RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/34
27 July 1998
(98-2969)
Council for Trade in Goods
5 June 1998
MINUTES OF THE MEETING
Held in the Centre William Rappard
on 5 June and 8 July 1998
Chairperson:  Mr. R. Saborío Soto
The meeting was convened by WTO/AIR/847.  The proposed agenda contained in
document G/C/W/116 was adopted, with the inclusion of items 4 and 5 under "Other business" and
reversing the order of the agenda by taking up the item on "Trade Facilitation" last.
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1. Free Trade Agreement between Turkey and Hungary
- Notification by the Parties (WT/REG58/N/1, WT/REG58/1) .................... 1
2. Free Trade Agreement between Turkey and Romania
- Notification by the Parties (WT/REG59/N/1, WT/REG59/1) .................... 2
3. Free Trade Agreement between Turkey and Israel
- Notification by the Parties (WT/REG60/N/1, WT/REG60/1) .................... 2
4. Japan - Canada's simp lified custom s tariff ..................................................... 3
5. Date of the ne xt meeting ........................................................................... 3
6. Trade Facilitation (paragraph 21 of the Singapore Ministerial Declaration)
(WT/MIN(96)DEC, G/C/ W/113, 114 a nd 115) ............................................ 4
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1. Free Trade Agreement between Turkey and Hungary
- Notification by the Parties (WT/REG58/N/1, WT/REG58/1)
1.1 The Chairman drew  attention to the notification from the parties to the Agreement circulated
in document WT/REG58/N/1.  The text of the Agreement had been circulated in
documents WT/REG58/1 and 2.G/C/M/34
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1.2 The Chairman proposed that the Committee on Regional Trade Agreements carry out the
examination of the Agreement in accordance with the following terms of reference:
"to examine, in light of the relevant provi sions of the GATT 1994, the Free Trade Agreement
between Turkey and Hungary and to submit a report to the Council for Trade in Goods".
1.3 It was understood that the understanding read out by the Chairman of the Council for Trade in
Goods under item 7 of the Agenda of the meeting of  the Council on 20 February 1995, as contained in
document WT/REG3/1, would apply mutatis mutandis  to the examination.  It was also understood
that, during the examination, due account would be taken of the intrinsic differences between customsunions and free-trade areas.
1.4 The Council so agreed.
2. Free Trade Agreement between Turkey and Romania
- Notification by the Parties (WT/REG59/N/1, WT/REG59/1)
2.1 The Chairman drew  attention to the notification from the parties to the Agreement circulated
in document WT/REG59/N/1.  The text of the Agreement had been circulated in
document WT/REG59/1.
2.2 The Chairman proposed that the Committee on Regional Trade Agreements carry out the
examination of the Agreement in accordance with the following terms of reference:
"to examine, in light of the relevant provi sions of the GATT 1994, the Free Trade Agreement
between Turkey and Romania and to submit a report to the Council for Trade in Goods".
2.3 It was understood that the understanding read out by the Chairman of the Council for Trade in
Goods under item 7 of the Agenda of the meeting of  the Council on 20 February 1995, as contained in
document WT/REG3/1, would apply mutatis mutandis  to the examination.  It was also understood
that, during the examination, due account would be taken of the intrinsic differences between customsunions and free-trade areas.
2.4 The Council so agreed.
3. Free Trade Agreement between Turkey and Israel
- Notification by the Parties (WT/REG60/N/1, WT/REG60/1)
3.1 The Chairman drew  attention to the notification from the parties to the Agreement circulated
in document WT/REG60/N/1.  The text of the Agreement had been circulated in
document WT/REG60/1.
3.2 The Chairman proposed that the Committee on Regional Trade Agreements carry out the
examination of the Agreement in accordance with the following terms of reference:
"to examine, in light of the relevant provi sions of the GATT 1994, the Free Trade Agreement
between Turkey and Israel and to submit a report to the Council for Trade in Goods".
3.3 It was understood that the understanding read out by the Chairman of the Council for Trade in
Goods under item 7 of the Agenda of the meeting of  the Council on 20 February 1995, as contained in
document WT/REG3/1, would apply mutatis mutandis  to the examination.  It was also understoodG/C/M/34
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that, during the examination, due account would be taken of the intrinsic differences between customs
unions and free-trade areas.
