FTAA - Free Trade Area of the Americas

Draft Agreement

Chapter on Agriculture

SECTION ONE: GENERAL PROVISIONS

Article 1: [Scope and Coverage] [Scope of application ]

[ 1.1 With the exception of the Section Five (Sanitary and Phytosanitary Measures),] [This [Chapter] [Agreement] applies to] [The provisions of this Agreement apply to] [ measures and practices affecting trade in ] the [agricultural] products [listed] [that are included] in [its] Annex 1 to [this Chapter] [the WTO Agreement on Agriculture] [hereinafter referred to as agricultural products] [with any subsequent changes agreed in the WTO to be automatically effective for this Agreement. (Annex 1 of the WTO Agreement on Agriculture is reproduced in Annex 1 of this Chapter for reference.)] [The provisions of Section Five apply to SPS measures as defined in the WTO Agreement on the Application of Sanitary and Phytosanitary Measures.]

[1.1. The agricultural provisions of this Chapter apply to the Agricultural products listed in Annex 1 to the WTO Agreement on Agriculture, with any subsequent changes agreed in the WTO to be automatically effective for this Agreement.]

[ Article 2.a.: Multilateral Disciplines ]

[Trade disciplines resulting from multilateral negotiations on agriculture shall automatically be incorporated in this Chapter.]

[Article 2.b: Relation to Other Chapters of [this Agreement] [the FTAA] ]

[2.1. In the event of any [inconsistency] [contradiction] [between] the provisions of this Chapter and those of any other Chapter of this Agreement, [the provisions of this Chapter shall prevail to the extent of such inconsistency.]]

[Article 2.c.: Smaller Economies

2.1. The concerns of smaller economies are to be fully considered in the provisions and application of the Articles of this Chapter]

SECTION TWO: [MARKET ACCESS] [TARIFFS AND NON-TARIFF MEASURES]

[ Article 3: National Treatment ]

[3.1. Each FTAA member country, shall accord national treatment to the agricultural products of other member countries pursuant to Article III of the 1994 General Agreement on Tariffs and Trade (GATT 1994). In accordance, the provisions of Article II of GATT 1994 and its interpretative notes are incorporated into this [Agreement] [Chapter] and are an integral part thereof. ] 

[ Article 4: Tariffs ]

[ 4.1. Relation to [Other] [Subregional Trade] Agreements ]

[ The preferences applied to trade between the Parties, together with the tariff reduction or elimination programs agreed to in bilateral or subregional agreements, shall remain in effect so long as the preferences agreed to under those agreements are greater than those resulting from the Tariff [Liberalization] [Tariff Elimination] Program established in the present section. ] 

[ 4.2. Tariff Elimination]

[4.2. The Parties agree to eliminate tariffs from trade between them in originating goods, following the Tariff Liberalization Program established in Annex .... The percentage preferential margins shall apply to the tariffs in effect at the time the goods are shipped to the market for consumption.

The preferential margin applicable to originating goods as a result of new tariff openings, shall not be lower than those applicable to the original tariff item. ]

[4.2.1. The base tariff for agriculture products of each of the Parties are specified in the country schedules annexed to this [Chapter] [Agreement] and are an integral part of this Chapter. ]

[ 4.2.2. As provided in the in the Annex to this Chapter, the parties shall apply, for trade among the Parties, the tariffs contained in country schedules.]

[ (i) Except as otherwise provided in this Agreement, no Party may increase any existing MFN applied tariff, or adopt any new tariff or any other duties and charges (to be defined) in connection with importation, on an [originating] agricultural product. ]

[ (ii) Except as otherwise provided [in this Agreement,] each Party shall progressively eliminate the tariffs and any other duties or charges (to be defined) in connection with importation applicable to [substantially all] originating agricultural products in accordance with the country schedules attached to this Agreement. ]

[(iii) During the tariff elimination process, the Parties agree to apply to originating goods traded among them the lesser of either the tariff established under the tariff reduction program, or the applicable tariff determined in accordance with Article I of GATT 1994.]

[ (iv) The Parties may maintain or increase a tariff when this is permitted pursuant to a dispute settlement provision of the WTO Agreement, or any other agreement negotiated in accordance with the WTO.]

[Exceptions]

[4.2.3. Products that create non-seasonal structural distortions to the pattern of consumption of the Parties shall not benefit from the Tariff Reduction Program. ]

[4.2.3.1. The Parties do not acquire tariff commitments on products included in Annex ...]

