RESTRICTED
WORLD TRADE G/C/M/11
6August 1996
ORGANIZATION(96-3142)
COUNCIL FOR TRADE INGOODS
5July1996
MINUTES OFMEETING
Held inCentre William Rappard
on5July1996
Chairman: Mr.S.Narayanan (India)
Theproposed agenda contained indocument G/C/W/49 wasadopted withtheinclusion ofitems
under "Other Business".
Page
1. Market Access Matters 2
(a) Committee onMarket Access 2
- Semi-annual report oftheCommittee (G/MA/4)
(b) Harmonized System -Requests forextensions ofwaivers 4
(i) Bangladesh (G/L/77, G/C/W/40) 4
(ii) Bolivia (G/L/78, G/C/W/41) 4
(iii) Guatemala (G/L/86, G/C/W/48) 4
(iv) Jamaica (G/L/79, G/C/W/42) 4
(v) Morocco (G/L/80, G/C/W/43) 5
(vi) Nicaragua (G/L/81, G/C/W/44) 5
(vii) SriLanka (G/L/83, G/C/W/46) 5
(c) Senegal -Renegotiation ofSchedule XLIX 6
- Request foranextension ofthewaiver (G/L/82, G/C/W/45)
(d) Zambia -Renegotiation ofSchedule LXXVIII 6
- Request foranextension ofthewaiver (G/L/84, G/C/W/47)
(e) Decision ontheintroduction ofHarmonized System changes into 6
WTO schedules oftariff concessions on1January 1996
- Extension ofthetime-limit (G/MA/W/6)
2. Request forawaiver byCuba withrespect toparagraph 6ofArticle XV 7
ofGATT 1994 (G/L/89)
3. Free-Trade Agreement between theCzech Republic andRomania 8
- Communication from theparties totheAgreement
(WT/REG26/N/1, WT/REG26/1 andWT/REG26/2)G/C/M/11
Page2
4. Free-Trade Agreement between theSlovak Republic andRomania 8
- Communication from theparties totheAgreement
(WT/REG27/N/1, WT/REG27/1 andWT/REG27/2)
5. Implementation oftheAgreement onTextiles andClothing andRelated Matters 9
- Communication from Pakistan onbehalf ofanumber ofWTO Members
6. Report toSingapore Ministerial Conference 17
- Statement byAustralia
Thefollowing items were included under "Other Business"
7. Argentine footwear 18
- Statement bytheUnited States
8. Singapore Ministerial Meeting status ofwork 19
- Statement bytheChairman
9. Dateofnextmeeting 20
TheChairman welcomed delegations tothismeeting oftheGoods Council which wasconvened
byWTO/AIR/373. Henoted thatinaccordance withtheagreement reached atthelastmeeting of
theCouncil which tookplace on22May1996, thefollowing Organizations hadbeeninvited tothis
meeting oftheCouncil namely: FAO, IMF, ITCB, OECD, UN,UNCTAD, World Bank andthe
World Customs Organization. Heproposed thatpending theadoption ofcriteria andconditions for
observer status forInternational Intergovernmental Organizations intheWTO andunless adelegation
raised anobjection, those Organizations invited totoday'smeeting oftheGoods Council beinvited
alsotoitsnextmeeting.
TheCouncil forTrade inGoods soagreed.
1.(a)Committee onMarket Access
- Semi-annual report oftheCommittee (G/MA/4)
1.1 Mr.J.St.Jacques,theChairmanoftheMarketAccessCommittee,referredtodocumentG/MA/4
dated 24June1996. Hestated thatduring theperiod under review, theactivities oftheCommittee
concentrated onthefollowing issues:
- Implementation ofHS96 changes: about 600changes which hadbeenintroduced in
theHarmonized System nomenclature hadcome intoforce on1January 1996, and
hadledtochanges inMembers WTO schedules. Given thetimeconstraints imposed
bythedeadline setbytheWorld Customs Organization, Members hadhadtoimplement
thechanges before having completed Article XXVIII negotiations. Inlightofthis
situation, theGeneral Council, atitsmeeting on13December 1995, hadgranted a
waiver from obligations under Article IIofGATT 1994 until30June1996 tothose
Members thathadrequested it.Tofacilitate theprocess, theseindividual waivers were
grouped onacollective basis. Atitsmeeting ofJune1996theCommittee onMarket
Access hadexamined thesituation related totheintroduction ofHS96 changes and,
inparticular, thesubmission ofdocumentation, andhadagreed thatanextension of
thewaiver would benecessary.G/C/M/11
Page3
Onthisoccasion, hehadproposed that-forpractical reasons andbecause there was
notalways ameeting oftheGeneral Council inDecember -theperiod forextension
ofwaivers, which atpresent ranforsixmonths periods, from January toJuneand
from JulytoDecember, should bechanged soastorunfrom MaytoOctober and
November toApril ofeachyear. TheCommittee onMarket Access approved this
proposal. Inorder tobridge thegapbetween thecurrent situation andthenewproposal,
itwasagreed thatthewaiver would exceptionally beextended until30April 1997,
andthattherelevant documentation would have tobesubmitted notlater than
30September 1996. Itwasalsoagreed thatindividual Members thatwished tobe
covered bythewaiver would havetosubmit asubstantiated request totheSecretariat.
Members thathadnotbeencovered bythewaiver uptonowbutfeltthattheyshould
becovered, hadtofollow thesameprocedure. ThelistofMembers having requested
tobeconsidered under thewaiver wasreproduced inAnnex Iofthesemi-annual report
oftheCommittee tothisCouncil.
- Other waivers: theCommittee onMarket Access, hadalsoagreed thatthesame
procedure would apply torequests forextensions oftheother waivers. Annex IIto
thesemi-annual report showed thefactual information provided bythecountries
concerning theextension oftheirwaivers.
- Establishment ofconsolidated loose-leaf schedules: adraftDecision containing the
Chairman 'sproposals fortheestablishment ofconsolidated loose-leaf schedules was
circulated toCommittee Members fortheirinformation. Inthisconnection one
important issue remained tobesolved, i.e.theverification ofthenewconsolidated
schedules. During informal consultations, someMembers hadrequested theSecretariat
toexplore thepossibility ofusing asystem ofelectronic verification oftheschedules.
TheChairman intended topursue consultations onthisissuewithinterested Members
withaviewtosolving theproblem.
- Non-tariff Matters: withreference totheDecision adopted bytheGoods Council in
December 1995onNotification Procedures forQuantitative Restrictions, theSecretariat
hadreceived onlythirteen notifications. TheChairman hadexpressed concern inthis
respect since thedeadline forthose notifications was31January 1996.
- Integrated DataBase(IDB): following thedecision taken bytheCommittee onMarket
Access onanumber ofissues pertaining totheIDB, theSecretariat hadprepared and
circulatedtoMemberssimplifiedformatsfortheIDBdatasubmissionandaPCsoftware
forthepreparation ofdataincapital. Astudy onthe"downsizing" oftheIDBfrom
amainframe toaPCenvironment would beinitiated inSeptember 1996. However,
veryfewcountries hadsubmitted therequired information andallMembers wereurged
toabide bythedecision taken bytheCommittee andprovide thenecessary information
asearly aspossible.
- Report oftheCommittee totheGoods Council fortheSingapore Ministerial Meeting:
theCommittee onMarket Access hadagreed atits13June1996meeting thatitsreport
would bestructured asfollows: (1)abackground section; (2)astatus report section
and(3)asection onassessment ofprogress andfuture work andthatafinaldrafttext
forexamination byCommittee Members would becirculated by25September 1996.
Ameeting oftheCommittee wasscheduled for18October 1996fortheconsideration
ofthereport.
1.2 TheCouncil forTrade inGoods tooknoteofthereport.G/C/M/11
Page4
(b) Harmonized System -Requests forextensions ofwaivers
1.3 TheChairman drew attention tothecommunications from Bangladesh, Bolivia, Guatemala,
Jamaica,Morocco,NicaraguaandSriLanka,containingrequestsforextensionsofwaiverswhichexpired
on30June1996. These requests forextension ofwaivers hadbeen made inthecontext ofthe
transposition oftheSchedules intotheHarmonized System, andinaccordance withparagraph 1of
theUnderstanding inrespect ofWaivers ofObligations under theGATT 1994. Pursuant toArticle IX
oftheMarrakesh Agreement establishing theWTO, these requests forwaivers werebefore theGoods
Council foritsconsideration; draftdecisions hadbeencirculated toassist theCouncil initsconsideration
ofthese requests.
