RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG/M/24
10 November 1999
(99-4842)
Committee on Regional Trade Agreements
NOTE ON THE MEETINGS OF 22 SEPTEMBER AND 8 OCTOBER 1999
Chairmen:  Mr. Krirk-Krai Jirapaet (Thailand) and
Mr. Guillermo Enrique González (Argentina)
A. ADOPTION OF THE AGENDA
1. The Twenty-Fourth Session of the Committee on Regional Trade Agreements (the CRTA or
the Committee) was convened in Airgram WTO/AIR/1166, dated 14 September 1999.
2. The following agenda was adopted (items A and B were considered on 22 September; items C
to E were dealt with on 8 October 1999):
A. Adoption of the Agenda
B. Examination of Regional Trade Agreements
I. Status Report on the Examination of Agreements
II. Free Trade Agreement between Poland and LithuaniaIII. Free Trade Agreement between Croatia and Slovenia
IV. Free Trade Agreement between Estonia and the Czech Republic
V. Free Trade Agreement between Estonia and the Slovak Republic
VI. Free Trade Agreement between Latvia and the Czech Republic
VII. Free Trade Agreement between Latvia and the Slovak Republic
VIII. Free Trade Agreement between Lithuania and the Czech Republic
IX. Free Trade Agreement between Lithuania and the Slovak Republic
X. Customs Union between the European Community and the Principality of
Andorra
XI. Interim Agreement between the European Community and Slovenia
XII. Euro-Mediterranean Agreement betw een the European Communities and their
member states and Tunisia
C. Systemic Implications of Regional Trad e Agreements for the Multilateral Trading
System and the Relationship between them
D. Annual Report to the General Council
E. Other Business
3. The Chairman sought confirmation on the ad hoc  observership granted to the Latin American
Integration Association (LAIA), and the Committee agreed that the LAIA would retain its status
during the next session.  The Chairman also informed, in relation to the  Schedule for the Submission
of Biennial Reports on RTAs , that the Secretariat had received and was processing for distribution
seven out of the ten reports which were due on 15 May; looking ahead, 14 reports were due on15 October 1999.  Finally, he made a proposal on how to organize the Committee's work in the
following days and announced, in particular, his intention to hold informal meetings to discuss the
draft Annual Report to the General Council, which had been circulated on 17 September, and to haveWT/REG/M/24
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a preliminary exchange of views on the Secretariat's draft "synoptic paper", which had been
distributed that day.
4. The representative of the United States, questioning the need for an informal meeting on the
draft "synoptic paper" prepared by the Secretariat, which was not supposed to be a negotiated
document, asked for further clarification.  The Chairman, noting that the Secretariat had been invited
to prepare such a paper on a factual basis, explained that the informal meeting would provide
delegations with an opportunity to discuss the draf t and come up with sugges tions as to how it could
be improved.
5. The representative of Uruguay asked for further clarification on the biennial reporting
mentioned earlier.  As the Committee had not adopted any examination report until then, he thought
biennial reports would not be required.  The representative of the Secretariat explained that such
reports were not yet required for agreements which were still under examination.  The Chairman's
comment referred to former agreements notified under the GATT, on which an examination report
had already been adopted.
B. EXAMINATION OF REGIONAL TRADE AGREEMENTS - STATUS REPORT ON THE EXAMINATION
OF AGREEMENTS
6. The Chairman said that the Committee had 72 RTAs under its purview.  Draft examination
reports on 30 of the agreements were under consideration, although in fact work focused on
six examination reports, to be used as a model for the others.  For 31 other agreements, either
examination reports were to be drafted or factual examinations were underway.  In addition, there
were eleven RTAs for which factual examination had not started until then, and six recently notifiedRTAs were to be transmitted to the CRTA for exam ination by the Council for Trade in Goods.  As he
had already mentioned during the previous session, if the Committee was to report any success to the
General Council in concluding examination reports, time was very short.  He once again stressed the
urgency of the matter.
