The revised draft modalities for agriculture and those for non-agricultural market access (NAMA) were issued simultaneously in an effort to launch a new stage in the Doha Work Programme (DWP) negotiations. The concurrent circulation of both papers was expected to enable negotiators to look crosswise at both issues to ensure a balance in the high level of ambition sought in market access in agriculture and NAMA.

This note follows on previous ones on the evolution of the modalities in agriculture. Rather than repeating the content of previous Background Notes, such as “Draft Modalities for Agriculture: Chairman Falconer’s Proposals” (25 July 2007) or “The ‘Challenges Papers’: Chairman Falconer’s Thoughts” (31 May 2007), this note is an attempt to synthesise the changes between the first draft modalities (known as the July 2007 Draft Modalities or “W4” paper) and the current revision.

I. Introduction

1. In some respects the revised draft modalities paper [note 1] issued by the Chairman of the Agriculture Negotiations, Ambassador Crawford Falconer ( New Zealand) in early February 2008 is a disappointment. In others, it is the inevitable result of a failure by WTO members to compromise, the difficult political environment in some capitals and stresses and strains beneath the surface in Geneva. No doubt, the Revised Modalities move the process forward, but not in a manner that can generate confidence in a settlement of the DWP by the end of the year.

2. Most of the big questions remained unchanged from the July 2007 (or W4) text. The “headline numbers” in the Revised Modalities, i.e. the ranges for reductions in domestic support and tariffs remain almost precisely where they were. Chairman Falconer noted that they remained unchanged because no serious negotiations had taken place on them. However, the ranges had been implicitly accepted and they are now subject to political decisions.

3. However, some advances had been made in the past six months or so. Between November 2007 and January 2008, Chairman Falconer issued no less than 16 working papers on all the different aspects of the agriculture negotiations, except on the Special Safeguard Mechanism (SSM). Progress made since September 2007 in the Room E consultations had been reflected in these papers. Despite these advances, some other very significant and politically troublesome questions (such as sectoral initiatives, differential export taxes and GIs, not dealt with in the W4 text) are also untouched in the latest draft (or are totally absent, as in the case of the “peace clause”). Not far short of 200 square brackets remain in place, presenting a considerable challenge to negotiators and their ministerial bosses.

4. The absence of an initial textual commentary from Ambassador Falconer is perhaps telling. It may be due to the fact that the Revised Modalities are presented in the form of a legal text. But also it may reflect some of the pressures to which the Chairman has undoubtedly been subject. The introductory sentence only states that the document shows the changes to the modalities intending to reflect the negotiating process. The way forward is unclear; there are apparent differences between the Chairpersons of the negotiating groups, the Director-General and certain WTO members on the nature, level and timing of a “horizontal” negotiation to bring Doha dossiers together and to secure cross-linking concessions. Chairman Falconer envisages no new revision of the Revised Modalities before the horizontal process takes place.

5. Certainly, the intense difficulties over the new NAMA text and the long-due but recently-issued services document cannot have helped the search for resolution in the agriculture modalities. Will it be easier to find compromise in a broader setting or will polarisation on all issues simply intensify in the absence of real political confidence? That remains to be seen. For the moment, delegations will no doubt focus on the technical aspects of the new draft.

6. The following is an attempt to identify what has changed from the July 2007 text and the working papers tabled by the Chairman between November 2007 and January 2008. It does not comment on the elements that remain as they were.

A. Implementation and Staging

7. Much of the new material in the first pillar concerns implementation periods and staging.

8. Overall trade-distorting domestic support (OTDS) [note 2]: Paragraph 5 provides a five-year schedule with six steps for reducing OTDS for developed countries. Initial instalments (on Day One) would be either one-third (first two tiers [note 3]) or 25 per cent (third tier). Paragraph 8 provides developing members (and recently acceded members (RAMs) to which OTDS reductions apply) with an eight-year schedule, nine steps and an initial reduction of 20 per cent.

