RESTRICTED
WORLD TRADE WT/GC/W/46
7November 1996
ORGANIZATION(96-4681)
VOLUME I
REPORT OFTHE GENERAL COUNCIL TOTHE 1996 MINISTERIAL CONFERENCE
Theannual reports for1996 oftheGeneral Council, Dispute Settlement Body, Trade Policy
Review Body, Sectoral Councils, Committees onTrade andDevelopment, Regional Trade Agreements,
Balance-of-Payments Restrictions, andBudget, Finance andAdministration arereproduced hereunder.
Each report isreproduced asaseparate section withitsownpagenumbering.
Reports Document Symbol
Section I: General Council1WT/GC/W/38
Section II: Dispute Settlement Body WT/DSB/8
Section III: Trade Policy Review Body WT/TPR/27
Section IV: Council forTrade inGoods2G/L/134
Section V: Council forTrade inServices S/C/3
Section VI: Council forTrade-Related Aspects of
Intellectual Property Rights (TRIPS) IP/C/8
Section VII: Committee onTrade andDevelopment WT/COMTD/9
Section VIII: Committee onRegional Trade Agreements WT/REG/2
Section IX: Committee onBalance-of-Payments Restrictions WT/BOP/R/19
Section X: Committee onBudget, Finance andAdministration WT/BFA/29
Section XI: Plurilateral Trade Agreements
- Committee onGovernment Procurement WT/L/190
- International Dairy Council WT/L/178
- International Meat Council WT/L/179
1Thereport oftheGeneral Council alsocovers thepreparatory work forthe1996 Ministerial Conference
undertakenintheHeads-of-DelegationsprocessundertheChairmanshipofMr.RenatoRuggiero,Director-General.
2Thereports ofthesubsidiary bodies oftheCouncil forTrade inGoods arecontained inVolume IIofthis
document.SECTION I
REPORT OFTHE GENERAL COUNCILRESTRICTED
WORLD TRADE WT/GC/W/38
28October 1996
ORGANIZATION(96-0000)
GENERAL COUNCIL
GENERAL COUNCIL
Draft Annual Report (1996)1
Thepresent report hasbeen prepared inpursuance oftheProcedures foranAnnual Overview
ofWTO Activities andforReporting under theWTO (WT/L/105), andsetsouttheactions taken by
theGeneral Council since theprevious overview ofWTO activities held inDecember 1995.2
Incarrying outitstasks, theGeneral Council hasheld [..]meetings since December 1995.
Theminutes ofthese meetings, which remain therecord oftheGeneral Council 'swork, arecontained
indocuments WT/GC/M/10-WT/GC/M/[..].
Thefollowing subjects areincluded inthereport:
Page
() 1996 Ministerial Conference 3
() Preparations fortheMinisterial Conference 3
() Reports bytheDirector-General 3
() Schedule ofmeetings ofWTO bodies 4
() Progress ofpreparatory work insubsidiary bodies oftheGeneral
Council 5
() Election ofofficers oftheMinisterial Conference 6
() Organizational matters 6
() Attendance ofobservers attheMinisterial Conference 7
() Governments 7
() International intergovernmental organizations 7
() Non-governmental organizations 8
() Finalization ofnegotiations onschedules ongoods andservices 8
- Decision ontheaccession of,andapproval ofprotocol ofaccession for,the
United Arab Emirates 8
() Composition oftheTextiles Monitoring Body 9
() Approval ofrules ofprocedure forsubsidiary bodies 9
- Committee onRegional Trade Agreements 9
1Thefinalversion ofthereport willalsoreflect theGeneral Council meeting on7November 1996, andthe
points willberenumbered asnecessary.
2Theannual report oftheGeneral Council for1995 iscontained inWT/GC/5 andCorr.1.WT/GC/W/38
Page2
() Committee onBalance-of-Payments Restrictions 9
() Consultations 9
() Disinvocation ofthebalance-of-payments provisions oftheGATT 1994 by
Turkey andPoland 9
() Notifications bythePhilippines andIndia 10
() Notes onmeetings 10
() Committee onBudget, Finance andAdministration 10
- Reports 10
() Committee onRegional Trade Agreements 10
() Establishment oftheCommittee andadoption ofitsterms ofreference 10
() Presiding officers totheCommittee 11
() Waivers under Article IXoftheWTO Agreement 11
() Harmonized System 11
- Bangladesh, Bolivia, Guatemala, Jamaica, Morocco, Nicaragua andSri
Lanka 11
() Renegotiations ofSchedules 11
() Malawi -Renegotiation ofSchedule LVIII 11
() Senegal -Renegotiation ofSchedule XLIX 11
() Zambia -Renegotiation ofSchedule 12
() Decision ontheintroduction ofHarmonized System changes into WTO
schedules oftariff concessions on1January 1996 12
- Extension oftime-limit 12
() Extension ofwaivers pursuant toparagraph 2oftheUnderstanding inrespect
ofwaivers ofobligations under GATT 1994 12
- Canada -CARIBCAN 12
- Cuba -Article XV:6 ofGATT 1994 12
- European Communities -Fourth ACP-EC Convention ofLomé 12
- France -Trading Arrangements with Morocco 12
- South Africa -Base dates under Article I:4 12
- United States -ANDEAN Trade Preference Act 12
- United States -Former Trust Territory ofthePacific Islands 12
- Zimbabwe -Base dates under Article I:4 12
() Status ofwaivers ineffect onthedate ofentry intoforce oftheWTO Agreement 13
() Accessions 13
() Bulgaria 13
() Georgia 13
() Kazakstan 14
() Kyrgyz Republic 14
() Mongolia 14
() Oman 15
() Panama 15
() Papua New Guinea 15
() Saudi Arabia 16
() Seychelles 16
() Tonga 16
() Vanuatu 16WT/GC/W/38
Page3
() Statement byCuba ontheUnited States 'Helms-Burton Actof1996 17
() Hungary -Invocation ofArticle 48oftheVienna Convention ontheLaw ofthe
Treaties 17
() Brazil -Provisional safeguard measures concerning imports oftoys 17
() Notification requirements 17
() Procedures forthecirculation andderestriction ofWTO documents 17
() Arrangements foreffective cooperation with other intergovernmental organizations 18
- Relations between theWTO andtheInternational Monetary Fund andtheWorld
Bank 18
() Guidelines forarrangements onrelations withnon-governmental organizations pursuant
toArticle V:2oftheWTO Agreement 18
() Compliance with the obligations ofArticles 70.8 and 70.9 ofthe TRIPS
Agreement 18
() WTO Press Release onTrade andForeign Direct Investment 19
() Administrative matters 19
() Offices oftheDeputy Directors-General 19
() Staff-related matters 19
() Pensions andsalaries ofWTO staff 19
() Observer status 19
() Governments 19
- Georgia 19
() International intergovernmental organizations 20
() Guidelines on observer status for international intergovernmental
organizations 20
() Election ofChairperson 21
() 1996 Ministerial Conference
() Preparations fortheMinisterial Conference
() Reports bytheDirector-General (WT/GC/M/11, 12,13,14,15)
AttheGeneral Council meeting on16April 1996, theChairman recalled thatataninformal
meeting oftheGeneral Council on5March, ithadbeen agreed thatpreparations fortheSingapore
Ministerial Conference would beundertaken inthefollowing manner:
1. TheGeneral Council, meeting informally onthatday,would invite theDirector-General,
Mr.Renato Ruggiero, inhispersonal capacity, tochair informal meetings open to
participation ofallMembers, inprinciple attheHead ofDelegation level. ThepurposeWT/GC/W/38
Page4
ofthese meetings would betoenable Members toexchange views onthepreparation
oftheSingapore Ministerial Conference, with regard toboth substantive and
organizational matters.
2. Insodoing, theDirector-General would actinclose cooperation andcoordination with
theChairman oftheGeneral Council.
3. Inallmatters relating totheorganization oftheMinisterial Conference, theDirector-
General would work closely with theHead oftheDelegation ofthehost country of
theMinisterial Conference.
4. TheDirector-General would submit progress reports onthiswork atthemeetings of
theGeneral Council.
5. TheGeneral Council would actupon these reports oftheDirector-General asnecessary.
Inparticular, itwould consider anyproposals addressed toitandtake anydecisions
itdeemedappropriateforthefurtherpreparationoftheSingaporeMinisterialConference.
Itwasunderstood thatthedifferent WTO bodies would carry outthetasks assigned tothem
under thetexts agreed intheUruguay Round forthepurposes ofthefirstMinisterial Conference.
Inaccordance with paragraph 4oftheabove procedures, theDirector-General then reported
ontheprocess thathadbeen undertaken thus far.
TheChairman proposed thattheGeneral Council takenoteoftheDirector-General 'sstatement
andagree thattheSingapore Ministerial Conference take place from 9-13 December 1996, thatthe
agenda fortheConference bedivided between general discussion andspecific business items, andthat
adecision onthespecific agenda items andtheexact time tobeallocated tothegeneral discussion
andthespecific items betaken atalater date.
TheGeneral Council soagreed.
AttheGeneral Council meetings on26June, 18July, 2October, and14October 1996, the
Director-General reported ontheprocess thathadbeen undertaken until then.
() Schedule ofmeetings ofWTO bodies (WT/GC/M/11)
AttheGeneral Council meeting on16April 1996, theChairman drew attention totheschedule
ofend-of-year meeting forvarious WTO bodies forthepurpose ofadoption oftheir respective reports
totheMinisterial Conference (WT/GC/W/32/Rev.1), andtotherevised Programme ofMeetings ofWTO
bodies for1996 (WT/GC/4/Rev.1).
With regard toreporting procedures fortheMinisterial Conference, hesaidthathisinformal
consultations hadresulted inagreement onthefollowing textofastatement toberead byhim:
"1. Subsidiary bodies oftheGeneral Council areinvited toprepare their reports onthe
basis oftheProcedures foranannual overview oftheWTO activities andforreporting
under theWTO laiddown bytheGeneral Council on15November 1995 (WT/L/105).
Thesereportsshouldbesubmittedinaccordancewiththescheduleofmeetingscirculated
indocument WT/GC/W/32/Rev.1 inorder toenable theGeneral Council toadopt its
own report totheMinisterial Conference on7November 1996.WT/GC/W/38
Page5
2. Given thedifferent mandates ofStanding Bodies oftheWTO itisdifficult toestablish
acommon format forreports ofthese bodies. Insome instances, forexample, efforts
toinclude inreports anassessment oranidentification ofproblems andissues could
leadtoundue difficulties. Each Body must therefore ultimately decide ontheformat
ofreport which itdeems most appropriate forconsideration ofrelevant issues bythe
superior Body.
3. While taking theabove intoaccount, Isuggest thatthese reports include atleast the
following elements:
(a) asection onimplementation oftherelevant Agreements;
(b) progress concerning work under theBuilt-in Agenda;
(c) anindication asappropriate ofissues andproblems which have been identified
andrecommendations ifany."
TheGeneral Council took note oftheChairman 'sstatement onreporting procedures forthe
Ministerial Conference (WT/L/145), alsotook note thattheChairman would consult with Pakistan on
itsconcerns regarding thesecond sentence ofparagraph 2ofthestatement, andfurther took note that
Pakistan would have thepossibility torevert tothismatter atthenext meeting.
TheChairman then invited thechairpersons ofsubsidiary bodies toundertake thenecessary
arrangements forthepreparation oftheir respective reports along thelines ofhisstatement.
() Progress ofpreparatory work insubsidiary bodies oftheGeneral Council
(WT/GC/M/13, 14,15)
Atitsmeeting on18July1996, theGeneral Council heard reports ontheprogress ofpreparatory
work intheir respective bodies, made under their ownresponsibility, bytheChairpersons oftheDispute
Settlement Body, theTrade Policy Review Body, theCouncil forTrade inServices, theCouncil for
Trade inGoods, theCommittee onTrade andDevelopment, theCommittee onTrade andEnvironment
andtheCommittee onRegional Trade Agreements, andbytheChairman onbehalf oftheChairman
oftheCouncil forTRIPS. TheGeneral Council alsoheard thattheChairmen oftheBudget andBalance-
of-Payments Committees hadnothing toreport atthisstage with regard topreparatory work forthe
Ministerial Conference intheir respective Committees.
Atitsmeeting on2October 1996, theGeneral Council heard brief reports onthepreparatory
work intheir respective bodies, made under their ownresponsibility, bytheChairpersons oftheCouncil
forTrade inGoods, theCouncil forTrade inServices andtheCouncil forTRIPS. TheGeneral Council
alsoheard thattheChairman oftheCommittee onTrade andDevelopment hadnothing toreport at
thisstage.
Atitsmeeting on14October 1996, theGeneral Council heard reports onthepreparatory work
intheir respective bodies, made under their ownresponsibility, bytheChairpersons oftheTrade Policy
Review Body, theCouncil forTrade inGoods, theCouncil forTrade inServices, theCouncil forTRIPS,
theDispute Settlement Body, theCommittee onTrade andDevelopment, theCommittee onRegional
Trade Agreements andtheCommittee onTrade andEnvironment. TheGeneral Council alsoheard
thattheChairmen oftheBudget andBalance-of-Payments Committees hadnothing toreport atthis
stage with regard topreparatory work fortheMinisterial Conference intheir respective Committees.WT/GC/W/38
Page6
() Election ofofficers oftheMinisterial Conference (WT/GC/M/14)
AttheGeneral Council meeting on2October 1996, theChairman recalled thattheRules of
Procedure forSessions oftheMinisterial Conference (WT/L/161) provided fortheelection ofa
Chairperson andthree Vice-Chairpersons who would hold office from theendofonesession until the
endofthenext regular session. Since theSingapore Ministerial Conference wasthefirstMinisterial
Conference, andthere wasnoelected Chairperson, heproposed thattheGeneral Council actonbehalf
oftheMinisterial Conference andelect aChairperson andthree Vice-Chairpersons atitsmeeting on
7November 1996. Ifthisproposal were acceptable, hewould consult with Members sothattheelection
oftheChairperson andthethree Vice-Chairpersons could take place attheGeneral Council meeting
on7November.
TheGeneral Council soagreed.
() Organizational matters (WT/GC/M/14)
AttheGeneral Council meeting on2October 1996, theChairman addressed thefollowing
organizational matters pertaining totheMinisterial Conference:
1. Opening Session oftheConference
(a) Inaccordance with theusual practice atMinisterial meetings, abrief inaugural
ceremony would beheldattheopening session towelcome thePrime Minister
ofSingapore.
(b) Theelected Chairperson oftheMinisterial Conference would invite thePrime
Minister ofSingapore toaddress theConference.
(c) Attheendofhisaddress totheConference, thePrime Minister ofSingapore
would declare thefirstMinisterial Conference oftheWTO formally opened.
(d) After thedeparture ofthePrime Minister ofSingapore, theChairperson would
take upthefollowing business onthemorning ofMonday, 9December as
follows:
(i) Adoption oftheAgenda.
(ii) Agreement ontheOrder ofBusiness.
(iii) Introduction oftheReport oftheGeneral Council bytheChairman
oftheGeneral Council.
(iv) Introduction oftheReport onanoverview ofdevelopments in
international trade andthetrading system bytheDirector-General.
(v) Statements byMinisters.
2. ListofSpeakers
Members wishing tospeak attheMinisterial Conference should contact theSecretariat
andmake reservations notlater than 1November 1996. Statements should belimited
toamaximum offiveminutes. Ifadelegation sowished, alonger textwould be
circulated indocument form totheConference.
Requestsforreservationsmadeafter1Novemberwouldbeaccommodatedinaccordance
withtheavailability oftime. Thepurpose ofthisprocedure wastoenable theSecretariat
toorganize inadvance thesequence ofplenary sessions oftheMinisterial Conference.
TheGeneral Council took note ofthese suggestions.WT/GC/W/38
Page7
() Attendance ofobservers attheMinisterial Conference
() Governments (WT/GC/M/14)
AttheGeneral Council meeting on2October 1996, theChairman recalled theprocedures for
theattendance ofgovernments asobservers atmeetings oftheMinisterial Conference assetoutin
Annex 2oftheRules ofProcedure forSessions oftheMinisterial Conference (WT/L/161). Under
these procedures, governments thatwere presently accorded observer status intheGeneral Council and
itssubsidiary bodies would beinvited toattend sessions oftheMinisterial Conference asobservers.
Other governments thatwished tohave observer status attheMinisterial Conference, anddidnotat
present have such status intheGeneral Council anditssubsidiary bodies, would have tomake aformal
request inaccordance with theprovisions ofparagraph 1oftheabove procedures. Any such requests
would beexamined inaccordance with theprocedures setout. Furthermore, observer governments
thatwished tospeak attheMinisterial Conference would beinvited todosoafter Members hadspoken,
asprovided forintheprocedures.
() International intergovernmental organizations (WT/GC/M/13, 14,15)
AttheGeneral Council meeting on18July1996, theChairman saidthat, ashehadindicated
todelegations ataninformal meeting on12July, heintended tostartconsultations ontheinternational
intergovernmental organizations tobeinvited asobservers totheMinisterial Conference onthebasis
ofthefollowing guidelines:
(a) organizations thatwere observers totheGeneral Council would beautomatically invited;
(b) organizations thatwere observers tosubsidiary bodies oftheWTO would beinvited
ifthey requested toattend theConference;
(c) consultations would becarried out todetermine which other international
intergovernmental organizations thatwere notobservers totheWTO andthatrequested
attendance attheConference should alsobeinvited.
Hehoped thatatitsmeeting scheduled forOctober, theGeneral Council would beinaposition
totake adecision ontheinternational intergovernmental organizations tobeinvited asobservers to
theMinisterial Conference.
TheGeneral Council agreed with theChairman 'sproposed approach.
Atitsmeeting on2October 1996, theChairman informed theGeneral Council thatthefollowing
organizations which were notalready observers totheWTO had requested attendance atthe
1996 Ministerial Conference: theCommon Market forEastern andSouthern Africa (COMESA), the
Central American Bank forEconomic Integration, theCommon Fund forCommodities andtheIslamic
Development Bank. Heproposed thattheGeneral Council accept these requests andinvite these
organizations asobservers totheMinisterial Conference.
TheGeneral Council soagreed.
Atitsmeeting on14October 1996, theChairman informed theGeneral Council thattheUnited
Nations Economic andSocial Commission forWestern Asia (ESCWA), which wasnotanobserver
totheWTO hadrequested attendance atthe1996 Ministerial Conference. Heproposed thattheGeneral
Council accept thisrequest andinvite thisorganization asanobserver totheMinisterial Conference.WT/GC/W/38
Page8
TheGeneral Council soagreed.
() Non-governmental organizations (WT/GC/M/13, 14,15)
AttheGeneral Council meeting on18July1996, theChairman saidhebelieved itwasnecessary
todetermine urgently how toproceed with requests from non-governmental organizations toattend
theMinisterial Conference inanobserver capacity and, onthebasis ofconsultations hehadheld,
proposed thefollowing method forproceeding:
(i) NGOs would beallowed toattend thePlenary Sessions oftheConference;
(ii) applications from NGOs toberegistered would beaccepted onthebasis ofArticle V
oftheWTO Agreement, i.e.those NGOs "concerned with matters related tothose of
theWTO"; and
(iii) adeadline would beestablished fortheregistration ofNGOs thatwished toattend the
Conference. AlistoftheNGOs thathadapplied forattendance would becirculated
subsequently fortheinformation oftheGeneral Council. Attendance atplenary sessions
byNGOs would alsodepend upon theavailability ofspace.
TheGeneral Council agreed totheChairman 'sproposed procedure.
AttheGeneral Council meeting on2October 1996, theChairman drew attention toaninformal
document recently circulated bytheSecretariat which listed those NGOs which hadcomplied with the
requirements forattendance attheSingapore Ministerial Conference thathadbeen agreed inJuly.
TheGeneral Council agreed thattheSecretariat would prepare apaper outlining theagreed
modalities fortheattendance ofNGOs attheMinisterial Conference andthatthedeadline forregistration
ofNGOs beextended to15October.
AttheGeneral Council meeting on14October 1996, theChairman saidthatsince theGeneral
Council would notmeet again before 7November, andinorder nottodelay unnecessarily theprocess
ofregistration forNGOs, agreement hadbeen reached ininformal consultations onawaytomove the
process forward, asfollows: (a)theSecretariat would establish for16October, asanaddendum to
thelistdistributed on2October, alistofthose additional NGOs which hadpresented requests for
registration andwhich hadreceived registration forms since 2October, andwould circulate on22October
afinal listofthose NGOs towhom confirmation would besent; and(b)thefacilities provided for
NGOs attheSingapore Ministerial Conference might bereviewed bytheGeneral Council inthelight
oftheexperience gained from thisfirstMinisterial Conference.
TheGeneral Council agreed totheChairman 'sproposed procedure.
() Finalization ofnegotiations onschedules ongoods andservices
- Decision ontheaccession of,andapproval ofprotocol ofaccession for,theUnited
Arab Emirates (WT/GC/M/10)
InDecember 1995, theGeneral Council hadapproved thegoods andservices schedules ofthe
United Arab Emirates.WT/GC/W/38
Page9
Atitsmeeting on6February 1996, theGeneral Council approved thetextoftheProtocol of
Accession fortheUnited Arab Emirates (WT/L/129) and, inaccordance with theDecision-Making
Procedures Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995 (WT/L/93),
adopted theDecision ontheAccession oftheUAE (WT/L/128).
() Composition oftheTextiles Monitoring Body (WT/GC/M/10)
InJanuary 1995, theGeneral Council hadadopted aDecision onthecomposition oftheTextiles
Monitoring Body until theendof1997 (WT/L/26). With regard totheChina/Pakistan constituency,
afootnote totheDecision stipulated thatintheevent thatChina didnotbecome aWTO Member by
31December 1995, "aWTO Member, tobeproposed bytheWTO Members thataremembers ofthe
International Textiles andClothing Bureau, shall beincluded inthisconstituency until such date as
China becomes aWTO Member".
Atitsmeeting on6February 1996, theGeneral Council considered acommunication from
theITCB (WT/GC/W/28) proposing thatMacau beincluded intheChina/Pakistan constituency until
such time asChina became aMember oftheWTO, oruntil 31December 1997, whichever came first.
TheGeneral Council took note oftheproposed nomination totheTMB (WT/L/26/Add.1).
() Approval ofrules ofprocedure forsubsidiary bodies
- Committee onRegional Trade Agreements (WT/GC/M/14)
Atitsmeeting on2October 1996, theGeneral Council approved therules ofprocedure for
meetings oftheCommittee onRegional Trade Agreements inWT/REG/1, which hadbeen adopted
bythatCommittee on2July.
() Committee onBalance-of-Payments Restrictions
() Consultations (WT/GC/M/10, 13)
Atitsmeeting on6February 1996, theGeneral Council considered andadopted theCommittee 's
report onitsconsultation with India (WT/BOP/R/11 -BOP/R/234).
Atitsmeeting on18July1996, theGeneral Council considered andadopted theCommittee 's
reports onitsconsultations with Nigeria (WT/BOP/R/13), Tunisia (WT/BOP/R/14) andSlovakia
(WT/BOP/R/15).
() Disinvocation ofthebalance-of-payments provisions oftheGATT 1994 byTurkey
andPoland (WT/GC/M/13)
Atitsmeeting on18July1996, theChairman oftheCommittee informed theGeneral Council
thatTurkey andPoland hadrecently communicated totheCommittee their intention todisinvoke the
balance-of-payments provisions ofGATT 1994 asof1January 1997 (WT/BOP/N/7 andWT/BOP/N/8).WT/GC/W/38
Page10
() Notifications bythePhilippines andIndia (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council took notethattheCommittee hadreceived
anotification from thePhilippines concerning thelifting ofrestrictions onagricultural products
(WT/BOP/N/9), andarecent submission from India containing alistofallquantitative restrictions
including those maintained forBOP purposes (WT/BOP/N/11).
() Notes onmeetings (WT/GC/M/10, 13)
Atitsmeeting on6February 1996, theGeneral Council tooknoteoftheCommittee 'sdiscussion
ofitsongoing business reported inWT/BOP/R/12 -BOP/R/235.
Atitsmeeting on18July1996, theGeneral Council took note oftheCommittee 'sdiscussion
ofitsongoing business reported inWT/BOP/R/16.
() Committee onBudget, Finance andAdministration
- Reports (WT/GC/M/10, 11,12,13)
Atitsmeeting on6February 1996, theGeneral Council considered theCommittee 'sreports
inWT/BFA/16 -L/7660 andWT/BFA/18 -L/7662, andadopted thetworeports.
Atitsmeeting on16April 1996, theGeneral Council considered theCommittee 'sreports in
WT/BFA/20, WT/BFA/21 andWT/BFA/22. TheGeneral Council approved theCommittee 'sspecific
recommendations inparagraphs 12and14ofitsreport inWT/BFA/20, andadopted thereport. The
General Council thenapproved theCommittee 'sspecific recommendations inparagraph 8ofitsreport
inWT/BFA/21, andadopted thereport. TheGeneral Council then approved theCommittee 'sspecific
recommendations inparagraphs 5to11ofitsreport inWT/BFA/22, andadopted thereport.
Atitsmeeting on26June 1996, theGeneral Council considered theCommittee 'sreport in
WT/BFA/24. TheGeneral Council approved theCommittee 'sspecific recommendation inparagraph 11
ofitsreport inWT/BFA/24, andadopted thereport.
Atitsmeeting on18July 1996, theGeneral Council considered theCommittee 'sreport in
WT/BFA/26. TheGeneral Council approved theCommittee 'sspecific recommendations inparagraphs 6
and8ofitsreport inWT/BFA/26, andadopted thereport.
() Committee onRegional Trade Agreements
() Establishment oftheCommittee andadoption ofitsterms ofreference (WT/GC/M/10)
InDecember 1995, theGeneral Council hadagreed inprinciple toestablish acommittee on
regional trade agreements andthattheChairman would hold consultations ontheterms ofreference
andother related matters concerning thecommittee.
AttheGeneral Council meeting on6February 1996, Mr.Weekes (Canada) reported onthe
consultations hehadheldonbehalf andattherequest oftheChairman, andproposed thatadraft decision
thathadbeen circulated todelegations onthismatter beadopted with anamendment.
TheGeneral Council adopted theDecision establishing theCommittee onRegional Trade
Agreements with theterms ofreference setouttherein (WT/L/127).WT/GC/W/38
Page11
() Presiding officers totheCommittee (WT/GC/M/11)
Atitsmeeting on16April 1996, theChairman informed theGeneral Council thatMr.Weekes
(Canada) hadagreed toserve asChairman oftheCommittee, andMr.Berthet (Uruguay) Mr.Harbinson
(Hong Kong), Mr.Ravaloson (Madagascar) andMr.Willems (Belgium) hadagreed toserve asVice-
Chairmen.
() Waivers under Article IXoftheWTO Agreement
() Harmonized System
- Bangladesh, Bolivia, Guatemala, Jamaica, Morocco, Nicaragua andSriLanka
(WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council considered requests byBangladesh (G/L/77),
Bolivia (G/L/78), Guatemala (G/L/86), Jamaica (G/L/79), Morocco (G/L/80), Nicaragua (G/L/81) and
SriLanka (G/L/83) forextensions ofwaivers previously granted inconnection withtheir implementation
oftheHarmonized System, andtherelated draft decisions.
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
these requests.
TheGeneral Council adopted theDecisions ontheextensions ofthewaivers (WT/L/164 -
Bangladesh; WT/L/165 -Bolivia; WT/L/172 -Guatemala; WT/L/166 -Jamaica; WT/L/167 -Morocco;
WT/L/168 -Nicaragua; andWT/L/170 -SriLanka) inaccordance withtheDecision-Making Procedures
Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995 (WT/L/93).
() Renegotiations ofSchedules
() Malawi -Renegotiation ofSchedule LVIII (WT/GC/M/10)
Atitsmeeting on6February 1996, theGeneral Council considered arequest byMalawi (G/L/51)
foranextension ofawaiver previously granted inconnection with itsrenegotiation ofitsschedule,
andadraft decision tothiseffect (G/C/W/31).
