 
 RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/REG/M/16  
18 March 1998 
 (98-1091) 
Committee on Regional Trade Agreements  
Sixteenth Session  
 
  
NOTE ON THE MEETINGS OF 16-18 AND 20 FEBRUARY 1998
 
Chairmen:  Mr. John Weekes (Canada) an d Mr. Jean-Marie Noirfalisse (Belgium) 
A. Adoption of the Agenda  
1. The Sixteenth Session of the Committee on Regional Trade Agreements (CRTA) was 
convened in Airgram WTO/AIR/769 and Corr.1.  In opening the Session, the Chairman  
(Mr. J. Weekes) noted that the Parties to Agreem ents listed under Agenda items D.IX and D.X had 
requested that their examinations be postponed. 
2. The representative of Turkey  and the representative of India  each indicated that, under "Other 
Business", their delegations would be making stat ements concerning India's request for a dispute 
settlement panel concerning "Turkey's Restrictions on Imports of Textiles and Clothing Products". 
The representative of Chile  said he wished to make a statement under "Other Business" concerning 
the postponement of the examination of the Fr ee Trade Agreement Between Canada and Chile. 
3. The following Agenda was adopted: 
A. Adoption of the Agenda 
B. Reporting on the Operation of Agreements 
 C. Systemic Implications of Agreements  and Initiatives for th e Multilateral Trading 
System and the Relationship Between Them: 
  I. "Other regulations of commerce" 
  II. "Substantially all the trade" 
D. Examination of Regional Trade Agreements: 
  I. Central European Free Trade Agr eement (Czech Republic, Hungary, Poland, 
Romania, Slovak Republic and Slovenia) 
  II. Free Trade Agreement Between the Re public of Slovenia and the Republic of 
Bulgaria 
  III. Free Trade Agreement Between the Czech Republic and the Republic of 
Bulgaria 
  IV. Free Trade Agreement Between the Slovak Republic and the Republic of 
Bulgaria 
  V. Interim Agreement Between Sl ovenia and the European Communities 
  VI. European Communities-Hungary Europe Agreement, Services 
  VII. European Communities-Poland Europe Agreement, Services   VIII. European Communities-Slovak Republic Europe Agreement, Services 
E. Election of Officers 
 F. Other Business 
 WT/REG/M/16 
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 B. Reporting on the Operation of Agreements
 
4. In taking up Agenda item B, the Chairman  recalled that during the Fourteenth and Fifteenth 
Sessions the Committee had reverted to an inform al mode to consider an Informal Proposal on 
Reporting on the Operation of Agreements.  T hose discussions had suggested that the Committee 
might soon be able to agree on recommendations for the Council for Trade in Goods (CTG), the 
Council for Trade in Services (CTS) and the Comm ittee on Trade and Development (CTD) to take 
certain decisions in order to make reporting requ irements operational.  A key element would be 
respecting the existing legal rights and obligations in corporated in the WTO texts.  Following up on 
the Committee's request at the last Session, the Secr etariat had revised the proposal in the form of a 
Chairman's Note (WT/REG/W/23), which incorporated the points made during the informal meetings.  
This Note had been distributed well in advance of th e day's meeting, so he anticipated that delegations 
would be in a position to reac t to it definitively this Session. 
5. The representative of Canada  said the draft recommendations had come a long way in 
accommodating all delegations' interests.  They were close to what could be acceptable.  There was a 
difference in language between Anne x III, which served as the draf t recommendations to the CTD for 
Enabling Clause agreements, and Annexes I and II, wh ich served as the draft recommendations to the 
CTG for GATT Article XXIV agreements and to th e CTS for GATS Article V services agreements.  
The difference reflected the fact that the legal obli gations between these types of agreements were not 
the same.  In particular, in paragr aph 1 of Annex III, it said "such information will be available to the 
Committee", whereas in the two previous Annexes the undertaking was more direct, saying "the 
information will also be made available".  He assu med that any information that was relevant to the 
Committee's work (in particular, work under item 1( d) of the terms of reference) would be made 
available and accessible to the Committee.  So, while th ere was a slight difference in the language, his 
delegation would be willing to acce pt the draft text on the understanding that any information that was 
pertinent to the Committee's work would be accessi ble to the Committee.  Regarding paragraph 2, 
there was again a notable difference between the language in Annexes I and III.  Part of the difference 
reflected the fact that Article XXIV agreements we re subject to a thorough examination, with one of 
the key elements being product coverage.  RTAs notified under the Enabling Clause were not subject 
to the same requirements, so his delegation could accept that there was no need to provide trade 
statistics on product coverage for those agreements, as was required for Artic le XXIV agreements.  
However, it was essential that some statistical in formation on trade among pa rties to the agreement 
and trade with third parties should be provided.  It  would be unfortunate if this information, which 
was central to seeing how RTAs developed, would not be made available to the Committee.  So, in 
paragraph 2 of Annex III, his delegation would like to  see the language changed from "would also be 
desirable" to reflect the same language used in Anne x I, which said that information "should also be 
provided".  That would make it clear that at least the basic trade information was reported both by 
agreements notified under Article XXIV and by agre ements notified under the Enabling Clause.  That 
sort of information had been made available in so me instances by RTA parties submitting information 
to the CTD, so rather than being something new, it was something that could simply be standardized 
across all agreements notified under the Enabling Clau se.  This would allow similar information to be 
submitted in the different kinds of periodic reports. 
6. The representative of the United States  said her delegation supported the intervention by the 
representative of Canada.  While many countries, particularly smaller countries, had difficulty 
submitting trade statistics, there was an obligation to su bmit data to the integrated data base (IDB);  if 
the presentation of the data was a problem, perh aps the Secretariat could help, drawing information 
from the IDB. 
7. The representative of Colombia  said that the draft recommendations called for the periodic 
reports to the CTG, the CTS and the CTD to be sent to this Committee.  This related to item 1(b) of  WT/REG/M/16 
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 the Committee's terms of reference;  but in his delegation's view, item 1(b) mandated the Committee 
to review the way in which reports on the opera tion of agreements might be presented - referring 
basically to the exercise undertaken earlier for form ats and the way in which th e presentations were to 
be made.  This referred to something else, howev er, which was the recommen dation that the periodic 
reports submitted to the CTG, the CTS and the CTD be  automatically sent to this Committee as well, 
so that the Committee might analyze the systemic co nsequences thereof; his delegation viewed this as 
going beyond the scope of the terms of reference, as  the text no longer referred purely to form.  
Item 1(b) of the CRTA's terms of reference involved the substantive requirement that these periodic 
reports be submitted to the CTG, the CTS and the CT D, and their permission was to be requested to 
send the reports to the CRTA for study of the syst emic consequences.  His delegation would prefer 
that paragraph 3 of Annexes I, II and III be seen as  relating to items 1(c) and 1(d) of the terms of 
reference, and not to item 1(a).  Rather than referring to the formats for the reports, this 
recommendation went beyond the matter of mere fo rm.  Also, the purpose of paragraph 2 was to have 
a study of systemic consequences and not of the ag reement itself.  Finally, in relation to Annex III, 
paragraph 1, his delegation would like to see the language mirror that found in the Decision on 
Differential and Preferential Treat ment for Least-Developed Countries (hereinafter the Enabling 
Clause), particularly paragraph 2(c).  In paragraph 2(c) of the Enabling Clause, there was no mention 
of "preferential" agreements - it spoke merely of regional or global agreements between Contracting 
Parties which were developing countries, to re duce or remove tariffs on a mutual basis. 
8. The representative of Brazil  said his delegation supported the intervention by the 
representative of Colombia but pr eferred the language as it was, rather than changing both 
paragraphs 1 and 2.  For pa ragraph 2, especially, it would be better to retain the language as it was, as 
changing the paragraph from "would also be desi rable" to language including the word "should" 
would create an obligation that was not otherwise in  the rules.  The same was true for the first 
paragraph, which his delegation preferred to keep as it was since the language saying "such 
information will also be available" to the CRTA ha d to be understood with reference to what came 
after it, which was the need for the systemic anal ysis.  So, his delegation would favour keeping the 
language as it was. 
9. The representative of the European Communities  said that, like the Canadian delegation, his 
delegation viewed the paper as advancing the discussion and capturing the sense of past discussions 
on the topic.  The point made by the United States representative on the use of the IDB seemed 
sensible, helpful and eminently practical.  To take the exercise forward, the Committee needed also to have some sense of what it would look like operati onally.  In previous discussions of this item, the 
Committee had had documentation of the full range of agreements which were likely to be subject to 
some sort of reporting requirement.  That had been helpful, but also somewhat daunting in setting out 
how much work Members had in front of them.  It was important to bear these operational 
consequences in mind as the Comm ittee finalized its recommendations.  He requested that a schedule 
be prepared to indicate what the consequences mi ght be.  He recalled his delegation's particular 
concern that the biennial reporting requirement, while affecting agreements the EC had with third 
countries, should not be applying to the EC itself. 
10. The representative of Australia
 said his delegation found the draft recommendations to be 
acceptable and congratulated the Secretariat for its work on this difficult issue.  His delegation could also accept the suggestions that the delegations of Canada and the United States had made.  It would 
be helpful to have the information on RTAs th at was submitted to the CTG, the CTS and the CTD 
also available to the CRTA to consider in its wo rk.  One of the difficulties facing the Committee was 
the fact that it did not have even basic data on what proportion of global trade was conducted under 
preferential terms.  This made it difficult to assess the overall effect of RTAs.  To that extent, it would 
be helpful to have information made available to  the Committee, including the reports made to the 
CTD.  Even with all that information, it would still be difficult for the Committee to assess the overall 
effect of RTAs.  Whatever information the Committee could obtain would therefore be helpful.  The WT/REG/M/16 
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 information would also be useful to Members who were contemplating RTAs themselves, as it would 
enable them to obtain an overall view of the univer se of RTAs, to see how they had been implemented 
by others and how they had developed.  So, the in formation could be useful to Members in a variety 
of ways.  But as said, his delegation could accept the draft recommendations as proposed. 
11. The representative of Hong Kong, China
 thanked the Chairman and the Secretariat for 
producing the draft recommendations, with which hi s delegation was conten t overall.  The draft 
basically reflected the existing WTO obligations on periodic reporting and transparency of RTAs.  His 
delegation welcomed in particular the retention of the specific arrangement whereby relevant 
information received by the CTG, the CTS and the CTD would also be available to the Committee as an input to its ongoing work on systemic issues.  His delegation was open to the proposed 
modifications by the delegations of Canada and the United States if they would promote early 
adoption and implementation of the recommendations .  His delegation also supported the Australian 
point in favour of having indications of the proportion of preferential trade to global trade. 
12. The representative of Morocco
 thanked the Secretariat for the draft recommendations, which 
he said were all acceptable.  In the beginning, his delegation had basically been opposed to submitting 
recommendations on the agreements between developing countries.  So, in relation to his delegation's 
initial position, Annex III went quite some way.  To jo in in the spirit of consensus and to ensure those 
who were seeking transparency, par ticularly in terms of the systemic  studies on preferential trade, his 
delegation had made an effort and was willing to go even further.  He joined the representative of 
Brazil in saying that Annex III was acceptable as it was, including paragraph 2, which did not add 
obligations to those already borne by the developing  countries.  Moreover, th e statistics were already 
there, at least in theory, in the IDB, and this was tremendous progress.  The Committee therefore 
should keep to the text as it was, without any amendment. 
13. The representative of Japan  said that overall his dele gation could support the draft 
recommendations.  Although previously his delegation had sought more ambitious guidelines, in the spirit of compromise it could go al ong with the proposed text.  In the previous draft there had been 
language saying the Committee could review the reco mmendations in the future, reading:  "Once the 
reporting is made operational, the Committee could submit further recommendations in light of its 
experience."  His delegation could go along with the recommendations with that wording reinserted. 
14. The representative of Uruguay
 thanked the Secretariat fo r preparing the new draft 
recommendations.  His delegation found the paper ac ceptable and preferred that it remain as it was, 
without any changes.  The reasons for this position ha d been put forward by other delegations already.  
The Colombian suggestion concerning Annex III an d the definition of a regional agreement as 
contained in the Enabling Clause would be acceptable.   The first paragraph of both Annexes II and III 
said that such information would be "available" to  the Committee as an input to the Committee's work 
under terms of reference item 1(d), i.e. systemic an alysis; this precluded the proposal that had been 
made at one point that the document would automa tically have a double purpose.  His delegation 
wished to make it clear that there would be no doub le purpose, and to say that it very much welcomed 
the new text. 
15. The representative of the Philippines , speaking on behalf of ASEAN, congratulated the 
Secretariat for preparing the draft, following the Committee's long discussions on this issue.  It 
seemed the Committee was nearing workable reco mmendations, so her delegation could join the 
consensus without any revision to this draft.  The Canadian proposal seemed inappropriate for reasons 
already mentioned by the representatives of Brazil and Morocco. 
16. The representative of Norway  said his delegation was satisfied with the draft as it stood.  It 
accurately reflected the informal discussions the Co mmittee had previously held.  The amendments to  WT/REG/M/16 
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 Annex III as suggested by the delegation of Canada  seemed desirable, as this would give the 
Committee a more comprehensive ov erview of trade flows covered by preferential agreements.  
However, his delegation also viewed  it as highly desirable to reach an early conclusion on the issue in 
order to operationalize these guidelines, so it would be willing to go along with the consensus on the 
text as it currently stood. 
17. The representative of India  said his delegation supported the advanced text and could go 
along with the consensus. 
18. The representative of Switzerland  said that the proposed text was an improvement and that his 
delegation could go along with it generally.  One issue he wished to raise was the fact that obligations 
already existed and the paper did not change them  as such.  However, he recalled that in the 
framework of the CTS there had been a long debate ov er the course of several sessions concerning the 
notification of existing agreements.  Members had not yet reached a successful conclusion of this 
debate, and there were still some notifications pending.  So he wondered how the Membership would 
deal with those existing RTAs that had not been notified through the normal procedures foreseen.  
When the Committee would send the recommendations  to the relevant bodies, debate might arise on 
this issue.  Perhaps the Committee should leave certain flexibility to the CTG, the CTS and the CTD to give their input.  The recommendations were an excellent basis, but the Committee might still 
receive some input from those other bodies. 
19. The representative of Hungary
 said his delegation was willing to support the 
recommendations in their current form; it also would be willing to support the proposal by the 
delegation of Canada and also that by the delegation of the United States concerning the IDB.  It was 
his delegation's conviction  that it would serve the interests of developing countries to provide the 
necessary information and thereby to try to influence in a more objective way the CRTA's 
discussions, which could have far-reaching consequences for the future of the WTO. 
20. The representative of Argentina  said Annex II mentioned a "description of developments in 
economic integration agreements not contained in the information previously presented to the WTO, and trade statistics covering the last representative period..."  However, experience had shown the 
difficulties of bringing together statistics on servic es.  How then might these trade statistics be 
compiled and presented?  Regarding Annex III, paragraph 1 said the information "will also be 
available to the Committee on Regional Trade Agreements, as an input to the Committee's work under 
item 1(d) of its terms of reference".  Did this mean that the notification would be from one WTO 
Committee to another, or did it mean that the Memb ers, who would have already notified to the CTD, 
then had to make a second notification, fo r information which was already in the IDB? 
21. The representative of Egypt
 said his delegation joined the re presentative of Argentina in its 
concerns regarding Annex III.  The purpose of notifying to the Committee preferential arrangements 
between developing countries was still not clear to  his delegation; was it just for the sake of 
transparency, or were those arra ngements to be discussed and examined by the Committee?  The 
answer to this would shape the understanding of paragraph 1, which read:  "as an input to the 
Committee's work..." 
22. The representative of Canada  said in response to one point raised by the representative of 
Argentina that, with respect to services, it was cl ear that there was no common basis for providing 
statistics.  Footnote 2 of the Standard Format  for Economic Integration Agreements said the 
Committee might be able to compile some elements using national product statistics.  There was 
always an effort to arrive at some basic material to lend a picture of the coverage.  Regarding the 
second question, it was his understanding that a plain reading of paragraph 1 would mean that, once 
the reports were submitted to the appropriate bodies, Members would have access to the information 
and could use it in the appropriate contexts, includin g in the discussions on systemic matters; the text WT/REG/M/16 
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 was not calling for a second notif ication to be made to the Committee.  There had been mixed 
reactions to his delegation's suggestion to change pa ragraph 2.  He again stressed that what was being 
contemplated was to have summary trade statis tics, not the detailed statistics required for 
Article XXIV agreements, which in cluded information on product coverage.  Preparing summary 
trade statistics should not be considered such a burden; this was an important element in the 
Committee's discussion, and it was a standard question posed when agreements were examined.  
Members were interested in knowing how much trad e took place among parties to an RTA and how 
much trade was with third parties.  It seemed stra ightforward to provide this information, especially 
with the IDB.  Concern had been expressed that th is might alter Members’ rights and obligations, but 
the last sentence in each of the Annexes addressed th is question, making it clear that this was not the 
case and that, rather, the point was to ensure that  there was some degree of commonality in the 
information presented.  If delegations had a strong pr eference for maintaining the text as it was, his 
delegation would be prepared to join the consensu s, with the suggestion fro m the Japanese delegation 
that the Committee look at the set of recommendations in light of experience after a few years’ time. 
23. The representative of Argentina
 said his delegation would act responsibly within its 
obligations.  Developing countries often had no choice but to accept the leadership and pioneering of developed countries.  Members were overloaded by notification requirements.  Since nobody was in a 
position to present a methodology for such things as determining the level of trade conducted under 
professional services, it seemed ina ppropriate to suggest an obligation to submit data which could not 
be presented in an orderly way.  His delegation could go along with the proposal but wished to note 
that it found the proposal somewhat unclear.  Turning to Annex III, he asked where in the rules it said that parties to agreements notified under the Enabling  Clause were obligated to provide statistics.  A 
systemic debate on statistics in the Committee was mandated neither in the Enabling Clause nor in the 
CRTA’s terms of reference.  Why should the discussi on be carried out in the CRTA, with a type of 
“double-dip” notification introduced?  Why duplicat e fora?  All Members in the CRTA were eligible 
to attend CTD meetings, so the issue could be disc ussed there.  If the idea were to shift the 
information to this Committee for the sake of transp arency as part of a systemic discussion, and if 
Members wanted to have a mandatory TPRM-type pr ocess in the CRTA, his delegation could join in 
the consensus so long as the recommendations had wo rding to that effect.  If, however, the Committee 
were creating new obligations, his delegation could not agree. 
24. The representative of the United States
 said it seemed the Committee had had the same 
discussion many times before.  The idea of having the notifications on all three types of agreements in the CRTA was simply to use them as raw material as the Committee discussed systemic effects.  She 
would not view the exercise as another TPRM, which was onerous for two-year-review countries.  
The idea was not to supplant any discussion of RTAs which might take place in the CTG, the CTS or 
the CTD.  She recalled that one of the reasons the CRTA was created was to have a central forum for 
discussing regional agreements.  There were different elements of the terms of reference, but the 
preamble clearly indicated that all three types of agreements were covered.  Regarding the 
notifications, she saw the idea as a “one-shot notif ication”, where Members could make a notification 
to the WTO, and efforts would be made to make th e best use of that single notification in whatever 
way it needed to be used, as opposed to having ten different bodies with ten slightly different 
requirements for notifying.  The same would hold fo r the IDB - Members could notify their data once, 
and this data could be used for all purposes necessary.  Every delegation spent a good deal of time 
making notifications, and the point was not to doub le-dip and extract double things in different 
shades.  Regarding the question of whether trade statis tics should be provided or  were desirable, with 
respect to Annex III, at issue were primarily go ods data, which Members already supplied to the 
Organization.  If the software program were written we ll in the IDB, the matter could be as simple as 
entering the country name to pull up the trade st atistics.  Since that information was so readily 
available (assuming all countries complied with thei r notification obligation in the IDB), this was an 
easy matter.  It would seem more appropriate for the Membership to concentrate on notification 
obligations that were harder to fulfil.  It was true that services data might be lacking, but this was a  WT/REG/M/16 
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 recognized problem which all delegations faced, so it was not a matter of singling out any given 
Member which had not done what it was supposed to do.  She hoped the Committee would be able to 
adjust Annex III, paragraph 2 to say that the data “should” be available, and perhaps it would be 
useful to include a note that it would be useful to use the IDB to the extent that it could be used so as 
to minimize the burden on any partic ular country or group of countries. 
25. The representative of Australia  said the United States representative had given a clear answer 
to many of the questions raised that day.  Hi s delegation viewed the draft recommendations as 
creating no new obligations for the provision of data, but rather as saying merely that summary trade 
statistics would be desirable.  He understood this to  mean that it was up to delegations to decide what 
they would provide.  To say trade statistics would be desirable seemed simply to be a sensible attempt to have the Committee provided with information that would enable it to fulfil its mandate with 
respect to systemic implications of RTAs for the mu ltilateral system.  Again, this did not create any 
obligation and did not entail double-dipping.  Annex III merely said that information provided to the 
CTD would also be available to the CRTA.  This  information would help the Committee fulfil its 
mandate to consider the systemic  implications - a mandate the Co mmittee had been quite slow to 
fulfil, despite the efforts of the Chairman.  In the past the Committee had found itself bogged down in 
procedural issues which had prevented it from making  progress in considering systemic implications.  
Of course delegations had every right to say what they wished to, and reporting was an important 
issue.  His delegation, however, woul d be seriously concerned if this Session went by, and, as a result 
of procedural discussion, the Committee was unable to have the important discussion it ought to on 
systemic issues. 
26. The representative of the European Communities
 said his delegation shared the views 
expressed just now by the representatives of the United States and Australia.  Because the EC was 
likely to be the biggest user of the reporting proc edures, it found it disconcerting that an otherwise 
sensible exchange on how to make the obligation work (which was what the terms of reference called 
for) should develop into such a prolonged and arca ne debate.  The question the Committee had been 
given was “to consider how the required reporting on the operation of such agreements should be 
carried out and to make appropriate recommendations  to the relevant body”; as the United States 
delegate had said, “such agreements” included agreem ents notified to all thre e bodies (i.e. the CTG, 
the CTS and the CTD).  It seemed that the draft recommendations were appropriate, subject to the 
point he made earlier about the need to look at the schedule of agreements reporting and to make sure 
Members knew what the consequences would be in operational terms.  After all, the Committee had 
had lengthy discussions. He recalle d one entire afternoon which had been spent usefully looking at the 
purpose of the exercise, which in the end was said to be promoting transparency and contributing to 
the wider work of the Committee.  It was not an invitation to self-incrimination.  The Committee 
should avoid reopening issues it had already resolved.  The texts of the recommendations were nearly 
right. He was glad that others had raised the poin t about the TPRM because his delegation was of the 
view that it was there that the EC as a WTO Member reported at considerable length, on a biennial 
basis, on the operation of every aspect of its co mmercial policy and many  other policies as well. 
27. The representative of Japan  noted that the Committee’s terms of reference as agreed by the 
General Council mandated it to consider reporting, and the draft texts represented the results of the 
work so far conducted in this respect.  As he ha d said, his delegation was compromising in the spirit 
of consensus, with the condition that the Committee could review the recommendations in the future.  
Regarding the point on duplication of information, there did not seem to be duplication, as the 
language stipulating that the information would al so be available to the CRTA meant that either 
delegations or the Secretariat could remind the Committee about documentation in other bodies.  
There was no additional burden.  Enhancing transp arency would benefit all Members, including 
developing countries.  Each country had an interest  in knowing what was happening in other regions.  
For example, in Asia there were many developing countries, and all countr ies were interested in 
knowing what was happening there.  He noted that the processes of the TPRM and CRTA differed.  WT/REG/M/16 
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 The cycles were different, with most Members submitting TPRM information once every six years; 
also, the TPRM was the forum for discussing all areas of trade, whereas the CRTA focused on RTAs. 
28. The Chairman
 said the discussion evidenced why the draft recommendations were drafted as 
they had been and revealed that a text would only be  agreeable if it were like the proposed text.  Also, 
there had been much discussion on the meaning of  Annex III, paragraph 1, which said:  “Such 
information will also be available to the Committe e on Regional Trade Agreements, as an input to the 
Committee’s work under item 1(d) of its terms of re ference”.  Delegations should not regard the text 
as threatening.  The only reference was to this  information being used under item 1(d) of the 
Committee’s terms of refere nce, that being the part that dealt with the systemic aspects of the 
Committee’s work, and not the part dealing with th e examination of agreements.  There had been 
some discussion about statistics, and he wished to  note that footnote one in the Annexes referred to 
the decision by the General Council on the IDB.  He recalled that the Committee’s taking a decision 
this Session on the recommendations would not ma ke them operational; the CRTA decision would 
essentially be a procedural one, to convey the recommendations to each of the other bodies in 
question, and those bodies would then have to consider the matter and decide whether they wished to adopt the procedures recommended by the CRTA.  It did seem from the discussion that the Committee was approaching agreement on this matter, though there were a couple outstanding issues.  
Delegations might wish to have discussions among themselves.  He suggested that the Committee aim 
to take a decision on this issue on the last da y of the Session.  The following were issues the 
Committee still needed to reflect on:  There was the pr oposal by the Japanese delegation to include in 
the recommendations the idea of a subsequent review of the recommendations in the light of experience; here he would point out that it would be the CTG, the CTS and the CTD which would be 
taking the decisions about this matter, so he qu estioned whether the Committee really wanted to 
recommend that those other bodies consider whether the CRTA could make recommendations.  The 
Committee’s terms of reference o ffered considerable scope for the Committee to make further 
recommendations, including as a result of its work on the systemic implications under item 1(d) and 
in its Annual Reports to the General Council.  Othe r points to reflect on were those made by the EC 
representative: In the case of sche duling, he said that RTAs which had been notified could be itemized 
to give a sense of what reporting would be needed, but noted that the Committee was not envisaging 
in these decisions a specific discussion of the reports  but rather the possibility of their being used in 
the context of the Committee’s work.  Scheduling di d not entail meeting times, but rather the timing 
for delegations to report on RTAs.  Delegations were no doubt specifically aware of the agreements to 
which they were party and what their own requirements might be. 
29. The representative of Mexico
 said his delegation had come to this meeting ready to accept the 
draft recommendations.  However, after having h eard diverse comments from delegations with which 
Mexico already had RTAs and with whom it woul d have to work to carry out the reporting as 
recommended, his delegation was no longer as cer tain as it had been.  There was merit in the 
comments by the delegations of Colombia, Morocco, Uruguay and others on Annex III.  Because the 
Committee would return to the issue at the end of the Session, his delegation would use the time to 
reflect further. 
30. The representative of New Zealand  said the Committee needed to acknowledge that there had 
been a long debate on the issue of reporting.  The debate seemed always to be reignited when details 
were discussed, which is an indication of why the straightforward draft recomme ndations read as they 
did.  Paragraph 1 of the various Annexes seemed simply to be a house-keeping matter that would make it clear that the information could be used in the discussion on systemic issues.  If consensus 
were possible that day, his delegation would be willing to go along with it. 
31. The representative of Colombia
 said that, after having listene d to the interventions and the 
Chairman’s summary, his delegation wished to stress a point that perhaps had been overlooked.  His 
delegation would like the text of Annex III, if possible, to follow the wording of the Enabling Clause.  WT/REG/M/16 
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 32. The Chairman  agreed that this was another point to take into consideration. 
33. The representative of Egypt  said that if the reference in Anne x III, paragraph 1, to "as an input 
to the Committee’s work under item 1(d) of its terms of reference” meant that the information would 
be used for the Committee’s systemic work, and not for the purpose of examinations and making 
recommendations, his delegation could join the consensus. 
34. The representative of Argentina  said that, in addition to what  had just been recommended by 
the representative of Colombia, his delegation would suggest that, in paragraph 2 of Annex III, where 
it said “recommends in the context of item 1(d)  that the Committee on Trade and Development adopt 
the following procedures”, the word "consider" be substituted for “adopt” because “adopt” had a 
mandatory connotation.  If this would be done, the Committee could conclude its discussion.  For the 
record, he wished to note that the question that his delegation put forth had not yet been answered: 
would this be mandatory for the agreements cove red by Article XXIV and not mandatory for those 
covered by the Enabling Clause?  It should be made  clear that the level of obligations would not be 
increased.  If the Committee needed to continue this discussion for a number of weeks and for years to 
come, his delegation would make its contribution there, too. 
35. The representative of Australia  said that the discussion had already gone on for weeks and 
months and years.  The long-standing inability of the Committee to fulfil its mandate was of serious 
concern to many delegations.  He also queried wh y the Committee would ever want to send a draft 
recommendation to another Committee if it were not proposing that the recomm endation be adopted.  
The Committee had a choice:  It could agree that th e recommendations would be referred to the other 
bodies which could decide whether to adopt them, or, if it could not agree to send the 
recommendations to other bodies, it could indicate th at it was unable to fulfil one of the items in its 
terms of reference. 
36. The representative of Argentina  contended that the CRTA was subordinate to the CTD.  The 
substantive point was that if the Committee in its sy stemic discussion wished to refer to statistical 
information on a regional agreement, it could go to th e IDB and obtain the information.  If, however, 
the recommendations entailed a notification to the Co mmittee, that would be an additional obligation 
which his delegation was not willing to accept.  He said he could give a dozen examples of the same 
point arising in other WTO bodies.  In other cont exts Members were not willing to increase their 
degree of obligations, so he did not understand why it was being asked that the Committee adopt a 
methodology that would do this.  If for systemic reasons a delegation wished to discuss a specific 
agreement, information could easily be obtained from the IDB, as the United States representative had 
said.  His delegation did not want to create a new obligation. 
37. The Chairman  said he would conduct consultations in this regard and encouraged delegations 
to reflect on the discussion.  He hoped the Committee would be able to reach an agreement on the 
matter by the end of the Session, so it could then transmit the draft decisions to the other bodies for 
consideration. 
38. At a subsequent meeting in the Session, the Chairman  returned to the issue of reporting.  He 
said he would first take up the matter of changes to the text of the draft recommendations and then 
would turn to the question of submitting the Annexes to the relevant WTO bodies.  On the basis of 
what he had heard, he would mainly suggest changes in  the wording of Annex III, to make it closer to 
the language of the Enabling Clause.  He thus s uggested deleting all references to "preferential 
arrangements" and, on the second line in the fi rst paragraph, referring to "regional or global 
arrangements entered into amongst developing countries for the mutual reduction/elimination of tariffs and of non-tariff measures", language which came from paragraph 2(c) of the Enabling Clause.  
The wording might also be changed in other Annexes, for consistency reasons.  One aspect the 
Japanese delegation had wanted to  see addressed in the text conc erned the possibility of the CRTA WT/REG/M/16 
Page 10  
 
