United States – Subsidies on Upland Cotton (AB-2004-5)

Appeal: Opening Statement of Australia

Geneva, 13 December 2004

Members of the Division,

1. Thank you for the opportunity to present the views of Australia.
2. Australia is a third participant in this appeal for two reasons:
   • First - Australia has a direct economic interest as a significant exporter of cotton and a range of other agricultural products.
   • Second - this appeal raises important interpretative issues relating to the application of the WTO Agreements.  Many of these have not previously been subject to Appellate Body review.  In particular, this appeal raises fundamental issues as to the comprehensiveness of the disciplines on support provided to agricultural products.
3. Australia has provided a written submission identifying some key issues of law and legal interpretation raised by this appeal.  Australia’s submission does not address every issue raised by Brazil and the United States.  However, this should not be taken as an indication that Australia considers that the issues it has not addressed are not important.
4. I will not repeat the arguments set out in our submission.  Rather, I would like to point to four of the questions that are directly before the Appellate Body in this dispute:
   • First – Does an income support payment come within the green box when the amount of the payment is reduced or eliminated if the recipient chooses to plant certain types of crops and therefore is not decoupled from production?
   • Second – Does an income support payment come within the green box when it is the replacement of a substantially identical support payment and the recipients of the payment were allowed to update their base periods in shifting to the new payment?
   • Third – Can a Member combine an export subsidy and a local content subsidy and then successfully claim that there is no export subsidy under Part V of the Agreement on Agriculture, no prohibited export subsidy under Article 3 of the SCM Agreement, and no prohibited local content subsidy under Article 3 of the SCM Agreement?
   • Fourth - Can a Member provide its agricultural exporters with the competitive advantage of unlimited export credits, unlimited export credit guarantees and unlimited export insurance programs yet not be subject to the export subsidy disciplines of Article 10.1 of the Agreement on Agriculture and Article 3 of the SCM Agreement?
5.   Australia submits that the answer to all of these questions should be “No”.
6. The Appellate Body’s responses to these questions will determine whether one of the fundamental objectives of the Uruguay Round - the imposition of meaningful disciplines on support provided to agricultural products – has been achieved through the WTO Agreements.
7. Thank you.