RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG/M/29
9 August 2001
(01-3959)
Committee on Regional Trade Agreements
Twenty-Ninth Session
NOTE ON THE MEETING OF 2-3 JULY 2001
Chairperson:  Mrs. L. Dubois Destrizais (France)
A. ADOPTION OF THE AGENDA
1. The Twenty-Ninth Session of the Committee on Regional Trade Agreements (CRTA) was
convened in Airgram WT O/AIR/1568, dated 15 June 2001.
2. The Chairperson indicated that she would introduce two issues under "Other Business",
concerning the Secretariat's studies on coverage and rules of origin, and the schedule of the
Committee's next meeting.
3. The representative of Hong Kong, China, said  that his delegation also wished to propose
under "Other Business" the organization of an educational seminar on the relationship between
regional trade agreements (RTAs) and the multilateral trading system.  He emphasized the importance
which his delegation attached to enhancing understanding on the matter.
4. The following Agenda was adopted:
A. Adoption of the Agenda
B. Election of Officers
C. Examination of Regional Trade Agreements
I. Status of the Draft Examination Reports
II. Customs Union between the Kyrgyz Republic, the Russian Federation, 
Belarus, Kazakhstan and Tajikistan
III. Free Trade Agreement between the Kyrgyz Republic and the Russian
Federation
IV. Free Trade Agreement between the Kyrgyz Republic and Ukraine
V. Free Trade Agreement between the Kyrgyz Republic and Uzbekistan
VI. Free Trade Agreement between the Kyrgyz Republic and Moldova
VII. Free Trade Agreement between the Kyrgyz Republic and KazakhstanVIII. Free Trade Agreement between Azerbaijan, Armenia, Belarus, Georgia, 
Moldova, Kazakhstan, the Russian Federation, Ukraine, Uzbekistan, 
Tajikistan, and the Kyrgyz Republic
IX. Free Trade Agreement between Estonia and Ukraine
X. Free Trade Agreement between Hungary and LithuaniaXI. Free Trade Agreement between Hungary and Latvia
XII. Free Trade Agreement between Poland and Latvia
XIII. Free Trade Agreement between Estonia and the Faroe Islands
XIV. Free Trade Agreement between Poland and the Faroe Islands
XV. Euro-Mediterranean Agreement between the European Communities and 
TunisiaWT/REG/M/29
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XVI. Free Trade Agreement between EFTA and Morocco
XVII. Free Trade Agreement between Turkey and Poland
D. Other Business
5. The Chairman recalled that the Latin American Integration Association (LAIA) had been
granted observer status to the CRTA on an ad hoc  basis and sought confirmation to extend an
invitation to LAIA to attend the Committee's next meeting.  It was so agreed.
B. ELECTION OF OFFICERS
6. The Chairperson reported that she had held informal consultations with various groups and
delegations so as to replace two of the three Vice-Chairpersons of the CRTA.  She also noted that
Dr. Vassili Notis of Greece had indicated that he would remain in his function as Vice-Chairman.  Sheproposed that the Committee elect by acclamation Ms. Margaret Liang, Deputy Permanent
Representative of Singapore, and Mr. Alberto J. Dumont, Alternate Permanent Representative of
Argentina, as new Vice-Chairpersons of the CRTA.  It was so agreed.
C. EXAMINATION OF REGIONAL TRADE AGREEMENTS
7. Reporting on the status of the CRTA's draft examination reports, the Chairperson recalled that
at the time of submitting the Committee's report to the General Council in December 2000, the then
Chairman (Amb. E. T. Custodio of the Philippines) had stated that, notwithstanding his multiple
efforts, the Committee had reached a deadlock.  Furthe r to an in-depth debate in the General Council,
the Committee had been invited to finalize the reports that had been pending for several years and toinform the Council of its progress.  In May 2001, the question had been raised about a possible report
to be presented to the General Council, but it was agreed to postpone such report until further
consultations and exchanges of views could take place.  Notwithstanding the hard work and goodwill
shown by all members of the Committee, the impasse remained.  Two rounds of informal consultation
held had not succeeded in overcoming it:  there were objections of principle from one delegation andcustomary objections from those delegations which were parties to RTAs.  She added that not even
the adoption of a new approach to the examinat ion reports, based on merg ing parts III and IV, had
brought about a clear breakthrough.  Delegations had then been invited to engage in bilateral
consultations, but little progress had been reported to date.  The delegation that had raised issues of
principle had not had the time to proceed with any consultations, while delegations more directly
involved in the five test agreements had not be en able to overcome their fundamental objections
despite the new approach.   It was her view that any agreement on the examination reports wasunlikely before the General Council meeting on 18 July.  It was her intention, therefore, to report to
the General Council that the deadlock persisted.  She also suggested that it might be more fruitful at
that moment in time for the Committee to focus on a positive development of its role and contribution
within the WTO, while guaranteeing the maximum transparency of RTAs.  This, she said, was an
opinion shared by the three Vice-Chairpersons and the Secretariat, and the one she intended tocommunicate to the General Council.
