                        AGREEMENT ON AGRICULTURE

Members,

      Having decided to establish a basis for initiating a process of reform 
      of trade in agriculture in line with the objectives of the 
      negotiations as set out in the Punta del Este Declaration; 

      Recalling that the long-term objective as agreed at the Mid-Term 
      Review "is to establish a fair and market-oriented agricultural 
      trading system and that a reform process should be initiated through 
      the negotiation of commitments on support and protection and through 
      the establishment of strengthened and more operationally effective 
      GATT rules and disciplines";

      Recalling further that "the above-mentioned long-term objective is to 
      provide for substantial progressive reductions in agricultural support 
      and protection sustained over an agreed period of time, resulting in 
      correcting and preventing restrictions and distortions in world 
      agricultural markets";

      Committed to achieving specific binding commitments in each of the 
      following areas:  market access;  domestic support;  export 
      competition;  and to reaching an agreement on sanitary and 
      phytosanitary issues;

      Having agreed that in implementing their commitments on market access, 
      developed country Members would take fully into account the particular 
      needs and conditions of developing country Members by providing for a 
      greater improvement of opportunities and terms of access for 
      agricultural products of particular interest to these Members, 
      including the fullest liberalization of trade in tropical agricultural 
      products as agreed at the Mid-Term Review, and products of particular 
      importance to the diversification of production from the growing of 
      illicit narcotic crops;

      Noting that commitments under the reform programme should be made in 
      an equitable way among all Members, having regard to non-trade 
      concerns, including food security and the need to protect the 
      environment;  having regard to the agreement that special and 
      differential treatment to developing countries is an integral element 
      of the negotiations, and taking into account the possible negative 
      effects of the implementation of the reform programme on  
      least-developed and net food-importing developing countries;

      Hereby agree, as follows:

Part I

Article 1 - Definition of Terms

      In this Agreement, unless the context otherwise requires:

      (a)  "Aggregate Measurement of Support" and "AMS" mean the annual 
           level of support, expressed in monetary terms, provided for an 
           agricultural product in favour of the producers of the basic 
           agricultural product or non-product-specific support provided in 
           favour of agricultural producers in general, other than support 
           provided under programmes that qualify as exempt from reduction 
           under Annex 2 to this Agreement, which is:

           (i)   with respect to support provided during the base period, 
                 specified in the relevant tables of supporting material 
                 incorporated by reference in Part IV of a Member's 
                 Schedule;  and

           (ii)  with respect to support provided during any year of the 
                 implementation period and thereafter, 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 Member's 
                 Schedule;

      (b)  "basic product" in relation to domestic support commitments is 
           defined as the product as close as practicable to the point of 
           first sale as specified in a Member's Schedule and in the related 
           supporting material;

      (c)  "budgetary outlays" or "outlays" include revenue foregone;
      
      (d)  "Equivalent Measurement of Support" means the annual level of 
           support, expressed in monetary terms, provided to producers of a 
           basic agricultural product through the application of one or more 
           measures, the calculation of which in accordance with the AMS 
           methodology is impracticable, other than support provided under 
           programmes that qualify as exempt from reduction under Annex 2 to 
           this Agreement, and which is:

           (i)   with respect to support provided during the base period, 
                 specified in the relevant tables of supporting material 
                 incorporated by reference in Part IV of a Member's 
                 Schedule;  and

           (ii)  with respect to support provided during any year of the 
                 implementation period and thereafter, calculated in 
                 accordance with the provisions of Annex 4 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 Member's 
                 Schedule;

      (e)  "export subsidies" refer to subsidies contingent upon export 
           performance including the export subsidies listed in Article 9 of 
           this Agreement;

      (f)  "implementation period" means the six-year period commencing in 
           the year 1995, except that, for the purposes of Article 13, it 
           means the nine-year period commencing in 1995;

      (g)  "market access concessions" include all market access commitments 
           undertaken pursuant to this Agreement;

      (h)  "Total Aggregate Measurement of Support" and "Total AMS" mean the 
           sum of all domestic support provided in favour of agricultural 
           producers, calculated as the sum of all aggregate measurements of 
           support for basic agricultural products, all non-product-specific 
           aggregate measurements of support and all equivalent measurements 
           of support  for agricultural products, and which is:

           (i)   with respect to support provided during the base period 
                 (i.e., the "Base Total AMS") and the maximum support 
                 permitted to be provided during any year of the 
                 implementation period or thereafter (i.e., the "Annual and 
                 Final Bound Commitment Levels"), as specified in Part IV of 
                 a Member's Schedule;  and

           (ii)  with respect to the level of support actually provided 
                 during any year of the implementation period and thereafter 
                 (i.e.,  the "Current Total AMS"), calculated in accordance 
                 with the provisions of this Agreement, including Article 6, 
                 and with the constituent data and methodology used in the 
                 tables of supporting material incorporated by reference in 
                 Part IV of the Member's Schedule;

      (i)  "year" in (f) above and in relation to the specific commitments 
           of a Member refers to the calendar, financial or marketing year 
           specified in the Schedule relating to that Member.
           

Article 2 - Product Coverage

      This Agreement applies to the products listed in Annex 1 to this 
Agreement, hereinafter referred to as agricultural products.



Part II

Article 3 - Incorporation of Concessions and Commitments


1.    The domestic support and export subsidy commitments in Part IV of each 
Member's Schedule constitute commitments limiting subsidization and are 
hereby made an integral part of the GATT 1994.

2.    Subject to the provisions of Article 6 of this Agreement, a Member 
shall not provide support in favour of domestic producers in excess of the 
commitment levels specified in Section I of Part IV of its Schedule.

3.    Subject to the provisions of paragraphs 2(b) and 4 of Article 9 of 
this Agreement, a Member shall not provide export subsidies listed in 
paragraph 1 of Article 9 in respect of the agricultural products or groups 
of products specified in Section II of Part IV of its Schedule in excess of 
the budgetary outlay and quantity commitment levels specified therein and 
shall not provide such subsidies in respect of any agricultural product not 
specified in that Section of its Schedule. 



Part III

Article 4 - Market Access

1.    Market access concessions contained in Schedules relate to bindings 
and reductions of tariffs, and to other market access commitments as 
specified therein.

2.    Members shall not maintain, resort to, or revert to any measures of 
the kind which have been required to be converted into ordinary customs 
duties[1], except as otherwise provided for in Article 5 and Annex 5 hereof.     