[4.2.3.2. The Parties agree to condition the initiation and fulfillment of the Tariff Reduction Program on Parties meeting their commitments regarding the elimination of export subsidies and other measures and practices that distort agricultural production and trade, pursuant to the provisions contained in the respective sections of this Chapter.] 

[ 4.3. Acceleration of Tariff Elimination ]

[4.3. On the request of any Party, consultations shall be carried out to examine the possibility of accelerating the elimination of tariffs for originating agricultural products set out in country schedules. An agreement between two or more Parties to accelerate the elimination of tariffs shall supersede any tariff rate or staging category set out in the country schedules when approved by each Party in accordance with its applicable legal procedures and shall apply to imports from any FTAA Party. ]

[4.3.1. Two or more Parties may agree to accelerate the Tariff Liberalization Program set forth in this Article for trade between them.]

[ 4.4. Price bands and margins ]

[ 4.4. By the time tariff elimination is initiated, the price bands or margins for intra-hemispheric trade in agricultural products shall have been eliminated.] [The Parties shall not apply price bands or margins and other price stabilization mechanisms for agricultural products in their reciprocal trade.]

[ The Parties may apply price band systems or other mechanisms for stabilization of prices on agricultural products to trade between themselves. ] 

[ 4.5. Export Taxes and other Levies ]

[ 4.5.1. [Except as otherwise provided for in Annex XX] No Party shall adopt or maintain any tax, duty or other charge on the exportation of an agricultural product to the territory of another Party, unless such taxes or duties are applied on such goods when they are used for domestic consumption and when they are exported to the territory of [other Parties.] ]

[ 4.5.1. The Parties agree not to limit exports of agricultural products through new export levies and other measures of an equivalent effect, as well as to pursue the complete elimination of any export levy affecting products of agriculture origin.]

[4.5.2. Export levy means the customs duties and any other tax of equivalent effect, whether fiscal, monetary, exchange- rate-related or of any nature affecting exports. Similar fees and surcharges, where equivalent to the cost of the services rendered, are not included in this definition. ]

[4.6 When a Party decides unilaterally reduce a tariff in a temporary or definitive manner, the Party shall apply the tariff preference granted at that reduced tariff level. In the case that the Party increases tariffs again, the Party may only do it up to the level that is permitted according to the schedules of tariff elimination.]

[Article_: Other Measures Affecting the Applied Tariff

x.1. The Parties may apply to trade between them price band systems or other mechanisms for stabilization of prices on agricultural products. ]

[Article 5: Non-Tariff Measures]

[ 5.1. Except as otherwise provided for in this Agreement, no Party may adopt or maintain any prohibition, restriction, or licensing requirement on the importation of any originating agricultural product of another Party or on the exportation of any agricultural product destined for the territory of another Party, except in accordance with provisions of World Trade Organization agreements which specifically allow such measures. ]

[5.1. Non-tariff barriers, measures that affect the applied tariff and measures having an equivalent effect to non-tariff barriers ]

[ 5.1.1. Before the beginning of tariff negotiations, the Parties shall have the right to counter-notify those measures that affect the applied tariff as well as those measures from other Parties which are considered to be non-tariff barriers or which are considered to have an equivalent effect to non-tariff barriers, including sanitary and phytosanitary measures and technical barriers to trade which are understood to be a discriminatory or unjustifiable discrimination among the Parties or a hidden barrier to international trade, given they are not consistent with the principles and obligations established multilaterally. ]

[ 5.1.2. Mechanisms to deal those counter-notifications ]

[ 5.1.2. The manner to deal with such measures shall be defined during the negotiating process. Once the FTAA has been established, there would be a mechanism of counter-notifications of new measures of this type, as well as procedures on how to deal with them.]

[ Article 6: World Trade Organization (WTO) Negotiations^*]

[6.1. Parties shall [cooperate] [participate] in the multilateral negotiations on agriculture being held in accordance with Article 20 of the WTO Agreement on Agriculture with the objective of achieving the maximum possible improvement in market access opportunities for all agricultural products.]

[ 6.2. [In consistency with this Article,] the trade disciplines produced in the [multilateral negotiations on agriculture] [under the framework of the WTO] shall be [automatically] incorporated into this Chapter [ to the extent that they help to improve the market access of agricultural projects of the countries in the hemisphere. ]]

[6.2. Market access improvements and improved trade rules and disciplines resulting from the WTO multilateral negotiations on agriculture shall automatically apply for trade between FTAA Parties.]