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
thisrequest.
TheGeneral Council adopted theDecision ontheextension ofthewaiver (WT/L/131) in
accordance with theDecision-Making Procedures Under Articles IXandXIIoftheWTO Agreement
agreed inNovember 1995 (WT/L/93).
() Senegal -Renegotiation ofSchedule XLIX (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council considered arequest bySenegal (G/L/82)
foranextension ofawaiver previously granted inconnection with itsrenegotiation ofitsschedule,
andtherelated draft decision (G/C/W/45).
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
thisrequest.WT/GC/W/38
Page12
TheGeneral Council adopted theDecision ontheextension ofthewaiver (WT/L/169) in
accordance with theDecision-Making Procedures Under Articles IXandXIIoftheWTO Agreement
agreed inNovember 1995 (WT/L/93).
() Zambia -Renegotiation ofSchedule LXXVIII (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council considered arequest byZambia (G/L/84)
foranextension ofawaiver previously granted inconnection with itsrenegotiation ofitsschedule,
andtherelated draft decision (G/C/W/47).
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
thisrequest.
TheGeneral Council adopted theDecision ontheextension ofthewaiver (WT/L/171) in
accordance with theDecision-Making Procedures Under Articles IXandXIIoftheWTO Agreement
agreed inNovember 1995 (WT/L/93).
() Decision ontheintroduction ofHarmonized System changes intoWTO schedules of
tariff concessions on1January 1996
- Extension oftime-limit (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council considered adraft decision extending the
time-limit oftheDecision ontheintroduction ofHarmonized System changes intoWTO schedules
oftariff concessions on1January 1996 (G/MA/W/6).
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
thisextension ofthetime-limit.
TheGeneral Council adopted theDecision extending thetime-limit (WT/L/173) inaccordance
with theDecision-Making Procedures Under Articles IXandXIIoftheWTO Agreement agreed in
November 1995 (WT/L/93).
() Extension ofwaivers pursuant toparagraph 2oftheUnderstanding inrespect ofwaivers
ofobligations under GATT 1994 (WT/GC/M/14, 15)
- Canada -CARIBCAN
- Cuba -Article XV:6 ofGATT 1994
- European Communities -Fourth ACP-EC Convention ofLomé
- France -Trading Arrangements with Morocco
- South Africa -Base dates under Article I:4
- United States -ANDEAN Trade Preference Act
- United States -Former Trust Territory ofthePacific Islands
- Zimbabwe -Base dates under Article I:4
Atitsmeeting on2October 1996, theGeneral Council considered requests byCanada (G/L/100),
Cuba (G/L/89), theEuropean Communities (G/L/108, G/L/109), South Africa (G/L/104), theUnited
States (G/L/101, G/L/102) andZimbabwe (G/L/106) forextensions ofwaivers pursuant toparagraph 2
oftheUnderstanding inrespect ofwaivers ofobligations under GATT 1994, andtherelated draft
decisions.
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
these requests.WT/GC/W/38
Page13
TheGeneral Council agreed torevert tothismatter atitsnext meeting.
Atitsmeeting on14October 1996, theGeneral Council again considered these requests and
adopted theDecisions ontheextensions ofthewaivers (WT/L/185 -Canada; WT/L/182 -Cuba;
WT/L/186andWT/L/187-EuropeanCommunities;WT/L/188-SouthAfrica;WT/L/183andWT/L/184-
United States; andWT/L/189 -Zimbabwe), inaccordance withtheDecision-Making Procedures Under
Articles IXandXIIoftheWTO Agreement agreed inNovember 1995 (WT/L/93).
() Status ofwaivers ineffect onthedateofentry intoforce oftheWTO Agreement (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council took notethatinconsultations heldrecently
bytheChairman onthestatus ofwaivers ineffect onthedateofentry intoforce oftheWTO Agreement,
there appeared tobebroad agreement thateach Member thatsought anextension ofsuch awaiver,
alistofwhich wasprovided inWT/L/153/Rev.1, should submit arequest foritsextension which should
bedealt with under theprovisions ofArticle IX:3 oftheWTO Agreement andthat, pursuant tothose
provisions, such requests should firstbeconsidered bytheCouncil forTrade inGoods.
() Accessions
() Bulgaria (WT/GC/M/14)
InNovember 1986 andFebruary 1990, theGATT 1947 Council hadestablished aworking
party toexamine Bulgaria 'srequest foraccession totheGeneral Agreement onTariffs andTrade.
Subsequently, inpursuance oftheDecision regarding requests forWTO accession adopted bytheGeneral
Council on31January 19953,theGATT 1947 Accession Working Party hadbeen transformed into
aWTO Accession Working Party.
Atitsmeeting on2October 1996, theGeneral Council considered theWorking Party 'sreport
(WT/ACC/BGR/5 andCorr.1, Add.1 andAdd.2).
TheGeneral Council approved thetextoftheProtocol ofAccession (WT/ACC/BGR/7) and
thetextofthedraft decision ontheAccession ofBulgaria and,inaccordance with theDecision-Making
Procedures Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995 (WT/L/93),
adoptedtheDecisionontheAccessionofBulgaria(WT/ACC/BGR/6).TheGeneralCouncilthenadopted
thereport oftheWorking Party (WT/ACC/BGR/5 andCorr.1, Add.1 andAdd.2).
() Georgia (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council considered acommunication from Georgia
(WT/ACC/GEO/1) concerning itsinterest inacceding totheWTO Agreement pursuant toArticle XII
thereof.
TheGeneral Council agreed toestablish aworking party toexamine Georgia 'srequest, and
authorized itsChairman todesignate theChairperson oftheWorking Party inconsultation with
representatives ofMembers andwith therepresentative ofGeorgia.
3SeeWT/GC/M/1, Item 4(g).WT/GC/W/38
Page14
() Kazakstan (WT/GC/M/10, 11)
Atitsmeeting on6February 1996, theGeneral Council considered acommunication from
Kazakstan (WT/ACC/KAZ/1) concerning itsinterest inacceding totheWTO Agreement pursuant to
Article XIIthereof.
TheGeneral Council agreed toestablish aworking party toexamine Kazakstan 'srequest, and
authorized itsChairman todesignate theChairperson oftheWorking Party inconsultation with
representatives ofMembers andwith therepresentative ofKazakstan.
TheChairman invited Kazakstan, onbehalf oftheGeneral Council, toattend meetings ofthe
General Council and, asappropriate, meetings ofother WTO bodies asanobserver during theperiod
when theWorking Party wascarrying outitswork.
Atitsmeeting on16April 1996, theChairman informed theGeneral Council thatMr.Ekblom
(Finland) hadagreed tochair theWorking Party.
() Kyrgyz Republic (WT/GC/M/11, 13)
Atitsmeeting on16April 1996, theGeneral Council considered acommunication from the
Kyrgyz Republic (WT/ACC/KGZ/1) concerning itsinterest inacceding totheWTO Agreement pursuant
toArticle XIIthereof.
TheGeneral Council agreed toestablish aworking party toexamine therequest oftheKyrgyz
Republic, andauthorized itsChairman todesignate theChairperson oftheWorking Party inconsultation
with representatives ofMembers andwith therepresentative oftheKyrgyz Republic.
TheChairman invited theKyrgyz Republic, onbehalf oftheGeneral Council, toattend meetings
oftheGeneral Council and, asappropriate, meetings ofother WTO bodies asanobserver during the
period when theWorking Party wascarrying outitswork.
Atitsmeeting on18July1996, theChairman informed theGeneral Council thatMr.Metzger
(France) hadagreed tochair theWorking Party.
() Mongolia (WT/GC/M/13)
InOctober1991,theGATT1947CouncilhadestablishedaworkingpartytoexamineMongolia's
request foraccession totheGeneral Agreement onTariffs andTrade. Subsequently, inpursuance of
theDecision regarding requests forWTO accession adopted bytheGeneral Council on31January 19954,
theGATT 1947 Accession Working Party hadbeen transformed intoaWTO Accession Working Party.
Atitsmeeting on18July 1996, theGeneral Council considered theWorking Party 'sreport
(WT/ACC/MNG/9 andCorr.1, Add.1, Add.1/Corr.1, andAdd.2).
TheGeneral Council approved thetextoftheProtocol ofAccession (WT/ACC/MNG/11) and
thetextofthedraft decision ontheAccession ofMongolia and,inaccordance withtheDecision-Making
Procedures Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995 (WT/L/93),
adopted theDecision ontheAccession ofMongolia (WT/ACC/MNG/10). TheGeneral Council then
4SeeWT/GC/M/1, Item 4(g).WT/GC/W/38
Page15
adopted thereport oftheWorking Party (WT/ACC/MNG/9 andCorr.1, Add.1 andAdd.1/Corr.1, and
Add.2).
() Oman (WT/GC/M/12, 14)
Atitsmeeting on26June 1996, theGeneral Council considered acommunication from Oman
(WT/ACC/OMN/1) concerning itsinterest inacceding totheWTO Agreement pursuant toArticle XII
thereof.
TheGeneral Council agreed toestablish aworking party toexamine Oman 'srequest, and
authorized itsChairman todesignate theChairperson oftheWorking Party inconsultation with
representatives ofMembers andwith therepresentative ofOman.
TheChairman invited Oman, onbehalf oftheGeneral Council, toattend meetings oftheGeneral
Council and,asappropriate, meetings ofother WTO bodies asanobserver during theperiod when the
Working Party wascarrying outitswork.
Atitsmeeting on2October 1996, theChairman informed theGeneral Council thatMr.Akram
(Pakistan) hadagreed tochair theWorking Party.
() Panama (WT/GC/M/14)
InOctober 1991, theGATT 1947 Council hadestablished aworking party toexamine Panama 's
request foraccession totheGeneral Agreement onTariffs andTrade. Subsequently, inpursuance of
theDecision regarding requests forWTO accession adopted bytheGeneral Council on31January 19955,
theGATT 1947 Accession Working Party hadbeen transformed intoaWTO Accession Working Party.
Atitsmeeting on2October 1996, theGeneral Council considered theWorking Party 'sreport
(WT/ACC/PAN/19 andCorr.1, Add.1 andAdd.2).
TheGeneral Council approved thetextoftheProtocol ofAccession (WT/ACC/PAN/21) and
thetextofthedraft decision ontheAccession ofPanama and,inaccordance with theDecision-Making
Procedures Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995 (WT/L/93),
adoptedtheDecisionontheAccessionofPanama(WT/ACC/PAN/20).TheGeneralCouncilthenadopted
thereport oftheWorking Party (WT/ACC/PAN/19 andCorr.1, Add.1 andAdd.2).
() Papua New Guinea (WT/GC/M/10, 11)
InNovember 1995, theGeneral Council hadadopted aDecision (WT/L/98) authorizing Papua
New Guinea toaccede totheWTO Agreement under terms setoutinitsProtocol ofAccession
(WT/L/99).
Atitsmeeting on6February 1996, theGeneral Council considered acommunication from Papua
New Guinea requesting thatthetime-limit foracceptance inparagraph 6ofitsProtocol ofAccession
bechanged to13May 1996 (WT/GC/W/30), andadraft decision tothiseffect intheAnnex tothat
document.
Therepresentative ofJapan reiterated hisGovernment 'sconcern with regard toPapua New
Guinea 'sapplied tariff oncanned mackerel thatwasinexcess ofthebound tariff.
5SeeWT/GC/M/1, Item 4(g).WT/GC/W/38
Page16
TheGeneral Council adopted theDecision extending thetime-limit (WT/L/130).
Atitsmeeting on16April 1996, theGeneral Council considered acommunication from Papua
New Guinea requesting thatthetime-limit inparagraph 6ofitsProtocol ofAccession befurther extended
to13August 1996 (WT/GC/W/33), andadraft decision tothiseffect intheAnnex tothatdocument.
TheGeneral Council adopted theDecision further extending thetime-limit (WT/L/148).
() Saudi Arabia (WT/GC/M/10)
InJuly1993, theGATT 1947 Council hadestablished aworking party toexamine Saudi Arabia 's
request foraccession totheGATT. Following therequest bySaudi Arabia foraccession totheWTO
Agreement (WT/ACC/SAU/1), thatworking party hadbeen transformed intoaWTO Accession Working
Party.
Atitsmeeting on6February 1996, theChairman informed theGeneral Council thatMr.Weekes
(Canada) hadagreed tochair theWorking Party.
() Seychelles (WT/GC/M/13)
InJuly1995, theGeneral Council hadestablished aworking party toexamine Seychelles 'request
foraccession totheWTO Agreement, andhadauthorized itsChairman todesignate theChairperson
oftheWorking Party inconsultation with representatives ofMembers andwith therepresentative of
Seychelles.
Atitsmeeting on18July1996, theChairman informed theGeneral Council thatMr.Ravaloson
(Madagascar) hadagreed tochair theWorking Party.
() Tonga (WT/GC/M/10)
InNovember 1995, theGeneral Council hadestablished aworking party toexamine Tonga 's
request foraccession totheWTO Agreement, andhadauthorized itsChairman todesignate the
Chairperson oftheWorking Party inconsultation with representatives ofMembers andwith the
representative ofTonga.
Atitsmeeting on6February 1996, theChairman informed theGeneral Council that
Mr.Harbinson (Hong Kong) hadagreed tochair theWorking Party.
() Vanuatu (WT/GC/M/11)
InJuly1995, theGeneral Council hadestablished aworking party toexamine Vanuatu 'srequest
foraccession totheWTO Agreement, andhadauthorized itsChairman todesignate theChairperson
oftheWorking Party inconsultation with representatives ofMembers andwith therepresentative of
Vanuatu.
Atitsmeetingon16April1996,theChairmaninformedtheGeneralCouncilthatMrs.Syahruddin
(Indonesia) hadagreed tochair theWorking Party.WT/GC/W/38
Page17
() Statement byCuba ontheUnited States 'Helms-Burton Actof1996 (WT/GC/M/11)
AttheGeneral Council meeting on16April 1996, therepresentative ofCuba expressed concern
thattheUSHelms-Burton Actof1996 wasaviolation ofinternational trade rules andinternational
law,aswellasofundertakings entered intobytheUnited States when signing theFinal ActEmbodying
theResults oftheUruguay Round, and noted that hisGovernment had recently circulated a
communication onthismatter (WT/L/142).
() Hungary -Invocation ofArticle 48oftheVienna Convention ontheLaw oftheTreaties
(WT/GC/M/11)
Atitsmeeting on16April 1996, therepresentative ofHungary informed theGeneral Council
ofHungary 'sinvocation, on9April 1996, ofArticle 48oftheVienna Convention ontheLawofTreaties
with respect toSection IIofPart IVofSchedule LXXI, andexpressed hisGovernment 'sreadiness
tohold consultations with anyMembers onthismatter.
() Brazil -Provisional safeguard measures concerning imports oftoys (WT/GC/M/13)
AttheGeneralCouncilmeetingon18July1996,therepresentativeoftheEuropeanCommunities
expressed concern atBrazil 'srecent initiation ofasafeguard investigation andtheimposition ofa
provisional safeguard measure onimports oftoys originating inallthird countries.
() Notification requirements (WT/GC/M/11)
AttheGeneral Council meeting on16April 1996, theDirector-General noted thatMembers
hadrecently been reminded oftheir unfulfilled notification requirements for1995 andtheir notification
requirements for1996, andunderlined theimportance offulfilling these obligations.
() Procedures forthecirculation andderestriction ofWTO documents (WT/GC/M/10, 12,13)
Atitsmeeting on6February 1996, theChairman informed theGeneral Council thatnofurther
progress onthismatter hadbeen achieved since themeeting oftheGeneral Council inDecember 1995
andthatheintended torefer tothismatter inastatement hewould make under aseparate Agenda item.6
Atitsmeeting on26June 1996, theChairman informed theGeneral Council thathewasstill
notinaposition tosubmit adraft decision onthismatter forconsideration byMembers.
AttheGeneral Council meeting on18July1996, theChairman saidthatfollowing extensive
consultations held since thebeginning oftheyear, agreement hadnow been reached onacompromise
textthatappeared tobeagreeable toamajority ofdelegations. Heproposed thatthetextofthedraft
decision onthismatter, withparagraph (h)oftheAppendix redrafted toreflect thecompromise regarding
panel reports, beadopted atthepresent meeting.
TheGeneral Council adopted theprocedures forthecirculation andderestriction ofWTO
documents (WT/L/160/Rev.1).
6Seeunder point [..]-"Election ofChairperson".WT/GC/W/38
Page18
The Chairman then made thefollowing statement: "Inadopting these procedures onthe
circulation andderestriction ofdocuments, theGeneral Council takes notethatMembers attach particular
importance totherestricted nature ofdocuments sodesignated, andthatindividual governments should
proceed accordingly intheir handling ofsuch documents."
() Arrangements foreffective cooperation with other intergovernmental organizations
- Relations between theWTO andtheInternational Monetary Fund andtheWorld Bank
(WT/GC/M/13)
AttheGeneral Council meeting on18July1996, theChairman saidthatinformal consultations
ondraft arrangements forrelations between theWTO andtheIMF andtheWorld Bank were currently
under way, andproposed thattheGeneral Council revert tothisitem atitsnext meeting.
TheGeneral Council soagreed.
() Guidelines forarrangements onrelations with non-governmental organizations pursuant to
Article V:2oftheWTO Agreement (WT/GC/M/10, 12,13)
Atitsmeeting on6February 1996, theChairman informed theGeneral Council thatnofurther
progress onthismatter hadbeen achieved since themeeting oftheGeneral Council inDecember 1995
andthatheintended torefer tothismatter inastatement hewould make under aseparate Agenda item.7
AttheGeneral Council meeting on26June 1996, theChairman recalled thatapproval ofthe
proposed guidelines onthismatter hadbeen linked toagreement onderestriction procedures, onwhich
hewasstillnotinaposition tosubmit adraft decision forconsideration.
AttheGeneral Council meeting on18July 1996, theChairman drew attention tothedraft
guidelines forarrangements onrelations with non-governmental organizations which hadbeen agreed
ininformal consultations held in1995 andheld inabeyance pending adecision onprocedures forthe
circulation andderestriction ofWTO documents. Since thelatter hadbeen adopted earlier atthat
meeting8,heproposed thattheguidelines onrelations with non-governmental organizations alsobe
adopted.
TheGeneral Council soagreed (WT/L/162).
() Compliance with theobligations ofArticles 70.8 and70.9 oftheTRIPS Agreement
(WT/GC/W/10)
AttheGeneral Council meeting on6February 1996, therepresentative oftheUnited States
expressed concern thatanumber ofcountries hadnotcomplied with theobligations ofArticles 70.8
and70.9 oftheTRIPS Agreement andreserved hisdelegation 'srights forfuture action inthisregard.
7Seeunder point [..]-"Election ofChairperson".
8Seeunder point [..]-"Procedures forthecirculation andderestriction ofWTO documents".WT/GC/W/38
Page19
() WTO Press Release onTrade andForeign Direct Investment (WT/GC/M/15)
AttheGeneralCouncilmeetingon14October1996,therepresentativeofIndiaexpressedconcern
attherecent issuance bytheSecretariat ofaPress Release entitled "Trade andForeign Direct Investment -
New Report bytheWTO", which raised thefundamental andimportant issue oftheroleoftheSecretariat
anditsrelationship with Members.
() Administrative matters
() Offices oftheDeputy Directors-General (WT/GC/M/11)
AttheGeneral Council meeting on16April 1996, theDirector-General proposed thatsince
preparationsfortheMinisterialConferenceinDecember1996wouldrequirealltheattentionofMembers,
thecontracts ofthethree Deputy Directors-General, Messrs. Hoda, Lavorel andSeade, which were
duetoexpire on31July1996, beextended foraperiod ofoneyear, andthatheinitiate consultations
onfurther renewals ornew appointments early in1997, well inadvance ofthedate ofexpiration of
their terms ofoffice.
TheGeneral Council agreed toproceed assuggested bytheDirector-General ifthismatter were
notraised again atitsnext meeting.
() Staff-related matters (WT/GC/M/10)
Atitsmeeting on6February 1996, theDirector-General recalled theDecision oftheGeneral
Council atitsmeeting on30October 1995 with regard tothereview ofthequestion ofsalaries, pensions
andother conditions ofservice ofWTO staff (WT/L/91), andoutlined reasons forwhich itwasurgent
fortheGeneral Council toresume consideration ofthese questions inorder toreach decisions assoon
aspossible. Heproposed thatinformal consultations bytheChairman would beappropriate forthis
purpose.
TheGeneral Council agreed thatitsChairman hold informal consultations onthese matters.
() Pensions andsalaries ofWTO staff (WT/GC/M/15)
AttheGeneral Council meeting on14October 1996, theChairman said thatininformal
consultations heldrecently, noconsensus hadbeen possible onthetextofadraft proposal onconditions
ofservice forWTO staff thathehadcirculated, andthathewould continue hisconsultations onthis
matter.
() Observer status
() Governments
- Georgia (WT/GC/M/12)
Atitsmeeting on26June 1996, theGeneral Council granted observer status toGeorgia.WT/GC/W/38
Page20
() International intergovernmental organizations (WT/GC/M/10, 11,12,13,14,15)
AttheGeneral Council meeting on6February 1996, theChairman saiditwashisunderstanding
thatpending agreement onguidelines forobserver status forinternational organizations, theUnited
Nations, UNCTAD, IMF, World Bank, FAO, WIPO andOECD would beinvited tothenext meeting
oftheGeneral Council, inaccordance with theadhocarrangements approved on16March 1995.9
AttheGeneralCouncilmeetingon16April1996,theChairmanrecalledhisearlierunderstanding
onthismatter.
AttheGeneral Council meeting on26June1996, theChairman recalled hisearlier understanding
onthismatter.
AttheGeneral Council meeting on18July1996, theChairman saiditwashisunderstanding
that, pending agreement ontheorganizations tobeaccorded observer status intheGeneral Council
inaccordance with theguidelines forsuch status agreed on18July10,theUnited Nations, UNCTAD,
IMF, World Bank, FAO, WIPO andOECD would beinvited tothenextmeeting oftheGeneral Council.
AttheGeneral Council meeting on2October 1996, theChairman recalled hisprevious
understanding onthismatter.
AttheGeneral Council meeting on14October 1996, theChairman recalled hisprevious
understanding onthismatter.
() Guidelines onobserver status forinternational intergovernmental organizations
(WT/GC/M/12, 13)
AttheGeneral Council meeting on26June 1996, theChairman recalled thatagreement on
guidelines onobserver status forinternational intergovernmental organizations hadbeen awaiting
agreement ontheparticipation oforganizations asobservers intheDispute Settlement Body andthat
anessential aspect ofthiswould bethearrangements forcooperation between theWTO andtheIMF
andtheWorld Bank thatwere presently under consideration. Theguidelines therefore could notyet
befinalized.
AttheGeneral Council meeting on18July1996, theChairman recalled thatMembers hadthus
farconsidered thatguidelines onobserver status forinternational organizations could notbeadopted
until agreement hadbeen reached onarrangements forcooperation between theWTO andtheIMF and
World Bank. Pending theapproval ofthose arrangements, heproposed thatMembers agree onthe
textascontained inPC/IPL/W/14, withanamendment toparagraph 3thereof, which would notprejudge
theoutcome oftheconsultations ontheabove arrangements, butwhich would atthesame time enable
theGeneral Council toadopt guidelines atthepresent time. This would allow theWTO tosettle the
question oftheattendance ofinternational intergovernmental organizations inWTO bodies intime for
decisions tobetaken regarding theparticipation ofobserver organizations attheMinisterial Conference
inSingapore.
TheGeneralCounciladoptedtheguidelinesonobserverstatusforinternationalintergovernmental
organizations proposed bytheChairman (WT/L/161, Annex 3).
9SeeWT/GC/M/3, Item 3.
10Seeunder sub-point [..]below -"Guidelines onobserver status forinternational intergovernmental
organizations".WT/GC/W/38
Page21
() Election ofChairperson (WT/GC/M/10)
AttheGeneral Council meeting on6February 1996, astheoutgoing presiding officer ofthe
General Council, theChairman made astatement onthework oftheGeneral Council in1995
(WT/GC(96)/ST/1).
TheGeneral Council then unanimously elected Mr.Rossier (Switzerland) totheChair.SECTION II
REPORT OFTHE DISPUTE SETTLEMENT BODYWORLD TRADE WT/DSB/8
28October 1996
ORGANIZATION(96-4542)
DISPUTE SETTLEMENT BODY
DISPUTE SETTLEMENT BODY
Annual Report (1996)
Thepresent report hasbeen prepared inpursuance oftheProcedures foranAnnual Overview
ofWTO Activities andforReporting under theWTO (WT/L/105), andsetsouttheactions taken by
theDispute Settlement Body (DSB) since theprevious overview ofWTO activities held inDecember
1995.1
Incarrying outitstask, theDSB hasheld 15meetings since December 1995. Theminutes
ofthese meetings, which remain therecord oftheDSB'swork, arecontained indocuments
WT/DSB/M/10-WT/DSB/M/24.
Thefollowing subjects areincluded inthereport:
Page
1. DSB schedule ofmeetings 2
2. Election ofChairperson 3
3. Working procedures oftheAppellate Body 3
4. Indicative listofgovernmental andnon-governmental panelists 3
5. Curricula vitae ofrepresentatives totheWTO 4
6. Mutually agreed solutions 4
7. Requests tobejoined inconsultations under theDSU 5
8. Recourse todispute settlement procedures 5
(a) Brazil 5
(i) Export financing programme foraircraft 5
(ii) Measures affecting desiccated coconut 5
(b) Canada 6
- Certain measures concerning periodicals 6
(c) European Communities 6
(i) Implementation oftheUruguay Round commitments concerning
rice 6
(ii) Measures affecting livestock andmeat (hormones) 6
(iii) Measures concerning meat andmeat products (hormones) 7
1The1995 Annual Report oftheDSB iscontained inWT/DSB/3.WT/DSB/8
Page 2
(iv) Regime fortheimportation, saleanddistribution ofbananas 7
(v) Trade description ofscallops 8
(d) Japan 8
- Measures affecting consumer photographic film andpaper 8
(e) Korea 9
- Measures concerning bottled water 9
(f) Pakistan 9
- Patent protection forpharmaceutical and agricultural chemical
products 9
(g) Poland 9
- Import regime forautomobiles 9
(h) Portugal 10
- Patent protection under theIndustrial Property Act 10
(i) Turkey 10
- Action onimports oftextiles andclothing 10
(j) United States 11
(i) Anti-dumping investigation regarding imports offresh orchilled
tomatoes from Mexico 11
(ii) Import prohibition ofcertain shrimp andshrimp products 11
(iii) Increase intherates ofduty oncertain products oftheEuropean
Communities (Presidential Proclamation No5759 of24December
1987) 11
(iv) Measures affecting imports ofwomen 'sandgirls'wool coats 11
(v) Measures affecting imports ofwoven wool shirts andblouses 12
(vi) Restrictions onimports ofcotton andman-made fibre underwear 12
(vii) Standards forreformulated andconventional gasoline 13
(viii) Tariff increases onproducts from theEuropean Communities 14
(ix) TheCuban Liberty andDemocratic Solidarity Act 14
9. USdraft billconcerning thedefinition of"domestic industry" inthearea of
safeguards 15
10. Report onprogress ofpreparatory work fortheSingapore Ministerial Conference 15
11. DSB report totheGeneral Council fortheSingapore Ministerial Conference 15
12. Summary conclusions 16
1. DSB schedule ofmeetings (WT/DSB/M/10)
AttheDSB meeting on31January 1996, theChairman announced thattheschedule ofDSB
meetings for1996 hadbeen circulated inWTO/AIR/237 on12December 1995.
TheDSB took note ofthisinformation.WT/DSB/8
Page 3
2. Election ofChairperson (WT/DSB/M/10)
Atitsmeeting on31January 1996, theDSB elected Mr.Celso Lafer (Brazil) asChairman
byacclamation.
