions

 
  399

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:

  400

(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:

  401

(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 for the product concerned.

  402

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.

  403

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.

  404

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 during the three preceding years for which data are available:

  405

(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;

  406

(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;

  407

(c) where such market access opportunities for a product are greater than 30 per cent, the base trigger level shall equal 105 per cent.

  408

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.

  409

5. The additional duty imposed under sub-paragraph 1(ii) above shall be set according to the following schedule:

  410

(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;

  411

(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;

  412

(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);

  413

(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);

  414

(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).

  415

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).

  416

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.

  417

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.

  418

9. The provisions of this Article shall remain in force for the duration of the reform process as determined under Article 20.

  419


Part IV

 
  420


Article 6 - Domestic Support Commitments

 
  421

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".

  422

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.

  423

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.

  424

4.

  425

(a) A Member shall not be required to include in the calculation of its Current Total AMS and shall not be required to reduce:

  426

(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

  427

(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.

  428

(b) For developing country Members, the de minimis percentage under this paragraph shall be 10 per cent.

  429

5.

  430

(a) Direct payments under production-limiting programmes shall not be subject to the commitment to reduce domestic support if :

  431

(i) such payments are based on fixed area and yields; or

  432

(ii) such payments are made on 85 per cent or less of the base level of production; or

  433

(iii) livestock payments are made on a fixed number of head.

  434

(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.

  435


Article 7 - General Disciplines on Domestic Support

 
  436

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.

  437

2.

  438

(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.

  439

(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.

  440


Part V

 
  441


Article 8 - Export Competition Commitments

 
  442

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.

  443


Article 9 - Export Subsidy Commitments

 
  444

1. The following export subsidies are subject to reduction commitments under this Agreement:

  445

(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.

  446

(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.

  447

(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.

  448

(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.

  449

(e) Internal transport and freight charges on export shipments, provided or mandated by governments, on terms more favourable than for domestic shipments.

  450

(f) Subsidies on agricultural products contingent on their incorporation in exported products.

  451

2.

  452

(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:

  453

(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

  454

(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.

  455

(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:

  456

(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;

  457

(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;

  458

(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

  459

(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.

  460

3. Commitments relating to limitations on the extension of the scope of export subsidization are as specified in Schedules.

  461

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.

  462


Article 10 - Prevention of Circumvention of Export Subsidy Commitments

 
  463

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.

  464

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.

  465

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.

  466

4. Members donors of international food aid shall ensure:

  467

(a) that the provision of international food aid is not tied directly or indirectly to commercial exports of agricultural products to recipient countries;

  468

(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

  469

(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.

  470


Article 11 - Incorporated Products

 
  471

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.

  472


Part VI

 
  473


Article 12 - Disciplines on Export Prohibitions and Restrictions

 
  474

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:

  475

(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;

  476

(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.

  477

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.

  478


Part VII

 
  479


Article 13 - Due Restraint

 
  480

During the implementation period, notwithstanding the provisions of the GATT 1994 and the Agreement on Subsidies and Countervailing Measures ("Subsidies Agreement"):

  481

1. Domestic support measures that conform fully to the provisions of Annex 2 to this Agreement shall be:

  482

(a) non-actionable subsidies for purposes of countervailing duties;

  483

(b) exempt from actions based on Article XVI of the GATT 1994 and Part III of the Subsidies Agreement; and

  484

(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.

  485

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:

  486

(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;

  487

(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

  488

(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.

  489

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:

  490

(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

  491

(b) exempt from actions based on Article XVI of the GATT 1994 or Articles 3, 5 and 6 of the Subsidies Agreement.

  492


Part VIII

 
  493


Article 14 - Sanitary and Phytosanitary Measures

 
  494

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

  495


Part IX

 
  496


Article 15 - Special and Differential Treatment

 
  497

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.

  498

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.

  499


Part X

 
  500


Article 16 - Least-developed and Net Food-Importing Developing Countries

 
  501

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.

  502

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

  503


Part XI

 
  504


Article 17 - Committee on Agriculture

 
  505

A Committee on Agriculture shall be established.

  506


Article 18 - Review of the Implementation of Commitments

 
  507

1. Progress in the implementation of commitments negotiated under the Uruguay Round reform programme shall be reviewed by the Committee on Agriculture.

  508

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 WTO Secretariat may be requested to prepare in order to facilitate the review process.

  509

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.

  510

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.

  511

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.

  512

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.

  513

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.

  514


Article 19 - Consultation and Dispute Settlement

 
  515

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.

  516


Part XII

 
  517


Article 20 - Continuation of the Reform Process

 
  518

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:

  519

-the experience to that date from implementing the reduction commitments;

  520

-the effects of the reduction commitments on world trade in agriculture;

  521

-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

  522

-what further commitments are necessary to achieve the above mentioned long-term objectives.

  523


Part XIII

 
  524


Article 21 - Final Provisions

 
  525

1. The provisions of the GATT 1994 and of other Multilateral Trade Agreements in Annex 1A to the WTO shall apply subject to the provisions of this Agreement.

