RESTRICTED
WORLD TRADE G/C/M/7
26January 1996
ORGANIZATION(96-0322)
COUNCIL FOR TRADE INGOODS
1December 1995
MINUTES OFMEETING
Held intheCentre William Rappard
on1December 1995
Chairman: Mr.M.Endo (Japan)
Theproposed agenda, contained indocument G/C/W/36, wasadopted withtheinclusion by
consensus ofitem10attherequest oftheEuropean Communities.
Page
1. Market Access Matters: 3
(A) Harmonized System- Extensions ofWaivers under Article IX 3
oftheWTO Agreement
- Bangladesh 3
- Bolivia 3
- Guatemala 4
- Jamaica 4
- Morocco 4
- Nicaragua 4
- Pakistan 5
- SriLanka 5
- Trinidad andTobago 5
(B) Malawi -Renegotiation ofSchedule LVIII -Extension ofWaiver 5
(C) Senegal -Renegotiation ofSchedule XLIX -Extension ofWaiver 6
(D) Zambia -Renegotiation ofSchedule LXXVIII -Extension ofWaiver 6
(E) Approval oftheDecision ontheIntroduction ofHarmonized 7
System changes intoWTO Schedules ofTariff Concessions
on1January 1996
(F) Approval oftheDecision onNotification Procedures for 7
Quantitative Restrictions
(G) Approval oftheDecision onReverse Notification of 7
Non-Tariff MeasuresG/C/M/7
Page2
2. Rules ofProcedure ofSubsidiary Bodies tobeapproved 7
- Committee onCustoms Valuation 7
- Committee onImport Licensing 7
- Committee onMarket Access 7
- Committee onRules ofOrigin 7
- Committee onTechnical Barriers toTrade 7
- Committee onTrade-Related Investment Measures 7
3. Reports from Subsidiary Bodies tobenoted: 8
- Committee onAgriculture 8
- Committee onAnti-Dumping Practices 8
- Committee onCustoms Valuation 8
- Committee onImport Licensing 8
- Committee onMarket Access 8
- Committee onRules ofOrigin 8
- Committee onSafeguards 8
- Committee onSanitary andPhytosanitary Measures 8
- Committee onSubsidies andCountervailing Measures 8
- Committee onTechnical Barriers toTrade 8
- Committee onTrade-Related Investment Measures 8
- Textiles Monitoring Body 8
- Working Party onState Trading Enterprises 8
- Working Group onNotification Obligations andProcedures 8
4. Approval oftheSchedule ofConcessions onGoods ofSolomon Islands 8
5. Agreement onPreshipment Inspection 8
Establishment oftheIndependent Review Entity under Article 4oftheAgreement
6. EFTA-Slovenia FreeTrade Agreement 9
- Communication from theParties totheAgreement
7. Agreement between theEuropean Community, ontheonepart, 10
andtheGovernment ofDenmark andtheHome Government ofthe
Faroe Islands, ontheother part
- Notification from theParties totheAgreement
8. Tariff Increase bytheEuropean Communities resulting from a 11
change oftheclassification ofCD-ROM drives
- Statement byJapan
9. Approval oftheReport (1995) oftheCouncil forTrade inGoods 13
totheGeneral Council
10. Enlargement oftheEC: Negotiations under Article XXIV:6 ofGATT 1994 14G/C/M/7
Page3
Thefollowing items were discussed under "Other Business"
11. TheSchedule ofGoods oftheUnited Arab Emirates 14
12. Chairmanships ofSubsidiary bodies oftheCouncil forTrade inGoods 15
- Chairmanships ofWorking Parties onRegional Agreements
- Chairmanships ofother subsidiary bodies oftheCouncil forTrade inGoods
TheChairman welcomed delegations tothemeeting oftheCouncil forTrade inGoods which
wasconvened byWTO/AIR/209. Henoted thatinaccordance withtheagreement reached atthelast
meeting oftheCouncil on26September 1995, thefollowing Organizations hadbeeninvited tothis
meeting oftheCouncil: FAO, IMF, ITCB, OECD, UN,UNCTAD, World Bank andtheWorld
Customs Organization. Heproposed thatpending theadoption ofcriteria andconditions forobserver
status forinternational intergovernmental organizations intheWTO andunless adelegation raised an
objection, theorganizations invited tothismeeting oftheCouncil forTrade inGoods beinvited also
toitsnextmeeting.
TheCouncil forTrade inGoods soagreed.
1. Market Access Matters
(A). Harmonized System -Extensions ofWaivers under Article IXoftheWTO Agreement
1.1 TheChairman drewtheCouncil 'sattention tothecommunications fromBangladesh, Bolivia,
Guatemala, Jamaica, Morocco, Nicaragua, SriLanka andTrinidad andTobago containing requests
forextensions ofwaivers which expired on31December 1995. These requests hadbeenmade in
thecontext ofthetransposition oftheschedules intotheHarmonized System, andinaccordance with
paragraph 1oftheUnderstanding inrespect ofWaivers ofObligations under theGeneral Agreement
onTariffs andTrade 1994. Pursuant toArticle IXoftheWTO Agreement, theserequests forwaivers
werebefore theCouncil, andtheCouncil hadaperiod which wasnottoexceed 90daystoconsider
these requests andtosubmit areport totheGeneral Council. Draft decisions hadbeencirculated to
assist theCouncil initsconsideration ofthese requests.
- Bangladesh (G/L/42, G/C/W/23)
1.2 TheChairman stated thattherequest fromBangladesh hadbeencirculated indocument G/L/42
andadraftdecision indocument G/C/W/23.
1.3 There wasnodiscussion onBangladesh 'srequest.
1.4 TheCouncil forTrade inGoods approved anextension ofthewaiver granted toBangladesh
until30June1996, andrecommended thatthedraftdecision contained indocument G/C/W/23 be
forwarded totheGeneral Council foradoption.