(I) Bangladesh
1.4 TheChairman stated thattherequest fromBangladesh hadbeencirculated indocument G/L/77
andadraftdecision indocument G/C/W/40.
1.5 TheCouncil forTrade inGoods approved theextension ofthewaiver granted toBangladesh
until30April 1997, andrecommended thatthedraftdecision contained indocument G/C/W/40 be
forwarded totheGeneral Council foradoption.
(II) Bolivia
1.6 TheChairman stated thattherequest from Bolivia hadbeencirculated indocument G/L/78
andadraftdecision indocument G/C/W/41. Certain corrections hadtobeintroduced totheSpanish
version ofthedraftdecision which hadbeencirculated indocument G/C/W/41/Corr.1
1.7 TheCouncil forTrade inGoods approved theextension ofthewaiver granted toBolivia until
30April 1997, andrecommended thatthedraftdecision contained indocument G/C/W/41 intheEnglish
andFrenchversionsandG/C/W/41/Corr.1inSpanishbeforwardedtotheGeneralCouncilforadoption.
(III) Guatemala
1.8 TheChairman stated thattherequest fromGuatemala hadbeencirculated indocument G/L/86
andadraftdecision indocument G/C/W/48. Certain corrections hadtobeintroduced totheSpanish
version ofthedraftdecision which hadbeencirculated indocument G/C/W/48/Corr.1
1.9 TheCouncil forTrade inGoods approved theextension ofthewaiver granted toGuatemala
until30April 1997, andrecommended thatthedraftdecision contained indocument G/C/W/48 in
theEnglish andFrench versions andG/C/W/48/Corr.1 inSpanish beforwarded totheGeneral Council
foradoption.
(IV) Jamaica
1.10 TheChairman stated thattherequest from Jamaica hadbeencirculated indocument G/L/79
andadraftdecision indocument G/C/W/42.
1.11 TheCouncil forTrade inGoods approved theextension ofthewaiver granted toJamaica until
30April 1997, andrecommended thatthedraftdecision contained indocument G/C/W/42 beforwarded
totheGeneral Council foradoption.G/C/M/11
Page5
(V) Morocco
1.12 TheChairman stated thatarequest from Morocco foranextension ofthewaiver hadbeen
circulated indocument G/L/80 andadraftdecision indocument G/C/W/43.
1.13 TheCouncil forTrade inGoods approved theextension ofthewaiver granted toMorocco
until30April 1997, andrecommended thatthedraftdecision contained indocument G/C/W/43 be
forwarded totheGeneral Council foradoption.
(VI) Nicaragua
1.14 TheChairman stated thattherequest fromNicaragua foranextension ofthewaiver hadbeen
circulated indocument G/L/81 andadraftdecision indocument G/C/W/44.
1.15 TheCouncil forTrade inGoods approved theextension ofthewaiver granted toNicaragua
until30April 1997, andrecommended thatthedraftdecision contained indocument G/C/W/44 be
forwarded totheGeneral Council foradoption.
(VII) SriLanka
1.16 TheChairman noted thattherequest fromSriLanka foranextension ofthewaiver hadbeen
circulated indocument G/L/83 andadraftdecision indocument G/C/W/46.
1.17 Therepresentative ofNewZealand stated thathisdelegation hadsome serious concerns about
thewaiver extension proposed forSriLanka. SriLanka hadsofarnotactedpositively onNewZealand 's
request toholdconsultations. Hisdelegation hadvoiced these same concerns atthemeeting ofthe
Goods Council inDecember 1995when theissueofextensions ofwaivers hadbeenaddressed. While
hisdelegation wasprepared toaccept thatthedraftdecision should goforward totheGeneral Council,
hewanted topoint outthatthiswaiver forSriLanka hadbeenextended repeatedly overalongperiod
oftime. NewZealand hadindicated clearly toSriLanka onthelasttwooccasions when SriLanka
hadrequested anextension thatitwould reconsider itsposition onaccepting anextension ofawaiver
ifSriLanka didnotenter intonegotiations withaviewtofinding asolution totheproblem.
1.18 AttheGoods Council meeting ofJune1995, therepresentative ofSriLanka hadsaidthathis
delegation would holdconsultations early intheautumn, butunfortunately, these consultations had
never taken place. InDecember 1995, while hisdelegation hadbeenprepared tomake anallowance
forthesecurity situation inSriLanka, ithadinformed thisCouncil andtheGeneral Council thatin
agreeing toyetanother extension, itwasputting SriLanka onnotice thatNewZealand might change
itsviewifnegotiations werenotheldinthenextsixmonths. Thisposition remained valid. During
thelastsix-month period, SriLanka, hadnotcontacted hisdelegation toenter intoconsultations. He
regretted having toexpand onthisbilateral problem indetail buttheissuewentbeyond NewZealand 's
immediate tradeinterests intotheimportant systemic question oftheroleofwaivers andhowseriously
theyweretaken. Intheperiod before themeeting oftheGeneral Council scheduled for18July1996,
hisdelegation hoped toreceive concrete assurances fromSriLanka thatthismatter willbedealtwith
expeditiously.
1.19 Therepresentative ofSriLanka drew theCouncil 'sattention todocument G/L/83, which
contained hiscountry 'srequest foranextension ofthetime-limit ofthewaiver. Thisrequest wasbased
onveryspecial circumstances inwhich hiscountry hadbeenplaced. SriLanka hadalready hada
roundofnegotiationswithinterestedMembersandwashopefulthatthesenegotiationscouldbeconcluded
without much delay. However, sinceitsinitial efforts SriLanka hadbeenbesetwithaseries ofproblems
which hadprevented hisauthorities from reaching asolution. First, there hadbeenadelay ontheG/C/M/11
Page6
partofsome oftheinterested Members tospecify clearly theirrequests. Thereafter, Members were
toopreoccupied withthefinalstages oftheUruguay Round negotiations. Atthesametime, theinternal
security situation inSriLanka haddeteriorated sharply. Asaresult, thepriorities ofhisGovernment
hadbecome morefocused ondomestic issues. More recently, problems hadbeencompounded following
asharp priceescalation ofbasicfooditems andparticularly imported milkproducts which hadbecome
ahighly sensitive political issue. Nevertheless, SriLanka wished tofinalize these negotiations with
allinterested Members asearly aspossible. Infact,theprocess hadalready been launched and
consultations were underway toobtain thenecessary approvals from theappropriate authorities in
SriLanka inorder tomake asuitable offer tointerested Members.
1.20 Despite thecurrent difficulties experienced bySriLanka, itseconomy hadbeenresilient and
hadregistered substantial economic growth, andtheprocess ofautonomous tradeliberalization which
hadcommenced in1977 continued unabated. Therefore, hisGovernment appealed toMembers to
understand SriLanka 'scurrent concerns andaccept assurances given ingood faiththatthere wasa
willtoresolve thisoutstanding issue asearly aspossible. Hisdelegation strongly believed that
Article XXVIII negotiations would beconcluded during theperiod ofextension thatwasbeing sought.
1.21 TheCouncil forTrade inGoods tooknoteofthestatements, approved theextension ofthe
waiver granted toSriLanka until30April 1997, andrecommended thatthedraftdecision contained
indocument G/C/W/46 beforwarded totheGeneral Council foradoption.
(c) Senegal -Renegotiation Schedule XLIX
- Request foranextension ofthewaiver (G/L/82, G/C/W/45)
1.22 TheChairman drew attention totherequest bySenegal circulated indocument G/L/82 for
anextension ofawaiver granted toitinconnection withtherenegotiation ofitsSchedule, andtoa
draftdecision which hadbeencirculated inorder tofacilitate consideration ofthisitemindocument
G/C/W/45.
1.23 TheCouncil forTrade inGoods approved theextension ofthewaiver granted toSenegal until
30April 1997, andrecommended thatthedraftdecision contained indocument G/C/W/45 beforwarded
totheGeneral Council foradoption.
(d) Zambia -Renegotiation ofSchedule LXXVIII
- Request foranextension ofthewaiver (G/L/84, G/C/W/47)
1.24 TheChairman drew attention totherequest byZambia circulated indocument G/L/84 foran
extension ofawaiver granted toitinconnection withtherenegotiation ofitsSchedule, andtoadraft
decisionwhichhadbeencirculatedinordertofacilitateconsiderationofthisitemindocumentG/C/W/47.