 reviewing the recommendations at a later date in the light of experience.  Rather than including this in 
the text, he would suggest that the Chairman of  the CRTA convey these recommendations to the 
appropriate body with a covering note, or an introduc tory statement.  One thing that might be included 
there would be the idea raised by the Japanese delegation that the CRTA should keep this question 
under some sort of review, such as:  “The Committee on Regional Trade Agreements may submit 
further recommendations in the lig ht of the experience gathered in implementing the recommended 
procedures.”  This wording would not be engaging anyone, but rather would simply be a statement 
that this was a possibility.  This possibility was well within the Committee’s terms of reference, but it 
could be simply noted for the information of delegations and different WTO bodies.  He then asked if 
the texts of the draft recommendations with th e proposed changes would be acceptable to the 
Committee. 
39. The Committee adopted
  the draft recommendations. 
40. The Chairman  then invited delegations to comment on how the recommendations would be 
conveyed to the relevant bodies. 
41. The representative of the European Communities  said that before the texts went forward, it 
was important to have a clear understanding of how the recommendations would be put into effect, 
assuming the CTG, the CTS and the CTD adopted them .  The general point was to understand what 
an eventual program of reporting might look like.  His delegation was a major user of Article XXIV and, having a large number of agreements potentially subject to reporting obligations, needed to 
understand how implementation would work.  Reporti ng was an exercise that was intended to be 
different and distinct from the process of the ex amination of notified agreements.  It seemed 
appropriate to suggest as a matter of practical unde rstanding that the process of reporting should be 
something that began after the co mpletion of the examination proce ss.  It would be wrong for a 
reporting obligation to operate in parallel and alongside the examination exercise.  Before the agreed 
recommendations went forward, perhaps it would be po ssible to have some understanding of what the 
universe of agreements would look like where the examination process had been completed for the relevant period of time.  That would be the guid ing principle which his delegation would propose as 
the underlying basis to the Committee’s approach to scheduling the work.  It also seemed appropriate 
to agree within the context of the CRTA to an approximate order in which reports might be expected.  
This would be helpful in terms of programming work for those having to prepare the reports. 
42. With reference to the EC representative’s point that it did not make sense to have reporting 
going on at the same time that the examination process was still under way, the Chairman
 said that it 
was unlikely that this issue would be resolved this Session, as delegations would likely want time to 
reflect on the matter.  He then said that to date there were 67 RTAs notified under GATT 
Article XXIV which were in force, and, of thos e, 42 were currently un der examination in the 
Committee.  If the Committee were as a genera l rule to interpret the Understanding on the 
Interpretation of Article XXIV of  GATT 1994 (the Understanding) to mean biennial reporting, one 
possibility was  that two years after the adoption of the report on the examination of an agreement, the 
first periodic report would be due.  In such a cas e, it would be necessary to think of some way of 
scheduling reporting on the 25 RTAs which underwent examination by GATT working parties prior to the coming into force of the WTO.  There would be subsequent reports which would fall due on a 
two-year basis.  He suggested that the Secretaria t could circulate to Memb ers a note detailing those 
possibilities. 
43. The representative of the European Communities
 said that what the Chairman had outlined 
seemed an appropriate way forward.  Another matte r was the question of the position of the EC itself 
(not its agreements with third countries) in the reporting exercise.  Though the EC enlarged through a process which was clearly one of regional integrat ion, the EC itself was a Member of the WTO and 
was itself nothing like an RTA.  Therefore, it did not  seem appropriate for the EC to report upon itself  WT/REG/M/16 
 Page 11 
 
 
 in terms of its continued existence; no other WTO Me mber was in a position of having to do so, and 
this would seem to go much wider than the effect ive operation of the WTO rules on RTAs.  It was 
also worth recalling that the EC reported on its trade policy every two years in the TPRM cycle, 
which was a lengthy, complex, compre hensive and detailed process.  So there was already a great deal 
of transparency in the way that the EC’s external commercial policies, as well as just about every 
other aspect of its economic po licies, were operating.  At the same time, the obligations which 
Members had accepted in the WTO Agreements st ood as they were, and his delegation was fully 
committed to discharging those obligations.  Taking all these factors together, in discharging its 
obligations, including the reporting obligations, the EC would want to do so in a way which took 
account of the qualitative difference between the EC and other RTAs to which the obligation applied.  
In responding to the note which would be circulat ed on the schedule of reporting, his delegation 
would indicate how the EC, taking  account of the qualitative differ ence, would propos e to meet the 
particular obligations which were being considered.  This would be a way of addressing concerns of 
the EC without asking for obligations to be varied for it. 
44. The representative of Japan  said he understood the EC delegation’s point that this was a 
special situation in that the EC’s trade policy wa s to be reviewed every two years and in that the 
reporting obligation was also on a biennial basis.  On the other hand, Canada, Japan and the United 
States also faced the two-year TPRM obligation, and in that setting it seemed that when RTAs were 
discussed, the Member being reviewed simply  referred to the CRTA and sometimes avoided 
answering questions.  He would consult with his capital. 
45. The representative of the United States  said it was important that the EC delegation had stated 
it was not seeking an exemption from the reporting requirement but was merely trying to determine 
how, in view of circumstances, it might best addres s the requirement.  It seemed reasonable to make 
some sort of accommodation in view of the facts.   Her delegation looked forward to receiving the 
Secretariat note on scheduling.  It might be worthw hile to have some flexibility in the schedule to 
harmonize reporting for similar agreements (e.g., some of the EFTA agreements). 
46. The Chairman  said perhaps this would be a good subject for future informal consultations. 
47. The representative of Hong Kong, China  said her delegation shared the observation by the 
representative of Japan regarding what happened in  the TPRM.  Her delegation would need to reflect 
on the point made by the EC representative. 
48. The representative of Canada  said his delegation understood that the EC was a particular case; 
at the same time, however, it was important to note  that the TPRM and biennial reporting were two 
separate obligations and involved two separate processes.  His delegation would be open to looking at 
how these two obligations could be discharged in the most efficient way in achieving the basic 
transparency goals underlying them, but the two obli gations needed to be ke pt separate and fulfilled 
by the EC.  The Membership could work on the modalities for discharging the obligations.  His 
delegation welcomed the concluding remark by th e EC representative that his delegation did not 
dispute that these two obligations needed to be fulfilled. 
49. The representative of Australia  said her delegation also understood that this was a particular 
case.  Her delegation would need to look at the matter more carefully when the EC provided more 
information on the idea.  Her delegation, too, was pleased to see that the EC delegation viewed the 
reporting obligation as something it wished to fulfil, but also shared the observations of the Japanese 
delegation about the TRPM.  Her delegation was willing to discuss how this obligation could be 
discharged. WT/REG/M/16 
Page 12  
 