3. Working procedures oftheAppellate Body (WT/DSB/M/10, 11)
AttheDSB meeting on31January 1996, theChairman saidthatthework ontheprocedures
fortheappellate review hadbeen carried outbytheAppellate Body members inJanuary 1996. The
views expressed byMembers onthismatter hadbeen conveyed totheAppellate Body inaccordance
with paragraph 14inWT/DSB/1. Any other views byMembers onkeyissues were required tobe
conveyed totheChairman thefollowing day, astheAppellate Body wasfinalizing itsprocedures.
TheDSB took note ofthisinformation.
AttheDSB meeting on21February 1996, theChairman drew attention totheworking
procedures oftheAppellate Body contained inWT/AB/WP/1, which hadbeen circulated on15February
1996 asanunrestricted document. Healsodrew attention toacovering letter from theChairman of
theAppellate Body which hadaddressed theissues ofinterest toMembers, andhadexplained thereasons
oftheAppellate Body foritsconclusions oncertain keyelements oftheworking procedures.
Therepresentatives ofMexico, Egypt, India, theUnited States, Chile, Canada andtheEuropean
Communities spoke.
TheDSB took note ofthestatements.
4. Indicative listofgovernmental andnon-governmental panelists (WT/DSB/M/10,14,20,21,22,24)
AttheDSB meeting on31January 1996, theChairman drew attention todocument
WT/DSB/W/17 containing names ofcandidates forinclusion ontheindicative list,andproposed that
theDSB approve thenames contained therein.
TheDSB soagreed.
AttheDSBmeetingon17April1996,theChairmandrewattentiontodocumentsWT/DSB/W/21
andWT/DSB/W/24, containing names ofcandidates forinclusion ontheindicative list,andproposed
thattheDSB approve thenames contained therein.
Therepresentative oftheUnited States spoke.
The DSB took note ofthestatement and approved thenames inWT/DSB/W/21 and
WT/DSB/W/24.
AttheDSB meeting on5July1996, theChairman drew attention todocument WT/DSB/W/30
containing names ofcandidates forinclusion ontheindicative list,andproposed thattheDSB approve
thenames contained therein.
TheDSB soagreed.WT/DSB/8
Page 4
AttheDSB meeting on15and16July 1996, theChairman drew attention todocument
WT/DSB/W/33 containing names ofcandidates forinclusion ontheindicative list,andproposed that
theDSB approve thenames contained therein.
TheDSB soagreed.
AttheDSB meeting on27September 1996, theChairman drew attention todocument
WT/DSB/W/36 containing names ofcandidates forinclusion ontheindicative list,andproposed that
theDSB approve thenames contained therein.
TheDSB soagreed.
AttheDSB meeting on16October 1996, theChairman drew attention todocument
WT/DSB/W/40 containing names ofcandidates forinclusion ontheindicative list,andproposed that
theDSB approve thenames contained therein.
TheDSB soagreed.
5. Curricula vitae ofrepresentatives totheWTO (WT/DSB/M/20)
AttheDSB meeting on5July1996, theChairman proposed thatinorder tofacilitate thework
oftheSecretariat withregard tothecomposition ofpanels, Members were invited tosubmit thecurricula
vitae oftheir Geneva-based representatives which might beconsidered toserve onpanels.
TheDSB took note ofthestatement.
6. Mutually agreed solutions (WT/DSB/M/15, 24)
AttheDSB meeting on24April 1996, theChairman drew attention totheobligation under
Article 3.6oftheDSU tonotify mutually agreed solutions tomatters formally raised under thedispute
settlement provisions.
Therepresentative ofIndia spoke.
TheDSB took note ofthestatement.
AttheDSB meeting on16October 1996, therepresentative ofIndia drew attention todocument
WT/DSB/W/35 prepared bytheSecretariat inresponse toIndia 'srequest made attheDSB meeting
on24April 1996, with regard totheobligation under Article 3.6oftheDSU tonotify mutually agreed
solutions. Hesaidthathewould make adetailed statement explaning hisviews onthisdocument at
alater date.
TheDSB took note ofthestatement.WT/DSB/8
Page 5
7. Requests tobejoined inconsultations under theDSU (WT/DSB/M/13)
AttheDSB meeting on27March 1996, theChairman presented aproposal concerning
communications containing requests tobejoined inconsultations pursuant toArticle 4.11 oftheDSU.
Thetextofthisproposal wassubsequently circulated inWT/DSB/W/23.
TheDSB agreed torevert tothismatter atitsnext meeting.
8. Recourse todispute settlement procedures
(a) Brazil
(i) Export financing programme foraircraft (WT/DSB/M/22)
Atitsmeeting on27September 1996, theDSB considered arequest byCanada forthe
establishment ofapanel toexamine itscomplaint regarding Brazil 'sexport financing programme for
aircraft (WT/DS46/2).
Therepresentatives ofCanada, Brazil andJamaica spoke.
TheDSB took note ofthestatements andagreed with Canada 'sdecision thatitsrequest for
apanel inWT/DS46/2 bewithdrawn andthatanew request forapanel onthismatter becirculated
andconsidered bytheDSB atitsnext regular meeting.
(ii) Measures affecting desiccated coconut (WT/DSB/M/10, 11,12)
AttheDSB meeting on31January 1996, therepresentative ofthePhilippines informed Members
thatconsideration oftherequest fortheestablishment ofapanel toexamine thePhilippines 'complaint
regarding Brazil 'scountervailing duties onimports ofdesiccated coconut would bepostponed
(WT/DS22/5).
Therepresentative ofBrazil spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext meeting.
Atitsmeeting on21February 1996, theDSB considered arequest bythePhilippines forthe
establishment ofapanel toexamine itscomplaint regarding Brazil 'scountervailing duties onimports
ofdesiccated coconut (WT/DS22/5).
Therepresentatives ofthePhilippines, Brazil, Indonesia onbehalf ofASEAN countries, and
SriLanka spoke.
TheDSB took note ofthestatements andagreed, attherequest ofthePhilippines, toconvene
itsnext meeting on5March inorder toreconsider thismatter.
Atitsmeeting on5March 1996, theDSB again considered thismatter.
Therepresentatives ofthePhilippines andBrazil spoke.WT/DSB/8
Page 6
TheDSB took note ofthestatements, agreed toestablish apanel toexamine thePhilippines '
request, andauthorized theChairman oftheDSB todraw uptheterms ofreference ofthepanel in
consultation with theparties tothedispute inaccordance with Article 7.3oftheDSU.
Therepresentatives ofCanada, theEuropean Communities, Indonesia, Malaysia andtheUnited
States reserved their third-party rights toparticipate inthepanel proceedings.2
(b) Canada
- Certain measures concerning periodicals (WT/DSB/M/18 andCorr.1, 19)
Atitsmeeting on6June 1996, theDSB considered arequest bytheUnited States forthe
establishment ofapanel toexamine itscomplaint regarding Canada 'smeasures concerning periodicals
(WT/DS31/2).
Therepresentatives oftheUnited States andCanada spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext meeting.
Atitsmeeting on19June 1996, theDSB again considered thismatter.
Therepresentatives oftheUnited States andCanada spoke.
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
(c) European Communities
(i) Implementation oftheUruguay Round commitments concerning rice
(WT/DSB/M/10)
AttheDSB meeting on31January 1996, therepresentative ofUruguay informed Members
thathiscountry hadrequested consultations under Article XXII:1 ofGATT 1994 with theEuropean
Communities with respect totheimplementation ofthecommitments onriceundertaken bythelatter
intheUruguay Round (WT/DS25/1 andCorr.1).
TheDSB took note ofthestatement.
(ii) Measures affecting livestock andmeat (hormones) (WT/DSB/M/22, 24)
Atitsmeeting on27September 1996, theDSB considered arequest byCanada forthe
establishment ofapanel toexamine itscomplaint regarding European Communities 'measures affecting
livestock andmeat (WT/DS48/5).
Therepresentatives ofCanada andtheEuropean Communities spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext regular
meeting.
Atitsmeeting on16October 1996, theDSB again considered thismatter.
2After themeeting SriLanka alsoreserved itsthird-party rights.WT/DSB/8
Page 7
Therepresentatives ofCanada, theEuropean Communities andArgentina spoke.
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
Therepresentatives ofAustralia, New Zealand, Norway andtheUnited States reserved their
third-party rights toparticipate inthepanel proceedings.
(iii) Measures concerning meat andmeat products (hormones) (WT/DSB/M/16,17)
Atitsmeeting on8May 1996, theDSB considered arequest bytheUnited States forthe
establishment ofapanel toexamine itscomplaint regarding theEuropean Communities 'measures
concerning meat andmeat products (WT/DS26/6).
Therepresentatives oftheUnited States, theEuropean Communities andArgentina spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext meeting.
Atitsmeeting on20May 1996, theDSB again considered thismatter.
Therepresentatives oftheUnited States andtheEuropean Communities spoke.
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
Therepresentatives ofAustralia, Canada, New Zealand andNorway reserved their third-party
rights toparticipate inthepanel proceedings.
(iv) Regimefortheimportation,saleanddistributionofbananas(WT/DSB/M/15,16,
19)
Atitsmeetingon24April1996,theDSBconsideredarequestbyEcuador,Guatemala,Honduras,
Mexico andtheUnited States fortheestablishment ofapanel toexamine their complaint regarding
theEuropean Communities 'regime fortheimportation, saleanddistribution ofbananas (WT/DS27/6).
Therepresentatives ofGuatemala, onbehalf ofEcuador, Honduras, Mexico andtheUnited
States, theEuropean Communities andMexico, onbehalf ofEcuador, Guatemala, Honduras andthe
United States spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext meeting.
Atitsmeeting on8May 1996, theDSB again considered thismatter.
Therepresentative ofGuatemala, onbehalf ofEcuador, Honduras, Mexico andtheUnited States,
therepresentative ofSt.Lucia, onbehalf ofBelize, Dominica, Dominican Republic, Grenada andSt.
Vincent andtheGrenadines, andtherepresentatives ofIndia, Côted'Ivoire, Cameroon, Ghana, Jamaica,
Dominican Republic, Costa Rica, Colombia, Nicaragua, Venezuela, Canada, theEuropean Communities
andtheUnited States spoke.WT/DSB/8
Page 8
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
Therepresentatives ofBelize, Cameroon, Colombia, Costa Rica, Côted'Ivoire, Dominica,
Dominican Republic, Ghana, Grenada, India, Jamaica, Japan, Nicaragua, thePhilippines, St.Lucia,
St.Vincent andtheGrenadines, Senegal, Thailand andVenezuela reserved their third-party rights to
participate inthepanel proceedings.3
AttheDSB meeting on19June 1996, therepresentative ofJamaica expressed hercountry 's
concerns with regard tothedecision taken bythepanel ontheCommunities régime fortheimportation,
saleanddistribution ofbananas, togrant ACP countries observer status during thefirst substantive
meeting ofthepanel. Sherequested theChairman toinitiate consultations onthismatter.
Therepresentatives ofCameroon, Côted'Ivoire, theEuropean Communities, theUnited States
andtheChairman spoke.
TheDSB took note ofthestatements.
(v) Trade description ofscallops (WT/DSB/M/20)
AttheDSB meeting on5July1996, therepresentative ofCanada, speaking onbehalf ofthe
European Communities, Chile andPeru, announced thatmutually agreed solutions hadbeen reached
inboth disputes regarding theFrench labelling regulation onscallops (WT/DS7, WT/DS12 and
WT/DS14).
TheChairman spoke.
TheDSB took note ofthestatements.
(d) Japan
- Measures affecting consumer photographic filmandpaper (WT/DSB/M/23,24)
Atitsmeeting on3October 1996, theDSB considered arequest bytheUnited States forthe
establishment ofapanel toexamine itscomplaint regarding Japan 'smeasures affecting consumer
photographic film andpaper (WT/DS44/2).
Therepresentatives oftheUnited States, Japan andtheEuropean Communities spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext regular
meeting.
Atitsmeeting on16October 1996, theDSB again considered thismatter.
Therepresentatives oftheUnited States, Japan andtheEuropean Communities spoke.
3After themeeting Thailand informed theSecretariat thatitwould notparticipate asathird party inthis
dispute; Canada andSuriname reserved their third-party rights.WT/DSB/8
Page 9
TheDSB took noteofthestatements andagreed toestablish apanel with theterms ofreference
tobedrawn upbytheparties tothedispute within 20days inaccordance with Article 7.1ofthe
DSU.
Therepresentatives oftheEuropean Communities andMexico reserved their third-party rights
toparticipate inthepanel proceedings.
(e) Korea
- Measures concerning bottled water (WT/DSB/M/15)
AttheDSB meeting on24April 1996, therepresentative ofCanada announced thatKorea and
Canada hadreached amutually agreed solution with regard toKorea 'smeasures concerning bottled
water (WT/DS20/6).
Therepresentative ofKorea spoke.
TheDSB took note ofthestatement.
(f) Pakistan
- Patent protection forpharmaceutical and agricultural chemical products
(WT/DSB/M/21)
Atitsmeeting on15and16July1996, theDSB considered arequest bytheUnited States for
theestablishment ofapanel toexamine itscomplaint regarding Pakistan 'spatent protection for
pharmaceutical andagricultural chemical products (WT/DS36/3).
Therepresentatives oftheUnited States andPakistan spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atafuture meeting.
(g) Poland
- Import regime forautomobiles (WT/DSB/M/21,22)
AttheDSB meeting on15and16July 1996, therepresentative ofIndia announced thatthe
authorities ofIndia andPoland hadreached amutually agreed solution with regard toPoland 'simport
régime forautomobiles (WT/DS19/1).
Therepresentative ofPoland spoke.
TheDSB took note ofthisinformation.
AttheDSB meeting on27September 1996, therepresentative oftheUnited States sought further
clarification with regard tothesettlement reached between Poland andIndia onpassenger cars
(WT/DS19/2).
Therepresentatives oftheUnited States andPoland spoke.
TheDSB took note ofthestatements.WT/DSB/8
Page 10
(h) Portugal
- Patent protection under theIndustrial Property Act(WT/DSB/M/24)
AttheDSB meeting on16October 1996, therepresentative oftheUnited States drew attention
ofMembers thatPortugal andtheUnited States hadreached amutually satisfactory solution tothematter
raised bytheUnited States concerning theterm ofpatent protection required bytheAgreement onTrade-
Related Aspects ofIntellectual Property Rights (WT/DS37/2 andCorr.1).
TheDSB took note ofthestatement.
(i) Turkey
- Action onimports oftextiles andclothing (WT/DSB/M/11, 13,14,15)
AttheDSB meeting on21February 1996, therepresentative ofHong Kong informed Members
thathisGovernment hadrequested consultations with Turkey with regard totheimplementation ofthe
Customs Union between Turkey andtheEuropean Community (WT/DS29/1).
Therepresentatives ofthePhilippines, onbehalf ofMalaysia andThailand, India, Korea, Peru,
Argentina, Colombia, Brazil, Pakistan, Turkey andtheEuropean Communities spoke.
TheDSB took note ofthestatements.
AttheDSB meeting on27March 1996, therepresentative ofIndia informed Members that
hisGovernment hadrequested consultations withTurkey onquantitative restrictions imposed unilaterally
onimports ofabroad range oftextile andclothing products from India (WT/DS34/1).
Therepresentatives ofTurkey, Hong Kong, theEuropean Communities andJapan spoke.
TheDSB took note ofthestatements.
AttheDSB meeting on27March 1996, therepresentative ofHong Kong saidthatsince the
thirty-day period toenter intoconsultations pursuant toArticle 4.3oftheDSU hadexpired, herequested
Turkey toconfirm itsreadiness toenter intoconsultations with Hong Kong (WT/DS29/1).
Therepresentatives ofThailand, onbehalf ofMalaysia andthePhilippines, andTurkey spoke.
TheDSB took note ofthestatements.
AttheDSBmeetingon17April1996,therepresentativeofHongKongexpressedhisdelegation's
position regarding theparticipation oftheEuropean Communities inconsultations which Hong Kong
hadrequested with Turkey (WT/DS29/1).
Therepresentatives ofThailand, onbehalf ofMalaysia andthePhilippines, India, Peru, Turkey,
Brazil, theEuropean Communities andCanada spoke.
TheDSB took note ofthestatements.
AttheDSB meeting on24April 1996, therepresentative ofIndia expressed hisdelegation 's
position regarding theparticipation oftheEuropean Communities inconsultations which India had
requested with Turkey (WT/DS34/1).WT/DSB/8
Page 11
Therepresentatives ofTurkey, theEuropean Communities andHong Kong spoke.
TheDSB took note ofthestatements.
(j) United States
(i) Anti-dumping investigation regarding imports offresh orchilled tomatoes from
Mexico (WT/DSB/M/20)
AttheDSB meeting on5July1996, therepresentative ofMexico informed Members thathis
country hadrequested consultations withtheUnited States withregard totheanti-dumping investigation
onimports offresh orchilled tomatoes from Mexico (WT/DS49/1)
TheDSB took note ofthestatement.
(ii) Import prohibition ofcertain shrimp andshrimp products (WT/DSB/M/24)
AttheDSB meeting on16October 1996, therepresentative ofThailand, onbehalf ofIndia,
Malaysia andPakistan, informed Members thattheyhadrequested consultations with theUnited States
concerning itsbanimposed onimportation ofshrimp andshrimp products from theabove-mentioned
countries (WT/DS58/1).
TheDSB took note ofthestatement.
(iii) Increase intherates ofduty oncertain products oftheEuropean Communities
(Presidential Proclamation No5759 of24December 1987) (WT/DSB/M/13)
AttheDSB meeting on27March 1996, therepresentative oftheEuropean Communities drew
attention totheunilateral measures taken bytheUnited States under Presidential Proclamation No5759
of24December 1987, inretaliation fortheCommunities 'directive prohibiting theuseofhormones
anditsbanonimports ofbeef from cattle raised with theuseofhormones.
Therepresentatives ofJapan andCanada spoke.
TheDSB took note ofthestatements.
(iv) Measures affecting imports ofwomen 'sand girls'wool coats
(WT/DSB/M/13,14)
Atitsmeeting on27March 1996, theDSB considered arequest byIndia fortheestablishment
ofapanel toexamine itscomplaint regarding theUnited States 'measures affecting imports ofwomen 's
andgirls'wool coats from India (WT/DS32/1).
Therepresentatives ofIndia andtheUnited States spoke.
TheDSB took note ofthestatements andagreed toconvene ameeting on17April inorder
torevert tothismatter.
Atitsmeeting on17April 1996, theDSB again considered thismatter.
Therepresentatives ofIndia andtheUnited States spoke.WT/DSB/8
Page 12
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
Therepresentatives ofCanada, Costa Rica, theEuropean Communities, Norway, Pakistan and
Turkey reserved their third-party rights toparticipate inthepanel proceedings.4
(v) Measures affecting imports ofwoven wool shirts and blouses
(WT/DSB/M/13,14)
Atitsmeeting on27March 1996, theDSB considered arequest byIndia fortheestablishment
ofapanel toexamine itscomplaint regarding theUnited States 'measures affecting imports ofwoven
wool shirts andblouses from India (WT/DS33/1).
Therepresentatives ofIndia andtheUnited States spoke.
TheDSB took note ofthestatements andagreed toconvene ameeting on17April inorder
torevert tothismatter.
Atitsmeeting on17April 1996, theDSB again considered thismatter.
Therepresentatives ofIndia, theUnited States, Norway, theEuropean Communities, Canada
andPakistan spoke.
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
TherepresentativesofCanada,theEuropeanCommunities,Norway,PakistanandTurkeyreserved
their third-party rights toparticipate inthepanel proceedings.
(vi) Restrictions onimports ofcotton and man-made fibre underwear
(WT/DSB/M/10, 11,12)
AttheDSB meeting on31January 1996, therepresentative ofCosta Rica informed Members
thathisauthorities hadrequested consultations with theUnited States under Article 4oftheDSU,
Article XXIII oftheGATT 1994, andthecorresponding provisions oftheAgreement onTextiles and
Clothing with regard totheintroduction andimplementation ofquantitative restrictions onimports of
cotton andman-made fibre underwear (WT/DS24/1 andCorr.1).
Therepresentatives ofIndia andHong Kong spoke.
TheDSB took note ofthestatements.
AttheDSB meeting on21February 1996, therepresentative ofCosta Rica requested thata
meeting oftheDSB beconvened within thenext 15days inorder toconsider Costa Rica'srequest
fortheestablishment ofapanel onthismatter.
TheDSB took note ofthestatement.
4Initscommunication dated 25April 1996 andcirculated inWT/DS32/2, India informed theDSB thatits
Government haddecided toterminate thepanel proceedings withregard tothisdispute.WT/DSB/8
Page 13
Atitsmeeting on5March 1996, theDSB considered arequest byCosta Rica forthe
establishment ofapanel onthismatter (WT/DS24/2).
Therepresentatives ofCosta Rica andtheUnited States spoke.
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.5
(vii) Standardsforreformulatedandconventionalgasoline(WT/DSB/M/11,17,19,20)
On10April 1995, theDSB hadestablished apanel toexamine thismatter attherequest of
Venezuela. On31May 1995, theDSB hadestablished apanel toexamine thismatter attherequest
ofBrazil. Atthatmeeting, pursuant toArticle 9oftheDSU inrespect ofmultiple complainants the
DSB haddecided, with theagreement ofallparties, thatthismatter beexamined bythepanel already
established attherequest ofVenezuela.
Atitsmeeting on21February 1996, theDSB considered thepanel report onthecomplaints
byVenezuela andBrazil contained inWT/DS2/R. Mr.Harbinson (Hong Kong), onbehalf ofMr.Wong,
Chairman ofthePanel, introduced thepanel report.
Therepresentatives ofVenezuela, theUnited States andBrazil spoke.
TheDSB took note ofthestatements andoftheUnited States 'decision toappeal thepanel
report inDS2/R.
Atitsmeeting on20May1996, theDSB considered theAppellate Body report inWT/DS2/AB/R
andthePanel report inWT/DS2/R pertaining tothecomplaints byVenezuela andBrazil.
Therepresentatives ofVenezuela, Brazil, theUnited States, theEuropean Communities and
Japan spoke.
TheDSB took note ofthestatements, adopted theAppellate Body report inWT/DS2/AB/R
andthePanel report inWT/DS2/R asmodified bytheAppellate Body report, andagreed thatin
accordance with theprocedures adopted bytheGATT 1947 Council inMay 1988 (BISD 35S/331),
both reports bederestricted.
AttheDSB meeting on19June 1996, theUnited States informed theDSB ofitsintentions
inrespect ofimplementation oftherecommendations oftheDSB atitsmeeting of20May (WT/DS2/9).
Therepresentatives ofVenezuela, Brazil andNorway spoke.
TheDSB took note ofthestatements andoftheinformation provided bytheUnited States
regarding itsintentions toimplement therecommendations oftheDSB.
AttheDSB meeting on5July1996, therepresentative ofVenezuela informed Members that
parties tothedispute haddecided toextend the45-day period stipulated inArticle 21.3 oftheDSU
with aview ofreaching amutually agreed time-period fortheimplementation oftheDSB
recommendations.
5After themeeting India reserved itsthird-party rights.WT/DSB/8
Page 14
Therepresentative ofBrazil spoke.
TheDSB took note ofthestatements.
(viii) Tariff increases onproducts from theEuropean Communities (WT/DSB/M/19,
20,21)
AttheDSB meeting on19June 1996, therepresentative oftheEuropean Communities requested
aspecial meeting oftheDSB inorder toconsider theCommunities 'request fortheestablishment of
apanel regarding tariff increases bytheUnited States oncertain export products from theEuropean
Communities (WT/DS39/2).
TheDSB took note oftherequest.
Atitsmeeting on5July 1996, theDSB considered arequest bytheEuropean Communities
fortheestablishment ofapanel toexamine their complaint regarding tariff increases bytheUnited
States oncertain export products from theEuropean Communities.
Therepresentatives oftheEuropean Communities andtheUnited States spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext meeting.
AttheDSB meeting on15and16July 1996, theDSB again considered thismatter.
Therepresentatives oftheEuropean Communities andUnited States spoke.
TheDSB took note ofthestatements.
(ix) TheCuban Liberty andDemocratic Solidarity Act(WT/DSB/M/24)
Atitsmeeting on16October 1996, theDSB considered arequest bytheEuropean Communities
andtheir Member States fortheestablishment ofapanel toexamine their complaint regarding theUnited
States 'legislation: i.e.,theCuban Liberty andDemocratic Solidarity Act(WT/DS38/2 andCorr.1).
Therepresentatives ofAustralia, Bolivia, onbehalf ofmembers ofthe"Rio Group"6,Canada,
Cuba, Mexico, India andSwitzerland spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext regular
meeting.
6Argentina,Bolivia,Brazil,Chile,Colombia,CostaRica,Ecuador,Mexico,Panama, Paraguay,Peru,Trinidad
andTobago, Uruguay andVenezuela.WT/DSB/8
Page 15
9. USdraft billconcerning thedefinition of"domestic industry" inthearea ofsafeguards
(WT/DSB/M/16)
AttheDSB meeting on8May 1996, therepresentative ofMexico expressed hisdelegation 's
concerns regarding thedraft billtobesubmitted forapproval bytheUSSenate under which thedefinition
of"domestic industry" contained intheUSlegislation onsafeguards would beredefined.
Therepresentatives ofCanada, Argentina, Australia, Brazil, Chile, Costa Rica, Dominican
Republic, Egypt, ElSalvador, Guatemala, Honduras, New Zealand, Nicaragua, Norway, Peru, the
Philippines onbehalf ofASEAN countries, andUruguay spoke.
TheDSB took note ofthestatements.
10. ReportonprogressofpreparatoryworkfortheSingaporeMinisterialConference(WT/DSB/M/21)
AttheDSB meeting on15and16July1996, theChairman announced thatatthemeeting of
theGeneral Council scheduled for18Julyhewould present anoralreport ontheactivities oftheDSB
inimplementing theprovisions oftheDSU.
TheDSB took note oftheinformation.
11. DSB report tothe General Council for the Singapore Ministerial Conference
(WT/DSB/M/20,22,24)
AttheDSB meeting on5July 1996, theChairman proposed thattheDSB submit itsannual
report forconsideration bytheGeneral Council atitsmeeting on7November 1996.
TheDSB took note ofthestatement.
AttheDSB meeting on27September 1996, theChairman drew totheattention ofMembers
thatcertain aspects concerning theDSB'sactivities referred toinhisstatement made attheGeneral
Council meeting on18July1996, would beincluded intheannual report oftheDSB tobesubmitted
forapproval bytheDSB atitsmeeting on16October 1996.
Therepresentatives ofJamaica, Mexico andNorway spoke.
TheDSB took note ofthestatements.
AttheDSB meeting on16October 1996, theChairman sumbitted foradoption adraft text
ofthe1996 Annual Report oftheDSB contained inWT/DSB/W/37. Heproposed thatfollowing its
adoption, theSecretariat beauthorized toupdate theAnnual Report under itsown responsitility. He
alsoproposed thatanannex beattached totheAnnual Report containing anoverview ofthestate of
play ofWTO disputes prepared bytheSecretariat.
Therepresentatives ofCanada, theUnited States, theEuropean Communities, India, Korea,
Norway, Hong Kong andtheChairman spoke.WT/DSB/8
Page 16
TheDSBtooknoteofthestatementsandadoptedtheAnnualReportcontainedinWT/DSB/W/37
ontheunderstanding thatdrafting amendments proposed byMembers with regard tothe"Summary
conclusions" beincluded inthetextandcirculated together with anannex asproposed bytheChairman.
Ifnecessary, informal consultations would beheld onthismatter. TheDSB authorized theSecretariat
toupdate theAnnual Report under itsown responsibility asproposed bytheChairman.
12. Summary conclusions
TheDispute Settlement Body (DSB) hasbeen inoperation forjustunder twoyears. Thepurpose
ofthissection istohighlight certain aspects ofthedispute settlement process during thisperiod.
