. /.WORLD TRADE
ORGANIZATIONG/MA/W/32
18 June 2002
(02-3381)
Committee on Market Access Original:  Spanish
IMPLEMENTATION-RELATED ISSUES AND CONCERNS:  MEANING
TO BE GIVEN TO THE PHRASE "SUBSTANTIAL INTEREST"
IN PARAGRAPH 2(d) OF ARTICLE XIII OF GATT 1994
Communication from Ecuador
The following statement was made by the representative of Ecuador at the Committee
meeting of 12 June 2002 with the request that it be circulated.
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During the informal consultations conducted by the Chairperson of this Committee at the
request of the Chairman of the General Council, prior to the Doha Ministerial Conference, my
delegation expressed its position on the request made by another Member of the Organization to
revise the meaning to be given to the expression "s ubstantial interest" in Article XIII:2(d) of the
GATT 1994.  Ecuador's position on this matter has not changed since the pre-Doha consultations.
In the days before Doha, Ecuador did not oppose transmitting the report made in a personal
capacity by the Chairperson of the Market Access Committee to the Chairman of the General Council
with a view to including it in the Ministerial Declaration on implementation issues.  However,
Ecuador agreed to this on condition that the only decision taken in this respect should be that the
matter should return to this Committee for further analysis without any conclusion being adopted.
At the latest meeting of the Committee, we were presented with the paper prepared by the
Secretariat illustrating, through an empirical example on the basis of the proposal made by Korea, the
implications that this proposal would have in the case of a specific product in a specific market.
Ecuador thanks the Secretariat for this study, which in our view confirms our delegation's initial
position.
We believe that it is not appropriate to state that there are doubts about the contents of
Article XIII:2(d) of the GATT 1994.  If anyone has any doubts as to this they should consult what the
Appellate Body had to say on the banana case in paragraph 161 of its report.  Obviously there are
Members who do not like what the Appellate Body said , but that is not a reason to alter the balance of
obligations and rights under the GATT.
The Appellate Body report clearly states the correct interpretation of Article XIII:2(d) of the
GATT 1994:  it is clear that at the moment when a quota is allocated there are Members who have a
substantial interest and others who do not.  The Appellate Body makes it clear what the rights of thosewith a substantial interest at the moment of quota allocation are.  It also states that the allocation of
quotas among those not having a substantial interest must follow the principle of non-discrimination.
The proposal to revise the meaning of the expression "substantial interest" is, in our view, an
attempt to alter the balance of rights and obligations under that Article and circumvent the principle ofnon-discrimination among those not having a substantial interest.G/MA/W/32
Page 2
A practice has been followed for a number of decades whereby, in order to have a substantial
interest at the moment when a quota is allocated, the criterion to be considered is whether a Member
has at least 10 per cent of the import market for a specific product.  On the basis of this practice many
tariff quotas have been distributed and disputes have been resolved.  And it is on the basis of this
practice that the results of the Uruguay Round were agreed.  To alter this practice has implicationsthat go beyond those originally raised when the consideration of this item was proposed.
Lastly, the proposal raises situations that are hard to accept, such as the following:  in the case
of a country the economy of which basically depends on a single crop, that country would
automatically have a substantial interest in all the markets of the world where quotas exist for that
product.  In other words, it would be in a more favourable situation than the main exporters of the
product in question.
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