CHECK AGAINST DELIVERY EMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER
TO THE CONTRACTING PARTIES OF THE GENERAL AGREEMENT
ON TARIFFS AND TRADES
GENEVA, SWITZERLAND 22 OCTOBER 1987
Director-General
Excellencies Ladies and Gentlemen
want at the outset to express my thanks for the oPono: tunitv
you have given me to speak about issues of immense importancethe
profound problems besetting world trade today. I have
spoken on this subject in many forums, but I am very conscious
of the fact that, as representatives of your countries
professionally responsible for trade negotiations, you
constitute an exceptionally expert body.
I do not today intend to talk to you about matters of technical
detail, important though those are in the negotiating process.
I want to talk to you on a broader scale, as the Prime Minister
of a countzy deeply concerned not just with the precise terms of
trade negotiations but with the whole trend of. what is happening
in international trade and with the direction in which I believe
we should be heading.
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For many of us in western society the decade of our forties can
trigger that troubling period of self-appraisai known as
m-d-life crisis. it can lead to aimlessness and a los-of self
es. teen. 3ut handled with ma& rity it can be a positive
experience: : t can lead to reinvigoration and a renewed sense
of purpose.
Sbelieve that the GATT,' which this year celebrates its
birthday, has entered a period akin to a mid-life crisis. Forty
years is certainly long enough to reduce an institution to
irrelevance if there is no process of introspection, of
reappraisal and, if necessary, of redirection.
it is my belief that nothing short of a fundamental rethink of
domestic policy settings by all economies, and especially by the
largest industrial economies, can remedy the current malaise in
the world trading system.
And I believe too that the rules of world trade must also be
reformed. For without a growth-oriented trading system
associated, I might add, as the founders of GATT recognised,
with an efficient financial system the imbalances will be
corrected only with severe economic cost and, stemming from
that, mounting social and political tension.
The simple fact is that since GATT was formed and even since
the last review of GATT the world has moved on. If we want to
see GATT remain relevant to the world's economic needs, it needs
to move with it.
The challenge confronting all of us as members of GATT is to use
the period of reappraisal afforded by the Uruguay Round to
provide a stable base for free and fair world trade for decades
to come just as the original Contracting Parties did 40 years
ago. That reappraisal must also provide the foundation from
which we can maximise equitable low-inflation world growth.
The need is great. Time is short. The costs of failure are
high. I am by nature an optimist but I must say that present
indications suggest that there is a long way to go before this
urgency is properly reflected in the actions of some of the
largest trading nations.
Today then, as the leader of a nation thoroughly committed to
the cause of liberalising world trade, I want to impress upon
you the necessity to take up this cause as a matter of highest
priority. And so that the theoretical validity of my argument is backed by
an immediately applicable course of action, I want to announce
new proposals which I believe show the way forward.
These new measures are of two kinds: they further demonstrate
the commitment of my Government to make what changes are needed
to further liberalise trade with Australia, and they demonstrate
the commitment of a number of countries, brought together in the
Cairns Group, to work towards change at the international level.
Resolution of the difficulties facing the world trading system
is not, and must not be allowed to be, a matter exclusively for
the major trading nations. Smaller trading countries have a
vital interest in the outcome and have a legitimate right to be
represented forcefully at the negotiating table.
As you know the rationale for the GATT was set out in the 1941
Atlantic Charter. The intention was to ensure that, after the
War, all countries ' great or small, victor or vanquished" would
enjoy " access on equal terms to the trade and to the raw
materials of the world."
The Contracting Parties to the GATT, who came together some si. x
years later after protracted but inconclusive negotiations to
establish a more permanent regime of management, had fresh in
their minds the exoerience of the 1920' s and 1930' s.
These were years in which the younger manufacturing nations were
inhibited in trade by bilateral arrangements among the
traditional European traders, and by other barrriers to trade,
investment and technology. World growth suffered. So, too, did
world harmony. The tensions created by these " beggar thy
neighbour" policies came to a head in the global conflict of
World War 2, with its incalculable cost in economic destruction
and human misery and suffering.
Forty years ago the parties to GATT appreciated the importance
of having a framework of rules that provide fairness,
non-discrimination and openness in the complex trading
environment needed to promote post-war recovery.
Although efforts have been made to update and refurbish it, the
fact is that the world now demands more of the GATT framework
than it has hitherto delivered.
