RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/62
3 October 2002
(02-5304)
Council for Trade in Goods
MINUTES OF THE MEETING
Held in the Centre William Rappard on 13 June 2002
Chairperson:  Ambassador  Supperamaniam (Malaysia)
The meeting of the Council for Trade in Goods was convened by WTO/AIR/1823.  Document
G/C/W/386 contained the proposed agenda.  The meeting was suspended to allow for furtherconsultation on Item 8.  As this matter was taken up at the meeting of the Council on 1-2 October
2002, the meeting of 13 June was considered closed with respect to this item.
I. DOHA MINISTERIAL DECISION ON IMPLEMENTATION-RELATED
ISSUES AND CONCERNS:  REQUEST FOR THE CTG TO EXAMINE
PROPOSALS CONTAINED IN PARAGRAPHS 4.4 AND 4.5 RELATING TO
THE AGREEMENT ON TEX TILES AND CL OTHING ....................................................3
II. REQUEST BY COSTA RICA;  INDIA;  INDONESIA;  PAKISTAN;  PERU
AND HONG KONG, CHINA:  CTG'S OVERSIGHT FUNCTION PURSUANT
TO ARTICLE IV OF THE AGREEMENT ESTABLISHING THE WTO –
TRANSPARENCY REGARDING NEW RESTRICTIONS ON TEXTILE ANDCLOTHING PRODUCTS COMMENTED ON BY THE TEXTILES
MONITORING BODY ..........................................................................................................13
III. MAJOR REVIEW OF THE IMPLEMENTATION OF THE AGREEMENT ON
TEXTILES AND CLOTHING DURING THE SECOND STAGE OF THE
INTEGRATION PROCESS, PURSUANT TO  ARTICLE 8.11 OF  THE ATC ...............14
IV. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER
ARTICLE 9 ...................................................................................................................... .......14
V. DISCUSSION OF IMPLEMENTATION ISSUES BY THE TRIMS
COMMITTEE – REPORT TO THE CO UNCIL FOR TRADE IN GOODS...................17
VI. STATUS OF NOTIFICATIONS UNDER THE PROVISIONS OF THE
AGREEMENTS IN ANNEX 1A OF  THE WTO AG REEMENT......................................18
VII. CUSTOMS VALUATION AGREEMENT:  REQUEST FOR A WAIVER
UNDER ARTICLE IX OF TH E WTO AGRE EMENT......................................................19
VIII. REQUEST FOR A WTO WAIVER – NEW EC SPECIAL TARIFF
ARRANGEMENTS TO COMBAT DRUG PRODUCTION ANDTRAFFICKING – REPORT TO  THE GENERAL  COUNCIL.........................................19G/C/M/62
Page 2
IX. PREPARATIONS IN CONNECTION WITH PARAGRAPH 18 OF THE
PROTOCOL ON THE ACCESSION OF THE PEOPLE'S REPUBLIC OF
CHINA .......................................................................................................................... ...........19
X. OTHER BU SINESS............................................................................................................... .20G/C/M/62
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I. DOHA MINISTERIAL DECISION ON IMPLEMENTATION-RELATED ISSUES
AND CONCERNS:  REQUEST FOR THE CTG TO EXAMINE PROPOSALS
CONTAINED IN PARAGRAPHS 4.4 AND 4.5 RELATING TO THE AGREEMENT
ON TEXTILES AND CLOTHING
The Chairman recalled that this agenda item related to the mandate given by Ministers at
Doha to examine two proposals concerning the Agreement on Textiles and Clothing, as set out in
paragraphs 4.4 and 4.5 of the Ministerial Decisi on of 14 November 2001 on Implementation-Related
Issues and Concerns.  The Council was requested to make recommendations on these proposals to the
General Council  by 31 July 2002, for appropriate action.  He noted that a number of documents
containing statistics on trade developments and related information, as listed in the conveningairgram, had been prepared by the Secretariat at the request of delegations, to assist the examination.
The Chairman also noted that, at the Council meeting held on 2 May, it had been accepted
that he would arrange a series of informal consultations on this and some other ATC-related matters,
to be held during May and June. Accordingly, two meetings had been held in May, at which there wasan extensive exchange of views on the concepts involved in the two proposals.  The developing
Members had given their arguments in favour of the adoption of the proposals and had referred to the
information in the document which they had prov ided (G/C/W/368).  The restraining Members had
given their reactions to some of these points as we ll as their views on the proposals in relation to their
implementation of the Agreement.
He also noted that a further consultation had been held in the previous week, with the
discussions focussing on the developments in textiles and clothing trade since the beginning of the
ATC.  In particular, comments had been made on the changes in import levels and in market shares.
There had also been an exchange of views on the approaches which Members had taken in applyingthe growth-on-growth provisions of ATC Articl e 2.18.  He commented that the views on how to
respond to the proposals remained widely separated after these informal sessions.  Nevertheless, the
participants were discussing the issues and they  continued to indicate a willingness to examine
possible approaches.  In these circumstances, he intended to press on with the consultation process
and would continue to keep the Council informed of developments.
The representative of the United States expressed appreciation for the Chairman's report on
the status of the consultations and for the opportunity to contribute further to the discussion on the
proposals at the present meeting.  As they had indicated at the last Council meeting, they wished to
provide, on this occasion, their further comments  on the proposals and to share with the broader
membership  some of the views that they had conveyed in the informal consultations, as well as their
reaction to some of the data which had been circulated by the Secretariat.  It was their expectation thatthe process of examining the proposals would remain open and transparent to permit maximum
participation by all interested Members rather than being limited to major textile producers and
consumers.  She confirmed that the United States intended to fully participate in the Council's
discussions and to remain engaged in the consultations.
She commented that the entry into force of the ATC had been a watershed event for
production and trade in textiles and apparel, as it had established an irreversible schedule for the
phased elimination of the quota regime that regulates a significant portion of world trade in the sector.
Equally important, the ATC had established binding commitments requiring all WTO Members to
open their own markets to increased competition.  The ATC was a very important agreement for theUnited States and it took very seriously its commitment to ensure that the provisions of the ATC, in
its entirety, were fully and faithfully implemented.  Industries around the world, in both restraining
and restrained Members, including small suppliers and least-developed countries, were beginning toG/C/M/62
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anticipate the challenges of increased competition in preparation for the final elimination of ATC
quotas on 1 January 2005.  The implementation proposals relating to the ATC would accelerate the
increase in competition in export markets as well as in domestic markets in advance of that date and,
therefore, it was vitally important that all Members carefully focused on these proposals and on their
impact and provided their views to the CTG.
The representative of the United States observed that the two proposals, in paragraphs 4.4 and
4.5 of the Implementation Decision, had been discussed at some length and, indeed, there was a
record that some elements of these proposals had been discussed at least since 1990 during the actual
negotiations that had led to the ATC.  To a significant degree, these proposals actually represented
exporting Member and group proposals that had been considered and put aside in the ATC
negotiations.  If adopted, these proposals would result in significant changes in substantive, economicprovisions of the ATC, itself, and in the view of the United States, would sever the carefully
negotiated balance of the Agreement.  Furthermore, it was of concern that among the Members which
had been most vocal about the proposals were thos e that did not provide market access to developed
or developing country exporters in this sector.  The purpose of this submission, which was requested
to be circulated to all Members
1 was to respond to some of the comments made by the exporting
Members during the course of the debate.  The United States wished, in particular, to respond through
the submission to the point that had been made repeatedly that the implementation of the ATC had
failed to come up to the developing Members' legitimate expectations.  The second point addressed in
the submission was that at least one major restraining Member had hindered, rather than allowed for,
the process of autonomous industrial adjustment in its market.