- Bolivia (G/L/43, G/C/W/24)
1.5 TheChairman stated thattherequest from Bolivia hadbeencirculated indocument G/L/43
andadraftdecision indocument G/C/W/24.
1.6 There wasnodiscussion onBolivia 'srequest.G/C/M/7
Page4
1.7 TheCouncil forTrade inGoods approved anextension ofthewaiver granted toBolivia until
30June1996, andrecommended thatthedraftdecision contained indocument G/C/W/24 beforwarded
totheGeneral Council foradoption.
- Guatemala (G/L/44, G/C/W/25)
1.8 TheChairman stated thattherequest fromGuatemala hadbeencirculated indocument G/L/44
andadraftdecision indocument G/C/W/25.
1.9 There wasnodiscussion onGuatemala 'srequest.
1.10 TheCouncil forTrade inGoods approved anextension ofthewaiver granted toGuatemala
until30June1996, andrecommended thatthedraftdecision contained indocument G/C/W/25 be
forwarded totheGeneral Council foradoption.
- Jamaica (G/L/45, G/C/W/26)
1.11 TheChairman stated thattherequest from Jamaica hadbeencirculated indocument G/L/45
andadraftdecision indocument G/C/W/26.
1.12 There wasnodiscussion onJamaica 'srequest.
1.13 TheCouncil approved anextension ofthewaiver granted toJamaica until30June1996, and
recommended thatthedraftdecision contained indocument G/C/W/26 beforwarded totheGeneral
Council foradoption.
- Morocco (G/L/56, G/C/W/35)
1.14 TheChairman stated thattherequest fromMorocco hadbeencirculated indocument G/L/56
andadraftdecision indocument G/C/W/35.
1.15 Therepresentative oftheEuropean Communities noted thathisdelegation wasactively pursuing
negotiations withMorocco onalimited number ofitems, andfeltthatanagreement would bereached
before theendof1995, inwhich caseanextension ofthewaiver might notbenecessary. However,
asagreement hadnotasyetbeenreached andasthiswasthelastoccasion onwhich sucharequest
could bemade in1995, hisdelegation would notraiseobjections toMorocco 'srequest foranextension
ofthewaiver.
1.16 TheCouncil forTrade inGoods approved anextension ofthewaiver granted toMorocco until
30June1996, andrecommended thatthedraftdecision contained indocument G/C/W/35 beforwarded
totheGeneral Council foradoption
- Nicaragua (G/L/46, G/C/W/27)
1.17 TheChairman stated thattherequest fromNicaragua hadbeencirculated indocument G/L/46
andadraftdecision indocument G/C/W/27.
1.18 There wasnodiscussion onNicaragua 'srequest.
1.19 TheCouncil forTrade inGoods approved anextension ofthewaiver granted toNicaragua
until30June1996, andrecommended thatthedraftdecision contained indocument G/C/W/27 be
forwarded totheGeneral Council foradoption.G/C/M/7
Page5
- Pakistan
1.20 TheChairman noted thatatthetimeofissuance oftheairgram, Pakistan hadnotsubmitted
arequest foranextension ofitswaiver. However, Pakistan wasincluded intheagenda asitwasa
Member whose waiver expired on31December 1995.
1.21 Therepresentative ofPakistan informed theCouncil thatPakistan expected toconclude
Article XXVIII negotiations by31December 1995. Anunderstanding hadalready beenreached with
theUnited States andnegotiations withtheEuropean Communities wereatanadvanced stage. Hence
Pakistan wasnotrequesting anextension ofitswaiver. However, incaseanyunforeseen developments
should takeplace atalaterstage, Pakistan intended tocome backtotheCouncil onthismatter.
1.22 TheCouncil forTrade inGoods tooknoteofthestatement.
- SriLanka (G/L/48, G/C/W/29)
1.23 TheChairman noted thattherequest fromSriLanka hadbeencirculated indocument G/L/48
andadraftdecision indocument G/C/W/29.
1.24 Therepresentative ofNewZealand wished toputonrecord hisdelegation 'ssense offrustration
thatdespite several approaches from NewZealand, SriLanka hadnotreverted toNewZealand on
thisissue recently. Hisdelegation appreciated thepreoccupations thatSriLanka faced, butitsfailure
toengage withNewZealand didimpede thepossibility ofreaching amutually satisfactory solution.
Inthatcontext, heurged SriLanka torespond promptly sothatnegotiations could beconcluded.
1.25 TheCouncil forTrade inGoods approved anextension ofthewaiver granted toSriLanka
until30June1996, andrecommended thatthedraftdecision contained indocument G/C/W/29 be
forwarded totheGeneral Council foradoption.
- Trinidad andTobago (G/L/49, G/C/W/30)
1.26 TheChairman noted thattherequest fromTrinidad andTobago hadbeencirculated indocument
G/L/49 andadraftdecision indocument G/C/W/30.
1.27 There wasnodiscussion onTrinidad andTobago 'srequest.
1.28 TheCouncil forTrade inGoods approved anextension ofthewaiver granted toTrinidad and
Tobago until30June1996, andrecommended thatthedraftdecision contained indocument G/C/W/30
beforwarded totheGeneral Council foradoption.
(B) Malawi -Renegotiation Schedule LVIII
- Extension ofwaiver (G/L/51, G/C/W/31)
1.29 TheChairman noted thatinthecaseofMalawi, duetotechnical problems, Malawi 'srequest
foranextension ofitswaiver hadreached theSecretariat atalatestage. Therequest hadbeencirculated
indocument G/L/51, andadraftdecision indocument G/C/W/31. Heproposed thattheCouncil revert
toMalawi 'srequest atitsnextmeeting.