Since January 1995, 42distinct matters have been raised intheDSB under theprovisions of
theDSU.7Dispute settlement panels have been established inrespect of12different matters, three
ofwhich were ultimately settled without panel decisions being issued. Ofthenine remaining matters,
three panel reports have been circulated,8twoofwhich were appealed totheAppellate Body (asat
18October 1996). TheAppellate Body hasissued reports intwocases. Although ineach case the
Appellate Body upheld thepanel 'srecommendations, itmodified thepanel 'slegal reasoning. The
remaining sixpanels areexpected toissue their reports induecourse.
Anumber ofobservations could bemade after theDSB'sexperience in1995 and1996. First,
thenumber ofmatters referred totheDSB isconsiderably greater than wasthenumber under GATT
duringsimilarperiods.Themajortradingnationshavebeenthemainparticipantsinthedisputesettlement
system, both ascomplaining andresponding Members. There hasbeen anevident tendency touse
theDSU insettling trade disputes inaccordance withtheaimofArticle 23oftheDSU on"Strengthening
oftheMultilateral System". Afurther noteworthy development istheincreased useofthesystem by
developing country Members.
Second, there have been asignificant number ofsettlements reached under theDSU. Inseven
ofthe42matters referred toit,theDSB hasbeen formally notified ofsettlements. Inaddition, inseven
other matters theDSB hasnotreceived arequest fortheestablishment ofapanel, even though more
than sixmonths haselapsed since theinitial request forconsultations. This record suggests thatthe
DSU isfulfilling itsfunction ofpermitting, wherever possible, Members toresolve disputes quickly,
without resort totheformal panel procedures.
Third, theexperience oftheDSB todateshows thatthere isincreased transparency intheWTO
dispute settlement system. Asaresult oftheimplementation oftheGeneral Council 'sDecision of18
July1996 onderestriction ofdocuments, alldocuments circulated under theauspices oftheDSB are
now available asunrestricted documents oraresubject toexpeditious consideration forderestriction.
Furthermore, theDSU provides that"mutually agreed solutions tomatters formally raised under the
consultation anddispute settlement provisions ofthecovered agreements shall benotified totheDSB
andtherelevant Councils andCommittees." TheChairman oftheDSB hasdrawn theattention of
Members tothese provisions.
7There haveactually been58formal requests forconsultations under theDSU andtwomatters brought before
theDSB pursuant totheAgreement onTextiles andClothing (ATC), which doesnotrequire consultations in
theDSU, butrather allows parties torequest theestablishment ofapanel following completion ofconsultation
andother procedures under theATC.
8Twoadditional short panel reports were circulated informing Members thatmutually agreed solutions have
been reached between theparties tothedisputes.WT/DSB/8
Page 17
Asthebody dealing with disputes intheWTO, theDSB, inaccordance with theprovisions
laiddown intheDSU, hasheldmeetings asoften asnecessary inorder tocarry outitsfunctions. Since
January 1995, theDSB hasheld 22meetings. There were twonon-scheduled meetings held in1995
andsince January 1996, fivesuch meetings have been held.
AmongitsfunctionstheDSBadministerstheindicativelistofgovernmentalandnon-governmental
panelists having expertise indifferent fields. This listwhich, asof18October 1996 contained 189
names, hasassisted Members toobtain high-level expertise indifferent panels.
Following thetradition ofGATT, theDSB hasworked inaspirit ofpragmatism andfacilitated
theobtention ofmutually acceptable solutions totrade disputes. Thedispute settlement system ofthe
WTO hashowever moved beyond theGATT dispute settlement procedures through theprogressive
development ofpastpractices inGATT which arenow enshrined intheDSU. TheDSU therefore
provides Members with both thepossibility ofreaching mutually satisfactory solutions totheir disputes
consistently with theWTO Agreement andwith thecertainty ofalegal solution ofsuch disputes, when
necessary.
Itmay therefore beconcluded thattheroleoftheDSB inmanaging thesettlement ofdisputes
within thenew multilateral trading system under theWTO hasbeen positive. TheDSU, under the
managementoftheDSB,iscontributingtogreatersecurityandpredictabilityinrelationsamongstpartners
intheopenmultilateraltradingsystem.Certainproblemsintheoveralloperationofthedisputesettlement
system have been identified andinmost cases, working practices have been developed tosolve these
problems inapragmatic manner. Further experience intheoperation ofthesystem isnevertheless
required before itcanbefully evaluated. Inthisrespect, theDecision byMinisters toreview theoperation
ofthesystem within four years after itsentry intoforce willprovide anopportunity for such an
evaluation andfortheintroduction ofimprovements inthesystem ifnecessary.
Itcanfinally bestated thattheeffective operation ofthedispute settlement system during the
firsttwoyearsofitsexistencehasfosteredgreatercooperationamongstMembers,reflectingtheirgrowing
trust inthemultilateral system, andthuscontributing towards thestrengthening andtheconsolidation
oftheWTO andtheopen multilateral trading system.WT/DSB/8
Page 18
ANNEX
OVERVIEW OFTHE STATE OFPLAY OFWTO DISPUTES
AttheDSBmeeting on16October 1996, theSecretariat wasrequested toprovide anoverview
ofthestateofplayofdisputes under thedispute settlement system intheWTO. Theattached overview,
which reflects thestateofplayofWTO disputes from1January 1995 to18October 1996, hasbeen
prepared bytheSecretariat under itsownresponsibility. Section Ioftheoverview indicates thestate
ofplayofdisputes untilthestage oftheestablishment ofpanels. Section IIindicates thestateofplay
ofdisputes from theestablishment ofpanels untilthestage ofadoption ofAppellate Body reports.WT/DSB/8
Page19SECTION I
Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
1. Malaysia -Prohibition ofImports
ofPolyethylene andPolypropylene13.01.95
Singapore
WT/DS1/110.01.95 11.03.95 17.03.95
Singapore
WT/DS1/2
withdrawal of
request on
19.07.95
WT/DSB/M/6
2. United States -Standards for
Reformulated andConventional
Gasoline02.02.95
Venezuela
WT/DS2/124.01.95 25.03.95 27.03.95
Venezuela
WT/DS2/210.04.95
WT/DSB/M/3
3. Korea -Measures Concerning the
Testing andInspection of
Agricultural Products06.04.95
United States
WT/DS3/104.04.95 03.06.95 09.06.95
Japan
WT/DS3/2
4. United States -Standards for
Reformulated andConventional
Gasoline12.04.95
Brazil
WT/DS4/110.04.95 09.06.95 22.05.95
Brazil
WT/DS4/231.05.95
WT/DSB/M/5WT/DSB/8
Page20Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
5. Korea -Measures Concerning the
Shelf-Life ofProducts05.05.95
United States
WT/DS5/103.05.95 02.07.95 24.05.95
Canada
WT/DS5/2
09.06.95
Japan
WT/DS5/431.07.95
WT/DS5/5 &
Corr.1
24.11.95
Add.1
22.04.96
Add.1/Rev.1
22.04.96
Add.2
22.04.96
Add.3
19.07.96
Add.4
20.09.96
Add.5
6. United States -Imposition of
Import Duties onAutomobiles
from Japan under Sections 301and
304oftheTrade Actof197422.05.95
Japan
WT/DS6/117.05.95 16.07.95 02.06.95
EC
WT/DS6/2
12.06.95
Australia
WT/DS6/319.07.95
WT/DSB/M/6
7. EC-Trade Description ofScallops 24.05.95
Canada
WT/DS7/119.05.95 18.07.95 09.06.95
Chile
WT/DS7/2
09.06.95
Iceland
WT/DS7/3
09.06.96
Japan
WT/DS7/4
12.06.95
Peru
WT/DS7/519.07.96
WT/DS7/1210.07.95
Canada
WT/DS7/7 &
Corr.119.07.95
WT/DSB/M/6WT/DSB/8
Page21Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
8. Japan -Taxes onAlcoholic
Beverages29.06.95
EC
WT/DS8/121.06.95 20.08.95 17.07.95
United States
WT/DS8/2
17.07.95
Canada
WT/DS8/315.09.95
EC
WT/DS8/527.09.95
WT/DSB/M/7
9. EC-Duties onImports ofCereals 10.07.95
Canada
WT/DS9/130.06.95 29.08.95 15.09.95
Canada
WT/DS/9/211.10.95
WT/DSB/M/8
10. Japan -Taxes onAlcoholic
Beverages17.07.95
Canada
WT/DS10/107.07.95 05.09.95 21.07.95
United States
WT/DS10/2
27.07.95
EC
WT/DS10/315.09.95
Canada
WT/DS10/527.09.95
WT/DSB/M/7
11. Japan -Taxes onAlcoholic
Beverages17.07.95
United States
WT/DS11/107.07.95 05.09.95 15.09.95
USA
WT/DS11/2 &
Corr.127.09.95
WT/DSB/M/7
12. EC-Trade Description ofScallops 25.07.95
Peru
WT/DS12/118.07.95 15.09.95 09.08.95
Canada
WT/DS12/3
11.08.95
Chile
WT/DS12/2 &
Rev.1
17.08.95
Japan
WT/DS12/519.07.96
WT/DS12/1215.09.95
Peru
WT/DS12/6
22.09.95
Peru
WT/DS12/711.10.95
WT/DSB/M/8
13. EC-Duties onImports ofGrains 26.07.95
United States
WT/DS13/119.07.95 17.09.95 29.09.95
United States
WT/DS13/2WT/DSB/8
Page22Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
14. EC-Trade Description ofScallops 31.07.95
Chile
WT/DS14/124.07.95 22.09.95 07.08.95
Canada
WT/DS14/2
11.08.95
Peru
WT/DS14/3
17.08.95
Japan
WT/DS14/419.07.96
WT/DS14/1115.09.95
Chile
WT/DS14/5
27.09.95
Chile
WT/DS14/611.10.95
WT/DSB/M/8
15. Japan -Measures Affecting the
Purchase ofTelecommunications
Equipment24.08.95
EC
WT/DS15/118.08.95 17.10.95 31.08.95
United States
WT/DS15/2
16. EC-Régime fortheImportation,
SaleandDistribution ofBananas04.10.95
Guatemala
Honduras
Mexico
United States
WT/DS16/128.09.95 26.11.95 13.10.95
St.Lucia
WT/DS16/2
20.10.95
Colombia
WT/DS16/3
24.10.95
Dominican Rep
WT/DS16/4
25.10.95
Venezuela
WT/DS16/5
20.10.95
Nicaragua
WT/DS16/6
30.10.95
Costa Rica
WT/DS16/7
17. EC-Duties onImports ofRice 11.10.95
Thailand
WT/DS17/105.10.95 04.12.95WT/DSB/8
Page23Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
18. Australia -Measures Affecting
Importation ofSalmon11.10.95
Canada
WT/DS18/105.10.95 04.12.95
19. Poland -Import Régime for
Automobiles18.10.95
India
WT/DS19/128.09.95 27.11.95 11.09.96
WT/DS19/2
20. Korea -Measures Concerning
Bottled Water22.11.95
Canada
WT/DS20/108.11.95 08.01.96 30.11.95
United States
WT/DS20/2
14.12.95
EC
WT/DS20/46.05.96
WT/DS20/6
21. Australia -Measures Affecting the
Importation ofSalmonids23.11.95
United States
WT/DS21/120.11.95 19.01.96 13.12.95
Canada
WT/DS21/2
22. Brazil -Measures Affecting
Desiccated Coconut20.12.95
Philippines
WT/DS22/1
10.01.96
Rev.130.11.96 29.01.96 08.02.96
Philippines
WT/DS22/505.03.96
WT/DSB/M/12
23. Venezuela -Anti-Dumping
Investigation inRespect ofImports
ofCertain OilCountry Tubular
Goods (OCTG )4.01.96
Mexico
WT/DS23/15.12.95 3.02.96
24. United States -Restriction on
Imports ofCotton andMan-Made
Fibre Underwear15.01.96
Costa Rica
WT/DS24/1
23.01.96
Corr.122.12.95 20.02.96 27.02.96
Costa Rica
WT/DS24/205.03.96
WT/DSB/M/12WT/DSB/8
Page24Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
25. EC-Implementation ofthe
Uruguay Round Commitments
Concerning Rice19.01.96
Uruguay
WT/DS25/1
19.10.96
Corr.114.12.95 12.2.96
26. EC-Measures Concerning Meat
andMeat Products (Hormones)31.01.96
United States
WT/DS26/126.1.96 26.3.96 8.02.96
New Zealand
WT/DS26/2
9.02.96
Australia
WT/DS26/3
13.02.96
Canada
WT/DS26/425.04.96
United States
WT/DS26/620.05.96
WT/DSB/M/17
27. EC-Régime fortheImportation,
SaleandDistribution ofBananas13.02.96
Ecuador
Guatemala
Honduras
Mexico
United States
WT/DS27/105.02.96 05.04.96 28.02.96
Dominican
Republic
WT/DS27/2
28.02.96
St.Lucia
WT/DS27/3
28.02.96
Nicaragua
WT/DS27/4
01.03.96
Jamaica
WT/DS/27/512.04.06
Ecuador,
Guatemala,
Honduras,
Mexico,
United States
WT/DS27/608.05.96
WT/DSB/M/16
28. Japan -Measures Concerning
Sound Recordings14.02.96
United States
WT/DS28/109.02.96 09.04.96 28.02.96
EC
WT/DS28/2WT/DSB/8
Page25Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
29. Turkey -Restrictions onImports
ofTextile andClothing Products15.02.96
Hong Kong
WT/DS29/112.02.96 12.04.96 01.03.96
EC
WT/DS29/2
28.02.06
Malaysia
Philippines
Thailand
WT/DS29/3
28.02.96
Peru
WT/DS29/4
29.02.96
India
WT/DS29/5
01.03.96
Brazil
WT/DS29/7
01.03.96
Canada
WT/DS29/8
30. Brazil -Countervailing Duties on
Imports ofDesiccated Coconut and
Coconut Milk Powder from Sri
Lanka05.03.96
SriLanka
WT/DS30/123.02.96 23.04.96
31. Canada -Certain Measures
Concerning Periodicals14.03.96
United States
WT/DS31/111.03.96 10.05.96 24.05.96
United States
WT/DS31/219.06.96
WT/DSB/M/19
32. United States -Measures Affecting
Imports ofWomen 'sandGirls'
Wool Coats30.04.96
WT/DS32/215.03.96
India
WT/DS32/117.04.96
WT/DSB/M/14WT/DSB/8
Page26Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
33. United States -Measures Affecting
Imports ofWoven Wool Shirts and
Blouses15.03.96
India
WT/DS33/117.04.96
WT/DSB/M/14
34. Turkey -Restrictions onImports
ofTextile andClothing Products25.3.96
India
WT/DS34/121.03.96 20.05.96
35. Hungary -Export Subsidies in
Respect ofAgricultural Products02.04.96
Argentina
Australia
Canada
New Zealand
Thailand
United States
WT/DS35/127.3.96 26.5.96 12.04.96
Japan
WT/DS35/2
36. Pakistan -Patent Protection for
Pharmaceutical andAgricultural
Chemical Products06.05.96
United States
WT/DS36/130.04.96 29.06.96 28.05.96
EC
WT/DS36/24.07.96
US
WT/DS36/3
37. Portugal -Patent Protection under
theIndustrial Property Act06.05.96
United States
WT/DS37/130.04.96 29.06.96 8.10.96
WT/DS37/2
15.10.96
Corr.1
38. United States -TheCuban Liberty
andDemocratic Solidarity Act13.05.96
EC
WT/DS38/13.05.96 2.07.96 8.10.96
WT/DS38/2
14.10.96
andCorr.1
39. United States -Tariff Increases on
Products from theEuropean
Communities29.05.96
EC
WT/DS39/118.04.96 17.06.96 24.6.96
EC
WT/DS39/2WT/DSB/8
Page27Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
40. Korea -Laws, Regulations and
Practices inthe
Telecommunications Procurement
Sector20.05.96
EC
WT/DS40/19.05.96 8.07.96
41. Korea -Measures Concerning
Inspection ofAgricultural Products31.05.96
US
WT/DS41/124.05.96 23.07.96
42. Japan -Measures Concerning
Sound Recordings04.06.96
EC
WT/DS42/128.05.96 27.07.96 11.06.96
US
WT/DS42/2
43. Turkey -Taxation ofForeign Film
Revenues17.06.96
US
WT/DS43/112.06.96 11.08.96
44. Japan -Measures Affecting
Consumer Photographic Film and
Paper21.06.96
US
WT/DS44/113.06.96 12.08.96 20.09.96
US
WT/DS44/216.10.96
WT/DSB/M/24
45. Japan -Measures Affecting
Distribution Services20.06.96
US
WT/DS45/1
24.09.94
US
WT/DS45/1/
Add.113.06.96
20.09.9412.08.96
46. Brazil -Export Financing
Programme forAircraft21.06.96
Canada
WT/DS46/119.06.96 18.08.96 17.09.96
Canada
WT/DS46/2
4.10.96
WT/DS46/4WT/DSB/8
Page28Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
47. Turkey -Restrictions onImports
ofTextile andClothing Products26.06.96
Thailand
WT/DS47/120.06.96 19.08.96
48. European Communities -Measures
Affecting Livestock andMeat
(Hormones)08.07.96
Canada
WT/DS48/128.06.96 27.08.96 22.07.96
Australia
WT/DS48/2
23.07.96
US
WT/DS48/3
23.07.96
New Zealand
WT/DS48/417.09.96
Canada
WT/DS48/516.10.06
WT/DSB/M/24
49. United States -Anti-Dumping
Investigation Regarding Imports of
Fresh orChilled Tomatoes from
Mexico08.07.96
Mexico
WT/DS49/101.07.96 30.08.96
50. India -Patent Protection for
Pharmaceutical andAgricultural
Chemical Products09.07.96
US
WT/DS50/102.07.96 31.08.96 22.07.96
EC
WT/DS50/2
51. Brazil -Certain Automotive
Investment Measures06.08.96
Japan
WT/DS51/130.07.96 28.09.96 13.08.96
Korea
WT/DS51/2
15.08.96
EC
WT/DS51/3
15.08.96
United States
WT/DS51/4
19.08.96
Canada
WT/DS51/6WT/DSB/8
Page29Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
52. Brazil -Certain Measures
Affecting Trade andInvestment in
theAutomotive Sector14.08.96
US
WT/DS52/109.08.96 08.10.96 19.08.96
Canada
WT/DS52/2
19.08.96
Japan
WT/DS52/3
28.08.96
Korea
WT/DS52/4
02.09.96
EC
WT/DS52/5
53. Mexico -Customs Valuation of
Imports9.09.96
EC
WT/DS53/127.08.96 26.10.96 18.09.96
Norway
WT/DS53/2
30.09.96
Switzerland
WT/DS53/3
54. Indonesia- Certain Measures
Affecting theAutomobile Industry14.10.96
EC
WT/DS54/13.10.96 2.12.96 18.10.96
United States
WT/DS54/2
..
Japan
WT/DS54/3
..
Korea
WT/DS54/4
55. Indonesia -Certain Measures
Affecting theAutomobile Industry10.10.96
Japan
WT/DS55/14.10.96 3.12.96 18.10.96
United States
WT/DS55/2
..
EC
WT/DS55/3WT/DSB/8
Page30Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
56. Argentina -Measures Affecting
Imports ofFootwear, Textiles,
Apparel andOther Items15.10.96
United States
WT/DS56/14.10.96 3.12.96 ..
Hungary
WT/DS56/2
57. Australia -Textile, Clothing and
Footwear Import Credit Scheme09.10.96
United States
WT/DS57/17.10.96 6.11.96
58. United States -Import Prohibition
ofCertain Shrimp andShrimp
Products14.10.96
India, Malaysia,
Pakistan and
Thailand
WT/DS58/18.10.96 7.12.96
59. Indonesia -Certain Measures
Affecting theAutomobile Industry15.10.96
United States
WT/DS59/18.10.96 7.12.96 ..
Japan
WT/DS59/2
60. Guatemala -Anti-Dumping
Investigation Regarding Imports of
Portland Cement from Mexico24.10.96
Mexico
WT/DS60/115.10.96 14.12.96WT/DSB/8
Page31SECTION II
Title Panel
EstablishedPanel Report
CirculatedExpiration
of20-Day
PeriodExpiration
of60-Day
PeriodNotice of
AppealPanel Report
AdoptedAppellate Report
CirculatedExpiration of
30-Day PeriodAppellate
Report
Adopted
1.United States -
Standards for
Reformulated and
Conventional
Gasoline10.04.95
Venezuela
WT/DS2
31.05.95
Brazil
WT/DS429.01.96
WT/DS2/R18.02.96 29.03.96 21.02.96
United
States
WT/DS2/620.05.96
WT/DS2/929.04.96
WT/DS2/AB/R29.05.96 20.05.96
WT/DS2/9
2.Japan -Taxes on
Alcoholic
Beverages27.09.95
EC
WT/DS8
Canada
WT/DS10
US
WT/DS1111.07.96
WT/DS8/R
WT/DS10/R
WT/DS11/R31.07.96 09.09.96 08.08.96
Japan
WT/DS8/9
WT/DS10/9
WT/DS11/64.10.96
WT/DS8/AB/R
WT/DS10/AB/R
WT/DS11/AB/R3.11.96
3.EC-Trade
Description of
Scallops19.07.95
Canada
WT/DS705.08.96
WT/DS7/R
4.EC-Trade
Description of
Scallops11.10.95
Peru
WT/DS12
Chile
WT/DS1405.08.95
WT/DS12/R
WT/DS14/R
5.Brazil -Measures
Affecting
Desiccated Coconut05.03.96
Philippines
WT/DS2217.10.96
WT/DS22/R06.11.96 16.12.96SECTION III
REPORT OFTHE TRADE POLICY REVIEW BODYWORLD TRADE WT/TPR/27
28October 1996
ORGANIZATION(96-4484)
Trade Policy Review Body
TRADE POLICY REVIEW MECHANISM
REPORT TOTHE SINGAPORE MINISTERIAL CONFERENCE
1. TheTrade Policy Review Mechanism wasestablished in1989, onaprovisional basis, asan
early harvest oftheUruguay Round. Ithasthusbeeninexistence forseven years. TheMarrakesh
Agreement, which confirmed thestatus oftheMechanism, envisages anappraisal ofitsoperation at
thelatest in1999 ("not more thanfiveyears aftertheentry intoforce oftheAgreement Establishing
theWTO"). Members, however, havekepttheMechanism under constant review since itsinception
andanumber ofprocedural improvements havebeenintroduced inthepastfewyears.
2. Thisreport bytheTrade Policy Review Body provides aninterim assessment oftheextent
towhich theTPRM isfulfilling itsstated objectives, itsvalue toMembers, itscost-effectiveness and
thescope forfurther procedural improvements. AtableofTrade Policy Reviews todateisannexed.
Fulfilling itsObjectives
3. Inframing theirexpectations oftheTPRM, Members areguided bytheobjectives stated in
Annex 3totheMarrakesh Agreement:
"tocontribute toimproved adherence byallMembers torules, disciplines andcommitments
made under theMultilateral Trade Agreements and,where applicable, thePlurilateral Trade
Agreements, andhence tothesmoother functioning ofthemultilateral trading system, by
achieving greater transparency in,andunderstanding of,thetrade policies andpractices of
Members. Accordingly, thereview mechanism enables theregular collective appreciation and
evaluation ofthefullrange ofindividual Members 'tradepolicies andpractices andtheirimpact
onthefunctioning ofthemultilateral trading system. Itisnot,however, intended toserve
asabasis fortheenforcement ofspecific obligations under theAgreements orfordispute
settlement procedures, ortoimpose newpolicy commitments onMembers."
4. Measurement oftheTPRM 'scoverage todatedepends ontheyardstick used. The57members
reviewed sofar(anumber onseveral occasions) account for98percentofallMembers 'tradeingoods
andservices. TheTPRM spotlight hastherefore effectively focused onallthemajor players inthe
WTO trading system andhasilluminated themostsignificant trends. Byanother yardstick, however,
theoutcome islessreassuring: withWTO membership of108(counting theEuropean Communities
asoneentity) onlyjustoverhalfofMembers havebeenreviewed during theseven-year existence of
theMechanism. Thequestion ofcompleting thecoverage ofdeveloping countries istaken upin
paragraphs 12-14 below.
5. Thecontent andstyleofthereviews isobviously critical totheireffectiveness. There isgeneral
acceptance thatreviews should becomprehensive, rigorous andanalytical, andconducted atan
appropriately senior level. Byandlarge, experience todatesuggests thatthese criteria arebeing met.WT/TPR/27
Page2
While thescope forprocedural improvements isconstantly being assessed, theessential character of
thereviews hasnotbeenchallenged. Oneindicator ofthegeneral health oftheprocess isthelevel
andcomposition ofdelegations from Members under review: thishasimproved markedly since the
establishment oftheWTO, withamajority ofMembers reviewed during thepasttwoyears being led
atMinisterial ordeputy Ministerial level, andwithdelegations including substantial expertise from
capitals.
6. Attempting toensure thatthereviews arecomprehensive isnotwithout risk. Acriticism has
beenmade thattheprocess canfocus toomuch ondetail, atthecostofgiving insufficient attention
topolicy direction. However, theTPRM isenvisaged asareview ofpolicies andpractices: ofthe
implementation ofpolicy aswellasitsoverall direction. Itwillcontinue tobeamatter fortheSecretariat
initspreparationofdocumentation,andforMembersinthemanneroftheirparticipationinthemeetings,
toseektoachieve anappropriate balance between discussion ofpolicy direction andofdetails of
implementation.
Value toMembers
7. There isaclear value forWTO Members inhaving aforum where theycanopenly discuss
eachother'strade andtrade-related policies, elicit information andregister concerns. Thebenefits
forthecountry under review arealsosignificant: theTPRM canprovide avaluable input intonational
policymaking,servingasanindependent,objectiveassessmentoftradeandeconomicpolicies;Members
havealsocommented ontheextent towhich theexperience ofreview hashelped tostrengthen inter-
agency discussion andco-operation intheirowncountries. Thetrading system asawhole benefits
inthattheprocess cansometimes assist governments inpursuing desirable trade policy reforms; it
alsofrequently illuminates areas ofWTO obligations which mayhavereceived insufficient attention
todateandthushelps toensure thatthese areaddressed.
8. Thedualaspects ofself-analysis andexternal audit underpin theeffectiveness oftheTPRM
exercise forallMembers. Inpractice, specific features ofareview canassume aparticular importance
depending onthetradeandeconomic situation oftheMember under review. Thelarger trading entities
aregenerally notshort ofopportunities forpresentation oftheirtradepolicies; intheircase, themost
significant aspect ofthereview istheopportunity fortrading partners tocomment onthebasis ofan
independent WTO Secretariat analysis. Inmany cases, however, review meetings canprovide auseful
forum forgovernments toexplain thedevelopment ofpolicies; additionally, inthecaseofdeveloping
countries, theprocess canhelptoidentify particular technical assistance needs.
Costeffectiveness
9. TheTPRDivision intheSecretariat hasanannual staffbudget ofsome Sfr.4million (just
under 6percentofthetotal). Withastaffcomplement of27(17professionals) itaccounts foraround
10percentoftheprofessional staffoftheorganization, excluding translators, interpreters and
administration. Members alsodevote considerable timetothepreparation andservicing ofmeetings.
Therelationship between tasks andcapacity obviously requires careful balancing: issues ofTPRM
coverage, depth ofthepreparatory process, anddesirable follow-up work, havetobeapproached in
thelightoftheresources available. Thiswillneedevenmore careful attention asWTO membership
expands.
10. Thecontinuing challenge istoensure maximum effectiveness oftheresources used. Inthis
connection, anumber ofareas offer scope forfurther examination:WT/TPR/27
Page3
- Inreviewing across-section ofcountries eachyear, theTPRM inevitably shows up
wider patterns which areinfluencing policy approaches inindividual Members. Over
thepastfewyears, forexample, theoverriding common theme thathasemerged is
therapid pace ofchange, with asustained shift tomore market-oriented and
outward-looking trade andinvestment régimes, deriving inpartfrom autonomous
liberalization policies andinpartfromthestimulus provided bytheUruguay Round.