8. The representative of the United States indicated that her delegation looked favourably upon
the merging of parts III and IV of the reports and considered it worth proceeding with this approach.
She said that placing the conclusions beside the discussion would allow the Committee to better
identify substantive differences and lead to a more precise and specific discussion.  She added,however, that the appropriate philosophy of the text of part III needed consideration, especially with
regards how to deal with differences among delegations.  On this point she argued that the current
philosophy whereby any RTA party could demand other Members to join in a consensus, and theWT/REG/M/29
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insistence not to have diverging views expressed in the Committee's conclusions, were inappropriate
in a multilateral organization such as the WTO where differences were negotiated and, therefore, had
to be expressed.  Accordingly, she stressed the need to agree to a philosophy which would permit
diverging views to be reflected, thus allowing the Committee and individual delegations to narrow
down their problems and move on to the next stage at which point political input might be needed toresolve the remaining differences.  This philosophy was no different from the one employed in
accession reports and other WTO Committees' reports.  She then reported that some progress had
been made on one of the reports being considered.  As regards the NAFTA, her delegation had yet to
receive any comments.  She then reiterated that a constructive approach on behalf of the Committee
would allow her delegation to identify the remain ing problems with regards to conclusions.  She
suggested that a new draft of the reports be prepared by the Secretariat, with brackets denoting the
points not enjoying consensus, thus allowing her delegation to pinpoint specific problems and to trymaking progress on those points.
9. The representative of the European Communities (EC) expressed disappointment at the lack
of progress with the examination reports, especially with regards to the leading group of reports which
were the Committee's priority.  He stressed that unless the Committee could find a way to finalize
those reports, progress on systemic issues and indi vidual examinations would be seriously hindered.
He agreed with the US delegation's opinion that the new approach to the examination reports was
worth pursuing further, for it facilitated the evaluation of the individual items.  He concurred that
some fundamental differences, whether of a systemic  nature or on the agreements as a whole, had
precluded the Committee from reaching a full conclusion on the issue, in spite of some findings in
line with the mandate, and agreed that Members could not be expected to agree where they disagreed.Yet, he maintained that efforts should be made to bridge these differences as much as possible, if
progress was to be made.  Another important point he wished to see reflected in the Chairperson's
report to the General Council was his delegation's disappointment with factual parts of the
examination reports, which had been previously concluded, being reopened by suggestions brought
forward while discussing the conclusions of these reports.  Such a practice would lead the Committeebackwards, since it would open the way to endless revisions in Members' positions.  His delegation
was of the impression that the Committee's intention wa s to have a snapshot in the reports of what had
been said and what had been done, so as to concentrate on whether they could find common ground or
find a way to move forward.  He expressed sympathy for those delegations which during the last
informal meetings had been willing to accept the texts of the draft reports without further changes,
despite the fact that they might not be getting the best possible deal.  His own delegation had very few
comments on the reports, that being one of the reasons why they had been very reluctant to reopenother texts.  Since they had two or maybe three substantive points on the EC-Hungary draft report, he
had been hoping to discuss these points rather than reverting back to a number of other requests which
made it more difficult to get the necessary support back home to finalize the exercise.  He concluded
by informing the Committee that although his delegation was willing to discuss further and would
keep the Chairperson and all other delegations fully informed of its activities and progress, he agreedwith the Chairperson that, under the current circum stances, her report to the General Council could
not be overwhelmingly positive.