 50. The representative of Korea
 said his delegation found merit in continuing to review the EC 
itself because the EC was approaching monetary union.  There was merit in seeing the effects of the 
accomplishment of the monetary union pro cess and other aspects of integration. 
51. The Chairman  recalled that the Committee was not tryi ng to conclude the discussion on the 
modalities for conveying the agreed recommendati ons;  neither was it trying to reach a final 
conclusion on exactly how it would take up its work.  The discussion had been useful and had given 
delegations an opportunity to hear what some of the issues were that still needed to be addressed, and 
there seemed to be a positive spirit in terms of find ing a practical but fair way to deal with these 
matters. 
C. Systemic Implications of Agreements and In itiatives for the Multilateral Trading System and 
the Relationship Between Them  
52. Turning to item C of the Agenda, the Chairman  said that, as indicated in the fax he had sent to 
delegations on 6 February, discussion today wo uld take place in line with the "three-pronged 
approach" for the Committee's work programme for systemic issues, as set out at its Thirteenth 
Session.  He recalled that this approach entaile d a legal analysis of relevant WTO provisions, 
horizontal comparisons of RTAs, and a debate on the context and economic aspects of RTAs.  During 
the past two Sessions, attention had been fixed on  the "legal analysis" component of the Committee's 
three-pronged approach as the Committee probed into  the issues of "other regulations of commerce" 
(with its sub-topics) and "substantially all the trad e".  Because there was interest in devoting more 
time to these discussions, it seemed worthwhile at this Session to afford delegations the opportunity to 
express further views on these different topics.  In th e discussion of "other re gulations of commerce", 
he would encourage delegates to fo llow the structure of the four sub-topics set out previously, which 
comprised the following:  the relationship between th e different parts of Article XXIV, in particular 
paragraphs 4, 5 and 8; the relationship betwee n Article XXIV and other GATT/WTO provisions; 
identification and analysis of measures or regulations covered by the term "other regulations of 
commerce"; and the difference between free-trade areas (FTAs) and customs unions.  The Committee would also continue discussing aspects of "substantia lly all the trade".  He noted that, as requested last 
Session, the Secretariat had prepared and distributed documents WT/REG/W/17/Rev.1 and 
WT/REG/W/21/Rev.1 to elaborate on the Uruguay Round drafting history of the issues being discussed.  He also called attention to the submissions by the Hong Kong, China delegation 
(WT/REG/W/19), the Australian delegation (WT/REG/ W/22) and the Japanese delegation (informal 
paper dated 4 December 1997, distributed at the Fifteenth Session). 
53. The Chairman
 noted that, once the Committee had delved deeper into the issues in front of it 
and rounded out its previous two discussions, in closing the day's discussion under this Agenda item, 
he would return to the question of what the Committee's next steps should be and open the floor for a 
brief discussion on that matter. 
I. "Other regulations of commerce" 
54. The representative of Turkey  thanked the Secretariat for the most recent background paper.  
Like the previous papers, this one was helpful in providing a wide perspective to the analysis of 
systemic issues in general.  A customs union, by the distinct feature of its existence, aimed at 
establishing free circulation of goods between its cont racting parties.  Its objective was more than just 
facilitating trade between partners through mutual elimination of barriers.  In accordance with 
Article XXIV:8(a)(ii), it re quired partners to adopt substantially the same common commercial policy 
measures and common customs tariffs against third countries.  Accordingly, the scope of the common 
trade policy jointly adopted as a result of the customs union might be so comprehensive that not every 
single trade policy measure adopted in respect of the formation of a customs union might be trade  WT/REG/M/16 
 Page 13 
 
 
 promoting.  The important point would be the overall picture.  In fact, Article XXIV:5(a) corroborated 
this argument, stating that a customs union had to  abide by the principle that the duties and other 
regulations of commerce imposed at the institution of any such union was not on the whole to be 
higher or more restrictive than prior to the forma tion of such a union.  The wording “on the whole” 
had key meaning here:  the impact of a customs union on third countries would have to be considered 
on the whole.  Accordingly, when the Committee tr ied to assess the impact of a customs union on 
third countries, it had to look at the total picture to see whether the market accessibility of the 
Members of  the customs union had increased or not as a result.  Since it was rather difficult to 
quantify the incidence of other regulations of commerce, a case-by-case examination became 
necessary to make an overall assessment.  It was th e view of his delegation that other regulations of 
commerce had broad coverage  and referred to measures applied in connection with importation and 
exportation;  in other words, without aligning external trade policies of the partners, a customs union 
could not function properly.  Otherwise, it would re sult in diversion of trade, which in turn would 
undermine free circulation of goods between the partie s, which would be contrary to the essence of a 
customs union.  Also with respect to the differen ces between an FTA and a customs union, he noted 
that parties to an FTA, while lowering trade barriers between each other, were under no obligation to adopt a substantially common trade policy or to appl y common tariff rates agains t third countries.  In 
fact, Article XXIV:5(b), which dealt with an FTA in respect of duties and other regulations of 
commerce with third countries, stated that the du ties and other regulations of commerce could not be 
higher or more restrictive than prior to the forma tion of an FTA.  What was notable here was that, 
unlike a customs union, the duties and other regulati ons of commerce, as far as third countries were 
concerned, were required in all cases not to be higher  or more restrictive than prior to the formation of 
the FTA.  However, in the case of a customs union , Article XXIV:5(a) recognized some flexibility by 
stating that duties and other regulatio ns of commerce were not to be higher or more restrictive on the 
whole.  Also needing emphasis was the distinction between an FTA and a customs union as far as the 
concept of free circulation of goods was concerned.  For instance, since the entry into force of the EC-
Turkey Customs Union on 1 January 1996, textiles and clothing products from third countries had 
been circulating freely between Turkey and the EC.  The maintenance by Turkey of a different import 
regime for such products from the EC would only be  possible if free circulation were suspended and 
preferential origin rules, accompanied by border ch ecks, were reintroduced.  In practice, this would 
correspond with the definition of an  FTA but would be entirely in contradiction with that of a customs 
union. 
55. The representative of the United States
 said that the Committee had in the past discussed the 
issue of what a customs union had to maintain in terms of a common trade po licy.  Delegations might 
have different views on what it meant precisely, but th e heart of the issue raised by the delegation of 
Turkey was whether a Member was allowed to impose new barriers as a result of joining a customs 
union.  She would argue that the safest approach would be to take the "lowest common denominator", 
in other words, for the party that had the restric tive measures to drop them.  Then there would be no 
question of consistency.  If a Member imposed new quantitative restrictions as part of joining a 
customs union, it seemed that Member could be judged to have raised barriers against third parties.  
Perhaps a larger issue was that, at  least with respect to Article XX IV, which had historically dealt 
with tariffs, it was fairly easy to calculate whethe r the level of tariffs was on the whole higher or was 
individually higher; but Members had less experience and expertise in assessing whether a non-tariff 
measure was higher or more restrictive, or what the actual effect was.  The Understanding recognized 
regarding Article XXIV:5 that it was more difficult to quantify such measures and that they needed to 
be looked at individually.  The argument of the Turkish delegation seemed somewhat untenable. 
56. The representative of Canada  said that the Committee had already devoted much time to 
discussion of “other regulations of commerce” from a legal perspective.  Reading the minutes of the 
last Session gave his delegation the sense that all the basic points had been voiced.  In fact, it was 
apparent that there was no agreed definition of what  the concept included.  In some instances the term 
was viewed as including border facilitation measur es when considering the concept in light of WT/REG/M/16 
Page 14  
 
 Article XXIV:5.  Then there was also the need to c onsider the term “other re strictive regulations of 
commerce” in Article XXIV:8.  Perhaps there wa s an overlap between the two, but so far no 
suggested definition satisfied all Me mbers.  There was also a measurement issue:  it was always more 
difficult to assess the trade impact of a non-tariff measure.  Nevertheless the concept was central to 
Article XXIV and central to trade libe ralization, so the term should be understood.  It seemed at this 
stage that the best way for the Committee to move fo rward in its discussion would be to gather as 
much information as possible from existing RTAs, as to what were the types of measures, disciplines 
or instruments dealing with “other regulations of  commerce” found in various RTAs.  Perhaps that 
would provide an inventory of all the measures th e Committee would want to assess with respect to 
Article XXIV.  His delegation saw merit in having su ch an information base, since looking at the term 
in a vacuum with the legal approach seemed to leave the Committee at a loss, due to the lack of agreed definition.  The Committee should cast its net as broad as possible and do a compilation of 
what existed in various RTAs, looking at commonalities and differences.  Perhaps the Committee 
would need to take into account the differences between customs unions and FTAs because the 
breadth of the liberalization might not be the same between these two types of RTAs.  In doing such 
an inventory, the Committee could attempt to do a taxonomy to identify elements for assessing the degree to which the regulations had a bearing on th e liberalization undertaken at the regional level and 
perhaps later at the multilateral level.  The discussi on could thus proceed w ith a larger information 
base than the Committee currently had.  It seemed se nsible to look at the picture of RTAs to try to 
assess in the practical world what were the discip lines and instruments dealt with in RTAs today, 
showing how the RTAs affected each other and ho w they interacted with the multilateral trading 
system.  The Standard Format listed a number of trade instruments which could provide the 
framework for categorizing all of the existing measures. 
57.  The representative of Hong Kong, China
 said it was his understanding that discussion under 
this agenda item was intended to focus on systemic implications, in  particular with respect to two 
particular terms.  One question was whether “oth er regulations of commerce” and “substantially all 
the trade” entailed two requirements  in parallel, where both had to be met individually, or whether 
they could be combined, with the implication that certain benefits involved in one particular element 
might offset certain deficiencies in the other.  He recalled in this regard that  his delegation had set out 
its views, as accurately reflected in paragraph 22 in WT/REG/M/15.  These views were based on the 
ordinary meaning of the words, which was a fundamental way to interpret the terms of an 
international instrument.  If the argument was now being advanced that, because of the appearance of 
the words “on the whole”, the two elements of tari ffs and other regulations of commerce were to be 
lumped together - if that argument prevailed, one would want to look at Article XXIV:5(b), where in 
addressing FTAs, the term “on the whole” did not appear.  The Understanding addressed the evaluation under Article XXIV:5(a) and included two assessments.  First, there was the assessment of 
tariffs.  Then, there was another assessment:  “It is recognized that for the purpose of the overall 
assessment of the incidence of other regula tions of commerce for which quantification and 
aggregation are difficult, the examination of individual measures, regulations, products covered and 
trade flows affected may be required."  The two elements were two separate requirements, with 
compliance required for each. 
58. The representative of the European Communities
 recalled his delegation’s view of the 
workings of Article XXIV.  Paragraph 8 contained the internal definitions or tests which parties 
forming a customs union or an FTA had to meet in order to benefit from the general derogation contained in the opening sentence of Article XXIV:5 , whereas separately paragraph 5(a) and (b) dealt 
with the relations between the partners to a preferen tial agreement and third parties.  This structure 
seemed to hold up well in the debate.  He supporte d the final point in the intervention by the Hong 
Kong, China representative, i.e. that duties and other regulations of commerce were separate.  Also, 
an important and often overlooked word relating to FTAs in Article XXIV:5(b) was the word “each”, 
indicating that the tests contained in that provisi on with respect to FTAs applied to each of the 
constituent territories.  This had bearing on the Committee’s examina tion reports.  Regarding “other 
regulations of commerce” and the sub-topic of th e relationship between Artic le XXIV and other WTO  WT/REG/M/16 
 Page 15 
 
 
 provisions, he said the Canadian point was he lpful in highlighting that the Committee was 
fundamentally dealing with questions of fact.  The Secretariat’s papers on the drafting history 
demonstrated the conclusion that attempts at ge neralized definitions of “other regulations of 
commerce” were unlikely to be any more successful  than the phrase “other regulations of commerce” 
itself.  Attempts to paraphrase the provisions  of Article XXIV would not necessarily help the 
Committee understand its meaning or application any be tter than the language it  contained.  Paragraph 
5(a) and (b) contained the respective use of the words “imposed” and “maintained”, which his 
delegation would argue referred to determinations or  questions of fact, to which the rule in the 
respective sub-paragraph was to be applied.  This le nt strength to the Canadian suggestion that the 
next sensible step in the debate was to develop so me sort of broad, factual list or taxonomy of the 
measures actually addressed by RTAs.  That would be  a helpful step, though it probably would not be 
exhaustive or comprehensive because, particularly in the case of FTAs, the coverage of other 
regulations of commerce maintained in each of th e constituent territories might well extend to 
measures which were not made subject to the agre ement in question.  The Committee might thus need 
to extend beyond the scope of what was covered by individual agreements if such a factual survey 
were ultimately to be useful.  This highlighte d one of the key definitional differences between 
customs unions and FTAs:  as the Article XXIV:8(a) headnote said, “A customs union shall be 
understood to mean the substitution of a single customs territory for two or more customs 
territories...”  That concept of  substitution had been important in other parts of the Committee’s 
debate and would provide one of the important di stinguishing features between the concept “other 
regulations of commerce” in the context of a custom s union, as opposed to what might be the more 
wide-ranging examination which the Committee was obliged to undertake in respect of the other 
regulations of commerce maintained in each of th e constituent territories to an FTA.  All this 
supported the Canadian proposal as a useful first st ep, grounding the debate in facts and moving away 
from the less successful paraphra sing approach taken in the past.  It was also worth recalling that a 
similar approach to the question of “other restric tive regulations of commerce” as set out in Article 
XXIV:8(a) and (b) would yield a different result.  It might well be sensible to consider undertaking 
the same exercise, but it was a different phrase with a different meaning.  One was part of the internal 
test which had to be met to benefit from the derogation, and the other was a more wide-ranging 
obligation, affecting the position of third parties.   That was also one of the areas in which the 
distinctions drawn between paragra phs 5 and 8 were likely to be further highlighted.  Finally, with 
reference to the Chairman’s introductory rema rks concerning the three-pronged approach the 
Committee had decided to follow, he said the Canadi an proposal was good in that it seemed to bring 
together at least two of the prongs. 
59. The representative of Japan  referred to the point made by th e delegation of Turkey concerning 
the words “on the whole” and said  the Committee needed to be careful to have the correct 
understanding here.  Parties to a customs union did not by virtue of their joining the customs union 
automatically have the right to raise barriers against third parties as long as they did not do so on the 
whole.  Reference had to be made to other provisi ons, in particular the principle of most-favoured 
nation (MFN) treatment and Article XXIV:4.  His delegation supported the argument put forth by the 
Hong Kong, China delegation that the phrase “shall not on the whole be higher or more restrictive” 
warranted treating duties and other regulations of commerce separately.  Regarding the Canadian 
proposal, his delegation supported the idea and was of the view that it was important first to grasp 
reality in order to see improved relations between  RTAs and the multilateral trading system for a 
better world.  Yes, the Secretariat should be asked to prepare a paper on coverage of the term “other 
regulations of commerce”, in line with the Canadian proposal regarding the horizontal, comparative 
approach. 
60. The representative of India  said in the last meeting the Committee had had a fruitful and 
substantive discussion of the issue “other regulations  of commerce”.  A number of issues relating to 
Article XXIV had been amplified.  In this context his delegation was grateful to the Secretariat for its 
compilation regarding "other regulations of commerce ".  In the context of the intervention made that 
day by the Turkish delegation, he wished briefly to revisit some of the provisions of Article XXIV.  WT/REG/M/16 
Page 16  
 
 First, his delegation wished to call attention to paragraph 4, which was the basic paragraph 
highlighting the purpose and objective of RTAs.  This was perhaps one of the most important 
provisions of Article XXIV as it provided the br oad guidelines under which other provisions of the 
Article should be interpreted.  It was clear from this paragraph that while the objective of all RTAs 
was to facilitate trade between the constituent territories, it was at the same time provided that those 
regional arrangements should not in any way raise barriers to trade with Members who were not 
parties to the RTA.  In this context his delegation did not see the logic of the argument put forth by 
the delegation of Turkey:  the provisions of Article XXIV did not justify imposing a more trade 
restrictive regime vis-à-vis  third countries after the formation of a customs union.  In fact it was 
Article XXIV:5 which provided the necessary prot ection to third parties after a customs union had 
come into force.  As mentioned by the delegati on of Hong Kong, China, if both paragraph 5 and 
paragraph 8 were looked at together, it was clear that the envisaged protection included not only the 
duties and other regulations of commerce “maintained”  in each of the constitu ent territories, but also 
those which might be “imposed” at the institution of  any such RTA.  In his delegation’s view, it was 
necessary that both the duties and other regulatio ns of commerce which might be maintained or 
imposed after the customs union came into force should not be higher or more restrictive than those prevailing before the customs union.  RTAs should not in any way be used as an excuse for taking any 
GATT-inconsistent measures.  There was no justification for any Memb ers to take such measures, as 
there were no grounds for Members to make trade more  restrictive for third parties.  As asserted by 
the delegations of Japan and Hong Kong, China, Me mbers who were otherwise not eligible to take 
steps such as the introduction of quantitative restrict ions or tariff quotas could not simply on the basis 
of their having entered an RTA become elig ible to take these restrictive measures. 
61. The representative of Australia
 said his delegation supported the suggestion by the Canadian 
delegation regarding a paper on the regulations that  might fall under “other regulations of commerce” 
and perhaps “other restrictive regulations of commerce”.  This seemed a sensible, pragmatic way of 
proceeding.  The exercise need not be unduly co mplicated, as he understood the proposal to entail 
something in the nature of a listing of all the non-ta riff measures covered by RTAs.  Presumably if the 
Committee started off with the entire universe of such non-tariff measures, it might then have a 
discussion on those measures which might be captured by “other regulations of commerce” and those 
which might not.  It seemed sensible to start with a broad list and then reduce it.  On the issue of the 
meaning of the words “on the whole” in Article XXIV:5 (a), as other delegations had said, this was an 
old question, and Members had had previous discussions on it.  His delegation had nothing new to contribute, other than to say that this seemed to be one of the areas  of Article XXIV that left the 
reader in a quandary:  On the one hand his delegation would agree with the Indian delegation that the 
rationale of RTAs and of parties entering into them  was to liberalize, and it  seemed the intent of 
Article XXIV was to ensure that the position of third parties was pr otected and that additional trade 
barriers were not created.  On the other hand, as the Turkish delegation had pointed out, 
Article XXIV:5(a) contained language that did not appear in Article XXIV:5(b).  The difference was 
not clear.  The delegation of Turkey seemed to be suggesting a case-by-case examination; however, 
the history of RTAs in the GATT/WTO showed that if there were no agreement on what the words 
meant, case-by-case examinations would be inconclu sive.  There were various ways of dealing with 
the ambiguities, including by agreement and also by ju risprudence, which was lack ing in this area.  It 
was not clear that there was much to be gained in  further legal analysis by the Committee; perhaps 
what the Committee should be doing instead was suggesting a range of possible ways to deal with the 
problem. 
62. The representative of Argentina
 said the Committee was not a legislative body but rather was 
a procedural body.  The terms of reference were cl ear: the Committee was to discuss procedures, not 
new rules as such.  This was important to bear in  mind when there were tendencies to go farther than 
this.  His delegation could support the proposal presented by the Canadian representative, but a 
question to consider was what the Committee planne d to do with the information it would gather, i.e. 
what methodology would be applied?  This would bring the Committee back to square one.  As the  WT/REG/M/16 
 Page 17 
 
 
 delegate of Australia had just said, if Members had not been able to arrive at a common understanding 
of terms when it had been the time and place to ne gotiate those rules, it was unlikely the Committee 
would be able to do much better.  His delegation co uld not argue against having a table, but it wished 
to know in advance what would be the methodology used for assessing that table.  What did the 
Committee plan to do once the Secretariat would be  in a position to present the outcome of this 
exercise?  Document WT/REG/17/Rev.1 served to set out a factual account of the elements of the 
discussion.  The account showed that for various reasons, the negotiating history since 1947 revealed 
an inability to move farther.  Why then should the Co mmittee think that it might be able to go farther, 
when it was not even supposed to be a legislative body?  The Committee always came around to this 
point.  If the Membership wished to go further, it needed to reflect on procedures, and not implicitly 
through procedures reflect  on the possibility of ma king new legislation.  For this reason, he could 
support what the EC representative had said, i.e.  that Article XXIV:8 was essentially a domestic 
procedure for complying with the rule s, either in a customs union or in an FTA.  He noted that by 
definition Article XXIV was a legal departure from Article I, and debating this point would only 
block progress in the Committee.  If the Committee had a reasonable and rational discussion of what 
it intended to do with the proposed horizontal comparisons table, then his delegation could go along with it. 
63. The representative of the European Communities
 asked the delegations of Japan and India to 
clarify the point made regarding the phrase “on the whole”in Article XXIV:5(a).  The phrase “on the 
whole” with respect to a customs union was clearly significant, otherwise it would not have been 
included in the drafting.  It had to have meaning, bo th in terms of the application of the test to all of 
the parties to the customs union in question, and al so in terms of the other regulations of commerce 
being assessed.  It seemed the Japanese delegate ha d been asserting that the phrase “on the whole” did 
not mean “on the whole”, which could not be correct.  He had also been struck by some points made 
by the Indian delegate in respect of Article XXIV:4.  The Committee had had a long and seemingly 
fruitful discussion about this paragraph at a previous meeting, but the question explored then was 
whether that paragraph could be used to suppor t arguments related to trade creation and trade 
diversion.  The phrase “not to raise barriers” seem ed to be at the heart of the point which was being 
made now.  It seemed to him that the question came down to the following:  Should the phrase “not to 
raise barriers” be interpreted to mean “not to raise any barrier”?  If that were the case, it was difficult 
to see how Article XXIV:6 fit in, because that paragr aph dealt with the raising of duties, which was a 
circumstance envisaged in the way the Article operated.  It seemed therefore appropriate to view the phrase “not to raise barriers” as intended to refer to the raising of barriers on the whole, in respect of a 
customs union at least.  Perhaps a separate interpretation was needed  in respect of an FTA, but in 
respect of a customs union Article XXIV:6 seemed to  envisage, both in theory and in subsequent 
practice, the possibility of at least one sort of barr ier being raised, so it was difficult to imagine that 
the phrase “not to raise barriers” should actually be interpreted as “not to raise any barrier”. 
64. The representative of Japan
 said that, regarding the difference between Article XXIV 
paragraphs 4 and 5, his delegation did not agree wi th the contention by the EC representative that 
paragraph 5 was the elaboration of paragraph 4.  Paragraph 4 did not equal paragraph 5.  When 
Members considered the meaning of the phrase “on the whole”, they also had to consider the meaning 
of Article XXIV:4, which was the guiding principle.   Members of a customs union could raise some 
duties or barriers, but the Committee needed to co nsider some hierarchy between Article XXIV and 
other Articles, especially Article I, i.e. the non-di scrimination or MFN principle, which his delegation 
considered to be above other Articles.  Article XX IV was a derogation.  His delegation was concerned 
about the idea of Article XXIV being considered as  a “legal departure” from Article I, which was the 
most important principle of the WTO;  Article XXI V was rather an exceptio n to it.  Article XXIV:5 
should thus be viewed narrowly, in the context of the WTO Agreement as a whole.  Regarding the 
raising of barriers, his delegation’s paper of 4 D ecember 1997 argued that it would not be appropriate 
to understand that members of RTAs were granted, ju st because of joining the RTA, the right to apply 
restrictive measures against third countries, including quantitative import restrictions, or other non-WT/REG/M/16 
Page 18  
 