Interms ofenhancing theprocess, theAnnual Overview ofDevelopments inthe
InternationalTradingSystem,providedforinSectionGoftheAgreementontheTPRM,
maybeusedtodevelop amore structured approach thanhasexisted inthepastof
looking atthecomposite picture emerging fromindividual reviews andtoidentify wider
themes forconsideration byWTO members andcommittees.
- TheTPRM occupies aunique place within theWTO inpromoting non-confrontational
discussion ofkeytrade policy issues. Itsspecific delinkage from dispute settlement
procedures isanessential feature which must besafeguarded; however, further
opportunities might besought forencouraging greater cross-fertilization between TPRB
discussions andthose undertaken inother WTO bodies.
- Oneareawhich isreceiving particular attention isenhancing awareness oftheTPRM
outside theGeneva circle. While WTO member Governments ofcourse havethe
primary stake intheTPRM, thematerial produced isalsoofinterest inthebusiness
andacademic communities. Thelong-term health oftheprocess canonlybenefit from
widedissemination ofinformation about reviews. Aconsiderable amount ofmedia
briefing isalready done bytheSecretariat andtheChair, andboththeSummary
ObservationsbytheSecretariatandtheClosingRemarksbytheChairaremadeavailable
ontheWTO Internet home page. Further improvements suchasspeedier publication
ofreports (within onemonth tosixweeks ofTPRB meetings) andimproved useof
theInternet fordissemination andsaleoffullreports arecurrently under active
consideration bytheSecretariat forearly introduction.
Coverage ofDeveloping Countries
11. ThecoverageofdevelopingcountriesintheTPRMtodateincludesmostofthemajordeveloping
country Members oftheWTO, aswellasanumber ofsmaller countries thathavevolunteered tocome
under review. There arestill,however, over50developing country Members thatremain tobe
reviewed, including asignificant number ofAfrican andleastdeveloped countries.
12. Theinvolvement ofdeveloping countries intheTPRM isexamined insome detail inaNote
of12July1996, circulated toallWTO Members, from theChair oftheTPRM totheChair ofthe
Committee onTrade inDevelopment. Thesummary conclusion inthatNote was:
"Involvement intheTPRM isanimportant wayfordeveloping countries, particularly least
developed countries, todevelop confidence andexperience withtheWTO. Thisneeds tobe
borne inmind in(a)planning theTPRM timetable and(b)ensuring thattechnical assistance
isavailable tothoseLDCs whowould otherwise havedifficulty inpreparing forandundergoing
review.WithincreasedparticipationofdevelopingcountriesintheTPRM,itwillbeparticularly
important toensure thatlessons learned from these reviews arechannelled intotheWTO
machinery".
13. Inanefforttocompletethecoverageofdevelopingcountries,includingleastdevelopedcountries,
while taking account ofresource constraints, theSecretariat iscurrently exploring ways ofgroupingWT/TPR/27
Page4
reviews -forexample inthecaseofsome Southern African orCaribbean countries -while respecting
theindividual nature oftheTPRprocess. Thequestion ofcompleting thecoverage ofTPRs, particularly
tothesmaller developing andleast-developed countries, isonewhich willrequire particular attention
inthepreparation oftheTPRB timetable.
Procedural Improvements
14. Asnoted, therehasbeenafairly continuous process ofself-examination within theTPRB over
theyears, leading toanumber ofimprovements inprocedures. Afirstsetofmodifications was
introduced in1994(L/7458). More recent discussions havebeenreflected intwoNotes fromtheChair,
thefirstinDecember 1995(WT/TPR/13) andthesecond inJuly1996(WT/TPR/20). Theprocedural
issues addressed include preparatory documentation, choice ofdiscussants, levelofrepresentation at
meetings, Chairperson 'ssumming up,follow-up tomeetings. Insofarasthere hasbeenagreement
onprocedural adaptations, these havebeenorarebeing putintoeffect.
15. Oneconcern ofMembers istoensure that,asanexercise intransparency, theTPRB clearly
reflects theprogress made byMembers inimplementing theWTO Agreements. TheSecretariat is
therefore encouraged tocontinue providing, initsreports, systematic information onmeasures taken
byMembers under review inthecontext oftheAgreements, themechanisms bywhich these are
implemented, andnotifications made.
16. Asindicated inparagraph 5,sincetheentryintoforceoftheWTO, themajority oftheMembers
coming forreview havebeenrepresented atMinisterial orDeputy Ministerial level; inmost other
cases, theyhave been represented bysenior officials from thecapital. However, thislevel of
representation hasnotalways beenmatched bytheparticipation -either innumbers orlevel-byother
Members oftheTPRB. IftherôleoftheTPRM istobepreserved andstrengthened, itisimportant
boththatthere beasubstantial number ofdelegations present inTrade Policy Reviews andthatthese
delegations berepresented atappropriate level.
17. Ithasalsobeenstressed thatMembers oweittothehealth ofthesystem toobserve strictly
thedeadlines laiddown foranswering questionnaires anddelivering documentation; delays inthe
completion ofreviews bothaffect thereview process fortheMember concerned andslowdown the
programme ingeneral.
18. Oneofthemoresubstantiveissuesaddressedhasbeenthecycleofreviews.Whileonedelegation
hasproposed amodification toprovide forathree yearcycle formembers currently onatwo-year
review pattern, there hasbeennosupport from other members forsuchachange. However, ithas
been agreed that,inthecaseoftwo-year reviews, every second review might have an"interim"
character, although thisshould notdetract fromthecomprehensive nature ofreviews ofsuchmembers.
Conclusion
19. TheTPRM isaunique element intherange ofWTO activities. Itistheonlyfocus forpeer
review ofthefullrange oftrade policies andcanoften beofconsiderable assistance toMembers in
their domestic review andrevision ofpolicy. Inaddition, itisofsignificant value inproviding
authoritative, wellfounded analyses ofdevelopments intradepolicies andpractices. Given thebenefits
oftheprocess, Members whohavenotyetpresented themselves forreview arestrongly encouraged
todoso;those whowould feeltheneedoftechnical assistance inundergoing theprocess arereminded
ofthepossibilities inthisregard.WT/TPR/27
Page5
20. While Members aresatisfied withtheconsiderable progress made inimproving thefunctioning
oftheTPRM, theyarealsoconscious ofthehighlevelofSecretariat andnational resources involved
intheprocess, andanxious toensure thatthese resources continue tobeusedeffectively. Members
willtherefore continue toassess thecontent, coverage andresources usedinreviews totrytoensure
theneeds ofallWTO members aremet. They willalsoseektoenhance theimpact oftheMechanism
intheways outlined inthisreport, while ensuring thatitsdistinctive character ispreserved.
Trade policy reviews conducted under GATT 1947 andWTO provisions, 1989-1996
Europe/Middle East Asia/Pacific Africa America
Austria1aAustralia (2)aCameroonaArgentinaa
Czech RepublicbBangladeshaCôted'IvoirebBrazil (2)c
European
Communities (4)cHong Kong (2)aEgyptaBoliviaa
Finland1aIndiaaGhanaaCanada (4)c
HungaryaIndonesia (2)aKenyaaChilea
IcelandaJapan (3)aMauritiusbColombia (2)c
IsraelaKorea (2)cMorocco (2)cCosta Ricab
Norway (2)cMacauaNigeriaaDominican Republicb
PolandaMalaysiaaSenegalaElSalvadorb
RomaniaaNewZealand (2)cSouth AfricaaMexicoa
SlovakiabPakistanaTunisiaaPerua
Sweden1(2)aPhilippinesaUgandabUnited States (4)c
Switzerland (2)cSingapore (2)cZambiabUruguaya
TurkeyaSriLankabZimbabweaVenezuelab
Thailand (2)c
14 15 14 14
a Reviewed under theGATT.
b Reviewed under theWTO.
c Reviewed under theGATT andtheWTO.
1 Included inEUfrom 1995.SECTION IV
REPORT OFTHE COUN CILFOR TRADE INGOODSWORLD TRADE G/L/134
5November 1996
ORGANIZATION(96-4676)
Council forTrade inGoods
1November 1996
REPORT OFTHE COUNCIL FOR TRADE INGOODS
TOTHE GENERAL COUNCIL
Introduction
1. ThisreporthasbeenestablishedinaccordancewiththestatementbytheChairmanoftheGeneral
Council, atthemeeting on16April 1996, withregard to"Reporting Procedures fortheSingapore
Ministerial Conference". Itcovers theperiod from 1January to4November 1996;1itcomprises
aSection I:factual part,andaSection II:conclusions and/or recommendations. Thereport also
covers theactivities ofthesubsidiary bodies oftheCouncil forTrade inGoods (hereinafter referred
toas"theCouncil"), asoutlined under item19(a).
2. Incarrying outitstask,theCouncil hasheldeight regular meetings. Theminutes ofthese
meetings, which remain therecord oftheCouncil 'swork, arecontained indocuments G/C/M/8 to
3. Thefollowing subject matters which wereraised and/or acted uponintheCouncil areincluded
inthereport:
Page
SECTION I:FACTUAL PART
1. Observer status forInternational Intergovernmental Organizations 5
2. Election ofChairperson oftheCouncil forTrade inGoods 5
3. Appointment ofOfficers fortheCommittee onAgriculture, Committee on
Sanitary andPhytosanitary Measures, Working Party onState-Trading Enterprises,
Working Group onNotification Obligations andProcedures 5
4. Approval ofRules ofProcedure oftheCommittees onAgriculture,
Anti-dumping Practices, Safeguards, Subsidies andCountervailing Measures 6
5. Letter from theChairman oftheCommittee onTrade andDevelopment 6
6. Circulation andDerestriction ofCouncil Documents 6
7. Availability ofdocuments inSpanish 6
1Thereport oftheCouncil forTrade inGoods for1995 iscontained inSection IVofdocument WT/GC/W/25.G/L/134
Page 2
8. Committee onMarket Access 6
- Semi-annual report oftheCommittee
9. Agreement onSubsidies andCountervailing Measures 7
- State ofplayconcerning subsidy notifications -lackofcompliance
withsubsidy notification requirements under Article 25.2ofthe
Agreement onSubsidies andCountervailing Measures
10. Working Party onState Trading Enterprises 7
11. Customs Unions andFree-Trade Areas: regional agreements 7
(a) Customs Union between Turkey andtheEuropean Community 7
(b) Agreement between theGovernment ofDenmark andthe
Home Government oftheFaroe Islands, oftheonepart,
andtheGovernment ofIceland, oftheother part,
onfreetrade between theFaroe Islands andIceland 7
(c) Agreement between theSwiss Government, oftheonepart,
andtheGovernment ofDenmark andtheHome Government
oftheFaroe Islands, oftheother part,onfreetrade
between theFaroe Islands andSwitzerland 8
(d) Agreement between theGovernment ofNorway, ofthe
onepart,andtheGovernment ofDenmark andthe
Home Government oftheFaroe Islands, oftheother part,
onfreetrade between theFaroe Islands andNorway 8
(e) Agreements between theCzech Republic andBulgaria, and
theSlovak Republic andBulgaria 8
(f) Preferential tariff treatment forthecountries offormer Yugoslavia 8
(g) EFTA-Estonia, EFTA-Latvia, EFTA-Lithuania FreeTrade Agreements 8
(h) Enlargement oftheCentral European FreeTrade Agreement (CEFTA) 8
(i) Europe Agreements between theEuropean Communities andthe
Czech Republic, andtheEuropean Communities andtheSlovak Republic 9
(j) Free-Trade Agreement between theCzech Republic andRomania 9
(k) Free-Trade Agreement between theSlovak Republic andRomania 9
(l) FreeTrade Agreement between theEFTA States andEstonia 9
(m) FreeTrade Agreement between theEFTA States andLatvia 9
(n) FreeTrade Agreement between theEFTA States andLithuania 10
12. Waivers under Article IXoftheWTO Agreement 10
(a) Harmonized System -Requests forextensions ofwaivers
Bangladesh, Bolivia, Guatemala, Jamaica, Morocco,
Nicaragua, SriLanka 10
(b) Malawi -Renegotiation ofSchedule LVIII 10
(c) Senegal -Renegotiation ofSchedule XLIX 10
(d) Zambia -Renegotiation ofSchedule LXXVIII 10
(e) Decision ontheintroduction ofHarmonized System changes
intoWTO schedules oftariff concessions on1January 1996 11
(f) Waivers falling under paragraph 2oftheUnderstanding inRespect
ofWaivers ofObligations under GATT 1994 11
(i) Cuba -Paragraph 6ofArticle XVofGATT 1994 11
(ii) United States -Former Trust Territory ofthePacific Islands 11
(iii) United States -Imports ofAutomotive Products 11
(iv) United States -Andean Trade Preference Act 11G/L/134
Page 3
(v) Canada -CARIBCAN 12
(vi) European Communities 12
-European Communities -Fourth ACP-EEC Convention
ofLomé
-France -Trading Arrangements withMorocco
(vii) South Africa -BaseDates under Article I:4 12
(viii) Zimbabwe -BaseDates under Article I:4 12
13. Issues raised concerning Members 'trade practices 12
(a) Brazilian Measure concerning theautomotive sector 12
(b) USdraftbillconcerning thedefinition of"domestic industry" inthearea
ofsafeguards 13
(c) US-"Cuban Liberty andDemocratic Solidarity Actof1996" 13
(d) Banonexports ofwild-harvested shrimps totheUS 13
(e) USNarcotics Control Trade Act 13
(f) Impairment bytheEuropean Community ofTariff Treatment
ofHigh Technology Products 13
(g) Argentine footwear 13
(h) USrequest forConsultations concerning Restrictive Business Practices
intheJapanese Photographic FilmandPaper Market 14
(i) ECproposal on"Trade Facilitation" 14
14. Agreement onPreshipment Inspection 14
(a) Commencement ofOperations oftheIndependent Review Entity 14
(b) Review under Article 6ofthePreshipment Inspection Agreement 14
(c) Notifications 14
15. Working Group onNotification Obligations andProcedures 15
(a) Status ofwork intheWorking Group 15
(b) Report oftheWorking Group onNotification Obligations
andProcedures 15
16. Implementation oftheAgreement onTextiles andClothing (ATC) andrelated matters 16
- Issues andproblems 16
(i) Integration programmes 16
(ii) Useoftransitional safeguards 17
(iii) Bilaterally agreed arrangements 18
(iv) Functioning oftheTextiles Monitoring Body 18
(v) Treatment ofsmall suppliers andleastdeveloped countries 19
(vi) Particular interests ofcotton-producing countries 20
(vii) Rules oforigin 20
(viii) Other ATC issues (outward processing trade, special regimes, etc.) 20
(ix) Relationship between restrictions andregionalism 21
(x) Useoftrade measures fornon-trade purposes 21
(xi) Market access 21
(xii) Rules anddisciplines 22
(xiii) Circumvention 22
17. Textiles Monitoring Body (TMB) 23
- Report oftheTMB 23
A. Summary ofcomments made byWTO Members 23
B. Action taken bytheCouncil 26G/L/134
Page 4
18. Proposals andinitiatives forfurther trade liberalization 26
19. Singapore Ministerial Conference 27
(a) Report ofsubsidiary bodies oftheCouncil forTrade inGoods 27
(b) Report bytheCouncil forTrade inGoods totheMinisterial Conference 28
SECTION II:CONCLUSIONS AND/OR RECOMMENDATIONS
1. Agreement onPreshipment Inspection 29
2. Notification Obligations andProcedures 29G/L/134
Page 5
SECTION I:FACTUAL PART
1. Observer status forInternational Intergovernmental Organizations (G/C/M/8 to14)
1.1 Atitsmeeting of29January 1996, theCouncil agreed thatpending theadoption ofcriteria
andconditions forobserver status forinternational intergovernmental organizations intheWTO and
unless adelegation raised anobjection, those organizations invited tothecurrent meeting oftheCouncil
beinvited toitsnextmeeting onanad-hoc basis. Theorganizations concerned were: FAO, IMF, ITCB,
OECD, UN,UNCTAD, World Bank andtheWCO.
1.2 Atitsmeetings of14February 1996, 19March 1996, 22May1996and5July1996theCouncil
agreed toinvite thesame organizations onanad-hoc basis toitsnextrespective meeting.
1.3 Atthemeeting of25July1996, theChairman pointed outthatatitsmeeting of18July1996,
theGeneralCouncilhadapprovedthe"GuidelinesonObserverStatusforInternationalIntergovernmental
Organizations".InlightofthisdecisionheproposedtoholdinformalconsultationsonwhichInternational
Intergovernmental Organizations would begranted observer status intheGoods Council.
1.4 Atitsmeeting of19September 1996, theCouncil agreed thatpending theoutcome offurther
consultations, theorganizations which hadbeenfollowing theCouncil 'smeeting uptonowonanad-hoc
basis, could attend future meetings oftheCouncil onanad-hoc basis.
2. Election ofChairperson oftheCouncil (G/C/M/8)
2.1 Atitsmeeting of14February 1996, theCouncil unanimously elected Ambassador Narayanan,
asChairman oftheCouncil for1996.
3. Appointment ofOfficers fortheCommittee onAgriculture, Committee onSanitary and
Phytosanitary Measures, Working Party onState-Trading Enterprises, Working Group
onNotification Obligations andProcedures (G/C/M/8)
3.1 Atitsmeeting of14February 1996, theCouncil approved theappointments ofthefollowing
Chairpersons: Committee onAgriculture: Mr.D.Tulalamba (Thailand); Committee onSanitary
andPhytosantiary Measures: MrK.Bergholm (Finland); Working Group onNotification Obligations
andProcedures: Mr.AShoyer (United States); Working Party onStateTrading Enterprises: Mr.
P.May(Australia).
3.2 Atitsmeeting of14February 1996, theCouncil tooknoteoftheresults oftheconsultations
heldbytheChairman onChairpersons for1996fortheother subsidiary bodies asfollows: Committee
onTechnical Barriers toTrade: Ms. C.Guarda (Chile); Committee onMarket Access:
Mr.J.Saint-Jacques (Canada); Committee onCustoms Valuation: Mr.P.Palecka (Czech Republic);
Committee onImport Licensing: Mr.C.Mbegabolawe (Zimbabwe); Committee onRules ofOrigin:
Mr.Osakwe (Nigeria); Committee onAnti-Dumping Practices: Mr.O.Lundby (Norway); Committee
onSubsidies andCountervailing Measures: Mr.V.DoPrado (Brazil); Committee onSafeguards:
Mr.A.Buencamino (Philippines); Committee onTrade-Related Investment Measures: Mr.V.Notis
(Greece).
3.3 TheCouncil alsoagreed thatthequestion ofVice-Chairpersons should behandled atthelevel
oftheCommittees themselves through aprocess ofconsultations.G/L/134
Page 6
3.4 Anumber ofdelegations stated thatfuture consultations onChairpersons should beinitiated
asearly aspossible, theyshould bemore transparent, andtheprinciple ofrotation should betherule
wherever possible. Thepoint wasalsomade thatinthefuture thequestion oftheVice-Chiarmanship
should besettled inthecontext ofsuchconsultations.
4. ApprovalofRulesofProcedureoftheCommitteesonAgriculture,Anti-dumpingPractices,
Safeguards, Subsidies andCountervailing Measures (G/C/M/10)
4.1 Atitsmeeting of22May1996, theCouncil approved therulesofprocedure oftheCommittees
onAgriculture (G/AG/W/22), Anti-Dumping Practices (G/ADP/W/135/Rev.1), Safeguards
(G/SG/W/59/Rev.1) andSubsidies andCountervailing Measures (G/SCM/W/143/Rev.1).
5. Letter from theChairman oftheCommittee onTrade andDevelopment
(G/C/M/10 and13andCorr.1)
5.1 Atthemeeting of22May1996, theChairman informed theCouncil thattheChairman ofthe
Committee onTrade andDevelopment (CTD) hadsentaletter tohimrequesting information onthe
implementation ofdevelopment-related provisions inthose Uruguay Round Agreements dealtwithby
theCouncil. Thisinformation wasnecessary forthereview tobeconducted bytheCTD. Hehadsent
aletter tothechairpersons ofthevarious subsidiary bodies ofthisCouncil requesting them togive
himinformation onthework doneinthisarea. After receipt ofthisinformation, hewould takefurther
action onthebasis oftheinformation provided.
5.2 Atthemeeting of19September 1996, theChairman informed theCouncil thattheresponses
totheletter hehadsenttotheChairpersons ofthesubsidiary bodies oftheCouncil hadbeenreceived
andforwarded totheChairman oftheCTD. TheSecretariat hadmade acompilation ofthose responses
indocument WT/COMTD/W/16 andAddendum. Thematter wasnowunder consideration intheCTD.
6. Circulation andDerestriction ofCouncil Documents (G/C/M/13 andCorr.1)
6.1 Atthemeeting of19September 1996, theChairman drewtheCouncil 'sattention tothedecision
taken bytheGeneral Council atitsmeeting of18July1996 on"Procedures fortheCirculation and
Derestriction ofWTO documents" (WT/L/160/Rev.1). TheCouncil tooknoteofthedecision.
7. Availability ofdocuments inSpanish (G/C/M/13 andCorr.1)
7.1 Atthemeeting of19September 1996, therepresentative ofElSalvador, alsoonbehalf of
GRULAC, expressed concern atthefactthatdocuments werenotmade available intheSpanish language
intimeformeetings. Another representative stated thatthesame problem hadarisen regarding
documents inFrench.
8. Committee onMarket Access
Semi-annual report oftheCommittee (G/C/M/11)
8.1 Atitsmeeting of5July1996, theCouncil tooknoteofthereport made bytheChairman of
theMarket Access Committee (G/MA/4) concerning (1)implementation ofHS96 changes; (2)other
waivers; (3)establishment ofconsolidated loose-leaf schedules; (4)non-tariff matters; (5)Integrated
DataBase; and(6)Report oftheCommittee totheCouncil inconnection withtheSingapore Ministerial
Meeting.G/L/134
Page 7
9. Agreement onSubsidies andCountervailing Measures
State ofplayconcerning subsidy notifications -lackofcompliance withsubsidy notification
requirements under Article 25.2oftheAgreement onSubsidies andCountervailing Measures
(G/C/M/10)
9.1 Atthemeeting of22May1996, therepresentative oftheECconveyed concern about thelack
ofcompliance byMembers withtheir notification obligation under Article 25.2oftheSubsidies
Agreement.
10. Working Party onState Trading Enterprises (G/C/M/14)
10.1 Atitsmeeting of15October 1996, theCouncil tooknoteofthecommunication from the
EuropeanCommunitiescirculatedinG/STR/W/33.TheECrequestedtheCounciltoreferitssubmission
totheWorking Party onStateTrading Enterprises foritsconsideration. TheCouncil agreed torevert
tothismatter atanappropriate time.
11. Customs Unions andFree-Trade Areas: regional agreements
(G/C/M/8, 9,10,11 and13andCorr.1)
11.1 Atitsmeeting of29January 1996, theCouncil tooknoteoftheinformation provided bythe
Chairman thatatthelastmeeting oftheGeneral Council, adecision wastaken inprinciple, toestablish
aCommittee dealing withregional trading matters. Consultations werebeing heldbytheChairman
oftheGeneral Council concerning thenature andterms ofreference ofthenewbody. TheCouncil
agreed thatthequestion ofestablishment ofseparate Working Parties would havetobereviewed in
lightofthefinaldecision onthisissue.
11.2 Atitsmeeting of19March 1996, theCouncil tooknoteofadecision taken bytheGeneral
Council toestablish aCommittee onRegional Trade Agreements (WT/L/127) which would carry out
theexamination ofsuchagreements inaccordance withtheprocedures andterms ofreference adopted
bytheCouncil andwhich would thereafter present itsreport totheCouncil forappropriate action.
(a) Customs Union between Turkey andtheEuropean Community (EC) (G/C/M/8)
11.3 Atitsmeetingof29January1996,theCounciltooknoteofthecommunication(WT/REG22/N/1)
fromtheparties, indicating theentryintoforceon1January 1996oftheCustoms Union between Turkey
andtheEC. TheCouncil established aWorking Party toexamine theAgreement.
(b) Agreement between theGovernment ofDenmark andtheHome Government oftheFaroe
Islands, oftheonepart,andtheGovernment ofIceland, oftheother part,onfreetradebetween
theFaroe Islands andIceland (G/C/M/8)
11.4 Atitsmeeting of19March 1996, theCouncil tooknoteofthenotification from theparties
totheAgreement (WT/REG23/N/1), indicating theentry intoforce on1July1993 oftheAgreement
(WT/REG23/1). TheCouncil established aWorking Party toexamine theAgreement.G/L/134
Page 8
(c) Agreement between theSwiss Government, oftheonepart,andtheGovernment ofDenmark
andtheHome Government oftheFaroe Islands, oftheother part,onfreetrade between the
Faroe Islands andSwitzerland (G/C/M/9)
11.5 Atitsmeeting of19March 1996, theCouncil tooknoteofthenotification from theparties
totheAgreement (WT/REG24/N/1), indicating theentry intoforceon1March 1995oftheAgreement
(WT/REG24/1). TheCouncil adopted theterms ofreference under which theCommittee onRegional
Trade Agreements should examine thisAgreement.
(d) AgreementbetweentheGovernmentofNorway,oftheonepart,andtheGovernmentofDenmark
andtheHome Government oftheFaroe Islands, oftheother part,onfreetrade between the
Faroe Islands andNorway (G/C/M/9)
11.6 Atitsmeeting of19March 1996, theCouncil tooknoteofthenotification from theparties
totheAgreement (WT/REG25/N/1), indicating theentry intoforce on1July1993oftheAgreement
(WT/REG25/1). TheCouncil adopted theterms ofreference under which theCommittee onRegional
Trade Agreements should examine thisAgreement.
(e) Agreements between theCzech Republic andBulgaria, andtheSlovak Republic andBulgaria
(G/C/M/9)
11.7 Atthemeeting of19March 1996, therepresentative oftheCzech Republic, speaking also
onbehalf oftheSlovak Republic andtheRepublic ofBulgaria, informed theCouncil ofthesigning
inDecember 1995ofthefreetradeagreements between theCzech Republic andBulgaria andbetween
theSlovak Republic andBulgaria. These agreements hadbeenapplied onaprovisional basis since
1January 1996andwould benotified totheWTO when theratification processes ineachofthesignatory
states hadbeencompleted.
(f) Preferential tariff treatment forthecountries offormer Yugoslavia (G/C/M/9)
11.8 Atthemeeting of19March 1996, therepresentative oftheECinformed theCouncil thathis
delegation intended toaskforawaiver fromobligations under Article IoftheGATT inorder togrant
thecountries offormer Yugoslavia preferential access totheCommunity market foralimited period
oftime.
(g) EFTA-Estonia, EFTA-Latvia, EFTA-Lithuania FreeTrade Agreements (G/C/M/10)
11.9 Atthemeeting of22May1996, therepresentative ofIceland onbehalf oftheEFTA countries
andEstonia, Latvia andLithuania informed theCouncil thattheEFTA states andEstonia, Latvia and
Lithuania respectively hadconcluded FreeTrade Agreements inDecember 1995. TheAgreements
wereexpected toenterintoforce ortobeapplied onaprovisional basisasof1June1996. Thecontent
andstructure oftheAgreements weresimilar tothefreetrade agreements which hadbeenconcluded
between theEFTA states andtheCentral andEastern European countries withcertain adjustments
reflecting recent developments. TheAgreements would benotified under Article XXIV: 7(a)ofGATT
1994.
