August 2004 framework: export subsidies and competition
The framework states clearly that all forms of export subsidies will be eliminated by a “credible” date. The elimination will work in parallel for all types of subsidies, including those in government-supported export credit, food aid, and state-sanctioned exporting monopolies. The negotiations will also develop disciplines on all export measures whose effects are equivalent to subsidies. More specifically:
UPDATED 1 DECEMBER 2004
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This briefing document explains current agricultural issues raised before and in the current negotiations. It has been prepared by the Information and Media Relations Division of the WTO Secretariat to help public understanding about the agriculture negotiations. It is not an official record of the negotiations.
The negotiated date will mark the end of: export subsidies as listed in members’ reduction commitments (“scheduled”); all export credits, export credit guarantees or insurance programmes with repayment periods beyond 180 days; those with shorter repayment periods but failing to conform with disciplines that are to be negotiated; trade-distorting practices of state trading enterprises that are considered to be subsidized (“the issue of the future use of monopoly powers will be subject to further negotiation”); and food aid that does not conform with various disciplines, which will also be negotiated.
The reductions will be by annual instalments, and with parallel treatment for the different forms of export subsidy, although the details still have to be negotiated. Some leeway in the reduction steps is allowed for “coherence” with members’ “internal reform steps”.
The small print balances the need for transparency — providing information — with respecting commercial confidentiality.
Again, developing countries are allowed more lenient terms. Elimination can take longer. They can continue to subsidize transportation and marketing (Article 9.4 of the Agriculture Agreement) “for a reasonable period, to be negotiated”, beyond the date for ending the main subsidies. At the same time, when members get rid of subsidized components of credit and insurance, they have to be able to avoid harming the interests of least-developed and net food-importing developing countries. And special consideration is given to poorer countries’ state trading enterprises whose monopoly privileges aim to keep domestic prices stable for consumers and to ensure food security.
“Ad hoc temporary financing arrangements” that would normally be disciplined should be possible in exceptional circumstances and under strict conditions for exports to developing countries, so long as these arrangements do not undermine the commitments that members will make. Details are to be negotiated.