The representative of the United States referred to the data that had been supplied by the
Secretariat in response to the requests made by the United States and others.  This was useful and she
looked forward to receiving the additional material that had been requested.  Even with some
significant gaps in the exporting Members' reporting, the Secretariat data had shown substantialgrowth in world trade in this sector.  Textile and clothing imports into the US, the EU and Canada had
increased 48% from 1994 to the year 2000.  Imports into the US during the time had increased by
72%, while imports into Canada and the EU had increased by 44% and 27% respectively.  WTO
Members' exports of textiles and clothing globally had increased 41% from 1994 to 2000, while at the
same time, US imports from all WTO Member countries had increased 72%.  Also of note was the
fact that this increased competition had resulted in lower costs, as has been noted by the Secretariat.
Indeed, this trend was supported by information from the US market where the average unit value ofapparel imports had been declining since 1998.
The United States also called the Council's attention to their own data analysis, with a focus
on apparel, which had been cited as being of critical importance for developing Members.  The data
showed that, in current US dollars, imports of apparel had increased 75% in value terms from 1994 to
2001 or from US$ 38.7 billion to US$ 67.3 billion.  The growth rate for apparel imports had exceeded
the growth rate of total US goods imports of 71.6% between 1994 to 2001, notwithstanding the
existence of the quota regime.  In volume terms, imports of apparel into the US had increased by over
90% between 1994 and 2001.  Further, despite some rationalization of apparel production and trade
expansion between Mexico and the United Stat es following the enactment of NAFTA and the
Caribbean Basin trade preferences, countries other than Mexico and those in the CBI had accounted
for over 61.3% of the US apparel import increase between 1994 and 2001.
It was noted that ITCB members, in particular, had benefitted from the growth in trade in
textiles and apparel vis-à-vis  the US market.  According to data on the ITCB website, the value of US
imports of textiles and apparel from its members, since the inception of the ATC, had grown faster
than total imports.  Imports from ITCB members had increased 91% from 1994 to 2000, while total
                                                     
1 Document G/C/W/387.G/C/M/62
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imports of textiles and apparel had increased 79% during the same period.  The quantity of US
imports from ITCB members, measured in square meter equivalents had grown by 107% from 1994
to 2000, while textile and apparel imports from all sources had increased by 90% during the same
period.  The value of US imports of textiles and apparel between 1994 and 2000 had increased by
US$ 31.7 billion;  the value of US imports from restrained Members and from ITCB members hadincreased by US$ 24.5 billion and US$ 22.2 billion, respectively, while the value of imports from the
CBI and NAFTA countries had increased by US$ 14.8 billion.  Even though the percentage increase
in the value of US textile and apparel imports from the CBI and NAFTA countries had been larger
between 1994 and 2000, which was to be expected since their 1994 level was relatively low, the dollar
value increase from the ITCB countries and from all restrained sources was nearly 50% larger, and
nearly 65% larger, respectively, than the dollar value increase from the CBI and NAFTA countries.
Also, the share of US imports of textiles and apparel from ITCB members, on a value basis, hadincreased from 61% in 1994 to 65% in 2000.
With respect to small suppliers, least developed countries, and cotton-producing textile
exporting countries, US textile and apparel imports from 22 suppliers had increased by 63% in
volume terms and 64% in value terms from 1994 to 2000.  US textile and apparel imports fromBangladesh, the only least developed Member under ATC restraint had increased by 140% in volume
and 137% in value.  Bangladesh was the fourth largest supplier of apparel to the US market,
accounting for US$ 2 billion of imports.
The representative of the United States also provided some observations with respect to the
data which had been provided by the Secretariat in response to a request from Hong Kong, China.
2
These data clearly demonstrated that ATC benefits had accrued to restrained Members.  Between1994 and 2000, the value of total textile and apparel imports into the US, the EU, and Canada had
increased by US$ 51.9 billion.  Although the percentage increase in the value of textile and apparel
imports into the US, EU and Canada from non-rest rained countries was greater than the percentage
increase in the value of imports from restrained Members, as would be expected, the increase in the
dollar value of imports from restrained Members, at US$ 26.7 billion, was actually greater than the
increase in value of imports from non-restrained countries, at US$ 25.2 billion.  US imports under
restraint had increased 52% from 1994 to 2001, compared to 45% in Canada and 23% in the EU.
Expectations aside, there could be no doubt about the results of the implementation of the ATC;  it
had led to tremendous benefits, real and tangible, for exporting Members.
She went on to point out that, in the US market, the increase in imports had let to intense
structural adjustment for the textile and apparel sectors throughout the transition period, as anticipated
by the Agreement.  The fact that the adjustment  was deepening was reflected in the data for the
year 2001, which had been an extremely difficult year  for US textile manufacturers, indeed, the worst
year in recent times.  On the topic of structural adjustment in the US, she considered that data onemployment were striking.  Textiles industry employment in 2001, at 583,100 workers, had been 19%
below the 1994 level.  The textiles industry employment decline between 2000 and 2001 was
especially steep, with a job loss of 9% (54,300 workers).  Apparel industry employment had fallen
even more.  Apparel industry employment in 2001, at 419,400 had been 51% below the 1994 level
and 13% below the 2000 level.  Textiles and apparel industry employment had declined 37% between1994 and 2001, for a total job loss of 581,500 and by 10% between 2000 and 2001, for a total job loss
of 117,900.  Adjustment was also clearly reflected in  poor industry conditions, shown in virtually all
of the significant economic indicators.  Information on these indicators was available in the
submission which was being circulated to Members (G/C/W/387).  In fact, there was abundant
evidence that the industries in the United States had undergone continuous industrial adjustment as aresult of increased competition, which itself was a result of a policy of the United States Government
                                                     
2 These data are set out in document G/C/W/373.G/C/M/62
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to fully and faithfully implement its commitments under the ATC.  In these circumstances, the ITCB
assertion did not withstand scrutiny.
The representative of the United States said that they had, for a number of years, carefully
reflected on the subjects which were now set out in the Doha proposals.  They had continued to cometo the same conclusion:  the ATC should be maintained as it had been negotiated and as adopted by all
Members.  The ATC was a carefully balanced agreement;  it should not be re-opened by the adoption
of the proposals in its final years, for a number of reasons.  In fact, the proposals had been
mis-characterized from the beginning as implementation concerns;  rather, the proposals would, if
adopted, result in significant changes in substantive economic provisions of the ATC.  The proposals,
in the view of the United States, would subvert the carefully negotiated balance of the ATC which
included the fact that major industrial adjustment had to take place in the restraining Members.  As
such, the proposals would disrupt the schedule that the industry around the world was anticipating, as
the industry focused its efforts on completing the adjustment process for the final implementation of
the ATC.  In addition, the cost to the United States of these proposals, in terms of additional access,
was extremely high, each separate proposal would be worth over US$ 1 billion.
It was also recognized that the quota regime under the ATC had provided guaranteed market
share for suppliers which otherwise might have had difficulties in competing with the larger, more
established producers.  As a result, the ATC provided preferential treatment for specific Members.
While something of a side issue, and clearly an issue that the ITCB members needed to resolve among
themselves, the United States wondered if there was not a fundamental inconsistency between theeconomic elements of the proposals, to the extent that liberalizing this trade for all Members could
erode the preferences that were already negotiated in the ATC for specific Members.  According to
the US analysis, there were real questions about which Members would have less access as a result of
these proposals;  they could particularly disadvantage trading partners in the Western Hemisphere and
in Africa.  The change that was ahead for all Members upon the expiration of the ATC wasunprecedented in scope.  In light of the impending changes, and given the importance of this vital
sector, all Members should reaffirm their commitment to the ATC and move forward to meet the
challenges of increased competition and adjustment.