3.4 The Council so agreed.
4. Japan - Canada's new simplified national customs tariff
4.1 The representative of Japan speaking under "Other business" stated that WTO rules expected
that, in principle, Members implement changes in tariff levels after having completed negotiations and
the modification process of their respective WTO schedules.  However, as a result of Canada'simplementation of this new simplified national customs tariff, which had been carried out bothunilaterally and prior to the Article XXVIII notification to WTO Members, some items of Canada'sapplied rates were now higher than their bound rates.  In addition, Canada had not started
Article XXVIII  negotiations with any Member so far.  Further, Japan had been informed recently thatCanada had notified its intention to extend the period of negotiations and consultations underArticle XXVIII until 31 December 1998.  As far as Japan was concerned, the number of items wherethe applied rates exceeded the bound rates was relatively small, and thus the damage caused was low.However, from a systemic viewpoint, Japan was concerned about such action by Canada whereby ithad raised its applied rates without prior consultations.  Japan urged Canada, therefore, to complete itsArticle XXVIII negotiations as soon as possible.
4.2 The representative of Canada stated that Canada's new simplified tariff came into force on
1 January 1998 after a long and exhaustive consultation process, including with Canada's international
trade community.  Canada regretted the delay in the submission of the Article XXVIIIdocumentation.  However, on 18 December 1997, Canada had submitted a communication to theWTO informing Members of the main features of the new national tariff before its implementation on1 January 1998.  In March 1998, Canada had also held a series of information sessions with interestedMembers, including Japan, to provide further details and explanations on the scope of the changes andthe overwhelming positive impact of Canada's new national tariff for its trading partners.  Due to thecomplexity of the task, however, Canada was able only earlier this week to submit its formalArticle XXVIII notification.  It was his understanding that this notification would be circulated toMembers in the coming days. However, to ensure that no interested Member was deprived of anyright, the notification stated that Canada would recognize the right of Members under paragraph 3 ofArticle XXVIII until 31 December 1998 in respect of consultations and negotiations initiated further tothe notification.  Finally, he stressed that the implementation of Canada's new simplified tariff wouldhave a very positive impact for all its trading partners, resulting in customs duty savings ofapproximately CAN$90 million in 1998.  For Japan alone, the benefits were estimated in tens ofmillions of dollars compared to possible impairme nts estimated at less than a few thousand dollars.
4.3 The representative of Switzerland stated that Switzerland had followed with interest Canada's
internal process to simplify its national customs tariff, and understood that the deadline to finalize
possible Article XXVIII negotiations was extended with the agreement of Canada.  He thankedCanada for having chosen this pragmatic approach.   In that context, he was confident that Canadawould share any relevant information. Switzer land was interested in following closely the
development of the systemic matter which had been raised by Japan.
4.4 The Council took note of the statements.
5. Date of the next meeting
5.1 The Council took note that its next meeting was scheduled for 8 July 1998, and that the
agenda would close by noon time,  25 June 1998.G/C/M/34
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6. Trade Facilitation (paragraph 21 of the Singapore Ministerial Declaration)
(WT/MIN(96)DEC, G/C/W/113, 114 and 115)
6.1 The Chairman drew attention to the Secretariat report of the WTO Trade Facilitation
Symposium circulated on 29 May 1998 in document G/C/W/115.  He informed Members that due to
the volume of the report and the heavy workload of the translation section, the French and Spanishversions would be issued with a few weeks dela y.   He requested Members' understanding on this
matter.
6.2 He recalled that at the Council meeting of 21 April 1998, Members had agreed that the
Chairman hold informal consultations on the further work process on trade facilitation.  In thiscontext, Switzerland had submitted a proposal for a possible structure of  future trade facilitation work,
which was circulated in document G/C/W/114.  It was first presented at an open-ended informalmeeting on 13 May 1998.  At the same meeting, the European  Communities ha d presented a
non-paper containing their suggestions on the future work process.  Following the meeting of13 May 1998, he had attempted to merge the two proposals, taking also into account the views andreactions other delegations had expressed during that informal meeting.  The resulting ideas for aChairman's proposal were shared with delegations which had shown interest in the work on tradefacilitati on.  Additional contribut ions by delegations led to a furt her refinement of the proposal.
6.3 He recalled the main elements of the format which was currently being discussed.  Under this
proposal, the Goods Council would hol d regular informal consultati ons on trade fac ilitation.  The
Chairman of the Goods Council w ould invite the Chairpersons of  other WTO Committees to propose
an item "trade facilitation" for inclusion in the agenda of their meetings, and would contact theChairpersons of the Council for Trade in Services and the Council for TRIPS to suggest that thesebodies make a similar contributi on.  Further consultations we re, however , still requi red on some
elements, notably as regarded: (1) the setting of a timetable for the completion of the work on tradefacilitati on; (2) the number and frequency of informal  meetings of the Goods Council;  (3) the
involvement of other organizations in the work process; and (4) the exact format in which the resultsof the work would be conveyed to the General Council and to the Ministerial Conference.   Heindicated that good progress was being made on these elements and it seemed probable that aconsensus would emerge prior to the Council's last meeting before the summer recess, on8 July 1998.  In light of this, he proposed that the Council suspend the present meeting and reconveneas soon as his consultations had reached agreement on a format for the future work process on tradefacilitation.
