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WTO AGREEMENT ON AGRICULTURE: LEGAL AND CONCEPTUAL ISSUES

WTO AGREEMENT ON AGRICULTURE: LEGAL AND CONCEPTUAL ISSUES. A PRESENTATION BY O.P. HISARIA. Context and Need of a separate Agreement. Agriculture outside the purview of GATT, 1947. Trade in agriculture important for a large number of countries. Prevalence of distortions.

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WTO AGREEMENT ON AGRICULTURE: LEGAL AND CONCEPTUAL ISSUES

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  1. WTO AGREEMENT ON AGRICULTURE: LEGAL AND CONCEPTUAL ISSUES A PRESENTATION BY O.P. HISARIA

  2. Context and Need of a separate Agreement • Agriculture outside the purview of GATT, 1947. • Trade in agriculture important for a large number of countries. • Prevalence of distortions. • Unwillingness of Members to integrate the agriculture trade completely with other goods trade.

  3. Product Coverage under AoA • HS Chapters 1 to 24 less fish and fish products. • Mannitol, sorbitol, essential oils, albuminoidal substances, modified starches, glues and finishing agents. • Hides and skins, raw furskins. • Raw silk, silk waste, wool and animal hair. • Raw cotton, waste and cotton carded or combed, raw flax and raw hemp.

  4. Areas of commitment: Market Access • Tariffication. • Binding of tariffs. • Tariff reduction. • Minimum market access commitments. • TRQ • Special Safeguard Mechanism (SSG).

  5. Tariff Rate Quota (TRQ) • Applied by 43 Members on 1425 products. • The methods of quota allocation: • First-come, first serve. • Licences on demand. • Auctioning. • Historical importers. • Import by STEs. • Import by producers’ group/association. • Applied tariff.

  6. Special Safeguard Mechanism (SSG) • Only for products in tariffication. • Cannot apply to in-quota imports. • Two types of triggers: volume based and price based. • Application based on notified levels of price and volume triggers. • In volume trigger, duty is one-third of applied rate. • In price trigger, duty depends on price.

  7. Areas of Commitment: Domestic Support • Amber Box • Exempt support under Article 6.2. • Exempt support under De-minimis. • Exempt support under Article 6.5 (Blue Box). • Subsidies under Annex.2 (Green Box)

  8. Green Box: The types • General services including research, pest and disease control, training, extension and advisory, inspection, marketing and promotion, infrastructural services. • Public stock holding for food security. • Domestic food aid. • Direct payments including decoupled income support, income insurance and income safety net, relief from natural disasters, structural adjustment assistance, environmental programmes and regional assistance programmes.

  9. Areas of commitment: Export subsidy • Reduction commitment. • Enumeration of prohibited subsidies. • S&D for developing countries.

  10. Subsidies prohibited under the Agreement • Direct export subsidies contingent on export performance. • Sale of non-commercial stocks of agricultural products for export at prices lower than comparable domestic prices. • Cost reduction measures such as subsidies to reduce the cost of marketing. • Internal transport subsidies applying to exports only. • Subsidies on incorporated products. • Government levy leading to promotion of export.

  11. Special and Differential Treatment for Developing Countries • Exemption under Article 6.2. • Higher level of De-minimis (Article 6.4). • Continuation of certain types of export subsidies (Article 9.4). • Special provision on use of export prohibition or restriction on food stuff (Article 12.2). • Lower levels of reduction commitment on tariff, trade distorting support and export subsidies.

  12. Special and Differential Treatment for Developing Countries • No commitments on LDCs. • Special measures for net food importing developing countries. • Future negotiations to take care of S&D for developing countries. • Special provision concerning public stock holding for food security and domestic aid. • Special treatment under Annex.5.

  13. Other issues • Non-trade concerns. • Peace Clause. • Notification Requirements • Case Law

  14. Peace Clause • Green Box – No CVD action, no nullification and impairment. • Amber and Blue Box – No serious prejudice action possible, no nullification and impairment, determination of injury required for CVD. • Export subsidies – No serious prejudice action possible, determination of injury required for CVD. • General Safeguards, BoP provisions, anti-dumping possible in some cases.

  15. Non-Trade Concerns • Food and livelihood security. • Environment. • Multi-functionality. • Food safety. • Animal welfare.

  16. Dispute Settlement Action • European Communities – measures affecting importation of certain poultry products. • European Communities – regime for importation, distribution and sale of banana. • Korea – Beef. • USA – Tax treatment for Foreign Sales Corporation • Canada – Import of milk and export of dairy products. • Chile – Price Band System • USA – Subsidy for upland cotton. • EC – Export subsidies for sugar.

  17. Notification Requirement • Notifications for volume and price trigger under the SSG, annual notification on use of measures. • Summary of total Domestic Support. • Export subsidy – budgetary outlay and quantity reduction commitment, notification of total exports, statement of non-use of export subsidy. • Annual notification setting out the quantity of food aid provided to LDCs and NFIDCs

  18. Thank you

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