We have just passed the first anniversary of the Uruguay
Declaration and are approaching the end of the initial phase of
the negotiations to update GATT to meet today's needs.
The Uruguay Round deals with a very broad range of subjects.
Nobody will be more familiar than this group with the fact that
Australia's paramount concern in this new round of multilateral
trade negotiations is agriculture.
But I do not wish to talk about agriculture exclusively, because
my country, like many of yours, has other major interests. We
are deliberately re-structuring our economy to diversify and
strengthen the base upon which Australia can engage
competitively in international trade. We are already an
exporter not just of primary commodities but of services and
manufactures.
we aspire to still greater success in these areas and it is
therefore very much in our interest that the negotiations
succeed in opening up markets and freeing up trade in the
services and manufactures fields.
Let me discuss these other issues first, before returning to the
question of agriculture.
1I1 is clear that without the development of global markets fox
services such as telecommunications and data services, without
the rapid growth of international financial and insurance
services, without rapid and flexible global transport, the total
world market for goods would be very much smaller, and we would
all be the poorer.
However the services sector is bound, world-wide, in a network
of regulations and restrictions which closely control the entry
into, and investment in, the services sector, and even in some
cases the physical delivery of services. Moreover, major
exporters have demonstrated willingness to protect their service
markets by bilateral agreements which by their nature are
discriminatory. Clearly, it is in the interests of all nations,
developed and developing alike, to ensure that the most
efficient and cheapest services are available to all.
The historic declaration at Punta del Este recognised this when
it called, for the first time, for services to be brought withi. n
the multilateral framework.
None of us can afford to let this opportunity pass.
The clear objective of the Round must be to develop a
non-discriminatory, multilateral framework for services which
provides: steady liberalisation and expansion of access to markets;
effective transparency of national regulations on services;
and workable procedures for the settlement of disputes.
To turn to trade in manufactured goods, we see a similar need
for reform.
Since the end of the Tokyo Round, the US and the European
Communities have undone much of the good which flowed from the
continuing reduction of tariff barriers by their proliferation
of non-tariff barriers.
I
UNCTAD and the World Bank estimate that about a sixth of
industriai country impoLts from other industrial countries and
more than a fifth of their imports from developing countries a-e
now controlled by non-tariff barriers such as prohibitions,
quotas, " voluntary" restraints by exporters and discretionary
imoort licensing.
Overall, the use of such measures represents an increase of
almost 25 per cent on barriers to industrial country imports
since the end of the Tokyo Round.
Accordingly, progress in the market access negotiations is
essential to halt and reverse the slide towards increased
protectionism which we have witnessed in recent years. These
negotiations address directly the liberalisation of trade
barriers of both the traditional and so-called
" new-protectionist" variety.
Unfortunately, the largest economies have not so far presented
proposals which provide a basis for tackling these matters
comprehensively, in conjunction with measures to reduce tariffs
on a broad front.
Australia is seeking real progress in reducing the high levels
of industry assistance that reduce the size of the internanional
market and cut the gains from trade.
Let me turn, then, to what Aus-zalia is prenared to do in this
resoeCt. In January this year I announced that Australia was p~ epared to
participate in these GATT negotiations in a way that it had
never agreed to do before. We said we are : eady to negotiate
bindings on tariffs in all sectors of the tariff. on that issue
our good faith has been pledged already.
Today I announce that we are prepared to go even further.
The tariff is the most significant form of support for
Australian industry.
We are prepared to negotiate a broad package of measures to
reduce overall levels of effective assistance to Australian
industry including tariffs as part of a broad-based
multilateral approach.
In this context, we are prepared to eliminate, over an
appropriate implementation phase, all quantitative import
measures designed to protect domestic industry. This means we
would phase-out all our quantitative restrictions, including
tariff quotas, licensing and embargoes.
This is a radical approach -but it is the kind of radical
approach necessary to provide the world with its best chance to
capture fully the potential gains from trade.
it i. s an offer made in good faith, seeking to persuade our
trading partners and multilateral forums such as this to see
that we are %, illing to practice what we preach.
We will be looking to our trading partners, who employ a panoply
of assistance measures, to reciprocate this offer by making a
similar reduction in effective rates of industry assistance.
And let me be clea! r: I am seeking from them cuts not only in
tariffs but also in various non-tariff measures and subsidies.
