AGREEMENT ON AGRICULTURE
Members,
Having decided to establish a basis for initiating a process of reform of trade in
agriculture in line with the objectives
of the negotiations as set out in the Punta del Este
Declaration;
Recalling that their long-term objective as agreed at the Mid-Term Review of the
Uruguay Round "is to establish a
fair and market-oriented agricultural trading system
and that a reform process should be
initiated through the negotiation of commitments on
support and protection and through the
establishment of strengthened and more
operationally effective GATT rules and
disciplines";
Recalling further that "the above-mentioned long-term objective is to provide
for
substantial progressive reductions in
agricultural support and protection sustained over
an agreed period of time, resulting in
correcting and preventing restrictions and distortions
in world agricultural markets";
Committed to achieving specific binding commitments in each of the following areas:
market access; domestic support; export
competition; and to reaching an agreement on
sanitary and phytosanitary issues;
Having agreed that in implementing their commitments on market access, developed
country Members would take fully into
account the particular needs and conditions of
developing country Members by providing
for a greater improvement of opportunities and
terms of access for agricultural
products of particular interest to these Members, including
the fullest liberalization of trade in
tropical agricultural products as agreed at the Mid-Term
Review, and for products of particular
importance to the diversification of production from
the growing of illicit narcotic crops;
Noting that commitments under the reform programme should be made in an
equitable way among all Members, having
regard to non-trade concerns, including food
security and the need to protect the
environment; having regard to the agreement that
special and differential treatment for
developing countries is an integral element of the
negotiations, and taking into account
the possible negative effects of the implementation
of the reform programme on
least-developed and net food-importing developing countries;
Hereby agree as follows:
Part I
Article 1
Definition of Terms
In this Agreement, unless the context
otherwise requires:
(a) "Aggregate Measurement of
Support" and "AMS" mean the annual level of
support, expressed in monetary terms,
provided for an agricultural product
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in favour of the producers of the basic
agricultural product or non-productspecific
support provided in favour of
agricultural producers in general, other
than support provided under programmes
that qualify as exempt from
reduction under Annex 2 to this
Agreement, which is:
(i) with respect to support provided
during the base period, specified in
the relevant tables of supporting
material incorporated by reference
in Part IV of a Member's Schedule; and
(ii) with respect to support provided
during any year of the
implementation period and thereafter,
calculated in accordance with
the provisions of Annex 3 of this
Agreement and taking into account
the constituent data and methodology
used in the tables of supporting
material incorporated by reference in
Part IV of the Member's
Schedule;
(b) "basic agricultural
product" in relation to domestic support commitments
is defined as the product as close as
practicable to the point of first sale as
specified in a Member's Schedule and in
the related supporting material;
(c) "budgetary outlays" or
"outlays" includes revenue foregone;
(d) "Equivalent Measurement of
Support" means the annual level of support,
expressed in monetary terms, provided
to producers of a basic agricultural
product through the application of one
or more measures, the calculation
of which in accordance with the AMS
methodology is impracticable, other
than support provided under programmes
that qualify as exempt from
reduction under Annex 2 to this
Agreement, and which is:
(i) with respect to support provided
during the base period, specified in
the relevant tables of supporting
material incorporated by reference
in Part IV of a Member's Schedule; and
(ii) with respect to support provided
during any year of the
implementation period and thereafter,
calculated in accordance with
the provisions of Annex 4 of this
Agreement and taking into account
the constituent data and methodology
used in the tables of supporting
material incorporated by reference in
Part IV of the Member's
Schedule;
(e) "export subsidies" refers
to subsidies contingent upon export performance,
including the export subsidies listed
in Article 9 of this Agreement;
(f) "implementation period"
means the six-year period commencing in the year
1995, except that, for the purposes of
Article 13, it means the nine-year period
commencing in 1995;
(g) "market access
concessions" includes all market access commitments
undertaken pursuant to this Agreement;
(h) "Total Aggregate Measurement
of Support" and "Total AMS" mean the sum
of all domestic support provided in
favour of agricultural producers, calculated
as the sum of all aggregate
measurements of support for basic agricultural
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products, all non-product-specific
aggregate measurements of support and
all equivalent measurements of support
for agricultural products, and which
is:
(i) with respect to support provided
during the base period (i.e. the "Base
Total AMS") and the maximum
support permitted to be provided
during any year of the implementation
period or thereafter (i.e. the
"Annual and Final Bound Commitment
Levels"), as specified in Part
IV of a Member's Schedule; and
(ii) with respect to the level of
support actually provided during any year
of the implementation period and
thereafter (i.e. the "Current Total
AMS"), calculated in accordance
with the provisions of this Agreement,
including Article 6, and with the constituent
data and methodology
used in the tables of supporting
material incorporated by reference
in Part IV of the Member's Schedule;
(i) "year" in paragraph (f)
above and in relation to the specific commitments
of a Member refers to the calendar,
financial or marketing year specified in
the Schedule relating to that Member.
Article 2
Product Coverage
This Agreement applies to the products
listed in Annex 1 to this Agreement,
hereinafter referred to as agricultural
products.
Part II
Article 3
Incorporation of
Concessions and Commitments
1. The domestic support and export
subsidy commitments in Part IV of each Member's
Schedule constitute commitments
limiting subsidization and are hereby made an integral
part of GATT 1994.
2. Subject to the provisions of Article
6, a Member shall not provide support in favour
of domestic producers in excess of the
commitment levels specified in Section I of Part IV
of its Schedule.
