RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/58
27 March 2002
(02-1578)
Council for Trade in Goods
MINUTES OF THE MEETING
Held in the Centre William Rappard on 4 December 2001 (and reconvened on 22 March 2002)
Chairpersons:  Ambassador István Major (Hungary) and Ambassador Milan Hovorka (Czech
Republic)
Page
I. CUSTOMS VALUATION AGREEMENT:  REQUEST FOR A WAIVER
UNDER ARTICLE IX OF THE WTO AGREEMENT - EL SALVADOR
(G/C/W/300/REV.2 AND ADD.1/CO RR.1)............................................................................2
II. REQUEST FOR A WAIVER UNDER ARTICLE IX OF THE WTO
AGREEMENT:  COLOMBIA – EXTENSION OF THE APPLICATION OF
ARTICLE 5.2 OF THE AGREEMENT ON TRADE-RELATEDINVESTMENT MEASURES (G /C/W/340, G/C/W/343) ......................................................2
III. REQUEST FOR A WTO WAIVER – NEW EC SPECIAL TARIFF
ARRANGEMENTS TO COMBAT DRUG PRODUCTION AND
TRAFFICKING (G/C/W /328 AND ADD.1)...........................................................................2
IV. FREE TRADE AGREEMENT – INTERIM AGREEMENT BETWEEN THE
EUROPEAN COMMUNITY AND THE FORMER YUGOSLAV REPUBLIC
OF MACEDONIA ................................................................................................................... .4
- NOTIFICATION FROM THE EUROPEAN COMMUNITIES
(WT/REG129/N/1, WT/REG129/1) .........................................................................................4
V. 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
MONITORING BODY (G/C/W/260(REV.1).........................................................................4
VI. OTHER BUSINESS.............................................................................................................. ....5
The meeting of the CTG was convened by  WTO/AIR/1678 and Corrigendum 1.  The proposed
agenda contained in G/C/ W/345 was adopted.  The discussion on agenda Items I and III was suspended
and reconvened on 22 March 2002 under the Chairmanship of Ambassador Hovorka.G/C/M/58
Page 2
I. CUSTOMS VALUATION AGREEMENT:  REQUEST FOR A WAIVER UNDER
ARTICLE IX OF THE WTO AGREEMENT - EL SALVADOR (G/C/W/300/REV.2
AND ADD.1/CORR.1)
The Chairman drew attention to document G/ C/W/300/Rev.2 which set out the request by El
Salvador for a waiver from certain obligations unde r the Customs Valuation Agreement, and Addendum
1 to that document which contained the relevant draft decision to assist the Council in its consideration
of this request.  The discussion was suspended and reconvened on 22 March 2002.  At this meeting,
El Salvador presented a revised draft decision, contained in document G/ C/W/300/Rev.2/ Add.1/Corr.1,
for consideration by Members.  The Council agreed to recommend that the revised draft decision be
forwarded to the General Council for adoption.
II. REQUEST FOR A WAIVER UNDER ARTICLE IX OF THE WTO AGREEMENT:
COLOMBIA – EXTENSION OF THE AP PLICATION OF ARTICLE 5.2 OF THE
AGREEMENT ON TRADE-RELATED INVESTMENT MEASURES (G/C/W/340,
G/C/W/343)
The Chairman recalled that the CTG had appr oved on 5 November 2001 a package of decisions
providing additional extensions of the TRIMs tran sition period for eight Members, of which one was
Colombia.  Together with this package there wa s a communication from Colombia indicating that, to
complete the process of securing approval for its maintenance of certain TRI Ms for a further transition
period through to the end of 2003, Colombia intended to request a waiver under WTO Article  IX:3 in
respect of the maintenance of certain TRIMs a pplied to beans.  The Chairman had introduced
Colombia's request for a waiver as forming part  of a package along with the decisions on TRIMs
extensions, and the CTG had agreed to give favourable consideration to making a positive
recommendation to the General Council on Colombia's request for an Article IX.3 waiver.  The request
was made in document G/C/W/340 and the draft decision contained in document G/C/W/343 for
consideration by Members.  The Council agreed to  recommend that the draft decision contained in
G/C/W/343 be forwarded to the General Council for adoption.
III. REQUEST FOR A WTO WAIVER – NEW EC SPECIAL TARIFF ARRANGEMENTS
TO COMBAT DRUG PRODUCTION AND TRAFFICKING (G/C/W/328 AND ADD.1)
The Chairman recalled that this matter was first discussed in the CTG on 2 November 2001,
when there was a preliminary exchange of views.  Since then, the European Community had tabled a
revised draft decision, contained in Addendum 1 of G/C/W/328, dated 23 November 2001. There had
also been informal consultations on the request and on the revised draft decision.  Following thoseconsultations, it seemed that more time would be need ed to deal with certain reservations that had been
expressed regarding this request.  Given this situation, he intended to propose that the CTG suspend
consideration of this issue in order to be able to return to it at short notice.