 tariff measures, e.g., licensing, rules of origin, et c.  “Other regulations of commerce” itself was 
unclear, and any raising of barriers in the form of other regulations of commerce should be done 
cautiously.  The RTA parties did not have an automa tic right to raise non-tariff barriers.  The raising 
of barriers should not be construed as a right.  Therefore, the meaning of “on the whole” should be 
understood carefully, in the context of the whole picture of the WTO Agreement. 
65. The representative of India
 said the response by the representative of Japan had answered in 
large part the question by the EC representative.  There had been an excellent discussion at the 
previous Session regarding Article XXIV:4.  In his de legation’s view, the last part of paragraph 4 said 
that constituent members should not raise any new barriers - so it was not a question of raising any 
barriers but of introducing new barriers.  Though his delegation preferred not to make reference to 
qualitative terms such as the Preamble or introductory statement, he recalled that the point had been 
made that, even though Article XXIV:4 did not real ly specify particular legal rights, it was like a 
preamble to the whole Article.  So it was in this  context that his delegation had referred to the 
provision. 
66. The representative of Korea  said his delegation hoped that, as a result of this long discussion 
of a systemic issue, Members would be able to  devise clear and unambiguous interpretations or 
determinations of the issues involved to promot e consistency of the Committee’s work with the WTO 
and to promote the effective examination of RTAs.  The basic objective of RTAs had been in two 
directions: first, to promote intra-regional cooper ation and free trade among the parties, and at the 
same time promoting an expansion of world trade.  This had been the case since the formation of the 
first RTA and held true in this globalization era.   In this regard, he wished to emphasize the 
importance of Article XXIV:4 in the Committee’s de liberation.  Regarding the Canadian proposal, he 
said that the Committee had been bogged down with a legal exercise and needed to find a way to 
move forward.  While the Committe e continued to move forward in its discussion of legal issues, it 
could collect valuable data on the restrictive measures of RTAs.  So, the proposal to launch an 
inventory through the Secretariat on non-tariff meas ures would be extremely useful.  If carefully 
drafted and prepared, that sort of inventory would be quite useful in promoting the Committee’s 
discussion. 
67. The representative of Brazil  said that as he had been reviewing the good paper by the 
Secretariat revealing the Uruguay Ro und drafting history, he had been struck by the fact that 
Uruguay Round negotiators had grappled with the sa me problems the Committee was confronting.  
The Canadian representative had said at the begi nning of the day’s discussion that there was no 
agreed definition of “other regulations of commerce”, and the United States representative had said the impact of such regulations was difficult to meas ure.  All this had been recognized during the 
Uruguay Round discussions, and this was exactly why negotiators had come up with the proposal to 
consider these effects in individual cases.  So, the Committee was going through something that had 
been studied and reviewed before, and the rules were  the result.  Any Article  in the WTO provisions 
could be interpreted differently, a nd this was why, if worse came to worse, Members had the dispute 
settlement system. 
68. The representative of Hong Kong, China
 supported the interventions by the representatives of 
India and Japan, especially the point made on  the connection between the two sentences in 
paragraph 4 concerning the relationship of rights of RTA Members and their obligations in regard to 
third parties.  After considering the EC argument (appearing in paragraph 12 of WT/REG/M/15) that 
paragraph 4 could be viewed as balancing the two ob jectives it contained, he had been convinced of 
the idea that third parties also had legitimate interest s.  There was a nuance there, in that what was 
called for was not a balancing of the two ideas contai ned in that paragraph, but instead, whereas the 
first sentence set out what was desirable, the s econd sentence stipulated what, in pursuing the 
desirable, RTA parties were not allowed to do - name ly, to raise barriers.  Only this interpretation 
would give meaning to the relationship of Article XX IV and the entire GATT, in particular Article I.  
That is, to the extent that the second sentence of paragraph 4 was fulfilled, RTA parties were free to 
pursue what was stated in the first sentence.  Th e Committee should not attempt to strike a balance  WT/REG/M/16 
 Page 19 
 
 
 between the two, because the situation was that Members could pursue RTAs allowed in the first 
sentence provided they observed the requirement s of the second sentence.  In the Committee’s 
deliberations, different words had been used to describe the relationship between Article XXIV and 
the GATT itself - words such as “derogation”, “dev iation” and “departures” had been used.   He 
would agree with the characterization previously us ed by the Argentinean representative, i.e. that 
Article XXIV was an “authorized exception” to the ob ligation of non-discrimination set out in Article 
I, so long as it was understood that exception was authorized only if, in forming RTAs, the 
compatibility requirements under Article XXIV were fully met.  Another point was that, bearing in 
mind that, it was not for the CRTA to make rules or  to legislate, it should be noted that to 
acknowledge an exception involved a legal impli cation:  the burden of proof to demonstrate 
compatibility rested with the party invoking the excep tion.  If the term “burden of proof” should prove 
too legalistic for the Committee, the notion could be se en as the obligation of the party seeking to take 
advantage of the “authorized exception” of Arti cle XXIV to demonstrate that the requirements had 
been fulfilled.  Finally, his delegation supported th e proposal by the Canadian delegation for work to 
be done by the Secretariat on “other regulations of commerce”. 
69. The representative of New Zealand  said the Secretariat’s papers provided a good background 
for the Committee’s discussion on "other regulations of commerce".  Document 
WT/REG/W/17/Add.1 was particularly useful in  highlighting the need for reaching a better 
understanding of what was encompassed in the phrase  "other regulations of commerce".  Document 
WT/REG/W/17/Rev.1 on the drafting history of the Article greatly reinforced this point.  It had been 
stated that during the Uruguay Round there had been attempts to clarify what the term meant; the Committee should not consider the Membership to have completely succeeded in the Uruguay Round 
by its having concluded that a case-by-case consid eration was needed for assessing the incidence of 
“other regulations of commerce”.  Members had to  know what they were considering in a case-by-
case situation, and this was the very problem the Committee was still confronting.  To move things 
forward in a practical way, the Canadian idea seemed appropriate as a useful way of increasing the 
Committee’s knowledge of issues needing to be ad dressed before the Committee could develop this 
better understanding.  His delegation did not view th is as a legislative function exercised by the 
Committee; rather, what the Committee was trying to do was increase its information base so that it 
might be better prepared to look at whether there was a possibility for coming up with the sort of 
general understanding that had prove d elusive during the Uruguay Round. 
70. The representative of the United States
 said it seemed that the Committee was conducting the 
entire Uruguay Round discussion again, with the excep tion of perhaps the one area that had then been 
substantially resolved, which was the process of cal culating compensation for tariff increases to third 
parties occurring with the formation of a custom s union.  Her delegation wished to react to the 
rhetorical question put forth by the EC representa tive regarding Article XXIV:6 and how it worked 
with paragraph 4.  The Committee had discussed pr eviously how invoking Article XXIV did not grant 
new rights and at the same time did not impose new obligations, with a few minor notification 
requirements and so forth.  One point in regard to  paragraph 4 which seemed important was the fact 
that every WTO Member had the right to change its tariff schedule, consistent with the rules of 
Article XXVIII, and this was not a ri ght that was changed by entering into a customs union.  What 
Article XXIV:6 did was to change  somewhat the rules by which th e calculations were made.  If a 
tariff were raised in the process of breaking the bindings in joining a customs union, this was allowed 
as long as the provisions of Article XXIV:6 and Article XXVIII were followed and adequate 
compensation were paid, which was very different than imposing new restrictions on an MFN basis 
against third parties, separate from whatever ru les parties applied internally, in order to grant 
preferential access to the customs union.  So, it seemed  that tariffs did not serve as a particularly good 
example.  The crux of the issue was how non-tariff measures were handled;  for instance, 
Article XXIV did not create a right to impose qu antitative restrictions on an MFN basis.  The 
Canadian idea to have an inventory seemed a good proposal.  As far as what the Committee planned 
to do once it received such a document, she noted that the Committee had spent a good deal of time WT/REG/M/16 
Page 20  
 
 listing measures that might have systemic effects but that it had not given much attention to the 
question of what the effects were.  Nor had the Co mmittee given significant attention to looking at 
types of measures and deciding whether they were real ly relevant in terms of their systemic impact on 
the system.  As the Committee conducted examinations, delegations had made points on others’ 
RTAs, but the Committee had not really engaged in a discussion of whether certain aspects were 
really relevant to the multilateral trading system or were limited in relevance to the workings of that 
particular RTA.  For example,  there were the multilateral rule s in TRIPS;  was "TRIPS plus" 
something Members wanted to do in FTAs?  Was "sanitary and phytosanitary (SPS) plus" something 
desirable in an FTA, meaning the parties would have  certain scientific rules that applied among each 
other and other scientific rules applying to MFN trad e partners?  Here, the answer was likely "no", but 
this pointed to the question of whether using the MF N rules was relevant to FTAs - she was not sure 
that it was, but it seemed this was a discussion th e Committee needed to have.  Perhaps having an 
inventory of what the measures out there were and how they were being implemented would be useful 
in doing that sort of work. 
71. The representative of Canada
 took the floor to respond to questions posed by the 
representative of Argentina.  It wa s useful to return to the mandat e and to what was agreed for the 
Singapore Ministerial Declaration, which served as a reminder that what the Committee was doing 
was aiming for a better understanding of Members’ WTO rights and obligations and how they related 
to Article XXIV and other basic provisions pertaining  to RTAs.  It was difficult to say more at this 
point about what the purpose of the proposed study would be, other than to say that it was in 
compiling information about the real world that  the Committee saw how RTAs interacted and how 
they could have an impact on Members’ rights and obligations, which was the fundamental purpose of 
the Committee.  The fact that some of the issues had been addressed during the Uruguay Round 
should not prevent Members from doing so again.  After all, looking at the matter objectively, over 
the last eight years the world had changed tremendous ly.  The vast majority of RTAs had entered into 
force over the past six or seven years.  So the context under which Members were operating today was 
vastly different than the one that existed in the mid-1980s.  This deserved attention.  Last summer his 
delegation had circulated a short non-paper on the idea of horizontal studies, which set out a number 
of relevant questions which the Committee might look at when considering information in various 
RTAs.  These would be legitimate questions to as k once the Committee receiv ed the compilation, as a 
way of better understanding how existing WTO rights and obligations could be supported or affected 
by the increasing use of RTAs, an d, conversely, how Members could use RTAs to facilitate greater 
multilateral liberalization.  These were the two fu ndamental points pertaining to the Committee’s 
mandate under item 1(d).  It was al ways useful to put forward questions such as those posed by the 
representative of Argentina, but it was also useful to go beyond them and discuss the substantive 
elements behind them. 
72. The representative of the European Communities  wished to clarify some points.  The day’s 
discussion had gone well, and a number of useful a pproaches to the question as well as comments of 
interpretation had emerged which would help the Committee as the debate developed.  His delegation 
had at the previous Session referred to the bala nce in Article XXIV:4 be tween the desirability of 
increasing freedom of trade through closer integratio n and the fact that thir d-party Members also had 
legitimate interests.  A legitimate interest in this  context related either to WTO rights and obligations 
as they appeared on the face of the Agreements, or to the negotiated balance of benefits which arose 
under the Agreements.  This was the only way in which that approach to the interpretation of 
Article XXIV:4 might be developed.  It was wo rth recalling that the WTO Agreements were a 
multilaterally negotiated balance of rights and obligatio ns.  It was not a global charter for free trade, 
and it was important to remember that the right s and obligations and the negotiated balance of 
benefits lay at the heart of the way the WTO system operated and was intended to operate.  The Committee’s interpretation of Article XXIV needed to be placed against this clear and fundamental 
background.  With respect to points made in the day’s discussion, he said he was increasingly drawn 
to the conclusion that the Committee needed to look  seriously at the distinction between FTAs and 
customs unions.  Much of the discussion the Comm ittee had had on the raising of barriers and the  WT/REG/M/16 
 Page 21 
 
 
 phrase “on the whole” concerned customs unions, and implicit in this had been an unasked and 
unanswered question as to whether the process of substituting one customs territory for two or more 
as required by Article XXIV:8 was either a right or ob ligation or both, and to that extent, what place it 
might rightly occupy within the broader structure of WTO rights and obligations and the negotiated 
balance of benefits.  This was at the heart of much  of the discussion.  Also, the discussion on “other 
regulations of commerce” had reinforced the case fo r the factual approach suggested by the Canadian 
delegation.  This went beyond the negotiated st ructure of rights and obligations and began to 
introduce the factual component upon which analysis of the underlying balance of benefits might be 
drawn, so it was an important step to take.  His de legation was of the view that the next step in the 
debate had to be to return to the distinction between customs unions and FTAs. 
73. The representative of Argentina  clarified that he had not said his delegation would 
unconditionally support the proposed exercise.  A paper by the Australian delegation, dated 
17 November 1997 (WT/REG/W/18), said on page 3 that among the non-tariff measures that should 
be resisted were those falling under Articles XXI, XIX , etc.  It was incorrect to equate the concept of 
“restrictions” to “non-tariff measures”, as a techni cal barrier to trade (TBT) or an SPS measure was a 
non-tariff measure but was not automatically a restriction.  The Committee thus needed to be more clear about what it was addressing.  Also, if, instead of making a case-by-case approach, the 
Committee had all the information collected in a table by the Secretariat, he wished to know what the 
next steps would be.  The next steps would be to draw a conclusion.  How was the Committee to 
assess whether the overall regulations of trade were more restrictive or less restrictive than in the 
past?  For example, an Article XXI type measure was more or less restrictive.  If FTA parties wanted to invoke Article XXI, they might each have differe nt concerns.  While all delegations were aware of 
the need to make progress, to make movement was not necessarily to make progress.  Again he would 
ask:  What would the Committee do once it had an inventory of the individual regulations 
summarized in a table? 
74. In response to the Argentinean representati ve’s reference to his delegation’s paper, the 
representative of Australia
 said that his reading of the paper was that in fact his delegation had been 
suggesting in a pragmatic way that Article XXI was no t one of those “other restrictive regulations of 
commerce” that should be examined, because Ar ticle XXI involved rather sensitive matters. 
75.  The representative of Argentina  said it was clear that the aim of the paragraph was as the 
representative of Australia had said .  He then quoted WT/REG/W/18 as reading in part: “Delegations 
have in the past pointed out that Article XXI is not lis ted.  In their view, if resort to general exceptions 
is permitted, there could hardly be a reason why security exceptions should be out of bounds.  But there has always been a recognition that this paragra ph applies to matters quite different to those listed 
in Article XX, and that no WTO Member will give up its right to judge when its essential security interests are involved...”  So to determine exactly if an Article XXI invocation had to be put aside, 
first Members had to make the assessment re commended by the Australian delegation. 
76. The representative of Hungary
 said it seemed sometimes the Committee was digressing.  The 
Committee needed to be sensible  enough to admit that Article  XXIV:5 was a damage-limiting 
paragraph.  One could not “impose” a liberalization measure.  It had been foreseen that there was a 
net price Members had to pay for an RTA to have  a trade-creating effect.  The whole paragraph 
worked to say that RTA parties c ould create trade in a positive sense toward third parties and on the 
whole it would be positive, though there were certain prices that might need to be paid.  The words “on the whole” should be read in that context.  There had been an interesting discussion as to whether the duties and other regulations or commerce were pa rallel or separate obligations.  In his delegation’s 
view, the fact that paragraph 5 contained the word  “higher” and then separately the word “more 
restrictive” on the one hand, and that there was paragraph 6 on the other hand, meant that the two 
together might indicate that there were separate obligations.  It would be incorrect to say that an RTA 
party had no right at all, under any circumstances,  to introduce any kind of measure that was not WT/REG/M/16 
Page 22  
 
 liberalizing.  As had been said, it was important that the Committee’s discussion was grounded in 
reality. 
77. The Chairman
 said that, contrary to what he had proposed at the meeting’s outset, the 
Committee had not waited to discuss its next steps but instead had already been talking about these 
concerns.  It seemed the Committee had exhausted its debate with respect to the legal aspects of the 
issues on the table.  Item 1(d) of the Committee’s terms of reference called for the Committee “to consider the systemic implications of such agre ements and regional initia tives for the multilateral 
trading system and the relationship between them  and make appropriate recommendations to the 
General Council”.  This mandate was not for an abstract discussion about the meaning of terms, but 
rather to relate them to the actual RTAs that existe d.  It seemed that the proposal by the Canadian 
delegation, which had been supported by many de legations, would be faithful to the Committee’s 
mandate of starting with the agreements and looking at the implications of those agreements for the 
multilateral trading system, and would also help the Committee enter into the second prong of its 
“three-pronged approach”, the second prong being very much a comparison of the provisions that 
could be considered “other regulations of commerce ” in the different RTAs.  At this stage, this 
process did not seem to entail anything with respect to the conclusions that might be drawn.  There 
seemed to be merit in compiling a listing of the different provisions in RTAs by breaking them down according to the headings of the different regulations of commerce.  The other point that had been suggested for further follow-up was the point made  by the EC representative that the Committee 
should spend more time on the differences between FTAs and customs unions, aspects of which had 
been addressed in the day’s discussion in looking in particular at Article XXIV:5(a) and (b).  The 
discussion had been useful and had built on previous di scussion, but more fuel was needed to take the 
discussion further.  The two areas identified in par ticular were following up on the Canadian proposal 
and pursuing further discussion of the differences between FTAs and customs unions. 
78. The representative of Argentina
 said that there was nothing wrong with having more input, 
but his delegation still wished to know how th e Committee intended to proceed once it had the 
information.  The problem was not collecting the info rmation, but rather introducing that information 
with a particular methodology.  There was so far no proposal for that methodology on the table.  So as 
not to "bite its tail", the Committee should deal w ith this issue now rather than returning to it when 
starting a new discussion.  If other delegations had a sense of where they wanted to go with the results of the horizontal work, his delegation wished to be apprised of it now. 
79. The Chairman
 said he was not going to be a proponent of the Canadian proposal, but he did 
wish to point out that one of the other elements the Committee had agreed should be part of its discussion in examining “other regulations of comm erce” was the identification of what was meant by 
this term.  A pragmatic or illustrative way of doing that would be by looking at precisely what already 
existed in various RTAs.  What the Committee then  would do with the information gathered was a 
matter for the Members to decide at that point in time.  The fundamental question could be asked as to 
whether it was worthwhile pursuing anything under item 1(d), but it was hard to see how the Committee might continue consideration of the syst emic implications of RTAs for the multilateral 
trading system if it did not pursue the analysis of systemic issues by looking at what was in the 
various agreements.  If delegations were uncomfor table proceeding now, the Committee could put off 
a decision about its next steps.  However, he wo uld encourage the Committee in the course of the 
meeting to agree on the next steps because the Co mmittee needed to have a sense of direction for 
delegates to convey to their capitals and to focus on how to contribute to the next phase of work. 
80. The representative of Argentina
 asked, assuming the Committee introduced the elements 
presented in the Australian paper (e .g., the steady use of a textiles safeguard by particular Members), 
if it could agree that this was another regulation of commerce which had implications.  The need for a 
methodology was analogous to the need for a person to know, when he went to a gas station, whether 
he was going to use the gasoline to drive or to keep in storage facilities.  If his delegation knew where  WT/REG/M/16 
 Page 23 
 