The representative of Canada said that he was well aware of the importance of textiles and
clothing trade to many Members, particularly the developing countries.  For this reason, Canada had
been examining the proposals and had been actively engaged in the consultations on the proposalscontained in paragraphs 4.4 and 4.5 of the Doha Declaration on Implementation-Related Issues and
Concerns.  Canada wished to make a number of comments in connection with the implementation of
the ATC and the examination of the two proposals.  First, the explicit object and purpose of the ATC
was the full integration of the textiles and clothing sector into GATT 1994 rules and disciplines by no
later than 1 January 2005, leading to the removal of all quotas by that date.  As had been indicated onnumerous occasions and re-affirmed by Ministers in Doha, Canada remained fully committed to the
full implementation of the Agreement on Textiles and Clothing, which will occur only two and a half
years from now.  Second, the purpose of the ten-year transition period was to allow the domestic
industry the necessary time to adjust to the full integration of this sector.  This was clearly reflected by
the ATC's specific provisions setting out how the integration process was to work during thetransition period.  Canada had implemented fully the specific requirements of the ATC's transitional
provisions regarding the integration process, including the required integration of import volumes as
called for under the Agreement for each of the three stages.
He said that Canada had also fully implemented the growth-on-growth provisions pertaining
to small suppliers.  Indeed, with regard to small suppliers, Canada had extended the benefits of the
small suppliers growth-on-growth provisions to a larger number of Members than was actually
required under the ATC.  For larger exporters, the typical Canadian annual growth rate prior to the
ATC was 6%.  This had increased to over 11% as a result of the ATC's growth-on-growth provisions,G/C/M/62
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which was more than three times higher than the average annual growth rate in the Canadian market
since 1994.  For small exporters, growth rates had increased even more.  Clearly this had provided
significantly enhanced access to both small and large exporters.  In addition to meeting the specific
ATC transitional obligations, Canada had also removed quotas on many commercially significant
products, including tailored-collar shirts, other shirts and blouses, women's, girls' and children's suitsand ensembles, swimwear, baby wear, rainwear and overalls.
The ATC had resulted in substantially higher levels of imports into Canada from developing
Members, including the restrained exporters.  Apparel imports into Canada, measured in Canadian
dollars, from the restrained Members had increased by over 80% from 1994 to 2001.  Apparel imports
from the small suppliers had doubled.  The Canadian domestic apparel market, on the other hand, had
been growing by less than 3% per annum in nominal terms since 1994.  Developing country exportershad seen their share of the Canadian domestic apparel market grow from less than one-third to over
one-half, with the restrained Members increasing their market share from 31% to 45%.  At the same
time, the Canadian producers' share of their own market had dropped from 55% to 36%. The loss of
such a large share of their own market had required substantial ongoing industrial adjustment in the
Canadian industry in terms of what it produced, how it produced and who it sold to.  In short, the
restrained Members had achieved substantial gains in the Canadian market, while the Canadian
producers had seen their domestic market share erode significantly.
In these circumstances, Canada did not agree th at it had not lived up to its obligations under
the ATC, or that the integration process, as defined by the ATC, had not provided meaningful marketaccess to developing countries, and at a considerable cost to Canadian producers.  The plain facts and
the results did not support the ITCB members' claim that their balance of rights and obligations under
the ATC had been seriously impaired.  He agreed with the view expressed by the United States that
the ATC's transitional integration process, as clearly defined in terms of integrating import volumes
and growth-on-growth, was a crucial element of a balance which had been carefully negotiated in theUruguay Round.  This negotiated ten-year transitional process also represented a fundamental
commitment made by the Canadian Government to its industry.  The two proposals being advanced
by the exporting Members would alter this carefully balanced transitional process established under
the ATC.
In conclusion, he stressed that Canada remained firmly committed to the full implementation
of the ATC and to the removal of the quota restrictions by no later than 1 January 2005.  But as
Canada had said before, it did not support imposing new conditions that would alter or accelerate theATC's ten-year transitional process before its completion and disrupt the already difficult industrial
adjustment process under way in Canada.  He remained ready to continue to participate actively in the
consultation process.
The representative of El Salvador expressed appreciation for the Chairman's report and for the
detailed presentations by the United States and Canada.  He noted their concerns and considered that
they should be taken into account as this would ad vance the work.  This would also be of benefit in
the Chairman's consultation process.  He undertook to transmit to his authorities all of the information
received at this meeting, for careful consideration.  He agreed with the comment made earlier that the
Chairman's consultations should be as broad and as transparent as possible.
The spokesman for the European Union re-stated its position that it had fully complied with
the obligations of the ATC, would continue to do so, and would respect the deadline of the end of
2004.  He noted, in this regard, the relevant statements contained in the latest report from the ITCB
analysing in detail the ATC.  He considered that the implementation process was well on track.  Withrespect to the proposals in paragraphs 4.4 and 4.5 of the Doha Implementation Decision, while the
CTG was asked to examine these proposals, he found it difficult to entertain these requests positively,
considering that the implementation process of the ATC was fully on track.  He said that the EU
would be in a position to provide figures to corrobo rate these views in the very near future, showingG/C/M/62
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that, in fact, there had been a large increase in imports into the EU.  To give an example, imports had
increased from €  45 billion in 1995 to stand at the level of € 72 billion in 2001.  Within this total
increase, he noted that the increase for products under restraint had been greater than for other
products.
The spokesman for the European Union also referred to the TMB report of 31 July 2001
(G/L/459) which covered the period 1 January 1998 to 20 July 2001.  It stated that the Community
had respected the letter and requirements of the ATC and he saw no reason to believe that the
situation had developed in a negative sense vis-à-vis  exporting countries since then.  He specifically
pointed to Article 7 of the ATC, which dealt with the general liberalization of trade in textiles and
clothing.  It was their contention that this Article, which was a cornerstone in the ATC, had been very
much overlooked in the implementation process.  Due account would have to be taken of this Articlein the remaining two and a half years before the termination of the ATC.
The representative of Honduras spoke in support of the comments made by El Salvador.
The representative of Hong Kong, China said that it would be necessary to study very
carefully the statements that had been made at the current meeting and, accordingly, he reserved the
right to come back to those statements and to comment substantively on them at a later stage.
However, as an initial comment, he said that his reading of the various data which had been submitted
was somewhat different.  The statistics clearly showed that, in respect of clothing, the import shares of
the restrained Members to the US had declined from 83% in 1994 to 69% in 2000, which was a verysignificant decrease.  Similarly, in the EU the import shares of clothing of the restrained Members had
declined from 48% to 43%.  In these circumstance s, it was difficult to understand the EU's policy of
restraining those Members which were responsible for less than half of the imports. It was difficult to
see the equity in that situation.  Only in the Canadian market had the import share of clothing of the
restrained Members held at more or less the same percentage since 1994, that was, about 69%.
The statistics which the Secretariat had supplied in response to the request from Hong Kong,
China also told a clear story.  As regards clothing imports into the US, in 1994 the share of the
restrained Members, in value terms, grew 2% while the unrestrained suppliers grew 31%.  In 1996,
the restrained Members grew 0% while the unrestrained Members grew 23%.  It was very clear that in
the US market, especially for clothing, the restrained Members were losing out to the unrestrained
Members.  He recalled that the representative of the US had said that this situation was to be expectedand he agreed that this would be the case if one group of Members was restrained and the other group
was unrestrained.  However, this led to this question:  where was the equity for those Members which
were restrained?  Why should they be frozen out of this market?  Returning to the statistics, as regards
the US imports of clothing, imports from Canada  at US$ 700 million in 1994 had risen to nearly
US$ 2 billion in 2000.  Canada was doing rather well from the current framework of imports into theUS.
