28 January 2002

Special Session of the Committee on Agriculture
Informal Meeting, 4-6 February 2001

Non-Paper by Switzerland

1. Switzerland welcomes to further discussions on the need and possible content of a development box as suggested by several developing country Member (DCs). The purpose of the exercise is to provide DCs the requisite flexibility to enhance domestic production, in particular for domestic consumption and food security, and to take such other measures necessary to improve the livelihood of their farmers, in and particularly low-income and resource-poor farmers. Furthermore, it would take into account non trade concerns (NTCs) on the understanding that some of these concerns are specific to certain countries and regions and some are common to all. In its negotiating proposal of 21 December 2000 (G/AG/NG/W/94), Switzerland explicitly welcomed suggestions for such measures for DCs. While being open to discuss and produce tangible results addressing these concerns, it was also made clear, in subsequent discussions, that the objective of such an exercise should not be to produce a two-tier system by which some countries would be permanently exempted from entering into any kind of commitments under the WTO rules on agriculture. In the view of Switzerland national agricultural policy reforms should allow all Members accept progressively increasing levels of appropriate commitments. It is however understood that instruments which are targeted, least trade distorting and/or compatible with WTO rules and principles may stay in place as long as they have to meet specific NTCs.
2. In their negotiating proposals and subsequent non-papers and interventions many DCs, least-developed countries (LDCs), net food importing developing countries (NFIDCs), small island states, landlocked DCs, single commodity producing DCs and vulnerable economies in transition etc. suggested changes in the current provisions of the Agreement on Agriculture as well as in their commitments to better take into account differences between Members as well as their specific situations and needs. Suggestions were particularly numerous in the fields of food security, rural development, food aid, tariffs and tariff structures including trade preferences, S&D, the Special Agricultural Safeguard and domestic support.
3. In Switzerland�s view the key questions to be addressed in a discussion would be:

1. Should a development box in the Agreement on Agriculture put together all elements important to agricultural trade specific to DCs and particularly LDCs? Presently most such elements are dispersed among several paragraphs in the current Agreement on Agriculture.
2. Should any elements be added or amended in the current provisions specific for DCs and particularly LDCs?
3. Are there elements which could be added or amended in the current provisions specific for DCs, and particularly LDCs, in a way which is promising with regard to the further development of their economies, as well as the reduction of poverty, and/or integration of the economies into the multilateral trading system?
4. Are there provisions in favour of developing countries or proposals which may have had counter-productive effects with regard to the fore-mentioned goals?
5. According to what criteria should a country be allowed to make use of the development box?
6. How do the proponents of a development box see the linkage with other efforts such as a review of special and differential treatment (S&D) provisions and particularly tariff preferences?
7. What is the relationship of temporary exceptions (provisions) specific to DCs and particularly LDCs with the long term objective to of securing a share in the growth of world trade commensurate with the needs of their economic development?
8. May it prove useful to more specifically target measures to the specific situation of individual countries and possibly even for certain regions and categories of producers?
9. What can be the contribution of technical assistance as well as capacity and institution building?

In addressing these issues it is to be noted that parallel work on S&D as a cross-cutting issue is going on in the CTD.

4. In their negotiating proposals and subsequent non-papers and interventions, many DCs and LDCs suggested that development aid as well as their market access and domestic support measures should not be subject to the general disciplines as well as monitoring or at least not when measures focus on low-income and resource-poor farmers. Domestic food production was crucial to development (including improving the balance of payments) and measures targeted to increase domestic food production for domestic consumption were to be exempted from commitments. The following paragraphs reflect Switzerland�s preliminary reactions to some of the suggestions made by developing countries in this context¹.

5. To maintain unchanged the provision Uunder Annex 2, that government food aid programmes, regional assistance schemes and food security buffer stocks are exempt from domestic support reductions: Switzerland supports this proposal DCs in their concern that these provisions be maintained unchanged as long as they measures are strictly targeted to those consumers and producers most in need.
6. Add to Annex 2 categories the budgetary spending on transportation costs within a country to ship staple foodstuffs / food security crops from surplus to deficit production parts of a DC or LDC: Switzerland is of the opinion that such an extension of the green box might be envisaged and supports further discussion on this subject.
7. Price support for staple foodstuffs / food security crops above the current 10% de minimis level of total support: Switzerland can support this proposal as a temporary exception for countries with low bound rates on these products as long as it can be ensured that farming sectors with producers which are able to produce undter world market conditions will not benefit form from this and if "staple foodstuffs / food security crops" can be well defined, so as to exclude cash crops, in particular for export purposes.
8. Credits at concessionary rates for low-income and resource-poor farmers are currently only possible if applied to all producers in a region (Art. 6.2): Switzerland is of the opinion that an extension of such programmes to all low-income and resource-poor farmers of a Member could be grantedcan make sense if a clear definition of this category of producers can be agreed upon and as long as this measure can be monitored effectively.
9. Food aid attached to certain conditionalities: Switzerland supports DCs in proposing that food aid is provided entirely in fully grant form and the amounts provided do not depend on world market prices.

10. Tariff rate increases for staple foodstuffs / food security crops in order to allow governments to raise revenue to spend on development and targeted safety-net programmes: Such a measure would raise several questions on how the procedure under Art. XXVIII GATT should be applied in this context, especially in the light of S&D provisions.
11. Extend the right to introduce the special safeguard (SSG) for staple foodstuffs to all DCs to enable them to address sudden price drops due to a surge in imports: Switzerland believes this to be a feasible proposal for LDCs and for countries whose producers are unable to produce under world market conditions provided that "staple foodstuffs / food security crops" can be well defined.

12. Prohibit all sorts of export subsidisation on commercial exports to DCs: Switzerland shall approach this request in the spirit of the Doha Ministerial Declaration, where Members agreed, without prejudging the outcome of the negotiations, to comprehensive negotiations aimed at reductions of, with a view of phasing out, all forms of export subsidies. Switzerland suggests to discuss modalities of further reductions of all forms of export subsidies with a priority on products exported to DCs and LDCs.

13. A development box could have the advantage of providing an adequate response to the specific situations and challenges in DCs, without a "one-size-fits-all" approach so far adopted in the S&D field. A graduated approach which could take into account the various countries� stage of development as well as other situations such as NFIDCs, landlocked DCs, small island states, single commodity producing DCs and vulnerable economies in transition etc. would, in the Swiss view, be a big step forward. It is understood that a legal definition of the development box would have to be complemented by an illustrative list of measures which could be used by the different categories of Members. One Member may need just one measure while others may need several. Switzerland understands that all possible instruments falling under a development box would need to be targeted and least trade distorting and/or compatible with WTO rules and principles.
14. The success of a possible development box is likely to depend on whether its instruments would be able to effectively target those countries which need them most, particularly the low-income and resource-poor farmers. Members using such measures should be ready to answer questions from other Members for transparency purposes. However, the difficulties of such an exercise are obvious and should not be underestimated. Switzerland is nevertheless prepared to actively and constructively work towards a solution for the serious problems of agricultural producers especially in DCs and LDCs.

1 | This list does not claim to be complete