7. The representative of the Czech Republic asked whether their FTA with Turkey was among
the 31 agreements, for which the drafting part of the process had started.  Although the deadline for
submitting questions had passed, they had not received any.  He was of the view that Members had
found their answers complete and did not have any further questions.  He proposed that the Secretariat
begin drafting the report on the Agreement.  The representative of the United States said that it would
not be possible to complete the factual examination of that FTA until outstanding questions withrespect to the System of European Cumulation of Origin had been answered.  In response, the
representative of the European Communities said that the answers to those questions would be
circulated in the very near future.  The representa tive of the United States then suggested that the
Committee review the proposal of the representative of the Czech Republic during a subsequent
session of the Committee, by which stage the answers would have been received.
8. The Chairman reminded the Committee that during the previous session deadlines had been
set for submitting questions and answers in writing on a number of agreements.  He wished to see
more cooperation in meeting the deadlines agreed upon by the Committee.  He added that some of
those agreements, for which the factual examination process was deemed to be nearing completion,
had been included in the Agenda with the hope that the Committee could finalize them.
9. (The minutes of the examination of Agreements listed under agenda items B.II-XII are being
distributed as separate documents.)WT/REG/M/24
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C. SYSTEMIC IMPLICATONS OF REGIONAL TRADE AGREEMENTS FOR THE MULTILATERAL
TRADING SYSTEM AND THE RELATIONSHIP BETWEEN THEM
10. The Chairman said that during the previous sessions the Committee had discussed several
issues related to GATS Article V provisions on the basis of the submissions by Hong Kong, China
and Japan.  A further contribution to the debate had been received from theEuropean Communities (EC) and their Member States in document WT/REG/W/35.  Since the
communication had been circulated well after the Agenda for the Session had been closed, he did not
expect delegations to be in a position to engage in a detailed discussion.  Still, he invited the EC
representative to present their paper.  Preliminary views from the floor would also be welcome.
11. The representative of the European Communities said that his delegation supported the
process of clarifying Article V of the GATS, for which they favoured a step-by-step approach.  Their
paper focused on sub-paragraphs V:1(a) and V: 1(b), also including some considerations on
paragraphs V:4 and V:5.  Their purpose was not to open the text of Article V as it was finely and
carefully balanced, but rather to clarify it.  The "substantial sectoral coverage" provision in
Article V:1(a) specified that no mode of supply could a priori  be excluded, but the requirement did
not extend to sectors or volumes of trade, mean ing that such exclusion was a possibility.  Still,
particular attention needed to be paid to the volume of trade affected, which, given the insufficiencyof statistics in the services area, could be judged using other indicative criteria such as the share of
services in GDP.  With respect to the provision on the elimination of substantially all discrimination,
the word "or" in Article V:1(b) was critical.  A standstill (or a prohibition of new or more
discriminatory measures) was only sufficient when restrictions were already largely absent.
Otherwise, a roll-back of the restrictions would be necessary.  With respect to the reasonable time forthe elimination of restrictions, the inclusion of an indicative target time, just like in the case for goods,
would be useful and would speed up the discussion of some examination reports.  Regulatory
integration, which was a tool used by the EC in bilateral services agreements, did not need to be a
requirement for all economic integration agreements (EIAs) in services.  Still, as it was a very potent
liberalization measure, it needed to be recognized at  least as an element of wider economic integration
in the sense of Article V:2 of the GATS.
12. The representative of Hong Kong agreed that there was a need to clarify Article V of the
GATS.  As had already been pointed out, the core objective was to enable the Committee to reach
clear conclusions on the consistency of EIA, a task mandated in Article V:7.  She recalled that
Hong Kong, China and other WTO Members had submitted proposals to the General Council for
clarifying WTO rules on RTAs, including GATS Article V.  As suggested by the EC representative,
the conditions of broad coverage and substantial liberalization for an EIA needed to be interpreted in astraightforward manner.  They did see merit in a step-by-step approach and in addressing among
others paragraphs 1, 4 and 5 of Article V with priority.  With respect to substantial sectoral coverage,
the possibility of exclusion of sectors or subsectors could not be evaluated easily by considering the
volume of trade affected, as the statistics for services were insufficient.  With respect to the
elimination of substantially all discrimination, they fully agreed with the delegations of the EC and
Japan that a standstill was not enough, as it would not be the correct interpretation of the obligations
in Article V:1.  With respect to the reasonable time-frame question, which they regarded not only as
an indicative provision but a substantive obligation, they were mindful that it was not as precise as
they would wish.  With respect to the assessment of barriers to trade with third parties, an important
consideration would be whether they were the inevitable consequence of trade harmonizationmeasures among parties to an EIA, even though such  measures would not automatically be justifiable.