He had the impression that some of the restrained Members were being blamed for a
phenomenon which the US and other restraining Members had themselves implemented, which was
unfair.  He accepted that adjustment was taking place in the US and jobs were being lost;  this seemedto be linked primarily to the unrestrained Members, as acknowledged in a recent newspaper article by
a senator from South Carolina.  He stressed that it remained his firm view that this was a genuine
implementation issue.  The two proposals that were to be examined by the CTG did not require
changes to the ATC;  the exporting Members were not seeking a reopening of the Agreement.  The
ATC already provided the necessary flexibility to implement these proposals.  He also commented on
the point raised by the representative of the US that there were certain benefits in having exports
restrained by quotas.  To the contrary, developing Members had been trying to get rid of the quotas
for 40 or 50  years, so that point was not relevant to them.  He also noted the EU claim that Article 7
was being overlooked.  In response, he said that the objective was to examine the two proposals thatG/C/M/62
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were given by Ministers and to make recommendations to the General Council by the end of July.  If
required, there could be a debate on Article 7 of the ATC, but in another context.
The representative of Hong Kong, China stressed that Ministers at Doha had asked the CTG
to examine the two proposals and to make recomme ndations to the General Council  by the end of
July.  He found it disappointing that some Members had apparently already conducted their own
examinations and appeared to have ruled out any progress on the two proposals, without there having
been thorough multilateral consideration in the Council.  The developing Members appreciated the
difficulty which the two proposals might represent to some of the importing Members;  nevertheless,
this blanket refusal also put the proponents in a difficult position and it was very unlikely that they
would drop the matter in the face of this response from the importing Members.  Therefore, a more
subtle and creative approach was needed and in these circumstances, he urged the EU, Canada and theUS, in particular, to reflect on the situation and to engage meaningfully in a collective effort to find a
solution.  He also invited the wider membership a nd not just the large traders, to reflect on the
situation and questioned if the positions of the major importing Members was the response that
Ministers had in mind in Doha when they asked the Council to examine these tirets?
The representative of Bangladesh noted the detailed statements made by the US, the EU and
Canada.  He stated in this regard that the views expressed by the representative of Hong Kong, China,
the Chairman of the ITCB, also reflected fully his views.  He would examine the statements of the
US, the EU and Canada carefully and would co me forward with responses in the future.
The representative of India also referred to the comments made by the US, the EU and
Canada, which left him with a feeling of appreh ension, dismay and disappointment.  He would need
to study the statements in greater detail and reserved his rights to come back on a later occasion;
however, at this stage he wished to make some preliminary remarks.  He recalled that the proposals
relating to the ATC were part of the overall package negotiated by the Ministers at Doha.  If theintention was not to take any constructive action on the two proposals, the Ministers obviously would
not have incorporated the relevant portion of section 4 in the Decision on Implementation-Related
Issues and Concerns.  This, in turn, would have had its impact on other decisions taken at Doha and
would have resulted in a different package.  He stressed the point that the textiles and clothing sector
was a major segment of the economy of many developing country Members, including India.  It
accounted for about 20% of exports of manufactured products and employed a large number of
workers.  The ATC had raised many hopes in many Members.  He recollected that it had beenexpected, during the Uruguay Round, that world income would increase by US$ 200 to 500 billion, of
which a third would come from liberalization of trade in textiles and clothing.  The fact, however, was
that there had been no meaningful integration of restrained categories under the ATC hitherto.
He went on to point out that, in India's case, 95% of its clothing, fabric and yarn trade with
some of its major trading partners would remain unintegrated even after the third stage.  The fact that
most of the quotas would remain in place until the end of the ATC was against the object and purpose
of the Agreement, which was the gradual and progressive phasing out of quota restrictions.  India's
problems had been compounded by repeated and unjustified anti-dumping action taken on products
already under quota restrictions as well as other Customs and administrative formalities, includingchanges in rules of origin.  To cite one example, according to Eurostat data, as a result of the EU's
antidumping measures on cotton fabrics, the market share of the targeted countries had dropped from
55.83% in value and 59.04% in volume during the year 1993 to 38.58% in value and 37.6% in volume
during the year 1998.  Likewise, as a consequence of the EU's antidumping proceedings on cotton bed
linen, the market share of the targeted countries had dropped from 49% in value and 51.84% involume during the year 1993 to 41.31% in value and 44.65% in volume during the year 2000.
He noted that the Secretariat had circulated a document, at the request of the US, which had
compiled data in accordance with the product groupings defined under the SITC classification forG/C/M/62
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textiles and clothing.  This did not, however, fully correspond to the product coverage of the ATC.
Nevertheless, the Secretariat document still clearly indicated that the market share of the exports of
restrained Members to the US market for both textiles and clothing had declined from 77% to 66%
during the period 1994-2000 and from 46% to 43% in the EU market.  So far as India was concerned,
its annual average growth of exports in value te rms to the US market had been 17.7% in the period
1990 to 1994.  This had come down to 10.3% during the period 1994-2000.  In the case of the EU
market, India's pre-ATC annual growth for the same period had been 11%, which went down to -0.8%
during the period 1995-2000.  He also mentioned that exports of textiles and clothing to the non-
restraining countries had been growing at a much faster pace during the past few years.
He then referred to a broader issue which caused great concern to his delegation.  He said that
the Doha Work Programme constituted an overall package, with emphasis on the developmentdimension.  Somehow, the message was coming across that the development dimension had been
jettisoned after Doha.  The first deadlines to be me t under the Doha package refered to the two textile
proposals presently under discussion and to the decision under paragraph 44 of the Doha Ministerial
Declaration relating to special and differential treatment.  Both had enormous interest for developing
Members.  They were to be meaningfully addressed by 31 July of this year, but so far there had beenlittle progress.  Another decision of great significance to the developing Members related to paragraph
12 of the Doha Ministerial Declaration, on outstanding implementation issues.  India had been hearing
negative comments on these issues also.  He felt that if the package negotiated at Doha had been
interpreted and recast in the post-Doha process at Geneva in such manner that the development
aspects were sidelined, it would inevitably have its impact on other aspects of the negotiations anddiscussions.  Development was not equal to technical assistance and capacity building;  it had a much
larger dimension and developing Members in the WTO were now mature enough to know what they
wanted and to determine whether they had received what they were promised.  Any attempt to drive
the Work Programme at two speeds - at a faster pace for areas of concern to developed Members and
at a slower pace for the concerns of developing Me mbers - would lead to unravelling of the package
and create roadblocks in the process, which, in the interests of the future of the multilateral trading
system, Members must seek to avoid at all costs.  India, therefore, sincerely hoped that all Members
would engage constructively in the consultations which the Chairman had proposed to hold and that
the deadlines in this case and in other cases relating to developing countries would be successfully
met.
The representative of China shared the views and analysis of Hong Kong, China and India.
The ATC implementation was one of the key issues in the Doha Agenda.  Although much of the
implementation period of the ATC had elapsed, developing exporting Members had not acquired the
gains they expected under the Agreement.  Their ma rket shares in the importing, restraining Members
had even dropped.  Based on the WTO document, G/C/W/366, the import share of the restrained
exporting Members in the US textiles and clothing market had fallen dramatically from 76.6% in1994 to 65.9% in the year 2000.  In the EU market, it had fallen from 45.6% in 1994 to 43.1% in the
year 2000.  The two proposals, therefore, merely served the purpose of redressing the imbalance
under the ATC which had developed during the past seven years or so.