[Article 7: Special [agricultural] Safeguard Provisions [SAS] ]

[7.1. [Considering that the agricultural sector should become fully integrated into the general commitments of the FTAA] [this Agreement] [T][t]he Parties agree to [eliminate] [not to apply] special safeguard measures [for agricultural products] [once the tariff elimination process has been initiated] [may apply an automatic SAS while this Agreement remains in force to imports of a product originating in another Party covered in Annex I to the WTO Agreement on Agriculture which at the date of its application is incorporated in the Tariff Liberalization Program] [Consequently, the Parties may not apply any [special]] automatic safeguard measure or any such measure not requiring evidence of injury to domestic industry. [ Nonetheless, each Party maintains its rights and obligations [with respect] under Article XIX of the 1994 GATT [and] the WTO Agreement on Safeguards [and] the WTO Agreement [on Agriculture]] [The agricultural products covered in this Chapter shall be subject to general FTAA disciplines on safeguards.] ]

[ 7.1. [Only the countries with small economies in the hemisphere shall be able to apply special safeguard provisions for agricultural products,] [ The conditions of application and the Parties to which the SAS may be applied are stipulated in ] [through methods yet to be defined in Annex x.]]

SECTION THREE: EXPORT [SUBSIDIES] 

Article 8: [Definitions] [Identification of Export Subsidies¹]

[8.1. “Export subsidies” [ on agricultural products ] [ refers to ] [ means ] [ those measures and practices] subsidies contingent [de jure or de facto] [on] [export performance] [as the unique condition or among various conditions], including but not limited to the export subsidies listed under Article [9] [ 9.1 ] of the WTO Agreement on Agriculture [and in [ considering the definition of subsidy set out in] [Article 1 and those definitions cited as examples in ]] [Article 1 and in] Annex I of the WTO⁺ Agreement on Subsidies and Countervailing Measures, and [with any subsequent changes agreed in the WTO to be automatically effective for this Agreement] [and subsidies on the granting of export credits, [export credits] guarantees or insurance programs^*. ]] [ and international food aid unless such aid meets the conditions stipulated in Article 10.4 of the WTO Agreement on Agriculture.]

[8.1. Export subsidies means those subsidies as defined in Article 1.(e) of the WTO Agreement on Agriculture ]

[8.1. Export subsidies means subsidies contingent on export performance as defined in Article 1e) of the WTO Agreement on Agriculture, with any subsequent changes agreed in the WTO to be automatically effective for this Agreement.]

[8.2. However, export credits, export credit guarantees or insurance programs, when provided consistently with WTO rights and obligations, [ and international food aid ] [and in consistency with the provisions of annexes 12.2.1, 12.2.2,12.2.2.1 and 12.2.2.2] shall not be considered to constitute export subsidies for purposes of this Agreement. ]

Article 9: Elimination of Export Subsidies

[Elimination of Export Subsidies for Trade in Agricultural Products in the FTAA]

[9.1. [ The Parties recognize that export subsidies for agricultural products prejudice trade in the Hemisphere. Therefore,] [ As of the date] [on which this Agreement enters into force, no Party shall maintain or introduce] [of] [implementation of this Agreement] [the beginning of the tariff reduction process] [entry into force] [no Party shall maintain or introduce] [ [T][t]he Parties agree to eliminate and prohibit the reintroduction in any form of] [for trade among them] export subsidies for agricultural products exported to other Parties, [ except as provided for under the provisions of this [Article] ] [ defined in the previous article, and to not apply new measures and practices having a similar effect or that involve circumvention of the established commitment.]

[9.1.1. Notwithstanding the general obligation not to grant export subsidies on trade in the hemisphere, a party has the right to resort to export subsidies an any agricultural product to the extent and for such time as may be necessary to offset an export subsidy granted by a non-party affecting the party’s exports of that product in the hemisphere. ]

[9.2 In addition, the Parties waive their GATT 1994 rights in reciprocal trade regarding the use of export subsidies and such rights that may stem from multilateral negotiations on agriculture within the framework of the WTO. ]

[9.2. notwithstanding the provisions in the previous paragraph, the countries with small economies shall eliminate export subsidies within a period of x years following the entry into force of the FTAA.]