3. Subject to the provisions of
paragraphs 2(b) and 4 of Article 9, 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.
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Part III
Article 4
Market Access
1. Market access concessions contained
in Schedules relate to bindings and reductions
of tariffs, and to other market access
commitments as specified therein.
2. Members shall not maintain, resort
to, or revert to any measures of the kind which
have been required to be converted into
ordinary customs duties1,
except as otherwise
provided for in Article 5 and Annex 5.
Article 5
Special Safeguard
Provisions
1. Notwithstanding the provisions of
paragraph 1(b) of Article II of 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 of this
Agreement 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:
(a) 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;
or, but not concurrently:
(b) 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 price2 for the product concerned.
2. Imports under current and minimum
access commitments established as part of
a concession referred to in paragraph 1
above shall be counted for the purpose of determining
the volume of imports required for
invoking the provisions of subparagraph 1(a) and
paragraph 4, but imports under such
commitments shall not be affected by any additional
duty imposed under either subparagraph
1(a) and paragraph 4 or subparagraph 1(b) and
paragraph 5 below.
1These
measures include quantitative import restrictions, variable import levies,
minimum import prices,
discretionary import licensing,
non-tariff measures maintained through state-trading enterprises, voluntary
export restraints, and similar border
measures other than ordinary customs duties, whether or not the measures
are maintained under country-specific
derogations from the provisions of GATT 1947, but not measures
maintained under balance-of-payments
provisions or under other general, non-agriculture-specific provisions
of GATT 1994 or of the other
Multilateral Trade Agreements in Annex 1A to the WTO Agreement.
2The
reference price used to invoke the provisions of this subparagraph shall, in
general, be the average
c.i.f. unit value of the product
concerned, or otherwise shall be an appropriate price in terms of the quality
of the product and its stage of
processing. It shall, following its initial use, be publicly specified and
available
to the extent necessary to allow other
Members to assess the additional duty that may be levied.
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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 subparagraph 1(a) and paragraph 4
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
subparagraph 1(a) in that year.
4. Any additional duty imposed under
subparagraph 1(a) 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 consumption3 during the three preceding years for which data are
available:
(a) where such market access
opportunities for a product are less than or equal
to 10 per cent, the base trigger level
shall equal 125 per cent;
(b) where such market access opportunities
for a product are greater than 10 per
cent but less than or equal to 30 per
cent, the base trigger level shall equal
110 per cent;
(c) where such market access
opportunities for a product are greater than 30
per cent, the base trigger level shall
equal 105 per cent.
In all cases the additional duty may be
imposed in any year where the absolute
volume of imports of the product
concerned entering the customs territory of the Member
granting the concession exceeds the sum
of (x) the base trigger level set out above multiplied
by the average quantity of imports
during the three preceding years for which data are
available and (y) the absolute
volume change in domestic consumption of the product
concerned in the most recent year for
which data are available compared to the preceding
year, provided that the trigger level
shall not be less than 105 per cent of the average
quantity of imports in (x)
above.
5. The additional duty imposed under
subparagraph 1(b) shall be set according to the
following schedule:
(a) if the difference between the
c.i.f. import price of the shipment expressed
in terms of the domestic currency
(hereinafter referred to as the "import
price") and the trigger price as
defined under that subparagraph is less than
or equal to 10 per cent of the trigger
price, no additional duty shall be
imposed;
(b) if the difference between the
import price and the trigger price (hereinafter
referred to as the
"difference") is greater than 10 per cent but less than or
equal to 40 per cent of the trigger price,
the additional duty shall equal 30
per cent of the amount by which the
difference exceeds 10 per cent;
(c) if the difference is greater than
40 per cent but less than or equal to
60 per cent of the trigger price, the
additional duty shall equal 50 per cent
3Where
domestic consumption is not taken into account, the base trigger level under
subparagraph 4(a)
shall apply.
Page 48
of the amount by which the difference
exceeds 40 per cent, plus the additional
duty allowed under (b);
(d) if the difference is greater than
60 per cent but less than or equal to 75 per
cent, the additional duty shall equal
70 per cent of the amount by which the
difference exceeds 60 per cent of the
trigger price, plus the additional duties
allowed under (b) and (c);
(e) if the difference is greater than
75 per cent of the trigger price, the additional
duty shall equal 90 per cent of the
amount by which the difference exceeds
75 per cent, plus the additional duties
allowed under (b), (c) and (d).
6. For perishable and seasonal products,
the conditions set out above shall be applied
in such a manner as to take account of
the specific characteristics of such products. In
particular, shorter time periods under
subparagraph 1(a) 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
subparagraph 1(b).
7. The operation of the special
safeguard shall be carried out in a transparent manner.
Any Member taking action under
subparagraph 1(a) 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 subparagraph 1(b) 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
subparagraph 1(b) where the volume of imports of the
products concerned are declining. In
either case a Member taking such action shall afford
any interested Members the opportunity
to consult with it in respect of the conditions of
application of such action.
8. Where measures are taken in
conformity with paragraphs 1 through 7 above, Members
undertake not to have recourse, in
respect of such measures, to the provisions of
paragraphs 1(a) and 3 of Article XIX of
GATT 1994 or paragraph 2 of Article 8 of the
Agreement on Safeguards.
9. The provisions of this Article shall
remain in force for the duration of the reform
process as determined under Article 20.