10. The representative of Hungary reminded the Committee that the pessimistic remarks he had
expressed during the last meeting were unfortunately substantiated, as the breakthrough he had hoped
for had not materialized.  He observed that in spite of the efforts made, detailed consideration of thetexts had led to increased difficulties, adding that his delegation's attempts at flexibility were not
yielding results.  In his view, the wish of some  delegations to apply retroactively self-established
targets, principles, and self-made interpretations as generally accepted rules, was the basic problem.
He recalled that when his delegation had agreed to merge parts III and IV of the report he had made it
clear that this process was not meant to be used as an opportunity to reopen the factual part anddefinitely not on a selective basis.  Although his delegation had been polite enough not to comment on
the NAFTA draft report hoping that it would help the process, his silence was by no means to beWT/REG/M/29
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interpreted as suggesting that his delegation was in a position to accept the present text.  He stressed
that examination reports on different RTAs were interrelated and observed that a step-by-step
approach was unlikely to lead to a successful conclusion of the work.  He admitted, however, that at
the current stage he was unsure as to how to proceed.  He called upon the Committee to economize
time as much as possible, as smaller delegations such as his own could no longer afford to attendmeetings that inherently contained negative outcomes, especially in the preparatory process to Doha.
Nevertheless, he reassured the Chairperson that his delegation would attend any meeting she deemed
necessary and would do its best to come to an agreement.
11. The representative of the Czech Republic shared  a similar position to that outlined by the EC
representative.  He also expressed full support for the remarks made by the representative of Hungary
and expressed his gratitude for his excellent work during the informal process when he had
represented the views of the CEFTA Members.
12. The representative of Australia reminded the Committee that his delegation had been closely
involved in both the systemic debate and the examination process and that it had worked closely with
the Chairperson to find a way out of the backlog facing the Committee.  He emphasized the
importance his delegation gave to ensure that the legal and normative integrity of the examination
process was maintained.  The Committee was obviously facing major difficulties in overcoming suchbacklog.  It was with this in mind that his delega tion had expressed its views on the five latest draft
examination reports at the informal CRTA meeting of 7 June;  his was one of the delegations able to
support the reports as currently drafted.  Even though not ideal, the new drafts had struck a reasonable
balance between Members' concerns about some of the RTAs and their parties' explanations.  He also
informed the Committee that since 7 June his delegation had been involved in bilateral consultationswith those delegations which had had comments on the ANZCERTA Services Protocol;  though those
consultations had been constructive, they were not yet close to resolution.  Given that those were the
only bilateral consultations his delegation had had, it was with surprise that he learned the negative
views expressed by the Chairperson and by some delegations who had spoken earlier at the meeting.
Without criticizing the assessment, he pointed out that keeping the reports as currently drafted couldbe a way forward, emphasizing that no changes should be made to the texts.  He concurred with the
Chairperson, however, that if her assessment was correct and no progress could be made, the
Committee should analyze why that was the case and take appropriate steps.  These steps might
involve raising the issue again in the General Council and reporting on the continued difficulties they
were having in the Committee.  Perhaps the time ha d come for the General Council to consider the
role of the CRTA.
13. Commenting on the intervention of the various delegations, the Chairperson said that the
negative tone of her comments had to be interprete d in light of the possible progress between the end
of the present CRTA meeting and 18 July, the date of the General Council.
14. The representative of Hong Kong, China, indica ted that instead of repeating his delegation's
opinion on the draft examination reports, he preferred to comment on the procedures and explore
ways in which progress could be made.  He agreed with the representative of Australia that theCommittee needed to elaborate on the causes of its difficulties and on the procedures and efforts that
had been made in trying to overcome the latter.  With regards to the General Council meeting, he said
that in addition to mentioning the difficulties and raising the issue of a possible mandate revision, the
Committee ought to give the General Council a more elaborate explanation of what had been done in
the past few months in a general effort to break the deadlock and the difficulties which could not beovercome.  He recalled that since the General Council meeting in February 2001, the Secretariat had
redrafted some of the draft examination reports merging parts III and IV, and Members had been
invited to submit written responses which would then be discussed at an informal meeting.  At that
informal meeting, however, discussions had gone no further than generic comments and had not got
into the specific drafts.  He recalled that the Chairperson had asked Members to engage in bilateralWT/REG/M/29
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discussions and that some Members had voiced concerns to the fact that they were part of a
multilateral process and that the Committee had a role to play in case of difficulties arising between
Members.  On this background, and given the lack of multilateral discussion on specific drafts, he was
doubtful about whether the Committee should decide to go no further and ask to have its mandate
reviewed.  He added that, notwithstanding the political difficulties and concerns of Members,especially those of parties to RTAs, to the formula tion of the drafts, he was of the opinion that they
should try to identify the particular problems and proceed further with the discussions.  He stated that
as far as his delegation was concerned, it had no difficulty with any particular agreement and no
problem agreeing to the drafts.  In this respect, he said that the Committee should consider each report
on its own merits, without linking the five drafts on the table.  His delegation did not feel that the
Committee had exhausted all means to fulfill its manda te with regard to the draft examination reports.