Article 5 - Special Safeguard Provisions

1.    Notwithstanding the provisions of Article II:1(b) of the GATT 1994, 
any Member may take recourse to the provisions of paragraphs 4 and 5 below 
in connection with the importation of an agricultural product, in respect of 
which measures referred to in paragraph 2 of Article 4 have been converted 
into an ordinary customs duty and which is designated in its Schedule with 
the symbol "SSG" as being the subject of a concession in respect of which 
the provisions of this Article may be invoked, if:  

      (i)  the volume of imports of that product entering the customs 
           territory of the Member granting the concession during any year 
           exceeds a trigger level which relates to the existing market 
           access opportunity as set out in paragraph 4 below;  or, but not 
           concurrently: 

      (ii) the price at which imports of that product may enter the customs 
           territory of the Member granting the concession, as determined on 
           the basis of the c.i.f. import price of the shipment concerned 
           expressed in terms of its domestic currency, falls below a 
           trigger price equal to the average 1986 to 1988  reference 
           price[2] for the product concerned.

2.    Imports under current and minimum access commitments established as 
part of a concession referred to in paragraph 1 above shall be counted for 
the purpose of determining the volume of imports required for invoking the 
provisions of sub-paragraph 1(i) and paragraph 4, but imports under such 
commitments shall not be affected by any additional duty imposed under 
either paragraph 4 or paragraph 5 below.

3.    Any supplies of the product in question which were en route on the 
basis of a contract settled before the additional duty is imposed under 
sub-paragraph 1(i) above and paragraph 4 below shall be exempted from any 
such additional duty provided that they may be counted in the volume of 
imports of the product in question during the following year for the 
purposes of triggering the provisions of sub-paragraph 1(i) in that year.

4.    Any additional duty imposed under sub-paragraph 1(i) above shall only 
be maintained until the end of the year in which it has been imposed, and 
may only be levied at a level which shall not exceed one-third of the level 
of the ordinary customs duty in effect in the year in which the action is 
taken.  The trigger level shall be set according to the following schedule 
based on market access opportunities defined as imports as a percentage of 
the corresponding domestic consumption[3] during the three preceding years 
for which data are available:

      (a)  where such market access opportunities for a product are less 
           than or equal to 10 per cent, the base trigger level shall equal 
           125 per cent;

      (b)  where such market access opportunities for a product are greater 
           than 10 per cent but less than or equal to 30 per cent, the base 
           trigger level shall equal 110 per cent;

      (c)  where such market access opportunities for a product are greater 
           than 30 per cent, the base trigger level shall equal 105 per 
           cent.

      In all cases the additional duty may be imposed in any year where the 
absolute volume of imports of the product concerned entering the customs 
territory of the Member granting the concession exceeds the sum of (x) the 
base trigger level set out above multiplied by the average quantity of 
imports during the three preceding years for which data are available and 
(y) the absolute volume change in domestic consumption of the product 
concerned in the most recent year for which data are available compared to 
the preceding year, provided that the trigger level shall not be less than 
105 per cent of the average quantity of imports in (x) above. 

5.    The additional duty imposed under sub-paragraph 1(ii) above shall be 
set according to the following schedule:

      (a)  if the difference between the c.i.f. import price of the shipment 
           expressed in terms of the domestic currency (hereinafter referred 
           to as the "import price") and the trigger price as defined under 
           that sub-paragraph is less than or equal to 10 per cent of the 
           trigger price, no additional duty shall be imposed;

      (b)  if the difference between the import price and the trigger price 
           (hereinafter referred to as the "difference") is greater than 10 
           per cent but less than or equal to 40 per cent of the trigger 
           price, the additional duty shall equal 30 per cent of the amount 
           by which the difference exceeds 10 per cent;

      (c)  if the difference is greater than 40 per cent but less than or 
           equal to 60 per cent of the trigger price, the additional duty 
           shall equal 50 per cent of the amount by which the difference 
           exceeds 40 per cent, plus the additional duty allowed under (b);

      (d)  if the difference is greater than 60 per cent but less than or 
           equal to 75 per cent, the additional duty shall equal 70 per cent 
           of the amount by which the difference exceeds 60 per cent of the 
           trigger price, plus the additional duties allowed under (b) and 
           (c);

      (e)  if the difference is greater than 75 per cent of the trigger 
           price, the additional duty shall equal 90 per cent of the amount 
           by which the difference exceeds 75 per cent, plus the additional 
           duties allowed under (b), (c) and (d).

6.    For perishable and seasonal products, the conditions set out above 
shall be applied in such a manner as to take account of the specific 
characteristics of such products.  In particular, shorter time periods under 
paragraph 1(i) and paragraph 4 may be used in reference to the corresponding 
periods in the base period and different reference prices for different 
periods may be used under paragraph 1(ii).

7.    The operation of the special safeguard shall be carried out in a 
transparent manner.  Any Member taking action under paragraph 1(i) above 
shall give notice in writing, including relevant data, to the Committee on 
Agriculture as far in advance as may be practicable and in any event within 
10 days of the implementation of such action.  In cases where changes in 
consumption volumes must be allocated to individual tariff lines subject to 
action under paragraph 4, relevant data shall include the information and 
methods used to allocate these changes.  A Member taking action under 
paragraph 4 shall afford any interested Members the opportunity to consult 
with it in respect of the conditions of application of such action.  Any 
Member taking action under paragraph 1(ii) above shall give notice in 
writing, including relevant data, to the Committee on Agriculture within 10 
days of the implementation of the first such action or, for perishable and 
seasonal products, the first action in any period.  Members undertake, as 
far as practicable, not to take recourse to the provisions of paragraph 
1(ii) where the volume of imports of the products concerned are declining.  
In either case a Member taking such action shall afford any interested 
Members the opportunity to consult with it in respect of the conditions of 
application of such action.

8.    Where measures are taken in conformity with paragraphs 1 through 7 
above, Members undertake not to have recourse, in respect of such measures, 
to the provisions of Article XIX:1(a) and XIX:3 of the GATT 1994 or 
paragraph 17 of the Agreement on Safeguards. 

9.    The provisions of this Article shall remain in force for the duration 
of the reform process as determined under Article 20.



Part IV

Article 6 - Domestic Support Commitments

1.    The domestic support reduction commitments of each Member contained in 
Part IV of its Schedule shall apply to all of its domestic support measures 
in favour of agricultural producers with the exception of domestic measures 
which are not subject to reduction in terms of the criteria set out in this 
Article and in Annex 2 to this Agreement.  The commitments are expressed in 
terms of Total Aggregate Measurement of Support and "Annual and Final Bound 
Commitment Levels".

2.    In accordance with the Mid-Term Review Agreement that government 
measures of assistance, whether direct or indirect, to encourage 
agricultural and rural development are an integral part of the development 
programmes of developing countries, investment subsidies which are generally 
available to agriculture in developing country Members and agricultural 
input subsidies generally available to low-income or resource poor producers 
in developing country Members shall be exempt from domestic support 
reduction commitments that would otherwise be applicable to such measures, 
as shall domestic support to producers in developing country Members to 
encourage diversification from growing illicit narcotic crops.  Domestic 
support meeting the criteria of this paragraph shall not be required to be 
included in a Member's calculation of its Current Total AMS.