1.25 TheCouncil forTrade inGoods approved theextension ofthewaiver granted toZambia until
30April 1997, andrecommended thatthedraftdecision contained indocument G/C/W/47 beforwarded
totheGeneral Council foradoption.
(e) Decision ontheIntroduction ofHarmonized System Changes intoWTO Schedules ofTariff
Concessions on1January 1996
- Extension ofthetime-limit (G/MA/W/6)
1.26 TheChairman stated that,ashadbeen explained bytheChairman oftheMarket Access
Committee inhisreport, thedraftdecision before theCouncil, circulated indocument G/MA/W/6,
related totheHS96 changes which weretobeintroduced on1January 1996. Ithadappeared necessary
thatawaiver would beneeded forMembers finding itnecessary toconsult ornegotiate underG/C/M/11
Page7
Article XXVIII ofGATT 1994 asaresult oftheHS96 changes introduced intheirschedules. The
decision togrant awaiver until30June1996toMembers which hadrequested tobecovered bysuch
awaiver wascirculated indocument WT/L/124 andCorr.1. Since thattime, andinlightofthecurrent
situation, ithadbeenproposed toextend thewaiver until30April 1997; thevarious time-limits set
outintheDecision would alsobeextended accordingly.
1.27 TheCouncil forTrade inGoods approved theextension ofthetime-limits setoutinthedraft
decision contained indocument G/MA/W/6 andagreed thatthedecision betransmitted totheGeneral
Council foradoption.
2. Request forawaiver byCuba withrespect toparagraph 6ofArticle XVofGATT 1994
(G/L/89)
2.1 TheChairman drewattention tothecommunication fromCuba contained indocument G/L/89
requesting awaiver from itsobligations under paragraph 6ofArticle XVofGATT 1994.
2.2 Therepresentative ofCuba stated that,withthepurpose offulfilling theobligations under
Article IXoftheMarrakesh Agreement establishing theWTO aswellastheUnderstanding inrespect
ofWaivers ofObligations under theGeneral Agreement onTariffs andTrade 1994, hisauthorities
hadrequested anextension ofthewaiver granted toCuba withregard toparagraph 6ofArticle XV
ofGATT 1947.
2.3 Thedecision granting thiswaiver dated 7August 1964waived Cuba fromtheimplementation
ofparagraph 6ofArticle XVoftheGATT which prescribed thatanycontracting party which ceased
tobeamember oftheIMFhadtoconclude aspecial exchange agreement withtheCONTRACTING
PARTIES. TheCONTRACTING PARTIES inthewaiver decision hadnoted that"..owing tospecial
circumstances, theapplication oftheprovisions ofparagraph 6ofArticle XVtoCuba would raise
anumber oflegalandpractical difficulties. ..."TheCONTRACTING PARTIES hadalsonoted the
assurances provided bytheGovernment ofCuba thatitwould actinamanner fullyconsistent with
theprinciples ofthespecial exchange agreement asadopted bytheCONTRACTING PARTIES intheir
resolution 20June1949, andinaccordance withtheintent oftheGeneral Agreement. Since theapproval
ofthiswaiver, thirty-two years hadelapsed, andthissettlement hadworked satisfactorily intherelations
between Cuba anditstrading partners. Thenegative circumstances which hadhadadecisive impact
ontheCuban economy in1964hadnotchanged butinstead hadbeenworsened withtheimplementation
ofnewlegislation aimed atintensifying theeconomic, commercial andfinancial blockade ofCuba.
Cuba found itselfobliged torequest thiswaiver pending achange forthebetter toitseconomy. Cuba
hoped thatadecision would betaken extending thewaiver granted in1964. Hereiterated thatany
measures adopted byCuba intheareaofexchange would becompatible withtheprinciples ofthespecial
exchange agreement andwiththeobjectives ofGATT 1994.
2.4 TheChairman stated thatheunderstood thatconsultations wereinprogress inawider context
onanumber ofwaivers falling under paragraph 2oftheUnderstanding inrespect ofWaivers of
Obligations under theGATT 1994. Heproposed thattheCouncil takenoteofthestatement made
bytherepresentative ofCuba, reflect onthisrequest andrevert tothisissue, asappropriate, inthe
lightoftheoutcome ofthese consultations andfurther reflections.
2.5 TheCouncil forTrade inGoods soagreed.G/C/M/11
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3. Free-Trade Agreement between theCzech Republic andRomania
- Communication fromtheparties totheAgreement (WT/REG26/N/1, WT/REG26/1
andWT/REG26/2)
3.1 TheChairman drew attention tothenotification fromtheparties totheAgreement contained
indocument WT/REG26/N/1. TheCouncil hadbeeninformed, atitsmeeting of3April 1995, that
thisFree Trade Agreement, signed on24October 1994, wasbeing applied provisionally since
1January1995,andwastobeestablishedoveratransitionalperiodendingnotlaterthan1January1998.
3.2 TheChairman proposed thattheCommittee onRegional Trade Agreements carry outthe
examination ofthisagreement inaccordance withthefollowing terms ofreference:
Terms ofreference:
"toexamine, inlightoftherelevant provisions oftheGATT 1994, theFreeTrade
Agreement between theCzech Republic andRomania, andtosubmit areport tothe
Council forTrade inGoods."
3.3 Itwasunderstood thattheunderstanding readoutbytheChairman oftheCouncil forTrade
inGoods under item7oftheAgenda ofthemeeting oftheCouncil forTrade inGoods on
20February 1995, ascontained indocument WT/REG3/1, would apply mutatis mutandis tothis
examination. Itwasalsounderstood that,during theexamination, dueaccount would betaken ofthe
intrinsic differences between customs unions andfree-trade areas.
3.4 TheCouncil forTrade inGoods soagreed.
4. Free-Trade Agreement between theSlovak Republic andRomania
- Communication fromtheparties totheAgreement (WT/REG27/N/1, WT/REG27/1
andWT/REG27/2)
4.1 TheChairman drew attention tothenotification fromtheparties totheAgreement contained
indocument WT/REG27/N/1. TheCouncil hadbeeninformed, atitsmeeting of3April 1995, that
thisFree Trade Agreement, signed on24October 1994, wasbeing applied provisionally since
1January1995,andwastobeestablishedoveratransitionalperiodendingnotlaterthan1January1998.
4.2 TheChairman proposed thattheCommittee onRegional Trade Agreements carry outthe
examination ofthisagreement inaccordance withthefollowing terms ofreference:
Terms ofreference:
"toexamine, inlightoftherelevant provisions oftheGATT 1994, theFreeTrade
Agreement between theSlovak Republic andRomania, andtosubmit areport tothe
Council forTrade inGoods."
4.3 Itwasunderstood thattheunderstanding readoutbytheChairman oftheCouncil forTrade
inGoods under item7oftheAgenda ofthemeeting oftheCouncil forTrade inGoods on
20February 1995, ascontained indocument WT/REG3/1, would apply mutatis mutandis tothis
examination. Itwasalsounderstood that,during theexamination, dueaccount would betaken ofthe
intrinsic differences between customs unions andfree-trade areas.
4.4 TheCouncil forTrade inGoods soagreed.G/C/M/11
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5. Implementation oftheAgreement onTextiles andClothing andrelated Matters
- Communication from Pakistan onbehalf ofanumber ofWTO Members
5.1 Therepresentative ofPakistan introduced apaper onbehalf oftheASEAN Members ofthe
WTO, namely, Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore andThailand, aswell
asHong Kong, India, Korea andPakistan. Hestressed theimportance oftextile trade formany
developing country Members andtheimmense systemic significance oftheAgreement onTextiles
andClothing (ATC) asaframework fortheintegration oftextiles intotheWTO body ofrules. In
thecontext ofpreparations fortheSingapore Ministerial Conference, theissue oftheimplementation
oftheATChadbeenraised bythesedelegations notonlyintheHeads ofDelegation meetings, chaired
bytheDirector General, butalsoinother relevant bodies. Needless tosay,thedelegations submitting
thispaper attached greatimportance tothefullandfaithful implementation oftheATC. Unfortunately,
itwasequally obvious thattheATC'simplementation hadsofarnotmatched thepromise withwhich
ithadbeenconcluded. Indeed, thesedelegations weredisappointed withthemanner inwhich theMFA-
restraining Members hadsetabout fulfilling theircommitments under theATC. Itwasagainst this
background thatthecommunication which hadbeencirculated sought areview oftheimplementation
oftheATC andofafewother issues relating totrade intextiles.