[Multilateral Elimination of Export Subsidies]

[9.3. The Parties [agree to] [ share the objective of the multilateral elimination of export subsidies for agricultural products and shall ] [work toward] a[n] [multilateral] agreement in the WTO [ negotiations on agriculture] to eliminate export subsidies for agricultural products [ as quickly as possible ] and to prevent their reintroduction in any form. [Accordingly,] [the Parties agree to cooperate to:] [the Parties [also] agree to:] ]

[ (a) [ Prevent any WTO member from using ] [ work toward agreements with non-Parties not to use ] export subsidies for exports of agricultural products to any [ FTAA ] Party from the date of implementation of this Agreement [ until full implementation of the comprehensive multilateral elimination of export subsidies ];]

[ (b) [work toward reaching an] [ reach ] agreement on rules to ensure that government-funded export credit and export credit guarantee programs, export market promotion and development activities, certain types of food aid, or other forms of export assistance do not become a substitute for export subsidies;]

[ c) eliminate those elements of Article 13 of the WTO Agreement on Agriculture (the “peace clause”) that restrict Members’ rights to pursue WTO dispute settlement in cases where export subsidies cause nullification or impairment of access or disrupt sales in third country or import markets.]

[9.3. The Parties agree to work toward a multilateral agreement in the WTO negotiations on agriculture to:

(a) eliminate export subsidies for agricultural products as quickly as possible and to prevent their reintroduction in any form

(b) Prevent any non-FTAA WTO member from using export subsidies for exports of agricultural products to any FTAA Party from the date of implementation of this Agreement until full implementation of the comprehensive multilateral elimination of export subsidies under Article 9.3.(a); and

(c) Reach agreement on rules to ensure that government-funded export credit and export credit guarantee programs, export market promotion and development activities, certain types of food aid, or other forms of export assistance do not become a substitute for export subsidies.]

[9.4. Other Provisions] [Non-compliance]

[9.4.1. Where a Party applies export subsidies to trade in any product between and among the Parties, the other Parties shall cancel the preferences granted on the same product until the Party that is applying such subsidies eliminates them² [except the countries with small economies.] ]

[9.4.2. Where a Party does not fulfill the commitments established in Articles ... and ..., the Parties concerned may apply to agricultural products the provisions of this Agreement on Subsidies and Countervailing Measures to counteract such practices.]

[9.5. Special and Differential Treatment]

[9.5.1. Without prejudice to this Article, member countries identified in Annex XX (developing countries) may phase out their subsidies in a period of XX years from the date of entry into force of the FTAA. ]

[Article 10: Treatment of Imports from non-Parties benefiting from Export [Subsidies]]

[10.1. Where [ an exporting Party considers that ] a non-Party is exporting an agricultural product to the territory of another Party with the benefit of export subsidies, the importing Party shall, on written request of [an] [the] exporting Party, consult with the exporting Party with a view to [ agreeing on specific measures ] [ [the importing Parties’ application of] enforce countervailing duties pursuant to Article 13.c)i of the WTO’s Agreement on Agriculture and in accordance with the provisions set forth in Part V of the WTO Agreement on Subsidies and Countervailing Measures, when possible; or anti-dumping duties to the benefit of a third country under the terms of Article 14 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ] [ For the treatment of subsidized imports of agricultural products not originating in Parties ] [ apply relevant WTO provisions ] ] that the importing Party [shall] [may] adopt to counter the effect of such subsidized imports.] 

[10.2. If the importing Party [does not implement such agreed measures,] [would not maintain the consultations or begin for the application of countervailing or anti-dumping duties mentioned in paragraph 10.1 above] the exporting Party [ may use an export subsidy for its exports of the same agricultural product to the importing Party until such time as the non-Party ceases to export that agricultural product to the importing Party with the benefit of export subsidies ] [ whose exports were displaced by the subsidized [exports] [operation] shall be entitled to cancel trade preferences for products from the Party importing the subsidized product in an amount equal to the affected trade or to apply other countervailing measures as agreed on within the scope of the FTAA. ]]

[10.2. If the importing Party adopts the agreed-upon measures, the exporting Party shall refrain from applying any export subsidy to exports of such product to the territory of the importing Party. ]

[10.1. In the event that the commitment by non FTAA WTO Members under Article 9.3.b) of this Chapter has not yet been implemented as of the date of implementation of this Agreement and if a non Party is exporting an agricultural product to another Party with the benefit of export subsidies, the importing Party shall, on request of an exporting Party, consult with the exporting Party with a view to agreeing on specific measures that the importing Party may adopt to counteract the effect of the subsidized imports. If the importing Party does not implement such agreed measures, the exporting Party may utilize an export subsidy for its exports of the same agricultural product to the importing Party until such time as the non Party ceases to export that agricultural product to the importing Party with the benefit of export subsidies.

