. /.WORLD TRADE
ORGANIZATIONG/AG/NG/W/40
5 October 2000
(00-4066)
Committee on Agriculture
Special SessionOriginal:  English
THIRD SPECIAL SESSION OF THE COMMITTEE ON AGRICULTURE
28-29 SEPTEMBER 2000
Statement by Australia introducing the Cairns Group proposal on Domestic Support
It gives me pleasure to introduce the second of a series of Cairns Group's negotiating
proposals.  The latest Cairns Group proposal (G/AG/NG/W/35) deals with the issue of domestic
support.
The Uruguay Round committed WTO Members to correct and prevent restrictions and
distortions in world agricultural markets.  But th e record of the past 6 years in achieving these
objectives in the area of domestic support has been disappointing.  Overall support to agriculture has
returned to record levels and distortions to world agriculture from domestic policies remain an
enormous problem.  Let me highlight just a few central elements when we consider problems
associated with domestic support:
. Overall levels of domestic support for agriculture remain far in excess of subsidies available
to other industries.
. The high levels of trade-distorting support are used only by a small group of rich countries.
The largesse of their treasuries and finance ministries are the target for our efforts to reduce
the distortions to world markets caused by expenditure on domestic support.
. Such support encourages inefficient production which competes unfairly with producers in
other countries.  In particular, it depresses prices, reduces market shares and destabilises
international markets for efficient unsubsidised farmers including from developing countries.
. Trade in agricultural products must be based on competition based on price and quality, not
competition between treasuries.
. At the end of the implementation period, and having met their current reduction
commitments, the EU, Japan and the US between them will still be able to provide US$ 110
billion in amber box support.  In addition to these enormous sums are  unlimited blue box
and green box payments.  The EU alone is providing more than ECU 20 billion in blue box
payments:  these payments are highly trade- and production-distorting and yet subject to little,
or no, discipline.
These are the problems we must address a nd the Cairns Group proposal puts forward a
practical, fair and balanced approach for these negotiations based on the objective of eliminating
trade- and production-distorting support.  Key elements of the proposal are:
. A formula approach to deliver major reductions in trade- and production-distorting domestic
support, including AMS and blue box, leading to the elimination of such support and thus the removal
of disparities;G/AG/NG/W/40
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. A substantial downpayment must be made during the first year of the implementation period
(involving, for example, not less than a 50 per cen t initial reduction in trade- and production-distorting
domestic support);
. Commitments must be undertaken on a disaggregated basis to ensure that reductions are
achieved for all agricultural products;
. And we must ensure that "green box" support is truly non-trade-distorting.
The Cairns Group proposal puts forward a general approach to addressing domestic support in
these negotiations but this general approach will be augmented by special and differential treatment
for developing countries.  It is clear that the problems caused to world agricultural markets bydomestic support are essentially caused by developed countries and these must be the focus of our
efforts in these negotiations.
The Cairns Group recognises that developing countries, including least-developed and net
food-importing developing countries have particular concerns including rural development, povertyalleviation and food security concerns.  The Cairns Group is committed to ensuring that S&D
provisions enable developing countries to address their legitimate and varied needs, including
agricultural and rural development, food security, and subsistence and small scale farming for the
development of domestic food production.  The final provisions will need to take into account the
outcome of the negotiations, but S&D outcomes must ensure that developing countries have adequateflexibility to pursue their development needs.
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