WTO Forum Kaliningrad State Technical University

20-22 March 2014

Clem Boonekamp

Aspects of the WTO Agreement on Agriculture

Why an Agreement on Agriculture?

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Why an Agreement on Agriculture ?• Before 1995 … Agriculture has always been part of GATT … • BUT

– Exceptions from general rules on export subsidies (Art. XVI GATT)

– Country specific exceptions and waivers– High subsidy level and high protection– Complicated market access protection structure, with numerous non tariff

measures (article XI GATT)

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Surpluses

Low prices

Difficult market access

Obstacle to production in countries with comparative advantages

Unfair competition Negative impact in particular for developing countries

Structure of the AgreementThree Pillars

Green Box

Blue Box

Article 6.2 – Development Programmes

Amber Box

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Export subsidies

Anti-circumvention

Export prohibitions and restrictions

Tariffs

Tariff rate quotas

Special safeguards

Market access Domestic support Export competition

Market Access--A Tariff Only Regime

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--Prohibition(with exceptions) on the use of non-tariff measures on agricultural products (Article 4 of the AoA)—all NTMs converted into tariffs (“tariffication”)-- All tariffs “bound”, with reduction commitments-- Members, including the Russian Federation, negotiated tariff quotas for some tariffied items --Special Safeguard (Article 5), possible for tariffied products--Tariffs, reduction commitments, tariff quotas and possible use of Special Safeguard are SCHEDULED, i.e. legally enforceable. On average, Russia’s tariff binding will be 10.8%

Tariff Rate Quotas

Russia has TRQs on beef, pork, poultry and dairy

Current and Minimum Access Opportunities3% - 5% of domestic consumption

Low tariff for limited volumes – in-quota tariff rate High tariff for imports outside the quota volume – out-of-

quota tariff rate (MFN rate)

20%

60%

In-quota duty

Tariff rate

Quota volume Imports (MT)

Out-of-quota duty

Members who have tariff and other quota commitments (TRQs) specified in their schedules

Australia European Union Nicaragua Barbados Former Yugoslav of Norway Bolivarian Republic Macedonia Panama of Venezuela Guatemala Philippines Brazil Iceland Russian FederationCanada India South Africa Chile Indonesia Switzerland--China Israel LiechtensteinColombia Japan Chinese Taipei Costa Rica Korea Thailand (Croatia ) Malaysia TunisiaDominican Republic Mexico UkraineEcuador Morocco United StatesEl Salvador New Zealand Viet Nam

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Special Safeguard – Article 5

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Volume-based SSG Trigger: import surges Extra duty: 1/3 of applied rate

Price-based SSG Trigger: price falls Extra duty depends on price

Additional import duty on over-quota imports, temporarily, if:

• Tariffication• SSG in Schedule• Volume or price triggers (notification)

33 Members,but not Russia,

have reserved the right

Option available only for “tariffied” products

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No/minimal effects on trade or

production

Development programmes

Production limiting

programmes

Green Box Annex 2

Art. 6.2 Blue Box Art. 6.5

Amber Box

Domestic Support -- Categories

Subject to reduction

commitments unless de minimis

All other support

De minimis

Article 6.4

Amber Box

Article 1 (of AoA):“... 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”

Annex 3:

• budgetary outlays, including revenue foregone• for each basic agricultural product as close as practicable to the point of first sale• including support to processors that benefit producers of the basic product• including support at national and sub-national level• deduct producer levies and fees

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All other forms of domestic support fall under the Amber Box and form the (Total) Aggregate Measurement of Support - AMS

Total AMS Reduction Commitment

DEVELOPED DEVELOPING

Implementation period

6 years 1995-2000

10 years 1995-2004

Cut in Total AMS -20% -13.3%

De minimis allowance

5% 10%

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% cut in aggregate terms

Russia’s de minimis allowance is 5%

Russia committed and Scheduled to: AMS not to exceed US$ 9 billion in 2012, to be reduced to US$4.4 billion by 2018 and product-specific AMS not to exceed

30& of the total.

What if there is no Total AMS commitment?

Article 7.2(b) of the AoA

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“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.”

Examples: Barbados, Chile, all LDCs

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Members withTotal AMS Reduction Commitments

Argentina EU Mexico Saudia Arabia

Australia Former Yugoslav Republic of Macedonia

Moldova South Africa

Bolivarian Republic of Venezuela

Iceland Morocco Switzerland— Liechtenstein

Brazil Israel New Zealand Chinese Taipei

Canada Japan Norway Thailand

Colombia Jordan Papua New Guinea

Tunisia

Costa Rica Republic of Korea Russian Federation

United States

Viet Nam

 

9 other Members with Total AMS commitments have become member States of the EU

De minimis

Amber Box type measures are not taken into account in the AMS calculation if:

– Product-specific AMS level :

< 5% Value of prod. for developed countries<10% Value of prod. For developing countries

– Non product-specific AMS level :

< 5% Value of total prod. for developed countries<10% Value of total prod. For developing countries

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Current Total AMS calculation and de minimis allowance

Product-specific supportWheatIntervention price for wheat $ 230/tFixed external reference price (AGST) $ 110/tEligible production of wheat 1,000,000 tValue of wheat production $ 230 millionLess associated fees or levies $ 0Wheat AMS (AMS 1) $ 120 millionDe minimis threshold $ 11.5 million

Non-product specific supportGenerally available interest rate subsidy $ 10 millionValue of total agricultural production $ 860 millionNon-product-specific AMS (AMS 2) $ 10 million Less associated fees or levies $ 0De minimis threshold $ 43 million

CURRENT TOTAL AMS (only AMS 1) $ 120 million

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Export Competition -- Export Subsidies

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Russia bound all export subsidiesat ZERO

General prohibition or reduction commitments under Article 3.3

of the AoA for listed export subsidies

Special and Differential treatment: Article 9.4 - subsidies for

marketing and internal transport (during the implementation period)

Anti-circumvention provisions for non-listed export subsidies

Prohibition of subsidies contingent on exports—unless scheduled reductions, product-specific

SchedulesAgricultural Concessions and Commitments

Agricultural concessions and commitments are spread between two of the four parts of Members’ Schedules:

Part I, Most Favoured Nation TariffSection I.A – Agricultural tariffsSection I.B – Agricultural tariff quotas

Part II, Schedule of preferential tariffsPart III, Non-tariff measure concessions other than agricultural products

Part IV, Commitments limiting subsidizationSection I – Domestic support, Total AMSSection II – Export subsidies – budget & volume

commitmentsSection III – Commitments limiting the scope of export

subsidies

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Thank you for your

attention !