1.30 TheCouncil forTrade inGoods soagreed.G/C/M/7
Page6
(C) Senegal -Renegotiation Schedule XLIX
- Extension ofwaiver (G/L/52, G/C/W/32)
1.31 TheChairman drew theCouncil 'sattention totherequest bySenegal circulated indocument
G/L/52 foranextension ofawaiver granted toitinconnection with therenegotiation ofits
Schedule XLIX, andtoadraftdecision which hadbeencirculated indocument G/C/W/32 inorder
tofacilitate consideration ofthisitem.
1.32 Therepresentative oftheEuropean Communities stated, thatasinthecaseofMorocco, his
delegation wasinanadvanced phase ofbilateral negotiations andthere wasonlyonetariff position
which wasstillthesubject ofdiscussions. From hisdelegation 'spoint ofview, itshould bepossible
toconclude these negotiations rapidly, before theendof1995 which would make anextension ofthe
waiver unnecessary. However, hisdelegation didnotwishtooppose anyconsensus regarding the
approval ofthisrequest.
1.33 Therepresentative ofCanada informed theCouncil thathisdelegation hadheldnegotiations
withSenegal, andexpected those negotiations toconclude inthenearfuture.
1.34 Therepresentative ofNewZealand stated thathisdelegation hadexpected thatSenegal would
engage promptly innegotiations toconclude theunderlying issue. Hisdelegation hadserious concerns
thatthere hadbeennoresponse from Senegal onthisissue since before thesummer break. Atthis
stage, NewZealand would anticipate having difficulty inagreeing totherequest foranextension of
thewaiver unless therewasrealprogress inthenegotiations. Heurged Senegal toengage innegotiations
withNewZealand promptly onthisissue. While theCouncil forTrade inGoods wasrequired toreport
totheGeneral Council ontherequest forawaiver andinthisrespect adraftdecision hadbeencirculated,
hisdelegation could nottakeafinaldecision atthismeeting. Heproposed thatthedraft decision
contained indocument G/C/W/32 beforwarded totheGeneral Council foritsconsideration.
1.35 Therepresentative ofSenegal stated thatnegotiations withNewZealand werewelladvanced
andthathecould confirm thathisdelegation would becontacting thedelegation ofNewZealand before
theGeneral Council meeting of13December 1995. With respect totheEuropean Communities, he
stated thatthere were problems ontwotariff positions andnotonlyonone.
1.36 TheCouncil forTrade inGoods tooknoteofthestatements, andagreed toforward thedraft
decision contained indocument G/C/W/32 granting anextension ofthewaiver until30June1996 to
Senegal totheGeneral Council foritsconsideration.
(D) Zambia -Renegotiation ofSchedule LXXVIII
- Extension ofwaiver (G/L/53), G/C/W/33)
1.37 TheChairman drew theCouncil 'sattention totherequest byZambia circulated indocument
G/L/53 foranextension ofawaiver granted toitinconnection with therenegotiation ofits
Schedule LXXVIII, andtoadraftdecision which hadbeencirculated inorder tofacilitate consideration
ofthisitemindocument G/C/W/33.
1.38 There wasnodiscussion onZambia 'srequest.
1.39 TheCouncil forTrade inGoods approved anextension ofthewaiver granted toZambia until
30June1996, andrecommended thatthedraftdecision contained indocument G/C/W/33 beforwarded
totheGeneral Council foradoption.G/C/M/7
Page7
(E) Approval oftheDecision ontheIntroduction ofHarmonized System Changes intoWTO
Schedules ofTariff Concessions on1January 1996 (G/MA/W/4 andRev.1)
1.40 TheChairman noted thatthedraftdecision before theCouncil related totheHarmonized System
1996 (HS96) changes tobeintroduced on1January 1996. From informal consultations heldbythe
Chairman oftheMarket Access Committee onthesituation arising from theintroduction and
implementation ofHS96 changes tonational tariffs on1January 1996 andtheimplication ofthese
changes onWTO Schedules ofconcessions, itappeared thatMembers wereinfavour ofacollective
waiver which would begranted upon request tothose Members finding itnecessary toconsult or
negotiate under Article XXVIII ofGATT 1994 asaresult ofthose changes. Thedraftdecision had
beencirculated indocument G/MA/W/4/Rev.1.
1.41 TheCouncil forTrade inGoods approved thedraft decision contained indocument
G/MA/W/4/Rev.1 andrecommended thatitbetransmitted totheGeneral Council foradoption.
(F) Approval oftheDecision ontheNotification Procedures forQuantitative Restrictions
(G/MA/NTM/W/1/Rev.1), and
(G) Approval ofthe Decision onReverse Notification ofNon-tariff Measures
(G/MA/NTM/W/2/Rev.1)
1.42 TheChairman noted thattheDecisions referred tounder agenda items FandGwereadopted
bytheCommittee onMarket Access atitsmeeting of31October 1995, pursuant toitsmandate set
outinparagraph (d)ofdocument WT/L/47, which indicated that"The Committee onMarket Access
shall: ...(d)conduct theupdating andanalysis ofthedocumentation onquantitative restrictions and
other non-tariff measures, inaccordance with thetimetable andprocedures agreed bythe
CONTRACTING PARTIES in1984 and1985 (BISD 31S/227 and228,andBISD 32S/92 and93)"
1.43 TheCouncil forTrade inGoods approved theDecisions ontheNotification Procedures for
Quantitative Restrictions contained indocument G/MA/NTM/W/1/Rev.1 andonReverse Notification
ofNon-Tariff Measures contained indocument G/MA/NTM/W/2/Rev.1.
2. Rulesofprocedureofsubsidiarybodiestobeapproved(G/VAL/W/2,G/LIC/W/1,G/MA/W/2,
G/RO/W/6, G/TBT/1/Rev.2, G/TRIMS/W/3)
2.1 TheChairman noted thatinaccordance withparagraph 6ofArticle IVoftheWTO Agreement,
theCouncil forTrade inGoods hadtoapprove thefollowing rulesofprocedure thathadbeensubmitted
byvarious subsidiary bodies oftheCouncil forTrade inGoods: G/VAL/W/2 from theCommittee
onCustoms Valuation, G/LIC/W/1 from theCommittee onImport Licensing, G/MA/W/2 from the
Committee onMarket Access, G/RO/W/6 from theCommittee onRules ofOrigin, G/TBT/1/Rev.2
fromtheCommittee onTechnical Barriers toTrade, andG/TRIMS/W/3 fromtheCommittee onTrade-
Related Investment Measures (TRIMs).
