United States - Export Subsidy on Unmanufactured Tobacco
United States - Unmanufactured Tobacco
|Products at issue
|Type of product
Tobacco and tobacco products
Key legal aspects
|A. Mahmood (Pakistan)
|Representative of Canada, Representative of EEC, Representative of Germany, Representative of India, Representative of Jamaica, Representative of Japan, Representative of Malawi, Representative of Switzerland, Representative of Turkey, Representative of United Kingdom, Representative of United States
|No of Pages (total / legal reasoning)
|Request for consultations
|Request for establishment
|Adoption of report
|Outcome of the proceedings
|L/2601/Add.13 (29/08/1966) Subsidies Notification Pursuant to Article XVI:1 - Addendum - United States "broadened tobacco export provisions to extend export payments".
L/2715 (05/12/1966) United States Export Subsidy on Unmanufactured Tobacco - Request by Malawi for Consultations under GATT Article XXII:1. The Government of the United States has agreed to this request.
L/2715/Add.1 (05/01/1967) United States Export Subsidy on Unmanufactured Tobacco - Canada wished to join the consultations, the US agreed.
L/2715/Add.2 (13/02/1967) United States Export Subsidy on Unmanufactured Tobacco - Turkey wished to join the consultations, the US agreed.
L/2715/Add.3 (15/02/1967) United States Export Subsidy on Unmanufactured Tobacco - India wished to join the consultations, the US agreed.
14-15/02/1967 Consultations held under GATT Article XXII:1 between United States and Malawi, joined by Canada, Turkey and India.
INT(67)50 (22/02/1967) Report on GATT Article XXII:1 consultations (14/02/1967) US had not been in a position to respond favourably to the representations made by Malawi, Canada, India and Turkey. "It was agreed that the consultations could be re-opened at the request of any of the consulting countries, particularly in the light of the availability of further information relative to the effects on their trade of the United States subsidy. The representative of Malawi indicated that, in the event of the United States Government's not reacting positively to the representations made, his Government would wish to consider what further relevant procedures were available under the General Agreement."
L/2856 (23/10/1967) United States Export Subsidy on Unmanufactured Tobacco - Request by Malawi for Consultations under GATT Article XXII:2
L/2897 (10/11/1967) United States Export Subsidy on Unmanufactured Tobacco - Statement made by the Representative of Malawi at the Council Meeting on 6 November 1967 (06/11/1967). Requested the appointment of a Working Party.
C/M/42 (13/12/1967) Minutes of Council Meeting (06/11/1967) Council appointed a Working Party with agreed terms of reference and composition. It was agreed "that the report on the consultations which has previously been held under Article XXII:1 should be submitted to the working party for information together with any other relevant documents."
L/2902 (09/11/1967) Working Party on United States Tobacco Subsidy - composition and terms of reference.
L/2925 (20/11/1967) Report of Working Party on Article XXII:2 (11/11/1967) Consultations on United States Export Subsidy on Unmanufactured Tobacco. The Working Party was established by the Council of Representatives at the request of Malawi to conduct consultations under GATT Article XXII:2 with respect to the export subsidy on unmanufactured tobacco introduced by the Government of the United States in June 1966. The Working Party took note of the arguments concerning:
- the reasons for introduction of the subsidy (related to US domestic price support programme, in return for which US producers were required to accept limitations on acreage that could be planted to tobacco);
- the effects of the subsidy (Malawi considered that, since it was the avowed aim of the subsidy to restore the competitive position of US tobacco in world markets by lowering the price differential between US and competing leaf, this could only have the effect of either reducing the volume of Malawi leaf sold, or of lowering the prices received for this leaf. The US representative could not accept that any increase in sales of US fire-cured would necessarily be at the expense of Malawi, since a number of other factors were involved.); and
- legal issues (Malawi pointed out that it was difficult to determine what constitutes "an equitable share of world export trade" in Article XVI:3 and that the US exports, whilst declining as a proportion of world trade, had not diminished in volume and had actually increased in value. The US noted that its leaf was generally more expensive because of its better quality and domestic farm price policies; therefore it could become increasingly difficult for the US producers to keep up with foreign competition.
Not possible with available evidence to demonstrate conclusively that the trade interests of Malawi and other countries which joined consultations had been adversely affected. Nevertheless, Malawi, Canada, India, Jamaica, and Turkey reiterated their apprehension concerning the effects on the international tobacco market. "In view of what they considered to be the adverse effects of the United States subsidy on the incomes of their respective tobacco industries these representatives requested that the subsidy be removed [and] referred in particular to the requirements Part IV of the General Agreement. The representative of the United States stated that he was not in a position to give any formal undertaking in this regard." Malawi, Canada, India, and Turkey also represented that "in the event of its considering the extension of the existing subsidy, it should consult, before taking action, with those governments whose export interests were chiefly affected." The US representative was not in a position to give any formal undertaking in this regard, but said he would convey this request to the appropriate authorities.
L/2925/Add.1 (04/12/1967) [same document as INT(67)50 (22/02/1967)] Article XXII:1 Consultations on the United States Export Subsidy on Unmanufactured Tobacco held on 14-15/02/1967. Document distributed by agreement of the Working Party on Article XXII:2 consultations as addendum to its Report L/2925 (20/11/1967) Report of Working Party on Article XXII:2 (11/11/1967).
SR.24/13 (04/12/1967) Contracting Parties Twenty-Fourth Session - Summary Record of the Thirteenth Meeting (21/11/1967) Adoption of the Working Party Report L/2925. "The Chairman noted that the report of the Working Party contained no conclusive indication as regards damage to the trade interests of other tobacco producers arising from the existence of the United States subsidy. However, as it appeared that, to some extent, the provisions of Part IV were involved and as it was conceivable that the trade interests of other producers could be affected, the Contracting Parties might wish to reinforce the requests contained in paragraphs 27 and 28 of the report by urging the United States to give sympathetic and urgent consideration to these requests."