WTO: 2007 NEWS ITEMS

NOTE:
THIS NEWS ITEM IS DESIGNED TO HELP THE PUBLIC UNDERSTAND DEVELOPMENTS IN THE WTO. WHILE EVERY EFFORT HAS BEEN MADE TO ENSURE THE CONTENTS ARE ACCURATE, IT DOES NOT PREJUDICE MEMBER GOVERNMENTS’ POSITIONS. THE OFFICIAL RECORD IS IN THE MEETING’S MINUTES
  

> Explanation in “Understanding the WTO”


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This regular meeting of the Agriculture Committee (not the negotiations) lasted less than two hours, almost certainly a record in the committee’s almost 13 years of existence.

Once again, the longest questions and answers were about clarifying domestic support programmes under the Green Box, which do not distort trade or cause minimal distortion and are therefore allowed without restriction. This time, the programmes of Brazil, Mexico and Switzerland featured.

China replied to questions from the US on value-added tax rebates and tariff quota administration under its annual transitional review (required for a period under its membership agreement).

And although the committee’s “regular” meetings are separate from the current negotiations, an agenda item on an issue that is also in the negotiations provided an opportunity for Cuba to continue to press for a 720-day repayment period for export credits offered to least-developed and net-food-importing developing countries.

These are some details of the discussions:

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Notifications and review, and related questions 

1. Notifications backlog

A rising number of members are behindhand in notifying their export subsidies, domestic support and market access measures (including tariff quotas and special safeguards). Data compiled up to the previous day (25 September) and circulated in the meeting show that 78 members — over half of the membership — still have not supplied some or all of the required information for 1995-2001.

Among those allowed distorting domestic supports above minimal “de minimis” levels, a number have not notified their spending for 2002 or earlier, including Argentina, Norway, and the US. Canada has not notified for 2003 and after, the EU for 2004 and after, and Japan, Republic of Korea and Switzerland for 2005 and after.

Chairperson Valéria Csukasi of Uruguay reminded members that the notifications are important for monitoring their commitments and for the current negotiations. Australia agreed and complained particularly about late notifications from the three biggest suppliers of domestic support, the EU, Japan and the US.

(Up-to-date information on domestic support is needed for members to calculate accurately what the effect of proposed cuts would be on actual current payments as distinct from the bound ceilings. It is also needed for calculating levels to be used as the base for some reductions.)

Of the 39 notifications received since March, 16 were about domestic support, 10 about tariff quotas, seven about export subsidies, and five about special safeguards.
  

2. Canada’s domestic programmes for milk

New Zealand said it is concerned that latest developments in Canada’s complex supply management policy, which includes “special milk classes” and a number of other tools, could impede New Zealand’s exports and undermine Canada’s commitments in the WTO. It reminded Canada that the Special Milk Classes Scheme was the subject of a WTO dispute (cases DS103 and DS113 brought by the US and New Zealand in 1997, which were not resolved until 2003.).

Replying to New Zealand’s detailed questions, Canada explained a number of points and insisted that none of the special milk subsidies concerned (i.e. except for “special milk class 5(d)”) constitute subsidies under the WTO’s Agriculture Agreement. The national and provincial bodies administering the programmes work with the national government to ensure the programmes are consistent with Canada’s commitments in the WTO, Canada said.
  

3. Brazil’s domestic support

Once again, the numerous types of programmes allowed without limit under the Green Box, provided an opportunity for lengthy questions and answers, this time those of Brazil (and also Mexico). Australia, the EU and the US sought numerous clarifications on a number of programmes, including why support for some products was not notified.

Brazil replied in some detail. It explained that where figures for individual products were not supplied this was because the programmes were available more generally and not specifically for those products, or because for other reasons (budget constraints or eligibility criteria) the money was not spent.

(Mexico also clarified its programmes in response to questions from Canada and Australia, and Switzerland replying to Australian questions.)
  

4. Other issues

Among the other “notification and review” topics raised were (details will be available when the minutes are issued; the relevant notifications can be found from links to searches for documents):

  • EU DOMESTIC SUPPORT PAID BY MEMBER STATES’ GOVERNMENTS — Australia wanted the EU to provide information on these; the EU said the aggregate figures are included in its nofications and that the EU reports as “a single entity”.

  • CANADIAN CHEESE: Australia asked Canada for more information on how its new “compositional standards” for cheese would increase producers’ revenue. Canada said the requirement to have a higher milk content would shift milk use from lower-value products to higher-value cheese, the increase amounting to almost 5m hectolitres.