9. Final bound total AMS: Paragraph 15 sets developed countries five years and six steps to achieve reductions commitments. Members in the top two tiers [note 4] would deliver a 25 per cent reduction from Day One; others would cut in equal instalments. Paragraph 16 allows developing countries, where applicable, nine equal annual instalments over eight years. It is worth noting that the AMS targets for the different tiers are now out of square brackets.

10. Product-specific AMS commitments: Paragraph 26 proposes full implementation on Day One except where the average notified product-specific AMS for the two most recent years is higher than the commitment calculated under Paragraph 22. In such cases, implementation would take place in three equal annual instalments with the starting point either the two-year average itself or 130 per cent of the scheduled limit (the lower of the two).

11. De minimis: Paragraph 30 provides options for implementation; either the reduction commitments should be implemented with effect from Day One or through five equal instalments. Special and differential treatment (S&D) terms are provided in Paragraph 31 with implementation for developing countries set at three years longer than that for developed members. The few RAMs that will be required to take on a de minimis reduction are given five years longer than developed members (Paragraph 33).

12. Cotton: The Paragraphs (55-59) on domestic support for cotton remained mostly the same as those in the original July 2007 document (Paragraphs 42-46): reductions on domestic support targeting cotton would be implemented over a period that is one-third of that applying generally (i.e. one year and eight months in the case of developed members). However, one notable change takes place in the Revised Modalities: instead of stating that the reduction formula “will’ be applied to the base value of support, the Revised Modalities have changed this “will” to “shall”, with the legally binding implications this word carries in the WTO.

B. Recently-acceded Members (RAMs)

13. Most RAMs are exempted from reduction commitments under three domestic support provisions. The exemptions apply to two categories of RAMs: the very recently acceded members ( Saudi Arabia, the Former Yugoslav Republic of Macedonia and Vietnam [note 5]) and “small, low-income RAMs with economies in transition” (Albania, Armenia, Georgia, Kyrgyz Republic and Moldova) [note 6]. The commitments exempted are those related to OTDS (Paragraph 9), Final Bound Total AMS (Paragraph 19) and De minimis (Paragraph 33).

14. For those RAMs that are not exempted, base OTDS will be reduced by two-thirds of the rate agreed for developed countries and implemented as for developing countries (Paragraph 8). Reductions of Final Bound Total AMS commitments will be those for developing countries (Paragraph 13(c)). For such RAMs with existing de minimis levels of 5 per cent (developed members), reduction commitments will be at least one-third of the rate specified for developed members (Paragraph 30).

15. One further important exemption for “small, low-income RAMs with economies in transition” is contained in Paragraph 19. In calculating their current total AMS limits, these countries will be able to exclude several forms of investment, input and financing subsidies. This exclusion permits increases in these forms of domestic support to farmers.

16. Paragraph 52 provides that RAMs benefit from the same conditions on Blue Box payment limits (5 per cent of the average value of total agricultural production) as outlined in Paragraph 49 for developing countries.

C. Blue Box

17. Paragraphs 36 and 37 require that members must choose, and then stick to, one of the two categories of Blue Box conditions outlined in Paragraph 35. Thus they cannot use both conditions and cannot move between them subsequently.

18. Special conditions apply to the US with respect to product-specific Blue Box limits (Paragraph 42).

19. Paragraph 46 provides for the scheduling of product-specific Blue Box commitments where there is otherwise no entitlement and no current AMS support. This will benefit developed countries but will require offsetting reductions in Total AMS commitments.

20. Paragraphs 47 and 48 contain safeguards against overspending on product-specific and overall Blue Box commitments.

D. Green Box

21. A number of additions, amendments and clarifications are included in Annex B which is a redraft of Green Box conditions in the Agreement on Agriculture (AoA). Changes since the July 2007 draft affect:

• Public stockholding for food security, where an addition to the existing AoA footnote 5, affecting developing countries, puts amended limits on the subsidy element of governmental purchases for stockholding programmes.
• Decoupled income support, where new language in square brackets may provide additional flexibility to developed members.
• Structural adjustment assistance provided through investment aids, where language to allow “exceptional updates” to the relevant base period is now disputed, with two options in square brackets.
• Payments under regional assistance programmes, where again conditions on exceptional updates to the base period are presented as two options.