 
 the Committee was headed, it could lend its support to  the proposal; but so far the proponents were 
not responding with concrete remarks.  It wo uld not help the Committee to have an unselective 
inventory of information. 
81. The representative of Japan  said his delegation preferred that the Committee take a decision 
this Session so the Secretariat could begin its work .  In order to fulfil item 1(d) of the terms of 
reference, information would be key.  The Committ ee had valuable information regarding the drafting 
history, but it would be helpful to know the reality  of what was taking place in the RTAs that were 
emerging.  The Committee might not know where it would go once it received the information, but 
without the information it could not go anywhere.  The Committee’s mandate had been given by the 
General Council and supported by ministers in th e Singapore Ministerial Declaration, so the 
Committee should at least initiate the work to move forward.  The collection should be as broad as 
possible.  His delegation trusted the Secretariat to begin the work, which the Committee could react to 
later. 
82. The representative of Canada  said the Committee had devoted much time to the procedural 
question of how to move forward but was having diff iculty proceeding on the basis it had set out in 
the past.  The Committee had agreed to tackle th e issues of “other regulations of commerce” and 
“substantially all the trade” by using the three-pronged approach.  This approach included legal 
analysis, for which the Secretariat had provided the Committee with useful background material.  It 
was clear that there was no agreed definition of the concept and that there was a desire to know more 
about the reality of RTAs.  It had been agreed last  year that the Committee would try to compile that 
information by performing the inventory, or horizontal study, of the various measures in place.  It was only logical to take this step now.  If delegations had other suggestions for advancing the discussion, 
his delegation would be eager to hear them.  It se emed some delegations we re ready to engage in 
almost a negotiating session - that was not the inten tion of his delegation, which had always viewed 
item 1(d) of the Committee’s mandate as involving a broad, policy driven discus sion.  But in order to 
have such a discussion, the Committee needed to have an information base.  So far the Committee had no detailed analysis of what was being covered in RTAs, giving rise to uncertainties, such as the following:  Did RTAs have similar treatment?  Were there different models?  What was the 
relationship between the various RTAs among them selves?  What was the relationship between the 
specific provisions of an RTA with comparable pr ovisions of the WTO?  The Committee so far had 
not yet addressed any of these questions, in large pa rt due to the lack of a broad information base.  
The Committee was starting to compile this informa tion, and the legal papers were helpful in this 
context, but now it would be a useful complement to produce a similar paper based on the reality of the various RTAs.  If this were not the next step fo rward, perhaps the only a lternative was to jump to 
the conclusions, which he would not advocate in the absence of information.  The specifics of his 
delegation’s proposal were straig htforward:  it was requesting the Secretariat essentially to do a 
descriptive compilation of measures that were cont ained in RTAs.  After that, delegations would be 
free to draw their own conclusions .  There did not, however, need to be any more specific guidance; 
the Secretariat was competent and had the Committee’s confidence to gather that sort of information, 
which would be of great use to the Committee’s future debate. 
83.  The representative of the European Communities
 said he agreed that, if the Committee knew 
the answers, it would not need to do the work.  This was a process of exploration, where the 
Committee was trying to proceed cautiously in a proce ss of careful, factual expl oration of the issues.  
The summary which the Chairman had just advanced seemed appropriate. 
84.  The representative of Australia  said he could understand the concerns of the delegation of 
Argentina that none of the Committee’s work be allowed to prejudice any conclusions the body might 
reach.  It seemed that nobody knew clearly what was meant by “other regulations of commerce” or 
“other restrictive regulations of commerce”, so the proposal for a simple, factual listing of all the non-
tariff measures in RTAs would at least provide the basis for discussion.  Presumably many measures WT/REG/M/16 
Page 24  
 
 would appear on such a list, which many Members of the Committee would immediately decide were 
not to be included in either “other regulations of commerce” or “other restrictive regulations of 
commerce”.  Still, the Committee needed to start some where, and a simple listing thus seemed to be a 
good, non-prejudicial way to start. 
85.  The representative of Argentina
 drew the scenario that a pa rticular RTA was scoring high 
marks in terms of TBT and SPS provisions but was poor  in terms of competition rules.  What would 
be the outcome of this kind of discussion?  Ho w was the Committee going to assess whether overall 
that particular trade agreement was fairing we ll?  And how would it use this to enhance the 
multilateral trading system? 
86.  The representative of Norway  said that, as a representative of a Party to an FTA, which had 
itself entered into numerous FTAs with third partie s, he would see no inconvenience in having such a 
listing of provisions covering “oth er regulations of commerce” in different RTAs.  On the contrary, 
this would be extremely useful for the Committee in  advancing its work.  As long as what was being 
suggested was a simple listing of such provisions, his delegation would support the notion and 
participate in such a debate. 
87. In response to the question raised concerning what judgment might be made about any 
measures listed in the proposed document, the Chairman   said that this should not be a judgmental 
exercise or an exercise designed to examine individual RTAs again and making judgments about 
them, but rather should be an effort to look more broadly at the question of how other regulations of 
commerce and their use in various RTAs could have an impact, positive or negative, on the 
multilateral trading system.  When the exercise would be initiated, it sh ould be factual, non-
judgmental and completely without prejudice to next steps.  The normal practice was that, if a factual 
listing was requested by a number of delegations, th e Secretariat would then be asked to produce such 
a paper.  Because in this case there were clearly some concerns about what the exercise might lead to, 
the Committee should emphasize in requesting the Secretariat to do this compilation that the work 
was to be non-judgmental and without prejudice to other delegations; he would also propose that the 
Committee invite the Secretariat to hold an inform al, open-ended consultatio n with delegations to 
consider the headings that the Secretariat would us e in compiling the information.  He suggested that 
the Committee move on to take up “substantially all the trade".  The re presentative of Japan  said that, 
because some delegations might object to the in clusion of various items in the listing, the 
categorization should be left to the Secr etariat.  The representative of Morocco  suggested the 
Secretariat could conduct consultations during the course of the week, and on the last day of the 
Session, the Committee could take up the issue again.  The Chairman  responded that the question of 
urgency was up to Members, and he was simply trying to bring discussion on this issue to a 
conclusion; he reiterated that this was not a question of taking a decision, as this sort of matter did not 
require a decision.  When a delegation requested th e Secretariat to produce a paper, the request did not 
require a formal decision of the Committee. 
88. The representative of Argentina  said that, while true that a group of delegations could request 
the Secretariat to produce a paper at any time, the current  situation was a different setting, with some 
delegations trying to have the Secretariat support or advance their positions  with the Secretariat 
having the responsibility of produci ng a tailor-made kind of paper.  As  he had said, if a particular 
methodology were to be applied to the work, his de legation could support the proposal and there was 
no need for voting;  but there needed to be a rationale behind the proposal, and this rationale had so 
far been expressed only in a broad manner.  How, through the collection of information, was the 
Committee going to meet its goals?  In an earlier intervention he had put forth a few examples making 
this point, and nobody countered his argument.  His delegation was still waiting to see how “other 
regulations of commerce” interpre ted in the light of Article XXIV  and the Understanding could be 
collected in a way to draw a conclusion related to the systemic implications.  Of course the  WT/REG/M/16 
 Page 25 
 
 
 Committee needed to collect information, but this in formation had already been collected in the many 
examinations the Committee had conducted.  Now the Committee was doing the same exercise from 
the systemic point of view, and for this, the Committee needed a new methodological approach.  If 
somebody could put forth such an approach, his delegation would be able to endorse it.  Rather than a 
problem of perception, there was a fundamental di sagreement here, and his delegation would not 
regard as a Secretariat paper a paper produced to advance the views of some Members, no matter how 
many Members there were. 
89. At a subsequent meeting in the Session, the Chairman  returned to the question of the future 
work which the Committee might undertake.  He requested the representative of Canada to 
reintroduce his delegation’s proposal. 
90. The representative of Canada  said that up until now the Committee’s discussion of “other 
regulations of commerce” had focused on the legal a pproach.  Several helpful notes prepared by the 
Secretariat had shown there were quite varied interpreta tions of the nature of this concept.  In order to 
move the discussion forward, it seemed the Committ ee could avail itself of another part of its three-
pronged approach, namely undertaking a horizontal comparative study.  RTAs today covered more 
than tariffs and many disciplines and trade instruments were being elaborated in various RTAs.  It would be useful for the Committee to have in one single document a listing of what existed in RTAs 
in terms of non-tariff disciplines or other trade instruments.  His delegation did not wish to see a 
debate about what could go in that listing at this po int, given the fact that the Secretariat papers had 
revealed that there was no agreed definition on this.  It would be better to look at the reality of what 
was out there, casting the Committee’s net as broadly as possible to make a simple listing.  This could be done in a fairly concise fashion, with some pa raphrasing or regrouping as the Secretariat deemed 
appropriate.  This would provide the Committee with  a sort of taxonomy or checklist of items covered 
in the various RTAs, and then the Committee could di scuss the paper to see what the extent of the 
coverage was, whether there were differences, what  models were being developed at the regional 
level, etc., which might help the Committee advanc e the objective of the WTO, which was further 
multilateral liberalization.  In short, his delegation viewed this proposal as an information gathering 
piece that could help the Committee in its work  under item 1(d) of its mandate, i.e. systemic 
implications. 
91. The representative of Argentina
 said that at the previous meeting his delegation had noted 
difficulties stemming from the fact that, while the prop osal might end up yielding interesting results, 
there was a need for a more precise articulation of what focus would be given to this work and what 
methodology would be followed in carrying out such an analysis.  His delegation would like to hear 
the views of others in this regard.  If there were consensus in support of the proposal, his delegation 
could go along with it so long as the Committee could hold informal consultations while the study was being carried out, so as to understand the methodology used by the Secretariat in dealing with the 
information.  This would ensure that the study wa s carried out and would give the opportunity for the 
Committee to have an exchange of views and work  on the question of how it intended to use the 
information. 
92. The representative of Switzerland
 said his delegation contin ued to support the Canadian 
proposal.  While the proposal would entail a good deal of work, this work was necessary if the 
Committee wanted to have an overview of the situ ation.  Subsequently, the Committee would need to 
develop a working method to enable the Committee to use the information.  As the Argentinean representative had suggested, informal consultations during the course of the study might enable the Committee to develop this method of work.  Regarding the production of the work, perhaps the 
Secretariat could draw inspiration from some work th at had been done, for example work done in the 
Framework of the Americas, as the Inter-American Development Bank and the Organization of 
American States had already carried out similar work .  It would be useful for the Committee to have 
as broad an overview as possible of the various RTA provisions on the subject. WT/REG/M/16 
Page 26  
 
 93. The representative of New Zealand
 said that his delegation, too, supported the Canadian 
proposal, which seemed geared toward increasing the amount of raw material on “other regulations of 
commerce”.  This seemed appropriate given that the Committee was far from reaching conclusions as 
to what “other regulations of commerce” involved.  He agreed that, as the Committee proceeded with 
this work, it would need to have informal cons ultations about whether some things should be 
categorized as “other regulations of commerce”.  It did seem that at this initial stage the Committee 
was simply requesting the Secretariat to provide the Committee with an overview of the contents of 
agreements.  In terms of methodology, all the Secretariat would be doing would be to look at the 
wording of Article XXIV:5(a), which referred to “d uties and other regulations of commerce”;  duties 
were clearly dealt with in agreements, so the Committee was asking the Secretariat to identify other things dealt with in agreements which might be co nsidered to be “other regulations of commerce”.  
Informal consultations should take place after the wo rk had been initiated in a basic, factual document 
by the Secretariat guided by th e wording of Article XXIV:5(a). 
94. The representative of Venezuela
 said his delegation shared the views expressed by the 
representative of Argentina.  Further thought shou ld be given to the proposal, and the Committee 
needed the support of the Secretaria t in seeking out a methodology as to how to carry out the review.  
It was difficult and complicated to know what ex actly was being sought, since the proposal to carry 
out an analysis of all the disciplines and the scope and coverage would be quite a complex task.  To 
go into the detail of agreements wa s a form of work which took on great magnitude.  If it was a 
question of having a general understanding of what the RTAs covered, what the disciplines were and 
what were some of the issues dealt with, that wa s a simpler approach, but if it was a matter of going 
into the details of each agreement, that was a comp licated task for the Committee to undertake.  For 
example, if the Committee were to begin by lookin g into the NAFTA, the task would be interesting 
but quite complicated. 
95. The representative of Japan  said first that the purpose of the exercise was to fulfil the 
Committee’s mandate as found in its terms of reference and in the Singapore Ministerial Declaration: 
the Committee was to consider the systemic implic ations of RTAs and the WTO, considering the 
relationship between the two, which was indeed co mplicated.  The Committee had been given this 
task, and it required information.  Second, normal ly agreement was not necessary for requesting the 
Secretariat to produce a paper.  Regarding the methodology, since it was so complicated, it seemed 
appropriate to entrust the Secretariat with the task, and, as suggested by the delegate of New Zealand, 
once work were begun the Committee could consult on  it.  The representative of Venezuela had said 
that the task would be complicated and difficu lt, and this was why the Committee was asking the 
Secretariat, made up of professionals and who had been working in the area a long time, to help.  If 
the initial paper were not sufficient, the Committee could amend or improve it.  Strengthening the 
multilateral trading system would benefit all Members, since all had an interest in market access in 
other regions, so the collection of information would benefit all Members. 
96. The representative of Australia  said her delegation supported the Canadian proposal and had 
understood it to mean that there would be no analysis  involved but that the Secretariat would merely 
be collecting available information on RTAs and co mpiling it in a simple, factual document to assist 
the Committee in its further discussion of a complex issue.  There would be no pre-judging of issues.  
It would be merely an exercise in collecting f actual information to provide the Committee with an 
overview of what was actually happening in practice in RTAs.  Much of this information was available in notifications to the Secretariat and, as the representative of Switzerland had noted, in work that was being done in other organizations.  The Secretariat would be merely putting this into 
one document to show what was happening in practice, and the Committee could have discussions 
after that document had been complete d as to how to take work forward.  WT/REG/M/16 
 Page 27 
 
 
 97. The representative of the European Communities  said his delegation supported the Canadian 
proposal for reasons previously mentioned.  The case  for the proposal had been articulated well by the 
representative of New Zealand.  This was simply a sensible step in acquiring a body of factual 
material which could then form the basis of taking the Committee’s consideration of this part of its 
mandate on to the next stage.  There was no more to the matter than that.  It was a sensible and 
actually cautious way of proceeding. 
98. The representative of the United States  said that it seemed several points were emerging.  One 
was the Canadian proposal itself, which was a mechanical exercise of going through the different 
RTAs and having the Secretariat identify what ite ms should be included in the list, following the 
horizontal approach talked about from the beginning.  It would be premature to have consultations on 
the methodology to be used; perhaps the Secretariat should first prepare the list, and then the 
Committee could consider having informal consulta tions.  A couple delegations had mentioned the 
possibility of looking outside of the RTAs for other indications of “other regulations of commerce” by 
reference to work done by other organizations.  Perhap s the way to do so would be to draw on such 
work once the list was drawn up, if there was a discussion on how the Committee should proceed. 
99. The representative of Canada  said that the proposed listing was to be without prejudice to any 
delegation’s position as to what constituted “other re gulations of commerce”.  This was not to be an 
analysis but rather only an identification of the cl auses contained in RTAs.  With respect to informal 
consultations, his delegation was always willing to  discuss among Members the best way to move a 
discussion forward.  But if underlying the request for informal consultations was a desire to outline 
how the study could be conducted, it seemed better  to discuss how the Committee should deal with 
the study once it was completed, as there would be much information and the Committee would need 
direction.  Such consultations seemed necessary before the Committee formally began debating the 
contents of the study. 
100. The representative of Hong Kong, China  recalled that when the Committee had debated how 
it should proceed with the discussion of systemic issues as listed in the annotated checklist, delegations had mentioned the question of "So wh at?”.  The Canadian proposal should be viewed 
within that context.  Her delegation’s understand ing of the proposal was that it was for a general 
inventory based on at least the information containe d in notifications relating to the Committee.  It 
was not meant to be an agreed document because the Committee did not yet have agreement on the 
definition of “other regulations of commerce”.  On this basis, her delegation could go along with the 
suggestion by the delegation of New Zealand that consultations would be required somewhere down the road to seek clarifications or to consider the wa y forward.  It would be useful to have a very basic 
document prepared by the Secretariat.  This would help the Committee to understand the concepts and 
to fulfil its mandate. 
101. The representative of Hungary
 quoted the English expression, “The government has no policy 
for a situation which has not yet arrived.”  He di d not have a position on the Canadian proposal, but 
because he did not know what the result would be, he felt he had no right to object to a preliminary study.  It seemed the Committee had to give the idea a chance.  The cautious and precise New Zealand 
approach seemed appropriate.  The Committee had fu ll confidence in the Secretariat, but the act of 
treating the different elements required the us e of certain breakdowns and groupings.  If the 
Secretariat found it necessary to seek views of de legations informally, it could be useful.  The idea 
was for the Secretariat to supply the widest possib le collection so that the Committee might then 
select what it considered to be "other regulations of commerce". 
102. The representative of Uruguay
 said his delegation found the Canadian response acceptable, 
inasmuch as the Committee wanted to begin to  study the problem and needed to identify the 
components or elements of the problem.  It was not  as simple a matter as some might think, since 
reading the thousands of pages of RTAs in force and identifying elements not clearly defined would WT/REG/M/16 
Page 28  
 
 imply a great deal of work.  The Secretariat would ha ve to define its own parameters in terms of what 
measures it was seeking to identify.  It would be  useful to include in the document information 
indicating on what basis the Secretariat decided to include a given measure.  This would enable the 
Committee afterwards, when it had info rmal consultations, to have a clear  idea of how the list actually 
had been compiled.  The first thing that the Committee would need to consult on would be its 
response to the content of the paper.  The Secretariat had already identified in the background papers 
some notion of the problems existing over time.  Those problems would likely resurface as the 
Committee looked at the document that would be prepared.  Knowing the criteria for the 
categorizations would therefore be important. 
103. The representative of Korea
 said that his delegation from the start had supported the Canadian 
proposal for an inventory.  The proposal seemed  necessary to allow the Committee to fulfil its 
mandate under item 1(d).  As had been the case in other areas of the Committee’s work, it would be 
helpful if the Secretariat conducted a survey.  After the compilation of all information, the Committee 
together would analyze it and explore the possibilit y of drawing some conclusions on the issue of 
"other regulations of commerce".  In various region al fora, this type of data compilation was often 
done and contributed to finding solutions to seemingly deadlocked issues.  The Swiss delegate had cited some sources of work in the Americas; similar work on trade-restrictive measures had been done 
by APEC.  The Secretariat could make use of thes e ideas and material and might also propose some 
work programmes.  It was time to let the Secretar iat start this work, conducting consultations where 
necessary. 
104. The representative of the United States
 said the representative from Uruguay had put forth 
some interesting ideas.  He agreed  that the Secretariat should indicate the criteria used for choosing 
items for its listing, as this would be useful not only for clarification as to why items were included 
but also for having a perspective on the items later.   However, there would be a practical problem if 
the Secretariat were asked to identify items not only  included but also excluded, as an account of 
items excluded would be vast and could not be exhaus tive.  It would only be workable for those items 
that were included. 
105. The representative of Brazil  noted that the Canadian representative had described the proposal 
as entailing a list of “non-tariff disciplines”, meant as a synonym for “other regulations of commerce”.  
In reading the background papers by the Secretariat, he had observed, as the delegate of Uruguay had, 
that a listing would not be such a simple matter since there had not been a consensus on the 
categorizations in the past.  (This was probably why in  the past this type of analysis was only done on 
a case-by-case basis.)  In compiling the list, the S ecretariat would have to review RTAs notified and 
grapple with difficult classification issues.  If the Secretariat already had an idea of how it might go 
about this task, it would be helpfu l if the Committee could hear about it.  The representative of the 
Philippines  supported this intervention. 
106. The representative of Japan  said that some delegations had asked on what basis the Secretariat 
would collect information.  This meant the Comm ittee would have to agree on the exclusion of 
information.  The Secretariat would necessarily have to exclude some information.  Still, to allow the 
Committee to fill its broad ta sk under item 1(d) of its terms of re ference, the collection of information 
should be as broad as possible.  A fundamental principle of the WTO was transparency.  Once the 
Committee received the information, it could decide what to do next. 
107.  The representative of Argentina  said that in the discussion, the Canadian proposal seemed to 
be growing beyond its original version.  It was his delegation’s understanding that the proposal was 
merely for a pulling together of “other regulations of commerce” included in the RTAs notified.  His 
delegation questioned how useful it would be, without yet having a definition of the term, to 
investigate what should be included; it seemed this investigation would make the task much more 
complicated and should be avoided.  WT/REG/M/16 
 Page 29 
 