  • CHINA’S DEPOSITS FOR EXPORTS: Australia asked whether domestically-produced goods are also subject to the deposits. China said the deposits only apply to imported goods that are in bond.

  • REP.KOREA’S EXPORT SUBSIDIES (under provisions for packing and transport allowed for developing countries): Australia wanted to know if the support provided in 2005 continued after that. Rep.Korea said 28.9bn was paid in 2005 and 2006.

  • US’s REGULATION ON PRICE REPORTING. New Zealand wanted to know if the regulation supplied the information needed to safeguard domestic producers. The US said the regulation is still being considered, along with comments (including New Zealand’s), and handed over the latest 60-page draft.

  • SUGAR QUOTAS: Thailand wanted to know how Chile and the US shared out their quotas among supplying countries. They said the shares were based on shares supplied in earlier years.

  • TUNISIA’S TARIFF QUOTAS (i.e. low duties on quantities within the quotas, higher duties on quantities outside): The US repeated its concerns about a lack of transparency in the way Tunisia administers quotas on some products. Canada also queried low fill rates in Tunisia’s milk powder imports.

  • CHINESE TAIPEI’S TARIFF QUOTAS: Thailand wanted to know why Chinese Taipei had not imported bananas, mango and shaddocks (pomelo) within its quotas — Chinese Taipei attributed this to phytosanitary issues and Thailand said it would raise the question in the Sanitary/Phytosanitary Measures Committee.

  • AUSTRALIA’S TARIFF QUOTAS: The Philippines sought (and obtained) details of Australia’s tariff quotas for tobacco, including a change in the definition of the reporting year.

  • SPECIAL SAFEGUARDS: Australia and Thailand asked about Japan’s safeguards and Thailand asked about Chinese Taipei’s. Japan and Chinese Taipei supplied details.

  

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China’s transitional review 

The only questions came from the United States. They dealt with: value added tax exemptions for some commodities produced and sold by farmers in China and whether the exemptions comply with the General Agreement on Tariffs and Trade (GATT) and the Subsidies Agreement; exemptions on agricultural inputs; value added tax rebates on exports; and complaints about lack of transparency in administering tariff quotas on products such as cotton (see document G/AG/W/68).

China replied that exemptions from the 13%-value-added-tax on agricultural products only apply to products made and sold by farmers, not to companies, and that it believes the practice complies with GATT and the Subsidies Agreement. It declined to comment on tax exemptions on industrial products in this committee, and said information on its quotas, such as for cotton, are on government websites.

The US responded that the main problem concerning transparency for cotton is how quantities outside the 894,000-tonne quota are handled.

The transitional reviews were agreed as part of China’s membership agreement, for a period and for a number of subjects.

  

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Implementation issues 

Ministers at the 2001 Doha conference identified three “implementation” issues for agriculture: export credit and other financing programmes; the concerns of net-food-importing developing and least-developed countries; and tariff quota administration.

These overlap with some of the issues in the agriculture negotiations, and Cuba reminded members that it has proposed a 720-day reimbursement period for net-food-importing countries as an exception to the normal 180 days agreed to ensure export credit is on commercial terms.

Argentina reiterated its view that export credit is part of implementing the present Agriculture Agreement and not a new negotiating issue. It called for the issue to remain on the regular committee’s agenda.
  

CHAIRPERSON: Ms Valéria Csukasi (Uruguay)

  

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Next 

  • Wednesday 21 November 2007

Regular committee meetings in 2008 (subject to change):

  • Tuesday 18, Wednesday 19 March 2008

  • (Possibly) Tuesday 24, Wednesday 25 June 2008

  • Wednesday 17, Thursday 18 September

  • Wednesday 26, Thursday 27 November

Jargon buster

• de minimis: minimal amounts of domestic support that are allowed even though they distort trade — up to 5% of the value of production for developed countries, 10% for developing
• Green Box: domestic support for agriculture that is allowed without limits because it does not distort trade, or at most causes minimal distortion.
• notification: a transparency obligation requiring member governments to report trade measures to the relevant WTO body if the measures might have an effect on other members
• special safeguard: temporary increase in import duty to deal with import surges or price falls, under provisions that are special to the Agriculture Agreement
• tariff quota: when quantities inside a quota are charged lower import duty rates, than those outside (which can be high)
  

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