The ITCB members, together with other developing exporting Members had carried out a
good analysis of why such an imbalance existed.  For the restraining Members, implementation was
not limited to the integration percentages and growth factors, there were many other requirements of
the ATC:  for example, the ATC required, in its Preamble, by recalling the April 1989 Decision of the
Trade Negotiations Committee, that quota restrictions shall be phased out progressively instead of
most of them being eliminated at the end of the implementation period.  However, so far only about20% of restrained textile and clothing trade ha d been liberalized.  Substantial, downward quota
adjustments made by a major importing Member due to partial integration of products had seriously
impeded the market access of affected exporting Members.  Anti-dumping measures against textile
products, including those already under quota restrictions, such as cotton fabrics, had damaged theG/C/M/62
Page 11
exports of those products by affected Members.  One restraining Member's anti-dumping action in
1997 had affected about US$ 1.2 billion worth of textiles trade.  In order to maintain developing
Members' confidence in the multilateral trading system, it was time that the restraining Members
showed flexibility and adopted positive views on th e two proposals.  The textile and clothing sector
was of a great economic significance to developing Members.  The resolution of this implementationissue would also facilitate the completion of the Doha Agenda.
The representative of Pakistan appreciated the confirmations given by the United States, the
European Union and Canada that they were committed to the ATC.  Such commitment, however,
must be in line with the objectives set out in the Agreement, otherwise they were only rhetoric and of
no significance.  The objective of the ATC was the progressive integration of products, leading to the
elimination of the quantitative restrictions on textiles and clothing.  The US delegation had said thatthe objective of the ATC was the phased elimination of the quota regime.  The ITCB members in their
paper (G/C/W/368) had clearly made a good case that the integration process had not been a
progressive integration so far and the figures suggested this.  Out of 758 quotas in the United States,
701 still remain and 167 quotas out of 219 in the EU would still remain until the last date of the ATC.
In Canada's case, out of 295 quotas, 239 would still remain.  Therefore, the implementation processwas not progressive in character.  He agreed with the comment by Hong Kong, China that the data
provided in one of the documents prepared by the Secretariat, illustrated that imports from restrained
Members had not increased, as claimed by both Cana da and the United States.  It was actually the
reverse and it was illustrated that in the US market, from the restrained sources, the share of clothing
in 1995 was 83% which dropped to 69% and similarly in the EU, it had dropped from 48% to 43%.The share had not increased as had been stated earlier by the restrained Members.  The figures in
themselves suggested that there had been a major drop in import shares in the restraining Members.
In Pakistan's case, 98% of its textile and clothing exports still remained under quota, despite the lapse
of more than seven years of the ATC.  Pakistan had argued time and again that it would not benefit
from the implementation of the ATC.  This had been emphasized even at the time of the negotiationof the ATC.
The representative of Pakistan also commented on the statement by the United States and the
EU that there had been no market opening by the non-restraining Members, in relation to Article 7.  In
the document prepared by the Secretariat, the data itself suggested that US exports to non-restraining
Members had consistently increased since 1995.  It was necessary to present more than a strict legal
interpretation of the ATC because the exporting Members had made a case that there had been nomeaningful market access made available to them as the result of the ATC and he believed that it was
necessary to go beyond the strict legal interpreta tion and to interpret the implementation process in
terms of the objectives of the ATC.  Pakistan believed that adoption of these two tirets would only
demonstrate that there was a staunch commitment by the Members to the Doha Agenda.  He noted
that he had refrained from calling it the Doha Development Agenda because, if the restrainingMembers did not show flexibility to accommodate the developing Members' concerns, there would be
nothing developmental about the agenda agreed in D oha.  He urged the EU, the US and Canada to try
to accommodate these concerns and to facilitate adoption of these proposals so that meaningful
market access would be made available to the exporting Members.
The representative of Brazil concurred with the comments made by other speakers in saying
that, for a number of reasons, the legitimate expectations of developing Members in respect of
enhanced market access opportunities for textile and clothing exports to the restraining Members had
not materialized.  The manner in which the restraining Members had implemented their integration
programmes under the ATC, leaving the bulk of quotas in place until the end of the transition period,had caused a serious imbalance in the exporting Members' rights.  The purpose of the ATC was to
secure a progressive phase out of quota restrictions during the transition period.  The restraining
Members, however, seemed to pay little attention to this progressiveness factor.  In terms of trade, as
had been mentioned earlier, barely 20% of imports under quota restrictions had been liberalized.  ThisG/C/M/62
Page 12
was the context in which the Doha implementation proposals on textiles came to the fore.  These
proposals were practical suggestions for redressing the problems identified.  The approval and
implementation of the two proposals would partly redress the balance.  Indeed, the CTG had a
specific mandate to take appropriate decisions to ensure that the balance of rights and obligations
embodied in the Agreement was not being impaired.  He emphasized that the two proposals fellwithin the existing provisions of the ATC;  their adoption did not require any modification in the
Agreement or in the domestic legislation of the rest raining Members.  This was the rationale of the
proposals.  He then turned to a point of procedure which had to do with the timing set out in the
Ministerial Decision.  The deadline for the examin ation by the Council would expire at the end of
July, just a few weeks from now.  This circumstance was a matter of concern since it seemed that
significant ground remained to be covered in order to conclude the exercise;  this would be a major
challenge.  He stressed that Brazil was prepared to continue working with the Chairman in order to
achieve a successful conclusion to the exercise within the agreed deadline.  He hoped that the
restraining Members would give positive consideration to the proposals, as failure to do so would be
interpreted as a truly worrisome signal.
The representative of the United States expressed appreciation for the very lucid, preliminary
responses from the representative of Hong Kong, Chin a, the Chairman of the ITCB, as well as those
of other Members.  She stressed that her earlier statement made earlier was the result of a thorough
examination of the proposals, including those that were conducted under the Chairman's auspices.
She expressed the hope that future discussions would be fully open, while accepting that the
Chairman's consultations had been transparent.  There should be no mistaking that there had been amultilateral process.
She considered that some of the comments made concerning the data were interesting because
they analysed the data from the perspective of  increased access, the increase in imports from
exporting Members.  She highlighted references in the Preamble, itself, to the objective of furtherliberalization of trade, that the process of integration should have a progressive character.  She also
emphasized Article 1.5 concerning the need to al low continuous autonomous industrial adjustment
and increase competition in markets.  These were major components of what Members were doing
and, therefore, it was questionable whether exclusively considering the share of imports was the
relevant approach that they should be looking at.  Concerning the developments with respect to
NAFTA and other parties, the US statement went into detail on this and they expected that the drop or
increase in trade would occur, because of the nature of those arrangements.  The details of the actualincreases under that regime versus those of the restrained Members had already been provided.  The
point made earlier regarding the concept of a privileged status for those with quotas, related to the fact
that a number of developing countries would have problems with access to some of the major markets
without the existing quota regime and particularly, in light of the new entrants into the WTO.  This
would become a more aggravated problem after 1 January 2005.
The representative of the United States referred to Article 7 of the ATC and said that
additional comments on this matter could be found in their statement which would be circulated by
the Secretariat.