2.2 TheCouncil forTrade inGoods approved therules ofprocedure contained indocuments
G/VAL/W/2 (Committee onCustoms Valuation), G/LIC/W/1 (Committee onImport Licensing),
G/MA/W/2(CommitteeonMarketAccess),G/RO/W/6(CommitteeonRulesofOrigin),G/TBT/1/Rev.2
(Committee onTechnical Barriers toTrade) andG/TRIMS/W/3 (Committee onTRIMS).
2.3 Therepresentative ofMexico proposed thattherulesofprocedure ofallWTO bodies should
becontained inonesingle document.G/C/M/7
Page8
2.4 TheCouncil forTrade inGoods noted thatsuchadocument could beissued assoonasall
thesubsidiary bodies oftheCouncil hadadopted theirrules ofprocedure.
3. Reports from subsidiary bodies tobenoted (G/L/29, G/L/30, G/L/31 andcorr.1, G/L/32,
G/L/34, G/L/35, G/L/36, G/L/37, G/L/38, G/L/40, G/L/41, G/L/50, G/L/54, G/L/55)
3.1 TheChairman noted thatpursuant tothe"Procedures foranannual overview ofWTO Activities
andforreporting under theWTO" (WT/L/105) which were adopted bytheGeneral Council on
15November 1995, allbodies constituted under Agreements inAnnex 1AoftheWTO Agreement
wererequired tosubmit afactual report totheCouncil forTrade inGoods. Hehadbeeninformed
thatsince thecirculation ofthedocument containing thereport oftheWorking Party onSanitary and
Phytosanitary Measures, Chile andSwitzerland hadsubmitted substantive notifications ofstate-trading
enterprises under Article XVII.
3.2 TheCouncilforTradeinGoodstooknoteoftheadditionalinformationandthefollowingreports:
Committee onAgriculture (G/L/41); Committee onAnti-dumping practices (G/L/34); Committee
onCustoms Valuation (G/L/55); Committee onImport Licensing (G/L/29); Committee onMarket
Access (G/L/50); Committee onRules ofOrigin (G/L/36); Committee onSafeguards (G/L/32);
Committee onSanitary andPhytosanitary Measures (G/L/38); Committee onSubsidies and
Countervailing Measures (G/L/31 andcorr.1); Committee onTechnical Barriers toTrade (G/L/54);
Committee onTrade-Related Investment Measures (G/L/37); Textiles Monitoring Body (G/L/40);
Working Party onState Trading Enterprises (G/L/35); Working Group onNotification Obligations
andProcedures (G/L/30).
4. Approval oftheSchedule ofConcessions onGoods ofSolomon Islands
4.1 TheChairman noted thattherevised schedule ofconcessions ongoods oftheSolomon Islands
wascirculated inAugust 1995, andverified atthemeeting oftheCommittee onMarket Access on
31October 1995.
4.2 TheCouncil forTrade inGoods agreed toforward theSchedule ofConcessions onGoods
oftheSolomon Islands forapproval totheGeneral Council.
5. Agreement onPreshipment Inspection
- Establishment oftheIndependent Review Entity under Article 4oftheAgreement
(G/PSI/W/1 and2)
5.1 TheChairman recalled thatatthemeeting of3July1995, theCouncil hadrequested the
Secretariat toissueaworking document outlining theproposed solution regarding thequestion ofthe
status oftheIndependent Entity andofthelegal liabilities oftheIndependent Entity, itsstaffand
panelists. TheSecretariat hadcirculated on20July1995anoteonthe"Legal Status oftheIndependent
Entity under Article 4oftheAgreement onPreshipment Inspection" indocument G/PSI/W/1.
Delegations hadbeenrequested tomake comments onthepaper notlaterthan15September 1995.
Onthebasis ofthesolution proposed inPartIIofthatnote, theSecretariat had,incooperation with
theInternationalChamberofCommerceandtheInternationalFederationofInspectionAgencies,prepared
draftdocumentation withaviewtoestablishing thePSIentity asasubsidiary bodyoftheCouncil for
Trade inGoods. Thedocumentation hadbeencirculated indocument G/PSI/W/2.G/C/M/7
Page9
5.2 Informal consultations hadbeenheldbased onthisdocumentation anditappeared thatthere
waswideagreement thattheproposed draftdecisions andaccompanying documents wereacceptable
toMembers asabasis fortheestablishment oftheIndependent Entity. There, however, appeared
tobetheneedtoclarify further oneortwopoints, andtoconsequently make certain changes tothe
textbefore itcould beformally adopted. Itwasexpected thatthiswould bedoneinthecoming days.
Hetherefore proposed that,assoonasfinalagreement wasreached, arevised version ofdocument
G/PSI/W/2, incorporating theagreed changes, becirculated andbeputbefore theGeneral Council
foradoption atitsmeeting of13December 1995.
5.3 TheCouncil forTrade inGoods soagreed.
6. EFTA-Slovenia FreeTrade Agreement
- CommunicationfromthepartiestotheAgreement(WT/REG20/N/1andWT/REG20/1)
6.1 TheChairman drewattention tothecommunication fromtheparties totheAgreement contained
indocument WT/REG20/N/1, indicating theentry intoforce on1July1995 onaprovisional basis
oftheFreeTrade Agreement between EFTA countries andSlovenia. ThetextoftheAgreement was
circulated asdocument WT/REG20/1.