A. Tiered Formula

22. While the Chairman has shied away from narrowing the ranges of possible tariff reductions in each of the four tiers he has introduced a new element in Paragraph 63 which lays down a minimum overall average cut of 54 per cent in final bound tariffs for developed countries (to be symmetrical to the maximum cuts for developing members). He also stipulates that if, with the impact of sensitive product treatment included, the overall average is not met then additional efforts must be made proportionately across all bands to meet the target. A footnote to this provision would normally exclude cuts on tropical products and tariff escalation products from calculation of the overall average. To date, this new proposal has met with fierce public opposition from some developed members.

23. Paragraph 65 sets out the maximum overall average tariff cut for developing countries. While the July 2007 draft contained alternatives of 36 per cent and 40 per cent, the new draft retains only the 36 per cent option, albeit still in square brackets.

24. Small and vulnerable economies are covered in Paragraph 66 which is greatly simplified from the provisions in Paragraphs 51 and 52 of the July 2007 draft. The new condition permits such members to add 10 ad valorem percentage points to the final bound tariffs that would result from the application of the developing country tiered cuts in Paragraph 64.

25. Some of the conditions affecting RAMs have also been amended since the July 2007 draft (Paragraphs 123-128). New Paragraph 76 entitles all RAMs to exempt from any Doha cuts all their current final bound tariffs standing at or below 10 per cent. For higher current bound tariffs, RAMs will be able to add 7.5 ad valorem percentage points to the final bound tariffs that would result from the application of the developing country tiered cuts in Paragraph 64. The July 2007 draft allowed only five additional points.

26. New Paragraph 68 excludes from any requirement to undertake reductions in bound tariffs the very recently-acceded members ( Saudi Arabia, FYI Macedonia, Vietnam and Tonga) and small low income RAMs with economies in transition (see above).

27. Remaining RAMs provisions are unchanged from the July 2007 draft.

B. Sensitive Products

28. There are almost no changes to the choices to be made on the designation of sensitive products (Paragraph 72 and 73). However, the word “dutiable” is now in square brackets. Clearly, if the term was to be excluded the number of tariff lines identified as sensitive will be larger than if the same designation percentage (4 or 6 per cent) were applied only to those tariff lines for which duties are not zero. F or members with more than 30 percent of their tariff lines subject to the top band tariff cuts, the percentage increases to 6 or 8 per cent.

29. Paragraph 74 now provides three options for sensitive product deviations from the application of the tiered formula: one-third, one-half and two-thirds (rather than one-third and two-thirds, as proposed in the July 2007 text). This applies to both developing and developed members.

30. Although still subject to multiple differences between members the methods for expanding sensitive product tariff quotas (Paragraphs 75-79) have been refined since the July 2007 text. While the negotiating options for one-third and two-thirds deviations remain as before, a new minimum for a one-half deviation is inserted; namely 3.5 or 5.5 per cent. Where members have recourse to the provision (Paragraph 72) to designate a further two per cent of its tariff lines as sensitive the consequent tariff quota expansion will need to be either an additional one-half or one percent of domestic consumption (Paragraph 76). That same Paragraph also contains a penalty for members wishing to retain more than four per cent of their tariff lines in excess of 100 per cent ad valorem; this will require an additional (unspecified) expansion of tariff quotas.

31. Paragraph 77 permits somewhat lesser expansions of tariff quotas where the existing bound tariff quota volume represents at least 10 per cent or at least 30 per cent of domestic consumption.

C. Tariff Escalation

32. Paragraphs 80 – 86 are new but repeat almost exactly the working document tabled by the Chairman in January 2008. In essence, the tariff cut required for a processed product falling within the list presented in Annex D would be that applicable to the next highest band in the tiered formula to that where the product’s current bound tariff would otherwise be placed. It is noted that the Annex D list is not finalised and can be added to or reduced.

