. /.WORLD TRADE
ORGANIZATIONG/AG/NG/W/92
21 December 2000
(00-5598)
Committee on Agriculture
Special SessionOriginal:  English/
French
WTO NEGOTIATIONS ON AGRICULTURE - DOMESTIC SUPPORT
Proposal by Canada
Objective
In these negotiations, Canada is seeking a further strengthening of the international rules
governing agricultural trade, the elimination of trade distorting subsidies, and real and substantial
improvements in market access for all agriculture and food products.
In the area of domestic support, Canada is  seeking the maximum possible reduction or
elimination of production and trade distorting support, including support under so called production
limiting or Blue Box programmes;  an overall limit on the amount of domestic support of all types
(green, blue, amber);  a review of the criteria of the green category to ensure that green support does
not distort production  and trade; permanent international recognition that such support should not be
countervailable; and the elimination of those elements of the Peace Clause that restrict Members'rights to pursue dispute settlement in cases where trade-distorting domestic support and export
subsidies cause nullification and impairment of access or disrupt sales in third country or import
markets.
Canada would like to complement the Cairns Group proposal on domestic support
(G/AG/NG/W/35) with two additional ideas.
1. Canada believes that the best way to ensure that overall support levels move in the right
direction is to negotiate an overall limit on support of all types.  Countries would be
encouraged to move towards green programmes, while applying an overall limit on the level
of support to agriculture so as to ensure that the reform programme reduces inequities.
Canada envisages that an overall limit would work together with major reductions in trade-distorting Amber and Blue-Box support, to remove disparities in support levels between
countries, using a harmonizing formula.  In Canada's view, such a formula would be one that
would bring trade-distorting support in the highest-support countries down quickly, starting
from each Member's final bound commitments, lead ing finally to the elimination of trade
distorting support above de minimis  levels.  Obviously a lot of details remain to be worked
out, including parameters of the reduction formula, such as the time period and the degree of
aggregation or disaggregation.  Canada intends to elaborate on the mechanics of an overall
limit, and these other ideas, as the negotiations progress.
2. Canada considers it an important achievement that the Uruguay Round began identifying the
difference between support policies that have distorting impacts and those with no, or at most
minimal, impacts on production or trade.  Canada believes it is reasonable to undertake a
review of the Green Box criteria in light of experience and taking into account the needs of
Members, including developing country Members, to deal with domestic policy issues in
ways that do not distort production or trade.  Canada believes that, if we can successfullyensure that programmes in the green category do not cause material distortions in production,G/AG/NG/W/92
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then it follows logically that they will not cause material injury to producers in importing
countries.  In that case, the current rules of GATT Article VI and the Agreement on Subsidies
and Countervailing Measures would prevent such programmes from being subject to
countervailing duties.  Canada will pursue a clear understanding on the non-countervailability
of green programmes as these negotiations progress.
Proposal
Canada proposes that the agricultural negotiations pursue and develop an overall limit on the
amount of support of all types (green, blue and amber) provided to agriculture, so as to ensure that the
reform programme reduces inequities.
Canada proposes that support meeting Annex 2 criteria should be permanently recognised as
not countervailable.
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