6.2 Therepresentative ofSwitzerland, speaking onbehalf oftheEFTA countries andofSlovenia,
recalled thatatitsmeeting of3July1995, theCouncil forTrade inGoods hadbeeninformed that
theEFTA countries andSlovenia hadconcluded afreetradeagreement, which hadnowbeennotified.
Theagreement wassigned inBergen on13June1995, andwasapplied provisionally byLiechtenstein,
Norway, Switzerland andSlovenia, andwould enterintoforceinallsignatory states when thenecessary
ratification procedures hadbeen concluded. Thefreetrade agreement covered trade inindustrial
products, fishandother marine products, andprocessed agricultural products. Within theframework
oftheagreement, bilateral agricultural agreements hadbeenconcluded between eachEFTA country
andSlovenia. Thecontent andstructure oftheagreement were similar tothefreetrade agreements
which hadbeen concluded between theEFTA countries andother Central andEastern European
countries. Theobjective ofthefreetrade agreement wastoabolish tariffs andother restrictions on
substantially alltrade between theEFTA countries andSlovenia. Italsocontained provisions dealing
with, inter alia,public procurement, intellectual property rights, stateaidandcompetition. An
evolutionary clause gavethepossibility toextend therelations toareas notcovered bytheagreement.
Aseparate article provided thebasis forfuture liberalization inservices andinvestments.
6.3 TheChairman proposed thattheCouncil forTrade inGoods takenoteofthestatement and
agree toestablish aworking party withthefollowing terms ofreference andmembership:
Terms ofreference:
"toexamine, inlightoftherelevant provisions oftheGATT 1994, theFreeTrade
Agreement between EFTA andSlovenia andtosubmit areport totheCouncil forTrade
inGoods."
6.4 Headded thathisstatement concerning theunderstanding, made under agenda item 7ofthe
meetingoftheCouncilforTradeinGoodson20February1995andcontainedindocumentWT/REG3/1,
applied mutatis mutandis tothisworking party. Itwasalsounderstood that,during theexamination,
dueaccount would betaken oftheintrinsic differences between customs unions andfree-trade areas.G/C/M/7
Page10
Membership:
"TheWorking Party would beopentoallMembers oftheWTO andother signatories
oftheFinal Actthatwerecontracting parties totheGATT 1947 andwereeligible to
become original Members oftheWTO indicating theirwishtoserve onit."
6.5 TheChairman noted thathewould betaking upthequestion ofChairperson oftheWorking
Party inamore general manner under "Other Business".
6.6 TheCouncil forTrade inGoods soagreed.
7. Agreement between theEuropean Community, ontheonepartandtheGovernment ofDenmark
andtheHome Government oftheFaroe Islands ontheother part
- Notification from the parties tothe Agreement (WT/REG21/N/1 and
WT/REG21/1)
7.1 TheChairman drewattention tothecommunication fromtheparties totheAgreement contained
indocument WT/REG21/N/1, indicating theentry intoforce on1January 1992 oftheAgreement
between theEContheonepartandtheGovernment ofDenmark andtheHome Government ofthe
Faroe Islands ontheother part. ThetextoftheAgreement wascirculated asdocument WT/REG21/1.
7.2 Heproposed thattheCouncil forTrade inGoods agree toestablish aworking party withthe
following terms ofreference andmembership:
Terms ofreference:
"toexamine, inlightoftherelevant provisions oftheGATT 1994, theAgreement
between theEContheonepartandtheGovernment ofDenmark andtheHome
Government oftheFaroe Islands ontheother partandtosubmit areport totheCouncil
forTrade inGoods."
7.3 Headded thathisstatement concerning theunderstanding, made under agenda item 7ofthe
meetingoftheCouncilforTradeinGoodson20February1995andcontainedindocumentWT/REG3/1,
applied mutatis mutandis tothisworking party. Itwasalsounderstood that,during theexamination,
dueaccount would betaken oftheintrinsic differences between customs unions andfree-trade areas.
Membership:
"TheWorking Party would beopentoallMembers oftheWTO andother signatories
oftheFinal Actthatwerecontracting parties totheGATT 1947 andwereeligible to
become original Members oftheWTO indicating theirwishtoserve onit."
7.4 TheChairman noted thathewould betaking upthequestion ofChairperson oftheWorking
Party inamore general manner under "Other Business".
7.5 TheCouncil forTrade inGoods soagreed.
7.6 Therepresentative ofKorea stated thatthisagreement hadbeenconcluded during 1991, and
hadcameintoforceon1January 1992, buthadbeennotified onlyfouryears afterwards. Hisdelegation
thereforequestionedthejustificationofsuchalatenotificationinthelightofparagraph7ofArticleXXIVG/C/M/7
Page11
ofGATT 1994, which stated that"anycontracting party deciding toenter intoacustoms union or
free-trade areashall .....promptly notify theCONTRACTING PARTIES ...". Many other late
notifications hadbeendefacto tolerated under theGATT, andhisdelegation didnotwanttosingle
outthisparticular case. However, thismostrecent latenotification should draw Members 'attention
tothefactthatasufficient enforcement mechanism waslacking which would ensure theprompt
notification ofregional integration agreements.
7.7 Inthisregard, itwasencouraging thatthere wasanattempt underway under theaegis ofthe
General Council toestablish aCommittee onRegional Trading Agreements. SuchaCommittee was
expected toimprove theArticle XXIV review process. Hisdelegation hadaconcern overtheloose
enforcement ofthe"prompt notification" requirement andhopefully thecurrent casewould provide
animpetus forthisCouncil todirect renewed attention towards theurgent needofdeveloping amore
effective notification procedure.