D. Tariff Simplification

33. Paragraphs 98 – 104 are largely new, although they bear some resemblance to the working document presented in January 2008. The language remains controversial in several respects. Principally, there is no resolution on the target for the expression of bound tariffs in simple ad valorem terms: the text provides alternatives of 100 per cent or 90 per cent of bound tariffs in each member’s schedule. In the latter case, where a member already has 90 per cent of its tariff in simple ad valorem terms, it is proposed that a further 50 per cent of the remaining non ad valorem lines be converted.

34. Paragraph 100 provides a timeline for conversion. The normal rule would be that simplification takes place on Day One. However, for members with less than 60 per cent of bound tariffs in simple ad valorem terms, there would be a phased simplification over two years. Particularly complex tariffs would have to be converted on Day One (Paragraph 101).

35. Developing countries required to make such conversions will have an additional two years and LDCs have no obligation to make such changes (Paragraph 102).

36. When scheduling simplified tariffs members will need to demonstrate that these are not higher than the more complex tariffs being replaced (Paragraph 103).

E. Tariff Quotas

37. The treatment of bound in-quota tariffs remains very controversial. Paragraphs 105-107 are based in part on the January 2008 working document. Paragraph 105 deals with existing tariff quotas. Either these would be subject to the “default” (tiered formula) cut or to the relevant sensitive product cut increased by 20 per cent for developed countries and 14 per cent for developing countries. The staging of cuts would be that applying to the out-of-quota tariff. An alternative provision (in effect a third option) would eliminate in-quota tariffs in equal instalments over five years for developed members but leave developing members with no reduction obligation.

38. New Doha Round tariff quotas are covered by Paragraph 106. One option is to bind them at zero. A further complex option links in-quota tariffs to both the tiered formula cuts and sensitive product cuts. Where the calculation results in an in-quota duty below 10 per cent, it would be bound at zero. No such duty would exceed 30 per cent.

39. Tariff quota administration is covered in Paragraphs 108 – 118. These provisions are largely as in the working document and are generally uncontroversial. However, provisions related to the underutilisation of tariff quotas and the reallocation of licenses remain at issue. Paragraph 115 presents one mechanism and Annex E a second. Paragraph 118 also remains in square brackets and concerns the necessity for certificates of origin to justify allocation of imports to a scheduled tariff quota (in the context of Article 3.5(k) of the Agreement on Import Licensing Procedures).

F. Special Agricultural Safeguard (SSG)

40. Developed countries remain reluctant, despite earlier assumptions, to relinquish the SSG. The first option in Paragraph 119 would, indeed, see the SSG expire for developed members on Day One. A second option in that Paragraph would, however, see the number of eligible tariff lines reduced to 1.5 per cent of the schedule with developing countries reducing their own tariff line eligibility to some, so far unspecified, percentage.

41. Paragraph 120 contains a further option that would require the full elimination of the SSG for developed countries within four years. This would, again, require a reduction in eligible tariff lines to 1.5 per cent of the full schedule on Day One. The remainder would be phased out over four years while stricter conditions would apply both to the quantity trigger and the price trigger as set out in (a) and (b).

42. Paragraph 121 confirms the unchanged applicability of the SSG for developing countries.

G. Special Products

43. Despite prodigious efforts in his consultations during the past six months and the Chairman’s January 2008 working document, there remains considerable uncertainty on special products.

44. Paragraph 123 sets out the principal parameters but reflects wide differences. The Chairman seems to have settled on a minimum entitlement of 8 per cent of tariff lines to be self-designated by developing countries. A maximum entitlement would be set at either 12 or 20 per cent. Self designation is, in principle, to be guided by indicators, 12 of which are listed in Annex F. However, footnote 14 (in square brackets and not in the main text) would stipulate that the indicators need not be used for products falling within the minimum entitlement. Where the indicators are used, footnote 15 allows for circumstances where they fail to identify any additional special products beyond the minimum entitlement. In such a case, and under specified conditions, any unused sensitive product entitlement could be transferred to special product status.