5.2 Hesaidthatthecommunication sought todevelop aten-point framework forthereview exercise
against theexperience andbackground ofanumber ofissues. Heintended tocover thesepoints under
seven broad categories. First, itwasfeltthatthereview might consider theimpact ofthemanner in
which theMFA-restraining countries hadimplemented theirfirststage integration programmes. The
examination could alsocover elements oftheintegration programmes oftheseMembers forthesecond
stage, including proposals byamajor trading entity forreciprocity intheprocess. Second, there was
theissue oftheinvocation ofsafeguard measures. Third, there were problems, suchas(a)the
functioning oftheTMB including thetransparency andimpartiality ofitsprocess, and(b)thebilaterally
agreed arrangements which havethepotential ofweakening, andevenundermining, themultilateral
rulesanddisciplines oftheATC. Fourth, itwasfeltthatthereview should cover theimplementation
oftheATC'sprovisions relating tospecial treatment infavour oftheleast-developed country Members,
andthose relating totheparticular interests ofcotton-producing exporting Members. Fifth, another
significant issue wasthesituation arising from changes intheRules ofOrigin relating toimports of
textile andclothing products byarestraining Member; theuncertainty these changes hadcreated for
businesses, andtheirdisruptive effects fortradeintextiles should alsobesubject tothereview. Sixth,
thereview exercise should consider theissue ofspecial privileges tocertain types oftrade, suchas
outward processing tradeandothersimilar special regimes. Seventh, therewasconcern withtheadverse
implications ofanexpanding coverage ofrestrictions inthecontext ofregional arrangements, andof
trademeasures fornon-trade purposes, suchastheprotection oftheenvironment, promotion oflabour
standards, andsoon,which hadbeentaken outside theframework ofWTO rules.
5.3 Thereview oftheimplementation oftheATC wasanimportant question, andmerited close
consideration inthecontext ofpreparations fortheSingapore Ministerial Conference. Since there
wasnodesignated multilateral body which could undertake suchareview, theGoods Council was
themostappropriate forum where thisissue should betaken up.Hehoped thatitwould bepossible
toagree atthismeeting onthemanner inwhich theCouncil should undertake thisexercise ofreviewing
theimplementation oftheATC.
5.4 TherepresentativeofThailand,speakingonbehalfofthemembercountriesofASEAN,supported
thestatement made bythedelegation ofPakistan andjointly subscribed tothepaper on"Implementation
oftheAgreement onTextiles andClothing andRelated Matters". Attheprevious Heads ofDelegations
meeting on17June1996, thisgroup ofcountries along withHong Kong, India, Korea andPakistan
hadsponsored theInformation Notewhich hadidentified tenimportant elements forfurther examination
withregard totheimplementation andbuilt-in work oftheATC. Theimplementation oftheATCG/C/M/11
Page10
during thelasteighteen months hadfallen short oftheexpectation ofthese delegations andhadthus
given risetoanumber ofconcerns. Attherecent meeting ofthetextile exporting developing countries
inBangkok, these concerns were clearly reflected intheCommuniqué which hadbeencirculated at
theHeads ofDelegations meeting. Itwasthebelief ofthese delegations thatthereview ofthe
implementationofUruguayRoundAgreementsshouldbethemainfocusandthepriorityattheSingapore
Ministerial Conference. Forthisreason, itwasfeltthattheimplementation oftheATC which had
beenoneoftheareas ofmajor concern tothemshould begiven aproper andthorough evaluation from
which appropriate recommendations could thenbemade totheSingapore Ministerial Conference.
Atpresent, therewasnospecific designated WTO body, comprising allWTO Members, which could
examine theimplementation oftheATC andthegeneral problems relating tothesector. Such an
arrangement inadequately reflected theviews andconcerns ofallMembers. Therefore, somemechanism
wasneeded tofacilitate thepreparation ofareport ontextiles andclothing totheMinisterial meeting.
Thispaper wasastepintherightdirection anditwasthewishofthese delegations thattheelements
presented inthepaper befullydiscussed byMembers.
5.5 TherepresentativeofColombiathankedthedelegationofPakistanfortheimportantandvaluable
contribution ithadmade totheanalysis oftheimplementation oftheATC. Thereasons advanced
forwanting tohavethisincluded ontheagenda fortheSingapore Ministerial Conference werejustified.
Speaking astherepresentative ofColombia aswellastheChairman oftheITCB, which brought together
some twenty exporting countries, allofthemdeveloping, hewished tosupport thesuggestion thatthis
Council, intheabsence ofanyother more specifically designated body, should carry outareview of
theimplementation oftheATC.
5.6 Thepoints made inthisdocument wereinconcurrence withthemajor areas ofconcern voiced
bymembers oftheITCB bothattheirperiodic meetings inGeneva, aswellasatthelastCouncil of
RepresentativesheldinBangkok.Thoughtheconclusionsofthatmeetingaswellasitsrecommendations
hadbeenwidelycirculated,includingattheInformalHeadsofDelegationsmeeting,itwasveryimportant
thatthisCouncil alsobeaware oftheconcerns andconclusions arrived. Inthepaper submitted by
Pakistan andother Members, attention wasdrawn totheproblem oftheimplementation oftheATC.
Themostimportant aspect oftheAgreement wasthatofgradually integrating products intoWTO rules
inanorderly fashion sothatattheendofthe10-year period afinaltotalintegration wasachieved.
Tothisend,theAgreement envisaged threestages ofintegration. However, thefirststageofintegration
which tookplace lastyear, while legally correct, hadonlyminimal commercial impact. Thissituation
alsogaveanindication ofprospects forthesecond phase asregards some ofthemajor importing
countries.
5.7 Another element mentioned inthepaper which should bethesubject ofareview wastheuse
ofsafeguards. TheATC authorized suchaction butunder certain conditions, i.e.safeguards were
tobeusedunder special conditions andsituations. Unfortunately, amajor country hadproceeded to
usethese safeguards inamanner which, inhisdelegation 'sopinion hadbeenabusive, andinthis
connection hewished toindicate thatin1995, twenty-four applications ofsafeguards weremade against
fourteen countries, members oftheITCB. Thishadnotmerely caused difficulties forthose countries,
buthadcaused difficulties within theTMB itself, where itgaverisetoamajor debate aswellasto
conclusions which were notsatisfactory forexporting countries. Countries which were thevictims
oftheapplication ofthistypeofmeasure wished todraw attention totheneedforathorough analysis
ofthemanner inwhich these actions hadbeentaken.
5.8 Asregarded theoperation oftheTMB, ithadtobepointed outthattheTMB hadmade serious
andimportant progress inidentifying certain concepts suchasserious injury orharm, which maybe
invoked inapplying ameasure. Unfortunately, theTMB, hadmetwithserious difficulties incoming
upwithrecommendations andgetting aconsensus. Incertain incidences theresult ofthishadbeenG/C/M/11
Page11
arequest from theTMB totheparties toreopen consultations, aprocedure which hisdelegation felt
wascounterproductive astheTMB should favour multilateral consensus.
5.9 Asconcerned themanagement ofrulesoforigin withregard totextiles, thenewrulesoforigin
applicable intheUSAasof1July1995hadcaused greatconcern. Atechnical analysis hadgenerated
serious concerns inexporting countries astotheimpact theapplication ofthese ruleswould haveon
trade flows. TheITCB hadapproached theAmerican authorities witharequest tocarry outajoint
analysis withaviewtorevising these rules.
5.10 Therepresentative ofPeruexpressed fullbacking forareview oftheimplementation ofthe
ATC, including paragraph 18ofArticle 2,withaviewtotheSingapore Ministerial Conference. Peru
considered thatthisCouncil wasthemostappropriate forum, pursuant toparagraph 5ofArticle IV
oftheMarrakesh Agreement establishing theWTO, inwhich suchareview should becarried out.
5.11 Therepresentative ofKorea thanked thedelegation ofPakistan forhaving raised thisimportant
issue. Hisdelegation agreed thattheATCwasoneoftheprinciple achievements oftheUruguay Round
inthatalongoverdue derogation wasbrought backunder multilateral rulesanddisciplines. However,
theAgreement hadtobeimplemented effectively andfaithfully. Inthisconnection, thereview
mechanism wasveryimportant. Hisdelegation alsoagreed withtherepresentative ofPakistan that
there wasnocontractually designated body within theWTO system mandated toconduct anoverall
review oftheimplementation oftheATC. Therefore, hisdelegation supported theproposal thatthe
Singapore Ministerial Conference should givedirections totheGeneral Council and/or thisCouncil
toreview properly theimplementation oftheATC andreport tothe1998 Ministerial Conference on
theresult ofsuchareview.