Let me turn last but not least to agriculture one area in
which we have seen signs of an historic willingness on the part
of GAT" T members to make progress towards reform. That I
certainly welcome. But we are still far from agreeing to, yet
alone implementing, effective solutions.
in January I had the honor of delivering the keynote address at,
the World Economic Forum at Davos, and I used that address to
draw attention to the crisis confronting worlAd trade in
agriculture. my argument was that countries which endeavour to achieve
domestic goals by distorting world trade are not only hurting
others, they are hurting and deluding themselves.
Reform of agricultural trade would produce gains far beyond the
agricultural sectors of our industrial economies.
FO: example, in the industrialised world, reforn would reduce
struc-tural inefficiencies which have, for example, added one
million people to the queues of unemployed in the Eutopean
Community predominantly in manufacturing.
Developing countries with onerous debt burdens would gain from
agricultural trade reform because they could comfortably trade
out of their problems if they could get a fair return for their
agricultural produce.
If world prices for many agricultural goods were allowed to rise
to undistorted levels, the agricultural sectors of many
developing countries could become engines of growth.
At Davos I welcomed the commitment of the GATT members at Punta
del Este to negotiate on agriculture in the Uruguay Round. It
presents an opportunity for reform which we literally all of
us cannot afford to refuse.
in the apprroach which I proposed for resolving the crisis in
agricultural trade I called for an immediate ceasefire in the
subsidies war. 1 said sound principles must be developed to
govern world agricultural trade, recognising the realistic need
for transitional support in some cases while reform proceeds.
Given all this, I was pleased to see that the OECD Ministerial
Council and the Venice Summit strengthened the resolve of
industrialized countries to reform agricultural trade.
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Within the Uruguay Round itself, the United States proposed a
bold and imaginative plan for the elimination of distortions in
the agricultural markets in which both the US and its trading
partners participate.
We in Australia recognise that the thrust of the US proposal is
towards truly liberalised trade in agriculture and we welcome
that.
But much as I applaud this general position, I am bound to say
and it will come as no surprise to my friends in the United
States that I do so we have reservations about its lack of
completeness.
Along with our colleagues in the Cairns Group, we believe that
the American proposals fall short of providing the necessary
basis for reform. Two deficiencies deserve particular mention.
First, there is no acknowledgement of the need to provide early
relief from the distorting effects of the existing arrangements,
evidenced by undertakings to begin soon the task of reducing
subsidies. Second, it does not adequately recognise that greatest
responsibility for reform rests with those whose policies are
causing greatest damage to world markets.
Now in case it seems that 1 am singling out the United States
let me s:: aight away correct that impression.
The European Community has yet to table its formal proposal
but the indications to date are that it is prepared to make the
historic decision to negotiate. But I must add that, as we
understand them, the measures in contemplation do not go far
enough. To be credible, the Community's approach must make an
explicit commitment to libeLalisation. Fat-sighted, creative
proposals are needed soon.
Further, theze are also countries tempted to argue that since
they are nc: significant exporters they have a lesser
responsibility. But they should remember that their highly
restrictive import regimes contribute just as much as heavily
subsidised exports to the problems of world markets.
The fact is that efficient agricultural exporters including
Australia are fed up with being caught in a crossfire of
competitive subsidisation by the US and the European Community.
We are also fed up with being denied access to legitimate
markets. It was to exc: ess this frustration that Australia, along with
other agricultural producers who are increasingly anxious about
the growing tide of protectionism, joined together to form a
third force in trade negotiations the Cairns Group.
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k
These coun: tries represent some 550 million people, account fo:
orie-auar: ter of the total amount of aaicultural exports, and
have suffered enormous damaae because of agricultural
protection. It is my pleasure today to present, on behalf of the Cairns
Group, our proposals which we believe not only meet our
interests but also provide a framework for reform which will
ultimately benefit all parties.
The proposal is comprehensive and it is far-reaching. It will
be formally tabled by the Cairns Group at the Agriculture
Negotiating Group meeting next week.
It contains three elements.
First, the overall objective of the proposal is to establish a
lono'term framework within which agricultural production and
trade can take place with minimum distortion and disruption. We
rnust go as far as possible towards eliminating all agricultural
subsidies and access barriers. This long term framework would
be supported by new or amended GATT rules.
