FTAA - Free Trade Area of the Americas

Draft Agreement

Chapter on Agriculture

(Continuation)

[ANNEX ¹

PRODUCT COVERAGE
WTO Agreement on Agriculture

ANNEX 1
PRODUCT COVERAGE

1. This Agreement shall cover the following products:

2. The foregoing shall not limit the product coverage of the Agreement on the Application of Sanitary and Phytosanitary Measures.]

[^*The product descriptions in round brackets are not necessarily exhaustive.]

[ANNEX 2 ⁷
DEFINITION OF EXPORT SUBSIDES

For ease of reference, this Annex contains the following texts of Articles 1.(e) and 9.1 of the WTO Agreement on Agriculture and Annex I of the WTO Agreement on Subsidies and Countervailing Measures:

i) WTO Agreement on Agriculture

Article 1

Definition of Terms

In this Agreement, unless the context otherwise requires:

(e) "export subsidies" refers to subsidies contingent upon export performance, including the export subsidies listed in Article 9 of this Agreement;

ii) WTO Agreement on Agriculture

Article 9

Export Subsidy Commitments

1. The following export subsidies are subject to reduction commitments under this Agreement:

(a) the provision by governments or their agencies of direct subsidies, including payments-in-kind, to a firm, to an industry, to producers of an agricultural product, to a cooperative or other association of such producers, or to a marketing board, contingent on export performance;

(b) the sale or disposal for export by governments or their agencies of non-commercial stocks of agricultural products at a price lower than the comparable price charged for the like product to buyers in the domestic market;

(c) payments on the export of an agricultural product that are financed by virtue of governmental action, whether or not a charge on the public account is involved, including payments that are financed from the proceeds of a levy imposed on the agricultural product concerned or on an agricultural product from which the exported product is derived;

(d) the provision of subsidies to reduce the costs of marketing exports of agricultural products (other than widely available export promotion and advisory services) including handling, upgrading and other processing costs, and the costs of international transport and freight;

(e) internal transport and freight charges on export shipments, provided or mandated by governments, on terms more favourable than for domestic shipments;

(f) subsidies on agricultural products contingent on their incorporation in exported products.

iii) WTO Agreement on Subsidies and Countervailing Measures:

ANNEX I

a) The provision by governments of direct subsidies to a firm or an industry contingent upon export performance.

b) Currency retention schemes or any similar practices which involve a bonus on exports.

c) Internal transport and freight charges on export shipments, provided or mandated by governments, on terms more favourable than for domestic shipments.

d) The provision by governments or their agencies either directly or indirectly through government mandated schemes, of imported or domestic products or services for use in the production of exported goods, on terms or conditions more favourable than for provision of like or directly competitive products or services for use in the production of goods for domestic consumption, if (in the case of products) such terms or conditions are more favourable than those commercially available⁸ on world markets to their exporters.

e) The full or partial exemption remission, or deferral specifically related to exports, of direct taxes⁹

The term "direct taxes" shall mean taxes on wages, profits, interests, rents, royalties, and all other forms of income, and taxes on the ownership of real property;

The term "import charges" shall mean tariffs, duties, and other fiscal charges not elsewhere enumerated in this note that are levied on imports;

The term "indirect taxes" shall mean sales, excise, turnover, value added, franchise, stamp, transfer, inventory and equipment taxes, border taxes and all taxes other than direct taxes and import charges;

"Prior stage" indirect taxes are those levied on goods or services used directly or indirectly in making the product;

"Cumulative" indirect taxes are multi staged taxes levied where there is no mechanism for subsequent crediting of the tax if the goods or services subject to tax at one stage of production are used in a succeeding stage of production;

"Remission" of taxes includes the refund or rebate of taxes;

"Remission or drawback" includes the full or partial exemption or deferral of import charges. or social welfare charges paid or payable by industrial or commercial enterprises.¹⁰ Paragraph (e) is not intended to limit a Member from taking measures to avoid the double taxation of foreign source income earned by its enterprises or the enterprises of another Member.

f) The allowance of special deductions directly related to exports or export performance, over and above those granted in respect to production for domestic consumption, in the calculation of the base on which direct taxes are charged.

g) The exemption or remission, in respect of the production and distribution of exported products, of indirect taxes⁵⁸ in excess of those levied in respect of the production and distribution of like products when sold for domestic consumption.