[10.2. If an exporting Party introduces an export subsidy in accordance with this Article, the importing Party may increase the rate of duty on such imports from the exporting Party up to the lesser of the rates being applied to the imports from the non Party or the applied most-favoured-nation tariff at that time.]

[10.3. If an exporting Party introduces an export subsidy in accordance with the provisions of this Article, the importing Party may increase the rate of duty on such imports from the exporting Party up to the [ lesser ] [ greater ] of the rates being applied to the imports from the non-Party or the applied most-favoured-nation tariff in effect at that time. ] 

[10.4. An exporting Party shall deliver written notice to the importing Party and to other Parties who are exporters of the product concerned at least seven days prior to adopting an export subsidy measure on an agricultural product exported to the territory of another Party. The exporting Party shall consult with the importing Party within 72 hours of receipt of the importing Party’s written request with a view to minimizing any adverse impact on the market of the importing Party for that product. The importing Party shall, when requesting consultations with the exporting Party, at the same time, deliver written notice to other exporting Parties of the request. Another exporting Party may request to participate in such consultations. ] 

[Article 11: Treatment of Export Subsidies by Parties to non-Party markets]

[11.1. WTO provisions shall apply to exports of agricultural products subsidized by the Parties intended for non-Party markets. ]

[11.1. Pending the full implementation of a multilateral elimination of export subsidies, Parties agree to cooperate in order to prevent adverse effects in the use of export subsidies when competing with other Parties in non-Party markets; in the event that a Party may be suffering an adverse effect in a non-Party market as a result of an export subsidy used by another Party, at the request of the affected Party, consultations shall be held with the objective of reaching an agreement on measures that would alleviate such adverse effect. ] 

[11.1. From the date of implementation of this agreement until full implementation of the comprehensive multilateral elimination of export subsidies under Article 9.3.a), if Parties utilize export subsidies for exports of agricultural products to Non-Parties, Parties agree to take into account the interests of other Parties and endeavour to minimize any adverse effect on exports from other Parties. If a Party is suffering an adverse effect in a Non-Party market because of an export subsidy by another Party, the Party using the export subsidy agrees to consult on request with the adversely affected Party with the objective of reaching agreement to alleviate the adverse effect. ]

[11.1. Parties agree that the funds no longer used to subsidize exports of agricultural goods to other Party markets shall not be used to subsidize exports to non-Party markets.]

[11.1.1. For the purposes [of this Article] [of what is provided for in paragraph 11.1] Parties shall deduct from the base level amounts of export subsidies declared/consolidated under the WTO Agreement on Agriculture those intended to other Party markets in the same period. ]

[11.1.2. Parties shall give notice regarding their export subsidy programs that are to be eliminated, along with the annual amounts and values by destination of those subsidies corresponding to 1995 no later than six months prior to the end of negotiations. ]

[11.1.3. When a Party identifies that, in a given year, another Party exported to non-Parties an agricultural product with subsidies in value or amounts higher than those indicated by the procedures [in this Article] [in paragraphs 11.1 and 11.1.1] it shall request the subsidizing exporting Party, in writing, for consultations to ensure compliance [with the terms of the provisions in this Article.] [in paragraph 11.1] In the event that a Party was displaced in a non-Party market by a Party not complying with the provisions [in this Article] [in paragraph 11.1], the affected Party shall have the right to request compensation and the subsidizing exporting Party shall be obliged to provide such compensation.]

[11.1.4. In the event that the subsidizing exporting Party repeats non-compliance with the commitments under this Article, any affected Party may cancel commercial preferences for products from that exporting Party in an amount equal to the affected trade or may apply countervailing measures as agreed upon within the scope of this Agreement.]

[Article 12: Measures and Practices Having an Equivalent Effect to Agricultural Export Subsidies ]

[12.1. The Parties shall not apply any measures and practices in a manner that results in, or which threatens to lead to, the circumvention of [the elimination of] [disciplines relatives to] export subsidies in trade in agricultural products among the Parties [as established under Article 9]; nor shall non-commercial transactions be used to circumvent such commitments [except for small economies.]]