7.8 Therepresentative oftheEuropean Communities stated thathisdelegation supported theidea
ofmore discipline intheareaofnotifications, andhadaninterest in"prompt notifications". Hewished
topoint outthathisdelegation wasprepared tonotify eventhose agreements forwhich thetradeimpact
wasquite insignificant when compared toanumber ofother agreements having amuch larger effect
ontrade. Notifying anagreement under Article XXIV ofGATT 1994 wasdifficult todobefore
GATT 1994hadcome intoeffect. Finally, therehadbeenamajor change introduced totheAgreement
inMarch 1995, anditwasfeltthatthisamendment should beincluded inthenotification, which was
thecasenow.
7.9 TheCouncil forTrade inGoods tooknoteofthestatements made.
8. Tariff Increase bytheEuropean Communities resulting fromachange oftheclassification of
CD-Rom Drives
8.1 TherepresentativeofJapanstatedthatCompactDiscRead-OnlyMemorydrive(CD-Romdrive)
had,since itsappearance, beenclassified under theHarmonized System (HS) tariff heading 84.71,
asastorage unitforautomatic dataprocessing machines inmany countries. TheCommunity had,
however, presented intheOfficial Journal dated 1November 1995, anewinterpretation which stated
thattheCD-Rom drive would bere-classified asvideo recording orreproducing apparatus under the
HStariff heading 85.21.9000. Accordingly, since 22November 1995, 21daysaftertheJournal was
issued, bound ratesforCD-Rom drives increased from 3.9percent(aconcession which wastobe
reduced tozeroin1999), to14percent(aconcession onwhich noreduction wasagreed intheUruguay
Round).
8.2 Historically, theCommunity 'scustoms offices permitted imports ofCD-Rom drives under
theHStariff heading 84.71, andmoreover thesame treatment wasaccorded inother countries. This
classification wasrecognized andcommonly adopted attheconclusion oftheUruguay Round atthe
endof1993 andtheschedules ofconcessions ofWTO Members were based onthisunderstanding.
Thismeasure taken bytheCommunity, ofchanging thetariff classification unilaterally andraising
bound rateswithout priorconsultations withtheMembers concerned, violated theprovisions ofGATT
1994, especially Article II.Atthesametime, theCommunity 'sunilateral tariffreclassification treated
CD-Rom drives differently fromother Members oftheWTO, andasaresult itcaused hugeconfusion
toexporters. Thismeasure rancounter totheprinciple oftheHS,which aimed tofacilitate international
trade through theharmonization ofclassification ofgoods.
8.3 Thefunction ofaCD-Rom drive wasonlytoreaddatasignals recorded onaCD-Rom, in
accordance withcommands fromautomatic dataprocessing machines (ADP), andCD-Rom drives neverG/C/M/7
Page12
reproduced sound orimages themselves, butonlyreadandsentsignals totheADPmachines. Therefore,
itwasnotappropriate toclassify CD-Rom drives under HStariff heading 85.21 asvideo recording
orreproducing apparatus, andsuchdrives should beclassified under HStariff heading 84.71, as
peripheral unitsofADPmachines. Asforthese technical points, Japan hadrequested theHarmonized
System Committee oftheWorld Customs Organization (WCO) toconfirm theclassification ofCD-Rom
drives. Apreliminary discussion washeldatameeting on14November 1995inBrussels andexperts
from several countries hadstated their views thatfully supported theposition ofJapan onthe
classification ofCD-Rom drives.
8.4 Inlightofthepoints mentioned, Japan could notaccept theCommunity 'sreclassification of
CD-RomdrivesandconsideredthatthisreclassificationviolatedtheprovisionsofGATT1994,especially
Article II.HisGovernment urged theCommunity towithdraw these measures immediately andto
classify CD-Rom drives asperipheral unitsofADPmachines which wasthepractice adopted byother
Members. Thisissue hadtobediscussed inbilateral consultations orattheappropriate forum ofthe
WTO, andhisGovernment reserved allitsrights under GATT 1994 onthisissue.
8.5 Therepresentative Korea stated thathisdelegation shared theconcern expressed byJapan
concerning theCommunity 'sreclassification ofCD-Rom drives. Firstly, thecaseforreclassification
wasnotpersuasive fromatechnical pointofview. Itwashisdelegation 'sunderstanding thatnoMember
other thantheCommunity hadclassified thiscomputer datastorage under HStariff heading 85.21,
which dealtwithvideo apparatus. Thetechnical aspects ofthisissuewerebeing discussed intheWCO.
Secondly, ithadtobemade clear thatthebound rateonthisitemcould notbewithdrawn orraised
inanymanner. Thirdly, thecurrent caseshould notconstitute aprecedent forthefuture. Considering
thattechnical development could cause similar classification issues inthefuture, thisCD-Rom drive
caseshould beexamined under alltherelevant principles oftheWTO. Hisdelegation urged the
Community towithdraw itsdecision, andthereby reaffirm itscommitment totheWTO Agreement.
8.6 Therepresentative oftheUnited States stated thattheproper tariff classification ofCD-Rom
drives wasasperipheral unitsofADP machines. Notonlywasthatclassification thepractice ofthe
UScustoms service, butalsoofthecustoms service ofmany other countries, andsuchaconclusion
wasdictated bycommon sense. Hisdelegation shared theconcerns ofJapan about thetariff rate
implications ofthereclassification ofCD-Rom drives.
8.7 Therepresentative ofMalaysia, speaking onbehalf oftheASEAN countries, stated thathis
delegation supported theviews expressed byJapan. Hisdelegation wasextremely concerned with
theCommunity 'sunilateral change ofthetariff classification forCD-Rom drives. Thetariff
reclassification wassetoutintheCommunity 'sOfficial Journal dated 1November 1995, andtheshift
oftariff heading from HS84.71.9350 toHS85.21.9000, resulted inanincrease inthebound tariff
rateforCD-Rom drives from3.9to14percent. Thistariffincrease would haveadverse implications
forASEAN exports ofCD-Rom drives. Akeyobligation ofanyWTO Member wasthemaintenance
ofthenegotiated bindings offered initsschedule ofconcessions. Therefore theCommunity 'sunilateral
reclassification ofCD-Rom drives could notbeaccepted. TheCommunity 'sactions constituted prima
facie aviolation ofthespirit andintent ofArticle IIofGATT 1994. Thereclassification nullified
andrendered invalid tariffconcessions offered bytheCommunity intheUruguay Round, andtherefore
hisdelegation strongly urged theCommunity torevert totheoriginal classification under HStariff
heading 84.71.9350 forCD-Rom drives. Hisdelegation 'sexpectation wasthatasatisfactory solution
could befound, buthewished tomention thatASEAN countries reserved theirrights topursue this
matter further intheWTO.