h) The exemption, remission or deferral of prior stage cumulative indirect taxes⁵⁸ on goods or services used in the production of exported products in excess of the exemption, remission or deferral of like prior stage cumulative indirect taxes on goods or services used in the production of like products when sold for domestic consumption; provided, however, that prior stage cumulative indirect taxes may be exempted, remitted or deferred on exported products even when not exempted, remitted or deferred on like products when sold for domestic consumption, if the prior stage cumulative indirect taxes are levied on inputs that are consumed in the production of the exported product (making normal allowance for waste).¹¹ This item shall be interpreted in accordance with the guidelines on consumption of inputs in the production process contained in Annex II.

i) The remission or drawback of import charges⁵⁸ in excess of those levied on imported inputs that are consumed in the production of the exported product (making normal allowance for waste); provided, however, that in particular cases a firm may use a quantity of home market inputs equal to, and having the same quality and characteristics as, the imported inputs as a substitute for them in order to benefit from this provision if the import and the corresponding export operations both occur within a reasonable time period, not to exceed two years. This item shall be interpreted in accordance with the guidelines on consumption of inputs in the production process contained in Annex II and the guidelines in the determination of substitution drawback systems as export subsidies contained in Annex III.

j) The provision by governments (or special institutions controlled by governments) of export credit guarantee or insurance programmes, of insurance or guarantee programmes against increases in the cost of exported products or of exchange risk programmes, at premium rates which are inadequate to cover the long term operating costs and losses of the programmes.

k) The grant by governments (or special institutions controlled by and/or acting under the authority of governments) of export credits at rates below those which they actually have to pay for the funds so employed (or would have to pay if they borrowed on international capital markets in order to obtain funds of the same maturity and other credit terms and denominated in the same currency as the export credit), or the payment by them of all or part of the costs incurred by exporters or financial institutions in obtaining credits, in so far as they are used to secure a material advantage in the field of export credit terms.

Provided, however, that if a Member is a party to an international undertaking on official export credits to which at least twelve original Members to this Agreement are parties as of 1 January 1979 (or a successor undertaking which has been adopted by those original Members), or if in practice a Member applies the interest rates provisions of the relevant undertaking, an export credit practice which is in conformity with those provisions shall not be considered an export subsidy prohibited by this Agreement.

l) Any other charge on the public account constituting an export subsidy in the sense of Article XVI of GATT 1994. ]

[ANNEX 12.2.1]

[RULES FOR THE PROVISION OF EXPORT CREDITS FOR AGRICULTURAL PRODUCTS]

[1) DEFINITION AND SCOPE]

[1.1. Export credits for agricultural products are considered to be any type of financial activity whose source is official resources, for the purpose of improving and marketing agricultural products, for export, [covered by the FTAA Agreement on Agriculture.] [included in Annex I of this Chapter.]]

[1.2. An illustrative, though not an exhaustive list of institutions and programs to be covered by this Annex can be found below [under its appendix], and shall be periodically revised. ]

[1.3. For the purposes of this Annex, official resources may take the form of credits, financing, interest rates, and export credit insurance and guarantees, among others. ]

[2) DISCIPLINES]

[2.1. All export-related credit operations of [undertaken by] institutions and programs involved with official resources for agricultural products shall respect the terms of this Annex, including private and State-owned enterprises that hold exclusive or special rights to market agricultural products, resulting from statutory or constitutional rights, the exercise of which could affect their acquisitions or sales, or influence imports or exports. ]

[2.2. Terms and conditions for granting of credits ]

[2.2.1. General Considerations ]

[2.2.1.1 This [Section] [Annex] establishes the most generous terms and conditions to be used in the context of the FTAA. All Parties, taking into account the risk of such terms and conditions becoming common practice in domestic agricultural policies, shall adopt the measures necessary to prevent such practices becoming generalized. ]

[2.2.1.2 The Parties shall observe the credit terms and conditions for agricultural products that traditionally use credit terms and conditions less favorable than those authorized by this Section. ]

[2.2.2. Term of payments ]

[Pre-shipment operations ]

[2.2.2.1 The term of payment for credit operations in the pre-shipment period is the time between the date on which the resources are available to the beneficiary and the date of maturity of the capital. ]

[2.2.2.2 The term of payment for pre-shipment credit operations covered by this [Section] [Annex] shall not exceed 90 days. ]

[Post-shipment operations ]