Part IV
Article 6
Domestic Support
Commitments
1. The domestic support reduction
commitments of each Member contained in Part
IV of its Schedule shall apply to all
of its domestic support measures in favour of agricultural
producers with the exception of
domestic measures which are not subject to reduction in
Page 49
terms of the criteria set out in this
Article and in Annex 2 to this Agreement. The
commitments are expressed in terms of
Total Aggregate Measurement of Support and
"Annual and Final Bound Commitment
Levels".
2. In accordance with the Mid-Term
Review Agreement that government measures
of assistance, whether direct or
indirect, to encourage agricultural and rural development
are an integral part of the development
programmes of developing countries, investment
subsidies which are generally available
to agriculture in developing country Members and
agricultural input subsidies generally
available to low-income or resource-poor producers
in developing country Members shall be
exempt from domestic support reduction
commitments that would otherwise be
applicable to such measures, as shall domestic support
to producers in developing country
Members to encourage diversification from growing illicit
narcotic crops. Domestic support
meeting the criteria of this paragraph shall not be required
to be included in a Member's
calculation of its Current Total AMS.
3. A Member shall be considered to be
in compliance with its domestic support reduction
commitments in any year in which its
domestic support in favour of agricultural producers
expressed in terms of Current Total AMS
does not exceed the corresponding annual or final
bound commitment level specified in
Part IV of the Member's Schedule.
4. (a) A Member shall not be required
to include in the calculation of its Current
Total AMS and shall not be required to
reduce:
(i) product-specific domestic support
which would otherwise be required
to be included in a Member's calculation
of its Current AMS where
such support does not exceed 5 per cent
of that Member's total value
of production of a basic agricultural
product during the relevant year;
and
(ii) non-product-specific domestic
support which would otherwise be
required to be included in a Member's
calculation of its Current AMS
where such support does not exceed 5
per cent of the value of that
Member's total agricultural production.
(b) For developing country Members, the
de minimis percentage under this
paragraph shall be 10 per cent.
5. (a) Direct payments under
production-limiting programmes shall not be subject
to the commitment to reduce domestic
support if:
(i) such payments are based on fixed
area and yields; or
(ii) such payments are made on 85 per
cent or less of the base level of
production; or
(iii) livestock payments are made on a
fixed number of head.
(b) The exemption from the reduction
commitment for direct payments meeting
the above criteria shall be reflected
by the exclusion of the value of those
direct payments in a Member's
calculation of its Current Total AMS.
Article 7
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General Disciplines on
Domestic Support
1. Each Member shall ensure that any
domestic support measures in favour of
agricultural producers which are not
subject to reduction commitments because they qualify
under the criteria set out in Annex 2
to this Agreement are maintained in conformity
therewith.
2. (a) Any domestic support measure in
favour of agricultural producers, including
any modification to such measure, and
any measure that is subsequently
introduced that cannot be shown to
satisfy the criteria in Annex 2 to this
Agreement or to be exempt from
reduction by reason of any other provision
of this Agreement shall be included in
the Member's calculation of its Current
Total AMS.
(b) Where no Total AMS commitment
exists in Part IV of a Member's Schedule,
the Member shall not provide support to
agricultural producers in excess
of the relevant de minimis level
set out in paragraph 4 of Article 6.
Part V
Article 8
Export Competition Commitments
Each Member undertakes not to provide
export subsidies otherwise than in conformity
with this Agreement and with the
commitments as specified in that Member's Schedule.
Article 9
Export Subsidy Commitments
1. The following export subsidies are subject
to reduction commitments under this
Agreement:
(a) the provision by governments or
their agencies of direct subsidies, including
payments-in-kind, to a firm, to an
industry, to producers of an agricultural
product, to a cooperative or other
association of such producers, or to a
marketing board, contingent on export
performance;
(b) the sale or disposal for export by
governments or their agencies of noncommercial
stocks of agricultural products at a
price lower than the
comparable price charged for the like
product to buyers in the domestic
market;
(c) payments on the export of an
agricultural product that are financed by virtue
of governmental action, whether or not
a charge on the public account is
involved, including payments that are
financed from the proceeds of a levy
imposed on the agricultural product
concerned or on an agricultural product
from which the exported product is
derived;
Page 51
(d) the provision of subsidies to
reduce the costs of marketing exports of
agricultural products (other than
widely available export promotion and
advisory services) including handling,
upgrading and other processing costs,
and the costs of international
transport and freight;
(e) internal transport and freight
charges on export shipments, provided or
mandated by governments, on terms more
favourable than for domestic
shipments;
(f) subsidies on agricultural products
contingent on their incorporation in
exported products.
2. (a) Except as provided in
subparagraph (b), the export subsidy commitment levels
for each year of the implementation
period, as specified in a Member's
Schedule, represent with respect to the
export subsidies listed in paragraph
1 of this Article:
(i) in the case of budgetary outlay
reduction commitments, the maximum
level of expenditure for such subsidies
that may be allocated or
incurred in that year in respect of the
agricultural product, or group
of products, concerned; and
(ii) in the case of export quantity
reduction commitments, the maximum
quantity of an agricultural product, or
group of products, in respect
of which such export subsidies may be
granted in that year.