[12.2. In accordance with Article 8.1, the Parties agree to comply with the conditions and disciplines for the provision of export credits [and food aid] for agricultural products [as provided] in [Annex 12.2.1 (Export Credits)] [and in Annexes 12.2.2, 12.2.2.1, and 12.2.2.2 (Food Aid)] of this Agreement. ] 

SECTION FOUR: OTHER MEASURES AND PRACTICES THAT DISTORT TRADE [AND PRODUCTION] IN AGRICULTURAL PRODUCTS

[Article 13: Domestic Support Measures]

[13.1. The Parties recognize that domestic support measures [can be of crucial importance to their agricultural sectors but may also [at the same time]] have distorting effects on the production and trade of agricultural products.]

[13.1.1. Consequently, the Parties agree that their domestic support measures shall comply with the provisions of this Article]

[13.1.1. The parties also recognize that domestic support reduction commitments can only be achieved in multilateral negotiations. Accordingly, the parties agree to work toward an agreement in the WTO to substantially reduce and more tightly discipline trade-distorting domestic support. ]

[General Disciplines and Commitments on Domestic Support ]

[13.2. The Parties agree to [ cooperate in subsequent ] [ work toward an agreement ] WTO negotiations on agriculture [ to define further disciplines and commitments on domestic support measures] [ to achieve:]

[1) the [maximum possible reduction or] elimination of production and trade-distorting domestic support, including support under “production limiting” or “blue box” programs [for the countries that are not small economies ]]

[2) an overall limit [or elimination] on the amount of domestic support of all types (green, blue and amber), ]

[3)] [ the elimination of or ] a review of the criteria for the “green [ box” ] category to ensure that green support does not distort production and trade, [and] [and [ permanent international recognition] [agreement] that such support [“green box” support] should not be countervailable,] and]

[4) agreement that “green box” support should not be countervailable.]

[Article 13.x.: Identification of Other Measures And Practices That Distort Trade [And Production] In Agricultural Products

13.x. For the purposes of this Agreement, other measures and practices that distort trade in and production of agricultural products, are defined as any other measure or practice other than the following, provided that such measures meet the requirements set out in subparagraphs “a” and “b” of number 1 of Annex 2 of the WTO Agreement on Agriculture.

i) General Services (Number 2 of Annex 2 of the WTO Agreement on Agriculture)

ii) Domestic Food Aid (Number 4 of Annex 2 of the WTO Agreement on Agriculture)

iii) Payments (made either directly or by way of government financial participation in crop insurance schemes) for relief from natural disasters (Number 8 of Annex 2 of the WTO Agreement on Agriculture)]

[Article_: [Elimination of] other measures and practices that distort trade and production of agriculture products]

[13.2. As of the date of entry into force of this Agreement, the Parties agree to eliminate measures and practices that distort agricultural production and trade, [as defined in Article] [ including ] [ with the exception of [Article 6.2 and Annex 2] [Annex 2(2), 2(4), 2(8)] of the WTO Agreement on Agriculture] insofar as they distort trade of agricultural products in their reciprocal trade. ] [ Accordingly, the Parties agree on the following disciplines and commitments concerning domestic support measures:]

[13.2. Upon entry into force of this agreement, when the countries that are not small economies decide to support their agricultural producers, they shall ensure that such measures are in conformity with annex 13.2.4.1]

[ 13.2.1. Definitions ]

[ 13.2.1.1 Domestic support means any [policy or measure] [subsidy that is applied to the agricultural sector and is not subject to export measures ] [policy or measure that affects decisions to produce, applied by a Party, to sustain the prices of agricultural products, increase the revenues of farmers, and/or improve production and/or marketing conditions.]]

[13.2.2.1. Aggregate Measurement of Support (AMS) means the annual level of support, expressed in monetary terms, provided for an agricultural product in favor of the producers of agricultural products, or of non-product-specific support provided in favor of agricultural producers in general, other than support provided under programs that may qualify as exempt from reduction under the provisions [of this Article and its Annexes] [in paragraphs 13.2.4. and Annex 13.2.4.1.] 

[13.2.2.2. Current Total Aggregate Measurement of Support means the support effectively accorded during any year of the implementation period.]

[13.2.2.3. Implementation period means the period beginning with the year in which the tariff reduction process begins until the year in which a 0% tariff level is achieved.]