[2.2.2.3 The term of payment for post-shipment export financing is the time between the date of shipment or of the delivery of the goods, invoice, commercial contract, or requirements contract and the maturity date of the final capital installment. ]

[2.2.2.4 The payment period for products covered by this [Section] [Annex] shall not exceed 180 days, and may be extendable [for more than] 180 days at the request of the debtor Party, [except in the cases listed below.] The period of extension shall be substantiated by the debtor Party and be approved by the other Parties. ]

[a) Bovines for animal improvement purposes: the term of payment shall not exceed 2 years for contracts of up to US$150,000 and 3 years for contracts in excess of US$150,000.

b) Other animals for purposes of animal improvement: the term of payment shall not exceed 12 months.

c) Plant material for reproduction: the term of payment for plant material (seeds, tubers and similar material), exported for purposes of reproduction, shall not exceed 12 months. ]

[2.2.3. Payment of capital ]

[Pre-shipment operations

2.2.3.1 The value of export credit capital shall be paid in a single installment or in equal and successive installments beginning on the date on which the resources are available to the beneficiary. ]

[Post-shipment operations ]

[2.2.3.2 The principal value [of the capital] of the export credit shall be paid in a single installment or in equal and successive installments, based on the [predetermined] [mentioned] events set forth in item [2.2.3. ] [2.2.2.3.]]

[2.2.4. Interest payments ]

[2.2.4.1 The form of interest payment shall be defined by free negotiation between the Parties, observing the terms defined in items 2.2.2 and 2.2.4. ]

[2.2.4.2 For the purpose of the provisions of this Section, interest excludes: ]

[a) any payment, such as premiums or other surcharges, for the purpose of ensuring or guaranteeing credit to exporters;

b) any other payment, such as bank fees or commissions, related to export credit; and

c) discounts made by importing countries. ]

[2.2.5. Cash payment]

[2.2.5.1 Parties shall require importers of agricultural products included in [item 2.2.4 (a)] [in paragraphs a), b), c) of provision 2.2.2.4.] that have received official resources to make cash payment of a minimum of 15 percent of the exported value, prior to or on the date of shipment of the goods. ]

[2.2.5.2 Exported value shall be understood to mean the total value to be paid by the importer, excluding interest. ]

[2.2.6 Sharing of risk ]

[2.2.6.1 Any type of credit guarantee dealt with in this [Section,] [Annex] including those financed with resources from national treasuries, shall include a minimum level of private sector participation. The official insurance agency may only cover up to 85 percent of the value of the transaction. ]

[2.2.7 Minimum interest rate: To be defined]

[2.2.8. General Provisions

Parties shall not use [any form of official] resource with a view to refinancing the payment of capital and interest on export credits for agricultural products. ]

[2.3. Non-compliance ]

[2.3.1 If a Party fails to comply with the disciplines established under this [Section,] [Annex] any other Party may cancel trade preferences granted to the product benefiting from the subsidized credit or may apply other countervailing measures agreed upon under this Agreement. ]

[ANNEX 12.2.2 ]

[DISCIPLINES FOR MONITORING THE PROVISION OF FOOD AID]

[1. General Considerations ]

[1.1 The purpose of these provisions is to ensure that food and other agricultural products exported as food aid do not displace normal commercial importations and do not act as a disincentive to domestic production in the recipient countries. In this respect, all food aid provided by the Parties in the context of the FTAA should serve only for additional consumption.

1.2 Any type of credit or donation provided by the Parties to finance commercial food aid activities should be based on standards established under these provisions.

1.3 This Annex contains an illustrative list of commercial transactions considered to be food aid. ]

[2. Procedure to determine Usual Marketing Requirements (UMR)]

[2.1 Additional consumption is understood to mean consumption that has occurred when such food aid was not present. In order to identify this additional amount of consumption, the Parties shall use the mechanism known as Usual Marketing Requirements (UMR), to which the recipient Party shall be required to adhere, under the contractual terms governing each food aid transaction.

2.2. Any transaction for which consultation and prior notification is required shall be subject to determining the UMR, in order to ensure that the transaction results in additional consumption and does not adversely affect normal production and trade patterns for agricultural products.

2.3. The recipient Party shall, apart from the food aid received, maintain, at a minimum, the volume of importations to be specified by calculating the UMR.

2.4. The calculation of the UMR shall, however, reflect the recent import performance of the recipient Party. At the same time, considerations regarding the balance of payments and the development needs of the recipient countries may be taken into account in determining the UMR.