(b) In any of the second through fifth
years of the implementation period, a
Member may provide export subsidies
listed in paragraph 1 above in a given
year in excess of the corresponding
annual commitment levels in respect of
the products or groups of products
specified in Part IV of the Member's
Schedule, provided that:
(i) the cumulative amounts of budgetary
outlays for such subsidies, from
the beginning of the implementation
period through the year in
question, does not exceed the
cumulative amounts that would have
resulted from full compliance with the
relevant annual outlay
commitment levels specified in the
Member's Schedule by more than
3 per cent of the base period level of
such budgetary outlays;
(ii) the cumulative quantities exported
with the benefit of such export
subsidies, from the beginning of the
implementation period through
the year in question, does not exceed
the cumulative quantities that
would have resulted from full
compliance with the relevant annual
quantity commitment levels specified in
the Member's Schedule by
more than 1.75 per cent of the base
period quantities;
(iii) the total cumulative amounts of
budgetary outlays for such export
subsidies and the quantities benefiting
from such export subsidies
over the entire implementation period
are no greater than the totals
that would have resulted from full
compliance with the relevant
annual commitment levels specified in
the Member's Schedule; and
Page 52
(iv) the Member's budgetary outlays for
export subsidies and the quantities
benefiting from such subsidies, at the
conclusion of the implementation
period, are no greater than 64 per cent
and 79 per cent of the 1986-
1990 base period levels, respectively.
For developing country Members
these percentages shall be 76 and 86
per cent, respectively.
3. Commitments relating to limitations
on the extension of the scope of export
subsidization are as specified in
Schedules.
4. During the implementation period,
developing country Members shall not be required
to undertake commitments in respect of
the export subsidies listed in subparagraphs (d)
and (e) of paragraph 1 above, provided
that these are not applied in a manner that would
circumvent reduction commitments.
Article 10
Prevention of Circumvention
of Export Subsidy Commitments
1. Export subsidies not listed in
paragraph 1 of Article 9 shall not be applied in a
manner which results in, or which
threatens to lead to, circumvention of export subsidy
commitments; nor shall non-commercial
transactions be used to circumvent such
commitments.
2. Members undertake to work toward the
development of internationally agreed
disciplines to govern the provision of
export credits, export credit guarantees or insurance
programmes and, after agreement on such
disciplines, to provide export credits, export credit
guarantees or insurance programmes only
in conformity therewith.
3. Any Member which claims that any
quantity exported in excess of a reduction
commitment level is not subsidized must
establish that no export subsidy, whether listed
in Article 9 or not, has been granted
in respect of the quantity of exports in question.
4. Members donors of international food
aid shall ensure:
(a) that the provision of international
food aid is not tied directly or indirectly
to commercial exports of agricultural
products to recipient countries;
(b) that international food aid
transactions, including bilateral food aid which
is monetized, shall be carried out in
accordance with the FAO "Principles
of Surplus Disposal and Consultative
Obligations", including, where
appropriate, the system of Usual
Marketing Requirements (UMRs); and
(c) that such aid shall be provided to
the extent possible in fully grant form or
on terms no less concessional than
those provided for in Article IV of the
Food Aid Convention 1986.
Article 11
Incorporated Products
Page 53
In no case may the per-unit subsidy
paid on an incorporated agricultural primary
product exceed the per-unit export
subsidy that would be payable on exports of the primary
product as such.
Part VI
Article 12
Disciplines on Export
Prohibitions and Restrictions
1. Where any Member institutes any new
export prohibition or restriction on foodstuffs
in accordance with paragraph 2(a) of
Article XI of GATT 1994, the Member shall observe
the following provisions:
(a) 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;
(b) before any Member institutes an
export prohibition or restriction, it shall
give notice in writing, as far in
advance as practicable, to the Committee
on Agriculture comprising such
information as the nature and the duration
of such measure, and shall consult,
upon request, with any other Member
having a substantial interest as an
importer with respect to any matter
related to the measure in question. The
Member instituting such export
prohibition or restriction shall
provide, upon request, such a Member with
necessary information.
2. The provisions of this Article shall
not apply to any developing country Member,
unless the measure is taken by a
developing country Member which is a net-food exporter
of the specific foodstuff concerned.
Part VII
Article 13
Due Restraint
During the implementation period,
notwithstanding the provisions of GATT 1994
and the Agreement on Subsidies and
Countervailing Measures (referred to in this Article
as the "Subsidies
Agreement"):
(a) domestic support measures that
conform fully to the provisions of Annex 2
to this Agreement shall be:
(i) non-actionable subsidies for
purposes of countervailing duties4;
(ii) exempt from actions based on
Article XVI of GATT 1994 and Part III
of the Subsidies Agreement; and
4"Countervailing
duties" where referred to in this Article are those covered by Article VI
of GATT 1994
and Part V of the Agreement on
Subsidies and Countervailing Measures.
Page 54
(iii) exempt from actions based on
non-violation nullification or impairment
of the benefits of tariff concessions
accruing to another Member under
Article II of GATT 1994, in the sense
of paragraph 1(b) of
Article XXIII of GATT 1994;
(b) 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:
(i) exempt from the imposition of
countervailing duties unless a
determination of injury or threat
thereof is made in accordance with
Article VI of GATT 1994 and Part V of
the Subsidies Agreement, and
due restraint shall be shown in
initiating any countervailing duty
investigations;
(ii) exempt from actions based on
paragraph 1 of Article XVI of 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
(iii) exempt from actions based on
non-violation nullification or impairment
of the benefits of tariff concessions
accruing to another Member under
Article II of GATT 1994, in the sense
of paragraph 1(b) of Article XXIII
of GATT 1994, provided that such
measures do not grant support to
a specific commodity in excess of that
decided during the 1992
marketing year;
(c) export subsidies that conform fully
to the provisions of Part V of this
Agreement, as reflected in each
Member's Schedule, shall be:
(i) 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
GATT 1994 and Part V of the
Subsidies Agreement, and due restraint
shall be shown in initiating
any countervailing duty investigations;
and
(ii) exempt from actions based on
Article XVI of GATT 1994 or Articles 3,
5 and 6 of the Subsidies Agreement.