Since the assessment concerned the rights of third parties, it merited early and detailed reflection.  Her
delegation would also reflect further on how the discussion on the services side would inform the
debate on the goods side.WT/REG/M/24
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13. The representative of Australia said that his delegation was also interested in the step-by-step
approach put forward by the EC.  Their preliminar y view was that considering sub-paragraphs V:1(a)
on substantial coverage and V:1(b) on substantially all discrimination would be a useful way to start
out clarifying the provisions of GATS Article V.  The representative of Japan welcomed the paper, on
which they would have comments at a later stage.
14. The representative of Hungary observed that the best forum to discuss the issues introduced
by the EC representative would be in multilateral negotiations.  In response, the representative of
Argentina said that the Committee needed to discuss the issues further.
15. Summing up, for the record, the Committee's informal discussions on a draft "synoptic paper"
prepared by the Secretariat, the Chairman expressed the Committee's appreciation for the efforts
involved in drafting the note, which had been requested earlier in the year.  As the paper had beencirculated not very long ago, delegations would need more time to reflect upon the work.  Hetherefore proposed that delegations provide any comments in writing by the end of the year 1999, so
that the Secretariat could incorporate them into the final paper before issuing it as a W/document.
16. The representative of the United States said that as his delegation was unaware of any
discussion in the Committee regarding the circulation of the paper as a W/document rather than an
informal note as consistent with past practice, he would have to make a reservation.  Therepresentative of Argentina said that they were not in a position to accept the paper as a W/document
either.  They proposed that that decision be made after further discussion of the paper.
17. The representative of Hungary said that it was his delegation's understanding that the paper
was drafted under the responsibility of the Secretariat; therefore, the Secretariat might take into
account comments as they deemed necessary.  The representative of the European Communities
agreed with this comment.
18. The Committee took note of the comments made.
D. ANNUAL REPORT TO THE GENERAL COUNCIL
19. The Chairman noted that a draft Annual Report had been circulated on 30 September 1999, as
document WT/REG/W/36, incorporating delegations' comments to an earlier informal text.  He
suggested that the Committee consider the draft section by section, starting with Section I
(Introduction).
20. The representative of the United States said that although his delegation had found the draft to
be overall quite a good one, they did have some suggestions.  With respect to paragraph 13, they
proposed the deletion of the last sentence as they were of the view that the Ministers would be
unimpressed that a draft paper had been circulated as an informal note.  Secondly, on Attachment I,they proposed to delete reference to the minutes, since these were not even included in the airgrams
and were unlikely to be referred to by Ministers.  He added that those references to the minutes did
not offer a complete picture, given that some of the examinations were carry-overs from a prior
period.  Still, they did find it useful to keep the list of agreements examined in each of the
Committee's sessions.  Thirdly, in Attachment IV, they proposed not to include the reference to the
same informal note by the Secretariat since it had only been circulated as a draft, which needed to be
worked on and which could more appropriately be included in the following year's report.
21. The representative of Hong Kong, China said that her delegation had no changes to propose
to the draft Annual Report, which had to reflect facts as they were.  She partially agreed with theWT/REG/M/24
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suggestion by the representative of the United States regarding Attachment IV, where the Secretariat
note was listed as an informal paper while in fact it was only a draft.  A better reflection of the
progress made could be to state that a draft Secretariat paper had been distributed on
22 September 1999, without specifying that it was an informal note.
22. The representative of the United States explained that his delegation would not oppose
reference to a non-paper in the Annual Report.  However, the Committee would be going beyond the
format agreed to for reports if references to drafts were also included.