3.    A Member shall be considered to be in compliance with its domestic 
support reduction commitments in any year in which its domestic support in 
favour of agricultural producers expressed in terms of Current Total AMS 
does not exceed the corresponding annual or final bound commitment level 
specified in Part IV of the Member's Schedule.

4.    (a)  A Member shall not be required to include in the calculation of 
           its Current Total AMS and shall not be required to reduce:

           (i)   product-specific domestic  support which would  otherwise 
                 be required to be included in a Member's calculation of its 
                 Current AMS where such support does not exceed 5 per cent 
                 of that Member's total value of  production of a basic 
                 product during the relevant year;  and

           (ii)  non-product-specific domestic support which would otherwise 
                 be required to be included in a Member's calculation of its 
                 Current AMS where such support does not exceed 5 per cent 
                 of the value of that Member's total agricultural 
                 production.

      (b)  For developing country Members, the de minimis percentage under 
           this paragraph shall be 10 per cent.
 
5.    (a)  Direct payments under production-limiting programmes shall not be 
           subject to the commitment to reduce domestic support if :

           (i)   such payments are based on fixed area and yields;  or

           (ii)  such payments are made on 85 per cent or less of the base 
                 level of production;  or
      
           (iii) livestock payments are made on a fixed number of head.

      (b)  The exemption from the reduction commitment for direct payments 
           meeting the above criteria shall be reflected by the exclusion of 
           the value of those direct payments in a Member's calculation of 
           its Current Total AMS.



Article 7 - General Disciplines on Domestic Support

1.    Each Member shall ensure that any domestic support measures in favour 
of agricultural producers which are not subject to reduction commitments 
because they qualify under the criteria set out in Annex 2 to this Agreement 
are maintained in conformity therewith.

2.    (a)  Any domestic support measure in favour of agricultural producers, 
           including any modification to such measure, and any measure that 
           is subsequently introduced that cannot be shown to satisfy the 
           criteria in Annex 2 to this Agreement or to be exempt from 
           reduction by reason of any other provision of this Agreement 
           shall be included in the Member's calculation of its Current 
           Total AMS.

      (b)  Where no Total AMS commitment exists in Part IV of a Member's 
           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.



Part V

Article 8 - Export Competition Commitments

      Each Member undertakes not to provide export subsidies otherwise than 
in conformity with this Agreement and with the commitments as specified in 
that Member's Schedule. 



Article 9 - Export Subsidy Commitments

1.    The following export subsidies are subject to reduction commitments 
under this Agreement: 

      (a)  The provision by governments or their agencies of direct 
           subsidies, including payments-in-kind, to a firm, to an industry, 
           to producers of an agricultural product, to a co-operative or 
           other association of such producers, or to a marketing board, 
           contingent on export performance.
           
      (b)  The sale or disposal for export by governments or their agencies 
           of non-commercial stocks of agricultural products at a price 
           lower than the comparable price charged for the like product to 
           buyers in the domestic market.
           
      (c)  Payments on the export of an agricultural product that are 
           financed by virtue of governmental action, whether or not a 
           charge on the public account is involved, including payments that 
           are financed from the proceeds of a levy imposed on the 
           agricultural product concerned or on an agricultural product from 
           which the exported product is derived.
           
      (d)  The provision of subsidies to reduce the costs of marketing 
           exports of agricultural products (other than widely available 
           export promotion and advisory services) including handling, 
           upgrading and other processing costs, and the costs of 
           international transport and freight.
           
      (e)  Internal transport and freight charges on export shipments, 
           provided or mandated by governments, on terms more favourable 
           than for domestic shipments.
           
      (f)  Subsidies on agricultural products contingent on their 
           incorporation in exported products.

2.    (a)  Except as provided in sub-paragraph (b), the export subsidy 
           commitment levels for each year of the implementation period, as 
           specified in a Member's Schedule, represent with respect to the 
           export subsidies listed in paragraph 1 of this Article:

           (i)   in the case of budgetary outlay reduction commitments, the 
                 maximum level of expenditure for such subsidies that may be 
                 allocated or incurred in that year;  and

           (ii)  in the case of export quantity reduction commitments, the 
                 maximum quantity of an agricultural product, or group of 
                 such products, in respect of which such export subsidies 
                 may be granted in that year.

      (b)  In any of the second through fifth years of the implementation 
           period, a Member may provide export subsidies listed in paragraph 
           1 above in a given year in excess of the corresponding annual 
           commitment levels in respect of the products or groups of 
           products specified in Part IV of the Member's Schedule, provided 
           that:

           (i)   the cumulative amounts of budgetary outlays for such 
                 subsidies, from the beginning of the implementation period 
                 through the year in question, does not exceed the 
                 cumulative amounts that would have resulted from full 
                 compliance with the relevant annual outlay commitment 
                 levels specified in the Member's Schedule by more than 3 
                 per cent of the base period level of such budgetary 
                 outlays;

           (ii)  the cumulative quantities exported with the benefit of such 
                 export subsidies, from the beginning of the implementation 
                 period through the year in question, does not exceed the 
                 cumulative quantities that would have resulted from full 
                 compliance with the relevant annual quantity commitment 
                 levels specified in the Member's Schedule by more than 1.75 
                 per cent of the base period quantities;

           (iii) the total cumulative amounts of budgetary outlays for such 
                 export subsidies and the quantities benefiting from such 
                 export subsidies over the entire implementation period are 
                 no greater than the totals that would have resulted from 
                 full compliance with the relevant annual commitment levels 
                 specified in the Member's Schedule;  and

           (iv)  the Member's budgetary outlays for export subsidies and the 
                 quantities benefiting from such subsidies, at the 
                 conclusion of the implementation period, are no greater 
                 than 64 per cent and 79 per cent of the 1986-1990 base 
                 period levels, respectively.  For developing country 
                 Members these percentages shall be 76 and 86 per cent, 
                 respectively. 

3     Commitments relating to limitations on the extension of the scope of 
export subsidization are as specified in Schedules.

4     During the implementation period developing country Members shall not 
be required to undertake commitments in respect of the export subsidies 
listed in sub-paragraphs (d) and (e) of paragraph 1 above provided that 
these are not applied in a manner that would circumvent reduction 
commitments.



Article 10 - Prevention of Circumvention  of Export Subsidy Commitments

1.    Export subsidies not listed in Article 9(1) of this Agreement shall 
not be applied in a manner which results in, or which threatens to lead to, 
circumvention of export subsidy commitments;  nor shall non-commercial  
transactions be used to circumvent such commitments.

2.    Members undertake to work toward the development of internationally 
agreed disciplines to govern the provision of export credits, export credit 
guarantees or insurance programmes and, after agreement on such disciplines, 
to provide export credits, export credit guarantees or insurance programmes 
only in conformity therewith.