Part VIII
Article 14
Sanitary and Phytosanitary
Measures
Members agree to give effect to the
Agreement on the Application of Sanitary and
Phytosanitary Measures.
Page 55
Part IX
Article 15
Special and Differential
Treatment
1. In keeping with the recognition that
differential and more favourable treatment
for developing country Members is an
integral part of the negotiation, special and differential
treatment in respect of commitments
shall be provided as set out in the relevant provisions
of this Agreement and embodied in the
Schedules of concessions and commitments.
2. Developing country Members shall
have the flexibility to implement reduction
commitments over a period of up to 10
years. Least-developed country Members shall not
be required to undertake reduction
commitments.
Part X
Article 16
Least-Developed and Net
Food-Importing Developing Countries
1. Developed country Members shall take
such action as is provided for within the
framework of the Decision on Measures
Concerning the Possible Negative Effects of the
Reform Programme on Least-Developed and
Net Food-Importing Developing Countries.
2. The Committee on Agriculture shall
monitor, as appropriate, the follow-up to this
Decision.
Part XI
Article 17
Committee on Agriculture
A Committee on Agriculture is hereby
established.
Article 18
Review of the
Implementation of Commitments
1. Progress in the implementation of
commitments negotiated under the Uruguay Round
reform programme shall be reviewed by
the Committee on Agriculture.
2. The review process shall be
undertaken on the basis of notifications submitted by
Members in relation to such matters and
at such intervals as shall be determined, as well
as on the basis of such documentation
as the Secretariat may be requested to prepare in
order to facilitate the review process.
3. In addition to the notifications to
be submitted under paragraph 2, any new domestic
support measure, or modification of an
existing measure, for which exemption from reduction
is claimed shall be notified promptly.
This notification shall contain details of the new
Page 56
or modified measure and its conformity
with the agreed criteria as set out either in Article
6 or in Annex 2.
4. In the review process Members shall
give due consideration to the influence of
excessive rates of inflation on the
ability of any Member to abide by its domestic support
commitments.
5. Members agree to consult annually in
the Committee on Agriculture with respect
to their participation in the normal
growth of world trade in agricultural products within
the framework of the commitments on
export subsidies under this Agreement.
6. The review process shall provide an
opportunity for Members to raise any matter
relevant to the implementation of
commitments under the reform programme as set out
in this Agreement.
7. Any Member may bring to the
attention of the Committee on Agriculture any measure
which it considers ought to have been
notified by another Member.
Article 19
Consultation and Dispute
Settlement
The provisions of Articles XXII and
XXIII of GATT 1994, as elaborated and applied
by the Dispute Settlement
Understanding, shall apply to consultations and the settlement
of disputes under this Agreement.
Part XII
Article 20
Continuation of the Reform
Process
Recognizing that the long-term
objective of substantial progressive reductions in
support and protection resulting in
fundamental reform is an ongoing process, Members
agree that negotiations for continuing
the process will be initiated one year before the end
of the implementation period, taking
into account:
(a) the experience to that date from
implementing the reduction commitments;
(b) the effects of the reduction
commitments on world trade in agriculture;
(c) 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
(d) what further commitments are
necessary to achieve the above mentioned
long-term objectives.
Page 57
Part XIII
Article 21
Final Provisions
1. The provisions of GATT 1994 and of
other Multilateral Trade Agreements in Annex
1A to the WTO Agreement shall apply
subject to the provisions of this Agreement.
2. The Annexes to this Agreement are
hereby made an integral part of this Agreement.
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ANNEX 1
PRODUCT COVERAGE
1. This Agreement shall cover the
following products:
(i) HS Chapters 1 to 24 less fish and
fish products, plus*
(ii) HS Code 2905.43 (mannitol)
HS Code 2905.44 (sorbitol)
HS Heading 33.01 (essential oils)
HS Headings 35.01 to 35.05
(albuminoidal substances,
modified starches, glues)
HS Code 3809.10 (finishing agents)
HS Code 3823.60 (sorbitol n.e.p.)
HS Headings 41.01 to 41.03 (hides and
skins)
HS Heading 43.01 (raw furskins)
HS Headings 50.01 to 50.03 (raw silk
and silk waste)
HS Headings 51.01 to 51.03 (wool and
animal hair)
HS Headings 52.01 to 52.03 (raw cotton,
waste and cotton
carded or combed)
HS Heading 53.01 (raw flax)
HS Heading 53.02 (raw hemp)
2. The foregoing shall not limit the
product coverage of the Agreement on the Application
of Sanitary and Phytosanitary Measures.
*The product descriptions in round
brackets are not necessarily exhaustive.
Page 59
ANNEX 2
DOMESTIC SUPPORT: THE BASIS FOR
EXEMPTION FROM
THE REDUCTION COMMITMENTS
1. Domestic support measures for which
exemption from the reduction commitments
is claimed shall meet the fundamental
requirement that they have no, or at most minimal,
trade-distorting effects or effects on
production. Accordingly, all measures for which
exemption is claimed shall conform to
the following basic criteria:
(a) the support in question shall be
provided through a publicly-funded
government programme (including
government revenue foregone) not involving
transfers from consumers; and,
(b) the support in question shall not
have the effect of providing price support
to producers;
plus policy-specific criteria and
conditions as set out below.