(h) Enlargement oftheCentral European FreeTrade Agreement (CEFTA) (G/C/M/10)
11.10 Atthemeeting of22May1996, theSlovak Republic onbehalf oftheparties totheCentral
EuropeanFreeTradeAgreement(CEFTA)andSloveniainformedtheCouncilthatthetextoftheCEFTA
hadbeencomplemented byprovisions ofArticle 39(a)which allowed foraccession totheCEFTA
byother countries. Onthisbasis, theRepublic ofSlovenia hadsigned theAgreement onAccessionG/L/134
Page 9
withthefourparties on25November 1995. TheAgreement wasbeing applied onaprovisional basis
andwould enter intoforce onceratification procedures inthecountries, parties tothisAgreement,
hadbeencompleted.
(i) Europe Agreements between theEuropean Communities andtheCzech Republic, andthe
European Communities andtheSlovak Republic (G/C/M/10)
11.11 Atthemeeting of22May1996, theChairman informed theCouncil thattheEurope Agreement
between theECandtheCzech andSlovak Federal Republic, hadbeenreplaced byseparate Agreements
witheachofthesuccessor states. Theexamination ofthese Agreements (WT/REG18/6 and7)would
takeplace intheCommittee onRegional Trade Agreements.
(j) Free-Trade Agreement between theCzech Republic andRomania (G/C/M/11)
11.12 Atitsmeeting of5July1996, theCouncil tooknoteofthenotification from theparties to
theAgreement (WT/REG26/N/1), which alsoindicated thatsincetheentry intoforceoftheAgreement
(WT/REG26/1), theparties hadagreed toaccelerate theelimination ofcustoms duties onmostindustrial
products (WT/REG26/2). In1995, theCouncil hadbeeninformed thatthisFreeTrade Agreement,
signed on24October 1994, wasbeing applied provisionally since 1January 1995, andwastobe
established overatransitional period ending notlaterthan1January 1998. TheCouncil adopted the
terms ofreference under which theCommittee onRegional Trade Agreements should examine this
Agreement.
(k) Free-Trade Agreement between theSlovak Republic andRomania (G/C/M/11)
11.13 Atitsmeeting of5July1996, theCouncil tooknoteofthenotification from theparties to
theAgreement (WT/REG27/N/1), which alsoindicated thatsincetheentry intoforceoftheAgreement
(WT/REG27/1), theparties hadagreed toaccelerate theelimination ofcustoms duties onmostindustrial
products (WT/REG27/2). TheCouncil hadbeeninformed in1995, thatthisFreeTrade Agreement,
signed on24October 1994, wasbeing applied provisionally since 1January 1995, andwastobe
established overatransitional period ending notlaterthan1January 1998. TheCouncil adopted the
terms ofreference under which theCommittee onRegional Trade Agreements should examine this
Agreement.
(l) FreeTrade Agreement between theEFTA States andEstonia (G/C/M/13 andCorr.1)
11.14 Atitsmeeting of19September 1996, theCouncil tooknoteofthenotification fromtheparties
totheAgreement (WT/REG28/N/1), indicating thattheFreeTrade Agreement (WT/REG28/1) was
signed on7December 1995 andhadbeenapplied onaprovisional basis asof1June1996, pending
ratification bytheparties totheAgreement. TheCouncil adopted theterms ofreference under which
theCommittee onRegional Trade Agreements should examine thisAgreement.
(m) FreeTrade Agreement between theEFTA States andLatvia (G/C/M/13 andCorr.1)
11.15 Atitsmeeting of19September 1996, theCouncil tooknoteofthenotification fromtheparties
totheAgreement (WT/REG29/N/1), indicating thattheFreeTrade Agreement (WT/REG29/1) was
signed on7December 1995 andhadbeenapplied onaprovisional basis asof1June1996, pending
ratification bytheparties totheAgreement. TheCouncil adopted theterms ofreference under which
theCommittee onRegional Trade Agreements should examine thisAgreement.G/L/134
Page 10
(n) FreeTrade Agreement between theEFTA States andLithuania (G/C/M/13 andCorr.1)
11.16 Atitsmeeting of19September 1996, theCouncil tooknoteofthenotification fromtheparties
totheAgreement (WT/REG30/N/1), indicating thattheFreeTrade Agreement (WT/REG30/1) had
beenapplied onaprovisional basis asof1August 1996, pending ratification bytheparties tothe
Agreement. TheCouncil adopted theterms ofreference under which theCommittee onRegional Trade
Agreements should examine thisAgreement.
12. Waivers under Article IXoftheWTO Agreement
(a) Harmonized System -Requests forextensions ofwaivers
Bangladesh, Bolivia, Guatemala, Jamaica, Morocco, Nicaragua, SriLanka (G/C/M/11)
12.1 Atitsmeeting of5July1996, theCouncil considered requests byBangladesh (G/L/77), Bolivia
(G/L/78), Guatemala (G/L/86), Jamaica (G/L/79), Morocco (G/L/80), Nicaragua (G/L/81) andSri
Lanka (G/L/83) foranextension until30April 1997 ofwaivers already granted inconnection with
theirimplementation oftheHarmonized System.
12.2 TheCouncil approved thetextsofthedraftdecisions onthewaiver extensions inG/C/W/40
(Bangladesh), G/C/W/412(Bolivia), G/C/W/483(Guatemala), G/C/W/42 (Jamaica), G/C/W/43
(Morocco), G/C/W/44 (Nicaragua) andG/C/W/46 (SriLanka), andrecommended theiradoption by
theGeneral Council.
(b) Malawi -Renegotiation ofSchedule LVIII (G/C/M/8)
12.3 Atitsmeeting of29January 1996, theCouncil considered arequest byMalawi (G/L/51) for
anextension, until30June1996, ofthewaiver granted toitinconnection withtherenegotiation of
itsSchedule. TheCouncil approved thetextofthedraftdecision (G/C/W/31) onthewaiver extension,
andrecommended itsadoption bytheGeneral Council.
(c) Senegal -Renegotiation ofSchedule XLIX (G/C/M/11)
12.4 Atitsmeeting of5July1996, theCouncil considered arequest bySenegal (G/L/82) foran
extension, until30April 1997, ofthewaiver granted toitinconnection withtherenegotiation ofits
Schedule. TheCouncil approved thetextofthedraftdecision (G/C/W/45) onthewaiver extension,
andrecommended itsadoption bytheGeneral Council.
(d) Zambia -Renegotiation ofSchedule LXXVIII (G/C/M/11)
12.5 Atitsmeeting of5July1996, theCouncil considered arequest byZambia (G/L/84) foran
extension, until30April 1997, ofthewaiver granted toitinconnection withtherenegotiation ofits
Schedule. TheCouncil approved thetextofthedraftdecision (G/C/W/47) onthewaiver extension,
andrecommended itsadoption bytheGeneral Council.
2G/C/W/41/Corr.1 inSpanish.
3G/C/W/48/Corr.1 inSpanish.G/L/134
Page 11
(e) Decision ontheintroduction ofHarmonized Commodity Description andCoding System (HS)
changes intoWTO schedules oftariff concessions on1January 1996 (G/C/M/11)
12.6 Atitsmeeting of5July1996, theCouncil considered thedraftofadecision (G/MA/W/6)
concerning awaiver, which related totheHS96 changes tobeintroduced inMember 'stariffschedules
on1January 1996. Awaiver hadappeared necessary forthose Members finding itnecessary toconsult
ornegotiate under Article XXVIII ofGATT 1994 asaresult oftheHS96 changes. TheCouncil
approved theextension ofthetime-limits setoutinthedraftdecision andagreed thatitbetransmitted
totheGeneral Council foradoption.
(f) Waivers falling under paragraph 2oftheUnderstanding inRespect ofWaivers ofObligations
under GATT 1994 (G/C/M/11, 13andCorr.1 and14)
12.7 Atitsmeeting of19September 1996, theCouncil tooknoteoftheconcerns voiced byone
delegation regarding theimportant number ofrequests forextensions ofwaivers fromtheobligations
under paragraph 1ofArticle IofGATT 1994. Intheviewofthisdelegation, stricter conditions applied
under theWTO thanunder GATT 1947 forthegranting ofwaivers ortheirpossible extensions.
(i) Cuba -Paragraph 6ofArticle XVofGATT 1994 (G/C/M/11 and13andCorr.1)
12.8 Atitsmeeting of5July1996, theCouncil considered therequest foranextension ofawaiver
byCuba (G/L/89) withrespect toparagraph 6ofArticle XVoftheGATT 1994. TheCouncil agreed
torevert tothisissue, asappropriate, inthelightoftheoutcome offurther consultations thatwere
inprogress.
12.9 Atitsmeeting of19September 1996, theCouncil tooknoteofthestatement bytheChairman
thattheconsultations hadledtoanunderstanding thatwaivers falling under paragraph 2ofthe
Understanding inRespect ofWaivers ofObligations under GATT 1994 should follow theprocedure
setoutinparagraph 3ofArticle IXoftheWTO Agreement. TheCouncil approved thedraftdecision
(G/C/W/51/Rev.1) onthewaiver extension, andrecommended itsadoption bytheGeneral Council.
(ii) United States -Former Trust Territory ofthePacific Islands (G/C/M/13 andCorr.1)
12.10 Atitsmeeting of19September 1996, theCouncil considered arequest bytheUnited States
(G/L/101) foranextension ofthewaiver fromitsobligations under paragraph 1ofArticle IofGATT
1994. TheCouncil approved thedraftdecision (G/C/W/53) onthewaiver extension andrecommended
itsadoption bytheGeneral Council.
(iii) United States -Imports ofAutomotive Products (G/C/M/13 andCorr.1 and14)
12.11 Atitsmeeting of19September 1996, theCouncil considered arequest bytheUnited States
(G/L/103 andCorr.1) foranextension ofthewaiver granted inconnection withimports ofautomotive
products. Inlightofonedelegation 'srequest forfurther information onthiswaiver request, theCouncil
agreed torevert tothismatter atitsnextmeeting.
12.12 Atitsmeeting of15October 1996, theCouncil approved thedraftdecision (G/C/W/55) on
thewaiver extension andrecommended itsadoption bytheGeneral Council.
(iv) United States -Andean Trade Preference Act(G/C/M/13 andCorr.1)
12.13 Atitsmeeting of19September 1996, theCouncil considered arequest bytheUnited States
(G/L/102) foranextension ofthewaiver granted inconnection withtheAndean Trade Preference Act.G/L/134
Page 12
TheCouncil approved thedraftdecision (G/C/W/54) onthewaiver extension andrecommended its
adoption bytheGeneral Council.
(v) Canada -CARIBCAN (G/C/M/13 andCorr.1)
12.14 Atitsmeeting of19September 1996, theCouncil considered arequest byCanada (G/L/100)
foranextension ofthewaiver granted inconnection withCARIBCAN. TheCouncil approved the
draft decision (G/C/W/52) onthewaiver extension andrecommended itsadoption bytheGeneral
Council.
(vi) European Communities (G/C/M/13 andCorr.1)
- European Communities -Fourth ACP-EEC Convention ofLomé
12.15 Atitsmeeting of19September 1996, theCouncil considered arequest bytheECandthe
Governments oftheACPStates which werealsoWTO Members (G/L/107 and108)foranextension
ofthewaiver granted inconnection withtheFourth ACP-EEC Convention ofLomé. TheCouncil
approved thedraftdecision (G/C/W/58/Rev.1) onthewaiver extension andrecommended itsadoption
bytheGeneral Council.
- France -Trading Arrangements withMorocco
12.16 Atitsmeeting of19September 1996, theCouncil considered arequest bytheEC(G/L/107
and109)foranextension ofthewaiver granted inconnection withFrance -Trading Arrangements
withMorocco. TheCouncil approved thedraftdecision (G/C/W/59/Rev.1) onthewaiver extension
andrecommended itsadoption bytheGeneral Council.
(vii) South Africa -BaseDates under Article I:4(G/C/M/13 andCorr.1)
12.17 Atitsmeetingof19September1996,theCouncilconsideredarequestbySouthAfrica(G/L/104)
foranextension ofthewaiver granted inconnection withbasedates under Article I:4oftheGATT.
TheCouncil approved thedraftdecision (G/C/W/56/Rev.1) onthewaiver extension andrecommended
itsadoption bytheGeneral Council.
(viii) Zimbabwe -BaseDates under Article I:4(G/C/M/13 andCorr.1)
12.18 Atitsmeeting of19September 1996, theCouncil considered arequest byZimbabwe (G/L/106)
foranextension ofthewaiver granted inconnection withbasedates under Article I:4oftheGATT.
TheCouncil approved thedraftdecision (G/C/W/57/Rev.1) onthewaiver extension andrecommended
itsadoption bytheGeneral Council.
13. Issues raised concerning Members 'trade practices
(a) Brazilian Measure concerning theautomotive sector (G/C/M/8, 9and10)
13.1 Atitsmeeting of29January 1996, theCouncil tooknoteoftheinformation provided byBrazil,
thatafternegotiations withMercosur, theBrazilian Government hadsenttoCongress aProvisional
Measure 1235 thatdealtwiththeautomotive sector.
13.2 Atthemeeting of19March 1996, therepresentative ofBrazil informed theCouncil thatit
hadsubmitted totheSecretariat on15March 1996, arequest forawaiver (G/L/68) fromcertain WTOG/L/134
Page 13
obligations asaconsequence oftheadoption ofaspecial regime concerning investment measures in
theautomotive sector.
13.3 Atthemeeting of22May 1996, Brazil informed theCouncil that, following informal
consultations withinterested WTO Members, ithadwithdrawn itsrequest forawaiver (G/L/75),
presented on15March 1996, regarding theBrazilian automotive regime.
(b) USdraftbillconcerningthedefinitionof"domesticindustry"intheareaofsafeguards(G/C/M/8)
13.4 Atthemeeting of29January 1996, therepresentative ofMexico expressed concern regarding
adraftbillthatwaspassed intheUSSenate concerning thedefinition of"domestic industry" inthe
United States legislation intheareaofsafeguards when dealing withperishable agricultural products.
(c) US-"Cuban Liberty andDemocratic Solidarity Actof1996" (G/C/M/9)
13.5 Atthemeeting of19March 1996, therepresentative ofCuba voiced concern atthesigning
intolawbytheUSPresident ofthe"Cuban Liberty andDemocratic Solidarity Actof1996", which
intheviewofCuba harmed theinterests ofthird-country WTO Members duetoitsextraterritorial
effects".
(d) Banonexports ofwild-harvested shrimps totheUS(G/C/M/9 and10)
13.6 Atthemeeting of19March 1996, therepresentative ofthePhilippines, alsoonbehalf ofthe
ASEAN countries, informed theCouncil thatfollowing thedecision oftheUSCourt ofInternational
Trade on29December 1995, exports ofwild-harvested shrimps totheUSafter1May1996 would
beembargoed iftheexporting country didnotadopt seaturtle conservation programs comparable to
theUSprogram.
13.7 Atthemeeting of22May1996, therepresentative ofHong Kong expressed concern onthis
matter, andrequested further information from theUnited States.
(e) USNarcotics Control Trade Act(G/C/M/9)
13.8 Atthemeeting of19March 1996, therepresentative ofMexico informed theCouncil ofa
USdraftBillwhich ifitbecame lawcould cause problems toUStrading partners. TheBillwould
oblige theUSgovernment toimpose trade sanctions onthose countries which itfeltwerenotdoing
enough toactagainst theproduction ortraffic inillegal narcotics.
(f) Impairment bytheEuropean Community ofTariff Treatment ofHigh Technology Products
(G/C/M/10)
13.9 Atthemeeting on22May1996, theUnited States informed theCouncil thaton2May1996,
ithadrequested consultations withtheECconcerning tarifftreatment being applied tohightechnology
products, i.e.Local AreaNetwork (LAN) equipment andpersonal computers withtelevision capability
(G/L/73).
(g) Argentine footwear (G/C/M/11)
13.10 Atthemeeting of5July1996, theUnited States representative stated thatinSeptember 1995,
Argentina hadenacted decrees which established specific duties forimports offootwear, textiles and
apparel. Intheview oftheUS,these specific duties violated Argentina 'stariff bindings, andits
obligations under theCustoms Valuation Agreement.G/L/134
Page 14
(h) USrequest forConsultations concerning Restrictive Business Practices intheJapanese
Photographic FilmandPaper Market (G/C/M/13 andCorr.1)
13.11 Atthemeeting of19September 1996, theUSrepresentative stated thathisgovernment had
requested consultations onthismatter withJapan pursuant totheCONTRACTING PARTIES 'Decision
of1960on"Restrictive Business Practices: Arrangements forConsultations" under theGATT (BISD
9S/170).
(i) ECproposal on"Trade Facilitation" (G/C/M/15)
13.12 Atthemeeting of1November 1996, under "Other Business", therepresentative oftheEuropean
Communities drewattention toaproposal submitted byhisdelegation ontradefacilitation (G/C/W/67).
Thisproposal covered thequestion ofsimplification andharmonization oftrade procedures inorder
toarrive atlower trade barriers andimproved market access.
14. Agreement onPreshipment Inspection
(a) Commencement ofOperations oftheIndependent Review Entity (G/C/M/10 and15)
14.1 Atthemeetingof22May1996,theChairmaninformedtheCouncilthattheIndependentReview
Entity under theAgreement onPreshipment Inspection, established byDecision oftheGeneral Council
(WT/L/125/Rev.1) atitsmeeting of13December 1995, hadbecome operational asof1May1996
(G/PSI/IE/2).
14.2 Atthemeeting of1November 1996, theChairman informed theCouncil thatsince the
Independent Review Entity (IE)hadbecome operational, theIEhadreceived noapplications requesting
independent review.
(b) Review under Article 6ofthePreshipment Inspection (PSI) Agreement
(G/C/M/13 andCorr.1 and14)
14.3 Atthemeeting of19September 1996, theChairman informed theCouncil thatArticle 6of
thePSIAgreement provided forareview oftheprovisions, implementation andoperation ofthis
Agreement bytheMinisterial Conference attheendofthesecond yearfrom thedateofentry into
forceoftheWTO Agreement. However therewasnospecific bodydesignated toconduct suchareview.
TheCouncil agreed totheChairman 'sproposal toconsult informally onthequestion ofthebody to
bedesignated toconduct thereview aswellasthetiming oftheexercise.
14.4 Atitsmeeting of15October 1996, theCouncil recommended thattheGeneral Council acting
onbehalf oftheMinisterial Conference inaccordance withArticle IV:2oftheAgreement establishing
theWorld Trade Organization, setupaWorking Party under theCouncil withthefollowing terms
ofreference: "toconduct thereview provided forunder Article 6oftheAgreement onPreshipment
Inspection andtoreport totheGeneral Council through theCouncil, inDecember 1997."4
(c) Notifications (G/C/M/15)
14.5 Atitsmeetingof1November1996,theCouncilhadbeforeitdocumentsconcerninginformation
onthenotificationssubmittedbyMembersundertheAgreement.PursuanttoArticle5oftheAgreement,
35Members hadnotified theirlawsandregulations bywhich theyhadputtheAgreement intoforce
4See1of"Section II:Conclusions and/or Recommendations".G/L/134
Page 15
aswellasother lawsandregulations relating topreshipment inspection (G/PSI/N/1, Add.1, Add.2,
Add.3, andAdd.4). Ofthese, 3Members hadnotified lawsandregulations putting theAgreement
onPreshipment Inspection intoforce; 13Members hadnotified other lawsandregulations relating
topreshipment inspection; and19Members hadnotified thattheyhadnolawsorregulations relating
topreshipment inspection.
15. Working Group onNotification Obligations andProcedures
(a) Status ofwork intheWorking Group (G/C/M/9)
15.1 Atitsmeeting of19March 1996, theCouncil tooknoteofthereport provided bytheChairman
ofthatGroup onthestatus ofwork intheGroup. TheGroup hadidentified fourgeneral subjects
forexamination namely: (1)duplication ofnotification obligations; (ii)simplification ofdata
requirementsandthestandardizationofformats;(iii)improvementinthetimingofthereportingprocess;
and(iv)possible assistance tosome developing countries inmeeting theirnotification obligation. The
Council tooknoteofthereport.
(b) Report oftheWorking Group onNotification Obligations andProcedures (G/C/M/14)
15.2 Atitsmeeting of15October 1996, theCouncil considered thereport oftheWorking Group
(G/L/112) andtookthefollowing action ontherecommendations contained inthereport:
(1) itagreed torequest theCommittee onAgriculture toconsider themodified notification formats
contained inthedraftrevision todocument G/AG/2, assetoutindocument G/NOP/W/15 andtorequest
theCommittee onSubsidies andCountervailing Measures toconsider themodified notification formats
contained indraft revision todocument G/SCM/6, assetoutindocument G/NOP/W/15. Both
Committees should consider themodified notification formats withaviewtoachieving greater coherence
andefficiency inthenotification system;
(2) itagreed torequest theGeneral Council totakethenecessary stepstoeliminate thenotification
obligations intheDecisions oftheGATT 1947CONTRACTING PARTIES relating toimport licensing
procedures (L/3756 andSR/28/6)5.TheCouncil alsoagreed torefertheDecisions oftheGATT 1947
CONTRACTINGPARTIESrelatingtoquantitativerestrictionsandnon-tariffmeasures(BISD32S/92-93
andBISD 31S/227-228), andtoMarks ofOrigin (BISD 7S/30-33) totheMarket Access Committee,
andtoretain theDecision onLiquidation ofStrategic Stocks (BISD 3S/51) intheCouncil, forfurther
consideration;
(3) itagreed thatacomprehensive listing ofnotification obligations andthecompliance therewith
byallWTOMembersbemaintainedonanongoingbasisandbecirculatedsemi-annuallytoallMembers.
TheCouncil alsoagreed toanupdating ofthelisting ofnotifications received, assetoutinAnnex III
tothereport oftheWorking Party, prior totheSingapore Ministerial Meeting;
(4) itagreed toconsider thepreparation ofgeneral guidelines forthebodies under itspurview,
providing fortheregular review ofquestionnaires andformats andofthesituation asregards compliance
withnotification obligations;
(5) itagreed toforward thetotheCommittee onTrade andDevelopment therecommendation
that"active consideration begiven ...tothedevelopment ofaspecial programme ofassistance to
developing country Members andparticularly totheleast-developed country Members providing more
5See2(a)of"Section II:Conclusions and/or Recommendations".G/L/134
Page 16
intensive technical assistance, possibly withtheparticipation ofother organizations, focusing onthe
development ofsystems andstructures required torespond tonotification obligations";
(6) itagreed torequest theMinisterial Conference ortheGeneral Council toconsider the
establishment, atanappropriate time, ofabodywithamandate toreview thenotification obligations
andprocedures throughout theWTO Agreement. Alternatively, consideration might begiven tothe
establishment ofabody, ortheextension/modification ofthemandate ofthecurrent Working Group,
toconduct, atanappropriate time, afurther comprehensive review ofthenotification obligations and
procedures intheagreements inAnnex 1AoftheWTO Agreement. Itwassuggested thatfuture work
alsoencompass matters relating totheCentral Registry ofNotifications, electronic transmission of
notifications andfurther work onthenotifications handbook6.
15.3 Inconnection withthelastrecommendation, onedelegate stated thathisdelegation preferred
theestablishment ofabody toconduct attheendof1998 acomprehensive review ofnotification
obligations andprocedures inalltheagreements covered bytheWTO andnotjustthose inAnnex 1A.
16. Implementation oftheAgreement onTextiles andClothing (ATC) andrelated matters
(G/C/M/11, 12,13andCorr.1, 14and15)
16.1 TheCouncil, attherequest ofsome Members, discussed theimplementation oftheAgreement
onTextiles andClothing andrelated matters pursuant toArticle IV:5oftheWTO Agreement andin
preparation fortheSingapore Ministerial Conference. Thediscussion tookplace on5July, 25July,
19September and15October 1996.
16.2 TheCouncil'sdiscussionwasbasedonwrittencontributionsbyPakistanonbehalfoftheASEAN
MembersoftheWTO,i.e.BruneiDarussalam,Indonesia,Malaysia,Philippines,SingaporeandThailand;
andHong Kong, India, Korea andPakistan (G/L/92); theUnited States (G/L/95 andAdd.1); and
theEuropean Communities (G/L/97). TheCouncil alsohadbefore itthereport oftheTextiles
Monitoring Body (G/L/113).
Issues andProblems
16.3 Thefullaccount ofthediscussions intheCouncil wasprovided intheminutes ofitsmeetings
(G/C/M/11-14). Thekeyissues andproblems identified were thefollowing:
(i) Integration Programmes
16.4 Recalling thatacentral feature oftheATC wastheprogressive character oftheintegration
process, concerns wereexpressed thatthefirststage ofintegration programmes implemented byfour
importing Members on1January 1995hadnotbeencommercially meaningful asnoneoftheproducts
integrated (except oneproduct (work gloves) byoneMember) hadbeen subject toquantitative
restrictions. Moreover, these products hadbeenconcentrated inrelatively lessvalue-added areas.
Thefirststage integration hadtherefore notmeaningfully improved access tothese markets. There
werenoindications thatthesecond stage integration on1January 1998would bemore commercially
meaningful. Theintegration programmes should contain amixture ofrestrained andunrestrained
products, andabalanced proportion ofsensitive andnon-sensitive products withgreater emphasis on
clothing. Only integration programmes onthese lines would ensure asmooth transition tothe
GATT/WTO disciplines, intheinterest ofbothrestraining andexporting Members.
16.5 Inresponse, itwasstated thatthechoice ofproducts tobeintegrated ateachintermediate stage
wasamatter foreachindividual Member todecide. Thiscould, withperfect legitimacy, result in
6See2(b)of"Section II:Conclusions and/or Recommendations".G/L/134
Page 17
products being integrated which were notsubject torestrictions. Specific proposals hadbeenmade
inthenegotiations, providing formandatory integration ofrestrained products, butthese proposals
hadnotbeenretained. Therequirements stipulated intheATC hadbeenfullymet. Anumber of
products tobeintegrated orbeing proposed forintegration atStage Twoweresubject toquantitative
restrictions. Thegrowth factors which werealsorequired intheATC werehaving averysignificant
impact onquota levels, bothinterms ofliberalization andtheircontribution tocontinuous adjustments
andincreased competition inthemarkets ofrestraining Members. Furthermore, theATC contained
aprovision forearly elimination ofrestrictions, which oneMember hadmade useof.Inaddition,
itwasstated thatpursuant toArticle 7,Members should takesuchactions asmaybenecessary toabide
byGATT 1994rulesanddisciplines soas,interalia,toachieve improved access toexporting Members '
markets fortextiles andclothing products aspartoftheintegration process.
16.6 Itwasalsoargued thatintegration hadaseparate purpose andhadnotbeendesigned asthe
primary means ofliberalization. Inresponse, itwasargued thattheATC contemplated integration
toproceed inparallel withincreased growth rates; inaddition, boththeseprocesses werealsodesigned
toachieve progressive liberalization oftrade.
(ii) UseofTransitional Safeguards
16.7 Concerns wereexpressed thattheintroduction oftransitional safeguard measures would have
arestrictive aswellasadisruptive effect ontrade, eveniftheyweresubsequently rescinded. They
could alsofrustrate theintegration process. TheATC'stransitional safeguard wasadeviation from
GATT 1994, because itwasselective anddiscriminatory innature. TheATCrecognized theexceptional
natureofthetransitionalsafeguardandprovidedforittobeapplied"assparinglyaspossible,consistently
with theprovisions ofthisArticle andtheeffective implementation oftheintegration process"
(Article 6.1). However, inthefirstyearoftheATC, oneWTO Member hadnotified theinvocation
ofthisclause inrespect of24cases within thespace ofafewmonths against nolessthan14WTO
Members, which werealldeveloping countries. Inthecaseofseven ofthese actions which came in
theformofdispute casesbefore theTMB, threehadbeenrescinded aftertheTMB found nojustification
forthem. Three actions hadbeenbrought before theDispute Settlement Body, ofwhich twowere
currently being examined bypanels. Thefragile grounds onwhich Article 6hadbeeninvoked inthese
cases wasalsoborne outbythefactthatinanother seven cases, therequests forconsultations orthe
measures adopted hadbeenwithdrawn evenbefore theycould bereviewed bytheTMB; thisincluded
anaction where imports ofaproduct hadalready beenrestrained from theMember concerned. An
unduly large number ofrestraints werestillinplace. Thetransitional safeguard hadthusbeenused
inviolation ofthisimportant provision, andalsocontrary tothe"objective offurther liberalization
oftrade" referred tointhepreamble totheATC.