5.12 Therepresentative ofEgypt stated thathisdelegation attached great importance tothereview
oftheimplementation oftheATC bytheSingapore Ministerial Conference. Thereview should take
place intheCouncil forTrade inGoods. Hisdelegation alsobelieved thattheCommittee onTrade
andDevelopment(CTD)shouldlookintotheimplementationoftheATCinsofarasthespecialprovisions
infavour ofdeveloping countries andinparticular LDCs wereconcerned inorder toexamine whether
theyhadbeenadequately implemented andshould report tothisCouncil forappropriate action. He
wished toplace onrecord hisdelegation 'sconcern anddisappointment atthelackoftangible results
reached -sofar-intheimplementation ofthespecial provisions fordeveloping countries ingeneral
andtheleast-developed countries inparticular. Hisdelegation would takeupthisissueintherelevant
bodies oftheWTO andintheCTD induetime. Regarding transparency, hewished toemphasize
theroleoftheCouncil inoverseeing thefunctioning oftheATC, asanAnnex 1Aagreement andas
provided forinparagraph 5ofArticle IVoftheMarrakesh Agreement establishing theWTO. Itwas
intheinterest ofthesystem andtobuild upconfidence inthefunctioning oftheWTO asanopenand
transparentorganization,thathisdelegationbelievedthattheGoodsCouncilcouldbeentrustedtodiscuss
allissues andproblems arising fromtheimplementation oftheATC, especially inlightoftherestricted
membership oftheTMB, whose members acted onanadpersonam basis.
5.13 Linked closely withtheissueofimproving thetransparency oftheimplementation oftheATC
andtheroletheGoods Council should playinthisrespect, wasthefunctioning oftheTMB, whose
roleintheimplementation period could notsufficiently bestressed, asitwasthesolebodyintheWTO
required specifically tosupervise andexamine allmeasures taken under theATC inaccordance with
Article 8.1oftheAgreement. Egypt believed thattheSingapore Ministerial Conference inthereview
process could consider ways toallow theGoods Council tosupervise regularly issues arising from
theimplementation oftheATC. TheTMB reports regarding theimplementation oftheAgreement
should bemade more focused. Heurged theimporting developed countries toimplement theATC
provisions infavour ofsmall suppliers, inbona fide,inletter andspirit, since these provisions were
negotiated andagreed upon inorder toopen theopportunity toallthebeneficiaries todevelop andG/C/M/11
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grow progressively. Theuseofunilateral trademeasures fornon-trade purposes wasaverylegitimate
concern andshould findaplace inthereview process bytheSingapore Ministerial Conference.
5.14 Therepresentative ofCosta Ricasupported thestatement made bytherepresentative ofPakistan
onbehalf ofother delegations ontheimplementation oftheATC. Hisdelegation shared theassessment
contained inthedocument presented. Theimplementation oftheATChadtobereviewed inthecontext
oftheSingapore Ministerial Conference, andthisreview should takeplace intheGoods Council.
5.15 TherepresentativeofHongKongthankedtherepresentativeofPakistanforraisingthisimportant
issue intheCouncil. Hisdelegation fullysupported thiscommunication, which wasafollow-up to
abriefinformation note,tabled ataninformal meeting oftheHeads ofDelegations heldon17June1996
bythesame group ofdelegations. Atthatmeeting, itwasagreed thatthematter should befurther
discussed inanappropriate body under theGeneral Council, withtheinformal process ofHeads of
Delegations keeping anoverview andifnecessary reverting toitinduecourse. Hisdelegation believed
thattheGoods Council wastheappropriate multilateral forum todiscuss thisimportant topic. Toput
thematter inproper perspective, thecommunication presented today should bereadinconjunction
withtheBangkok Communiqué bytheITCB dated 24May1996. Bothdocuments hadpointed to
thecoreissues which needed tobereviewed, forreasons clearly setoutinthedocuments themselves,
aspartoftheWTO preparations fortheSingapore Ministerial meeting. Aspecial session ofthisCouncil
dedicated tothetheme oftextiles andclothing should beconvened atanearly date.
5.16 Therepresentative ofBangladesh, inthecontext ofthestatement made bytherepresentative
ofPakistan regarding theimplementation oftheATC, wished tobring totheattention ofCouncil
Members anarticle published inthe"International Monetary andFinance Issues forthe1990s",
Volume VII.Thearticle wasentitled "TheUruguay Round -CostandCompensation forDeveloping
Countries". Thisarticle analyzed thecostsandbenefits oftheUruguay Round Agreements. Hewished
torefertooneaspect ofthisarticle which showed thatintheareaoftextiles, fortheACP countries
andleast-developed countries, theUruguay Round would produce losses equal to0.2percentoftheir
exports in1992. Bangladesh would beparticularly affected andaccording tothepublication mentioned
above, itwasestimated thatBangladesh would suffer adecline of18.9percentinexports oftextiles.
This wasamatter ofgreat concern tohisdelegation. Therefore, along withother issues, the
implementation ofthespecial provisions fortheleast-developed countries under theATC needed to
bereviewed.
5.17 Therepresentative ofIndia stated thathisdelegation fullysupported thecommunication made
byPakistan onbehalf ofanumber ofWTO Members, including India, andthestatement made by
therepresentative ofPakistan. Thetextiles andclothing sector wasanextremely significant sector
oftheIndian economy, bothinterms oftheemployment thatitprovided andtheexport earnings that
itgenerated. Hisdelegation wasamong those Members oftheWTO whohadactively participated
inthenegotiations during theUruguay Round, which hadresulted intheATC. Inhisdelegation 's
view, thisAgreement provided themechanism forintegrating thetextiles andclothing sector intothe
disciplines ofthemultilateral trading system. Hisdelegation wastherefore extremely interested in
theoperation ofthismechanism, asnegotiated andagreed tointheprovisions oftheATC. While
theATC fellfarbelow theexpectation ofcountries likeIndia, hisdelegation wasstillhappy thatafter
alongperiod adecision hadbeentaken tointegrate thetextiles andclothing sector intotheWTO system,
anddoaway withthediscriminatory regime which existed inthissector.
5.18 AsaWTO Member, hisdelegation wasdeeply concerned bythelackofproper transparency
intheimplementation oftheATC. ForIndia, theintegration ofthetextiles andclothing sector inthree
phases, ascontained inArticle 2oftheATC, wasinessence theheart oftheAgreement. Itwasnot
possible from thereports oftheTMB, which hadbeenestablished under theprovisions oftheATC
tosupervise itsimplementation, tooversee thefullextent oftheintegration process under thefirstG/C/M/11
Page13
phase. Hisdelegation 'simpression wasthatthisphase ofintegration hadnotbeenofanyrealvalue
forIndia'sexports oftextiles andclothing, asthepercentage ofmade-up textile products andclothing
forming partoftheintegration programme ofIndia'smajor export markets wasextremely small. India
wasconcerned about suchcosmetic integration, which conformed totheletter oftheATC butnotto
itsspirit. Hisdelegation wasinfavour offocusing onthisaspect inthereview oftheimplementation
oftheATC bytheGoods Council. Itshould betheMembers 'endeavour toensure thattheprovisions
oftheATC were faithfully implemented inletter andspirit inthefuture. Hisdelegation wasalso
concerned about themanner inwhich measures were being taken inthetextiles andclothing sector,
inthecontext oftheprovisions oftheATC. Hereagain, hisdelegation wasatadisadvantage innot
knowing thefullpicture from thereports oftheTMB. India shared withother WTO Members a
commitment toabide bytherulesofthemultilateral trading system, andtherefore expected theTMB
reports toreview indetail theconformity ofsuchmeasures withtheprovisions oftheATC. His
delegation wasdisappointed thatthesereports didnotconvey either suchdetails oranyreasoning behind
theviews oftheTMB onthemeasures taken inthetextiles andclothing sector byWTO Members.
Hisdelegation 'sconcerns were brought outinthecommunication, forexample, withregard to
implementation programmes, theuseoftransitional safeguards andbilaterally agreed arrangements.