Government Service
Programmes
2. General services
Policies in this category involve
expenditures (or revenue foregone) in relation to
programmes which provide services or
benefits to agriculture or the rural community. They
shall not involve direct payments to
producers or processors. Such programmes, which
include but are not restricted to the
following list, shall meet the general criteria in
paragraph 1 above and policy-specific
conditions where set out below:
(a) research, including general
research, research in connection with
environmental programmes, and research
programmes relating to particular
products;
(b) pest and disease control, including
general and product-specific pest and
disease control measures, such as
early-warning systems, quarantine and
eradication;
(c) training services, including both
general and specialist training facilities;
(d) extension and advisory services,
including the provision of means to facilitate
the transfer of information and the
results of research to producers and
consumers;
(e) inspection services, including
general inspection services and the inspection
of particular products for health,
safety, grading or standardization purposes;
(f) 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
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(g) infrastructural services,
including: electricity reticulation, roads and other
means of transport, market and port
facilities, water supply facilities, dams
and drainage schemes, and
infrastructural works associated with
environmental programmes. In all cases
the expenditure shall be directed
to the provision or construction of
capital works only, and shall exclude the
subsidized provision of on-farm
facilities other than for the reticulation of
generally available public utilities.
It shall not include subsidies to inputs
or operating costs, or preferential
user charges.
3. Public stockholding for food
security purposes5
Expenditures (or revenue foregone) in
relation to the accumulation and holding of
stocks of products which form an integral
part of a food security programme identified in
national legislation. This may include
government aid to private storage of products as
part of such a programme.
The volume and accumulation of such
stocks shall correspond to
predetermined targets related solely to
food security. The process of stock
accumulation and disposal shall be
financially transparent. Food purchases
by the government shall be made at
current market prices and sales from
food security stocks shall be made at
no less than the current domestic market
price for the product and quality in
question.
4. Domestic food aid6
Expenditures (or revenue foregone) in
relation to the provision of domestic food aid
to sections of the population in need.
Eligibility to receive the food aid
shall be subject to clearly-defined criteria
related to nutritional objectives. Such
aid shall be in the form of direct
provision of food to those concerned or
the provision of means to allow eligible
recipients to buy food either at market
or at subsidized prices. Food purchases
by the government shall be made at
current market prices and the financing
and administration of the aid shall be
transparent.
5. Direct payments to producers
Support provided through direct
payments (or revenue foregone, including payments
in kind) to producers for which
exemption from reduction commitments is claimed shall
meet the basic criteria set out in
paragraph 1 above, plus specific criteria applying to
individual types of direct payment as
set out in paragraphs 6 through 13 below. Where
exemption from reduction is claimed for
any existing or new type of direct payment other
5For
the purposes of paragraph 3 of this Annex, governmental stockholding programmes
for food security
purposes in developing countries whose
operation is transparent and conducted in accordance with officially
published objective criteria or
guidelines shall be considered to be in conformity with the provisions of this
paragraph, including programmes under
which stocks of foodstuffs for food security purposes are acquired and
released at administered prices,
provided that the difference between the acquisition price and the external
reference price is accounted for in the
AMS.
5 & 6For
the purposes of paragraphs 3 and 4 of this Annex, the provision of foodstuffs
at subsidized prices with
the objective of meeting food
requirements of urban and rural poor in developing countries on a regular basis
at reasonable prices shall be
considered to be in conformity with the provisions of this paragraph.
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than those specified in paragraphs 6
through 13, it shall conform to criteria (b) through
(e) in paragraph 6, in addition to the
general criteria set out in paragraph 1.
6. Decoupled income support
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) No production shall be required in
order to receive such payments.
7. Government financial participation
in income insurance and income safety-net
programmes
(a) 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.
(b) 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.
(c) 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.
(d) Where a producer receives in the
same year payments under this paragraph
and under paragraph 8 (relief from
natural disasters), the total of such
payments shall be less than 100 per
cent of the producer's total loss.
8. Payments (made either directly or by
way of government financial participation in
crop insurance schemes) for relief from
natural disasters
(a) 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
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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.
(b) 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.
(c) 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.
(d) Payments made during a disaster
shall not exceed the level required to
prevent or alleviate further loss as
defined in criterion (b) above.
(e) Where a producer receives in the
same year payments under this paragraph
and under paragraph 7 (income insurance
and income safety-net programmes),
the total of such payments shall be
less than 100 per cent of the producer's
total loss.
9. Structural adjustment assistance
provided through producer retirement programmes
(a) 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 nonagricultural
activities.
(b) Payments shall be conditional upon
the total and permanent retirement of
the recipients from marketable
agricultural production.
10. Structural adjustment assistance
provided through resource retirement programmes
(a) 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.
(b) Payments shall be conditional upon
the retirement of land from marketable
agricultural production for a minimum
of three years, and in the case of
livestock on its slaughter or
definitive permanent disposal.
(c) Payments shall not require or
specify any alternative use for such land or
other resources which involves the
production of marketable agricultural
products.
(d) 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.
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11. Structural adjustment assistance
provided through investment aids
(a) Eligibility for such payments shall
be determined by reference to clearlydefined
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.
(b) 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 criterion (e) below.
(c) 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.
(d) 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.
(e) 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.