3.    Any Member which claims that any quantity exported in excess of a 
reduction commitment level is not subsidized must establish that no export 
subsidy, whether listed in Article 9 or not, has been granted in respect of 
the quantity of exports in question.

4.    Members donors of international food aid shall ensure:

      (a)  that the provision of international food aid is not tied directly 
           or indirectly to commercial exports of agricultural products to 
           recipient countries;  

      (b)  that international food aid transactions, including bilateral 
           food aid which is monetised, shall be carried out in accordance 
           with the FAO "Principles of Surplus Disposal and Consultative 
           Obligations" including, where appropriate, the system of Usual 
           Marketing Requirements (UMRs);  and

      (c)  that such aid shall be provided to the extent possible in fully 
           grant form or on terms no less concessional than those provided 
           for in Article IV of the Food Aid Convention 1986.



Article 11 - Incorporated Products

      In no case may the per unit subsidy paid on an incorporated 
agricultural primary product exceed the per unit export subsidy that would 
be payable on exports of the primary product as such.



                                 Part VI

    Article 12 - Disciplines on Export Prohibitions and Restrictions


1.    Where any Member institutes any new export prohibition or restriction 
on foodstuffs in accordance with paragraph 2(a) of Article XI of the GATT 
1994, the Member shall observe the following provisions:

      (i)  the Member instituting the export prohibition or restriction 
           shall give due consideration to the effects of such prohibition 
           or restriction on importing Members' food security;

      (ii) before any Member institutes an export prohibition or 
           restriction, it shall give notice in writing, as far in advance 
           as practicable, to the Committee on Agriculture comprising such 
           information as the nature and the duration of such measure, and 
           shall consult,  upon request, with any other Member having a 
           substantial interest as an importer with respect to any matter 
           related to the measure in question.  The Member instituting such 
           export prohibition or restriction shall provide, upon request, 
           such a Member with necessary information.

2.    The provisions of this Article shall not apply to any developing 
country Member, unless the measure is taken by a developing country Member 
which is a net-food exporter of the specific foodstuff concerned.


Part VII

Article 13 - Due Restraint 


      During the implementation period, notwithstanding the provisions of 
the GATT 1994 and the Agreement on Subsidies and Countervailing Measures 
("Subsidies Agreement"):

1.    Domestic support measures that conform fully to the provisions of 
Annex 2 to this Agreement shall be:

      (a)  non-actionable subsidies for purposes of countervailing 
      duties[4];

      (b)  exempt from actions based on Article XVI of the GATT 1994 and 
           Part III of the Subsidies Agreement;  and

      (c)  exempt from actions based on non-violation nullification or 
           impairment of the benefits of tariff concessions accruing to 
           another Member under Article II of the GATT 1994, in the sense of 
           Article XXIII:1(b) of the GATT 1994.

2.    Domestic support measures that conform fully to the provisions of 
Article 6 of this Agreement including direct payments that conform to the 
requirements of paragraph 5 thereof, as reflected in each Member's Schedule, 
as well as domestic support within de minimis levels and in conformity with 
paragraph 2 of Article 6, shall be:

      (a)  exempt from the imposition of countervailing duties unless a 
           determination of injury or threat thereof is made in accordance 
           with Article VI of the GATT 1994 and Part V of the Subsidies 
           Agreement, and due restraint shall be shown in initiating any 
           countervailing duty investigations;

      (b)  exempt from actions based on Article XVI:1 of the GATT 1994 or 
           Articles 5 and 6 of the Subsidies Agreement, provided that such 
           measures do not grant support to a specific commodity in excess 
           of that decided during the 1992 marketing year;  and

      (c)  exempt from actions based on non-violation nullification or 
           impairment of the benefits of tariff concessions accruing to 
           another Member under Article II of the GATT 1994, in the sense of 
           Article XXIII:1(b) of the GATT 1994, provided that such measures 
           do not grant support to a specific commodity in excess of that 
           decided during the 1992 marketing year.

3.    Export subsidies that conform fully to the provisions of Part V of 
this Agreement, as reflected in each Member's Schedule of Commitments, shall 
be:

      (a)  subject to countervailing duties only upon a determination of 
           injury or threat thereof based on volume, effect on prices, or 
           consequent impact in accordance with Article VI of the GATT 1994  
           and Part V of the Subsidies Agreement, and due restraint shall be 
           shown in initiating any countervailing duty investigations;  and

      (b)  exempt from actions based on Article XVI of the GATT 1994  or 
           Articles 3, 5 and 6 of the Subsidies Agreement.

Part VIII

Article 14 - Sanitary and Phytosanitary Measures


      Members agree to give effect to the Agreement on Sanitary and 
Phytosanitary Measures.



Part IX

Article 15 - Special and Differential Treatment

1.    In keeping with the recognition that differential and more favourable 
treatment for developing country Members is an integral part of the 
negotiation, special and differential treatment in respect of commitments 
shall be provided as set out in the relevant provisions of this Agreement 
and embodied in the Schedules of concessions and commitments.

2.    Developing countries shall have the flexibility to implement reduction 
commitments over a period of up to 10 years.  Least developed country 
Members shall not be required to undertake reduction commitments.


Part X

Article 16 - Least-developed and Net Food-Importing Developing Countries

1.    Developed country Members shall take such action as is provided for 
within the framework of the Decision on Measures Concerning the Possible 
Negative Effects of the Reform Programme on Least-developed and Net 
Food-Importing Developing Countries.

2.    The Committee on Agriculture shall monitor, as appropriate, the 
follow-up to this Decision.


Part XI

Article 17 - Committee on Agriculture

      A Committee on Agriculture shall be established.



Article 18 - Review of the Implementation of Commitments

1.    Progress in the implementation of commitments negotiated under the 
Uruguay Round reform programme shall be reviewed by the Committee on 
Agriculture.

2.    The review process shall be undertaken on the basis of notifications 
submitted by Members in relation to such matters and at such intervals as 
shall be determined, as well as on the basis of such documentation as the 
MTO Secretariat may be requested to prepare in order to facilitate the 
review process.

3.    In addition to the notifications to be submitted under paragraph 2, 
any new domestic support measure, or modification of an existing measure, 
for which exemption from reduction is claimed shall be notified promptly.  
This notification shall contain details of the new or modified measure and 
its conformity with the agreed criteria as set out either in Article 6 or in 
Annex 2 to this Agreement.

4.    In the review process Members shall give due consideration to the 
influence of excessive rates of inflation on the ability of any Member to 
abide by its domestic support commitments.

5.    Members agree to consult annually in the Committee on Agriculture with 
respect to their participation in the normal growth of world trade in 
agricultural products within the framework of the commitments on export 
subsidies under this Agreement.

6.    The review process shall provide an opportunity for Members to raise 
any matter relevant to the implementation of commitments under the reform 
programme as set out in this Agreement.