3  She shared some of the views expressed by the EU on Article 7 as well as those of
Canada.  She recalled that the Council was mandated by Ministers to examine the proposals and inthis regard they should neither engage in a discussion of new interpretations or adding to what the
Ministers had said, nor would they expect to simply accept the proposals outright without any basis to
do so.  The Council was in an examination, with data available and she could not accept a position
that these data were without merit.  Considerati on had to go both ways.  There may be a difference of
opinion;  however, the participants had to have a common opinion on what the problem was.  Thatwas one of the reasons for the examination.  She said that the United States took note of comments
made by other delegations, including the reference to the entire work programme.  She recalled that
                                                     
3 G/C/W/387.G/C/M/62
Page 13
their position was exclusively based on the serious concerns that they had about their own domestic
industry, the balance that was struck concerning the ATC and the adjustment that had to take place
and was still on course to 1 January 2005.
The representative of Hong Kong, China provided  some further comments in the light of what
had been said, particularly by the US.  First, concerning the question of import share, he said that it
was worrying if a Member felt that it had a reasonably competitive industry in world terms and was
doing well in unrestrained markets to find that in the restrained markets and important markets like
the US, it was actually losing import share.  This indicated that there was some sort of a distortion
going on and it was obviously to the disadvantage of that particular Member.  He considered that
whilst Members were apparently in the process of liberalization, certain additional distortions were
taking place and exporting Members were being further disadvantaged in certain instances.  It was notgood enough for the major importing Members to say that other Members' exports were going up so
please keep quiet.  The commercial world was not like that and it was necessary also to assess the
relative positions.  Secondly, he noted what the US had to say in relation to the argument for keeping
quotas;  however, he took it that this was not being put forward as a reason to retain quota as he
accepted that the restraining Members were fully co mmitted to the full integration of the trade in
textiles and clothing into the normal disciplines of the WTO on 1 January 2005.  Finally, concerning
the issue of Article 7 of the ATC, he had the impression that the argument was being made that if a
few developing exporting Members would open up their markets, then the restraining Members would
be much more sympathetic to the demands in relation to their markets.  In this area, Hong Kong,
China was the living example which disproved this theory, because with its completely open market,it had continually been discriminated against and was in a worse position now than probably ever
before.  Meanwhile, major importing restraining Members had removed quotas from non-WTO
Members, so this argument also had to be seen in perspective. From a Hong Kong, China point of
view and from its experience, this was not a convincing argument and he urged colleagues in other
exporting Members to be very wary of it.  The representative of Hong Kong, China also asked if therewere any other documents that Members would like to be circulated, would this be possible?
The representative of Turkey stressed that he was against any kind of measures which would
impair access to the markets of the importing countries.
The Chairman confirmed that the possibility of circulating further documents remained open.
He also confirmed that he would continue his consultations on this particular subject and would keep
the Council informed of developments.
The Council took note of the Chairman's report and of the statements made.
II. REQUEST BY COSTA RICA;  INDIA;  INDONESIA;  PAKISTAN;  PERU AND
HONG KONG, CHINA:  CTG'S OVERSIGHT FUNCTION PURSUANT TO
ARTICLE IV OF THE AGREEMENT ESTABLISHING THE WTO –
TRANSPARENCY REGARDING NEW RESTRICTIONS ON TEXTILE AND
CLOTHING PRODUCTS COMMENTED ON BY THE TEXTILES MONITORINGBODY
The Chairman explained that when the Council last met, he had reported that he would be
arranging consultations on this matter with a view  to arriving at an understanding on how to address
the concerns which had been raised by the group of Members in their submission, which had been setout in document G/C/W/260/Rev.1.  He informed the Council that, in the consultations which he had
arranged, the participants had exchanged views with respect to both the restraint measure which had
prompted this request and the  proposals which had been made in relation to the CTG's oversightG/C/M/62
Page 14
function for the ATC.  Members had made solid efforts to deal with this matter and the discussions
had been  helpful;  however, it had not been possib le to arrive at an agreement on how to resolve the
long-standing differences of view.  Nevertheless, it wa s his intention to continue the efforts to find an
acceptable solution to this matter through the process of consultations and to keep the Council
informed of developments.
The Council took note of the Chairman's report.
III. MAJOR REVIEW OF THE IMPLEMENTATION OF THE AGREEMENT ON
TEXTILES AND CLOTHING DURING THE SECOND STAGE OF THE
INTEGRATION PROCESS, PURSUANT TO ARTICLE 8.11 OF THE ATC
The Chairman pointed out that this agenda item related to the work being done in relation to
the preparation of a draft report on the outcome of the major review of the ATC for consideration and
adoption by the Council.  He said that this had been a long and difficult process, with important gaps
in the understandings on some of the key issues.  At the same time, he felt that much progress hadbeen achieved and he remained cautiously optimistic that a solution to the outstanding issues could be
found.
He recalled that, when the Council had met on 24 May, he had reported on his consultations,
at which the exporting Members, in particular, had set out their difficulties with certain aspects of thecurrent draft report.  Following a good exchange of views, the participants had accepted to give
consideration to the points raised and the exporting Members had undertaken to prepare their specific
proposals on how the draft report might be further developed to encompass their particular needs.
These consultations had continued in the previous week, when specific proposals were provided by
the ITCB members, highlighting the changes they woul d make to the existing draft text.  This had led
to an exchange of views after which the participants  had undertaken to review the situation in the light
of these discussions and to provide their further inputs  before the next informal meeting.  He said that
he would keep the Council informed of the outcome of these consultations.
The Council took note of the Chairman's report.
IV. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER
ARTICLE 9
 The Chairman recalled that the Council initiated the review under Article 9 of the TRIMs
Agreement in October 1999.  Since then there had been an invitation outstanding to delegations to
present written submissions on this issue.  To date, none had been received.  At a meeting on 2 May
the CTG continued discussion of a background st udy produced jointly by the WTO and UNCTAD
secretariats on trade-related investment measures and other performance requirements.  Part 1 of the
study was contained in G/C/W/307 and part 2 in Addendum 1.
The representative of the United States stated for the purposes of the Article 9 review that she
considered that the intent of the review was not to decide if measures disciplined by the TRIMs
Agreement did or did not have harmful effects and therefore should not be disciplined.  Moreover, if
the review was not proceeding in a direction of additional provisions on investment and competition
as called for by Ministers at Doha, she was not sure what value added came from continuing thereview.  The review should not be seen as an oppo rtunity to lower the standards outlined in the
TRIMs Agreement.G/C/M/62
Page 15
The CTG was now entering into a situation with this review where the disciplines found, not
only in the TRIMs agreement, but in the GATT itself, were going to be prime targets for erosion.  She
was not interested in a review which would yield a result that lowered the standards in the TRIMs
Agreement, or eroded the elimination of TRIMs that were notified under that Agreement.
