3. Market access in July 2021 draft agriculture negotiations text

The draft aims for decisions at the November 30–December 3, 2021 ministerial conference (“MC12”)

See also
New agriculture draft suggests nervousness in divided WTO

Previous: 2. domestic support | next: 4. export competition/subsidies

By Peter Ungphakorn
POSTED AUGUST 3, 2021 | UPDATED AUGUST 3, 2021

Note: the official July 29, 2021 draft text for the WTO agriculture negotiations is here with a minor correction here. Links to all sections are here.

This page combines the two sections of the text on market access, the chair’s assessment, and her draft

3          MARKET ACCESS

3.1.          Regarding market access, I continue to believe that if elements of this pillar were to be included in an MC12 agriculture package, they would contribute to fulfilling Members’ desire of having a balanced outcome at MC12. In terms of content, I broadly see two specific components of an outcome on market access, namely a decision on some specific transparency-inspired elements, and a work programme on market access negotiations post-MC12. The issue of applied tariff transparency and the treatment of shipments en route has dominated the transparency discussions in the Market Access pillar. The joint proposal in JOB/AG/212 is the basis of my draft text on this issue. This proposal emanated from extensive discussions between the proponents and non- proponents, including during the Market Access Facilitator-led process. Its in-built flexibilities, including the possibility of agreeing on the decision on a best endeavour basis, has been welcomed by some Members. The recent discussions on the proposal in the CoA-SS confirmed that additional work might be required to bridge the remaining gaps in Members’ positions. I also attempted to include some suggestions in my draft in light of Members’ reactions to the proposal.

3.2.         On a post-MC12 Market Access work programme, the text incorporates some elements from the joint proposal in JOB/AG/198. Several Members have indicated a preference for a comprehensive approach and this is reflected in my draft. In addition, the text refers to the issue of non-ad valorem tariffs from a narrow perspective of facilitating a conversation among Members on market access modalities, as the absence of data on ad valorem equivalents (AVEs) could hinder an informed discussion on this issue. Mindful of some Members’ view that tariff simplification should not be seen purely through the lens of transparency, I wish to emphasize that the reference to AVEs in the text is without prejudice to Members’ eventual decision on the timing and modalities of modifying or simplifying the nature of their tariff commitments. Several Members, especially developing Members, have raised the importance of addressing non-tariff barriers (NTBs). While being cognizant of other existing agreements and Committees that routinely deal with such matters, I have suggested that Members explore possible options to address NTBs within the agriculture market access negotiations. Finally, the text acknowledges the linkage which is often invoked by some Members between market access and other pillars, particularly the Domestic Support pillar.


Compare with newer November 2021 text

MARKET ACCESS
DRAFT MINISTERIAL DECISION


GUIDELINES TO ENCHANCE TRANSPARENCY IN APPLIED TARIFF RATE CHANGES


The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement establishing the World Trade Organization (the “WTO Agreement”);

Recognizing that transparency and a predictable trading environment are fundamental elements of the multilateral trading system;

Underscoring the need for Members to take steps to ensure international trade remains predictable;

Desiring to enhance transparency and predictability in the application of Most Favoured Nation (MFN) applied tariff rates without causing undue burden on Members’ customs administration;

Understanding that unexpected increases in MFN applied tariff rates by Members can create uncertainty for traders, as well as additional costs, and can be a significant disincentive to trade;

Reaffirming Members rights to adjust MFN applied tariff rates consistent with their respective Goods Market Access Schedule.

Decides as follows:

Scope:

1.             This Decision applies to changes in MFN applied tariffs in respect of both agricultural and non-agricultural goods.

Best Practices in the application of changes1 to MFN applied tariff rates:

             1 A Member may decide not to apply this Decision in cases where MFN applied tariffs are lowered.

2.            In order to promote predictability in the application of changes to MFN applied tariff rates, whilst recognizing that Members have different domestic frameworks and customs administration practices, Members agree that the options presented in Annex 1 to this Decision represent best practices in the application of such changes.

3.             Members also agree to examine options to inform the WTO as soon as practicable of MFN applied tariff changes as part of broader efforts to improve transparency in the WTO.

Application of Best Practices:

4.            Recognizing that Members have different domestic frameworks and customs administration practices, Members [shall][should] apply at least one of the best practices listed in Annex 1 of this Decision.

5.            Least Developed Country (LDC) Members in a position to do so should apply [at least] one of the best practices listed in Annex 1 of this Decision.

Ongoing Development of Best Practices:

6.            Members recognize that additional best practices may be developed to improve predictability and transparency when an MFN applied tariff rate changes.

