Agriculture Trade Negotiations – Lecture 3

WTO Agreement on Agriculture:

Monitoring Implementation and
the Cotton Case
Serafino Marchese
“Virtual” Visiting Lecturer, Foreign Trade University, Hanoi
former WTO staff member

AG - 1
 Presentation Outline

1. The Committee

2. Notifications

3. Review of Notifications

4. The Cotton Case

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The Commitee

3
 Regular Committee on Agriculture

Review process
 Implementation of commitments
under the Reform Programme
(Article 18.6)

 Review of notifications
- Questions
- Counter-notifications
- Deferred replies to questions raised
- Overdue notifications

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 Committee on Agriculture

Other matters
 Implementation issues

 Best practices: Improved timeliness and completeness of

notifications

 Members’ compliance with notification requirements

 Follow-up to NFIDC Decision

Implementation of Bali outcome (since 2014)

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Committee on Agriculture
Agenda

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Committee on Agriculture
Agenda

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Procedure : G/AG/1
Notifications

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Notification requirements
 AoA: Structure
of the Agreement
 Who has to notify?

Tariff Quotas Only Members with tariff

quota commitments

Special Safeguard Only Members with recourse

Domestic Support All Members

Export Subsidies All Members

Export Prohibitions Ad hoc

and Restrictions
Follow-up to the All food-aid donors
NFIDC Decision

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How are notifications submitted ?
 Market Access - TRQs

Initial
and
 Table MA:1 – Administration changes

 Table MA:2 – Import volumes

Annual
 Table MA:1
(TRQ administration)

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 Table MA:2
(Imports under TRQ)

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 Market Access –
Special safeguard

Ad hoc

Table MA:3 – volume-based SSG

Up-front /
Table MA:4 – price-based SSG Ad hoc

Table MA:5 – Annual summary of safeguards

actions, both volume and price
Annual
based
 Table MA:3
(volume-based SSG)

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 Table MA:4
(price based SSG)

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 Table MA:5
(SSG Summary)

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Table MA:5 (SSG Summary – nil
statement)

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 Export subsidies

Members…
Annual
… Without reduction commitments
• Table ES:1 – Notification absence of export subsidies
• Supporting table ES:2 – Developing countries using article 9.4
• Table ES:2 - “Significant Exporter” Total exports
• (cf. G/AG/2/Add.1 and G/AG/W/123)

… with reduction commitments

Annual

• Table ES:1 – Export subsidies budgetary outlays and quantities

• Table ES:2 – Total exports products with reduction commitments

… Food Aid donors

Annual
• Table ES:3 Total volume food aid
 Table ES:1
(Export subsidies)

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Supporting Table ES:1

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Supporting Table ES:2

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 Table ES:2
(Total exports)

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Table ES:3
(food aid)

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 Domestic Support

… Annual level of Support

Annual
– All Members
– Table DS:1

…Introduction or modification of measures

exempt from reduction commitments
– All Members
Ad hoc
– Green Box, Blue Box, Article 6.2
– Table DS:2
Table DS:1 (AMS)

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Supporting Table DS:1
(Green Box)

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 Supporting Table DS:2
(Development Programme)

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Supporting Table DS:3
(Blue Box)

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 Supporting Table DS:4
(Summary of Amber Box)

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 Supporting Table DS:5
(Market Price Support)

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 Supporting Table DS:9
(Non-product-Specific Support)

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 Table DS:2
(New exempt measure)

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 Exports prohibitions
and restrictions
Ad hoc
Table ER:1

… Any Member instituting an export

prohibition or restriction covered by article
12 AoA (foodstuffs)

… except Developing country Members

which are not net exporters of the product
concerned
 Table ER:1
(export restrictions)

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 Follow up decision
on LDCs and NFIDCs

Table NF:1 Annual

… for all donor Members

in respect of actions taken within the
framework of decision on LDCs and NFIDCs.
 Table NF:1
(NFIDC Decision)

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 Notifications submitted to the WTO
(1995-2019): total of 4’436

Source: Docsoline (docs.wto.org  Notifications )

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Notifications state of play

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The review
process

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 Review Process

Questions
1. Give notice of intention to raise or revert to any
matter relating to a particular notification to the
notifying Member concerned and to the WTO
Secretariat.
2. Provide an outline of concerns.
3. Deadline for notice of intention to raise questions
(WT/AIR/#)
4. Compilation of questions (G/AG/W/#).

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 Review of Notifications

• Updates on Discussions

• Counter Notifications

• Deferred replies to questions raised

45
 Questions raised in the CoA

600

500

400

300

200

100

0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

46
 Distribution of questions
by pillar (1995-2014)

Source: AG-IMS
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 Evolution of distribution of
questions by pillar (1995-2014)
600

500

400

300

200

100

0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Market Access Domestic Support Export Competition

Source: AG-IMS
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 Questions asked by developed and
developing countries

Source: AG-IMS
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 Questions addressed to developed and
developing countries

Source: AG-IMS
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 Review Process

Questions by Section

Article 18.6 (8.8%)

Individual Notifications
(90.1%)
Other (1.1%), including
overdue notifications

Source: AG-IMS
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 Most Active Members

Top 10 Members raising questions 1995-2014 Top 10 Members answering questions since 1995-2014