2.5. In order to arrive at the value of the UMR, the following procedures shall be adopted:

a) As a starting point, the aid-supplying Party shall calculate the value represented by the commercial importations of the agricultural products to be supplied through the food aid, for a representative period of time, such as, for example, the last 5 years. In order to facilitate the task of calculation, the Hemispheric Data Base¹² (HDB) shall provide the necessary trade statistics. The Party shall forward the relevant trade information to assist in the work of the HDB.

b) It should also be taken into consideration that the UMR obtained through the procedure stipulated in the preceding paragraph may be modified based on the following considerations:

b1) substantial change in the ratio between production and consumption, in the recipient Party, of the agricultural product supplied as food aid;

b2) substantial change in the balance of payments position or in the general economic situation of the recipient Party;

b3) any factor that could affect the representativeness of the import statistics of recipient Parties, as well as such other factors as may be presented by the parties involved in the transactions being analyzed.

c) The UMR obtained shall be included in the prior notifications to the FTAA Agriculture Committee¹³ and shall be responsive to the interests of the party receiving the food aid and of other Parties that are food exporters.

d) For each recipient Party and for each agricultural product involved in the food aid transaction, a single UMR, valid for a given (tax, calendar or agricultural) period shall be established.

e) In case of unforeseen circumstances that substantially affect the balance of payments or the general economic situation of the recipient Party during the period when a given UMR is in force, the UMR may be renegotiated through consultations with all concerned Parties. ]

[3. Procedures for notification and consultation ]

[3.1 Prior to carrying out any food aid transaction, the aid-supplying Party shall:

a) hold bilateral consultations with other potentially concerned Parties, based on the interests of the Parties exporting the agricultural products included in the transaction with the recipient Party;

b) notify the FTAA Agriculture Committee¹⁴ of the main characteristics of the transaction to be carried out, in order to allow other Parties to be able to request consultations on the transactions involved.

3.2 The following transactions are exempt from the procedure established in the preceding paragraph:

a) transactions carried out through inter-governmental organizations, such as the World Food Programme (WFP), which has special rules on consultation, or inter-governmental organizations such as the United Nations International Children's Emergency Fund (UNICEF), the nature and volume of whose operations are such that they do not interfere significantly with normal patterns of production of and trade in agricultural products;

b) transactions carried out through private charitable institutions, the nature and volume of whose operations are such that they do not interfere significantly with normal patterns of production of and trade in agricultural products; and

c) Emergency situations, such as those defined below.

3.3 For the transactions enumerated in Article 3.2 supra, the donor Parties shall provide notification on an ex post facto basis, up to (x)4 months after the donation has been made, and shall respond to potential requests for consultations from the Parties concerned. ]

[Prohibitions]

[4.1. Food aid transactions that are tied directly or indirectly too commercial importation of agricultural products or of other products or services from the Parties supplying food aid to the recipient Parties are prohibited.

4.2 In food aid transactions, the recipient Party may not re-export the products received under concessional terms to other Parties.

4.3 Likewise, the recipient Party may not export surplus quantities of those products (produced domestically), or products similar to those received in food aid, when the stocks of such products may be the result of donations or importations made under concessional terms.

4.4 When triangular transactions occur, in which an agricultural product supplied as food aid is sent to a third country for processing, that country shall ensure that the product arrives at its final destination. The same principles shall be applied to transactions in which more than three countries are involved. ]

[5. Penalties]

[5.1. In the event that Parties do not comply with the disciplines established in this subchapter on food aid, any other Party may suspend trade preferences granted, in direct proportion to the value of the injury caused, or may apply other countervailing measures agreed upon in the framework of this Agreement.]

[ANNEX 12.2.2.1]

[LIST OF FOOD AID TRANSACTIONS]

[1. Agricultural products produced domestically that are donated by one government to the government of an importing Party or to an inter-governmental organization or private institution, for free distribution directly to final consumers in the importing Party.

2. Agricultural products produced domestically that are donated by one government to the government of an importing Party or to an inter-governmental organization or private institution, for free distribution in the importing Party through sale in the open market.

3. Cash donations made by the government of an exporting Party to an importing Party for the specific purpose of acquiring a given product in the exporting Party.

4. Cash donations made by a government of a supplier Party (or Parties) to a recipient Party for the specific purpose of acquiring a product from a Party (or Parties) or from local suppliers of the recipient Party, for delivery to/in the recipient Party involved.