  526

2. The Annexes to this Agreement are hereby made an integral part of this Agreement.

  527


ANNEX 1 - PRODUCT COVERAGE

 
  528

1. This Agreement shall cover the following products:

  529

(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 Headings

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 Headings

53.01

(raw flax)

HS Headings

53.02

(raw hemp)

 

2. The foregoing shall not limit the product coverage of the Agreement on Sanitary and Phytosanitary Measures.

  530


ANNEX 2 - DOMESTIC SUPPORT: THE BASIS FOR EXEMPTION FROM THE REDUCTION COMMITMENTS

 
  531

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:

  532

(i) the support in question shall be provided through a publicly- funded government programme (including government revenue foregone) not involving transfers from consumers; and,

  533

(ii) the support in question shall not have the effect of providing price support to producers;

  534

plus policy-specific criteria and conditions as set out below.

  535

Government Service Programmes

  536

2. General services

  537

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:

  538

(i) research, including general research, research in connection with environmental programmes, and research programmes relating to particular products;

  539

(ii) pest and disease control, including general and product-specific pest and disease control measures, such as early warning systems, quarantine and eradication;

  540

(iii) training services, including both general and specialist training facilities;

  541

(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;

  542

(v) inspection services, including general inspection services and the inspection of particular products for health, safety, grading or standardization purposes;

  543

(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

  544

(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.

  545

3. Public stockholding for food security purposes

  546

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.

  547

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.

  548

4. Domestic food aid

  549

Expenditures (or revenue foregone) in relation to the provision of domestic food aid to sections of the population in need.

  550

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.

  551

5. Direct payments to producers

  552

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.

  553

6. Decoupled income support

  554

(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.

  555

(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.

  556

(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.

  557

(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.

  558

(v) No production shall be required in order to receive such payments.

  559

7. Government financial participation in income insurance and income safety-net programmes

  560

(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.

  561

(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.

  562

(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.

  563

(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.

  564

8. Payments (made either directly or by way of government financial participation in crop insurance schemes) for relief from natural disasters

  565

(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.

  566

(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.

  567

(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.

  568

(iv) Payments made during a disaster shall not exceed the level required to prevent or alleviate further loss as defined in criterion (ii) above.

  569

(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.

  570

9. Structural adjustment assistance provided through producer retirement programmes

  571

(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.

  572

(ii) Payments shall be conditional upon the total and permanent retirement of the recipients from marketable agricultural production.

  573

10. Structural adjustment assistance provided through resource retirement programmes

  574

(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.

  575

(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.

  576

(iii) Payments shall not require or specify any alternative use for such land or other resources which involves the production of marketable agricultural products.

  577

(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.

  578

11. Structural adjustment assistance provided through investment aids

  579

(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.

  580

(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.

  581

(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.

  582

(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.

  583

(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.

  584

(vi) The payments shall be limited to the amount required to compensate for the structural disadvantage.

  585

12. Payments under environmental programmes

  586

(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.

  587

(ii) The amount of payment shall be limited to the extra costs or loss of income involved in complying with the government programme.

  588

13. Payments under regional assistance programmes

  589

(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.

  590

(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.

  591

(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.

  592

(iv) Payments shall be available only to producers in eligible regions, but generally available to all producers within such regions.

  593

(v) Where related to production factors, payments shall be made at a degressive rate above a threshold level of the factor concerned.

  594

(vi) The payments shall be limited to the extra costs or loss of income involved in undertaking agricultural production in the prescribed area.

  595


ANNEX 3 - DOMESTIC SUPPORT: CALCULATION OF AGGREGATE MEASUREMENT OF SUPPORT

 
  596

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.

  597

3. Support at both the national and sub-national level shall be included.

  598

4. Specific agricultural levies or fees paid by producers shall be deducted from the AMS.

  599

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.

  600

6. For each basic product, a specific AMS shall be established, expressed in total monetary value terms.

  601

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.

  602

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.

  603

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.

  604

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.

  605

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.

  606

12.Non-exempt direct payments which are based on factors other than price shall be measured using budgetary outlays.

  607

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.

  608


ANNEX 4 - DOMESTIC SUPPORT: CALCULATION OF EQUIVALENT MEASUREMENT OF SUPPORT

 
  609

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.

  610

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.

  611

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).

  612

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.

  613


ANNEX 5 - SPECIAL TREATMENT UNDER ARTICLE 4:2

 
  614

Section A

  615

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"):

  616

(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");

  617

(b) no export subsidies have been provided since the beginning of the base period for the designated products;

  618

(c) effective production restricting measures are applied to the primary agricultural product;

  619

(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

  620

(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.

  621

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.

  622

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.

  623

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.

  624

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.

  625

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.

  626

Section B

  627

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:

  628

- 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.

  629

- appropriate market access opportunities have been provided for in other products under this Agreement.

  630

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.

  631

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.

  632

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.

  633


Attachment to Annex 5: Guidelines for the Calculation of Tariff Equivalents for the Specific Purpose Specified in Paragraphs 6 and 10 of this Annex

 
  634

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:

  635

(i) shall primarily be established at the four-digit level of the HS;

  636

(ii) shall be established at the six-digit or a more detailed level of the HS wherever appropriate;

  637

(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.

  638

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:

  639

(i) appropriate average c.i.f. unit values of a near country; or

  640

(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.

  641

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.

  642

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.

  643

5. The initial tariff equivalents may be adjusted, where necessary, to take account of differences in quality or variety using an appropriate coefficient.

  644

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.

  645

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.

  646



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