45. As for the treatment of special products, Paragraph 123 proposes that 6 per cent of tariff lines be subject to a tariff cut of 8 or 15 per cent and a further 6 per cent take a 12 or 25 percent cut. Controversy also remains over whether the provision should also allow for 8 per cent of tariff lines to be subject to no cut at all.

46. Small vulnerable economies are provided with additional flexibility in Paragraph 124. These members can choose to apply both the moderated tiered formula conditions in Paragraph 66 and their special product entitlement. Alternatively, they could designate special products without using indicators and without applying minimum tariff cuts provided they meet the average cut of 24 per cent [note 7].

47. RAMs are provided for in Paragraph 125. The Chairman proposes that the threshold above which indicators will [note 8] be used should be 2 per cent higher (i.e. 10 per cent), the maximum entitlement should be 1 per cent higher and the relevant tariff cuts 2 per cent lower. If there is to be an allowance for a proportion of special products eligible for zero cuts then the allowance for RAMs should be an additional 1 per cent.

H. Special Safeguard Mechanism (SSM)

48. The SSM text (Paragraphs 126 – 139) is largely new, complex and significantly disputed. Paragraph 126 limits its use to either three or eight products in any 12-month period. Footnote 16 defines “product” as a maximum of four or eight tariff lines at the HS 6-digit level. Clearly the differences generated by these two sets of alternatives are potentially large.

49. Paragraphs 128 - 129 set out parameters for a volume-based SSM. No working paper was issued on SSM, but the Chairman stated that the text and numbers reflected both the G33 proposals and an amalgam of the numbers proposed by those members who opposed the SSM. Trigger volumes in each of three levels of rising import penetration are hotly contested as are the maximum additional duties to be imposed on applied rates. In each case, the maximum additional duties are related to bound tariffs but imposed on applied tariffs.

50. The price-based SSM is covered in Paragraphs 130 – 132. This option applies on a shipment-by-shipment basis. Paragraph 136 includes disputed language on the maximum period that the measures under the volume-based SSM can be maintained.

I. Tropical and diversification products

51. Annex G provides a list of such products at the 6-digit level. Paragraphs 140 - 141 set out provisions for their “fullest liberalisation”.

52. Paragraph 140 contains two options. The first provides for all scheduled tariffs at or below 25 per cent to be reduced to zero. For bound tariffs above 25 per cent the cut would be 85 per cent. Sensitive product treatment is excluded for products on the list. Implementation would be in four equal annual steps. The second option envisages tariffs less than 10 per cent being eliminated. Above 10 per cent, the cut would be of 66 per cent or 73 per cent.

53. Paragraph 141 makes clear that these reductions would be required of developed members; developing members would be encouraged to make additional efforts beyond the requirements of the tiered formula.

J. Long-standing preferences and preference erosion

54. Annex H provides a consolidated list of products likely to be affected by significant preference erosion. Paragraphs 142 - 143 set out two options for addressing the problem. The first would simply delay for ten years any tariff cuts to listed items. Thereafter, cuts would be implemented over five years.

55. The second option is more tentative. It would restrict special conditions to products where the current binding is above 10 per cent, where the preference-receiving country has conducted significant trade in the past three years and where there is “unlimited and long-standing preference eligibility in the market concerned. In such cases, the preference granting member would implement cuts in equal annual instalments over a period that is two years longer than that for developing country members under the tiered formula.

56. Paragraph 143 stipulates that where there is overlap, tariff escalation and tropical products provisions normally take precedence.