He hoped that the Chairperson would circulate her draft statement before the General Council meetingof 18 July in order to have some idea of what would be reported.  He concluded that his delegation
would welcome any informal meeting aimed at resolving outstanding problems before having to
resign itself to the fact that the Committee could move no further.
15. The representative of Japan informed the Committee that, due to a very busy schedule during
the previous few weeks, his delegation had been unable to consult with the parties concerned as it had
been suggested by the Chairperson at the informal meeting; hence no progress had been made on that
front. He indicated that his delegation was ready to assess the present texts in a favorable manner,
after consultation with the parties concerned for confirmation, which he hoped to do in the course of
that meeting.  On the issue of how to proceed wi th the examination reports, he agreed with the
representative of Hong Kong, China, that to date the Committee had only had one informal
consultation on generic issues and that it would be perhaps appropriate to have another to see whether
they could come up with some positive results.
16. The representative of Norway, speaking on behalf of the EFTA States, indicated that their
position was quite similar to those outlined by the EC and CEFTA countries and wished to endorse
many of their viewpoints, although with some variations concerning the grade of pessimism
expressed.  He was of the opinion that the Committee would have to proceed with its work
irrespective of the mood expressed during the discussions.  In particular, he wished to support two of
the conclusions made by the representative of the EC, namely the need to focus on reaching an
agreement on the split-conclusions approach, as it was clear that fully-supported conclusions were not
possible;  and not to reopen issues that had been previously closed.
17. The representative of India agreed with the realistic assessment made by the Chairperson and
regretted that the new approach, which his delegation went along with, had not resolved the impasse.
He understood the problems faced by the signatories to the agreements, but was of the opinion that a
collective effort was needed to continue looking for a solution to these problems.  He suggested that
there might be a communication gap between some delegations.  He cited as an example the reference
made by the representative of Hungary to the practice of setting retroactive targets.  Another problem
preventing agreement on conclusions was the inadequacy of the relevant provisions in the GATT andGATS, and the systemic issues arising therefrom.  He noted very little progress in the consideration of
systemic issues; he had been looking forward to a detailed debate in the course of this meeting, but he
believed it would have to be postponed.  He welcomed the Chairperson's suggestion to report to the
General Council the factual position of the examination reports and the status of the work of the
Committee.  His delegation, along with five others, ha d been highlighting this aspect for the last two
or three General Council meetings.  He added that this would also be useful in the context of the
forthcoming Ministerial Meeting in Doha.  He recalled that many delegations, in their comments on
checklist item 1, as circulated by the Chairman of the General Council, had highlighted the lack of
progress in the CRTA and the need for Ministers to give fresh guidance.  In light of this, he also
supported the suggestion made by the representative  of Hong Kong, China, that the ChairpersonWT/REG/M/29
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might consider circulating her statement at least two or three days in advance so that a meaningful
response could be given at the General Council.
18. The representative of the United States wished to comment on the issue of reopening the
examination reports, so that her delegation's views c ould be officially recorded.  At issue was whether
certain questions and concerns could be raised once the formal or factual examination of an agreementwas over, that is during consideration of the draft examination report.  She recalled that for the
examination of NAFTA, numerous new concerns had been raised after the formal meetings were over
and almost one-third of the NAFTA draft report, as currently drafted, was in response to those
concerns.  She stressed that the informal drafting process was intended to be an "informal" process;
the focus on conclusions and the comments made by delegations in the last round were an attempt to
come to closure on the draft reports.  It was therefore quite clear that everyone knew that texts were
supposed to be drafts in progress.  Furthermore, as these drafts had never been considered in a formalway, she could not see how they could ever be looked at as anything more than informal drafts.