7.            To this end, Members are encouraged to present additional best practices to the Committee on Market Access (CMA), which will be responsible for an annual review of this Decision. If no objections are raised in the annual review, the best practice(s) shall be added to the list in Annex 1 to this Decision.

Notification:

8.            Members [shall] [are encouraged to] notify to the CMA the best practice(s) they use, outlined in Annex 1 to this Decision, no later than [12] [6] months after the adoption of this Decision. Members [shall] [should] notify to the CMA of subsequent changes to their practices.

9.            If a Member is not in a position to implement one of the best practices presented in Annex 1 to this Decision, the Member [shall][should] notify to the CMA its current practice in this matter.

10.          Members [should][shall] use the template in Annex 2 to this Decision to notify their practice(s) to the WTO.2

          2 Information on notified practices submitted pursuant to this Decision is for transparency purposes and does not prejudge its consistency or otherwise with provisions of relevant WTO Agreements.

11.           The WTO Secretariat shall maintain a list of practices notified by Members.

12.          Members facing resource constraints in meeting this notification shall, upon request from another Member, provide information on the current practice(s) used by them.

Technical Assistance:

13.           Upon request, the WTO Secretariat shall provide technical assistance to [developing] Members who encounter challenges in applying a best practice presented in Annex 1 to this Decision. In addition, [developing] Members and LDCs are encouraged to reach out to Members to discuss how to apply the best practice(s) or develop a best practice that fits their domestic system.


ANNEX 1. BEST PRACTICES IN THE APPLICATION OF CHANGES TO MFN APPLIED TARIFF RATES

1.             Provide an approach for shipments or consignments en route1 to be eligible to benefit from the tariff treatment in effect at the time such shipments or consignments begin their final journey from the country of exportation.

            1 The Oxford English Dictionary defines en route as “On the way, in the course of the journey”. It can be inferred that the product will soon be exported or has been exported to a destination market, and the exporter may thus not account for the impact of the applied tariff changes on the shipment in question. A Member may have a more precise definition or may provide guidance on its application.

2.            Provide in advance clear guidance on how a tariff will change in response to defined factors, such as changes in market prices or indexation against inflation.

3.             Provide the ability to pre-pay customs duties on shipments, according to the domestic laws of the importing Member, so that the importer pays the tariff in effect at the time the goods begin their final journey from the country of exportation.

4.            Provide a public notice prior to coming into force of a change in an applied tariff rate.2

            2 For example, this could be XX days prior notice. This option includes such actions as equivalent to public notice (e.g., appropriate disclosure of provisional information to the public on the amendment of applied tariff) as long as the compliance with Article X:2 of the GATT 1994 is secured.


ANNEX 2. TEMPLATE TO [INFORM/NOTIFY] CURRENT PRACTICE IN THE APPLICATION OF MFN APPLIED TARIFF RATE CHANGES

Member: XYZ

Date: Day/Month/Year

1.             Description of Current Practice when an applied MFN tariff rate changes (including relevant weblinks, if applicable):





2.            Corresponding Best Practice from Annex 1 (check practice applicable)1

               a. _______               

               b. _______

               c. _______

               d. _______

               1 This template would be updated as new best practices are agreed.



ELEMENTS FOR THE CONTINUATION OF WORK POST-MC12
MARKET ACCESS


1.             Members agree to reinvigorate the negotiations on agricultural market access with a view to reducing the level of protection and creating meaningful market access opportunities. Members commit to achieving enhanced market access outcomes through incremental steps.

2.            Negotiations shall be based on the following guiding principles:

               i.              Tariff reductions will be made from bound rates with deeper cuts in higher tariffs in order to achieve substantial progressive reduction in tariff levels. Each Member (other than LDCs) will make a contribution based on the negotiating modalities and parameters to be agreed.

               ii.            Negotiating modalities shall take into account the different elements of the Market Access pillar and across other pillars, particularly the Domestic Support pillar.

               iii.           The treatment of non-tariff barriers within the framework of the agriculture market access negotiations shall be explored.

               iv.           Account shall be taken of special and differential treatment for developing country Members and non-trade concerns of Members.

3.             To pave the way for informed discussions on tariff reduction modalities, Members agree to notify ad valorem equivalents (AVEs) of non-ad valorem tariffs in their Schedules with an explanation of data and calculations used within [x] months after MC12.

4.            Members commit to enhance transparency and monitoring in the area of agricultural market access [, including by streamlining as necessary the existing notification requirements and formats under G/AG/2]. Members also agree to making all efforts to comply with current notification obligations under this pillar.

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Updates: None so far
Image credit: Background aerial shot of farmland | Julian Ebert, Unsplash, CCO

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