Second, recognising the truly massive scale of structural
distortions which we all must tackle, the Group proposes a
teform'program, whereby countries would negotiate commitments to
reduce trade distorting policies using defined rules.
n. nlike othe: pooosals, this pio zam assigns priority to phasing
out those measures which most disrupt trade. 7he European
Community, the United States and Japan obviowsly bear a
particular responsibility here.
Two other features of the program deserve mention.
The program calls for international co-operation to minimise the
impact on trade of regulations protecting human, animal or plant
health. These regulations should not be used as unwarranted
barriers to trade.
It also proposes a surveillance mechanism to avoid any
circumvention of remedial action, to ensure that remaining or
new measures do not impede the reform process and to ensure
compliance with undertakings.
The third major element of the Cairns Group proposal reflects
our recognition that such a reform process is gradual and must
be bolstered by specific earlv'relief-measares.
Cairns Group members take no comfort from the assurances of the
major economies that their subsidies are not aimed at us. ' What
matters is that they are hitting us. Indeed our casualties are
greater than those of the protagonists.
Efficient producers are being forced out of the market, to the
long term detriment of all consumers.
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Therefore the proposal calls for early relief in the form of:
a freeze on access barriers, on production and export
subsidies, and on unjustified health regulations;
a political commitment to the responsible management
and non disruptive release of stocks: and
a concerted multilateral cutback on all export and
production subsidies, coupled with a commitment to
increase access opportunities.
The proposal recognises the reality of uneven stages of
development in various countries and their industries.
It provides for the principle of differential and more
favourable treatment for developing countries to apply to the
agricultural reform process. This is consistent with the GATT
itself and the Punta del Este Declaration.
Realism demands that certain exceptions will have to be allowed
if the will for reform is to be translated into action.
Therefore the proposal allows scope for a strictly defined list
of support measures to continue if they have a negligible effect
on output and trade.
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The Cairns Group believes that its proposal provides a firm
basis on which to proceed into the substantive negotiating
phase. We will be aiming to achieve agreement on the parameters for the
reform program by the end of next year, or sooner if possible,
so that the early relief measures can be implemented immediately
thereafter.
We will be aiming to agree on the details of the reform program
and implement them from the end of 1990 at the very latest, with
a maximum phase-in period of 10 years.
I recognise that this timetable is ambitious. 3ut the trade
crisis calls for urgent measures. Such measures should indeed be
achievable given the sincerity of the commitments made by the
leaders of industrialised countries to urgent agricultural
reform.
Ladies and Gentlemen,
Last week in Vancouver the Commonwealth Heads of Government
M~ eeting issued a declaration on world trade.
In that declaration the Commonwealth representing some
nations and one quarter of the world's population expressed
its opposition to continued protectionism and correspondingly,
our strong support for trade liberalisation.
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It supported a strong, credible and working GATT and welcomed
the Uruguay Round of multilateral trade negotiations. It agreed
on the crucial need for reform of trade-distorting agricultural
policies. And, most signficantly, it expressed hope for an
" early harvest" from the negotiations on agriculture and other
key subjects.
The Vancouver Decla: ation is only the latest demonstration of
the growing world-wide momentum towards the achievement of trade
liberalisation. Forty years after the establishment of GATT, the international
trading system is ccrrupted and ailing. The members of GATT
have a fundamental choice to make.
We can do nothing, decide that it is all too hard, and plunge
the world into escalating protectionism and the heightened
global political tensions that would inevitably follow.
Or we can decide to add to the momentum of reform, moving
forward, cooperatively dismantling the barriers to trade,
improving the economic well being of all nations and making an
invaluable contribution to the prospects of world peace.
I have often remarked on this paradox: the remarkable capacities
of the human mind in the realm of scientific and technological
engineering have almost continuously dazzled us in the post war
era. Telecom ' 87 which I visited this morning reminds us
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vividly of this seemingly endless capacity. But there has been
no symmetry with that genius in our demonstrated capacity in
social engineering.
This is, of course, not so much a failure or dysfunction of the
mind but a failure of political will.
If we are not prepared now to grasp the challenge and the
opportunity before us, history will harshly and properly judge
us as the incompetent imitators of that tragic pattern. For us
the prospect of such a judgement should be incentive enough.
For me, even more damning would be that we were not sensible
enough to perceive and pursue what enlightened self interest
makes so glaringly obvious.