8.8 TherepresentativeofCanadastatedthatCanadahadalreadyindicateditssupportfortheJapanese
position intheHarmonized System Committee oftheWCO. Canada classified CD-Rom drives under
HSheading No.84.71 (automatic dataprocessing machines andunits thereof) andwould continueG/C/M/7
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toclassify them under thisheading in1996 when theamendments totheHarmonized System came
intoeffect. Canada wasconcerned thattheHSprinciples guiding theclassification ofgoods hadto
beconsistently applied toavoid thepotential expansion ofsuchreclassification toinclude other multi-
media products.
8.9 Therepresentative ofAustralia shared theconcerns thatJapan hadraised which hadalsobeen
supported inthediscussions attheWCO. There wasanimportant WTO principle involved when goods
subject totariff bindings werereclassified. Thishadbeenwellaccepted within theGATT, andwas
thereason whyWTO Members were nowengaged inArticle XXVIII negotiations inrelation tothe
1996changes totheHarmonized System. Hisdelegation believed thatitwasveryimportant forWTO
Members tocontinue toapply thisprinciple.
8.10 Therepresentative oftheEuropean Communities stated thathisdelegation tooknoteofthe
statement made byJapan andotherdelegations atthemeeting butwished topointoutthattheCommunity
didnotarbitrarily reclassify products. Thepurpose oftheregulation proposed bytheCommunity was
toconfirm theproper classification ofCD-Rom drives withacapability toreproduce sound, images
andtexts. TheCommunity hadtoensure thatthecorrect classification andrelated duties wereuniformly
applied throughout theCommunity, andcustoms classification required thegiven product tobeclassified
under onetariff sub-heading only. Ifthere weredepartures fromthis,thematter hadtoberemedied,
which wasprecisely theaimoftheproposed regulation. TheCommunity 'sclassification ofCD-Rom
drives withaudio orvideophonic capabilities hadalways beenunder HStariff heading 85.21. Those
with noaudio orvideophonic capability were computer peripherals, classified under HStariff
heading 84.71. Article IIofGATT 1994rights hadtherefore notbeenaffected, since thishadalways
beentheCommunity 'sclassification. Traders never complained ifalower dutyhadbeenmistakenly
levied asaresult oftheincorrect application oftheCommunity 'sclassification, butwhen suchsituations
were redressed, complaints appeared. Thismatter hadalready been raised, asnoted byseveral
delegations, attheWCO. TheWCO hadbeenasked tolookattheclassification ofCD-Rom drives,
andtheCommunity would follow anynewclassification decided intheWCO foraparticular product
andinsodoing would transfer theproducts andtherelated duties fromtheprevious Community heading
tothenewheading. Finally, hewished tonotethatinpractice access hadnotbeenaffected. The
Community 'sregulations hadbeenadapted insuchawaythatnoCD-Rom drive would besubject
toadutyofmore than3.9percent.
8.11 Therepresentative ofArgentina stated thatinthisparticular case, hisdelegation didnothave
adirect tradeinterest, butitdidhaveaconcern regarding thedisciplines ofthesystem. Hisdelegation
wasconcerned byoneofthecomments made bytherepresentative oftheCommunities inclarifying
theCommunity 'sposition. Thefactthattraders didnotcomplain when thetariffratewaslower appeared
normal, andinfactitwasworthwhile torecall thattheaimofthisorganization wastofacilitate and
increase trade access, andnottoimpede it,sothere wasnosymmetry inthisdiscussion. Thisin
particular hadtobeborne inmind bycountries thatexerted aleading roleinthisorganization.
8.12 TheCouncil forTrade inGoods tooknoteofthestatements made.
9. Approval oftheReport (1995) oftheCouncil forTrade inGoods totheGeneral Council
(G/C/W/34)
9.1 TheChairman noted thatthe"Procedures foranannual overview ofWTO Activities andfor
Reporting under theWTO" (WT/L/105) which wereadopted bytheGeneral Council on15November
1995, provided that"The respective sectoral Councils should report inNovember eachyeartothe
General Council ontheactivities intheCouncil aswellasinthesubsidiary bodies" andthatthereports
ofthesectoral councils should be"factual innature, containing anindication ofactions anddecisionsG/C/M/7
Page14
taken, withcross references toreports ofsubordinate bodies andcould follow themodel oftheGATT
1947 Council reports totheCONTRACTING PARTIES."
9.2 TheChairman proposed thatthereport assetoutindocument G/C/W/34 beadopted. The
Secretariat would make theappropriate additions toinclude matters discussed atthepresent meeting.
Thereport, asamended, would beforwarded totheGeneral Council foritsmeeting on
13December 1995. Inthisconnection, hewished tonotethathewould bemaking anoralreport to
theGeneral Council atthatmeeting, inwhich heintended tohighlight theproblem arising outofthe
inability ofmany Members tocomply withtheirnotification requirements.
9.3 Therepresentative ofIndiastated thatthegeneral report tobesubmitted totheGeneral Council
when itmeton13December 1995would consist ofreports fromtheCouncil forTrade inGoods and
itssubsidiary bodies. Some ofIndia'sconcerns wereissues ofacross-cutting nature, andsome were
stillunder examination inhiscapital. Asaresult, hisdelegation wished toreserve itsposition, and
tomake astatement attheGeneral Council meeting onthereports which were before thisCouncil
andalsoother reports which would becoming upbefore theGeneral Council.