23. The representative of the European Communities said that his delegation was prepared to
adopt the draft Annual Report as it was.  If there were additional proposals for change, he would have
to make a reservation.
24. The representative of Argentina noted that his delegation could go along with a consensus to
adopt the draft.  He added that the proposal to remove the reference to an informal note by the
Secretariat in Attachment IV seemed appropriate.
25. The representative of Hungary said that his delegation would be able to adopt the draft as it
was.  As to the reference to the Secretariat's paper, he wondered whether, given that a modified
version would shortly be issued as a non-paper and the draft would disappear, the Annual Report
covering the whole year, could state that a Secretariat paper was being distributed.
26. The representative of the United States proposed to change paragraph 13 to read:  "A draft
Secretariat paper [was] being prepared as an informal note".  The representative of the
European Communities proposed the following language: "an informal paper [was] in preparation, of
which a first draft [had] been distributed".
27. Following informal consultations, the Chairman sought the Committee's approval for the
modifications to the draft Annual Report, proposed by delegations and the Secretariat.  First, in
section III, footnote 3, first sentence, instead of "… co mparable to the former one", it would be clearer
to say "… comparable to the total of notified RTAs".  Second, in paragraph 5, the references to the
CTG, CTS and the CTD would be spelled out in full.  Third, there should not have been a paragraph
16 under section VII, as the phrase therein was part of the last sentence of paragraph 15.  Also inparagraph 15 (which had been paragraph 16), the last part which read "item (d) of its terms of
reference" should have been "item 1(d) of its Terms of Reference".  Fourth, reference to the minutes
of meetings would be deleted from Attachment I.  Fifth, the last sentence in paragraph 13 would read:
"A first draft was circulated to Members by the Secretariat on 22 September 1999".  Sixth, in
Attachment IV, reference to the Secretariat's "synoptic paper" would be deleted, since it was not an
informal paper.
28. The Committee adopted its Annual (1999) Report to the General Council as modified.
E. OTHER BUSINESS
29. The Chairman said that, although no issues had been raised under Other Business, he wished
to take this opportunity for inviting delegations to inform the Committee of any progress in the
consideration of draft examination reports.
30. The representative of the European Communitie s reassured the Committee that replies to the
latest questions from the United States on the services part of the Europe Agreements would be
provided very soon.  The representative of the United States, though expressing his delegation'sWT/REG/M/24
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appreciation of such update, said that it would still not be possible to reach conclusions without an
update on the EC-15 Schedule.  With respect to the draft report on the ANZCERTA (services), he
noted that the draft language provided by the Parties, especially on the investment review process,
would serve as a good basis for moving ahead in the discussions; he added that his delegation was
currently reviewing the language proposed with respect to the provision on denial of benefits.
31. The representative of Australia said that in the last five years 100 per cent of investment
applications from respective sides of the ANZCERTA Agreement had been approved and they would
be happy to provide any additional information if so desired.  The representative of
Hong Kong, China welcomed the clarification on the coverage of the ANZCERTA Services
Agreement, which was in response to a question they had raised during informal bilateralconsultations.  They had no further questions.
32. The representative of Hungary regretted that the Committee had not made progress on the
consideration of outstanding reports.  He expected there would be informal consultations, after the
Ministerial Conference and before the end of the year, regarding the work plan for the following year
as well as the examination reports.
33. The representative of the United States asked about the status of the responses to the last set
of questions they had submitted on the System of European Cumulation of Origin.  The representative
of the Secretariat said that the relevant document would be issued shortly.
34. The Chairman said that he would not propose any meetings until after the Ministerial
Conference as there had not been sufficient progress in the bilateral consultations.  He added that the
CRTA session of that day would be his last as he was leaving Geneva.  It had been a privilege and
honour for him to work with the Committee.  Although there were still many problems to be solved,they had done a significant amount of work.  He was hopeful that there would be more progress
during the subsequent year.  He also thanked the Secretariat for their patience and hard work.
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