16.8 Inresponse, itwasstated thatanyMember hadtherighttoinvoke safeguard measures. All
theinvocations referred tohadbeenconsistent withATC procedures andwere justified. Anumber
ofmeasures hadbeenrescinded andatpresent 11restraints wereinplace. Requests forconsultations
were made togivetimefortrade toadjust andtoprevent damage inthemarket andoncethiswas
achieved themeasures wererescinded. TheTMB recommendations hadbeenheeded. Theconcept
of"sparingly" wasarelative oneandshould alsobeseeninthelightofthefactthattheMember in
question wasahugeimporter. Theexistence ofthisprovision helped toproceed withgreater confidence
ingoing ahead withtheintegration process. Theoverall effect ofwhat hadhappened seems notto
bediscouraging forthefuture oftheintegration process. Over thelastninemonths theparticular
Member hadmade onlyonerequest forconsultations under thisArticle. Asaresult, thetotalnumber
ofrequests forconsultations hadbeenconsiderably lower thanin1995. Itwasalsoargued thatthe
useofArticle 6wasnotexceptional innature. Inthenegotiations specific proposals hadbeenmade
thatwould haveavoided theuseofdiscriminatory measures, buttheseproposals hadnotbeenretained.G/L/134
Page 18
(iii) Bilaterally Agreed Arrangements
16.9 Itwasstated thatafundamental concept oftheATCwastostrengthen themultilateral disciplines
inthefieldoftextile andclothing trade withaviewtoensuring finalintegration ofthesector intothe
GATT/WTO rules. Itwasrecalled that,inthecontext ofsafeguard measures, anumber ofbilateral
arrangements hadbeennotified. Concern wasexpressed thatthough under theATC theTMB was
required todetermine whether these bilateral arrangements hadbeenjustified inaccordance withthe
provisions ofArticle 6,some ofthese hadnotbeensubsequently confirmed bytheTMB asbeing in
conformity withtheprovisions oftheATC. Theabsence ofendorsement byTMB ofasafeguard action
didnotmake thesafeguard action legal. Thus, theintegrity ofthemultilateral rules anddisciplines
wasweakened.
16.10 Inresponse, itwasstated thatArticle 6made explicit provisions forbilaterally agreed restraint
measures, andsome otherArticles alsoprovided thatMembers consult withaviewtoreaching mutually
agreed solutions. Intheabsence ofconfirmation bytheTMB, asafeguard action didnotbecome illegal.
During thenegotiations aproposal hadbeenmade formandatory endorsement ofsafeguard actions
bytheTMB. Thisproposal hadnotbeenretained.
16.11 Inresponse, itwaspointed outthatArticle 6.9oftheATC provided foraTMB determination
astowhether bilaterally agreed restraint measures wereinaccordance withtheprovisions ofArticle 6.
(iv) Functioning oftheTextiles Monitoring Body
16.12 Itwasrecalled thattheTMB wasrequired tosupervise theimplementation oftheATC, to
examine allmeasures taken under itandtheirconformity therewith, andtotaketheactions specifically
required ofitbytheATC(Article 8.1). Before raising atextile matter intheDispute Settlement Body,
ithadfirsttoberaised attheTMB. Concerns wereexpressed that,inorder toretain theconfidence
ofallMembers, there wasaparticular needtoenhance transparency oftheTMB'sfunctioning, and
toensure adpersonam participation byitsmembers soastoensure impartiality. TheTMB had
recognized thatinafewcases itcould notarrive ataconsensus decision onmatters brought toit,and,
therefore, could notfulfilitsmandate. This, apartfromhaving anadverse impact ontrade, hadseriously
modified thebalance ofrights andobligations oftheATC. TheTMB should ensure thatsuchsituations
didnotariseinfuture. TheTMB should giveadequate reasons foritsrecommendations or,where
recommendations should havebeenmade butwerenotmade, themainreasons underlying theTMB's
failure todischarge itsfunctions should have been made known. Thiswould have enhanced the
effectiveness andaccountability oftheBody asawhole andwould have further strengthened the
confidence ofWTO Members thatthewayTMB functions wasfair.Those Members which maintained
apermanent seatintheBody hadtheadvantage ofmaintaining an"institutional memory" onpoints
which could berevisited inthefuture, unlike other Members whose representatives served intheTMB
onarotating basis. Greater transparency would provide rotating members withabetter understanding.
Inreviewing safeguard measures, theTMB had,onoccasions, failed topoint outsubstantive aswell
asprocedural inconsistencies inmeasures taken. Itsreview process hadnotalways taken place within
ATCdisciplines. TheTMB should alsomake available notifications received byittoallWTO Members
without delay. Under Article IV:5oftheWTO Agreement, theCouncil "shall oversee thefunctioning
oftheMultilateral Trade Agreements inAnnex 1A."
16.13 Inresponse, itwasstated thattheTMB haddoneitsjobunder difficult circumstances; one
hadfullconfidence initscompetence andintegrity. TheTMB hadsucceeded, byasystematic approach,
insetting certain standards forassessing thejustification oftheexistence ofserious damage. TheTMB's
roleandresponsibilities asestablished bytheATC should berecognized. Theview thattheTMB
haderred inprocedures andsubstance onsome occasions could notbeshared. Some oftheTMB's
problems wereduetoambiguities intheATC itself. TheTMB wasaquasi-judicial body, therefore,
there werereasonable limits tohowtransparent itcould be.TheTMB hadacknowledged problemsG/L/134
Page 19
withdecision-making andhadmentioned aspossible factors thecircumstances ofitsestablishment,
thelarge number ofdisputes ithadfaced andtighttime-constraints under which itoften operated.
Itsreports hadtobecarefully crafted andifmore transparency wasrequested thenthereports would
havetobemore detailed, which would inturnalsoincrease theTMB'sworkload anddifficulties with
respect todecision-making. Despite bestefforts andcertainly good faithefforts, theTMB hadfaced
cases thenature ofwhich required time-itwasunfair tocriticise this. Onecould onlyurgethatit
make greater efforts andhopethatitsmembers could overcome divergencies ofviews andenhance
TMB'sability toreach consensus. TheTMB'sreport totheCouncil hadfacilitated increased
transparency, which should beencouraged.
16.14 Itwasalsostated thatthedegree ofacceptance orcompliance withTMB recommendations
would beoneimportant element inanyassessment ofitsfunctioning. Itwasargued thatthefactthat
oneMember declined tofollow aTMB recommendation affirming aMember 'ssafeguard action
undermined theATC'sassumption thatMembers would follow theTMB'srecommendations.
16.15 Inresponse, itwaspointed outthattheATCdidnotrequire governments tocomply withTMB
recommendations buttoendeavour toaccept them infullandthatitwould bewrong toimply that
affected exporting Members should notexercise thedispute settlement rights under Article 8.10.
(v) Treatment ofSmall Suppliers andLeast Developed Countries
16.16 With respect tosmall suppliers, itwasrecalled that,according toArticle 1.2,meaningful
increasesinaccesspossibilitiesmustbeprovidedforsmallsuppliers,usingtheprovisionsofArticles2.18
and6.6(b). Concern wasexpressed thattheonlywaytodetermine iftheprovisions werebeing complied
withwastoreceive notifications from Members imposing ormaintaining restrictions, indicating the
wayinwhich "meaningful increases" inaccess possibilities were being implemented.
16.17 Inresponse itwasstated thattheMembers wereabiding nowandwould continue toabide by
theirobligations tosmall suppliers.
16.18 Itwasrecalled thattheATCprovided that,totheextent possible, exports fromaleast-developed
country Member might alsobenefit fromtheprovisions ofArticle 2.18(concerning improved growth
inquotalevels)soastopermitmeaningfulincreasesinaccesspossibilitiesforsuchMembers.Provisions
onspecial treatment ofLLDCs hadalsobeenprovided inthepreamble, inthefootnote toArticle 1.2
andinArticle 6.6(a). These provisions didnotspecify theprecise modalities foraccording such
treatment, butonewaymight betoreview thequotas inplace, including more favourable growth rates.
IntheMarrakesh Declaration, Ministers hadrecognized theimportance oftheimplementation ofspecial
provisionsfortheLLDCsandhaddeclaredtheirintentiontocontinuetoassistandfacilitatetheexpansion
oftheirtrade andinvestment opportunities. They hadagreed tokeepunder regular review bythe
Ministerial Conference andtheappropriate organs oftheWTO theimpact oftheresults oftheUruguay
Round ontheLLDCs withaview tofostering positive measures toenable them toachieve their
development objectives. Positive measures wererequired tostopthefurther marginalization ofLLDCs,
whose integration intotheglobal trading system would beintheinterest ofallWTO Members.
16.19 Inresponse, itwasstated thatMembers were abiding nowandwould continue toabide by
thebestendeavour provisions infavour ofLLDCs. OneMember added thatalthough itmaintained
restraints oncertain textile exports ofanLLDC Member, thatMember, although being averylarge
supplier, hadunusually freeaccess andbenefitted frominitial quota growth ratesinexcess of8percent.
Another Member added thatithadnorestraints onLLDCs andthatitapplied zerotariffs.G/L/134
Page 20
(vi) Particular Interests ofCotton-Producing Countries
16.20 Recalling thataccording toArticle 1.4"theparticular interests ofthecotton producing exporting
Members should, inconsultation withthem, bereflected intheimplementation oftheprovisions of
thisAgreement", itwaspointed outthat,aswasclearfromthequoted wording, theonusofconsultations
wasontheimporting Member integrating products intoGATT 1994. Concern wasexpressed thatno
suchconsultations hadbeennotified, norheld. TheTMB hadreceived nonotifications relating to
theimplementation ofthisprovision. Itshould havesought information fromtheMembers concerned.
Therefore therequirements ofthisprovision hadnotbeen fulfilled andtheparticular interests of
cotton-producing exporting Members hadnotbeenreflected intheimplementation oftheprovisions
oftheATC.
16.21 Inresponse itwasstated thatthisprovision hadbeenfaithfully implemented. Nospecific
consultations hadbeenrequested from anyMember withrespect tothisprovision. Some Members
hadheldconsultations withanumber ofcountries which theyconsidered toberelevant toArticle 1.4.
There wasnoobligation tonotify theTMB andnoMember hadtaken thisissue totheTMB.
(vii) Rules ofOrigin
16.22 Itwasrecalled thataccording totheATC theintroduction ofchanges, suchaschanges in
practices, rules andprocedures, should notupset thebalance ofrights andobligations between the
Members concerned; adversely affect theaccess available toaMember; impede fullutilization of
suchaccess; ordisrupt tradeunder theATC(Article 4.1). TheAgreement onRules ofOrigin (ARO)
further provided thatpending thecompletion oftheworkprogramme forharmonization oforigin rules,
Members should ensure, interalia,thattheirrules oforigin were notusedasinstruments topursue
trade objectives directly orindirectly. Concerns wereexpressed thatoneMember hadimplemented
changes initsorigin rulesfortextile andclothing products asaninstrument oftrade policy. Thiswas
contrary totheprovisions oftheARO aswellasArticle 4oftheATC, andhadintroduced great
uncertainty andunpredictability withadverse effects ontheexports ofalarge number ofMembers.
Corrections tothissituation werenecessary. Theharmonization oftherulesoforigin hadbeenmandated
bytheARO tobeundertaken atthemultilateral level; thefactthattheMember concerned had
harmonized itsrules oforigin relating toimports oftextiles andclothing products unilaterally
demonstrated thatithadproceeded contrary totherelevant provisions oftheARO andtheATC. This
development wasverydisturbing considering thattheobjective oftheATC wastobring about further
liberalization, notrestrictions, oftrade intextiles andclothing.
16.23 Inresponse, itwasstated thatMembers requesting consultations under Article 4wererequired
toshow thatthere hadbeenachange intheimplementation andadministration ofrestrictions andif
thatwasthecase,thattheyhadbeenadversely affected ortradedisrupted. Inconsultations withvarious
Members, ithadinanumber ofcases beenagreed thattheimplementation ofrevised origin ruleshad
hadnoadverse impact. Incases where adverse impact could bedemonstrated, theparticular Member
wasworking towards amutually satisfactory solution. Thenewruleshadbeendesigned toconform
withrulesofotherMembers andalsotoprovide greater protection against circumvention. OneMember
hadexpressed concern about thenewrulesandwasconsulting withtheMember inquestion, buthad
sofarnotrequested theintervention ofanyWTO body. TheMembers whofeltthattheywereaffected
bythechanges intherules were freetoraisethematter intheappropriate forum.
(viii) Other ATC Issues (Outward Processing Trade, Special Regimes, etc.)
16.24 Itwasstated thatafundamental principle oftheGATT/WTO wastheelimination of
discriminatory treatment ininternational commerce. Concerns wereexpressed, however, thatspecial
regimes werecontinually being extended toprovide better access tocertain Members. Special regimes
werealsobeing usedtopromote theinterests ofspecial interest groups inimporting countries, suchG/L/134
Page 21
asmanufacturers offabrics attheexpense oftheexport oftextile andclothing products fromdeveloping
country manufacturers. Itshould beensured thataccess rights ofother restrained Members werenot
adversely affected.
16.25 Inresponse itwasstated thattheATC required more favourable treatment toqualifying re-
imports asdefined bythelawsandpractices oftheimporting country. TheATC gaveimporting
Members discretion onwhat typeofmore favourable treatment wastobegiven tothistrade. A
particular Member wascurrently providing more favourable treatment tore-imports under itsoutward
processing programme, fullyconsistent withtheATC.
(ix) Relationship Between Restrictions andRegionalism
16.26 Concerns wereexpressed thatexpanding restrictions inthecontext ofregionalism hadadverse
implications, especially fortheexport prospects ofdeveloping country Members. Unilateral restrictions
under thepretext ofregional obligations could notbejustified under GATT 1994ortheATCandcould
undermine theimplementation oftheATC objective offurther liberalization oftrade.
16.27 Inresponse, itwasstated thatregionalism could beneficially influence trade inoverall terms
through itsimpact onbothquantitative restrictions andtariff rates. General conclusions could notbe
drawn fromveryspecific individual cases. Thegeneral question ofregionalism should appropriately
bediscussed intheCommittee onRegional Trading Arrangements.
(x) UseofTrade Measures forNon-Trade Purposes
16.28 Concerns were expressed thatpressures hadbeengrowing fortrade measures inpursuit of
non-trade objectives, particularly affecting textile products. Often, suchmeasures carried aprotectionist
bias,were based oncriteria outside theframework ofWTO rules anddisciplines, produced serious
disruptive effects forthetradeinterest andprospects ofdeveloping country Members, andmayimpinge
ontheeffective implementation oftheATC. Measures being adopted orcontemplated under thepretext
ofsocial andenvironmental concerns were examples ofsuchnon-tariff barriers.
16.29 Inresponse itwasstated thatitwasinappropriate toconcentrate onjustonesector when dealing
withthisissue which hadamuch broader scope thantextiles trade. Thesubject should bedealtwith
inawider context.
(xi) Market Access
16.30 Itwasstated thatanimportant element oftheATCwasincreased opening ofthetextiles markets
ofallWTO Members. Article 7.1(a) provides that"aspartoftheintegration process andwithreference
tothespecific commitments undertaken bytheMembers asaresult oftheUruguay Round, allMembers
shalltakesuchactions asmaybenecessary toabide byGATT 1994 rules anddisciplines soasto:
(a)achieve improved access tomarkets fortextile andclothing products through suchmeasures as
tariffreductions andbindings, reduction orelimination ofnon-tariff barriers, andfacilitation ofcustoms,
administrative andlicensing formalities". Concerns were expressed thatsome exporting Members
hadnotcomplied withtheir obligations under Article 7.Inexamining theextent towhich the
commitment toachieve improved access tomarkets hadbeencomplied with, attention should alsobe
paidtoanyinstances where defacto market access hadbeenreduced through theraising ofapplied
tariffrates, inaddition tothereduction orelimination ofnon-tariff barriers. OneMember hadinvited
exporting Members tomake itclear inwhat waytheywould beprepared togiveeffect tothis
commitment. Atrade-off fortheprogressive liberalization ofrestraints byimporting Members was
theremoval ofvarious impediments totextile imports byexporting Members.G/L/134
Page 22
16.31 Inresponse, itwasstated thattheUruguay Round results constituted atotalpackage witha
general equilibrium between rights andobligations forallMembers. Benefits given tocertain Members
intheATCthrough progressive integration ofthetextile andclothing tradeintotheATCweretrade-offs
fortheobligations these Members hadundertaken inother Agreements. Besides, Article 7explicitly
referred to"specific commitments undertaken byMembers asaresult oftheUruguay Round" and
therefore therewasnoobligation onthepartofanyMember toprovide additional market access over
andabove thecommitments already included initsSchedule ofCommitments. International tradecould
notbeconducted onabasisofsectoral reciprocity. There hadbeennotifications expressing appreciation
tocertain exporting Members forhaving provided effective access intheirmarkets fortextiles and
clothing products. Noprovisions intheATCrequired thattheintegration beconditional ontheremoval
ofimpediments totextile imports byexporting Members. Theapproach undertaken byimporting
Members atoffering more meaningful integration inexchange forgreater market access inexporting
Members wasnotjustified. Thesuggestion thatattention should alsobepaidtoincreased applied tariff
rateswasrejected because themultilateral trading system had,asitscornerstone, theconcept ofbindings
oftariffs. ItwastherightofanyMember toapply anyratessolongasthese werewithin thebound
levels initsschedule. Applied ratescould fluctuate depending ontherevenue anddevelopment needs
ofMembers.
16.32 Inresponse, itwasstated thatthere wasnoattempt toestablish anewkindofconditionality;
whatwasbeing looked forwasthewidest possible contribution totheworldwide liberalization oftrade
intextiles andclothing. AMember, ofcourse, might adjust anapplied tariffrateupwards tothebound
level. However, onewould seriously question thelogic ofthose whowould argue thatthere wasno
deterioration oftherealconditions ofmarket access tocountries thatmake suchadjustments.
16.33 Thepoints were alsomade thatneither intheMarket Access Committee, theTMB northe
DSB hadthere been complaints astocompliance withmarket access obligations. Thescheduled
commitments onlyprovided secure andpredictable trading opportunities anddidnotnecessarily translate
intohigher trade volumes ineachcase. Moreover, alarge group ofMembers hadadopted unilateral
liberalization measures. What wasneeded wasamechanism which would enable those Members to
becompensated forthese measures which hadbenefitted thewhole multilateral trading system.
(xii) Rules andDisciplines
16.34 Itwasstated thattheCouncil should examine Members 'compliance withGATT 1994 rules
anddisciplines having animpact ontradeinthetextiles sector. Ifnecessary, itshould request relevant
information fromother relevant bodies suchasthose dealing withanti-dumping, balance-of-payments,
subsidies and/or theprotection ofintellectual property.
16.35 Inresponse itwasstated thataneffective evaluation oftheimplementation oftheATC should
notbeextended tocompliance withother WTO disciplines. There wereconcerns about thegrowing
misuse ofanti-dumping proceedings ontextile products which resulted inthedisruption anddislocation
oftradeamounting totradeharassment. Anyperceived non-fulfilment ofobligations should bebrought
totheattention oftherelevant Committees.
(xiii) Circumvention
16.36 Concerns were expressed thateffective implementation oftheATC depended onexporting
Members adopting effective measures toprevent circumvention oftheAgreement. Transshipment,
inparticular, wasalargeandgrowing problem. Theoverall problem oftransshipment wasmuch bigger
thantheamount ofimports which hadbeensubject tocharge-back.Members hadcommitted themselves
intheATC toestablish thenecessary mechanisms todealwiththisproblem. They should abide by
thisandcommit themselves tocloser cooperation inthisarea.G/L/134
Page 23
16.37 Inresponse itwasstated thattheconcerned Members continued tofully implement anti-
circumvention measures. They hadfully cooperated withtheirtrading partners atcombating and
redressing situations which might suggest theexistence ofcircumvention. They reaffirmed their
commitments toclose cooperation butstated thatrecourse totheremedies provided forintheATC
wastheproper course tofollow. Oneofthemain problems wasthesubjective manner inwhich the
circumvention provisions werebeing interpreted andapplied. Themagnitude oftheproblem should
notbeexaggerated. Itwasalsopointed outthatimplementation oftheATC could notbemade
conditional oneffective anti-circumvention measures.
*****
16.38 Divergent views wereexpressed withrespect topossible conclusions and/or recommendations,
withreference totheissues andproblems referred toinparagraphs 16.4-16.37 above.
16.39 AttheCouncil 'smeeting of1November 1996Hong Kong, onbehalf alsooftheASEAN WTO
Members, i.e.Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore andThailand; and
Colombia, Costa Rica, India, Pakistan andPeruandwiththesupport ofsome otherMembers, presented
under"OtherBusiness"aproposalforconclusionsandrecommendationsinrespectoftheimplementation
oftheAgreement onTextiles andClothing. Theproposal wassubsequently circulated asG/C/W/65.
16.40 Atthesamemeeting, alsounder "Other Business" Pakistan, onbehalf ofanumber ofMembers,
presented adraftofaMinisterial Decision, subsequently circulated asG/C/W/66.
16.41 Divergent views were expressed onhowthese proposals should betreated.
17. Textiles Monitoring Body (TMB)
Report oftheTMB (G/C/M/14)
17.1 TheTextiles Monitoring Body isastanding body oftheWTO setuppursuant toArticle 8:1
oftheAgreementonTextilesandClothingtosupervisetheimplementationoftheAgreement,toexamine
allmeasures taken under it,andtheirconformity withit,andtotaketheactions specifically required
ofitbytheAgreement. TheTMB consists ofaChairman and10members. Themembers areappointed
byMembers designated bytheCouncil toserve ontheTMB, discharging their function onan
adpersonam basis. TheTMB'sreport istherefore notareport byabodyconsisting ofWTO Members.
17.2 Atitsmeetingof15October1996,theCouncilconsideredtheReportoftheTextilesMonitoring
Body (G/L/113) inthecontext ofthepreparations fortheSingapore Ministerial Conference. Thefull
account ofthediscussions intheCouncil wasprovided intheminutes ofthemeeting (G/C/M/14).
Thefollowing is(a)asummary ofthecomments made byMembers atthatmeeting; and(b)action
taken bytheCouncil.
A. Summary ofComments Made byWTO Members
17.3 Some Members stated thatthereport wasacomplete, well-documented analysis oftheactivities
oftheTMB based onthemandate given toitintheATC. Itwasthemostimportant reference document
foranalysis oftheimplementations oftheATC, giving afactual account onthewayinwhich the
Members hadcomplied withtheirobligations andthewayinwhich thedifferent problems which had
arisen hadbeen analyzed andassessed. Itwasanimportant contribution totheCouncil towards
understanding themajor complexity ofthematters being handled bytheBody andthedifficulties therein.
TheTMB wasahard-working body, andanumber ofdelegations appreciated theamount oftimeand
effort given bytheTMB members anditsChairman tocompleting thereport. Itwasalsostated that
itwasapparent thattheTMB hadrelied extensively onnotifications byMembers toperform itstasks.G/L/134
Page 24
17.4 Some Members stated that,according toArticle 8.3,theTMB wassupposed alsotorelyon
additional andsupplementary information thatcould orshould beavailable toit.Incertain cases, it
hadnotsoughtsuchinformation,e.g.fromtheimportingaswellasthemajorcotton-producingMembers
astowhether consultations required under Article 1.4hadbeen conducted. TheTMB hadalso
overlooked changes intherules oforigin ofoneimporting Member andshould havebeenabletoat
leaststatethatthetransitional safeguard hadnotbeensparingly used. TheTMB hadreceived butnot
yetdisclosed anumber ofnotifications involving administrative arrangements. Itwould seemimportant
fortheTMB toreview these toensure thattheywereconsistent withtheprovisions oftheATC. It
wasalsostated thatthereport confirmed almost allconcerns voiced withregard totheoperation of
theTMB, aswellasontheimplementation oftheATC.
17.5 Inresponse itwasstated thatnocomplaints hadbeenbrought totheTMB concerning changes
intherules oforigin norabout non-sparing useoftransitional safeguards.
17.6 Itwasstated thatwhile theTMB hadbrought outtheabsence ofcommercially meaningful
integration inthefirststage, ithaderred innotpointing outthattheintegration programmes ofMembers
which didnotmaintain quantitative restrictions carried overfromtheMFA wasanotional integration,
andthattheproducts theyselected forintegration hadnoimplication fortheaccess; unlike inthecase
ofthefourother Members.
17.7 Inresponse itwasstated thattheTMB hadhandled theintegration notifications inafactual
andseparate manner which recognized thattheobligations concerning integration arose fromdiffering
legalprovisions (paragraphs 7(a)and7(b)ofArticle 2).
17.8 Itwasalsostated thatthereport should haveincluded information astowhether theMember
taking safeguard action hadclaimed serious damage oractual threat thereof orboth, andwhether the
TMB hadfound serious damage oractual threat orboth.
17.9 Inresponse itwasstated thatsuchinformation wasnotanimportant andcertainly notanecessary
element thatshould havebeenincluded inthereport.
17.10 Some Members stated thatthemanner inwhich Article 6notifications hadbeenreviewed by
theTMB didnotalways seem tohavetaken place within thedisciplines oftheATC. Forexample
specific limits lower thantherollback level, inconsistent withtheATC, should havebeenpointed out
bytheTMB. TheTMB hadaccepted, inseveral cases, bilateral solutions which werenotconsistent
withtheletter andthespirit oftheATC; inthisconnection, theso-called Guaranteed Access Levels
(GALs) were mentioned. TheTMB hadconcluded thatanotified restraint wasjustified "inoverall
terms", atermnotusedinArticle 6.When further bilateral consultations hadbeenrecommended,
rights andobligations hadbeenmodified. Doubts were expressed withregard toastatement inthe
report thatMembers invoking thesafeguard provisions had,inallcases, strictly observed theprocedural
requirements. TheTMB hadgonebeyond theprovisions oftheATC, inthatArticle 8.9didnotenvisage
anyrequirement ofMembers "tocomply" withTMB recommendations, especially when readwith
theprovision ofArticle 8.10which enabled Members topursue unresolved matters intheDSB. It
wasalsorecalled thattheTMB hadstated itsawareness oftheconcerns expressed bysome Members
withrespect tolackofsufficient improvements inaccess tomarkets insome developing country
Members. However, therehadnotbeenanynotification byanyWTO Member totheTMB withregard
totheimplementation ofArticle 7.Norhadthere beenanycommunication fromtheMarket Access
Committee totheTMB onthematter ofcross- andreverse-notifications. Itwassurprising thatthe
TMB should havemade suchanextra-jurisdictional observation.
17.11 Inresponse tosome ofthesepoints itwasstated thattheGALs involved anoutward processing
programme andArticle 6explicitly notonlypermitted suchprogrammes butrequired thataMember
usingArticle6givemorefavourabletreatmenttoMembersinvolvedinoutwardprocessingprogrammes.G/L/134
Page 25
TheGALs offered tocertain Members werenecessary toremain inconformity withArticle 6.The
remark bytheTMB thatinmostcases Members could comply withrecommendations wasapositive
statement offactwhich didnotreflect distorted legalobligations, namely thatMembers hadbeenable,
following theirbestendeavours, tocomply infullwiththerecommendations made. Inmost cases
Members hadbeenabletoabide byTMB recommendations, which boded wellfortheATC. Reference
hadbeenmade todispute caseswhere theBody could notreach agreement, buttheavoidance ofdecisions
onlateorabsent notifications wasofequal concern. TheTMB wasentitled tomention market access
because Article 8:1entrusted itwithsupervision ofallaspects oftheATC, including Article 7.