9.4 Therepresentative ofPerustated thathisdelegation wished todraw attention tothefactthat
thespanish version ofthereport wasnotyetavailable. Hehoped thatitwould beavailable bythe
timeoftheGeneral Council meeting.
9.5 TheCouncil forTrade inGoods tooknoteofthestatement, adopted thereport contained in
document G/C/W/34, andagreed thattheSecretariat make theappropriate additions toinclude matters
discussed atthepresent meeting andthattherevised document beforwarded totheGeneral Council
foritsmeeting of13December 1995.
10. Enlargement oftheEC: Negotiations under Article XXIV:6 ofGATT 1994
10.1 TherepresentativeoftheEuropeanCommunitiesstatedthat,ascouldbeseenfromthedocument
which hisdelegation hadcirculated atthebeginning ofthismeeting1,theCommunity wished toprolong
allrights heldbyMembers under paragraph 3ofArticle XXVIII oftheGATT 1994 inthecontext
oftheenlargement oftheEuropean Communities beyond 31December 1995, foronefurther month,
until31January 1996.
10.2 Inresponse toaquestion bytherepresentative ofMexico, theChairman stated thatthisitem
wasnotanitemunder "Other Business", butanitemincluded byconsensus attheoutset ofthemeeting
asanitemunder theordinary agenda.
10.3 TheCouncil forTrade inGoods agreed thattherights heldbyotherMembers under paragraph 3
ofArticle XXVIII inthecontext oftheenlargement oftheEuropean Communities would beextended
until31January 1996.
11. TheSchedule ofGoods oftheUnited Arab Emirates
11.1 TheChairman, speaking under "Other Business", noted thatattheverification meeting of
24April 1995, theCommittee onMarket Access hadagreed thatfurther consultations would berequired
onthesecond revision ofthedraftfinalschedule oftheUnited Arab Emirates (UAE). Hehadbeen
1Thisdocument hasbeensubsequently circulated asdocument WT/L/126.G/C/M/7
Page15
informed thatathirdrevision ofUAE'sschedule which reflected theresults ofthese consultations had
beencirculated veryrecently.
11.2 Heproposed thattheCouncil agree thataninformal meeting oftheMarket Access Committee
beconvened during thelatter partofthefollowing week forthepurpose ofverifying thisschedule.
Ifnoobjections wereraised against theUAEschedule atthatmeeting, theschedule should beforwarded
totheGeneral Council forapproval atitsmeeting scheduled for13December 1995.
11.3 Therepresentative oftheUnited States informed theCouncil, thatthethird revision ofthe
draftfinalschedule oftheUAE thatwasreferred towasnotacceptable atthisstagetotheUnited States.
Unless therewasfurther development, hisdelegation would bemaking thatpointattheinformal meeting
oftheCommittee onMarket Access thatwasconvened forthepurpose ofverifying UAE'sthirdrevised
draftfinalschedule.
11.4 TheCouncil forTrade inGoods tooknoteofthestatement andagreed thatifnoobjections
wereraised against theUAEschedule atthemeeting oftheCommittee onMarket Access tobeconvened
during theforthcoming week forthepurpose ofverifying theUAE schedule, theschedule should be
forwarded totheGeneral Council forapproval atitsmeeting scheduled for13December 1995.
12. Chairmanships ofSubsidiary bodies oftheCouncil forTrade inGoods
- Chairmanships ofWorking Parties onRegional Agreements
12.1 TheChairman, speaking under "Other Business", recalled thatatthelastCouncil meeting of
26September 1995, hehadnoted thatithadbecome increasingly difficult tofindasufficient number
ofofficials tochair thelarge number ofCommittees andworking parties established under theWTO
Agreements. Thisproblem wascompounded asfewpotential Chairpersons wereavailable forthefull
duration oftheworking party process required toexamine theregional trading arrangements. Hehad
informed theCouncil that,inlightofthissituation, hewould beholding consultations withaview
tofinding howbesttodealwiththissituation.
12.2 Inthisconnection, herecalled theproposal made byCanada attheGeneral Council meeting
of15November 1995concerning theestablishment ofaCommittee onRegional Trading Arrangements.
AsChairman oftheCouncil forTrade inGoods, hehadnoted atthattimethatwhile discussions on
theestablishment ofsuchaCommittee wereunderway, itmaybeagood ideatosetupasaninterim
measure aCommittee within theCouncil forTrade inGoods which would havethesame terms of
reference, orsimilar terms ofreference astheexisting Working Parties, butcovering allregional
arrangements. Inthemeantime consultations hadbeenheldbytheChairman oftheGeneral Council,
withaview tofinding awaytostreamline andrationalize procedures concerning Article XXIV
Agreements. Heproposed, therefore, thattheCouncil review thisquestion earlyin1996, when abetter
assessment ofthesituation inlightoftheconsultations going onunder theChairman oftheGeneral
Council regarding theCanadian proposal would beavailable.
12.3 Under these circumstances, thequestion ofappointment ofChairpersons would appear less
urgent, andinthisconnection henoted thattherewould beadelay inthestart-up ofthework concerning
theexamination ofthese regional agreement arising from thecircumstances thathehaddescribed.
12.4 TheCouncil forTrade inGoods tooknoteofthisinformation.G/C/M/7
Page16
- Chairmanships ofother subsidiary bodies oftheCouncil forTrade inGoods
12.4 TheChairman,speakingunder"OtherBusiness",informedtheCouncilthathewouldbeholding
consultations ontheappointment ofChairpersons ofother subsidiary bodies inaccordance withthe
guidelines setoutindocument WT/L/31 concerning "Appointment ofOfficers toWTO Bodies".
12.5 TheCouncil forTrade inGoods tooknoteofthisinformation.