WTO Forum Kaliningrad State Technical University 20-22 March 2014 Clem Boonekamp

1. Aspects of the WTO Agreement on Agriculture WTO Forum Kaliningrad State Technical University 20-22 March 2014 Clem Boonekamp

2. Why an Agreement on Agriculture?

3. 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) UnfaircompetitionNegative impact in particular for developing countries • Surpluses • Low prices • Difficult market access • Obstacle to production in countries with comparative advantages

4. Structure of the AgreementThree Pillars Market access Domestic support Export competition

5. Market Access--A Tariff Only Regime --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%

6. Tariff Rate Quotas • Current and Minimum Access Opportunities 3% - 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) Tariff rate 60% Out-of-quota duty 20% Quota volume Imports (MT) In-quota duty

7. 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 Federation Canada India South Africa Chile Indonesia Switzerland-- China Israel Liechtenstein Colombia Japan Chinese Taipei Costa Rica Korea Thailand (Croatia ) Malaysia Tunisia Dominican Republic Mexico Ukraine Ecuador Morocco United States El Salvador New Zealand Viet Nam

8. Special Safeguard – Article 5 33 Members, but not Russia, have reserved the right Option available only for “tariffied” products

9. Domestic Support -- Categories Subject to reduction commitments unless de minimis exempt from reduction No/minimal effects on trade or production Development programmes Production limiting programmes All other support De minimis Amber Box Art. 6.2 Blue Box Art. 6.5 Green Box Annex 2 Article 6.4

10. Amber Box All other forms of domestic support fall under the Amber Box and form the (Total) Aggregate Measurement of Support - AMS Article 1 (of AoA): “... calculated in accordance with the provisions of Annex 3 of this Agreement and taking into account theconstituentdata 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

11. Total AMS Reduction Commitment % 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.

12. What if there is no Total AMS commitment? Article 7.2(b) of the AoA “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

13. MemberswithTotal AMS ReductionCommitments 9other Members with Total AMS commitments have becomemember States of the EU

14. 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

15. Current Total AMS calculation and de minimis allowance Product-specific support Wheat Intervention price for wheat $ 230/t Fixed external reference price (AGST) $ 110/t Eligible production of wheat 1,000,000 t Value of wheat production $ 230 million Less associated fees or levies $ 0 Wheat AMS (AMS 1) $ 120 million De minimis threshold $ 11.5 million Non-product specific support Generally available interest rate subsidy $ 10 million Value of total agricultural production $ 860 million Non-product-specific AMS (AMS 2) $ 10 million Less associated fees or levies $ 0 De minimis threshold $ 43 million CURRENT TOTAL AMS (only AMS 1) $ 120 million 0

16. Export Competition -- Export Subsidies Prohibition of subsidies contingent on exports—unless scheduled reductions, product- specific Russia bound all export subsidies at 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

17. Schedules Agricultural Concessions and Commitments • Agricultural concessions and commitments arespread between two of the four partsof Members’ Schedules: • Part I, Most Favoured Nation Tariff Section I.A – Agricultural tariffs Section I.B – Agricultural tariff quotas Part II, Schedule of preferential tariffs Part III, Non-tariff measure concessions other than agricultural products • Part IV, Commitments limiting subsidization Section I – Domestic support, Total AMS Section II – Export subsidies – budget & volume commitments Section III – Commitments limiting the scope of export subsidies

18. Thank you for your attention !