5. Cash donations made by a government to an inter-governmental organization or to a private institution for the specific purpose of acquiring products in the open market (including local purchases), for delivery to/in recipient Parties (developing countries).

6. Transfers of products carried out according to the standards and procedures established by the World Food Programme.

7. Sales in the currency of the importing Party not transferable or convertible to currency or to goods and services capable of being used by the supplier Party.

8. Sales in the currency of the importing Party partially convertible to currency or to goods and services capable of being used by the supplier Party.

9. Government-sponsored loans of agricultural products that are reimbursable in cash.

10. Government and non-governmental barter transactions that do not involve price concessions.

11. Barter transactions not sponsored by a government that involve price concessions.

12. Sales in non-convertible currency that do not involve price concessions.]

[ANNEX 12.2.2.2]

[1. An emergency situation is defined as a situation that is the result of natural disasters or disasters caused by man, that effectively contribute to or promote:

a) the limiting of access to sources of food and/or income;

b) the interruption of the normal functioning of the food market;

c) the compromising of food production.

2. Following is an illustrative list of natural disasters and disasters caused by man:

a) Natural disasters: volcanic eruptions, earthquakes, hurricanes, tornadoes, typhoons, sea quakes, torrential rains, floods, fires, pests and diseases.

b) Disasters caused by man: civilian populations and refugees that are victims of civil conflicts and war. ]

ANNEX 13.2.3.1]

[[DOMESTIC SUPPORT:] MEASURES [AND PRACTICES THAT DISTORT PRODUCTION AND TRADE OF AGRICULTURAL PRODUCTS] EXEMPTED FROM [REDUCTION] [ELIMINATION] COMMITMENTS [FOR COUNTRIES THAT ARE NOT SMALL ECONOMIES]]

[1. General services

Policies in this category involve expenditures (or revenue foregone) in relation to programmes which provide services or benefits to agriculture or the rural community. They shall not involve direct payments to producers or processors. Such programmes, which include but are not restricted to the following list, shall meet the general criteria of Article 9, and policy-specific conditions where set out below:

a) research, including general research, research in connection with environmental programmes, and research programmes relating to particular products;

b) pest and disease control, including general and product-specific pest and disease control measures, such as early-warning systems, quarantine and eradication;

c) training services, including both general and specialist training facilities;

d) extension and advisory services, including the provision of means to facilitate the transfer of information and the results of research to producers and consumers;

e) inspection services, including general inspection services and the inspection of particular products for health, safety, grading or standardization purposes;

f) marketing and promotion services, including market information, advice and promotion relating to particular products but excluding expenditure for unspecified purposes that could be used by sellers to reduce their selling price or confer a direct economic benefit to purchasers; and

g) infrastructural services, including: electricity reticulation, roads and other means of transport, market and port facilities, water supply facilities, dams and drainage schemes, and infrastructural works associated with environmental programmes. In all cases the expenditure shall be directed to the provision or construction of capital works only, and shall exclude the subsidized provision of on-farm facilities other than for the reticulation of generally available public utilities. It shall not include subsidies to inputs or operating costs, or preferential user charges.]

[2. Public stockholding for food security purposes¹]

[Expenditures (or revenue foregone) in relation to the accumulation and holding of stocks of products which form an integral part of a food security programme identified in national legislation. This may include government aid to private storage of products as part of such a programme. ]

[ The volume and accumulation of such stocks shall correspond to predetermined targets related solely to food security. The process of stock accumulation and disposal shall be financially transparent. Food purchases by the government shall be made at current market prices and sales from food security stocks shall be made at no less than the current domestic market price for the product and quality in question.]

[3. Domestic food aid²]

[ [3.1] Expenditures (or revenue foregone) in relation to the provision of domestic food aid to sections of the population in need. ]

[ Eligibility to receive the food aid shall be subject to clearly-defined criteria related to nutritional objectives. Such aid shall be in the form of direct provision of food to those concerned or the provision of means to allow eligible recipients to buy food either at market or at subsidized prices. Food purchases by the government shall be made at current market prices and the financing and administration of the aid shall be transparent.]

[3.2. the party that establishes a domestic food aid program, in accordance with paragraph 4 of annex 2 to the agreement on agriculture, which forms part of the WTO agreement, shall ensure, through the instruments it deems necessary, that the benefits of this program are received only by the consumers of that party.]