[13.2.3. Commitments on Domestic Support]

[13.2.3.1. The FTAA member countries agree to not apply domestic support measures in agriculture that are not in conformity with the provisions [of this Section.] [in paragraphs 13.2.4 and Annex 13.2.3.1]]

[13.2.3.2. Taking into account the objective of the negotiating mandate of the FTAA regarding the establishment of disciplines on measures and practices that distort the trade in agricultural products in the hemisphere, the FTAA member countries³ that have bound commitments for reducing total AMS in the WTO must reduce their total AMS until it is completely eliminated by the end of the implementation period. This implies that by that time any product-specific and non-product-specific AMS shall not exceed the “de minimis” levels established in [this Article.] [paragraph 13.2.4.4.]]

[13.2.3.3. The elimination of the Total AMS referred to above shall be made on the basis established in [this Article] [paragraph 13.2.3.4] by means of a reduction in the amounts of the Current Total AMS using the linear formula and automatically in the period of implementation, in accordance with the timetable for tariff reduction provided in the [Chapter on Market Access for Agricultural Products.] [contained in the countries’schedules which are mentioned in paragraph 4.2.2 of Section 2 “Market Access” of this Chapter.]]

[13.2.3.4. The basis on which the timetable for reducing the Total AMS shall be applied shall be the lesser of the amounts resulting from the following calculations:

a) the mean of the Current Total AMS for the years (J,J,J), reduced by X%; and 

b) The Total AMS bound under the WTO, for the year 2000 by developed countries, and for the year 2004 by developing countries, both reduced by 50%. ]

[13.2.4. Exempt Measures]

[13.2.4.1. Domestic support measures exempted from reduction commitments must satisfy the basic requirement of having minimal or no trade distorting or production effects. Thus, all measures that are to be exempted shall meet the following criteria:

a) the support in question shall be provided by a government program financed with public funds (including foregone fiscal revenues) that do not, as a consequence, imply transfers to consumers, and

b) the support in question shall not have the effect of providing price support to producers and also the criteria and terms of specific policies set out in [Annex 13.2.4.1] to this Article. ]

[13.2.4.2. Direct or indirect government support measures to stimulate agricultural and rural development are an integral part of developing countries’ development programs. Subsidies for investments that are generally available for agriculture in FTAA developing member countries and subsidies for agricultural inputs that are generally available for low-income or limited-income producers in developing member countries shall be exempted from the reduction commitments of domestic support that would normally apply to such measures. All domestic support that satisfies the criteria set out in this paragraph shall be exempted of reduction commitments.]

[13.2.4.3. A Party shall be considered to have complied with its commitments to reduce domestic support in every year in which its domestic support for agricultural producers, expressed in terms of Current Total AMS, if it does not exceed the corresponding level of annual or final [bound] [agreed] commitment, calculated in accordance with the contents of [Annex 13.2.4.3 (illustrative list of Parties´ domestic support commitments).]]

[13.2.4.4. No FTAA member country shall be required to include the calculation of the Current Total AMS, nor to reduce or eliminate:

i) the domestic support granted to specific products that it would otherwise be required to include in the calculation of its Current AMS, when such support does not exceed 5% of the total value of the output of an agricultural product during the corresponding year; and

ii) the non-product-specific domestic support that it would otherwise be required to include in the calculation of its Current AMS, when such support does not exceed 5% of the value of its total agricultural output.

iii) In the case of developing member Parties, the de minimis percentage established in this paragraph shall be 10%.]

[13.2.4.5. The calculation of Current Total AMS of a FTAA member country shall include any domestic support measures established for agricultural producers, including possible modifications to same, and any subsequent measures that do not satisfy the criteria of [Appendix I to this Section] [Annex 13.2.4.1. to this Chapter], or that are exempted from reduction by virtue of any other provision [in this Section.] [of this Article].]

[13.2.5. [Non-Circumvention] [and commitment not to re-introduce] ]

[13.2.5.1. Parties agree that they shall not apply domestic support policies or measures to agriculture that entail circumvention of the commitments established in this [Section] ]

[13.2.5.1. The Parties undertake not to reintroduce measures and practices covered in Article ... and not to apply new measures and practices that have a similar effect or that involve circumvention of the commitment established in Article ... ]

[13.2.6. Non-compliance]

[13.2.6.1. Should any Party fail to comply with the disciplines on domestic support established in this Section, any Party may suspend the tariff preferences accorded in an amount equivalent to the value of the injury caused or apply other compensatory measures agreed to under the FTAA. ] 

[13.2.6.1. In the case that a Party applies measures and practices that distort trade and production of agricultural products in trade of any product among the Parties, the other Parties may cancel preferences granted on the same product until the Party that has applied such measures and practices eliminate them⁴.]

