1. WTO agreements regarding Agriculture
Agreement on Agriculture Agreements on Standards Agreement on Intellectual Property
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

2. General framework of the AoA
Objective : to ensure a certain discipline in agricultural trade
Means : restricting the use of agricultural policy tools having negative or distorting effects on trade.
Came into force 1 July 1995
For 6 years (Developed countries)
For 10 years (Developing countries )
Three pillars
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

3. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Coverage of the AoA
Relevant for agricultural products, raw and processed, including fibres (cotton, wool, silk, flax) and raw skins
Fish products, wood, agricultural inputs are submitted to the GATT agreement (trade in goods)
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

4. General provisions for developing countries
Developing countries : level of reduction are 2/3 level of reduction for Developed countries
No reduction for LDCs
More time for implementation
Possible use of specific tools
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

5. Market access : relevant measures
Restrict access to national markets
Tariffs barriers : custom duties
ad valorem, or minimum custom value
Non tariffs barriers
import quotas
variable entry levies
minimum import prices
import licenses
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

6. Market access: transparency
tariffication: conversion of non tariffs barriers in custom duties (tariffs equivalents)
binding principle : tariffs bound at a certain level. Cannot increase.
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

7. Market access : openness
Reduction of tariffs
36% in 6 years for developed countries
24% in 10 years for developing countries
Minimum import threshold for tariffied products
5% of the average of the internal consumption during the period of reference.
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

8. Market access exceptions
Special Safeguard clause : rapid surge in the volume of imports, or strong fall in domestic prices, possible to add a tax of 30 % (max), for a limited period. For tariffied products only
Other safeguard provisions in GATT
significant deterioration of the balance of payments
clearly established dumping (sale under the price in the country of origin)
to protect a newly developing industry (infant industry)
to protect health and life of human, animals, plants
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

9. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Domestic support (1)
Objective : reducing production supports with distorting effects on trade
Classification of support into three boxes
amber box: price support measures
blue box: aides partially discoupled and given to producers within the framework of a production-limiting programme
green box : subsidies with minimal or no distorting effects
government services programmes : research, extension, training, infrastructures, pest controls, food security stocks
direct payment to producers non linked to production level or factor of production. Ex : insurance mechanism (market crisis, natural disasters)
programmes for protection of the environment and support to less favoured areas
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

10. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
The Amber box
Calculation of the price support : the Aggregated measure of support (AMS)
AMS = (Domestic price – world price) X volume of production
Reduction of domestic support in the amber box :
minus 20% on 6 years
minus 13,3% on 10 years for developing countries
Exception : the “De minimis” Provision : no reduction
if the value of the support for a given products < 5 % of the total production value of this product (10 % for DCs) or
if the value of non product-specific support < 5% of the value of the whole agricultural production (10% for DCs)
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

11. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Other boxes (3)
Blue box : for the EU and the US. Not compulsory to decrease, impossible to increase
Green box : no limitation (can increase)
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

12. Exceptions for developing countries
Following measures are not subject to reduction
agricultural investment incentives
subsidies for the input of low-income producers
assistance to replace illicit crops
Least developed countries are not subject to reduction commitments
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

13. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Export competition
Objective : to limit export supports
Measures
Type of support concerned by the AoA
direct export subsidies
stock sale under the domestic price
support to reduce marketing and transport costs
AoA provided a cut in the budget and in the volume of subsidised export
Volumes supported cut of 21% (14 % for developing countries)
Budget decreases of 36 % (24 % for developing countries)
There is no commitment for LDCs
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

14. Classification of agricultural policy tools
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

15. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Example for China
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

16. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
The Peace clause
Most of AoA clauses are not in conformity with GATT
The Peace clause protects this exception
Covers a period of nine years ( )
End on July 2004
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

17. Two case of dispute seton the AoA, initiated by Brazil
US / cotton
EU / sugar
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

18. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
The cotton case
Initiated in october won in march 2005 (appeal)
Direct aid = 617 M$; Export credits = 1,6 B$ (several products); Step 2 = 415 M$
Total = 3 billions $ in 2002
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

19. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
The sugar case
EU sugar policy:
Production quota, high price
Part of the producer price is take off, to fund export support
Preferential import of ACP countries, refined in the EU and re-exported with export subsidies
According to the EU: no export subsidies
Decision of the appellate body: they are export subsidies
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

20. WTO agreements on standards
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

21. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Introduction
WTO agreements on standards : prevent them from being used as protection tools.
Two agreements:
TBT : Technical barriers to trade
SPS : Sanitary and Phytosanitary
TBT existed before the WTO : Tokyo round standards code (1979). Uruguay round : strengthening and clarifying.
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

22. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
SPS agreement
Rules of procedure which define formulation and implementation of SPS measures in international trade
Set of measures to protect life and health of human / animals, and to protect plants.
But : does not define the measure.
Definition in under the responsibility of relevant international organisations ( Codex alimentarius, Office international des épizooties, International plant protection convention) or member states
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

23. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Two key principles
National treatment : non-discrimination between foreign and national products
Scientific justification : member states have to establish risk assessment, to scientifically justify the relation between a SPS measure and level of sanitary protection.
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

24. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Modalities
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

25. Transparency and equivalence
All measures have to be notified to WTO SPS Committee, before their implementation
Other members may be allowed to contest scientific proofs
Members have to accept equivalent SPS measures implemented by other members, if they provide the same level of protection
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

26. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
TBT agreement
Technical regulations : specific characteristics of a product :
size, design, functions, performance
the way it its labelled or packaged
the way it is produced : more appropriate to draft technical regulations on the production methods rather than the characteristics per se (case of organic products)
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

27. The objectives of the TBT agreement
Protection of human safety or health
Protection of animal and plant life or health
Protection of the environment
Protection of deceptive practices: to protect consumers through information (labelling requirement)
Other: quality, trade facilitation. (ex: size of vegetables)
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

28. Principles of the TBT agreement
Avoidance of unnecessary obstacles to trade
Non-discrimination and national treatment
Harmonisation: encourage members to use existing international standards
Equivalence
Mutual recognition of conformity assessment results
Transparency
notifications
national enquiry point
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

29. Distinction between technical regulations and SPS measures
A measure is SPS if its objective is to protect
human life from risks arising from additives, toxins, plant / animal disease
animal life from risks arising from additives, toxins, pests, diseases, disease carrying organisms
plant life from risks arising from pests, diseases, disease carrying organisms
a country from the risks arising from damage caused by the entry, establishment or spread of pests
Measures adopted for other purpose are TBT measures
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

30. Special treatment for DCs
Recognition that developing countries may face difficulties
to conform to developed countries SPS/TBT measures (access to market)
to implement into their countries SPS measures
Special treatment (market access)
provide technical assistance to developing countries
in case of implementation of new measures which may hardly reduce market access, the member have to provide technical assistance
more time to implement new measures
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

31. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
But
Technical assistance is insufficient
Restrictive implementation of equivalence:
developed countries look for similarity more than for equivalence
loss of flexibility.
Lack of human resources or expertise to participate to the international organisations :
lack of ownership on SPS measures
difficulties to harmonise and implement standards.
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

32. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
The TRIPS Agreement
Trade related intellectual property rights
Obligation to protect inventions and processes . Covers all intellectual property rights
Defines the areas that should be protected
pesticides, plant varieties, geographical indications, trademarks,…
And the means to protect them
Strong opposition on this agreement
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

33. Plant variety protection
The TRIPS agreement
allows members to exclude living being from patentability
but a plant variety protection system is compulsory
for instance the UPOV system
difference between patent and UPOV : farmers’ right to save seeds.
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

34. Geographical indications
Used to identify a good
as originating of a geographical area
which gives it its characteristic
Obligation to provide the legal means to prevent inappropriate use of geographical terms
Art 22 : defines a standard level of protection, all products
GI have to be protected to avoid misleading the public an prevent unfair competition
Art 23: higher level of protection for wine and spirits
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

35. Geographical indications (cont’d)
Two issues are debated in the WTO
Creation of a multilateral register for winne and spirits
Extension of the higher protection to others products (food and handicrafts), beyond wines and spirits (China, EU, Thailand)
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

36. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Results of the implementation of WTO on agriculture in developing countries
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

37. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Expected results
More export opportunities due to better access to developed countries markets
More stable and reliable international markets, due to the reduction of distortion
Improvement of supply conditions of world market
BUT
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

38. Tariffs obstacles remain
Still high tariffs in OECD countries
tariffs for agricultural products around 35 %
tariffs for industrial products around 4 %
peak tariffs : up to 300 % (some temperate products).
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

39. Duties in some developed countries
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

40. Tariffs escalation (Japan)
MFN rate
GSP rate
Cocoa beans
0 %
Cocoa paste not defatted
5.0 %
3.5 %
Cocoa paste defatted
10.0 %
7.0 %
Cocoa powder without sugar
12.9 %
10.5 %
Cocoa powder sugar added
15.0 %
12.5 %
Chocolate
21.3 %
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

41. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
The main obstacles
Standards and quality requirements
Most of developed countries have strengthened their SPS and TBT measures
For instance, in the EU
implementation of traceability
review of authorised pesticides : most of them suppressed
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

42. Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005
Market prices
Increasing of amount spent to supporting farmers by developed countries: shift from Amber box and Blue Box to Green Box
Export support decreased but are still used
WTO definition of dumping : not the common sense (sell under the cost of production)
No regulations of trans national corporate
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005

43. Trends in agricultural exports
Training session - Vietnamese agriculture and WTO - Hanoi - sept. 2005