[3.3. if requested by a party, consultations shall be conducted to ensure compliance with the provisions in paragraph 3.2.]

[4. Direct payments to producers. To be defined.]

[5. Decoupled income support. To be defined.]

[6. Government financial participation in income insurance and income safety-net programmes. To be defined.]

[7. Payments (made either directly or by way of government financial participation in crop insurance schemes) for relief from natural disasters

(a) Eligibility for such payments shall arise only following a formal recognition by government authorities that a natural or like disaster (including disease outbreaks, pest infestations, nuclear accidents, and war on the territory of the Member concerned) has occurred or is occurring; and shall be determined by a production loss which exceeds 30 per cent of the average of production in the preceding three-year period or a three-year average based on the preceding five-year period, excluding the highest and the lowest entry.

(b) Payments made following a disaster shall be applied only in respect of losses of income, livestock (including payments in connection with the veterinary treatment of animals), land or other production factors due to the natural disaster in question.

(c) Payments shall compensate for not more than the total cost of replacing such losses and shall not require or specify the type or quantity of future production.

(d) Payments made during a disaster shall not exceed the level required to prevent or alleviate further loss as defined in criterion (b) above.

(e) Where a producer receives in the same year payments under this paragraph and under paragraph 6 (income insurance and income safety -net programmes), the total of such payments shall be less than 100 per cent of the producer's total loss.]

[8. Structural adjustment assistance provided through producer retirement programmes

a) Eligibility for such payments shall be determined by reference to clearly defined criteria in programmes designed to facilitate the retirement of persons engaged in marketable agricultural production, or their movement to non-agricultural activities.

b) Payments shall be conditional upon the total and permanent retirement of the recipients from marketable agricultural production.]

[9. Structural adjustment assistance provided through resource retirement programmes. To be defined.]

[ 10. Structural adjustment assistance provided through investment aids

(a) Eligibility for such payments shall be determined by reference to clearly-defined criteria in government programmes designed to assist the financial or physical restructuring of a producer's operations in response to objectively demonstrated structural disadvantages. Eligibility for such programmes may also be based on a clearly-defined government programme for the reprivatization of agricultural land.

(b) The amount of such payments in any given year shall not be related to, or based on, the type or volume of production (including livestock units) undertaken by the producer in any year after the base period other than as provided for under criterion (e) below.

(c) The amount of such payments in any given year shall not be related to, or based on, the prices, domestic or international, applying to any production undertaken in any year after the base period.

(d) The payments shall be given only for the period of time necessary for the realization of the investment in respect of which they are provided.

(e) The payments shall not mandate or in any way designate the agricultural products to be produced by the recipients except to require them not to produce a particular product.

(f) The payments shall be limited to the amount required to compensate for the structural disadvantage.]

[ 11. Payments under environmental programmes . To be defined]

[a) Eligibility for such payments shall be determined as part of a clearly-defined government environmental or conservation programme and be dependent on the fulfilment of specific conditions under the government programme, including conditions related to production methods or inputs.

b) The amount of payment shall be limited to the extra costs or loss of income involved in complying with the government programme.]

[ 12. Payments under regional assistance programmes

a) Eligibility for such payments shall be limited to producers in disadvantaged regions. Each such region must be a clearly designated contiguous geographical area with a definable economic and administrative identity, considered as disadvantaged on the basis of neutral and objective criteria clearly spelt out in law or regulation and indicating that the region's difficulties arise out of more than temporary circumstances.

b) The amount of such payments in any given year shall not be related to, or based on, the type or volume of production (including livestock units) undertaken by the producer in any year after the base period other than to reduce that production.

c) The amount of such payments in any given year shall not be related to, or based on, the prices, domestic or international, applying to any production undertaken in any year after the base period.

d) Payments shall be available only to producers in eligible regions, but generally available to all producers within such regions.

e) Where related to production factors, payments shall be made at a degressive rate above a threshold level of the factor concerned.

f) The payments shall be limited to the extra costs or loss of income involved in undertaking agricultural production in the prescribed area. ]

[Domestic aid applied in accordance with the terms indicated in paragraphs 2, 3 and 11, shall be subject to a de minimis level (to be defined)]

[ANNEX 13.2.3.3.

ILLUSTRATED REDUCTION TIMETABLE OF GLOBAL MEASUREMENT
OF SUPPORT IN THE FTAA

(millions of US$)

Source: Section I, Part IV, List of Commitments under the WTO ]