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TPD > FTAA > Canada Proposals 2000 > Positions
PROPOSAL ON EXPORT SUBSIDIES, OTHER MEASURES OF EQUIVALENT EFFECT AND OTHER MEASURES AND PRACTICES THAT DISTORT TRADE
It was agreed at the 6th meeting of the FTAA NGAG, that delegations wishing to submit proposed texts for consideration at the 7th meeting of the FTAA NGAG should do so by April 14, 2000 , that proposed texts could address all issues and that submissions were without prejudice to presentations of additional proposals for consideration at a later point in the process (FTAA.ngag/rep/06).
In this context, Canada respectfully submits for consideration of the NGAG, without prejudice to its right to submit additional or revised proposals in the future, the following proposals with respect to the subject matter to be addressed at the 7th meeting of the Group; specifically, export subsidies, other measures of equivalent effect to export subsidies and other measures and practices that distort trade in agricultural products in the Hemisphere. Canada wishes to note, that these measures and practices, as considered to date by the NGAG, would for the most part be most practically and effectively addressed in multilateral fora.
Canada was guided in the preparation of this submission by its previous submissions to the NGAG on these topics, by the November 4, 1999 FTAA Declaration of Ministers, in particular as it relates to the relationship between the FTAA and the WTO, as well as by the September 1999 Report of the NGAG to the Trade Negotiation Committee (FTAA.ngag/01) . In this regard, Canada wishes to underline the importance that it attaches to ensuring that the efforts of the FTAA NGAG are concentrated on the development of provisions appropriate to incorporation in a Free Trade Agreement, as defined by and in a manner consistent with Article XXIV of the GATT 1994.
The preferred means of eliminating agricultural export subsidies affecting trade in the Hemisphere is to reach an agreement, during the WTO Negotiations on Agriculture, on the global elimination of export subsidies on agricultural products and on the prohibition of their re-introduction in any form. FTAA Ministers agreed to work toward this objective in their November 4, 1999 Declaration. This would achieve the elimination of all export subsidies as defined by the WTO.
Pending full implementation of a multilateral agreement to eliminate export subsidies on agricultural products and the prohibition of their re-introduction in any form, it would be desirable to develop interim provisions in an FTAA to achieve the elimination of agricultural export subsidies affecting trade in the Hemisphere, in advance of multilateral elimination.
In this instance, it is proposed that FTAA participants would agree to phase out export subsidies subject to reduction commitments under the WTO Agreement on Agriculture by an agreed date for exports to other countries in the Hemisphere. In order to facilitate the fulfilment of this objective, the FTAA participants should agree to work together to obtain a commitment from the other WTO Members, as part of a multilateral agreement or otherwise, to cease to use export subsidies on exports to any of the countries of the Hemisphere by the agreed date. This option would achieve the objective of eliminating agricultural export subsidies affecting trade within and into the Hemisphere, but would continue to allow the use of agricultural export subsidies for exports to WTO Members outside the Hemisphere in accordance with the WTO Agreement on Agriculture.
It may not be possible for FTAA participants to obtain a comprehensive commitment from other WTO Members not to use export subsidies on exports to any of the countries of the Hemisphere by the agreed date.
In this instance, it is proposed that FTAA countries would nevertheless commit to eliminate the use of export subsidies for their exports to the other countries in the Hemisphere by the agreed date, with special provisions for cases where an FTAA country imports agricultural goods benefiting from export subsidies from a WTO Member outside the Hemisphere. In such cases, an importing FTAA country, on the written request of an exporting FTAA country, would be required to consult with the exporting FTAA country with a view to agreeing on specific measures that the importing FTAA country may adopt to counter the effect of any such third party imports benefiting from export subsidies. If the importing FTAA country did not adopt the agreed-upon measures, the exporting FTAA country would be free to apply an export subsidy to exports of such goods to the importing FTAA country, for as long as the third party continues to export such goods benefiting from export subsidies to the importing FTAA country. However, the importing FTAA country would be free during this period, to increase the rate of duty on such exports from the exporting FTAA country, up to the applied most-favoured-nation tariff in effect during that time.
Pending multilateral elimination of export subsidies on agricultural products, it is proposed that FTAA participants agree not to use export subsidies on exports to WTO Members outside the Hemisphere in competition with each other, except where there has been prior consultation and mutual agreement.
Other Measures of Equivalent Effect to Export Subsidies
The export subsidy provisions of the WTO provide a multilateral framework for identifying and bringing under appropriate discipline export subsidies and measures of equivalent effect to export subsidies. The establishment of disciplines for measures of equivalent effect to export subsidies within an FTAA, first requires that such measures be precisely and accurately identified. To this end, the NGAG previously agreed that the next stage of the process would be a transparency exercise based on notifications and counter-notifications. Until that exercise is completed, the need for the establishment of disciplines on measures of equivalent effect to export subsidies in an FTAA agreement remains to be determined.
Other Measures and Practices That Distort Trade in Agricultural Products
The establishment of disciplines for other measures and practices that distort trade in agricultural products, whether multilaterally or within an FTAA, first requires that such measures be precisely and accurately identified. In their Declaration of November 4, 1999, FTAA Ministers agreed to work towards having disciplines on other trade distorting practices and measures in the next WTO Negotiations on Agriculture. For the purpose of establishing or strengthening existing disciplines in this area, what constitutes a measure or practice that distorts trade in agricultural products has been and continues to be the subject of multilateral negotiation. To the extent that measures and practices of concern stem from domestic support policies, programs and/or institutional arrangements, multilateral negotiations offer the best avenue to establishing more effective disciplines; as it is impractical in most instances for a Party to modify such measures and practices to limit their application only to goods traded outside the Hemisphere.
Draft language for inclusion in an eventual agreement text, designed to reflect the aforementioned proposals is contained in Annex 1.
OTHER MEASURES AND PRACTICES THAT DISTORT TRADE IN AGRICULTURAL
PRODUCTS IN THE HEMISPHERE , INCLUDING THOSE THAT HAVE AN EFFECT
EQUIVALENT TO AGRICULTURAL EXPORT SUBSIDIES.