7.    Any Member may bring to the attention of the Committee on Agriculture 
any measure which it considers ought to have been notified by another 
Member.
      

Article 19 - Consultation and Dispute Settlement

      The provisions of Articles XXII and XXIII of the GATT 1994, as 
elaborated and applied by the Understanding on Rules and Procedures 
Governing the Settlement of Disputes, shall apply to consultations and the 
settlement of disputes under this Agreement.



Part XII

Article 20 - Continuation of the Reform Process

      Recognizing that the long-term objective of substantial progressive 
reductions in support and protection resulting in fundamental reform is an 
ongoing process, Members agree that negotiations for continuing the process 
will be initiated one year before the end of the implementation period, 
taking into account:  

      -    the experience to that date from implementing the reduction 
           commitments;  

      -    the effects of the reduction commitments on world trade in 
           agriculture; 

      -    non-trade concerns, special and differential treatment to 
           developing country Members, and the objective to establish a fair 
           and market-oriented agricultural trading system, and the other 
           objectives and concerns mentioned in the preamble to this 
           Agreement;  and 

      -    what further commitments are necessary to achieve the above 
           mentioned long-term objectives.


Part XIII

Article 21 - Final Provisions


1.    The provisions of the GATT 1994 and of other Multilateral Trade 
Agreements in Annex 1A to the MTO shall apply subject to the provisions of 
this Agreement.

2.    The Annexes to this Agreement are hereby made an integral part of this 
Agreement.

ANNEX 1
PRODUCT COVERAGE

1.    This Agreement shall cover the following products:



  (i)   HS Chapters 1 to 24 less fish and fish products, plus

  (ii)  HS Code            29.05.43         (mannitol)

        HS Code            29.05.44         (sorbitol)

        HS Heading         33.01            (essential oils)

        HS Headings        35.01 to 35.05   (albuminoidal substances, 
                                            modified starches, glues)

        HS Code            38.09.10         (finishing agents)

        HS Code            38.23.60         (sorbitol n.e.p.)

        HS Headings        41.01 to 41.03   (hides and skins)

        HS Heading         43.01            (raw furskins)

        HS Headings        50.01 to 50.03   (raw silk and silk waste) 

        HS Headings        51.01 to 51.03   (wool and animal hair)

        HS Headings        52.01 to 52.03   (raw cotton, waste and cotton 
                                            carded or combed)

        HS Heading         53.01            (raw flax)

        HS Heading         53.02            (raw hemp)
           
2.    The foregoing shall not limit the product coverage of the Agreement on 
Sanitary and Phytosanitary Measures.


ANNEX 2

DOMESTIC SUPPORT:  THE BASIS FOR EXEMPTION FROM 
THE REDUCTION COMMITMENTS


1.    Domestic support policies for which exemption from the reduction 
commitments is claimed shall meet the fundamental requirement that they have 
no, or at most minimal, trade distortion effects or effects on production.  
Accordingly, all policies for which exemption is claimed shall conform to 
the following basic criteria:

      (i)  the support in question shall be provided through a 
           publicly-funded government programme (including government 
           revenue foregone) not involving transfers from consumers; and,

      (ii) the support in question shall not have the effect of providing 
      price support to producers;

plus policy-specific criteria and conditions as set out below.

Government Service Programmes

2.    General services

      Policies in this category involve expenditures (or revenue foregone) 
in relation to programmes which provide services or benefits to agriculture 
or the rural community.  They shall not involve direct payments to producers 
or processors.  Such programmes, which include but are not restricted to the 
following list, shall meet the general criteria in paragraph 1 above and 
policy-specific conditions where set out below:

      (i)  research, including general research, research in connection with 
           environmental programmes, and research programmes relating to 
           particular products;

      (ii) pest and disease control, including general and product-specific 
           pest and disease control measures, such as early warning systems, 
           quarantine and eradication;

      (iii)training services, including both general and specialist training 
           facilities;

      (iv) extension and advisory services, including the provision of means 
           to facilitate the transfer of information and the results of 
           research to producers and consumers;

      (v)  inspection services, including general inspection services and 
           the inspection of particular products for health, safety, grading 
           or standardization purposes;

      (vi) marketing and promotion services, including market information, 
           advice and promotion relating to particular products but 
           excluding expenditure for unspecified purposes that could be used 
           by sellers to reduce their selling price or confer a direct 
           economic benefit to purchasers; and

      (vii)infrastructural services, including: electricity reticulation, 
           roads and other means of transport, market and port facilities, 
           water supply facilities, dams and drainage schemes, and 
           infrastructural works associated with environmental programmes.  
           In all cases the expenditure shall be directed to the provision 
           or construction of capital works only, and shall exclude the 
           subsidized provision of on-farm facilities other than for the 
           reticulation of generally-available public utilities.  It shall 
           not include subsidies to inputs or operating costs, or 
           preferential user charges.

3.    Public stockholding for food security purposes[5]
      
           Expenditures (or revenue foregone) in relation to the 
      accumulation and holding of stocks of products which form an integral 
      part of a food security programme identified in national legislation.  
      This may include government aid to private storage of products as part 
      of such a programme.  

           The volume and accumulation of such stocks shall correspond to 
           predetermined targets related solely to food security.  The 
           process of stock accumulation and disposal shall be financially 
           transparent.  Food purchases by the government shall be made at 
           current market prices and sales from food security stocks shall 
           be made at no less than the current domestic market price for the 
           product and quality in question.

4.    Domestic food aid[6] 

           Expenditures (or revenue foregone) in relation to the provision 
      of domestic food aid to sections of the population in need. 
      
           Eligibility to receive the food aid shall be subject to 
           clearly-defined criteria related to nutritional objectives.  Such 
           aid shall be in the form of direct provision of food to those 
           concerned or the provision of means to allow eligible recipients 
           to buy food either at market or at subsidized prices.  Food 
           purchases by the government shall be made at current market 
           prices and the financing and administration of the aid shall be 
           transparent.

5.    Direct payments to producers

      Support provided through direct payments (or revenue foregone, 
including payments in kind) to producers for which exemption from reduction 
commitments is claimed shall meet the basic criteria set out in paragraph 1 
above, plus specific criteria applying to individual types of direct payment 
as set out in paragraphs 6 to 13 below.  Where exemption from reduction is 
claimed for any existing or new type of direct payment other than those 
specified in paragraphs 6 to 13, it shall conform to criteria (ii) to (v) of 
paragraph 6 in addition to the general criteria set out in paragraph 1.

6.    Decoupled income support 

      (i)  Eligibility for such payments shall be determined by 
           clearly-defined criteria such as income, status as a producer or 
           landowner, factor use or production level in a defined and fixed 
           base period.

      (ii) The amount of such payments in any given year shall not be 
           related to, or based on, the type or volume of production 
           (including livestock units) undertaken by the producer in any 
           year after the base period.