13.2.6.1.2. In any case, when a Party does not comply with the commitments established in Article XX, the affected Parties may apply, on the agricultural products, the provisions on Subsidies and Compensatory Measures of this Agreement in order to counteract such practices.]

[13.2.6.1. When the application of any type of domestic support measures to an agricultural product causes or threatens to cause damage to the production or trade of another party, it shall, to that extent, be subject to investigation in the field of unfair international trade practices and, if pertinent, be subject to the application of countervailing quotas, in accordance with chapter yy of this agreement.]

[Special and Differential Treatment]

[13.3. without prejudice to the above paragraphs, the countries with small economies may apply domestic support measures in accordance with the provisions established in the WTO agreement on agriculture and resulting agreements.]

[Exchange of Information / Notifications ]

[13.4. to ensure transparency, the FTAA committee on agriculture shall, at least once a year, analyze the state of all domestic support measures in the parties, as well as any modification in such measures, so as to assess compliance with the provisions in this article. furthermore, the parties shall exchange public information on a timely basis or at the request of any party.]

[13.4. The Parties shall notify each year, in accordance with Article …, those measures that can be considered non trade and production – distorting measures, explaining the type of measure, the amount of support funding, and stating if the measure is specific or general in its application.]

[Article 14: [ Differential ] Export Taxes ]

[14.1. Effective (date of entry into force of the Agreement), the Parties agree to eliminate any differential between the rate of export tax charged on a primary agricultural product and the rate of export tax charged on any product or byproduct produced from the primary product.]

[14.1. The Parties agree that at the moment of initiating the tariff elimination process, the difference between the rates of differential export taxes of products and/or by products obtained from the processing of a given primary input and the export tax on the latter, shall be up to a maximum of X percentage points]

[ 14.2. No Party shall adopt or maintain any tax, duty or other charge on the exportation of an agricultural product to the territory of another Party, unless such taxes or duties are applied on such goods when they are used for domestic consumption and when they are exported to the territory of other Parties. ] 

[Article 15: State Trading Enterprises]

[15.1. The Parties agree to the staged elimination of the exclusive export rights granted to state trading enterprises engaged in the export of agricultural products by permitting private traders to participate in, compete for, and transact for exports of agricultural products.]

[15.1.1. In the transition period from exclusive export rights held by the state trading enterprise to full competition with private traders, such state trading enterprises shall provide information on its acquisition costs, export pricing, and other sales information. To ensure that such enterprises compete fairly with private traders in export sales during the transition period, the national government is prohibited from providing government funds, loans, guarantees or other financial support to the state trading enterprise.]

[15.1. By the time the tariff elimination program is initiated, disciplines shall have been established for the operations of state and private trade enterprises, which have an import [and/or export]  monopoly on agricultural products, in order to avoid restrictions to and discrimination upon access in addition to other distortions in agricultural trade.]

[15.1. State trading enterprises of agricultural products mean those enterprises owned by the State or those enterprises to which the State, by a fact or law, have granted exclusive or special rights to trade agricultural products.]

[15.2. At the beginning of the tariff elimination process, disciplines on State trading enterprises shall be established in order to prevent market access restriccions and discrimination and other trade distortions.]

[ ^* This draft Article is an interim proposal pending progress in the WTO negotiations on agriculture. This Article could then be replaced with an Article to incorporate that progress in accordance with the mandate of the FTAA Negotiating Group on Agriculture.]

¹ [other measures and practices to be identified in the notification and counter-notification process during the negotiating process shall be used for broadening the definition of export subsidies]

⁺ [these WTO provisions are reproduced in Annex 2 for reference]

^* to be defined: the conditions that determine whether an export credit, export credit guarantee or insurance programs constitute export subsidies for agricultural products.

² [the procedure intended to ensure the transparent application of this provision is to be defined]

[³ These countries are: Argentina, Brazil, Canada, Colombia, Costa Rica, Mexico, United States and Venezuela. Because the other FTAA countries do not have bound commitments for reducing AMS under the Uruguay Round, they are prohibited from granting support to agricultural products beyond the de minimis level. (Art. 7.2 of the Agreement on Agriculture)]

⁴ [the procedure to ensure a transparent application of this provision is to be defined]