The representative of Brazil said the Article 9 of the TRIMs Agreement said:  not later than
five years after the date of entry into force of the WTO agreement, the Council for Trade in Goods
shall review the operation of this agreement and as appropriate propose to the Ministerial Conference
amendments to its text.  In the course of this review, the Council for Trad e in Goods shall consider
whether the agreement should be complemented with provisions on investment policy and
competition policy.  It seemed to his delegation that the mandate was clear and did not prejudge inany way which direction the CTG should be going in the discussions under the mandate.  Regarding
the joint WTO/UNCTAD study contained in document  G/C/W/307, in previous discussions of this
issue, for example, at the 22 May CTG meeting and previous meetings, the delegations of Colombia
and India had made a number of interesting points on the basis of the WTO/UNCTAD study and also
on the basis of other research addressing the question of the impact of TRIMs on national economiesas well as on international trade flows.  For example, the point was made that the joint study, as well
as additional literature, pointed to no definitive conclusion as to the trade-distortive effects of trade-
related investment measures used by certain countries, including his own. This was an important
element to take into account which could perhaps point to the conclusion that these trade-distortive
effects were perhaps over-estimated at the time the Agreement was negotiated, and therefore now inretrospect there was a unique opportunity to evaluate the basic assumptions that underlined the
negotiations of the disciplines contained in the Agreement, disciplines that imposed, particularly
unequal levels of obligations on developed and developing countries.  The second aspect that should
merit some reference was that there were other measures, e.g. in the area of agriculture, that even
though they might be permitted, it was evident that the trade-distortive effects that they caused faroutweighed any trade distortive effects that could be perhaps associated with the use of trade-related
investment measures.  Regarding submissions by delegations, his capital was working on the issue
and he hoped to come back with more detailed comments and perhaps proposals on how to conduct
the review further, bearing in mind also its relationship with the discussion of this issue under the
TRIMs implementation process going on in the Committee on TRIMs
The representative of Pakistan made clear that his delegation was not willing to accept any
circumvention of the definition of the term "review" and was not going to start the review with any
prejudged outcomes or notions that the review was going to cover this or that, because the mandate of
Article 9 stated that the Council for Trade in G oods "shall review the operation of this Agreement
and, as appropriate, propose to the Ministerial Conference amendments to its text".  This was a very
broad mandate.  TRIMs was an important aspect of  government policies and a tool which developing
countries, like Pakistan and others, were using for development objectives.  There was no defined
parameters of the review;  it was an open review and should be looked at in this manner. Colombia
and India did make substantial points in the last meeting which Pakistan fully endorsed.  There were
also certain questions which were asked by the representative of India.  His delegation fully
subscribed to those questions posed and would wish that the Council not only take into account whatthe conclusions of the joint study were, but make an attempt, with the help of the Secretariat, to study
the issue of corporate practices by MNCs.  Deve lopment was a long process which did not happen
over night.  Developed countries had practised various elements of the TRIMs programme for years.
He was not contending that they did the wrong thing but developing countries were at various stages
of development and TRIMs provided one instrument, a move forward in terms of their developmentalobjectives.  Pakistan was starting off as a handicapped Member and hence needed some policy space
to go forward with its policy objectives.  The submission made by India was very comprehensive.
Members of the CTG needed to give active consideration as to how to answer the questions posed byG/C/M/62
Page 16
India and Colombia and while this was being done there would be other submissions coming, perhaps
national experiences.
The delegate of Norway stated that the Norwegian Ministry for Trade and Industry had
considered approximately 2,100 cases since the Law of Acquisition and Ownership was implemented
on 1 January 1995, and only 13 cases have been submitted for further examination.  No cases have
been denied.  In eight cases conditions have been made.  The Norwegian Government had been
circulating a proposal that the law be abolished, as it had not proved to be an efficient tool to ensure
industrial activity in Norway, as was initially intend ed.  Experience showed that there was little need
to control ownership changes as there was rarely dramatic consequences involved because of
ownership changes.  The decision to close or to mo ve industrial activity in Norway tended to happen
mostly because of market changes which also enforced structural changes.
The representative of Colombia recalled that Colombia wanted to continue work on the scope
and modalities concerning this important subject to be able to present the outcome of this work for the
purposes of the Fifth Ministerial in Mexico.  The mandate included in Article 9 of the Agreement did
not prejudge the orientation of the review.  The study opened the door for a constructive debate on thereal implications of TRIMs and their functionality or otherwise for the multilateral trading system as
well as the legitimate wishes of his country in terms of development.
The representative of Mexico said the CTG should avoid going further than what was stated
under Article 9 and it was important to maintain balance in order to come out with a successful
review.
The representative of India recalled that certain TRIMs had been used by many developed
countries as a tool for development and growth.  His delegation also attached a lot of importance to
the conduct of the review and agreed with the interpretation of Article 9 of the TRIMs Agreementalluded to by the delegations of Brazil and Pakistan.  His delegation had raised some questions which,
if they were discussed in the Council, would be usef ul as a procedure in this process of review of the
TRIMs Agreement.  He had also suggested that it would be useful to have a study on the corporate
practices by the multinational corporations in the past and their effect on development growth and
international trade.  On the same lines as th e joint study on TRIMs and performance requirements
done by the UNCTAD and WTO Secretariat, it would be useful to have a further study which would
enable delegations to participate meaningfully in the discussion.
The representative of the European Communities said that, like other delegations, he was
happy to see the good cooperation between the UNCTAD and the WTO Secretariat providing with
background for discussion.  How much it would help in fulfilling the mandate to review the
Agreement was the subject of debate.  The study did point out that the TRIMs Agreement was anillustrative list, which was a concretization of Articles III and XI, basic concepts of GATT , and he
would have some difficulties to enter into a di scussion to abrogate from these fundamental GATT
Articles.   He warned against too high expectations and believed the study did not give much
ammunition to people who thought that a fundamen tal change in the Agreement and the requirements
of the Agreement should be undertaken.  Regarding comments that had been made by Brazil andothers about the evolution clause a nd competition and investment, he referred to the historical context
in the sense that the evolution clause had been overtaken in the last couple of years by the progressive
discussions on these items, which provided a basis for further discussions on that on a separate track.
The representative of Brazil reacted to the comments by the European Communities and their
Member States.  If the TRIMs Agreement is just a concretization of Articles III and XI of the GATT
he failed to see why it was necessary in the first place.  Regarding the question whether the TRIMs
illustrative list was exhaustive or not, he thought the study was clear in pointing out that there was no
clear definition of what a trade-related investment measure was from a theoretical stance.G/C/M/62
Page 17
The representative of the Philippines, regarding investment and competition policy, said that
whatever the outcome of that parallel track was, it should in no way prejudge the outcome of the
review of the TRIMs Agreement under Article 9.  He did not agree that a parallel track on investment
and competition policy had evolved to such a stage that one was looking at a clear direction orconclusion to those discussions on the new issues.  It could be that the review would require the
development of complementary provisions on inve stment and competition policy but there again the
review might not lead in that direction.  Likewise, certain concerns had been raised regarding possible
erosions of existing GATT disciplines but he was not certain this would necessarily be the outcome of
this review.  He was also not foreclosing the possibility that there might be certain modifications that
might be required to the existing agreements.  Likewise in the study prepared by the WTO and
UNCTAD Secretariats, there were wide variants of Members which had undertaken and implemented
TRIMs or TRIMs-like measures over the years and this was not limited to developing countries
because clearly the document related experiences which developed countries have gone through in the
process of undergoing their own development process.  The United States had made a reference to the
fact that in the experience of the Philippines, the TRIMs measures, or implementation of TRIMs in
the automotive sector was not successful or did not improve the automotive sector and, in fact, it mayhave resulted in a stunting of the growth and development of the automotive sector.  He sought
enlightenment from the United States as to where that conclusion could be drawn clearly from the
documentation.
The representative of Pakistan said his  intervention could not be construed or implied by any
means as leading towards abrogation or erosion of any other commitment under the Uruguay Round
Agreements.  The  review had its own negotiatin g history and had a purpose and objective behind it
and at least his delegation would not agree to any circumvention or any preconceived definition of the
term "review".  It provided an opportunity to make proposals and amendments "as appropriate".