 
 108.  The representative of New Zealand  noted that the last two interventions underscored the 
difficulties involved in setting parameters when in fact the proposal was for just a factual exercise at 
this stage.  It seemed to protect all delegations’ po sitions to leave it to the Secretariat to come up with 
a basic document which would of course be without prejudice to the views of any delegation.  Any 
subsequent discussion or action then to be based on the document would flow naturally from there.  
The minute the Committee delved into methodologi es, etc., it found itself in difficult territory.  
109.  The Chairman  said what was contemplated was for the Secretariat to produce a general paper 
that would be a listing of the various types of m easures and provisions found in RTAs.  The primary 
source of information would be  the documentation provided to the Committee, including that 
presented in the form of the Standard Format, and the Standard Format itself contained some 
suggestions about how the information might be orga nized.  The Secretariat indicated that such a 
document could be produced by mid-April.  Because views seemed to be conve rging but a few issues 
remained unresolved, he suggested that the Co mmittee ask the Secretariat to hold an open-ended 
information session in the next few weeks to describe how it envisioned undertaking the work.  At 
that point, if delegations were co mfortable with what the Secretariat was doing, things could progress 
as outlined, but if there were concerns, then the new Chairman of the Committee could engage in 
consultations.  Once the Committee had the paper, real analysis would need to begin, so the Chairman would at that time need to conduct consultations as to how the work addressing the document would 
best be organized.  In other words, delegations would have an opportunity to react to the Secretariat’s 
work as it was being shaped, and then would consid er what to do with the document once produced.  
He then recalled that during the Thirteenth Session of the CRTA in September 1997, he had said:  "To 
serve as a tool for the Committee’s discussion on syst emic issues, the Secretariat will compile factual 
information on RTAs.  This will be an evolving exer cise, with blocks of information being distributed 
to Members as soon as they are processed."  Responding to this request, the Secretariat had just distributed an informal paper with certain basic information. 
II. "Substantially all the trade" 
110. The representative of Australia
 noted that in producing its paper, his delegation had tried to 
move away from the methodology that the Committee had focused on so far, which was essentially an 
analysis of the legal issues.  The legal issues had been with the Committee for a long time, and the 
difficulties were well known.  So what his delegation had done was to produce a possible solution to 
the interpretation of “substantially all the trade”, es sentially by suggesting that the Membership could 
define "substantially all the trade" as 95 per cent  of all the six-digit tariff lines listed in the 
Harmonized Commodity Description and Coding System (hereinafter the Harmonized System, or 
HS).  It was not a very complicated proposal, and his delegation did not offer it in the hopes of 
immediate acclamation.  It was geared toward gene rating discussion on how to solve the problems of 
Article XXIV.  His delegation had made sure that the paper had been distributed well in advance to 
allow delegations time to react to it. 
111. The representative of Hong Kong, China  circulated an outline of his delegation’s statement.  
He then began by saying that, because there was an apparent lack of precision in the meaning of the 
term “substantially all the trade”, his delegation last Session had suggested that the Secretariat 
consider the term in the context of the Vienna Convention on the Law of Treaties (Vienna 
Convention).  His delegation had attempted such an an alysis in the context of Article 31 of the Vienna 
Convention.  His delegation was not advocating a rigi d, legal approach and agreed that it was not the 
role of the CRTA to make rules, but rather it was the role of the General Council to do so, and his 
delegation looked forward to its do ing so if necessary and appropriate.  Article 31 of the Vienna 
Convention entailed five steps of interpretative analys is: the ordinary meaning of the term; the term in 
the context of the relevant provision, i.e. Article XXIV; the term in the light of the object and purpose 
of Article XXIV and the GATT; any subsequent decision that had been taken in the GATT/WTO; WT/REG/M/16 
Page 30  
 
 and, finally, any subsequent practice, i.e. past work ing parties or the CRTA.  First, with reference to 
the ordinary meaning of the term “substantially all the trade”, he noted that the term "all the trade" 
was qualified with the word “subs tantially”, unambiguously indicating that not all trade between RTA 
parties had to be covered by the RTA for it to be judged compatible with Article XXIV:8.  However, 
the term did not offer the precision required to show exactly how much trade was to be covered for an 
RTA to pass the Article XXIV:8 test.  Synonyms fo r “substantially” found in dictionaries included 
such words as "essentially", "virtually" or "practically".   On that basis, substantially all the trade in its 
ordinary meaning would be interpreted as very close to, but not 100 per cent, all the trade.  Another 
approach would be to regard “substantially all the tr ade” as meaning in substance all the trade, i.e. all 
trade of substance should be included, or as meaning conversely that if any trade of substance were excluded from an RTA, the RTA would not satisfy  the “substantially all the trade” requirement.  
Whichever the reading, if “substantially all the trad e” were to be made more  precise by interpreting it 
in terms of a specific percentage of trade, that percen tage should be very high to be consistent with the 
ordinary meaning of "substantially all".  In rela tion to the context where the provision "substantially 
all the trade" was found, he noted that first, the contex t of the term was at least the rest of the relevant 
Article where the term appeared - i.e. Article XXIV.  Then, context also included the rest of the 
Agreement where the Article appeared - i.e. the GATT.  In the context of Article XXIV, paragraph 4 
had been described as the preamble to the opera tive provisions in Article XXIV:5-8.  There was 
clearly a relationship between paragr aphs 4 and 8, which was the provision covering what appeared to 
have been recognized as the internal requirements  that needed to be fulfilled for an RTA to be 
compatible with Article XXIV.  In  paragraph 4 it was stated that the positive purpose of an RTA was 
“to facilitate trade between the constituent territorie s"; this on its own did not add precision to the 
interpretation of the term "substan tially all the trade", but it lent support to an interpretation in the 
direction of more trade rather than less trade, since the more that trade was included in an RTA, the 
more trade between constituent territories would be  facilitated, and the more the purpose of the RTA 
would be fulfilled.  Turning to the context of Artic le XXIV in relation to the whole GATT, he noted 
that in the CRTA debate, objection had been made to the use of such terms as “derogation”, 
“deviation”, etc.  Earlier this Session his delegation had said it could accept the idea that 
Article XXIV was an exception to the basic obligat ion of non-discrimination laid down in GATT 
Article I.  His delegation could agree that it was an authorized exception, on the understanding that 
the exception would be authorized only if the comp atibility requirements of Article XXIV were met.  
As he had said, if a treaty provision were acknowle dged as being of exceptional character, it followed 
that the burden of proof to demonstrate compatibility  rested with the party invoking the exception.  
His delegation repeated this point because it wo uld be relevant to the ultimate purpose of the 
Committee’s analysis.  Looking at the term in the co ntext of Article XXIV also did not give a more 
precise meaning of the term "substantially all the trad e".  The lack of precision here made it difficult 
for RTA parties or prospective RTA parties to prove  compatibility of their RTA with the requirements 
of Article XXIV.  Regarding the third dimension - the purpose and object of the Agreement - his 
delegation understood the purpose and object of the GATT to be to liberalize international trade.  
Such liberalization should occur on a non-discriminato ry basis as enshrined in Article I of the GATT.  
It was clear that liberalization on an MFN basis was the most thorough, the most effective and 
therefore the most conducive to achieving the object and purpose of the GATT.  Any deviation, 
derogation, departure, or exception therefore ough t to be well justified and should be kept to a 
minimum to the extent possible, so as not to undermine the basic purpose and object of the GATT.  
Accordingly, the term “substantially all the trade” should be interpreted covering as much as possible 
all trade between the constituent members of an RT A;  to do the opposite would be going against 
trade liberalization and therefore would not be supp orted by any interpretation in the light of the 
purpose and object of the GATT.   However, his delegation accepted that an analysis of the purpose and object again did not lead to a more precise me aning of the term "substantially all the trade".  
Turning to look at subsequent decisions, he noted that his delegation understood the notion of 
subsequent decisions as any formal amendments  or interpretive notes concluded between GATT 
Contracting Parties or WTO Members regarding the in terpretation of "substan tially all the trade".  
However, throughout the history of the GATT/WTO, never had an interpretation of the term been  WT/REG/M/16 
 Page 31 
 
 
 adopted.  Unadopted proposals which had at times been advanced did not have any significance for 
the purpose of the Committee’s analysis.  Finally, turning to subsequent practice of the GATT/WTO, 
he explained that by this his delegation meant the practice of past GATT working parties as reflected 
in their reports throughout the years in examining the compatibility of individual RTAs with 
Article XXIV.  A footnote in the GATT Analytical Index provided an extensive list of working party 
reports dealing with this issue.  A wide range of op inions had been advanced in past working parties.  
Perhaps a most appropriate summation of past practice was offered by the Working Party on the EC 
Agreements with Portugal, where the EC noted that there was no exact definition of the term 
"substantially all the trade".  Howe ver, in another working party EC members had expressed the view 
that "substantially all the trade" entailed 80 per cent  of total trade volume.  In the Working Party on 
EFTA, the view was advanced that the percentage of  trade covered, even if established to be 90 per 
cent, was not considered to be the only factor to be  taken into account.  Other working party reports 
(e.g., the EEC Agreement with Finland) reflected the view that the exclusion of an entire sector would 
run contrary to the spirit of both Article XXIV and the GATT as a whole.  In sum, subsequent practice 
as reflected in working party reports had shown that  the term “substantially all the trade” had not been 
clearly defined by any working party.  Many working party reports had been inconclusive.  No single report unanimously concluded on all issues put before the working party.  The lack of unanimity, 
however, did not prevent the adoption of such reports.   On the other hand, despite adoption, the legal 
status of the working party reports, and therefore their value, remained unclear.  To the extent that 
adopted working party reports usually represented a variety of often conflicting opinions on issues, 
past working party reports looked like an inventory for future disputes.  Therefore, his delegation saw a strong case for pursuing a clear interpretation of  the terms in Article XXIV, including the term 
"substantially all the trade".  To conclude, his dele gation’s attempt to analyze the term "substantially 
all the trade" in accordance with  the interpretative means in Artic le 31 of the Vienna Convention 
showed several points:  First, there was at present no precise definition of the term "substantially all 
the trade"; second, the term should be understood as covering as large as possible a proportion of the 
trade between the constituencies of an RTA;  third, to arrive at a more precise interpretation of this 
term would enable the CRTA to more effectiv ely discharge its functions in examining the 
compatibility of RTAs with the requirements of Ar ticle XXIV;  and finally, a precise interpretation 
would also help potential RTA parties by providing  guidance for demonstrating that the requirements 
of Article XXIV were met.  The view had also emer ged from past deliberations that the term should 
have a quantitative as well as a qualitative compon ent, in the sense that it covered a percentage of 
trade and at the same time did not allow the exclusion of a major sector of a national economy.  The 
contention could be made, on the other hand, that the quantitative component of  the term, if applied 
vigorously, would suffice.  He then said his delegation supported the proposal by the Australian 
delegation. 
112. In introducing her delegation’s paper (WT/REG/W/22), the representative of Australia
 
recalled that Article XXIV:8 requir ed that “duties and other restrictive regulations of commerce” had 
to be eliminated with respect to “substantially all the trade” between the constituent territories of an 
RTA, apart from some stated exceptions.  The question was first whether it was possible to set some 
quantitative threshold to satisfy this criterion, an d second whether this permitted the exclusion of 
entire traded sectors, as sometimes was the case in  RTAs.  The drafting history of Article XXIV was 
of no use in the search for a solution.  Similarly, an examination of the reports of working parties 
established to examine th e GATT conformity of RTAs revealed only the gap in perceptions between 
delegations on the meaning of “substantially all th e trade” and offered no suggestions for reaching 
greater clarity.  The Australian paper sought to focus discussion on the problem of how to identify a 
reasonably objective measure for the interpretation of  “substantially all the trade”.  Suggestions in the 
past had been that 80 per cent of trade would satisfy this criterion, though much higher figures had also been suggested.  This posed  its own difficulties.  Participan ts in several working parties had 
recognized that any calculation of the percentage of  trade not freed from barriers would need to take 
account of the fact that this trade would have been larger if the trade had been allowed freely.  In other 
words, looking simply at trade flows did not take  account of the dynamics at work before the WT/REG/M/16 
Page 32  
 
 conclusion of an agreement, its implementation and the situation prevailing once it was fully 
implemented.  In its paper, her delegation offered an  alternative:  instead of using trade flows, it was 
possible to take advantage of the classifications used  to examine or regulate aspects of these flows.  
The Harmonized System would be particularly su itable as the basis for an assessment of whether 
"substantially all the trade" were covered by an agr eement.  This aimed specifically at internationally 
traded goods and was therefore well understood by the trade policy community.  Her delegation’s 
proposal was that "substantially all the trade" should be defined as coverage by an RTA of 95 per cent 
of all the six-digit tariff lines listed in the Harmonized System.  Th is approach should ensure that 
there was sufficient flexibility to set aside product ar eas that for one reason or another could not yet 
be traded between the parties free of restrictions.  One advantage of proceeding in this way was that it 
would not be necessary to discover the extent to  which trade in a given product might have been 
affected by other measures in place, such as ex isting quantitative restrictions.  Additionally, it was 
unlikely that this approach perm itted the carving out of any major s ector because of the probability 
that the permitted exemptions would have to be  spread over potentially sensitive sectors.  Her 
delegation did not assume that its proposal would find broad support;  however, in its view, the paper 
was a constructive approach to a problem that had been on the agenda since the examination of the 
Treaty of Rome in 1957 and that had continued to prevent the CRTA in its examinations from 
reaching agreement on whether RTAs were in conformity with WTO rights and obligations. 
113. The representative of the Philippines
, speaking on behalf of AS EAN, thanked the delegation 
of Australia for its paper and sa id her delegation agreed that the lack of consensus on what 
unequivocally defined key concepts such as “substan tially all the trade” had led to many inconclusive 
reports on RTAs examined.  The work of the CRTA in respect to systemic issues therefore was particularly significant insofar as it provided an opportunity for the Members to debate and hopefully 
agree on a common definition.  The Australian proposal  to define “substantially all the trade” on the 
basis of coverage in the Harmonized System was co nceptually appealing for the reasons cited in the 
paper, and most importantly because it was simple.  The proposal thus deserved further thought.  She 
asked the delegation of Australia to elaborate on certain questions:  For example, what was the 
rationale for the choice of the arbitrary figure of 95  per cent and the use of the six-digit tariff lines 
(instead of four- or eight-digit lines)?  With resp ect to the numerical benchmark for HS coverage, was 
it envisaged to apply to individual parties of the RTAs or to the cumulative coverage, taking into 
account total RTA-wide HS lines?  While the proposal had the virtue of simplicity, it had the potential 
to obscure a few operating realitie s in various RTAs.  For example, there might be compensation 
based on historical trade with some RTA parties su ch that the high coverage  rate in terms of HS 
would not be achieved, at least with respect to thos e parties; a fixed and high  numerical benchmark in 
this case could prove inflexible and biased.  In th e situation of an expanding RTA, if the new parties 
competed primarily with the RTA parties in other markets and therefore did not trade heavily with the 
original parties, would not a fixed and high nume rical benchmark automatically disqualify the RTA 
from even aspiring to comply with Article XXIV? 
114. The representative of Japan
 said his delegation welcomed th e Australian delegation’s effort at 
clarifying the meaning of substantially all the tr ade.  The proposal was constructive.  The GATT 
Contracting Parties/WTO Members had been discussing  this issue for many years, but since the term 
"substantially all the trade" was not clear, no conc lusion had been reached in the examination of 
several agreements.  His delegation was willing to use the proposed HS definition.  Regarding the 
number 95 per cent, his delegation so far had not looked at the matter and did not yet know if this 
would cover almost all sectors.  A number near to 100 per cent would be appropriate.  As a starting 
point, however, his delegation appreciated the proposal.  One concern was whether allowing 
5 per cent of HS lines to be excluded would allow an entire sector to be excluded.  In light of what 
was stated in Article XXIV:8 and the Preamble to the Understanding, his delegation could support the 
Australian proposal.  WT/REG/M/16 
 Page 33 
 