5.19 Asacountry which willbesignificantly affected bymeasures being taken inthefieldoftextiles
andclothing inthenearfuture, suchaschanges intherulesoforigin ofamajor importing Member,
orspecial regimes which provide fordiscriminatory market access, India hadexpressed itsconcerns
inthecommunication. Hisdelegation feltthatmore attention needed tobepaidbytheWTO tothe
useoftrade measures fornon-trade purposes, asubject which hadalready hadanegative impact on
India'sexports oftextiles andclothing. Thereview oftheimplementation oftheATCneeded toaddress
thisproblem, which ledtoadistortion oftrade andincreased protectionism. Hisdelegation wished
tohavetheseconcerns further explored bytheCouncil inanappropriate manner, sothatanyexperience
gained could beused toguide inatransparent, impartial andresponsible manner thefuture
implementation oftheATC. Hisdelegation wished theGoods Council, astheWTO bodycompetent
todealwithtextiles andclothing, todiscuss thissubject indetail andtosubmit areport totheSingapore
Ministerial Conference.
5.20 Therepresentative ofBrazil focused ononepoint, namely theappropriate forum fordiscussions
ontextiles issues. Inthefirstplace, thecompetence oftheTMB wasestablished intheATC. He
alsonoted thatparagraph 5ofArticle IVoftheMarrakesh Agreement establishing theWTO stated
thatthe"Council forTrade inGoods shalloversee thefunctioning ofthemultilateral trading agreements
inAnnex 1A". AstheATC wasoneoftheagreements included inAnnex 1A,theGoods Council
should dealwithmatters related tothefunctioning oftheATC.
5.21 Therepresentative ofElSalvador agreed withthepoints made bytherepresentative from
Colombia, representing theITCB. Herdelegation especially wished toemphasise twopoints: first,
theoveruse oftransitional safeguard measures, andsecondly paragraph 18ofArticle 2oftheATC,
which referred tomore access tonewsuppliers. Herdelegation thought thattheGoods Council should
dealwiththisissue, andsupported thesuggestion thatameeting oftheGoods Council beheldtoexamine
thismatter.
5.22 Therepresentative ofNigeria supported therequest forareview oftheimplementation ofthe
ATC forthereasons citedbyPakistan, aswellasforthesystemic implications ofissues being raised
within theTMB which concerned other areas ofWTO, forinstance rules oforigin, trade and
environment. Nigeria alsosupported theproposal thattheMinisters inSingapore should request the
General Council andalsotheGoods Council toreview theimplementation oftheATC, andtoreport
tothenextmeeting ofMinisters in1998.G/C/M/11
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5.23 Therepresentative ofAustralia stated thatinhisdelegation 'sview, theforthcoming Ministerial
meeting inSingapore wasprimarily anopportunity toreview anddiscuss theagenda thatMembers
hadestablished andnegotiated during theUruguay Round. Inthatcontext, Australia hadalsomade
itsviewveryclear, thattheimplementation oftheUruguay Round Agreements wasakeyissue for
theSingapore Ministerial Conference. Theother keyissue wasthefuture work programme ofthe
WTO beyond theSingapore Ministerial Conference. Against thatbackground, Australia supported
strongly theGoods Council carrying outasubstantive review oftheimplementation oftheATC, and
inmaking recommendations totheSingapore Ministerial Conference ontheeffective implementation
oftheATC, aswellasappropriate work onthefurther implementation oftheATC.
5.24 Therepresentative oftheUnited States stated thathisdelegation hadjustreceived thepaper
communicated byPakistan onbehalf ofanumber ofWTO Members, andwasnotabletocomment
onitatthismeeting. Alsotheproposal thatameeting oftheGoods Council bededicated tothistopic,
needed careful consideration.
5.25 TherepresentativeofArgentinaendorsedthecommentsmadebytherepresentativeofAustralia.
5.26 Therepresentative oftheEuropean Communities saidthathisdelegation hadnowabetter
understanding ofthepositions ofanumber ofdelegations. However, since onlyaveryshort time
hadbeenavailable toconsider thedocument, hehadtoreserve hisposition withregard tothesubstantial
elements ofthepaper, andtotheprocedural questions.
5.27 Therepresentative ofCanada stated thatmoretimewould beneeded forhisdelegation toreview
thepaper thathadbeentabled andtoconsider theinterventions made byanumber ofother delegations.
5.28 TheChairman insummarising thediscussion stated thatthefirstpoint onwhich there was
complete understanding, wasthatattheSingapore Ministerial Conference theimplementation ofvarious
agreements which werepartoftheUruguay Round package would beanimportant itemforMinisters
toconsider. Secondly, itappeared thatalldelegations agreed thattheATC wasoneoftheagreements
intheUruguay Round package, andtherefore theSingapore Ministerial Conference initsreview of
implementation should dealwiththeimplementation oftheATC. Theproposal byPakistan, which
hadbeensupported byagoodnumber ofdelegations, wasthatthereshould beadiscussion intheGoods
Council onthesubject oftheimplementation oftheATC, tobefollowed byanappropriate report to
theSingapore Ministerial Conference. There hadbeensuggestions, thateither aspecial meeting of
theGoods Council beheldtodiscuss thissubject indepth, orthatthematter beinscribed intheagenda
ofthenextscheduled Goods Council meeting. ItwasclearthattheGoods Council hadtheresponsibility
tooversee theimplementation ofAnnex 1AAgreements andanumber ofdelegations hadsuggested
thattheGoods Council wastheappropriate forum forreviewing theimplementation oftheATC. At
thesametime, itappeared thatsome delegations wished tohavetimetoreflect onthatpoint. Hedrew
attention tothefactthatthere wasnotmuch timeavailable, andthatitwasnecessary togetonwith
theprocess.
5.29 Therepresentative ofPakistan thanked theChairman forhissummary ofthediscussion, and
those delegations which hadfound merit inthepaper thathadbeencirculated. Hisdelegation looked
forward toasubstantive discussion oftheissues thathadbeenidentified. IntheHeads ofDelegations
process ithadbecome clear thatimplementation issues would betaken upinthevarious bodies
concerned. With regard totextiles, hisdelegation hadbelieved that,andthiswould appear tohave
beenreflected inthegeneral discussion heldintoday'sCouncil meeting, themost appropriate body
forareview wastheGoods Council. Thequestion confronting Members waswhether thismatter should
betaken upataspecial meeting ormeetings, ashadbeensuggested, orthrough theinscription ofthe
itemonaregular meeting ofthisCouncil. Itwastherightofanydelegation toinscribe anitemon
theagenda ofthemeetings oftheCouncil. Thequestion which stillremained tobedecided wasperhapsG/C/M/11
Page15
thatthisitemmight bebetter dealtwithinaspecial meeting. Thisissue should besorted outassoon
aspossible astherewasnotmuch timebefore theSingapore Ministerial Conference. Eachissueraised
hadtobediscussed indepth inorder toreach aconsensus onwhattoreport toMinisters inSingapore.
5.30 Therepresentative ofHong Kong stated thatitshould come asnosurprise thatthissubject
wasbeing addressed intheCouncil today. Discussion hadalready beenheldforsome timeconcerning
theforum inwhich suchamatter should beaddressed, anditwould notbeappropriate toallow more
timeforfurther reflection onthisparticular point. Theissue onwhich briefinformal consultations
might beneeded would beinrelation totheprecise mechanism fordealing withthisimportant subject.
5.31 TheChairman stated thatitappeared tohimthat:1)anumber ofdelegations tooktheview
thatthissubject hadtobediscussed intheGoods Council, notonlybecause thatwasenvisaged inthe
WTO Agreement, butbecause intheHeads ofDelegations process ithadbeenclearly mentioned that
implementation issues should bediscussed inthebodies concerned. Therefore therewasafeeling among
alargenumber ofdelegations whohadtaken thefloorthattheGoods Council should discuss theissue.
Thesecond aspect waswhether thismatter should bediscussed inaregular Council meeting, orbecause
thetimepressure wasconsiderable, whether there should beaspecial meeting. Astherepresentative
ofPakistan hadpointed out,anydelegation could include anitemintheregular meeting. However,
hewished toaskthose delegations whohadrequested some time, whether there wasanyobjection
from theirsidetohaving thematter discussed intheGoods Council.
5.32 Therepresentative oftheEuropean Communities stated thathehadnoinstruction onthe
procedural points andcould notgiveananswer atthismeeting. Hewould dohisbesttoobtain
instructions asquickly aspossible andwould consult withtheChairman andothers asnecessary.
5.33 Therepresentative oftheUnited States stated thatheneeded togetfurther instructions from
hiscapital.