      (iii)The amount of such payments in any given year shall not be 
           related to, or based on, the prices, domestic or international, 
           applying to any production undertaken in any year after the base 
           period.

      (iv) The amount of such payments in any given year shall not be 
           related to, or based on, the factors of production employed in 
           any year after the base period.

      (v)  No production shall be required in order to receive such 
      payments.

7.    Government financial participation in income insurance and income 
safety-net programmes

      (i)  Eligibility for such payments shall be determined by an income 
           loss, taking into account only income derived from agriculture, 
           which exceeds 30 per cent of average gross income or the 
           equivalent in net income terms (excluding any payments from the 
           same or similar schemes) in the preceding three-year period or a 
           three-year average based on the preceding five-year period, 
           excluding the highest and the lowest entry.  Any producer meeting 
           this condition shall be eligible to receive the payments.

      (ii) The amount of such payments shall compensate for less than 70 per 
           cent of the producer's income loss in the year the producer 
           becomes eligible to receive this assistance.

      (iii)The amount of any such payments shall relate solely to income;  
           it shall not relate to the type or volume of production 
           (including livestock units) undertaken by the producer;  or to 
           the prices, domestic or international, applying to such 
           production; or to the factors of production employed.

      (iv) Where a producer receives in the same year payments under this 
           paragraph and under paragraph 8 below (relief from natural 
           disasters), the total of such payments shall be less than 100 per 
           cent of the producer's total loss.

8.    Payments (made either directly or by way of government financial 
participation in crop insurance schemes) for relief from natural disasters

      (i)  Eligibility for such payments shall arise only following a formal 
           recognition by government authorities that a natural or like 
           disaster (including disease outbreaks, pest infestations, nuclear 
           accidents, and war on the territory of the Member concerned) has 
           occurred or is occurring;  and shall be determined by a 
           production loss which exceeds 30 per cent of the average of 
           production in the preceding three-year period or a three year 
           average based on the preceding five-year period, excluding the 
           highest and the lowest entry.
           
      (ii) Payments made following a disaster shall be applied only in 
           respect of losses of income, livestock (including payments in 
           connection with the veterinary treatment of animals), land or 
           other production factors due to the natural disaster in question.

      (iii)Payments shall compensate for not more than the total cost of 
           replacing such losses and shall not require or specify the type 
           or quantity of future production.

      (iv) Payments made during a disaster shall not exceed the level 
           required to prevent or alleviate further loss as defined in 
           criterion (ii) above.

      (v)  Where a producer receives in the same year payments under this 
           paragraph and under paragraph 7 above (income insurance and 
           income safety-net programmes), the total of such payments shall 
           be less than 100 per cent of the producer's total loss.

9.    Structural adjustment assistance provided through producer retirement 
programmes

      (i)  Eligibility for such payments shall be determined by reference to 
           clearly-defined criteria in programmes designed to facilitate the 
           retirement of persons engaged in marketable agricultural 
           production, or their movement to non-agricultural activities.

      (ii) Payments shall be conditional upon the total and permanent 
           retirement of the recipients from marketable agricultural 
           production.

10.   Structural adjustment assistance provided through resource retirement 
programmes

      (i)  Eligibility for such payments shall be determined by reference to 
           clearly-defined criteria in programmes designed to remove land or 
           other resources, including livestock, from marketable 
           agricultural production.

      (ii) Payments shall be conditional upon the retirement of land from 
           marketable agricultural production for a minimum of 3 years, and 
           in the case of livestock on its slaughter or definitive permanent 
           disposal. 

      (iii)Payments shall not require or specify any alternative use for 
           such land or other resources which involves the production of 
           marketable agricultural products.

      (iv) Payments shall not be related to either the type or quantity of 
           production or to the prices, domestic or international, applying 
           to production undertaken using the land or other resources 
           remaining in production.

11.   Structural adjustment assistance provided through investment aids

      (i)  Eligibility for such payments shall be determined by reference to 
           clearly-defined criteria in government programmes designed to 
           assist the financial or physical restructuring of a producer's 
           operations in response to objectively demonstrated structural 
           disadvantages.  Eligibility for such programmes may also be based 
           on a clearly-defined government programme for the reprivatization 
           of agricultural land.

      (ii) The amount of such payments in any given year shall not be 
           related to, or based on, the type or volume of production 
           (including livestock units) undertaken by the producer in any 
           year after the base period other than as provided for under (v) 
           below.

      (iii)The amount of such payments in any given year shall not be 
           related to, or based on, the prices, domestic or international, 
           applying to any production undertaken in any year after the base 
           period.

      (iv) The payments shall be given only for the period of time necessary 
           for the realization of the investment in respect of which they 
           are provided. 

      (v)  The payments shall not mandate or in any way designate the 
           agricultural products to be produced by the recipients except to 
           require them not to produce a particular product.

      (vi) The payments shall be limited to the amount required to 
           compensate for the structural disadvantage.

12.   Payments under environmental programmes

      (i)  Eligibility for such payments shall be determined as part of a 
           clearly-defined government environmental or conservation 
           programme and be dependent on the fulfilment of specific 
           conditions under the government programme, including conditions 
           related to production methods or inputs.

      (ii) The amount of payment shall be limited to the extra costs or loss 
           of income involved in complying with the government programme.

13.   Payments under regional assistance programmes

      (i)  Eligibility for such payments shall be limited to producers in 
           disadvantaged regions.  Each such region must be a clearly 
           designated contiguous geographical area with a definable economic 
           and administrative identity, considered as disadvantaged on the 
           basis of neutral and objective criteria clearly spelt out in law 
           or regulation and indicating that the region's difficulties arise 
           out of more than temporary circumstances.

      (ii) The amount of such payments in any given year shall not be 
           related to, or based on, the type or volume of production 
           (including livestock units) undertaken by the producer in any 
           year after the base period other than to reduce that production.
           
      (iii)The amount of such payments in any given year shall not be 
           related to, or based on, the prices, domestic or international, 
           applying to any production undertaken in any year after the base 
           period.

      (iv) Payments shall be available only to producers in eligible 
           regions, but generally available to all producers within such 
           regions.

      (v)  Where related to production factors, payments shall be made at a 
           degressive rate above a threshold level of the factor concerned.

      (vi) The payments shall be limited to the extra costs or loss of 
           income involved in undertaking agricultural production in the 
           prescribed area.

ANNEX 3

DOMESTIC SUPPORT:  CALCULATION OF AGGREGATE MEASUREMENT OF SUPPORT

1.    Subject to the provisions of Article 6, an Aggregate Measurement of 
Support (AMS) shall be calculated on a product-specific basis for each basic 
product (defined as the product as close as practicable to the point of 
first sale) receiving market price support, non-exempt direct payments, or 
any other subsidy not exempted from the reduction commitment ("other 
non-exempt policies").  Support which is non-product specific shall be 
totalled into one non-product-specific AMS in total monetary terms.  
2.    Subsidies under paragraph 1 shall include both budgetary outlays and 
revenue foregone by governments or their agents.