6.4 The Council so agreed.
6.5 The meeting was suspended and resumed on 8 July 1998.6.6 The Chairman welcomed delegations to the resumed Council meeting.  He recalled that, prior
to the meeting of 5 June 1998, Members had held intensive consultations on the future WTO work
programme on trade facilitation.  On that date, it was, however, not possible to reach a consensus onthe details of this work programme, and additional consultations had been held which had resulted in a“Chairman’s proposal on future work on trade facilitation”.  He informed the Council that copies ofthis proposal had been sent out by fax in the three languages on 7 July 1998. It read as follows:G/C/M/34
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"1. The Council for Trade in Goods will hold regular, informal meetings to continue the
work on trade facilitation, as set out in paragraph 21 of the Singapore Ministerial
Declaration.
2. The schedule of meetings (each lasting 2-3 days) and the core agenda will be as noted
below:
(1) import and export procedures and requirements, including customs and border-
crossing problems; overview of the Kyoto Convention and its current revision
process – September 1998;
(2) physical movement of consignments (transport and transit); payments, insurance
and other financial requirements which affect the cross-border movement ofgoods in international trade - December 1998;
(3) electronic facilities and their importance for facilitating international trade;
technical cooperation and development issues relating to simplification of trade
procedures; consideration of WTO Agreements relating to, or includingprovisions on, trade facilitation - March 1999;
(4) evaluation of the exploratory and analytical work to assess the scope for WTO
rules in the area of trade facilitation - June 1999.
Although this agenda should, for the sake of efficiency, be adhered to as closely
as possible, there should be freedom at any meeting to address issues from any other
meeting or to bring in any other related issue and question.  Prior to the fourth meeting,
the Secretariat will compile a factual summary of the first three meetings to assist
Members in evaluating the work undertaken thus far.
3. Furthermore, the Chairman of the CTG will invite the Chairpersons of the Committees
on Customs Valuation, Import Licensing, Rules of Origin, Sanitary and Phytosanitary
Measures, Technical Barriers to Trade, the Chairperson of the Working Party on
Preshipment Inspection and, as appropriate, the Chairpersons of other subsidiary bodiesof the CTG to propose an item "trade facilitation" for inclusion in the agenda of their
meetings.  Under this agenda item, these bodies will henceforth address those aspects of
trade facilitation which they regard as being related to the respective agreements with a
view to introducing the results of these discussions into the informal CTG discussions on
trade facilitation in March 1999.  The Chairman of the CTG will also contact the
Chairpersons of the Council for Trade in Services and the Council for TRIPS as well as
the Chairperson of the Committee on Trade and Development to suggest that thesebodies make a similar contribution.
4. Other international inter-governmental organizations with expertise and experience in
the field of trade facilitation (notably ITC, UN/ECE, UNCTAD and WCO) will be
invited to contribute to the exploratory and analytical work.  Specific arrangements tothis effect will be made in the informal meetings of the CTG or in the WTO bodies
mentioned under para 3 supra as appropriate.  A symposium with non-governmental
organizations and specialists from the private sector will be considered.
5. To ensure the success of the exercise, Members are encouraged to submit substantive
ideas and proposals at all stages of the process.
6. The results of the exploratory and analytical work mandated by the Singapore
Ministerial Declaration should be reported by the CTG to the General Council."G/C/M/34
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6.7 As some delegations had said they had concerns regarding the schedule of work, the
Chairman also proposed that the Council take note of his intention, as Chairman of the Council, to
reserve the possibility of using the Chairman's prerogative to decide in the light of the developmentof the discussions and the work carried out under paragraph 2 of his proposal, whether additionalmeetings and time were needed to complete this work.
6.8 He realized that some delegations had only just received the text and would need time to get
instructions from their capital before a decision could be taken. For this reason, he proposed givinguntil 13 July 1998 for comments.  If no objections were received by that date, he would assume thatthe text was acceptable to all delegations.
1
6.9 The Council took note of the Chairman's statement and agreed to his proposed way of
proceeding.
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1 No objections were received.