5.34 Therepresentative ofCanada stated thathisdelegation hadrequested timeforreflection on
thesubstantive points raised inthepaper byPakistan andbyother delegations inorder toprepare
adequately foranysubsequent discussions. Inhisfirstintervention, hehadstated thathisdelegation
recognized thatthere wasacertain inevitability tothediscussion being heldinthisforum. Inother
words hisdelegation hadrecognised thefactthatthiswasprobably theappropriate forum tohavethis
discussion. There might beneedfortheChairman toholdconsultations inorder todecide onhow
toproceed onthismatter.
5.35 TheChairman stated thatMembers hadtobeclearabout thesubstance and/or scope ofpossible
consultations. There werethree elements oftheproposal made byPakistan which weresupported by
alarge number ofdelegations. Firstly, theGoods Council should discuss theimplementation ofthe
ATC withaviewtosubmitting areport totheSingapore Ministerial Conference, because itwasan
important implementation aspect, andalsobecause there wasnoother body which could discharge
these functions onbehalf oftheWTO Members asacollectivity. Thesecond point wasthatinview
oftheimportance andthecomplex anddifficult nature ofthesubject, itmight benecessary tohave
special meetings inorder toarrive atareport based onconsensus which could besubmitted tothe
Singapore Ministerial Conference. Thethirdelement wasrelated tothevarious substantive issues in
theAgreement. Inthisregard, alarge number ofdelegations hadindicated thatthere could notbe
anydecision atthismeeting. Itwasobvious thatmaybe several meetings were necessary todiscuss
thesubstance ofthevarious points raised inthepaper andinthepresentation made bytherepresentative
ofPakistan. Astotheprocedural issue, thesuggestion was,based onallthefactors known, thatthe
Goods Council should discuss thissubject. From theinterventions ofUSandEC,itwasnotclear
astowhether theycould accept thesuggestion thattheGoods Council discuss thissubject inpreparation
fortheSingapore Ministerial Conference.G/C/M/11
Page16
5.36 Therepresentative ofArgentina referred torule2oftheRules ofProcedure oftheGoods
Council, which stated thatmeetings maybeconvened withshorter notice formatters ofsignificant
importance orurgency attherequest ofaMember concurred withbythemajority ofMembers.
5.37 Therepresentative oftheEuropean Communities stated thatithadtobeborne inmind that
whatMembers wereconcerned withwasthequestion ofimplementation andnotrenegotiation ofexisting
obligations. Heregretted thathewasnotinaposition toagree atthismeeting totheproposal for
further discussion ofthesubject inthisforum. Healsowished tomake apoint oforder: the
communication from Pakistan wasreceived onlyonedaybefore themeeting, which wasonereason
whyhisdelegation wasnotinaposition todecide howthatproposal should bedealt with. His
delegation would engage asquickly aspossible intheprocess ofconsultations withaviewtoresolving
thisissue asrapidly aspossible.
5.38 Therepresentative ofNorway associated himself completely withwhathadbeensaidbythe
representative oftheEuropean Communities.
5.39 Therepresentative ofPakistan stated thatinaccordance withtherules ofprocedure, itwas
therightofanydelegation toinscribe anitemontheagenda ofameeting oftheGoods Council or
tocallforameeting oftheCouncil. Indeed, inaccordance withparagraph 5ofArticle IVofthe
Marrakesh Agreement establishing theWTO, the"Council forTrade inGoods shall oversee the
functioning ofthemultilateral tradeagreements inAnnex 1A". Therefore, hisdelegation feltthatthe
Goods Council waswellwithin itsrights todiscuss thematter thathadbeenraised, without any
requirement foraconsensus onthisissue. Hisunderstanding wasthatthedelegations oftheUnited
States andtheEuropean Communities hadasked formore timeinorder tostudy thesubstance ofthe
paper thathadbeencirculated. Thiswasunderstandable, andhisdelegation wasprepared towait;
however, itwasimportant thatthiswaiting period should notbetoolong.
5.40 Therepresentative ofHong Kong stated thatMembers could notbeputinaposition of
negotiating whether ornotthisparticular matter could beraised atthisCouncil. However, itwould
beinorder fortheChair ifhesowished toconsult onthedateofameeting which might consider
thissubject, andperhaps theprecise format forthatdiscussion. Here-emphasized thepoint made that
notalotoftimeremained toconsider thismatter.
5.41 TheChairman proposed, inlightofthediscussion, toholdinformal consultations early next
weekwithaviewtodeciding onthemodalities ofcarrying outdiscussions onthissubject. Heappreciated
thepoint thatthere wasnotmuch timeavailable andthatdiscussions onthesubstantive issue would
havetocommence assoonaspossible.
5.42 Therepresentatives ofTurkey, Mexico andSwitzerland indicated theirinterest inparticipating
inanyconsultations undertaken bytheChairman.
5.43 TheCouncil forTrade inGoods tooknoteofthestatements, andagreed totheChairman 's
proposal1.
1Theconsultations wereheldon8July1996 where itwasagreed thattheGoods Council wasthe
appropriate forum todiscuss thissubject. Ameeting oftheGoods Council wasconvened for
25July1996 todiscuss thismatter.G/C/M/11
Page17
6. Report toSingapore Ministerial Conference
- Statement byAustralia
6.1 Therepresentative ofAustralia stated thathisdelegation hadsubmitted apaper onthebuilt-in
agenda oftheWTO fordiscussion intheDirector-General 'sinformal Heads ofDelegation consultations
ontheSingapore Ministerial Conference. Ithadbeenagreed attheHeads ofDelegations meeting of
10June1996 thatelements oftheAustralian paper should betaken upintherelevant WTO bodies.
Since oneofthose elements concerned industrial tariffs, hisdelegation wanted theGoods Council to
consider theissue ofindustrial tariffs andnon-tariff measures inthecontext ofthefuture work
programme oftheWTO. Thebuilt-in agenda comprised commitments tomonitor andreview Uruguay
Round agreements andtonegotiate further liberalization insome areas. Itprovided afuture work
programme fortheWTO. Ithadbeenwidely accepted indiscussions ontheagenda fortheSingapore
Ministerial Conference thatthebuilt-in agenda should betheprincipal focus oftheMinisterial
Conference. Thebuilt-in agenda included commitments toresume negotiations inimportant areas of
market access, namely agriculture andservices. These commitments wereembodied intheAgreement
onAgriculture andtheGeneral Agreement onTrade inServices andnegotiations inthese areas would
resume fromthebeginning oftheyear2000. Butthebuilt-in agenda didnotinclude anycommitment
tobegin negotiations intheareaoftrade inindustrial products. Australia believed thattheomission
fromtheWTO 'swork programme ofnegotiations onindustrial tariffs wasanoversight, resulting from
thefactthattheUruguay Round didnotproduce acovered agreement onindustrial tariffs similar to
theagreements produced onagriculture andservices. Australia didnotbelieve thattheinadvertent
omission ofindustrial tariffs fromthebuilt-in agenda indicated anintent ofWTO Members tosideline
issues related toindustrial tariffs. Tariffs andnon-tariff measures continued torepresent significant
barriers tomarket access. Toremedy thissituation, Australia proposed thattheGoods Council
recommend thatMinisters attheSingapore Ministerial Conference agree thatnegotiations onindustrial
tariffs begin atthesame timeasnegotiations onagriculture andservices, atthebeginning ofthe
year2000. Thiswasnotanewproposal sinceother Members hadexpressed theviewthatthereshould
beacommitment tocommence further tariff liberalization negotiations attheappropriate time.
6.2 Australia wasnotseeking tore-open existing agreements onindustrial tariffs. Australia 's
intention wastoensure thatthefuture work programme oftheWTO wasbalanced andthatitreflected
theinterests ofallWTO Members. Australia believed thatbalance wasbestachieved byensuring that
thefuture agenda oftheWTO resulted incomprehensive multilateral negotiations inwhich allMembers
oftheWTO wereabletopursue theirprincipal market access interests, whether inindustrial products,
servicesoragriculture.Australiaalsoproposedthatpreparatoryworkforfuturenegotiationsinindustrial
tariffs beundertaken either bytheGoods Council ortheMarket Access Committee starting in1997
aftertheSingapore Ministerial Conference. Such work would beinlinewiththepreparations that
Australia believed should beundertaken forelements oftheexisting built-in agenda. Aworkprogramme
could examine themodalities offuture negotiations. Itcould lookattherelative advantages of
request/offer negotiations andformula cuts. Suchawork programme could encompass information-
gathering andanalysis ofthisandsimilar issues leading uptothebeginning ofnegotiations. Australia
haddonesome work onmeasuring thetotaleffect ofprotection foruseintariffnegotiations, andwould
envisage submitting apaper onthisaspartofapreparatory work programme leading tofuture tariff
negotiations. Agreement byMinisters attheSingapore Ministerial Conference thattheWTO undertake
suchpreparatory work would ensure thatindustrial tariffs werenotoverlooked atSingapore. Itwould
ensure thatif,asproposed byAustralia, negotiations began in2000, theywould begin inearnest and
werenotdelayed bypreparatory discussions thatwould needtotakeplacebefore thenegotiating process
began.