 
 115. The representative of New Zealand  said his instructions read: "The problem relates to the 
word 'substantially' which is by its nature imprec ise.  Our view is that many problems would be 
res olved  if the wo rd  were rem oved ."  That was where his delegation saw the starting point for the 
debate:  it would prefer that the word be removed.  Given the constraints, his delegation was drawn to 
the approach taken by the Hong Kong, China delega tion in considering the term with respect to the 
Vienna Convention.  Otherwise, the Committee could take the view that, because there was no precise 
definition of the term, it was meaningless - which was what the Membership ran the risk of doing if it 
did not give attention to the term.  If the Committee did not provide the term with some further 
clarification, at some point in the future the Appellate Body mi ght have to wrestle with these 
questions.  It seemed better for the Membership to de vote attention to the issue.  The statement by the 
delegation of Hong Kong, China pointed to the sort s of considerations that needed to guide an 
approach to the issue.  In particular, the point had been made that under Article XXIV a Member was 
able to do certain things as exceptions to its obliga tions under Article I.  It  seemed to his delegation 
that, like a waiver, this called for a very strict interp retation to be given to te rms that were set out in 
Article XXIV.  His delegation also took the view that  “substantially all the trade” was meant to mean 
very nearly all trade.  With these considerations in mind, and bearing in mind that the Committee did not seem able to come up a general, legal, descriptive definition of the term, the Committee seemed 
pointed in the direction of a formula definition in  which what was looked at was the percentage of 
trade covered, and this brought the Committee to th e Australian proposal.  In the past his delegation 
had not been attracted to quantitativ e approaches to dealing with th e issue of “substantially all the 
trade” because it seemed that in some cases these approaches would not take account of some of the 
qualitative elements needing to be taken into accou nt.  However, if a qua ntitative approach were 
pitched high enough, a number of the qualitative prob lems could be dealt with effectively.  For this 
reason, the Australian proposal seemed to be a good starting point for attempting to resolve the issue 
with a clear formula that could be applied to any RTA under Article XXIV.  A result could be 
generated fairly quickly without having the current mine field of ingredients for dispute settlement.  
Therefore, it would be useful to hear views on th e Australian approach.  Some concerns had already 
been set out and the Committee should devote attention to such points.  Unless the Committee went 
forward on the basis of specific proposals such as the Australian one, it was not going to make 
progress.  To the extent possible, the Commi ttee should in the future focus on the various 
considerations that guided the accept ability of specific formula proposals. 
116. The representative of India
 thanked the Australian delegation for its paper which, apart from 
being precise, focused on the essence of the discussion - i.e. the attempt to give the term “substantially all the trade” a more concrete an d perhaps quantitative interpretation.   His delegation also supported 
what had been said by the delegation of Hong Kong, China, that while there was no precise definition 
of “substantially all the trade”, the implication without doubt was that it should cover as large a 
proportion of trade as possible.  His delegation’s ow n experience of the coverage of trade between the 
constituents of a customs union was in its infancy.  However, based on both the evaluation of RTAs 
that the CRTA had carried out, as well as the preliminary discussions the Committee had had in this 
regard, his delegation strongly supported the call to respond to the need for a more precise definition 
of “substantially all the trade”.  As amplified by a number of previous speakers, the term “except” 
implied that not all the trade between the constituent  members was proposed to be covered.  However, 
the interpretation could be two-fold.  As the dele gate of New Zealand had suggested, it could imply 
coverage of as nearly close to all trade as possible.   Alternatively, it could also be that the intention 
was to recognize that coverage for a certain portion of trade would not be possible.  At this stage, his 
delegation supported the latter idea, as it was unlikely that all trade in all products would ever occur 
unhindered.  The issue then was how much trade - whether quantitatively or in terms of HS lines - if 
excluded, would still constitute a substantial portion of trade.  His delegation was not sure whether the 
Membership should exclude the criteria of actual and potential trade flows, since these were useful criteria and helped to highlight the economic context of trade.  However, the suggestion made by the 
Australian delegation that “substantially all the trad e” should be defined as a specific percentage of 
the total six-digit HS lines had distinct advantages .  It was a clear and unambiguous criteria which WT/REG/M/16 
Page 34  
 
 would to a large extent remove the grey areas of evaluation; it also would permit a better 
understanding of the gradual increase in the covera ge of trade as a customs union or FTA evolved 
from an interim agreement;  this approach would also allow Members to delineate sensitive sectors 
more precisely, rather than through broadly designed exclusions.  However, the only point on which 
his delegation was still not sure was the exact pe rcentage of HS lines whose coverage should 
constitute “substantially all the trade”.  Notwithsta nding this, his delegation supported the principle 
enunciated in the proposal, which it felt had the merit of simplicity, transparency and horizontal 
uniformity. 
117. The representative of Korea
 expressed appreciation for the background papers produced by 
the Secretariat.  In view of the proliferation of RTAs, there was an on-going need to develop a clear 
and unambiguous interpretation of “substantially all the trade” in order to identify an RTA’s 
conformity with WTO principles.  Regarding the analytical paper by the delegation of Hong Kong, 
China, he said his delegation appreciated its refl ective nature and sound conclusion.  His delegation 
agreed that “substantially all the trade” meant c overing as large as possible a proportion of trade 
between RTA parties.  Further work was nece ssary to develop a clearer interpretation and 
understanding of the term.  His delegation also appr eciated the initiative of the Australian delegation 
and welcomed its paper.  The reference to the Harm onized System proposed had merit, given the ever 
increasing number of RTAs.  Six-digit HS codes could provide a simple yardstick determining the 
extent of trade liberalization within RTAs and se rve as a criterion to be applied to monitor the 
compliance of an RTA with the requirements of Article XXIV:8 that dutie s and other restrictive 
regulations of commerce be eliminated on “substan tially all the trade".  However, in spite of its 
advantages, the HS code alone did not seem a sufficient criterion for determining the extent of the trade liberalization.  It might still happen that the remaining 5 per cent of trad e not free from barriers 
could account for sizable volumes and amounts of trade.  For instance, it might happen that the 
volume of liberalized trade in an RTA might be less than 70 per cent of the total trade.  Thus there 
was a need to address the potential loopholes which mi ght arise if the HS criteria would be used as the 
measure for the "substantially all the trade" requir ement.  Thus, further thought on both qualitative 
and quantitative aspects of the issue was needed.  More discussion and study on this matter would be 
welcome. 
118. The representative of the European Communities
 said the two papers from delegations were 
proving useful as a stimulus for discussion.  Th ere was no disagreement as to what the question was 
and as to what had been the long-standing diffi culties of practical interpretation of the word 
"substantially" in the term “substantially all the trade”.  The approach by Hong Kong, China of 
offering an analysis based on the Vienna Conven tion was a useful contribution to the intellectual 
equipment which the Committee might bring to bear  on the problem.  The approach might not be 
determinative in providing the answers to the quest ions, but it was genuinely helpful in improving the 
Committee’s understanding of the quest ion.  One conclusion he drew from the analysis set out in the 
statement by the representative of Hong Kong, China was that the solution to the question of defining 
the word "substantially" was unlikely to be found in  simply paraphrasing the word.  This wider point 
emerged from the Secretariat papers as well.  When considering the arguments set out by that 
delegation in deploying its analytical approach, it seemed there were two as pects which his delegation 
would not support.  First, he would disagree with the contention that the purpose and object of the 
GATT/WTO was the liberalization of international trade; this had been one of its consequences but in 
purely juridical terms was not one of the formal  purposes or objectives of the GATT/WTO.  While 
this did not alter the answer of that particular se ction of the five-step analysis, it was always worth 
recalling that it was the balance of rights and obligat ions and the negotiated balance of benefits which 
were intended to be at the heart of the WTO syst em, not a wider commitment, however desirable that 
might be, to the further liberalization of internat ional trade (which was essentially a political objective 
rather than one that was susceptible to such legal analysis).  Where he disagreed fundamentally with 
the approach, and where the real problem seemed to  lie, was in the same material being used to 
answer the points on subsequent decisions and subsequent practice.  The same answer drawn from the 
same material was supplied to both analytical questions.  For his delegation’s part, subsequent  WT/REG/M/16 
 Page 35 
 
 
 practice more usefully seemed to entail looking at the practice of Members in actually designing, 
developing, negotiating and implementing RTAs.  This was different from taking the decisions which 
Members had taken in the GATT/WTO as the basis for the analytical question on subsequent 
decisions.  Looking at subsequent practice in terms of what RTAs actually contained was a useful step 
to take at this point.  In this regard, the Australian proposal was ambitious and courageous, and should 
be checked against the wider reality of the way not only the multilateral trading system in general but 
also RTAs in particular actually operated and were likely to develop.  The imperfections of the rules 
were arguably reflected in imperfections in the real world - many RTAs fell short of what others 
would like to see as the desirable standard.  There was a connection between the difficulties of the text 
and the way actual agreements had in practice developed.  His delegation was not setting out 
gratuitously to attack or knock the Australian proposal, but he had to make it clear that his delegation did not support it.  The practical problems to which others had already pointed highlighted the 
difficulty of an a priori  approach to solving what was actually a complex, real world problem. For 
example, the Korean delegation had referred to the hypothetical circumstance where a sizeable 
proportion of the trade in a particular agreement might lie in less than 5 per cent of the HS tariff lines.  
The four Faroe Islands agreements met that sort  of condition, where well under 50 tariff lines 
accounted for about 80 per cent of the trade, so he re the idea to base coverage on 95 per cent of HS 
tariff lines might not work.  It was thus good to test  some of the approaches against reality.  He also 
noted and agreed with the intervention by the repr esentative of the Philippines on behalf of ASEAN 
as to whether the Australian proposal was a two-way exercise; if not, it meant that each party had to 
have only 47.5 tariff lines covered.  There was also a question as to the extent to which a high, quantitative approach could be extended to Enabli ng Clause agreements.  These were just some 
examples of the kind of difficulties to which an a priori  formula approach might give rise.  At the 
same time, there were similar problems regarding the suggestion of the Ne w Zealand delegation to 
remove the word "substantially", which raised ques tions about the effects on existing agreements as 
well as on future ones.  The conclusions which could be drawn from the analysis by the Hong Kong, 
China delegation revolved around the central importance of subsequent practice: what had delegations 
actually done?  What did agreements actually look like?  Currently there were many RTAs in the 
world, and whatever clarification might be agreed wo uld affect existing agreements as well as future 
ones.  It would be pointless to try to solve the prob lem in a perfect or abstract way, without taking due 
account of reality and the effect of what was being proposed on the stock of RTAs.  It was also worth 
bearing in mind that attempts to develop clear or ri gid interpretations could have the perverse effect of 
giving negotiators an incentive not to improve thin gs.  For these reasons, his delegation preferred to 
take a more cautious approach in the analysis of these problems.  It was worth bearing in mind, when 
one looked at the practical situation, that the Committee had encountered across the range of 
examinations which it had undertake n that the level of liberalization in the RTAs was not bad, 
particularly when compared to earlier agreements.  There seemed to be a rising trend of conformity 
and improvement.  The Committee should bear in mind this raising of the benchmark which had 
occurred, to see the extent to which further improveme nts were desirable or achievable.  So it seemed 
advisable not just to think of what was desirable in theory but also to take account of the wider 
situation existing today. 
119. The representative of Canada
 agreed that the historical record on trying to define 
"substantially all the trade" had shown the Cont racting Parties/Members unable to do so on a 
quantitative or qualitative basis.  It therefore seemed  important to put the issue of a precise definition 
in a broader policy context.  An important goal for any country wishing to enter into an RTA was the 
aim or initial objective of achieving comprehensive coverage, as the benefits to the parties would be 
maximized and cherry-picking could be avoided.  Tr ade policy would not have to be at the mercy of 
protectionist claims that always existed.  So, when  standards and objectives were set at the maximum 
level, Members were trying to ensure that the benefits of the liberalization process would be 
maximized.  Of course, reality sometimes required room to accommodate special circumstances.  
Failure to define the concept up until now was probably due to the fact that it was difficult in a simple WT/REG/M/16 
Page 36  
 
 arithmetic formula to capture all of the policy considerations that might underlie a particular 
negotiation of an RTA and which might result in some  exclusions or limitations of coverage in certain 
areas.  But the basic premise which all Members sh ould strive toward was to aim at comprehensive 
coverage, so that the benefits of liberalization woul d be maximized.  Regarding the Australian suggestion 
to use a percentage of the HS tariff lines as a criter ion for "substantially all the trade", he said this might 
not be easy to calculate.  Sometimes countries used  eight-digit numbers and not six-digit ones, so there 
were always additional complications that would arise.  Also, the point had been made that the HS classification also might not represent the trend in trad e itself, so there might need to be some recognition 
of actual trade coverage  beyond the HS classification.  The di scussion was helpful as the Committee 
grappled with one of the key challenges of its work, i.e. to look from a systemic standpoint how RTAs 
could have possible synergies with the multilateral trad ing system.  His delegation was not hopeful that a 
more precise definition could be agreed.  The Austra lian proposal had brought attention to the Harmonized 
System with respect to the question of duties, but what  about other restrictive regulations of commerce, to 
which this test of "substantia lly all the trade" also applied?  This n eeded to be addressed.  His delegation 
was attracted to the suggestion by the EC delegation  that perhaps it would be useful to gather basic 
information on the coverage issue, including along HS lines; this could help Members down the road in 
considering whether a more precise de finition were feasible.  Gathering information would be more fruitful 
than entering into a negotiation about the concept and would lead to a more policy-oriented impact on the 
development of RTAs in term s of furthering the multilateral liberalization process. 
120. The representative  of the United States
 said that it seemed that th e delegations which were quick 
to support the Australian proposal were not engaged in Article XXIV RTAs.  Her delegation was not 
convinced that the approach was appropriate.  Para graph 2 of the Australian pape r said that "the lack of 
meaning of the term 'substantially all the trade' is  one of the main reasons why most working parties 
established to examine conformity have not been able to  arrive at a clear-cut decision.  The latest examples 
of this failure are the draft reports on NAFTA."  This was odd, because a calculation of the numbers, be it according to tariff lines or trade covered, showed that NAFTA covered 98-99 per cent of all the trade 
between the NAFTA parties.  If that were not "sub stantially all the trade" , it was questionable what 
definition could be applied.  She had also been struck by the EC argument that reference should be made to 
what seemed to her to be the lowest  standard, i.e. the notion that Memb ers had maintained certain practices 
before, so they could continue to do so.  From her de legation’s perspective, the use of this authorized 
exception - Article XXIV - had to be done under very strict conditions.  The point of having the rules was 
to make sure that parties took great  care in negotiating an agreement and were cognizant that there were 
difficult choices involved to meet the rules (which had been designed that way), and that entering into an 
agreement was not taken lightly.  In some of the ex aminations of services agreements, there had been 
mention of having a negative list instead of a positiv e list, where the starting premise was that everything 
was covered, working back from there and excluding on ly that which needed to be excluded.  This was 
important, instead of starting from the basis that parties might exclude sectors.  Her delegation had been a proponent of the argument that an entire sector coul d not be excluded.  While the Australian proposal was 
interesting, Contracting Parties/Members had been considering this question since 1957, and virtually 
these same discussions had taken place during the Ur uguay Round in the middle of a negotiation, and no 
agreement had been possible.  She doubted whether it was feasible in the near future to fix this one point.  The Australian idea was interesting, but there were we aknesses in that "drawing a line in the sand" would 
encourage RTA parties to exclude it ems from their agreement.  While no ting that the term "substantially" 
in Article XXIV was ambiguous, there was another prov ision in the WTO that applied to agreements in the 
goods area, i.e. the Enabling Clause, which arguably had language that was far more ambiguous than that 
found in Article XXIV.  The Committee seemed to be  looking at a subset of agreements and had not 
explored the full range of rules.  Finally, paragraph 12 of the Australian paper referred to “no tariffs or 
non-tariff measures” - since there was a big difference  between “measures” and "b arriers" (similar to the 
difference between "other regulations of commerce" a nd "other restrictive regulations of commerce"), did 
the delegation really intend to use
 the word "measures"?  In sum, the Australian proposal was an 
interesting idea, but she was not convinced it was the right approach.  WT/REG/M/16 
 Page 37 
 
 
 121. The representative of Argentina  said his delegation welcomed the Australian proposal and 
had been impressed by the work done by the delegation of Hong Kong, China.  His delegation did not 
yet have a defined position, though it was willing to work constructively in defining the term.  With 
respect to his own country’s experience with MERC OSUR, he noted that the parties only had one 
internal exception, i.e. sugar, so  the parties were close to 100 per cent coverage.  His delegation had 
been indicating in the Committee that it had doubt s about the Committee acting in a legislative way, 
putting in new restrictions on RTAs.  His country was a Member making broad use of Article XXIV.  
His delegation had been surprised to hear how easily delegations had been coming up with figures, for 
example 95 per cent, which seemed arbitrary.  More analysis was needed.  His delegation preferred an 
approach that, more than just a six-digit code, would speak in terms of commerce.  Using the HS system could create discriminatory situations fo r those countries which had less diversified trade 
and would have a higher commitment than others in meeting the requirements.  Furthermore, his 
delegation was of the view that the definitio n of the term had to include all sectors. 
122. The representative of Hungary
 thanked the delegation of Hong Kong, China for its statement, 
which was an example of how delegations should pr epare for meetings.  There were many interesting 
points that needed to be studied, and immediate reactions could not meet the high level and standard of the statement.  Nevertheless, he wished to react to one of the sub-points of the statement, namely 
the issue of the burden of proof.  It had been asse rted that it was the parties’ responsibility to prove 
whether they were in compliance with the provisi ons of Article XXIV.  He would disagree, as it 
seemed no country entered into an RTA with a clear intention to breach its WTO obligations by 
agreeing to provisions that ran counter to the obliga tions of Article XXIV.  Consequently, it seemed it 
was the task of other Members to prove that the RT A parties were not matching the standard or level 
of Article XXIV, though the RTA parties did of course  need to provide sufficie nt information to allow 
the other Members to make this assessment. Regardin g the Australian proposal, he said that whatever 
his delegation’s position would be after consideration, its agreem ents all met the 95 per cent 
threshold.  On the ten-digit line, 784 lines woul d be allowed as exceptions, which was somewhat 
excessive.  It seemed the quantitative and qualitative  elements needed to be combined.  Still, the 
Australian proposal was a step in the right direction in terms of improving understanding.  It would be 
difficult to have meaningful progress when the Committee’s examinations still lacked conclusions. 
123. The representative of Switzerland
 thanked the delegations of Australia and Hong Kong, China 
for their contributions.  At this stage, his delegation could only argue against too narrow and too 
mechanical a focus  on the concept of "substantially all the trade".  Also, Article XXIV:8 had to be 
viewed in conjunction with, inter alia , paragraph 4, which among other things addressed the trade-
distortive element, which was a key element in Ar ticle XXIV.  In other words, clarification of 
Article XXIV had to rely on a more comprehe nsive and integrated approach of analysis. 
124. The representative of Norway  expressed appreciation for the document presented by the 
delegation of Australia and for the analysis conducte d by the delegation of Ho ng Kong, China.  While 
his delegation did not share the views of the Australian delegation, it saw the proposal as an important contribution to the Committee’s debate.  His delegatio n could in large part agree with the analysis and 
conclusions by Hong Kong, China, in particular the idea that “substantially all the trade” should be 
interpreted as covering as large a pr oportion of trade as possible.  It was in this light that the EFTA 
parties had submitted its RTAs with third countries to the scrutiny of the CRTA, believing fully that 
the agreements complied with the “substantially all th e trade” coverage requir ement.  His delegation 
did not share the view that it was up to RTA partie s to prove that they were in compliance with 
Article XXIV obligations, as RTA part ies considered their agreements to be in compliance when they 
submitted them for examination.  The guidance provid ed by the CRTA examination could be used for 
adjusting RTAs in the future.  On another note, he  said that through its examinations, the Committee 
had witnessed shortcomings regarding the concept of “substantially all the trade”, which was one 
reason why it had been difficult to arrive at conclu sions.  In this regard the delegation of Hong Kong, 
China seemed correct in saying that there were no clear interpretations and that neither the WTO texts WT/REG/M/16 
Page 38  
 