K. Least-Developed Countries

57. Paragraphs 145 – 147 are almost unchanged from the July 2007 modalities whose text is the “Decision on Measures in Favour of Leas-Developed Countries” in Annex F of the Hong Kong Ministerial Declaration [note 9] on duty-free, quota-free (DFQF) market access for all products originating from LDCs. However, the Revised Modalities have a couple of additions: (i) that WTO members should inform of the products covered defined at the tariff line level by 2008 or no later than the start of the implementation period and (ii) that the Committee on Trade and Development monitors progress in the implementation of this section of Decision (including on preferential rules of origin). One essential part of the Decision which is left out in the July 2007 and the new text is the reference to financial and technical assistance.

58. This third pillar of the agriculture negotiations continues to be the most advanced and complete. Nevertheless, there remain several points of contention that will probably require ministerial intervention.

59. The only addition to the text on export subsidy commitments (Paragraphs 153 - 155) is the insertion of a cut-off date by which developing countries must reduce to zero their scheduled export subsidies. This should be achieved in equal annual instalments by 2016, three years later than for developed members. However, Paragraph 155 allows those members to have recourse to AoA Article 9.4 [note 10] until 2021.

60. The specific conditions on export competition affecting cotton are contained in Paragraphs 159 - 160. Elimination of export subsidies is immediate ( Hong Kong declaration) or after one year of the implementation period for developing country members. The same implementation schedule applies to the three other forms of export competition disciplines (Paragraph 160).

A. Export credits, export credit guarantees or insurance programmes

61. The Annex J text is clarified and simplified from both the July 2007 text and the November working document.

62. The maximum repayment period for developing countries – envisaged in the July 2007 text as twice that for developed members – is now 180 days in both cases. However, developing countries generally have three years to reach that point.

63. The self-financing of export credit and insurance programmes remains in dispute. The period during which operating costs and losses must be covered is either four or five years for developed members and six or 7.5 years for developing members.

64. Paragraph 5 of the Annex provides least-developed countries (LDCs) and net food-importing developing countries with a repayment period of 360 days for basic foodstuffs and 540 days in exceptional circumstances.

B. Agricultural Exporting State Trading Enterprises

65. Annex K is little changed from the 2007 text. The key issue in dispute remains the inclusion of a date (2013) by which the agricultural export monopoly powers of state trading enterprises should be eliminated (Paragraph 3(a)(iv)).

66. One change in the S&D provisions (Paragraph 6) would extend to small, vulnerable economies the possibility of maintaining monopoly powers for agricultural exports exercised by their state trading enterprises (STEs).

C. International Food Aid

67. These provisions are now in reasonably good order but some difficult political decisions remain outstanding, notably for the US.

68. Annex L sets out the terms. Paragraph 3 requires members to refrain from providing in-kind food aid where it would disrupt the local market. This provision is now softened by a footnote that recognises that in emergency situations it might act as an “unintended impediment” to an effective response.

69. A new Paragraph 5 recognises that recipient governments have a primary role and responsibility for the organisation, coordination and implementation of food aid on their territories.

70. It is now clear from Paragraph 6 and its footnote that while regional intergovernmental organisations and NGOs may be involved in needs assessment in emergency situations, responsibility falls squarely on the “relevant United Nations agency.”

71. Paragraph 8 limits the monetisation of food aid inside the “Safe Box” to LDCs where there is a demonstrable need for the sole purpose of transport and delivery. However, in non-emergency situations (Paragraph 12) the issue of monetisation is unresolved. Provisions in square brackets would either prohibit monetisation or permit it in certain circumstances. One option envisages a standing committee of experts to review any such transactions.

72. New Paragraph 11 omits reference to the actionability of food aid, supplied outside the Safe Box, that leads to commercial displacement (Paragraph 9 in the July 2007 text). The ensuing three indents now merely set out conditions to be met by in-kind food aid in non-emergency situations rather than defining criteria against which commercial displacement would be deemed present.

73. As in July 2007, no text is presented for sectoral initiatives, differential export taxes and geographical indications. The latter issue remains potentially troublesome.

A. Export prohibitions and restrictions

74. Two elements have been removed from square brackets: the elimination, in one year, of existing prohibitions and restrictions on foodstuffs and feeds; and a normal limitation of 12 months on new export prohibitions and restrictions, extendable to 18 months with the agreement of importing members.