CAIRNS GROUP PROPOSAL ON AGRICULTURE
1. Argentina, Australia, Brazil, Canada, Chile, Colombia,
Hungary, Indonesia, Malaysia, New Zealand, Philippines,
Thailand and Uruguay submit the following proposal to achieve
the objectives relating to agriculture in the Punta del Este
Declaration. The proposal envisages participants agreeing to a
short " reform programme" to take 10 years or less at the
conclusion of which a long-term framework to govern world
agriculture would apply fully.
Introduction 2. The fundamental aim of the proposal is to provide the
means to achieve fully liberalised trade in agriculture, to
eliminate distortive agricultural policies and to bind the
necessary undertakings under strengthened GATT rules and
disciplines, taking into account the general principles
governing the negotiations.
3. World agricultural markets are currently characterised
by barriers to access, widespread government price and income
support programmes, massive overproduction and stagnant demand
in some parts of the world and unfulfilled demand in others.
4. Accordingly, there is a need for early action to give
relief and a reform programme that will take us progressively
from these massively distorted agricultural markets to a point
where all subsidies and other government support measures
having an effect on agricultural trade are no longer permitted
and domestic markets are open to effective competition from
imports. At the same time, no reform programme will be capable
of effecting secure liberalisation of agricultural trade unless
it is devised in light of, and becomes firmly entrenched in, an
effective new framework of strengthened and more operationally
effective GATT rules and disciplines.
6. In light of this, the proposal involves three
inter-related phases: the full application of the long-term framework
of revised and strengthened rules and disciplines for
agriculture; the systematic reduction of aggregate support by
the removal of distorting policy measures, supported by interim
rules which will govern during the reform period; and
the achievement of immediate steps for early
relief from the severe distortions affecting agricultural trade.
2.
Differential and More Favourable Treatment for Developing
Countries 7. The principle of differential and more favourable
treatment for developing countries as embodied in the GATT and
related instruments as well as in the Punta del Este
Declaration applies to all elements of this proposal, including
early relief measures: for example
longer timeframes for the implementation of
the measures prescribed in this proposal;
certain support measures in relation to
domestic economic programmes to promote
economic and social development, which are
not explicitly linked to export purposes.
I THE LONG-TERM FRAMEWORK
8. The implementation of a long-term framework is
necessary to achieve the objectives of full liberalisation in,
and elimination of existing exceptions for, agriculture. This
framework will both underpin and drive the adjustment process
during the reform phase and will come into effect at its
conclusion.
9. It is also recognised that the successful conclusion
of negotiations in other related groups will be crucial to the
effective operation of an open and fair agricultural trading
system. Market Access
GATT rules and disciplines should be agreed to remove
restrictions to the free flow of trade in agricultural
products. This would include:
a prohibition on the introduction or
continued use of all measures not explicitly
provided for in the GATT, including
non-tariff barriers and other measures such
as variable levies and minimum import prices.
the elimination when the long-term framework
comes into force of all provisions for
exceptional treatment whether maintained
under waivers, protocols of accession, or
other derogations and exceptions;
a binding of all tariffs on agricultural
products at low levels or zero.
3.
Agricultural Subsidies
11. GATT rules and disciplines should be agreed upon to
prohibit the use of all subsidies and other government support
measures, including consumer transfers, having an effect on
agricultural trade.
12. In the long-term framework, measures deemed to be
exceptions to the general prohibition would be strictly defined
in relation to the following categories:
structural adjustment measures which do not
impact negatively on trade;
measures to assist domestic consumption of
food which do not impede trade or
discriminate against imports;
non-commodity specific aid for
infrastructure development covering
research, extension, education, market
information, inspection, grading, pest and
disease control;
measures for specific disaster relief; and
measures for humanitarian purposes which
respect obligations equivalent to those
applying to surplus disposal transactions;
direct income support which is decoupled
from production and marketing.
Sanitary and Phytosanitary Measures
13. A long-term framework for sanitary and phytosanitary
measures will be established which reflects only strict
justification to protect human, animal or plant life or
health. The aim shall be to harmonise sanitary and
phytosanitary regulations to remove barriers to international
trade: and where full harmonisation is not technically
feasible adverse trade effects of differing regulations will be
minimised to the maximum extent.