3.    Support at both the national and sub-national level shall be included.

4.    Specific agricultural levies or fees paid by producers shall be 
deducted from the AMS.

5.    The AMS calculated as outlined below for the base period shall 
constitute the base level for the implementation of the reduction commitment 
on domestic support.

6.    For each basic product, a specific AMS shall be established, expressed 
in total monetary value terms.  

7.    The AMS shall be calculated as close as practicable to the point of 
first sale of the product concerned.  Policies directed at agricultural 
processors shall be included to the extent that such policies benefit the 
producers of the basic products.  

8.    Market price support:  market price support shall be calculated using 
the gap between a fixed external reference price and the applied 
administered price multiplied by the quantity of production eligible to 
receive the applied administered price.  Budgetary payments made to maintain 
this gap, such as buying-in or storage costs, shall not be included in the 
AMS. 

9.    The fixed external reference price shall be based on the years 1986 to 
1988 and shall generally be the average f.o.b. unit value for the product 
concerned in a net exporting country and the average c.i.f. unit value for 
the product concerned in a net importing country in the base period.  The 
fixed reference price may be adjusted for quality differences as necessary.

10.   Non-exempt direct payments:  non-exempt direct payments which are 
dependent on a price gap shall be calculated either using the gap between 
the fixed reference price and the applied administered price multiplied by 
the quantity of production eligible to receive the administered price, or 
using budgetary outlays.  

11.   The fixed reference price shall be based on the years 1986 to 1988 and 
shall generally be the actual price used for determining payment rates.

12.   Non-exempt direct payments which are based on factors other than price 
shall be measured using budgetary outlays.

13.   Other non-exempt policies, including input subsidies and other 
policies such as marketing cost reduction measures:  the value of such 
policies shall be measured using government budgetary outlays or, where the 
use of budgetary outlays does not reflect the full extent of the subsidy 
concerned, the basis for calculating the subsidy shall be the gap between 
the price of the subsidised good or service and a representative market 
price for a similar good or service multiplied by the quantity of the good 
or service.



ANNEX 4

DOMESTIC SUPPORT:  CALCULATION  OF  EQUIVALENT MEASUREMENT OF SUPPORT

1.    Subject to the provisions of Article 6, equivalent measurements of 
support shall be calculated in respect of all products where market price 
support as defined in Annex 3 exists but for which calculation of this 
component of the AMS is not practicable.  For such products the base level 
for implementation of the domestic support reduction commitments shall 
consist of a market price support component expressed in terms of equivalent 
measurements of support under paragraph 2 below, as well as any non-exempt 
direct payments and other non-exempt support, which shall be evaluated as 
provided for under paragraph 3 below.  Support at both national and 
sub-national level shall be included.

2.    The equivalent measurements of support provided for in paragraph 1 
shall be calculated on a product-specific basis for all products as close as 
practicable to the point of first sale ("basic products") receiving market 
price support and for which the calculation of the market price support 
component of the AMS is not practicable.  For those basic products, 
equivalent measurements of market price support shall be made using the 
applied administered price and the quantity of production eligible to 
receive that price or, where this is not practicable, on budgetary outlays 
used to maintain the producer price.

3.    Where products falling under paragraph 1 above are the subject of 
non-exempt direct payments or any other product-specific subsidy not 
exempted from the reduction commitment, the basis for equivalent 
measurements of support concerning these measures shall be calculations as 
for the corresponding AMS components (specified in paragraphs 10 to 13 of 
Annex 3).

4.    Equivalent measurements of support shall be calculated on the amount 
of subsidy as close as practicable to the point of first sale of the product 
concerned.  Policies directed at agricultural processors shall be included 
to the extent that such policies benefit the producers of the basic 
products.  Specific agricultural levies or fees paid by producers shall 
reduce the equivalent measurements of support by a corresponding amount.



                                 ANNEX 5

SPECIAL TREATMENT UNDER ARTICLE 4:2


Section A

1.    The provisions of Article 4:2 of this Agreement shall not apply with 
effect from the entry into force of this Agreement to any primary 
agricultural product and its worked and/or prepared products ("designated 
products") in respect of which the following conditions are complied with 
(hereinafter referred to as "special treatment"):

      (a)  imports of the designated products comprised less than 3 per cent 
           of corresponding domestic consumption in the base period 
           1986-1988 ("the base period");

      (b)  no export subsidies have been provided since the beginning of the 
           base period for the designated products;

      (c)  effective production restricting measures are applied to the 
           primary agricultural product;

      (d)  such products are designated with the symbol "ST-Annex 5" in 
           Section IB of Part I of a Member's Schedule annexed to the 
           Uruguay Round (1994) Protocol as being subject to special 
           treatment reflecting factors of non-trade concerns, such as food 
           security and environmental protection;  and

      (e)  minimum access opportunities in respect of the designated 
           products correspond, as specified in Section IB of Part I of the 
           Schedule of the Member concerned, to 4 per cent of  base period 
           domestic consumption of the designated products from the 
           beginning of the first year of the implementation period and, 
           thereafter, are increased by 0.8 per cent of corresponding 
           domestic consumption in the base period per year for the 
           remainder of the implementation period.
 
2.    At the beginning of any year of the implementation period a Member may 
cease to apply  special treatment in respect of the designated products by 
complying with the provisions of paragraph 6 below.  In such a case, the 
Member concerned shall maintain the minimum access opportunities already in 
effect at such time and increase the minimum access opportunities by 0.4 per 
cent of corresponding domestic consumption in the base period per year for 
the remainder of the implementation period.  Thereafter, the level of 
minimum access opportunities resulting from this formula in the final year 
of the implementation period shall be maintained in the Schedule of the 
Member concerned.

3.    Any negotiation on the question of whether there can be a continuation 
of the special treatment as set out in paragraph 1 above after the end of 
the implementation period shall be completed within the time-frame of the 
implementation period itself as a part of the negotiations set out in 
Article 20 of this Agreement, taking into account the factors of non-trade 
concerns.

4.    If it is agreed as a result of the negotiation referred to in 
paragraph 3 above that a Member may continue to apply the special treatment, 
such Member shall confer additional and acceptable concessions as determined 
in that negotiation.

5.    Where the special treatment is not to be continued at the end of the 
implementation period, the Member concerned shall implement the provisions 
of paragraph 6 below.  In such a case, after the end of the implementation 
period the minimum access opportunities for the designated products shall be 
maintained at the level of 8 per cent of corresponding domestic consumption 
in the base period in the Schedule of the Member concerned.