 nor the WTO jurisprudence gave much interpretative  guidance.  The purpose of Article XXIV was to 
ensure that RTAs were building blocks, or at the least did not undermine the multilateral trading 
system.  In this regard, Article XXIV:8 and its c oncept of “substantially all the trade” should be 
viewed in the context of Article XXIV:4, which stated that the purpose of an RTA should be "to 
facilitate trade between th e constituent territories and not to ra ise barriers to the trade of other 
Contracting Parties with such territories".  An isol ated attempt to clarify or define the concept of 
"substantially all the trade" would not likely be su ccessful.  The concept of “substantially all the 
trade” had to be looked at in the context of the whole of Article XXIV:8, including the provision that 
an FTA entailed a group of two or more territor ies in which "the duties and other restrictive 
regulations of commerce" were eliminated.  Therefore, the concept of elimination of the duties and other restrictive regulations of commerce had to be viewed in the same vein as "substantially all the trade", and the Committee should not make an isol ated attempt at defining "substantially all the 
trade".  Regarding the Australian proposal, he no ted that the Faroe Island s-Norway FTA would fall 
outside such a mechanical interpretation, since tr ade between the parties was conducted under about 
10 tariff lines. 
125. The representative of the United States
 agreed that dealing with only one aspect of 
Article XXIV:8 would be problematic.  Recently th e Committee had encountered some agreements in 
which there was elimination of restrictive measures on some portion of the trade (with it being 
another question as to whether that was with respect to "substantially all the tr ade"), but some part of 
the trade on which the duties and other restrictive regulations of commerce were not eliminated was 
now subject to some kind of preferential treatmen t - better than MFN but greater than zero; this was 
an issue that needed to be addressed as the Co mmittee discussed the pieces of Article XXIV:8. 
126. The representative of Hong Kong, China  thanked delegations for their responses to his 
delegation’s work.  To reply to some points, he fi rst referred to the context in which his delegation 
had raised the question of the burden of proof.  As he had said previously, his delegation could accept 
Article XXIV as an authorized exception to the GATT, and to acknowledge that a treaty provision was of exceptional character had the consequenc e that the burden of proof to demonstrate 
compatibility rested with the party invoking the exce ption.  Perhaps the Secr etariat’s Legal Affairs 
Division would want to consider the validity of this idea in the context of public international law.  
Regarding the point by the Philippine  delegation and others that the Australian proposal set a figure of 
95 per cent at six-digit HS tariff lines seemed somewhat arbitrary, he suggested that perhaps the 
95 per cent figure was not intended as a rigid be nchmark.  The EC representative had said that the 
Hong Kong, China analysis on subsequent decisi ons and subsequent practice had used the same 
material or substance for both; to this he would say that his delegation understood “decisions” to be 
formal decisions taken in the context of the GATT/WTO - i.e. decisions by the GATT Contracting 
Parties or WTO Members (at a level higher than a working group or the CRTA), found in such 
instruments as the Understanding.  His delegation to ok "subsequent practice" to mean the practices of 
different working parties, which did not reach the level of decisions by the GATT Contracting Parties 
or WTO Members.  Alluding to a point by the representative of India as to what the present situation 
was, he said that in his delegation’s view the pres ent situation was that there was a large volume of 
RTAs, which some would call a proliferation, and th ere was a serious lack of horizontal conformity 
among RTAs as to, inter alia , what Article XXIV requirements were and how they were to be met.  It 
had been difficult for past working parties to come  to conclusions in examinations of RTAs, which 
partly explained how the CRTA had come into being.   It seemed impossible for working parties to 
reach unanimous conclusions on all aspects of an examination.  Of the 45 RTAs referred to the 
CRTA, 38 had so far been subject to examination, with the factual examination having been 
completed for 24 RTAs but the conclusions not having been reached for any.  While the Australian 
proposal was not perfect, the Committee should not "let the best be the enemy of the good".  The 
reading of the term "substantially all the trade" as  proposed by the Australian delegation did not aim 
at overturning any agreed-upon interpretation or at arriving at a new interpretation, but rather aimed at 
arriving at more precision.  The proposal therefore of covering a high percentage of trade, irrespective  WT/REG/M/16 
 Page 39 
 
 
 of the final specific formula percentage to be  adopted, was sound.  His delegation hoped the 
Committee would procee d to further work on this basis. 
127. Regarding the issue of the burden of proof, the representative of Japan  said that since 
Article XXIV was a derogation from the MFN principle and was thus an exception to the basic rule of 
the WTO, it was natural for the burden of proof to  lie with the parties using the exception.  His 
delegation agreed with the representative of Norway that the provisions needed to be viewed together, 
with Article XXIV:4, Article I, the term “substanti ally all the trade” and the word "eliminate" all 
being understood together.  With reference to the call to base views on reality, he pointed out that in 
reality there was a growing number of RTAs, and fo r the sake of the multilateral trading system there 
needed to be clear disciplines, including with resp ect to "substantially all the trade".  The multilateral 
trading system benefitted all, including the parties to RTAs.  The numerical approach of 95 per cent 
would permit the exclusion of an entire sector, and th e trade volume of 5 per cent of HS six-digit tariff 
lines might be significant, as large as 50 per cent of trade volume.  As said, there were cases such as 
the Faroe Islands Agreements, so it seemed the CRT A needed to look at qualitative and quantitative 
aspects together. 
128. The representative of Hungary  said perhaps he should not have raised the issue of the burden 
of proof, as this should not be a major issue.  The views on this point were actually not far apart.  In 
notifying RTAs, providing the Standard Format an d responding to written and oral questions, the 
parties to RTAs in effect were trying to prove that their agreement met WTO requirements, even if 
legally they did not bear the burden of proof. 
129. The representative of Australia  said her delegation’s objective of provoking debate had been 
well met and many points that had been put forward deserved reflection.  The attention devoted to the 
discussion showed that the Committee could work and go forward on these issues. 
130. The representative of New Zealand  referred to a point made by the United States 
representative that the delegations most keen to cl arify “substantially all the trade” were those which 
did not have Article XXIV agreements; he woul d note that ANZCERTA had been notified under 
Article XXIV and that this agreement involved the elimination of all tariffs  between Australia and 
New Zealand. 
131. The Chairman  said it had been a thorough initial discu ssion on a thoughtful proposal by the 
delegation of Australia and a thoughtful intervention by the delegation of Hong Kong, China.  It 
seemed delegations wished to reflect on the implications of the discussion before reverting to the 
issue. 
132. The representative of Norway  requested that the Chairman offer his views on how the 
Committee might further its systemic discussion.  He was concerned that the Committee might 
become bogged down with “other regulations of commerce” and “substantially all the trade”, when it 
had a long list of systemic issues that had been defined.  The Chairman  said that it was up to Members 
to decide how to proceed, but that he would po int out that the Committee had developed a programme 
for treating the systemic issues with a three-pronged ap proach.  The Committee had also decided to 
take up the issues of "other regulations of commer ce" and "substantially all the trade" first, which it 
had done.  There would be much potential once the Committee went deeper into the work on "other 
regulations of commerce", and the Committee also had its other issues on the checklist.  Also, the 
Secretariat was always available to provide advice on approaching the work.  The representative of 
Hong Kong, China  wished to take deliberations forward by looking at more issues from the checklist 
of systemic issues.  Perhaps the Committee would want to take up issues related to those already 
explored, for example, checklist item Q, "Article XXIV:8(a)(ii) requirements and their relationship 
with other WTO provisions".  The representative of the United States  said it would be useful to treat 
other issues on the systemic checklist. WT/REG/M/16 
Page 40  
 
 D. Examination of Regional Trade Agreements
 
133. (Minutes for these examinations are being circulated as separate documents.) 
E. Election of Officers  
134.  The Chairman  noted that, according to the Rules of Procedure for the CRTA, the Committee 
was to elect a Chairperson from among the representatives of Members.  The election was to take place at the first meeting of the year and was to take immediate effect.  At its meeting on 19 February 1998 (the previous day), the General Council had approved a slate of names for 
chairmanships of its subsidiary bodies, incl uding the nomination of Ambassador Jean-Marie 
Noirfalisse of Belgium as Chairman of the CRTA.   He then proposed that the Committee formally 
elect Ambassador Noirfalisse as the new Chairman of the CRTA. 
135. The Committee agreed
 to elect Ambassador Noirfalisse as Chairman. 
136. The outgoing Chairman  then made a statement regarding the work that the Committee had 
conducted to date, as he had had the pleasure of serving as Chairman from the Committee's inception 
until now.  The Committee had had a good record of  accomplishments.  Regarding the examination of 
regional trade agreements, he noted that at the time  of its creation, the Committee inherited a backlog 
of 32 RTA examinations that needed to be carrie d out.  At present, the CRTA was dealing with the 
examination of 51 agreements.  Currently cons ultations were under way on draft reports for 
11 examinations.  Conclusions were presently being drafted for another 15 agreements whose factual 
examinations had finished.  Factual examinations were in process for 12 other agreements, and 
examinations for 13 other agreements which had been referred would begin in the course of the year.  
His only regret here was that the Committee had not yet completed any of these examinations.  He said he was sure the Committee would be able to do so under its new Chairman, and he urged delegations to attend to this.  He hoped the conc lusions would be written in a fashion that would 
actually inform the reader of what the issues were  that had arisen during the examinations, including 
matters where there was disagreement.  The Committee' s progress in carrying out examinations to the 
degree that it had, however, was in large part due to the Committee's success in dealing with item 1(c) 
of its terms of reference:  "to develop, as appr opriate, procedures to facilitate and improve the 
examination process."  The Committee had developed and taken note of the "Standard Format for 
Information on Regional Trade Agreements" and the "Standard Format for Information on Economic 
Integration Agreements on Trade in Services".   These documents had contributed greatly to 
improving the procedures for examining RTAs, as they had encouraged the timely and accurate 
submission of information and had substituted for a lengthy question and reply process.  The 
Committee also had developed and taken note of th e "Guidelines on Procedures to Facilitate and 
Improve the Examination Process", which had set out useful yardsticks to guide examinations and 
which had spelled out the Committee's new approa ch to examination reports.  Under this new 
approach and unlike the past, the Committee no longer had to negotiate over the facts surrounding an 
agreement, as it now simply took note of the "fac tual record" of an examination.  Regarding the 
matter of reporting, he said he did not need to  elaborate on the Committee's progress here, as the 
Committee had seen what it had been able to accomp lish that day on reaching agreement on the draft 
recommendations on how to carry the work forward.  The Committee of course had yet to decide on 
the exact way of doing this and transmitting the recommendations to the appropriate bodies.  Then 
there was item 1(d) of the Committee's terms of re ference, dealing with "systemic implications of 
agreements and initiatives for the multilateral tradi ng system and the relationship between them".  The 
CRTA had used its systemic discussions to identify and discuss issues relating to RTAs which were 
seen as having potentially broad consequences for the multilateral trading system.  In this work, the 
Committee had also taken advantage of the synergies inherent in its examination work.  First the 
Committee had developed the Checklist of Systemic  Issues.  Then the Committee had had this  WT/REG/M/16 
 Page 41 
 
 
 expanded into the Annotated Checklist.  Next the Committee had decided on the "three-pronged 
approach", entailing a legal analysis of relevant WTO provisions; horizontal comparisons of RTAs; 
and debate on the context and economic aspects of RTAs.  The Committee had begun treatment of 
Checklist issues using this three-pronged approach,  e ngaging in legal analysis to discuss the issues of 
"other regulations of commerce" with its four sub- topics and "substantially all the trade".  And now, 
with this Session, the Committee was carrying that  work further forward.  In summary, the basic 
accomplishments of the Committee had been the ex amination work; there was still work to be done, 
but the Committee had improved the procedures and this was proving quite helpful.  On the systemic 
front, it seemed the Committee was just beginnin g its discussions, and yet this could be very 
important for the future work undertaken not only in the Committee but also in other WTO bodies and in the domestic policy formation process by Government s.  After all, it was in the systemic analysis 
and the discussion flowing from it that delegations could have the benefit of engaging in discussion 
without prejudice, in a non-confrontational and non-juridical way.  The implications of RTAs and 
initiatives for the multilateral trading system was worthy  of discussion in this manner, particularly as 
Governments contemplated new initiatives at the regi onal and multilateral level.  One of the things 
Governments and delegations would want to do in this process would be to consider the respective agendas that they were carrying forward in those two related and complementary sets of initiatives. 
137. The outgoing Chairman
  then turned to discuss the servic e of the Committee's Vice Chairmen.  
He recalled that on 16 April 1996 the General C ouncil appointed the Committee's first four Vice-
Chairmen:  Ambassador Lode Willems of Belgiu m, Mr. Stuart Harbinson of Hong Kong, China, 
Ambassador Jaona Ravaloson of Madagascar and Ambassador Miguel Berthet of Uruguay.  
Ambassador Willems had served until July 1997, though he had returned in December 1997 for 
informal consultations;  Ambassador Ravaloson serv ed until June 1997 when he left Geneva;  and 
Ambassador Berthet served un til January 1998, when he also left Ge neva.  He wished to thank all of 
these individuals for the contribution which they had made to the work of the Committee.  Given the 
amount of work, with the backlog of examinations , it simply would not have been possible for the 
work of the Committee to have been carried ou t with only one presiding officer.  The Committee 
owed a debt to these individuals, as did he.  Mr. Harbinson had informed him recently that it was his 
intention to step down as a Vice-Chairman of the Committee; the Committee would miss his 
contribution as a presiding officer, as he had undertaken his task with enthusiasm and dedication and 
had filled in on many occasions for the other presiding officers, including the Chairman, for which the 
Chairman was grateful.  He then recalled that on 30 September 1997 the Committee had elected two 
new Vice-Chairmen, Ambassador Cla ude Bouah-Kamon of Côte D'Ivoire, who would be continuing 
as a Vice-Chairman, and Ambassador Jean-Marie Noir falisse of Belgium, who had just been elected 
Chairman.  He suggested that the Committee re quest its new Chairman to conduct informal 
consultations with a view to finding replacements fo r at least two of the Vice Chairman.  It seemed 
three Vice-Chairman would be sufficient and useful given the volume of outstanding work that 
remained.  He then thanked the Committee for all th e support it had given him as Chairman.  He had 
enjoyed the work very much.  He also wished to thank the Secretariat, as it was impossible to be a 
Chairperson without the active support of the Secret ariat.  All the staff members of the Division had 
been of a first-rate calibre and ex tremely helpful to him in carrying out his duties.  He wished the new 
Chairman success and said he was sure Ambassador Noirfalisse would enjoy the work and carry it 
forward in admirable fashion. 
138. The representative of Japan  said his delegation wished to thank the outgoing Chairman for his 
outstanding work.  When the Membership estab lished the Committee, his delegation had not been 
confident that it would function well; however, th e Chairman had enabled the CRTA to do so.  The 
Secretariat, too, deserved to be commended for its work.  He then congratulated the new Chairman on 
his election. WT/REG/M/16 
Page 42  
 
 139. The new Chairman
 thanked the Committee for the confidence it was putting in him.  The 
Committee was in good standing af ter having had Ambassador Weekes as its Chairman.  The 
Committee should congratulate Ambassador Weekes not only for the work he had achieved in the 
Committee, but also for his election to the fore most position of responsibility in the WTO as 
Chairman of the General Council.  It was in the Committee that Members needed to make sure that 
the multilateral trading system remained strong an d would be further developed with individual 
regional efforts in a mutually supportive relati onship.  The Committee had its examination work, 
which was important for making sure that rules were  followed in RTAs; inspiration could be found in 
the work the Committee had done so far, and he would endorse the vision of the outgoing Chairman, 
which was also a common vision the Committee shar ed.  There was much quality expertise in the 
Committee.  The Committee would endeavour to make  further progress, and there were important 
deadlines ahead of it.  The Secretariat was also to be commended for its precise, dedicated, high-
quality, responsible and responsive work. 
F. Other Business  
140. The representative of Turkey  said his delegation wished to bring to the attention of the 
Committee its concern on a recent  development.  A Member had recently requested the Dispute 
Settlement Body (DSB) to establish a panel to exam ine whether quantitative restrictions placed by 
Turkey on the importation of certai n textile and clothing products were in breach of certain WTO 
provisions.  The said restriction had been in effect , in accordance with the provisions of the Customs 
Union Between Turkey and the European Communities,  since 1 January 1996.  The issue that this 
WTO Member was now bringing before the DSB was a systemic issue.  This question, and other 
systemic issues like it, had been under rigorous disc ussion for some time in the Committee.  While not 
denying the right of any Member to go before the DSB, his delegation had the impression that the 
request for the establishment of a panel on this ma tter, which was a direct result of the Customs Union 
Between Turkey and the European Communities, was aimed at preempting the discussions in the 
Committee.  Any decision the panel would take on th is question would be strictly legal and would 
have direct effects on the work of the Committee, whereas the Committee was working to achieve a decision based on a much wider range of considerat ions through consensus.  Moreover, he recalled 
that the Customs Union Between Turkey and th e European Communities was currently under 
examination in the Committee, the last meeting in this  regard having been held on 1 October 1997.  In 
sum, his delegation submitted to the Committee that  it was puzzled with the course of action chosen 
by this respectable Member of the WTO. 
141. The representative of India
 stated that the Dispute Settlement Understanding (DSU) was one 
of the most important WTO Agreements, and its prov isions lay at the heart of the efficacy of the 
multilateral trading system.  Dispute settlement right s were fundamental for all WTO Members, and it 
was an accepted principle that Members had the right to seek consultations and to request the 
establishment of a panel if their rights were being impaired.  His delegation wished to make it clear 
that, in its view, neither the provisions of any ot her WTO Agreement nor the examination process of 
any other WTO body could infringe upon the rights of Members under the DSU.  Hence his 
delegation disagreed with the argument put forward that since the enlargement of the European Union 
would at some stage be examined by the CRTA, it was preemptive on a Member's part to approach 
the DSB.  A discussion on systemic issues could,  to a certain extent, clarify implementation or 
procedural issues, but it could in no way substitute for the remedy provided under WTO rules for cases where Members' rights were perceived as bein g impaired.  His delegation accordingly was of 
the view that it was entirely appropriate for a Member to approach the DSB.  Also, the introduction of 
quantitative restrictions by any Member, not otherw ise eligible to introduc e such measures, was not 
only violative of the provisions of the Agreement on Textiles and Clothing (ATC) but also of 
Article XI and XIII of the GATT.  Neither could th ese measures be justified under the provisions of 
Article XXIV.  In fact, in his delegation's view, for a Member to introduce quantitative restrictions on  WT/REG/M/16 
 Page 43 
 
 
 textiles, where none had existed at the time of the coming into force of the ATC, could not be justified 
under the provisions relating to the formation of RTAs.  To the best of his delegation's knowledge, no 
RTA had in the past been used to introduce quantitative restrictions such as the ones which had 
recently been introduced by a Member.  Before co ncluding, his delegation also wished to draw the 
Committee's attention to paragraph 12 of the Unde rstanding, which stated that the provisions of 
Article XXII and XXIII might be invoked with respect to any matter arising out of the application of 
Article XXIV, i.e. relating to any matter arising out of the formation of a customs union or an FTA.  
His delegation accordingly was of the view that the request for the establishment of a dispute 
settlement panel was not contrary to any provisions  of the GATT and was entirely within the ambit of 
paragraph 12 of the Understanding. 
142. The representative of Chile  said the examination of the Canada-Chile Free Trade Agreement 
had originally been scheduled to begin this Session.  The corrigendum to the Agenda 
(WTO/AIR/769/Corr.1) said the examination was be ing postponed "for unforeseen circumstances".  
His authorities wished to inform Members that it had not been possible for his delegation's experts to 
come from the capital due to previous commitmen ts.  His authorities also wished to thank the 
Government of Canada for its understanding with rega rd to this matter.  Then, speaking on behalf of 
both Chile and Canada, he reiterated the full readiness on the part of both parties to see the Agreement 
examined in the CRTA.  Evidencing this was the fact that all the information had been duly prepared 
in the Standard Format.  The two delegations looked forward to responding to questions when the 
Agreement would be examined. 
143. The Committee took note  of the comments made. 
__________ 