Consultation, Surveillance, Dispute Settlement
14. With the application of the long-term framework, trade
in agricultural products will be integrated fully into the
generally applicable provisions and mechanisms for
consultation, surveillance and dispute settlement within the
GATT system, as strengthened through negotiations in the
Uruguay Round. I
4.
II REFORM PROGRAMME
An effective reform programme must be both shaped by
and capable of creating the conditions for application of, the
long-term framework. The key to this is a programme that rolls
back the levels of aggregate support.
The reform programme would have the following elements:
Phase Down of Aggregate Support
16. As overall government support levels are the root
cause of trade distortions, commitments would be undertaken by
countries to reduce and eliminate trade distorting policies in
the form of country schedules of reductions, implemented on a
non-discriminatory unconditional MFN basis.
17. Countries would determine the most effective mechanism
for translating the overall objective of the negotiations into
clear, specific and easily monitored commitments in their
schedules. 18. However, the development of countries' schedules of
reduction would be subject to defined terms and conditions.
Most importantly, it would be necessary to make those
systematic and coordinated adjustments required to ensure
conformity with the long-term framework that will apply at the
end of the reform period. The terms and conditions would
include the following: countries would have to reach targets of
reduced levels of overall support;
those support and policy measures which
contribute most heavily to trade distortions
would need to be targetted for priority
attention. This would require countries to
ensure their schedules manifestly contribute
to early and significant reform of the most
trade distorting measures;
the range of agricultural products to be
covered would be as comprehensive as
possible, as would be the range of trade
distorting policies.
19. This reform programme would be facilitated by
establishment of a measure of aggregate support capable of
capturing the diverse policies that have distorted
international agricultural production, consumption and trade.
A PSE-type measure should be developed in the GATT context to
provide this function. Such an aggregate country PSE-type
measure could play an appropriate role in specifying the
measured point of departure for, and monitoring progress
towards, the targets for reduced levels of overall support.
However to ensure that support for every commodity is reduced,
commodity-specific PSE-type measures would be used in
conjunction with the aggregate measures.
Priorities for Phase Down
As indicated above, the precise pattern of phase down
may vary from country to country, but would include priority
treatment for the: phase out of direct export subsidies and
other subsidies which operate directly or
indirectly to increase exports or reduce
imports and cause or threaten serious
prejudice; systematic enlargement of import access
opportunity involving tariff reductions,
phase out of non-tariff measures or
enlargement of minimum access arrangements
as applicable.
Exceptions
21. The only exceptions to be considered to the coverage
of the programme of reductions of overall support levels would
be certain measures with humanitarian objectives, including
consumption subsidies, or for the promotion of structural
adjustment. These measures would be permissible only if their
effects on output and trade are negligible. They would be
excepted under certain prescribed and tightly circumscribed
conditions. 22. In this regard precise terms and conditions would be
developed in relation to the following elements:
direct income support which is decoupled
from production and marketing;
adjustment or resource redeployment
assistance which has a negligible impact on
production and trade or which acts to reduce
production/ export levels;
non-commodity specific aid for
infrastructure development covering
research, extension, education, market
information, inspection, grading, pest and
disease control;
specific, natural disaster relief measures.
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6.
Sanitary and Phytosanitary Measures
23. Negotiation of agreements and undertakings oriented to
fulfil the Long-term framework of objectives, specifically they
have to include among others:
establishing a procedure of notification and
reverse notification to achieve full
transparency concerning the application of
such measures, with provision for review
under the relevant provisions of the General
Agreement, clarified as appropriate;
harmonising sanitary and phytosanitary
regulations and standards among countries
with the aim of removing barriers to
international trade. Even where full
harmonisation is not feasible, countries
would give greater recognition to the
principle of equivalency of treatment;
developing procedures to require any
Contracting Party so requested by another
Contracting Party to set out the precise
terms and timetable of steps required to be
undertaken to achieve conformity with its
sanitary or phytosanitary regulations;
providing that, upon request, technical
assistance from countries with regulations
in place for exporting developing countries
would be given to help them overcome the
substantive and administrative problem
arising from phytosanitary and sanitary
measures.
Consultation, Surveillance, Dispute Settlement and
Transitional Rules
24. Such a programme of systematic reduction in assistance
to agriculture would require effective verification procedures.
Pending full application of the long-term framework,
agreement will also be required on supplementary rules and
arrangements applicable in the transition to secure its
effective operation. These would also provide a basis for any
recourse to dispute settlement procedures.