6.3 AsAustralia hadindicated, non-tariff measures could alsobeabarrier tomarket access.
Exporters world-wide continued tofindthatthiswasthecase. Moreover, astariffs hadcontinued
todecrease asaresult ofmultilateral agreement intheWTO aswellasunilateral actions inregionalG/C/M/11
Page18
fora,non-tariff measures hadbecome evermore exposed aspotential oractual barriers totrade. Such
measures weredealtwithintheWTO Annex 1Aagreements. Consideration ofnon-tariff measures
inthesebodiescouldperhapsberelevanttoaworkprogrammeleadingtofuturenegotiationsonindustrial
tariffs. Insummary, Australia wasproposing thattheSingapore Ministerial Conference agree to:
begin industrial tariff negotiations in2000 atthesame timeasfurther negotiations inagriculture and
services; andmandate theGoods Council ortheMarket Access Committee toundertake preparatory
work forsuchnegotiations from1997. While bringing theissuetothismeeting oftheGoods Council,
hewished toforeshadow thatAustralia intended tomake thisstatement available asanon-paper in
theinformal Heads ofDelegations process nextweek. Thiswould provide afurther opportunity to
discuss theproposal inthecontext ofother elements inthepost-Singapore work programme ofthe
WTO.
6.4 Therepresentative ofCanada stated thathisdelegation agreed withtheAustralian delegation
thatfurther liberalization oftradeinindustrial products should beanimportant component ofthefuture
work ofthisOrganization. Canada would becoming forward nextweek intheHeads ofDelegations
process withsome further elaboration ofsuggestions thatCanada hadalready made regarding further
progress towards liberalization inthese products before orattheSingapore Ministerial Conference.
Canada hadtalked about possible advanced implementation ofUruguay Round tariffconcessions. His
delegation hadalsotalked about looking atproposals fortheelimination ofduties ininformation
technology products, andwould beprepared toexamine thepossibility ofelimination ofduties inother
areas aswell. Thiswasaprocess which should notbepostponed untiltheyear2000, butrather one
which should beengaged inamuch shorter timeframe, including overthecourse ofthenextfewmonths.
6.5 Therepresentative ofNewZealand stated thathisdelegation welcomed theAustralian proposal,
andsupported theview thattheSingapore Ministerial Conference should initiate some preparatory
work onthequestion ofindustrial tariff negotiations, andhowthese might beconducted.
6.6 Therepresentative ofChile stated thatherdelegation alsosupported Australia 'sproposal that
inSingapore apreparatory programme ofwork forfuture negotiations intheareaofindustrial products
beestablished. Thiswaspartofabalanced agenda ofwork fortheWTO, andChile wasespecially
interested ingreater liberalization inallsectors, andparticularly inthiscase, inindustrial products,
sincetherewerestillcontinuing problems oftariffescalation andofhightariffduties onfishing products.
Infuture, innegotiations which would begin intheyear2000foragriculture andservices, Chile would
likefishing products tobecovered.
6.7 Therepresentative ofHong Kong stated thathisdelegation wasinterested intheAustralian
proposal, andlooked forward toreceiving further details.
6.8 Therepresentative ofAustralia thanked those delegations thathadspoken favourably ofthe
proposal thathisdelegation hadmade andlooked forward tofurther discussions onthisissue, both
intheHeads ofDelegations process andintheGoods Council.
6.9 TheCouncil forTrade inGoods tooknoteofthestatements.
7. Argentine footwear
- Statement bytheUnited States
7.1 Therepresentative oftheUnited States, speaking under "Other Business", stated thatin
September 1995, Argentina hadenacted decrees thatestablished specific duties forimports offootwear,
textiles andapparel. These specific duties violated Argentina 'sWTO tariff bindings. Argentina had
developed theseduties bycalculating anaverage pricebased onfictional values. Hisdelegation believed
thatArgentina wasinviolation ofitsWTO obligations under theCustoms Valuation Agreement. TheG/C/M/11
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United States hadraised thisissueinGeneva andinbilateral consultations. InMarch, Argentina had
admitted thatthecurrent regime wasnotconsistent withtheWTO, andhadpromised toissue new
regulations within three weeks. Newregulations hadasyetnotbeenissued. TheUScontinued to
beconcerned about theWTO-inconsistent regime that Argentina maintained forimports ofthose
products.
7.2 Therepresentative ofKorea joined theUSdelegation inurging thattheArgentinean Government
takecorrective measures without further delay. TheWTO-inconsistent trade measures were being
maintained since September 1995. Korea hadyettocomplete itsanalysis ontheadverse impact of
theArgentineanmeasuresontheexportsofKoreanfootwearandtextileproductstoArgentina.However,
itwasimportant tonotethatKorea 'sexports ofthose items toArgentina, which amounted toan
equivalent ofUS$76 million in1994, decreased toUS$64 million in1995. Ifitwastruethatthe
ArgentineanGovernmentadmittedthatthesaidmeasureswereWTO-inconsistent,andmadecommitments
torectify thesituation within threeweeks, thedelay uptonow,might poseanimportant anddangerous
implication interms ofrights andobligations oftheWTO Members.
7.3 Therepresentative ofArgentina stated thathisdelegation hadtaken noteofthecomments made
bytheUSandKorea, andwould transmit them tohisauthorities.
7.4 TheCouncil forTrade inGoods tooknoteofthestatements.
8. Singapore Ministerial Conference -Status ofwork relating toimplementation andthe
built-in agenda
- Statement bytheChairman
8.1 TheChairman, speaking under "Other Business", recalled thathehadmade astatement at
thelastmeeting regarding thereport tobemade bythisCouncil totheSingapore Ministerial Conference.
Inthatcontext, hehadreferred tothe"Procedures foranAnnual Overview ofWTO Activities and
forReporting under theWTO" which were adopted bytheGeneral Council on15November 1995
andtothestatement made bytheChairman oftheGeneral Council atthemeeting of16April 1996
concerning "Reporting Procedures fortheSingapore Ministerial Conference". Oneofthepoints
mentioned wasthatthereports ofthesubsidiary bodies should comprise atleastthefollowing elements:
(a)asection onimplementation oftherelevant Agreement; (b)progress concerning work under the
Built-in Agenda; (c)anindication asappropriate ofissues andproblems which havebeenidentified,
andrecommendations ifany.
8.2 Inthisconnection, there weretwoaspects inthisprocess thathewished tocover: First, his
assessment oftheimplementation process oftheWTO Agreements. Second, thereporting aspect.
Onthefirstaspect, fromwhatheknew about theprocess ofimplementation, while thesituation was
satisfactory inrespect ofscheduled commitments, aserious problem seemed tobeemerging inrespect
ofcompliance withnotification obligations inanumber ofAgreements. Inthisconnection, hereferred
toadocument issued bytheWorking Group onNotification Obligations andProcedures (G/NOP/W/14
dated 20May1996) which gaveaclearpicture ofthestateofplayofnotifications inthegoods area.
Itappeared fromthisdocument thattherewasstillneedforwork tobedoneonthepartofdelegations
torectify thisdeficiency inthenotification area,especially before theSingapore Ministerial Conference.
Hewished tomake anearnest appeal toalldelegations tomake themaximum effort possible tofulfil
theirnotification obligations.
8.3 Thesecond aspect related totheindication given bytheChairman oftheGeneral Council that
itwould beappropriate fortheChairmen oftheSectoral Councils topresent anoralreport totheGeneral
Council regarding thecurrent status ofwork concerning thepreparations fortheSingapore Ministerial
Conference, particularly inrespect ofimplementation andthebuilt-in agenda. Accordingly, heintendedG/C/M/11
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topresent anoralreport onhisownresponsibility totheGeneral Council atitsmeeting scheduled on
18July1996.
8.4 TheCouncil forTrade inGoods tooknoteofthestatement.
9. Date ofthenextmeeting
9.1 TheCouncil forTrade inGoods tooknotethatitsnextmeeting hadbeen scheduled for
19September 1996. However, inlightofthediscussions heldunder agenda item5,theCouncil noted
thatameeting might becalled prior tothisdate.