WTO Forum Kaliningrad State Technical University March 2014 Clem Boonekamp Aspects of the WTO Agreement on Agriculture

Why an Agreement on Agriculture? 2

Before 1995 … Agriculture has always been part of GATT … Before 1995 … Agriculture has always been part of GATT … BUT 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) 3 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 Agreement Three Pillars Green Box Blue Box Article 6.2 – Development Programmes Amber Box 4 Export subsidies Anti-circumvention Export prohibitions and restrictions Tariffs Tariff rate quotas Special safeguards Market accessDomestic supportExport competition

Market Access--A Tariff Only Regime 5 --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, Russias tariff binding will be 10.8%

Tariff Rate Quotas Russia has TRQs on beef, pork, poultry and dairy 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) 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 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 7

Special Safeguard – Article 5 8 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

9 No/minimal effects on trade or production Development programmes Production limiting programmes Green Box Annex 2 Art. 6.2Blue 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 Members 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 10 All other forms of domestic support fall under the Amber Box and form the (Total) Aggregate Measurement of Support - AMS

Total AMS Reduction Commitment 11 % cut in aggregate terms Russias 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 12 Where no Total AMS commitment exists in Part IV of a Members 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 Members withTotal AMS Reduction Commitments ArgentinaEUMexicoSaudia Arabia AustraliaFormer Yugoslav Republic of Macedonia MoldovaSouth Africa Bolivarian Republic of Venezuela IcelandMoroccoSwitzerland Liechtenstein BrazilIsraelNew ZealandChinese Taipei CanadaJapanNorwayThailand ColombiaJordanPapua New Guinea Tunisia Costa RicaRepublic of KoreaRussian 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 14

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 wheat1,000,000 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

Export Competition -- Export Subsidies 16 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 subsidies for marketing and internal transport (during the implementation period) Anti-circumvention provisions for non-listed export subsidies Prohibition of subsidies contingent on exportsunless scheduled reductions, product- specific

Schedules Schedules Agricultural Concessions and Commitments Agricultural concessions and commitments are spread between two of the four parts of 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 17

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