The representative of the European Communities underlined the importance of the waiver for
the EC and for the beneficiary Members engaged in this extremely difficult fight against drugs
trafficking and he believed that the proposal should also be seen in the context of using our trade
policy in order to favour sustainable development and to promote shared responsibility. In the light of
comments made by Members, the EC has been able to refine the language of the draft decision.  At
the last meeting several Members expressed their support in principle for granting the waiver, butindicated that they needed more time to study the request.  His delegation had been working with
others in recent days to provide all requested clarifications. He was ready to support and endorse the
procedural proposal made by the Chairman.
The representative of Paraguay was not opposed to the waiver which concerned both the
production and the trafficking of drugs.  In the recent informal meeting he had said that Paraguay,G/C/M/58
Page 3
which was suffering from drug-trafficking, had had to take measures which has had a great economic
impact.  It had established an anti-drug secretariat to combat this traffic across its borders and to avoid
trafficking which came from producing countries.  Consequently Paraguay had requested that it
wanted to participate also in the benefits granted by the EU and be part of this group which received
the benefits of the waiver.
The representative of Malaysia requested consultations with the EU because Malaysia had
some concerns with regard to the list of products included in this waiver.
The representative of Colombia pointed out that the issue of the drugs and drug trafficking
clearly went beyond trade. Countries like Colombia annually lost three points of their GDP as a
consequence of the struggle against the production and trafficking in drugs.  This problem was theshared responsibility of the whole of the internat ional community in combatting and controlling drug
trafficking.  He invited all delegations to try and resolve the problems as soon as possible in this area
bearing this perspective in mind. The representatives of Guatemala, El Salvador
 and Honduras
underlined the need for solving these difficulties as soon as possible, not for trade reasons only but for
social reasons also.
In light of the need for further consultation, the discussion was suspended.  At the resumed
meeting, held on 22 March 2002, the Chairman noted that delegations were still involved in
discussions on this issue and proposed that the CTG should wait for the results of those discussions
before reverting to the waiver request at a future meeting.  It was so agreed.
4. REQUEST BY THE SLOVAK REPUBLIC – CONSIDERATION OF THENOTIFICATION BY POLAND UNDER ARTICLE 12.5 OF THE AGREEMENT ON
SAFEGUARDS (G/L/453 – G/SG/35, G/C/W/312, G/C/W/313)
The Chairman said that the matter was first raised at the CTG on 31 July 2001 under Other
Business and then discussed at the meeting on 17 October 2001.  The CTG held informal
consultations last week and yesterday which resulted in a bilateral agreement.  The representative of
the Slovak Republic made a joint statement to this effect.
Poland and Slovakia wished to inform the CTG Members that they held bilateral talks with
regard to the subject of the dispute i.e. safeguard measures imposed by Slovakia on imports of sugar(G/SG/N/8-11/SVK/1) and suspension of concessi ons within the meaning of Article 8.2 of the
Safeguards Agreement in the form of the quantitative restrictions imposed by Poland on imports of
butter and margarine from Slovakia (G/SG/35, G/L/453) . As a result of these talks the two sides had
reached the following agreement:  first, the Slovak side had agreed to increase the level of quota for
imports of sugar from Poland up to the amount of  4,500 tonnes, 5,175 tones ad 5,850 tonnes in the years
2002-2004 respectively.  The changed schedule of liberalization of the quota would be notified by
Slovakia in the Safeguards Committee. Second, the Polish side had agreed to remove the quantitative
restriction on imports of butter and margarine.  The removal of the measure would be notified by Poland
to the CTG and Safeguards Committee.  Third, the two sides had undertaken to implement the decisions
mentioned in points 1 and 2 by 1 January 2002. Th e Slovak Republic and the Republic of Poland, by
reaching this bilateral solution, successfully conc luded the DSU consultations as requested by the
Republic of Poland (documents WT/DS235/1, G/L/ 456, G/SG/D18/1) and woul d immediately inform
the Chairman of the Dispute Settlement Body about conclusion thereof.  The bilateral solution had been
agreed without prejudice to legal positions and system ic concerns of both sides. The two sides believed
that the bilateral agreement resolved the matter unde r dispute.  The representative of Poland confirmed
the statement made.
The representative of Australia welcomed the agreement reached between the parties and
noted what the Slovak Republic has agreed to do vis-a-vis the increases to the level of quotas forG/C/M/58
Page 4
sugar.  He wondered whether this was a global quota available on an MFN basis for sugar suppliers
and that raw cane sugar of 1701-11 would be covered by the increases.  The representative of the
Slovak Republic answered that the overall global quota could be increased.
The representative of the United States said the delegation was pleased that both sides worked
to reach a settlement and find a way to observe the multilateral character of the institutions and to take
advantage of the dispute settlement process which is available.  Recognising that, the United States
still maintained that Article VIII of the Safeguards Agreement could not be interpreted in a way to
take unilateral action.  Her delegation was concerned overall with the future use of Article 8.
The representative of India took note of the bilateral agreement reached between the Slovak
Republic and Poland.  Both delegations wished to ask the CTG to conclude this agenda point.
The Chairman noted that the CTG agreed to end of consideration of this matter.