(f) The payments shall be limited to
the amount required to compensate for the
structural disadvantage.
12. Payments under environmental
programmes
(a) 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.
(b) The amount of payment shall be
limited to the extra costs or loss of income
involved in complying with the
government programme.
13. Payments under regional assistance
programmes
(a) 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.
(b) 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.
Page 64
(c) 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.
(d) Payments shall be available only to
producers in eligible regions, but generally
available to all producers within such
regions.
(e) Where related to production
factors, payments shall be made at a degressive
rate above a threshold level of the
factor concerned.
(f) The payments shall be limited to
the extra costs or loss of income involved
in undertaking agricultural production
in the prescribed area.
Page 65
ANNEX 3
DOMESTIC SUPPORT:
CALCULATION OF AGGREGATE MEASUREMENT OF
SUPPORT
1. Subject to the provisions of Article
6, an Aggregate Measurement of Support (AMS)
shall be calculated on a
product-specific basis for each basic agricultural product receiving
market price support, non-exempt direct
payments, or any other subsidy not exempted from
the reduction commitment ("other
non-exempt policies"). Support which is non-product
specific shall be totalled into one
non-product-specific AMS in total monetary terms.
2. Subsidies under paragraph 1 shall
include both budgetary outlays and revenue
foregone by governments or their
agents.
3. Support at both the national and
sub-national level shall be included.
4. Specific agricultural levies or fees
paid by producers shall be deducted from the AMS.
5. The AMS calculated as outlined below
for the base period shall constitute the base
level for the implementation of the
reduction commitment on domestic support.
6. For each basic agricultural product,
a specific AMS shall be established, expressed
in total monetary value terms.
7. The AMS shall be calculated as close
as practicable to the point of first sale of the
basic agricultural product concerned.
Measures directed at agricultural processors shall
be included to the extent that such
measures benefit the producers of the basic agricultural
products.
8. Market price support: market price
support shall be calculated using the gap between
a fixed external reference price and
the applied administered price multiplied by the quantity
of production eligible to receive the
applied administered price. Budgetary payments made
to maintain this gap, such as buying-in
or storage costs, shall not be included in the AMS.
9. The fixed external reference price
shall be based on the years 1986 to 1988 and shall
generally be the average f.o.b. unit
value for the basic agricultural product concerned in
a net exporting country and the average
c.i.f. unit value for the basic agricultural product
concerned in a net importing country in
the base period. The fixed reference price may
be adjusted for quality differences as
necessary.
10. Non-exempt direct payments:
non-exempt direct payments which are dependent
on a price gap shall be calculated
either using the gap between the fixed reference price
and the applied administered price
multiplied by the quantity of production eligible to receive
the administered price, or using
budgetary outlays.
11. The fixed reference price shall be
based on the years 1986 to 1988 and shall generally
be the actual price used for
determining payment rates.
12. Non-exempt direct payments which
are based on factors other than price shall be
measured using budgetary outlays.
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13. Other non-exempt measures,
including input subsidies and other measures such
as marketing-cost reduction measures:
the value of such measures 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 subsidized
good or service and a representative market price for
a similar good or service multiplied by
the quantity of the good or service.
Page 67
ANNEX 4
DOMESTIC SUPPORT:
CALCULATION OF EQUIVALENT MEASUREMENT
OF SUPPORT
1. Subject to the provisions of Article
6, equivalent measurements of support shall be
calculated in respect of all basic
agricultural products where market price support as defined
in Annex 3 exists but for which
calculation of this component of the AMS is not practicable.
For such products the base level for
implementation of the domestic support reduction
commitments shall consist of a market
price support component expressed in terms of
equivalent measurements of support
under paragraph 2 below, as well as any non-exempt
direct payments and other non-exempt
support, which shall be evaluated as provided for
under paragraph 3 below. Support at
both national and sub-national level shall be included.
2. The equivalent measurements of
support provided for in paragraph 1 shall be
calculated on a product-specific basis
for all basic agricultural products as close as practicable
to the point of first sale receiving
market price support and for which the calculation of
the market price support component of
the AMS is not practicable. For those basic
agricultural products, equivalent
measurements of market price support shall be made
using the applied administered price
and the quantity of production eligible to receive that
price or, where this is not
practicable, on budgetary outlays used to maintain the producer
price.
3. Where basic agricultural products falling
under paragraph 1 are the subject of nonexempt
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 through 13 of Annex 3).
4. Equivalent measurements of support
shall be calculated on the amount of subsidy
as close as practicable to the point of
first sale of the basic agricultural product concerned.
Measures directed at agricultural
processors shall be included to the extent that such
measures benefit the producers of the
basic agricultural products. Specific agricultural
levies or fees paid by producers shall
reduce the equivalent measurements of support by
a corresponding amount.
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ANNEX 5
SPECIAL TREATMENT WITH RESPECT TO
PARAGRAPH 2 OF ARTICLE 4
Section A
1. The provisions of paragraph 2 of
Article 4 shall not apply with effect from the entry
into force of the WTO Agreement to any
primary agricultural product and its worked and/or
prepared products ("designated
products") in respect of which the following conditions are
complied with (hereinafter referred to
as "special treatment"):
(a) imports of the designated products
comprised less than 3 per cent of
corresponding domestic consumption in
the base period 1986-1988 ("the base
period");
(b) no export subsidies have been
provided since the beginning of the base period
for the designated products;
(c) effective production-restricting
measures are applied to the primary
agricultural product;
(d) such products are designated with
the symbol "ST-Annex 5" in Section I-B
of Part I of a Member's Schedule
annexed to the Marrakesh Protocol, as being
subject to special treatment reflecting
factors of non-trade concerns, such
as food security and environmental
protection; and
(e) minimum access opportunities in
respect of the designated products
correspond, as specified in Section I-B
of Part I of the Schedule of the Member
concerned, to 4 per cent of base period
domestic consumption of the
designated products from the beginning
of the first year of the implementation
period and, thereafter, are increased
by 0.8 per cent of corresponding domestic
consumption in the base period per year
for the remainder of the
implementation period.