26. Countries should: provide a binding commitment to implement
agreed schedules including an undertaking
not to resort to any measures to circumvent
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this commitment or to offset reductions in
measures undertaken as per schedules by
introducing new measures or expanding the
use of existing ones;
agree to establish a surveillance mechanism
to monitor countries' compliance with agreed
implementation schedules which would include
an obligation to notify all relevant
measures affecting trade in agriculture;
in order to monitor recourse by countries to
exceptions, also subject to surveillance the
total level of support, including excepted
measures, during the reform period;
define strengthened and more operationally
effective rules reinforcing the reform
programme, which will further Limit any
scope for prejuduce to the trade interests
of Contracting Parties, pending application
of the long-term framework.
III EARLY RELIEF MEASURES
27. Given the urgent need to achieve greater
liberalization and reduce distortion in world agricultural
trade, early relief measures would be implemented immediately
there is provisional agreement on the long-term framework or by
the end of 1988, whichever is the sooner.
28. As a first step these measures would be, as an
integral part of negotiations, a precise, immediate commitment
on trade distorting measures distinct from and additional to
the overall standstill and rollback commitments contained in
the Ministerial Declaration instituting the Uruguay Round. In
addition these measures would not be a substitute for the
reform or long-term measures.
Freeze Access: No reduction in existing levels of
access through, for example, the
introduction of new quantitative
restrictions, the reduction in access levels
of existing quantitative restrictions, the
extension of variable levy coverage to new
commodities, the reduction of existing
levy-free or reduced Levy commitments, the
extension of minimum import prices to new
commodities, the application to new
commodities of measures not explicitly
provided for in the GATT.
8.
Subsidies: Freeze all export and production
subsidies affecting directly or indirectly
world agricultural trade.
No introduction of new sanitary or
phytosanitary regulations operating as a
disguised barrier to trade and inconsistent
with the long-term objectives of
negotiations. Stock Disposal: A political commitment to
the responsible management and
non-disruptive release of stocks built up as
a consequence of government support
policies. Consideration to be given to
alternative methods of stock disposal
including increased domestic consumption,
and food aid programmes which would be
managed in strict accord with FAO Principles
of Surplus Disposal. Steps to be taken to
promote enhanced consultative procedures for
stock disposal with other interested
countries.
Cutback: On the basis of the above freeze there would
be a concerted multilateral first step to provide relief from
existing distortions. This would demonstrate political will to
take urgent and positive action to improve agricultural trade.
It would involve: an across the board reduction by X percent
of all export and production subsidies
affecting directly or indirectly world
agricultural trade;
a commitment to increase access opportunity.
It would apply from the end of 1988 until overtaken by the
effects of implementation of the programmed reduction in
agricultural support. Measures implemented will be taken into
account in the programme of reduction.
WORLD AGRICULTURAL EXPORTS BY COUNTRY GROUP
CAIRNS GROUP
AGRICULTURAL EXPORTS OF
PRODUCTS
Source: UN FAO Trde Yeorbook Volume 39/ 1985
SELECTED ECONOMIC INDICATORS FOR 1985
Popu lat ion I)
-millions of world total
GDP ( 2)
-US$ billion
of world total
Agricultural Exports( 3
-US$ million
of world total
Total Exports ( 4)
-US$ million
of world total Cairns Group 550
11.4 1089 9.1
69844 25.6
215528 10.8 EEC 12)
322 6.7
3252 27. 3
84562 31.0
649610 32.6 USA 239 4. 9
3957 33.2
37009 13.6
213146 10. 7 World 4837
11933 ( a)
272739
1991600
Agricultural Exports share in
total exports 32.4
Note 1984 figure 13.017. 4
Sources
S( 1) IMF, International Financial Statistics ( September 1907)
Dank Velox, Resena Estadistica, 1986 ( for Argentine statistics)
UN, Monthly Bulletin of Statistics ( January 1987)
IMF, International Financial Statistics ( September 1987)
Bank Velox, Resera Estadistica, 1986 ( for Argentine statistics)
OECD, Main Economic Indicators ( September 1987)
UN, National Accounts Statistics, Analysis of Main Aggregates, 1984 ( for world total)
FAO, Production Yearbook, 1985
IMF, Direction of Trade Statistics Yearbook, 1987