Member Number of questions Member Number of questions

1 United States of America 1275 1 European Union 707
2 Australia 1258 2 United States of America 561
3 Canada 997 3 Canada 347
4 New Zealand 960 4 Japan 302
5 European Union 612 5 Switzerland 257
6 Japan 325 6 Norway 229
7 Argentina 253 7 India 212
8 Brazil 147 8 Thailand 197
9 Thailand 81 9 Korea, Republic of 195
10 Korea, Republic of 65 10 Brazil 188

Source: AG-IMS (Cut-off date: December 2014)

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 AG document symbols

G/AG/# Adopted decision, final report

G/AG/W/# Proposal for action by Committee
Questions and Answers Compilation
G/AG/GEN/# Information document
G/AG/R/# Report of meeting / report of workshops
G/AG/N/ISO/# Notifications (ISO=3 letter country code,
ex: VNM Vietnam)
G/L/# Annual reports to Goods Council
WT/GC/# Reports to General Council
WTO/AIR Announcement / agenda of meetings
JOB/AG/# Room document (informal paper)
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 Some relevant documents

• Committee on Agriculture Working Procedures–

G/AG/1
• Notification Requirements and Formats–
G/AG/2
• Compliance with notification obligations–
G/AG/GEN/86/Rev.#
• Implementation of the decision of measures
concerning the possible negative effects of the
reform programme on least developed and net-
food importing developing countries –
G/AG/W/42/Rev.#
 Information Sources

• AG- Information Management System:

http://agims.wto.org/

• Reviewing notifications  Cairns group paper on

“What to look for when reviewing notifications”

• Agriculture notifications: http://www.wto.org/

 Trade Topics  Agriculture
 Members’ Transparency Toolkit

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The Cotton Case

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Why cotton at the WTO?

• The cotton four (C-4): Benin,

Burkina Faso, Chad and Mali.
• Presentation of the Sectoral
Initiative at the WTO by President
Blaise COMPAORE of Burkina
Faso on 10 June 2003: “our
countries are not asking for
charity, neither are we requesting
preferential treatment or
additional aid. We solely demand
that, in conformity with WTO
basic principles, the free market
rule be applied”.
 US – Upland Cotton (DS267)

• Feb. 2003: Brazil’s request to establish a panel

• Aug. 2009: DSB authorization to retaliate

• Apr. 2010: Bilateral agreement

• Sept. 2014: Mutually agreed solution

– Payment to Brazil: US$ 300,000,000
– Agreed that the dispute was terminated

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The cotton issue was brought into the WTO arena with
the launching of the Sectoral Initiative in
Favour of Cotton on 30 April 2003
Three points were raised:

• the damage that they believed was inflicted

on them by richer countries’ cotton subsidies

• a call for the subsidies to be eliminated

• a call for compensation to be paid so long as

the subsidies remain, to cover the economic
losses they caused
July Package (2004)
 WTO Negotiations:
Agriculture

Comprehensive negotiations aimed at:

• substantial improvements in market access
• reductions of, with a view to phasing out, all forms of

export subsidies
• substantial reductions in trade-distorting domestic

support
……..
Cotton negotiations: “quad plus” – C4 +
Argentina, Australia, Brazil, China, Colombia,
EU, India, Pakistan, US
 WT/MIN(15)/46

Cotton - Trade component

Market Access

Developed Members and developing Members in a position

to do so:

Shall grant, to the extent provided for in their respective

preferential trade arrangements in favour of LDCs, as from
1 January 2016,

 Duty‑free and quota‑free market access for exports by LDCs

Cotton

Relevant cotton-related products

 included in the list annexed to this Decision
 and covered by Annex 1 of the Agreement on Agriculture.
WT/MIN(15)/46

Nairobi outcome
Cotton
Trade component
 WT/MIN(15)/46

Cotton - Trade component

Domestic support
Acknowledge past efforts made by some Members to reform their
domestic support cotton policies

Emphasize more efforts remain to be made

Necessary transparency provided in notifications and review process

in the Committee on Agriculture

Export competition
To be read in conjunction with the Nairobi Ministerial Decision on
export competition (document WT/MIN(15)/45)
Disciplines and commitments in the Decision shall be implemented:
 Immediately by developed country Members
 No later than 1st January 2017 by developing country Members
 WT/MIN(15)/46

Trade-related dedicated discussions

Ministers in Bali and Nairobi agreed “to hold a dedicated
discussion on a bi-annual basis in the context of the
Committee on Agriculture in Special Session to examine
relevant trade-related developments across the three
pillars of Market Access, Domestic Support and Export
Competition in relation to cotton.”

• Not a negotiation forum, but to inform negotiations

• Secretariat background papers: TN/AG/GEN/34 –
TN/AG/SCC/GEN/13 and their addenda and revisions)
• Presentation from International Cotton Advisory
Committee (ICAC) on cotton trade trends
 Cotton - Development
aspect (1)

A Forum: The Director-General’s Consultative Framework

Mechanism on Cotton (DGCFMC)

• Exchange information (Donors/Beneficiaries)

on development assistance provided to cotton-
producing developing countries

• Platform for:
• presentation of projects and calls for funding;
• review of case studies on projects impacts and on
best practices;
• data on development assistance funding
 Cotton - Development
aspect (2)

Instruments/Tools: The evolving table

• A unique transparency-enhancing and monitoring

tool in the world of commodities.

• Track developments and exchange information on

development assistance provided to cotton producing
developing countries.

• As of June 2018 – 26 ongoing cotton projects

totalling 204 million dollars.
Cotton Portal
Thanks for your attention

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