Referring to the pessimism expressed during this meeting, she agreed with the representative of
Hong Kong, China, that to be pessimistic when  the Committee had not yet focused on why it could
not agree might not be helpful to the General Council.  She observed that the specific reasons on why
it could not agree were slightly different from the reasons that existed six to eight months ago, and shehoped that the Committee could be constructive during the next few weeks and see whether it could
narrow these down a bit further.
19. The Chairperson summed up by saying that the meeting had clarified two important points.
First, she noted a positive attitude and general willingness to continue work in the Committee, within
the constraints imposed by the preparation to the Mi nisterial meeting.  Second, she observed that there
had been no challenging of the new approach of merging of parts III and IV of the reports, one
delegation further suggesting that square brackets be added as discussion proceeded; even though the
new approach might not have solved the substantive issues, it had permitted an easier identification of
the most difficult points to solve.  She continued by observing that some delegations, in particular
those not parties to the five agreements under discussion, had expressed frustration for not beingimplicated in the specific parts of the discussions.  While understanding their frustration, she
explained that, from the comments submitted, it seemed clear that discussions during a normal three-
hour informal open-ended meeting could not have solved much and that the bilateral road was more
promising.  She added that from the statements made by the most concerned delegations (EFTA, the
EC and the US for NAFTA), there appeared to still be room for bilateral discussions before getting
back to another round of multilateral discussions.  Moving to comments by delegations in relation to
her report to the General Council, she pointed out that according to a principle agreed upon at anearlier Council meeting, it was her duty to report.  This did not imply a value judgement in favour of
pessimism.  She recalled that several delegations had made the point that any change in the
Committee's terms of reference could only be taken in the General Council framework.  She could
understand the concerns of some delegations about moving too swiftly to that stage, for, if the General
Council would decide that the Committee was no longer able to pursue its work on its currentmandate, that would imply that the work done throughout the last three years had come to nothing.
She stressed that her report to the General Council would be highly factual and would be circulated to
delegations a few days in advance.  She concluded by encouraging delegations to continue their
consultations on the basis of the five reports.  Given the very busy schedule ahead, she did not think it
feasible to convene an informal Committee meeting before the next regular session, and she indicatedthat a half-day informal meeting could be scheduled at the beginning of the next session.  She added
that if she felt the slightest progress in bilateral consultations, she would immediately convene an
informal session.
20. (The minutes of the examination of the Agreements listed under agenda items C.II-CXVII are
being distributed as separate documents.)WT/REG/M/29
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D. OTHER BUSINESS
21. Under this item, a representative of the Secretariat gave an update on progress on the two
crosscutting studies requested by the Committee, on coverage and liberalization processes, and on
rules of origin in RTAs.  He apologised for not being in a position to present these studies to the
Committee, but stated that both studies were well advanced and would be presented in good time forthe next Session in September.  He deemed it im portant to present these two studies together since
they had been requested in parallel, and hoped the studies would give Members real food for thought.
Work for the study on coverage and liberalization processes involved the collection of data relating to
MFN and preferential partners for 26 countries or entities (involving a total of 115 RTA partners);
processing and analysis of such data and preparation of charts and tables; and drafting a text to
accompany and explain the analysis.  The primary data sources used for the study were, in order of
priority used, the Integrated Data Base, Trade Policy Reviews, the UNCTAD TRAINS database andthe FTAA database.  The main problems encountered thus far related to data availability on
preferential tariffs, including terms of preferential access, and on trade flows.  The data collection
phase had been largely completed, although he indicated that there might be a need to go further into
detail in some cases to improve comparability among RTAs, and the following remained to be done:
charts and tables had to be prepared for those RTAs on which they had managed to find completeinformation; a horizontal analysis had to be prepared showing the coverage of countries’ RTA
partners; the draft needed to be refined and conclu sions, if any, drawn.  He gave mid-August as a
realistic completion date for the study, with scheduled distribution to Members by the beginning of
September.  Once further data became available, the study could be supplemented.  He stressed that
the work should be considered as a preliminary step in the direction of a more complete study oninternal trade liberalization within RTAs.