6.    Border measures other than ordinary customs duties maintained in 
respect of the designated products shall become subject to the provisions of 
Article 4:2 of this Agreement with effect from the beginning of the year in 
which the special treatment ceases to apply.  Such products shall be subject 
to ordinary customs duties, which shall be bound in the Schedule of the 
Member concerned and applied, from the beginning of the year in which 
special treatment ceases and thereafter, at such rates as would have been 
applicable had a reduction of at least 15 per cent been implemented over the 
implementation period in equal annual instalments.  These duties shall be 
established on the basis of tariff equivalents to be calculated in 
accordance with the guidelines prescribed in the attachment hereto.

Section B

7.    The provisions of Article 4:2 of this Agreement shall also not apply 
with effect from the entry into force of this Agreement to a primary 
agricultural product that is the predominant staple in the traditional diet 
of a developing country Member and in respect of which the following 
conditions, in addition to those specified in paragraph 1(a) through 1(d) 
above, as they apply to the products concerned, are complied with:

      -    minimum access opportunities in respect of the products 
      concerned, as specified in Section IB of Part I of the Schedule of the 
      developing country Member concerned, correspond to 1 per cent of base 
      period domestic consumption of the products concerned from the 
      beginning of the first year of the implementation period and are 
      increased in equal annual instalments to 2 per cent of corresponding 
      domestic consumption in the base period at the beginning of the fifth 
      year of the implementation period.  From the beginning of the sixth 
      year of the implementation period, minimum access opportunities in 
      respect of the products concerned correspond to 2 per cent of 
      corresponding domestic consumption in the base period and are 
      increased in equal annual instalments to 4 per cent of corresponding 
      domestic consumption in the base period until the beginning of the 
      tenth year.  Thereafter, the level of minimum access opportunities 
      resulting from this formula in the tenth year shall be maintained in 
      the Schedule of the developing country Member concerned.

      -    appropriate market access opportunities have been provided for in 
      other products under this Agreement.
      
8.    Any negotiation on the question of whether there can be a continuation 
of the special treatment as set out in paragraph 7 above after the end of 
the tenth year following the beginning of the implementation period shall be 
initiated and completed within the time-frame of the tenth year itself 
following the beginning of the implementation period.

9.    If it is agreed as a result of the negotiation referred to in 
paragraph 8 above that a Member may continue to apply the special treatment, 
such Member shall confer additional and acceptable concessions as determined 
in that negotiation.

10.   In the event that special treatment under paragraph 7 above is not to 
be continued beyond the tenth year following the beginning of the 
implementation period, the products concerned shall be subject to ordinary 
customs duties, established on the basis of a tariff equivalent to be 
calculated in accordance with the guidelines prescribed in the attachment 
hereto, which shall be bound in the Schedule of the Member concerned.  In 
other respects, the provisions of paragraph 6 above shall apply as modified 
by the relevant special and differential treatment accorded to developing 
country Members under this Agreement.
Attachment to Annex 5


                Guidelines for the Calculation of Tariff
           Equivalents for the Specific Purpose Specified in 
                    Paragraphs 6 and 10 of this Annex



1.    The calculation of the tariff equivalents, whether expressed as ad 
valorem or specific rates, shall be made using the actual difference between 
internal and external prices in a transparent manner. Data used shall be for 
the years 1986 to 1988.  Tariff equivalents:

      (i)  shall primarily be established at the four-digit level of the HS;  
      
      (ii) shall be established at the six-digit or a more detailed level of 
           the HS wherever appropriate;

      (iii)shall generally be established for worked and/or prepared 
           products by multiplying the specific tariff equivalent(s) for the 
           primary agricultural product(s) by the proportion(s) in value 
           terms or in physical terms as appropriate of the primary 
           agricultural product(s) in the worked and/or prepared products, 
           and take account, where necessary, of any additional elements 
           currently providing protection to industry.

2.    External prices shall be, in general, actual average c.i.f. unit 
values for the importing country.  Where average c.i.f. unit values are not 
available or appropriate, external prices shall be either:  

      (i)  appropriate average c.i.f. unit values of a near country;  or 

      (ii) estimated from average f.o.b. unit values of (an) appropriate 
           major exporter(s) adjusted by adding an estimate of insurance, 
           freight and other relevant costs to the importing country.

3.    The external prices shall generally be converted to domestic 
currencies using the annual average market exchange rate for the same period 
as the price data.

4.    The internal price shall generally be a representative wholesale price 
ruling in the domestic market or an estimate of that price where adequate 
data is not available. 

5.    The initial tariff equivalents may be adjusted, where necessary, to 
take account of differences in quality or variety using an appropriate 
coefficient.

6.    Where a tariff equivalent resulting from these guidelines is negative 
or lower than the current bound rate, the initial tariff equivalent may be 
established at the current bound rate or on the basis of national offers for 
that product.

7.    Where an adjustment is made to the level of a tariff equivalent which 
would have resulted from the above guidelines, the Member concerned shall 
afford, on request, full opportunities for consultation with a view to 
negotiating appropriate solutions. 

1. These measures include quantitative import restrictions, variable import 
levies, minimum import prices, discretionary import licensing, non-tariff 
measures maintained through state trading enterprises, voluntary export 
restraints and similar border measures other than ordinary customs duties, 
whether or not the measures are maintained under country-specific 
derogations from the provisions of the GATT 1947, but not measures 
maintained under balance-of-payments provisions or under other general, 
non-agriculture-specific provisions of the GATT 1994 or of the other 
Multilateral Trade Agreements in Annex 1A to the MTO.

2. The reference price used to invoke the provisions of this sub-paragraph 
shall, in general, be the average c.i.f. unit value of the product 
concerned, or otherwise shall be an appropriate price in terms of the 
quality of the product and its stage of processing.  It shall, following its 
initial use, be publicly specified and available to the extent necessary to 
allow other Members to assess the additional duty that may be levied. 


3. Where domestic consumption is not taken into account, the base trigger 
level under (a) below shall apply.

4."Countervailing duties" where referred to in this Article are those 
covered by Article VI of the GATT 1994 and Part V of the Agreement on 
Subsidies and Countervailing Duties.

5. For the purposes of paragraph 3 of this Annex, Governmental stockholding 
programmes for food security purposes in developing countries whose 
operation is transparent and conducted in accordance with officially 
published objective criteria or guidelines shall be considered to be in 
conformity with the provisions of this paragraph, including programmes under 
which stocks of foodstuffs for food security purposes are acquired and 
released at administered prices, provided that the difference between the 
acquisition price and the external reference price is accounted for in the 
AMS.  

5 & 6For the purposes of paragraphs 3 and 4 of this Annex, the provision of 
foodstuffs at subsidized prices with the objective of meeting food 
requirements of urban and rural poor in developing countries on a regular 
basis at reasonable prices shall be considered to be in conformity with the 
provisions of this paragraph.   



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