75. Immediately after the release of the Revised Modalities, some of the main actors in the agriculture negotiations, such as the US and others, did not offer initial comments or did so in very broad terms. The USTR spokesperson stated that the texts were complex and they were in the process of analysing them. However, once the dust had settled, the US Trade Representative criticised the Revised Modalities, particularly with regard to the flexibilities for developing countries on Special Products and the SSM.

76. The Trade Minister of New Zealand noted, soon after the Revised Modalities were issued, that there had been real advances in the negotiations. Although there was now a consensus text on most issues regarding subsidies and considerable work had been done to narrow gaps between different countries’ positions, the most important outstanding market access issues in relation to developing countries still needed to be resolved. However, more detailed comments required further analysis and it was too soon to gauge whether sufficient progress had been made to allow the negotiations to be concluded in 2008.

77. Canada’s Minister of Agriculture stated that he welcomed the Chairman’s Revised Modalities text which, while not reflecting a consensus, had provided the basis to react to. The Chairman had included his own ideas and proposals on where the middle ground was in the agriculture negotiations, but much remained towards achieving Canada’s objectives of significantly reducing trade-distorting domestic support, improving market access and eliminating all forms of export subsidies. Concern was expressed on the ideas on sensitive products, which were inconsistent with Canada’s fundamental position of maintaining a firm opposition to any tariff cuts or tariff quota expansion for sensitive products.

78.  The immediate reaction from the EU came from one of its members: the Irish Minister of Agriculture, who expressed serious concerns the range and the staging pace of reductions proposed for domestic support in the Revised Modalities. Finding proposals put forward on export subsidies were not balanced, she demanded genuine parallel commitments by all parties. She insisted that agriculture must not be sacrificed in the effort to get a WTO deal now.

79. Within the group of developing countries, the Minister of Trade and Industry of India recognised the progress made since September 2007. He welcomed the fact that the original G20 proposal of a minimum 54 per cent cut in agricultural tariffs for developed countries and a maximum tariff cut of 36 per cent for developing countries was back on the table. He remarked that, although convergence had been achieved in some areas, Chairman Falconer had issued a new text in some other unresolved areas which would require detailed discussions. These issues included special products, the SSM, special safeguards, tropical products, tariff simplification, etc. He also noted that there were wide divergences on OTDS, market access in sensitive products and tariff capping, among others. In addition, he acknowledged that there could be no compromise on the significant and effective reduction of trade-distorting subsidies of the developed members, which has an adverse impact on the livelihood of millions of poor farmers.

Note 1: TN/AG/W/4/Rev.1, Revised Draft Modalities for Agriculture, 8 February 2008. (return to text)

Note 2: Overall trade distorting support includes: final total bound Aggregate Measurement of Support (AMS), (better known as amber box and being the most distorting); de minimis and .blue box (subsidies that are less distorting production-limitation programmes). (return to text)

Note 3: The fist tier refers to members whose base OTDS is greater than USD60 billion (the EU) and the second tier to those whose base OTDS is greater than USD10 billion and less than or equal to USD 60 billion (the US and Japan). (return to text)

Note 4: In the first tier those members whose final bound total AMS is greater than USD40 billion and the second tier where the final bound total AMS is greater than USD15 billion or less than or equal to USD40 billion. (return to text)

Note 5: Tonga, which is a very-recently acceded member, is not included in the Chairman’s text. (return to text)

Note 6: Essentially this leaves China, Chinese Taipei, Croatia, Jordan, Oman and Panama, although only the first three will be significantly affected by domestic support disciplines. (return to text)

Note 7: TN/AG/W/4 (return to text)

Note 8: There appears to be an error in the paper which states “the threshold above which indicators are not required….” (return to text)

Note 9: WT/MIN/(05)/DEC. (return to text)

Note 10: This provision exempts subsidies to reduce marketing costs on agricultural exports and government-backed measures to reduce internal transport and freight charges on export shipments. (return to text)