IV. FREE TRADE AGREEMENT – INTERIM AGREEMENT BETWEEN THE
EUROPEAN COMMUNITY AND THE FORMER YUGOSLAV REPUBLIC OFMACEDONIA 
- NOTIFICATION FROM THE EUROPEAN COMMUNITIES
(WT/REG129/N/1, WT/REG129/1)
The Chairman drew attention of the Council to the Interim Agreement between the European
Community and the Former Yugoslav Republic of Macedonia.  The relevant texts had been circulated
in the documents listed.   In the absence of comments, the Chairman proposed the Committee on
Regional Trade Agreements carry out the examin ation of the agreement in accordance with the
following terms of reference:
"to examine, in light of the relevant provisions of the GATT 1994, the Free Trade
Agreements just referred to and to submit a report to the Council for Trade in Goods.  It is understood
that the understanding read out by the Chairman of the Council for Trade in Goods under Item 7 of
the agenda of the meeting of the Council for Tr ade in Goods on 20 February 1995, as contained in
document WT/REG3/1, will apply mutatis mutandis to the examination of the agreements.  It is also
understood that, during the examination, due account will be taken of the intrinsic differences
between customs unions and free-trade areas."
It was so agreed.
V. REQUEST BY COSTA RICA;  INDIA;  INDONESIA;  PAKISTAN;  PERU AND
HONG KONG, CHINA:  CTG'S OVERSIGHT FUNCTION PURSUANT TOARTICLE IV OF THE AGREEMENT ESTABLISHING THE WTO –
TRANSPARENCY REGARDING NEW RESTRICTIONS ON TEXTILE AND
CLOTHING PRODUCTS COMMENTED ON BY THE TEXTILES MONITORING
BODY (G/C/W/260(REV.1)
The Chairman said that this item had been retained on the agenda at the request of Hong
Kong, China also on behalf of Costa Rica, India, Indonesia, Pakistan and Peru.  It concerned the
CTG's oversight function in relation to the Agreement on Textiles and Clothing and, in particular, to a
restraint agreement between the US and Turkey on one clothing category. This issue was also under
discussion within the framework of the Council's majo r review of the implementation of the ATC.  In
light of the fact that the major review was considering its conclusions at present, it seemed appropriateto take up this matter taking into account the outcome of the major reviewG/C/M/58
Page 5
It was so agreed.
VI. OTHER BUSINESS
Free Trade Agreement
Speaking on behalf of delegations of Croatia, the Czech Republic and the Slovak Republic,
the representative of the Czech Republic informed Members that on 12 November and on 6
November 2001 were signed the Free Trade Agreement between the Czech Republic and the Republicof Croatia and the Free Trade Agreement between the Slovak Republic and the Republic of Croatia,
respectively.  Both Agreements would enter into force after the necessary domestic ratification
procedure in each of the parties to the respective Agreements was completed.  In the meantime, the
Agreements would be provisionally applied as of 1 January 2001.  The Agreements aimed at the
progressive establishment of a free-trade area between the parties in the sense of and in accordance
with Article XXIV of the GATT 1994.  The free-trade areas would be established on the date of entry
into force of the Agreements, when duties and other restrictive regulations of commerce will be
abolished on substantially all the trade between the signatories.  Possibilities of a liberalization of the
remaining part of trade are foreseen in the Agreements.  The Free Trade Agreements also containedprovisions dealing with, inter alia , rules of origin, customs cooperation, state aid, competition, public
procurement and intellectual property rights.  An evolutionary clause offers the possibility of
extending the Agreement to areas not covered by it.  In accordance with the provisions of
Article XXIV:7(a) of the General Agreement, the text of both Free Trade Agreements with the
annexes and protocols which form an integral part thereof would be notified to this Council after theirentry into force.
Statement by the Chairman on the 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 ATC required that a review of the implementation of the Agreement be conducted by the
CTG before the end of the present stage of integration.  As this was the last meeting of the Council for
2001, he reported on the current situation in this  review.  The Council conducted the review at
meetings held on 27 September and on 17 and 26 October 2001.  At the first meeting, the objectives
and goals of the review were discussed and a list of subjects to be examined and a timetable were
adopted.  The subsequent meetings addressed, in detail, several aspects of the integration process of
the ATC which include the integration programmes of Members, increases in quota growth rates, andother provisions of Article 2.  It had also examined the use of the transitional safeguard mechanism
and issues which have arisen in relation to other articles of the ATC.  These discussions were
contained in the reports on these meetings in documents G/C/M/51, 52 and 56.  The goal of the
review was to develop a report, with conclusions and recommendations, where possible.  It was,
however, clear from the discussions that, on several issues, important gaps exist in Members'perceptions.  Accordingly, he had been holding further informal consultations to reach an
understanding on the final report.  This process was on-going and required additional time to
complete.  On this basis, it was his intention to continue consultations in the coming days and to
provide a further statement at the meeting of the General Council on 19 December 2001.
Furthermore, when this process was complete, he would submit a report to the Goods Council.
__________