22. Moving to the survey on rules of origin, the representative of the Secretariat indicated that it
was also advanced, perhaps more advanced than the coverage study.  The rules of origin study would
give Members detailed information on RTA rules of origin regimes, first setting out a general
framework for comparison purposes.  He explained that the survey had been conducted on 94 RTAsin force in March 2001.  These fell into three groups:  the “European Family” of RTAs, including
agreements by EFTA and agreements with the Mediterranean countries, which basically used a
European model of rules of origin, with different types of cumulation of origin (given the importance
of the pan-European System of Cumulation of Orig in, which was applied by 50 RTAs, the survey also
contained an overview of its main features);  ag reements in or by the Americas, including NAFTA,
Mexico-Chile, Canada and Mexico-Israel; and agreements among developing countries, including
PATCRA, AFTA, CACM, COMESA and MERCOSUR.  Th e issues investigated fell into two broad
categories:  requirements contained in product-specific origin rules (i.e. the “general origin rules”);
and provisions supplementing or modifying these requirements, such as the cumulation rules.  He
indicated that, as with the study on coverage, the Secretariat was aiming for a realistic completion
date of late August with distribution to Members by the beginning of September.
23. The representative of Australia expressed his di sappointment that these two horizontal studies
on coverage and rules of origin had not been finalized and therefore could not be discussed at the
meeting.  He recalled that it had been agreed at  the previous formal CRTA meeting in February that
the studies should be the focal point for the Committee’s systemic debate that year.  Having said that,
he appreciated the explanations of the Secretariat and was encouraged to hear that the studies would
be available as early as possible in advance of the September session.  The representative ofHong Kong, China, echoed the Australian delegation's concerns and encouraged the Secretariat to
double its efforts in completing the studies.
24. The Chairperson concurred that it would have been preferable to have the studies ready
before the summer break.  She had, however, no doubt that the Secretariat would make sure that the
Committee received the studies by early September.  Moving to the second question raised underWT/REG/M/29
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"Other Business", she informed the Committee of a minor modification concerning the dates of the
next Session, which would be held on 26-27 Sept ember instead of 27-28 September as previously
scheduled.
25. The representative of Hong Kong, China, in troduced the third matter under this item by
saying that his delegation was interested in deepening the knowledge of the relationship between
RTAs and the multilateral trading system.  In this regard, he observed that some academics and
organisations had made some positive contributions, and cited a seminar on RTAs conducted by
APEC and some studies released by the OECD.  Given the interest of WTO Members in the subject
and in light of the mandate of the Committee, he proposed the organization of an educational seminar
on the topic for later that year or early in the comi ng year.  He said that the feedback received from
other Members had been, thus far, quite positive.  He added that it would be particularly useful if the
seminar could present the latest economic studies about the relationship between RTAs and themultilateral trading system, and that Members involved  in RTAs share some of their experiences, so
that more discussions in that regard could be encouraged.  His delegation had discussed the topic with
the Secretariat and had been informed that such a seminar would take three to four months to
organize.  He said that his delegation wished to help and support the organization of such a seminar.
26. The Chairperson remarked that from a practical point of view the seminar would be
impossible to organize before the beginning of the year 2002.
27. The representative of the European Communities expressed support for the initiative as well
as for any other initiative which aimed at getting this subject a little bit higher on the WTO agenda.
He observed that they were faced with a situation, which many might have not realized, where the
exceptions, namely GATT Article XXIV and GATS Article V, were becoming the rule, and a rule notvery well defined.  This situation could lead to more problems in the future.  He stated that if such a
seminar could achieve the basic objective of raising awareness about the fact that only a minority of
world trade was conducted under normal MFN trade, his delegation would be willing to informally
discuss the right sort of approach to such a se minar to make sure that that objective would be
achieved.  He added that his delegation did not want to give the impression that it had a problem withthe exception, because it used it itself, but it was his view that disciplining its use and making clear
how it could be used was absolutely necessary.  He reiterated his support for any initiative, like
seminars, which would help delegations better understand the limitations of GATT Article XXIV and
GATS V.
28. The Committee took note of the comments made.
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