The representative of the United States had never questioned the word "review".  She was
concerned about the substance of the review which she considered had already commenced. The CTG
had a document which included information which, by its own terms, also experienced certain
deficiencies in data.  Her concern was the objectives for the review and what she considered to be an
erosion of the text and objectives of the TRIMs Agreement as originally negotiated. She would not
accept any prejudgement of the outcome of this review and emphasized the expression in Article 9
concerning "as appropriate" on what should be sent to any Ministerial conference regarding thisreview.
The Chairman said it was clear from the statements made that it would be necessary to revert
to this item, at which time there would also be an opportunity to respond to the questions raised by
India.  He considered it important not to get into a debate on definitions but to enter into thesubstantive aspects of the review.  The CTG would take note of the statements made and of the
intention expressed by certain delegations to submit proposals for the review.
The Council for Trade in Goods took note of the statements made.
V. DISCUSSION OF IMPLEMENTATION ISSUES BY THE TRIMS COMMITTEE –
REPORT TO THE COUNCIL FOR TRADE IN GOODS
The Chairman recalled that at the CTG meeting of 7 May 2002, the Goods Council decided to
assign to the Committee on TRIMs the responsibility for conducting the work on the outstanding
implementation issues contained in tirets 37-40 of document JOB(01)/152/Rev.1.  Under this
arrangement, the TRIMs Committee was to report regularly on the progress of its work to the CTG.G/C/M/62
Page 18
The Chairman of the TRIMs Committee reported that, pursuant to the Council for Trade in
Goods' decision of 7 May 2002, the TRIMs Committee initiated the discussion of outstanding
implementation issues related to the TRIMs Agreement at its meeting of 21 May 2002 and agreed that
the Chairman would make a brief oral report to the CTG after each meeting of the TRIMs Committeeat which the issue was discussed.  He reported on the discussions held at the TRIMs Committee
meeting on the 21
st of May. The Committee received a very useful description by some Members of
the substance of their concerns as reflected in tirets 37 to 40 of document JOB(01)/152/Rev.1.  The
Committee also had a useful exchange of views on the best way of moving the discussion forward in
the TRIMs Committee this year, with a view to allowing the Committee to make its final report on the
relevant outstanding implementation issues to the CTG in October.  In preparation for further
discussion on these issues at the next meeting of the TRIMs Committee on 10 July, some Membersagreed to submit written proposals on how they believed a satisfactory solution could be produced to
respond to their concerns in the relevant tirets.  Pursuant to the TRIMs Committee decision on
reporting procedures he would inform CTG Memb ers on any further discussions or developments
related to the TRIMs implementation issues after the Committee held its next meeting scheduled for
the 10 July.
The representative of Brazil said the initial discussion on 21 May was exactly that, where
some Members, including his delegation, presented their views on the four tirets under discussion for
implementation of TRIMs.  He had stressed on that occasion, having presented the basic points of
interest under tiret 40, that Brazil was expecting this  process to unfold in an honest and constructive
manner benefitting from positive engagement by all dele gations.  This would be fully in the spirit and
letter of paragraph 12 of the Doha Ministerial De claration and, in that regard, he was concerned by
certain interventions made at the 21 May TRIMs Committee meeting to the effect that paragraph 12
of the Ministerial Declaration did not cover issues that were for negotiation.  If implementation-
related issues were not included in the single undertaking at Doha, there would have been no DohaRound.  Ministers were aware of that in Doha when  they signed up to implementation being included
in the single undertaking which was what paragraph 12 clearly meant.
The representative of India said delegations also looked forward to more positive engagement
from all Members in view of the mandate given by the Ministers at Doha under para. 12 of the
Ministerial Declaration.
The Council took note of the report and of the statements made.
VI. STATUS OF NOTIFICATIONS UNDER THE PROVISIONS OF THE
AGREEMENTS IN ANNEX 1A OF THE WTO AGREEMENT
The Chairman said, as indicated in the cover page to document G/L/223/Rev.8, the Council
adopted, at its meeting of 15 October 1996, a recommendation by the Working Group on Notification
Obligations and Procedures to maintain on an ongoing basis the comprehensive listing of notification
obligations under the provisions of the Agreemen ts in Annex 1A of the WTO Agreement and the
compliance therewith.  The latest update was contained in the document G/L/223/Rev.8 and included
all notifications made up to and on 31 December 2001.
The Council took note of the information contained in document G/L/223/Rev.8.G/C/M/62
Page 19
VII. CUSTOMS VALUATION AGREEMENT:  REQUEST FOR A WAIVER UNDER
ARTICLE IX OF THE WTO AGREEMENT
- Côte d'Ivoire
The Chairman drew attention to the request by Côte d'Ivoire for a waiver under WTO Article
IX with respect to the application of minimum values for certain products as detailed in the most
recent version of the request in document G/C/W/301/Add.2 and a draft decision on this matter which
had been circulated in document G/C/W/385, dated 10 June 2002.  He proposed that the Council
made use of Rule 26 of the Rules of Procedure to enable it to take action in respect of this document,
which was circulated after the appearance of the airgram convening this meeting.
The Council recommended that the request, together with the draft decision, be forwarded to
the General Council for adoption.
It was so agreed.
VIII.  REQUEST FOR A WTO WAIVER – NEW EC SPECIAL TARIFF ARRANGEMENTS
TO COMBAT DRUG PRODUCTION AND TRAFFICKING – REPORT TO THE
GENERAL COUNCIL
The Chairman recalled that under the item "Other Business" at the meeting of the CTG on 24
May, he had made a statement with respect to the report of the CTG on this waiver request by the
European Community.  Since then, there had been discussions among concerned delegations
regarding the content of the CTG report to the General Council.  In view of the lack of agreement on
this item, he proposed that the CTG suspend discussion of this item and revert to it at the appropriate
time.  In the meantime, he would hold open-ended consultations.
It was so agreed.
IX. PREPARATIONS IN CONNECTION WITH PARAGRAPH 18 OF THE PROTOCOL
ON THE ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA
The Chairman recalled that this item was first discussed in the CTG at the meeting on 24 May
2002.  It was agreed that at the last regular meeting for this year, scheduled for 22 November 2002,
the CTG agenda would include the review of China's commitments in relevant areas pursuant to
paragraph 18 of its Protocol of Accession.  It was also agreed that the Chair conduct informal
consultations to best determine how we should carry out our obligations under this review within the
time-frame for our report to the General Council.  He informed the Council that his consultations in
this matter were continuing.
The representative of the United States said the Goods Council should establish a practical
and pragmatic timeline for developing the information and receiving the notifications necessary to
conduct China's national review so that the Council can  accomplish that task at its November meeting.
The Goods Council should focus on the timing of th e specific information to be provided to the
Council, including information and answers to questions on NTMs, export licensing, remaining non-
automatic licensing restrictions on exports, govern ment procurement, non-discrimination, preferential
trading arrangements  and preshipment inspection.  Preparation should allow sufficient time for
translation into official WTO languages and circulation by the Secretariat.  The purpose of thisexercise was not to renegotiate or add to China's obligations but rather to ensure transparency andG/C/M/62
Page 20
predictability in the Goods Council's procedures  so that the Goods Council could carry out its
obligation to review China's implementation with a minimum of disruption to its regular work.  The
Goods Council review of China's implementation must occur far enough in advance of the December
10 General Council meeting to allow for the circulation of the Goods Council's report and its
subsequent submission to the General Council in accordance with standard practice.
The representative of China had stated his position clearly at the last CTG meeting.  He fully
endorsed the Chairman's proposal to continue consultations on this issue.
X. OTHER BUSINESS
The Chairman said the next scheduled meeting of the CTG was due to take place on 22 and
23 July 2002.  The agenda for the meeting would close on Thursday, 11 July 2002.
The meeting was closed.
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