2. At the beginning of any year of the
implementation period a Member may cease
to apply special treatment in respect
of the designated products by complying with the
provisions of paragraph 6. In such a
case, the Member concerned shall maintain the
minimum access opportunities already in
effect at such time and increase the minimum
access opportunities by 0.4 per cent of
corresponding domestic consumption in the base
period per year for the remainder of
the implementation period. Thereafter, the level of
minimum access opportunities resulting
from this formula in the final year of the
implementation period shall be
maintained in the Schedule of the Member concerned.
3. Any negotiation on the question of
whether there can be a continuation of the special
treatment as set out in paragraph 1
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 nontrade
concerns.
4. If it is agreed as a result of the
negotiation referred to in paragraph 3 that a Member
may continue to apply the special
treatment, such Member shall confer additional and
acceptable concessions as determined in
that negotiation.
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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. In such a
case, after the end of the
implementation period the minimum access opportunities for the
designated products shall be maintained
at the level of 8 per cent of corresponding domestic
consumption in the base period in the
Schedule of the Member concerned.
6. Border measures other than ordinary
customs duties maintained in respect of the
designated products shall become
subject to the provisions of paragraph 2 of Article 4 with
effect from the beginning of the year
in which the special treatment ceases to apply. Such
products shall be subject to ordinary
customs duties, which shall be bound in the Schedule
of the Member concerned and applied,
from the beginning of the year in which special
treatment ceases and thereafter, at
such rates as would have been applicable had a reduction
of at least 15 per cent been
implemented over the implementation period in equal annual
instalments. These duties shall be
established on the basis of tariff equivalents to be
calculated in accordance with the
guidelines prescribed in the attachment hereto.
Section B
7. The provisions of paragraph 2 of
Article 4 shall also not apply with effect from the
entry into force of the WTO 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), as they apply to the products
concerned, are complied with:
(a) minimum access opportunities in
respect of the products concerned, as
specified in Section I-B 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 10th year.
Thereafter, the level of minimum access
opportunities resulting from this
formula in the 10th year shall be
maintained in the Schedule of the developing
country Member concerned;
(b) appropriate market access
opportunities have been provided for in other
products under this Agreement.
8. Any negotiation on the question of
whether there can be a continuation of the special
treatment as set out in paragraph 7
after the end of the 10th year following the beginning
of the implementation period shall be
initiated and completed within the time-frame of
the 10th year itself following the
beginning of the implementation period.
9. If it is agreed as a result of the
negotiation referred to in paragraph 8 that a Member
may continue to apply the special
treatment, such Member shall confer additional and
acceptable concessions as determined in
that negotiation.
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10. In the event that special treatment
under paragraph 7 is not to be continued beyond
the 10th 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 shall apply
as modified by the relevant special and differential
treatment accorded to developing
country Members under this Agreement.
Page 71
Attachment to Annex 5
Guidelines for the Calculation of
Tariff
Equivalents for the Specific Purpose
Specified in
Paragraphs 6 and 10 of this Annex
1. The calculation of the tariff
equivalents, whether expressed as ad valorem or specific
rates, shall be made using the actual
difference between internal and external prices in
a transparent manner. Data used shall
be for the years 1986 to 1988. Tariff equivalents:
(a) shall primarily be established at
the four-digit level of the HS;
(b) shall be established at the
six-digit or a more detailed level of the HS
wherever appropriate;
(c) shall generally be established for
worked and/or prepared products by
multiplying the specific tariff
equivalent(s) for the primary agricultural
product(s) by the proportion(s) in
value terms or in physical terms as
appropriate of the primary agricultural
product(s) in the worked and/or
prepared products, and take account,
where necessary, of any additional
elements currently providing protection
to industry.
2. External prices shall be, in
general, actual average c.i.f. unit values for the importing
country. Where average c.i.f. unit
values are not available or appropriate, external prices
shall be either:
(a) appropriate average c.i.f. unit
values of a near country; or
(b) estimated from average f.o.b. unit
values of (an) appropriate major exporter(s)
adjusted by adding an estimate of
insurance, freight and other relevant costs
to the importing country.
3. The external prices shall generally
be converted to domestic currencies using the
annual average market exchange rate for
the same period as the price data.
4. The internal price shall generally
be a representative wholesale price ruling in the
domestic market or an estimate of that
price where adequate data is not available.
5. The initial tariff equivalents may
be adjusted, where necessary, to take account of
differences in quality or variety using
an appropriate coefficient.
6. Where a tariff equivalent resulting
from these guidelines is negative or lower than
the current bound rate, the initial
tariff equivalent may be established at the current bound
rate or on the basis of national offers
for that product.
7. Where an adjustment is made to the
level of a tariff equivalent which would have
resulted from the above guidelines, the
Member concerned shall afford, on request, full
opportunities for consultation with a
view to negotiating appropriate solutions.