17.12 Recalling thatthereport didrecognize thatthere hadbeendifficulties which wereveryoften
duetothelimited amount oftimeavailable toreview dispute cases, theview wasexpressed thatit
would beinconsistent withtheprovisions oftheATCtoprovide time-frames otherthanthose prescribed
inArticle 6.Thedanger ofaccepting suchaview, andtransposing ittoother processes under the
Dispute Settlement Body, could notbeoveremphasized.
17.13 Inresponse, theviewwasexpressed thatthiswassimply stating afact.Itwasunfair tocriticize
theTMB inthismatter. Onecould seefrom thelength ofthereport whattasks theTMB faced. In
some cases itmight notbepossible fortheBody toreach consensus, particularly when itwasoperating
under tightdeadlines.
17.14 Recalling thattheTMB hadexpressed awareness oftheneedforgiving reasons foritsdecisions,
someMembers didnotagree thatmoredetailed reports might render consensus moredifficult toachieve
orrequire additional time. Thediscipline ofhaving toprovide reasons orcommon rationale fora
decision orrecommendation would encourage TMB members tostudy thevarious elements seriously
anddischarge theirduties strictly inanadpersonam capacity. TheTMB'sreviews should bedictated
bytheactions themselves rather thanbytheconvenience oftheparticipants. They believed greater
transparency provided forgreater accountability andtherefore greater acceptability. Itwasfurther
recalled thattheTMB wasconcerned thatinafewcases ithadnotbeenabletoarrive ataconsensus
decision andtherefore could notfulfil itsmandate. TheTMB alsohadsaidthatthiscould havean
adverse impact ontheMembers affected. Itwasactually concerned about theimplications ofunresolved
issues forthecontinued operation oftheAgreement. However, while theTMB stated itsdetermination
totakeallnecessary steps toovercome suchdifficulties, itwentontosaythatsimilar circumstances
could notbeexcluded inthefuture. Itwasofconcern thattheTMB recognized thatithadnotfulfilled
itsmandate under theATC andthenalsorecognized thepossibility thatsuchasituation might occur
again. Furthermore, theTMB wasaware oftheimplications fortrade ofrequests forconsultations
made withaviewtointroducing transitional safeguard measures. However, theTMB onlysaidthat
further efforts would bemade toprovide asmany details andexplanations aspossible. There was
thusneither ademonstration ofwilltoaddress theroots oftheproblem noracommitment toprovide
common rationale.
17.15 Inresponse theviewwasexpressed thattheTMB hadbeenabletoestablish standards forthe
review ofnotifications anddisputes which could provide guidance toMembers withrespect tothe
implementation oftheATC. Thereasons forTMB'sdecisions wereimportant notonlyfortheparties
towhom theyweredirected, butforallother Members. TheTMB hadacknowledged these problems
andwasdetermined tomake every effort toovercome theobstacles toreaching decisions byconsensus
andtotrytomake itsdecisions more understandable. Onecould onlyurgetheTMB tomake greater
efforts soastoenhance itsability toreach consensus decisions. Anassessment ofTMB'sfunctioning
could notbemade without taking intoconsideration circumstances ofitsestablishment, theinitial
workload itwasfaced with, aswellastheimportance ofthissector ofinternational trade. Itwasa
factthatmoredetailed reports might render consensus moredifficult toachieve and/or require additional
time. Explanations incaseofnoconsensus alsorequired consensus intheTMB. Because ofthe
quasi-judicial nature andneutrality requirement oftheTMB there should beareasonable limittoits
transparency. Some alsoargued thatTMB'sproblems werepartly duetoshortcomings intheATCG/L/134
Page 26
itself. TheATC established theTMB andunless onewasready toembark onsubstantial legislative
andnegotiating activity which didnotseem feasible, onehadtocontinue tolivewiththeTMB. The
course ofaction therefore wastotrytoenhance itsfunctioning precisely through adiscussion such
asthepresent one.Bytheverynature ofitsconstitution theTMB hadlimits toaperfect performance.
17.16 Itwasstated thatthereport oftheTMB hadcontributed towards greater transparency ofthe
TMB functioning, andthatthistrend should beencouraged.
B. Action Taken bytheCouncil
17.17 TheCouncil tooknoteoftheTMB'sreport anddecided toannex ittoCouncil 'sownreport
totheGeneral Council.
17.18 TheCouncil alsoagreed totakethefollowing action onthethree recommendations made by
theTMB totheCouncil:
(i) ittooknoteoftheobservations andconcerns contained inparagraph 102oftheTMB report
andrecalled toMembers theparticular importance ofstrictly adhering tothenotification
requirements under theAgreement onTextiles andClothing;
(ii) itagreed thattheChairman resume consultations ontheproposal oftheadpersonam status
ofTMB'smembers (G/C/W/20) atanappropriate time;
(iii) ittooknoteoftherecommendation thatdueconsideration should begiven totheschedule of
meetings oftheTMB intheWTO 'soverall schedule ofmeetings.
18. Proposals andInitiatives forFurther Trade Liberalization
(G/C/M/11, 13andCorr.1, 14and15)
18.1 Atthemeeting of5July1996, therepresentative ofAustralia stated thatwhile thebuilt-in
agenda covered many areas, itfailed todealwithindustrial tariffs. Forthatreason Australia proposed
thattheSingapore Ministerial Conference agree tobegin comprehensive industrial tariff negotiations
intheyear2000, atthesame timeasfurther negotiations inagriculture andservices, andmandate
theCouncil ortheCommittee onMarket Access toundertake preparatory work forsuchnegotiations
asfrom 1997 (G/L/96).
18.2 Atthemeetingof19September1996,therepresentativeofAustraliafurtherclarifiedtheproposal
made byhisdelegation inthecontext ofpreparations fortheSingapore Ministerial Conference. The
Council agreed totheChairman 'sproposal toconsult informally onthismatter.
18.3 Atthemeeting of15October 1996, therepresentative ofAustralia proposed thatadraft
recommendation onthismatter beincluded inthereport oftheCouncil.
18.4 Atthemeeting of1November 1996, therepresentative ofAustralia proposed thattheCouncil
consider theinclusion ofarecommendation inSection IIofitsreport totheeffect that"Members agreed
tokeepunder review theprospect ofeffecting further tradeliberalisation including onanautonomous,
plurilateral ormultilateral basis".
18.5 Inthediscussions ofthismatter intheCouncil, Members expressed divergent views withrespect
tothesubstance oftheAustralian proposal aswellastherequest fortheinclusion ofarecommendation
inthereportoftheCouncil.WhilesomeMembersexpressedsupportinvaryingdegreesfortheproposal,
other Members expressed opposition totheproposal aswellastotherequest forarecommendation.G/L/134
Page 27
18.6 Attheresumed meeting of4November 1996, therepresentative ofAustralia stated thathis
delegation would continue towork withother delegations towards theobjective thattheSingapore
Ministerial Conference underlines thecommitment oftheWTO tothefurther progressive liberalization
oftariffs through successive rounds ofmultilateral trade negotiations. Atthisstage, Australia would
notinsist ontheinclusion oftherecommendation proposed inSection IIoftheCouncil 'sreport.
18.7 Atthemeeting of1November 1996, under "Other Business", aproposal wasalsosubmitted
byCanada onFurther Tariff Liberalization (G/MA/W/9) which recommended aWTO workprogramme
toaddress, interaliatheacceleration ofUruguay Round tariff reductions, expansion ofmembership
forexistingsectoralandharmonizationinitiatives,andidentificationofadditionalsectorsforzero-for-zero
andharmonization initiatives.
18.8 Additionally, twocommunications were submitted atthatmeeting under "Other Business":
onebytheUnited States (G/MA/W/8), concerning theInformation Technology Agreement onfurther
liberalization ofinformation technology products; andonebytheEuropean Communities onbehalf
oftheWTO Members concerned (G/MA/W/10), onTrade inPharmaceutical Products outlining the
review ofpharmaceutical product coverage thathadresulted intheaddition of465products forduty-free
treatment.
19. Singapore Ministerial Conference
(a) Reports ofsubsidiary bodies oftheCouncil (G/C/M/13 andCorr.1, 14and15)
19.1 Atitsmeeting of19September 1996, theCouncil agreed totheChairman 'sproposal toconsult
informally ontheCouncil 'streatment ofthereports ofitssubsidiary bodies.
19.2 Atitsmeeting of15October 1996, theCouncil agreed thatthebroad guidelines withregard
tothehandling ofthereports of12ofitssubsidiary bodies (i.e.,theCommittees onAgriculture, Anti-
Dumping Practices, Customs Valuation, Import Licensing, Market Access, Rules ofOrigin, Safeguards,
Sanitary andPhytosanitary Measures, Subsidies andCountervailing Measures, Technical Barriers to
Trade, Trade-Related Investment Measures andtheWorking Party onStateTrading Enterprises) who
wereexpected tosubmit theirreports onaconsensus basistotheCouncil inthecontext oftheSingapore
Ministerial Conference, would betotakenoteofthose reports andannex themtoitsownreport. This
would bewithout prejudice totheability ofMembers toraisepoints withregard tothereports, and
alsotheability oftheCouncil torecord observations, tomake recommendations, andtotakedecisions,
ifconsidered necessary. With regard tothefactual report fromtheIndependent Entity under thePSI
Agreement andthereport from theWorking Group onNotification Obligations andProcedures, the
Council agreed totreattheminthesame wayastheother 12reports. Asconcerned theTMB report,
theCouncil agreed totheChairman 'sproposal toconsult informally onhowtodealwiththisreport.
19.3 Asregards thereports oftheCommittees onAgriculture (relating totheMarrakesh Ministerial
Decision onMeasures concerning thePossible Negative Effects oftheReform Programme onLeast-
DevelopedandNetFood-ImportingDevelopingCountries)7,Anti-DumpingPractices,CustomsValuation,
Import Licensing, Market Access, Rules ofOrigin, Safeguards, Sanitary andPhytosanitary Measures,
Subsidies andCountervailing Measures, Technical Barriers toTrade andTrade-Related Investment
Measures, theIndependent Entity, theWorking Group onNotification Obligations andProcedures
andtheWorking Party onStateTrading Enterprises, theCouncil atitsmeeting of1November 1996,
tooknoteofthem anddecided toannex them toitsownreport. Asregards thereport oftheTMB,
7Atthetimeofadoption oftheCouncil 'sreport, thereport oftheCommittee onAgriculture ontheImplementation
oftheAgreement onAgriculture andthework oftheCommittee hadnotbeen received. TheCouncil agreed toconsider
thatreport separately after itsreceipt andforward ittotheGeneral Council asanaddendum totheCouncil 'sreport.G/L/134
Page 28
theCouncil tooknoteofitanddecided toannex ittoitsownreport; thisaction waspreceded bya
fullconsideration ofthereport (seediscussion inparagraphs 17.1to17.18).
19.4 Atitsmeeting of1November 1996, theCouncil tooknoteoftheconcerns voiced bysome
delegations onthethirdsentence ofparagraph 15ofthereport oftheCommittee onTechnical Barriers
toTrade (TBT) relating totheissue ofeco-labelling anditscoverage intheTBTAgreement.
(b) Report bytheCouncil forTrade inGoods totheMinisterial Conference (G/C/M/10, 11,13
andCorr.1, 14and15)
19.5 Atitsmeeting of22May1996, theChairman referred tothestatement made bytheChairman
oftheGeneral Council atthemeeting of16April 1996, concerning "Reporting Procedures forthe
Singapore Ministerial Conference" (WT/L/145), andsuggested holding informal consultations ata
laterstage ontheCouncil 'sreport totheSingapore Minsterial Conference.
19.6 Atitsmeeting of5July1996, theChairman stated thatinthecontext ofthestatus ofwork
withrespect totheSingapore Ministerial Conference hewished toaddress twoaspects regarding this
process. While thesituation wassatisfactory inrespect ofscheduled commitments, aserious problem
seemed tobeemerging inrespect ofcompliance withnotification obligations inanumber ofAgreements,
asreflected indocument issued bytheWorking Group onNotification Obligations andProcedures.
Thesecond aspect related totheindication given bytheChairman oftheGeneral Council thatitwould
beappropriate fortheChairmen ofthesectoral Councils topresent anoralreport totheGeneral Council
regardingthecurrentstatusofworkconcerningthepreparationsfortheSingaporeMinisterialConference,
particularly inrespect ofimplementation andthebuilt-in agenda. Accordingly, heintended topresent
anoralreport onhisownresponsibility totheGeneral Council atthemeeting scheduled for18July
1996.
19.7 Atitsmeeting of19September 1996, theCouncil agreed totheChairman 'sproposal toconsult
informally ontheformat andcontent oftheCouncil 'sreport totheSingapore Ministerial Conference.
19.8 Atitsmeeting of15October 1996, theCouncil agreed thattheCouncil 'sreport would consist
oftwoparts, onefactual andonecontaining conclusions and/or recommendations.
19.9 Atitsresumed meeting of4November 1996, theCouncil adopted thereport totheGeneral
Council contained inG/C/W/62/Rev.1, asamended inthelightofthediscussion atthatmeeting8.
8Thereport wassubsequently issued initsfinalversion asG/L/134.G/L/134
Page 29
SECTION II:CONCLUSIONS AND/OR RECOMMENDATIONS
Theconclusions and/or recommendations ofthesubsidiary bodies oftheCouncil arecontained
inthereports oftherespective bodies annexed tothisreport.
Thefollowing conclusions and/or recommendations arisedirectly from thedeliberations of
theCouncil:
1. Agreement onPreshipment Inspection
1.1 TheCouncil recommends thattheGeneral Council acting onbehalf oftheMinisterial
ConferenceinaccordancewithArticleIV:2oftheAgreementestablishingtheWorldTradeOrganization,
setupaWorking Party under theCouncil withthefollowing terms ofreference:
"toconduct thereview provided forunder Article 6oftheAgreement onPreshipment Inspection
andtoreport totheGeneral Council through theCouncil, inDecember 1997."
2. Notification Obligations andProcedures
(a) TheCouncil requests theGeneral Council totakethenecessary stepstoeliminate the
notification obligations intheDecisions oftheGATT 1947 CONTRACTING PARTIES relating to
import licensing procedures (L/3756 andSR/28/6).
(b) TheCouncil requests theMinisterial Conference ortheGeneral Council toconsider
theestablishment, atanappropriate time, ofabodywithamandate toreview thenotification obligations
andprocedures throughout theWTO Agreement. Alternatively, consideration might begiven tothe
establishment ofabody, ortheextension/modification ofthemandate ofthecurrent Working Group,
toconduct, atanappropriate time, afurther comprehensive review ofthenotification obligations and
procedures intheagreements inAnnex 1AoftheWTO Agreement. Itwassuggested thatfuture work
alsoencompass matters relating totheCentral Registry ofNotifications, electronic transmission of
notifications andfurther work onthenotifications handbook.SECTION V
COUNCIL FOR TRADE INSERVICESWORLD TRADE S/C/3
6November 1996
ORGANIZATION(96-4706)
Council forTrade inServices
COUNCIL FOR TRADE INSERVICES
Report totheGeneral Council
PartI:Activities oftheCouncil andSubsidiary Bodies
1. TheCouncilforTradeinServiceshasheldninemeetingsduring1996.Reportsonsuchmeetings
arecontained indocuments S/M/8 -16. TheCouncil addressed thefollowing matters:
Procedures fortheImplementation ofArticle XXI(Modification ofSchedules)
2. Paragraph 5ofArticle XXIoftheGATS (Modification ofSchedules) callsupon theCouncil
forTrade inServices toestablish procedures forrectification ormodification ofschedules. Ininformal
consultations intheUruguay Round, participants hadbeenworking onthebasisofadetailed preliminary
draftofsuchprocedures. During 1995, informal consultations started under theCouncil onthebasis
ofthatdraftandcontinuedin1996resultinginthreeconsecutiverevisionsthelastofwhichwascirculated
inaninformal notebytheSecretariat dated 23May1996. Several delegations expressed theview
thatinthelightofadditional questions which hadbeenraised, informal consultations should continue
withaviewtoproducing afinaldrafttextforconsideration andadoption bytheCouncil. Consultations
arecontinuing.
Taxes andSubsidies attheSub-Central Level
3. InaccordancewiththestatementmadebytheChairmanoftheGroupofNegotiationsonServices
dated 13December 1993(MTN.GNS/50), participants intheUruguay Round weregiven anadditional
period oftimeuntil15June1994 tocomplete thescheduling ofmeasures relating tosubsidies and
taxes atthesub-central level. Thestatement alsostipulated that"itisunderstood thatthisprocess will
notresult inanyalteration inthenegotiated balance ofrights ofobligations. Foraperiod ofthirty
daysstarting on16June1994, ifanyparticipant considers thatsuchbalance hasbeenaltered asaresult
ofscheduling additional measures, itmayconsult withtheparticipant orparticipants concerned with
aviewtoreaching asatisfactory adjustment". Pursuant tothatstatement, theUnited States submitted
acommunication, contained inPC/SCS/W/4 dated 30June1994, through theSub-Committee on
Services. Upon request fromdelegations, thecommunication wassubject tomultilateral consultations
under theauspices oftheSub-Committee onServices during 1994andunder theauspices oftheCouncil
during 1995 and1996. Atitsmeeting of4March 1996, theCouncil considered aninterim report
ontheprogress achieved inconsultations thusfar(S/C/W/13). TheCouncil tooknoteofthereport
andagreed thatmultilateral consultations shallcontinue withaviewtoreaching asatisfactory outcome
fullyconsistent withGATS disciplines. Anumber ofdelegations tooktheviewthatfuture consultations
onthematter should notbedirected towards factfinding, butshould focus onpractical solutions to
theproblems identified inprevious consultations.S/C/3
Page2
Notification oftheEstablishment ofEnquiry andContact Points
4. Paragraph 4ofArticle IIIandparagraph 2ofArticle IVoftheGATS callupon Members to
establish enquiry points and,where appropriate, contact points within twoyears fromthedateofentry
intoforceoftheAgreement. However, thesearticles donotrequire thenotification oftheestablishment
andlocation ofthese agencies. Given theobjective behind theestablishment ofsuchagencies, the
Council considered itdesirable thattheirexistence andlocation bemade known. TheCouncil therefore,
atitsmeetingon28May1996,adoptedthe"DecisionontheNotificationoftheEstablishmentofEnquiry
andContact Points" (S/L/23) which callsuponMembers tonotify theestablishment ofsuchagencies.
Sofartwenty-four Members havesubmitted suchnotifications (S/ENQ/1 -24).
Notifications pursuant toArticle V(Economic Integration)
5. Atitsmeeting on22November 1995, theCouncil forTrade inServices hadreceived a
communication from theEuropean Communities andtheirMember States notifying the"Economic
Integration Agreement" asinstituted bytheTreaty ofRome, subsequently enlarged, andmodified most
recently bytheTreaty ontheEuropean Union. Atitsmeeting on23September 1996, theCouncil
decided torequest theCommittee onRegional Trade Agreements toexamine theAgreement interms
ofitsconsistency withtheprovisions ofArticle VoftheGATS.
6. TheCouncilhasalsoreceivednotificationspursuanttoparagraph7(a)ofArticleVfromAustralia
andNewZealand (S/C/N/7), theEuropean Communities andtheirMember States andtheSlovak
Republic (S/C/N/23), theRepublic ofHungary (S/C/N/24), theRepublic ofPoland (S/C/N/25), the
Czech Republic (S/C/N/26), Romania (S/C/N/27) andtheKingdom ofNorway, theRepublic ofIceland
andthePrincipality ofLiechtenstein (S/C/N/28).
Atitsmeeting on30October 1996theCouncil decided torequest theCommittee onRegional
Trade Agreements toexamine thefollowing agreements:
- ProtocolonTradeinServicestotheAustralia-NewZealandCloserEconomicRelations
Trade Agreements (S/C/N/7)
- Europe Agreement between theEuropean Communities andtheirMember States and
theSlovak Republic (S/C/N/23)
- Europe Agreement between theEuropean Communities andtheirMember States and
Republic ofHungary (S/C/N/24)
- Europe Agreement between theEuropean Communities andtheirMember States and
Republic ofPoland (S/C/N/25)
Committee onSpecific Commitments
7. TheCommittee onSpecific Commitments hasheldtwomeetings in1996. Itsdiscussions have
focused onhowtoorganise itsactivities andwork priorities according toitsthree main areas of
responsibility asspecified intheterms ofreference (seedocument S/L/16).
8. With respect tothefirstresponsibility -overseeing theimplementation ofcommitments -
Members generally consider thattheoversight function should behandled onanad-hoc basisandshould
focus ontechnical aspects ofimplementation.S/C/3
Page3
9. Members consider thatagreat dealofuseful work canbedoneintheCommittee regarding
thesecond function -examining technical aspects ofschedules ofcommitments andMFN exemption
listsinorder toimprove theirtechnical accuracy andcoherence butwithout affecting thecurrent
commitments. Astarthasbeenmade inexamining issues relating tothedefinition ofsectoral coverage
ofcommitments andtotheadequacy oftheexisting GATS classification list.TheCommittee discussed
aSecretariat paper onrelevant developments inservices classification systems incoordination with
otherinternational organizations andtheirimplications fornegotiations andscheduling under theGATS.
TheCommittee hasalsodiscussed thequestion ofhowtofacilitate thehandling oflistsofcommitments
andMFN exemptions. Inthisregard, theSecretariat prepared apaper analysing relevant issues
concerning, first, theintroduction ofaloose-leaf binding system forthelistsand,second, current
developments attheWTO inthecomputerisation ofschedules.
10. WithrespecttothethirdfunctionoftheCommittee-overseeingtheapplicationoftheprocedures
forthemodification ofschedules under GATS Article XXI-Members generally consider thatthe
Committee should address relevant issues when theprocedures themselves havebeenfinalized.
Working Party onProfessional Services
11. Since starting work inJuly1995, theWPPS hasheldseven meetings. Itsdeliberations have
focused onthethree setsofissues intheaccountancy sector laiddown inparagraph 2oftheDecision
onProfessional Services .These issues are:(a)thedevelopment ofmultilateral disciplines toensure
thatdomestic regulatory requirements arebased onobjective andtransparent criteria andarenotmore
burdensome thannecessary; (b)theuseofinternational standards and(c)theestablishment of
guidelines fortherecognition ofqualifications.
(a) Development ofmultilateral disciplines
12. Theactivities oftheWorking Party have focused ontheestablishment ofanextensive
information baseonregulation intheaccountancy sector andonprioritizing andaddressing specific
issues withaviewtothedevelopment ofmultilateral disciplines particularly inthissector.
13. TheWorking Party hasdevoted considerable timeandeffort tothecollection andanalysis of
dataandstudies ofdomestic regulation intheaccountancy sector. Aseminar wasorganized atwhich
theInternational Federation ofAccountants (IFAC) presented theresults ofamajor international survey
ontheregulation andstructure ofaccountancy services, explained itsroleandthatoftheInternational
Accounting Standards Committee (IASC) insetting international standards insuchareas asauditing,
education foraccountants andfinancial reporting, andintroduced astatement onrecognition of
accountancy qualifications. Briefings werealsoreceived fromtheOECD andUNCTAD, bothofwhich
havecarried outextensive workonaccountancy services. TheOECD presented theresults ofitssurvey
onregulations onaccess forprofessional services andthecategorized inventory ofmeasures affecting
trade inprofessional services. UNCTAD, through itsInter-governmental Working Group ofExperts
onInternational Accounting Standards ofAccounting andReporting (ISAR), explained itsmainactivities
inpromoting international harmonization ofcorporate accounting andreporting practices.
14. Inorder tocomplete theinformation thathadbeenmade available bytheabove organizations
ontheregulatory regimes ofMembers affecting theaccountancy sector, asupplementary questionnaire
onspecific aspects ofdomestic regulation wascirculated toWPPS Members. Twenty-three responses
covering thirty-seven Members havebeenreceived todate.S/C/3
Page4
15. With respect toissues, Members drew upanon-exhaustive listofpriority issues, based on
delegation submissions andstatements, which define insome detail thepolicy areas forwhich the
Working Party isdeveloping multilateral disciplines. Theissues proposed forconsideration comprise:
qualificationrequirementsandprocedures;licensingrequirements(otherthanqualificationrequirements)
and procedures; regulations governing the establishment ofacommercial presence;
nationality/citizenship/residency requirements; professional liability andethics; regulations governing
entry andtemporary stayofnatural persons forthepurpose ofsupplying accountancy services. The
tworemaining issues, relating toguidelines forrecognition ofqualifications anduseofinternational
standards, aredealtwithbelow.
16. AmongtheseissuesMembershaveconcentratedinitiallyonlicensingrequirementsandprocedures
intheaccountancy sector. Inthisregard, theWorking Party hasstarted toexamine theapplicability
oftheconcepts andapproaches taken intheTechnical Barriers toTrade (TBT) Agreement astheyapply
tolicensing requirements andtheother measures covered byGATS Article VI.4. Similarly, theWPPS
hasbegun toexamine therelevance ofthedisciplines intheImport Licensing Agreement totheneed
toensure thatlicensing procedures intheaccountancy sector donotinthemselves restrict trade.
(b) Useofinternational standards
17. Themain roleoftheWorking Party inthisareaistokeeptrack ofwork going onelsewhere
andencourage cooperation withrelevant international organizations. Inafurther seminar members
oftheWorking Party received briefings onthedevelopment ofinternational standards bytheIASC
andtheInternational Auditing Practices Committee (IAPC), andontheir co-operation with the
International Organization ofSecurities Commissions (IOSCO).
(c) Establishment ofnon-binding guidelines formutual recognition agreements orarrangements
intheaccountancy sector
18. TheWorking Party hasalsoworked onthedevelopment ofnon-binding guidelines forthe
negotiation ofmutual recognition agreements orarrangements, which arepermitted under theconditions
laiddown inArticle VIIoftheGATS. Thepurpose ofsuchguidelines, which would constitute a
roadmaporchecklist, would betoassist onavoluntary basisthenegotiation andconclusion ofmutual
recognition agreements orarrangements among WTO Members andtoensure theirtransparency. At
itsseventh meeting, theWorking Party tooknotethatadraftpaper entitled Guidelines forMutual
Recognition Agreements orArrangements intheAccountancy Sector hadbeenprepared andisunder
discussion.
Working Party onGATS Rules
19. TheWorking Party onGATS Rules wasestablished inMarch 1995 bytheCouncil onTrade
inServices tocarry outthenegotiating mandates contained intheGATS onemergency safeguard
measures, government procurement inservices andsubsidies. Article Xrequires thatmultilateral
negotiations shallbeheldonthequestion ofemergency safeguard measures, based ontheprinciple
ofnon-discrimination, theresults ofwhich aretoenter intoeffect notlaterthan1January 1998.
Article XIIIofGATS callsformultilateral negotiations ongovernment procurement inservices within
twoyears fromthedateofentry intoforce oftheWTO Agreement. Article XVofGATS stipulates
thatnegotiations willbeheldwithaviewtodeveloping thenecessary disciplines toavoid thetrade-
distortive effects ofsubsidies thatmayariseincertain circumstances andtoaddress theappropriateness
ofcountervailingprocedures.ItalsorequiredMemberstoexchangeinformationconcerningallsubsidies
related totrade inservices andtoestablish afuture work programme todetermine how, andinwhat
timeframe, negotiations onsuchmultilateral disciplines willbeconducted.S/C/3
Page5
20. TheWorking Party hasheldeight meetings. TheWorking Party firsttookuptheissue of
emergency safeguard measures, followed atintervals ofthree months bygovernment procurement in
services andsubsidies. Thus, since itsfifthmeeting, theWorking Party hasconsidered allthree
negotiating mandates atevery meeting. Differing views havebeenexpressed byMembers inregard
tothequestion ofdeveloping anemergency safeguard mechanism under GATS andsubstantive
discussions arecontinuing inregard tothisquestion. Working papers onemergency safeguard measures
were submitted totheWorking Party byAustralia (S/WPGR/W/5), Thailand (S/WPGR/W/6) and
Switzerland (S/WPGR/W/14). TheWorking Party agreed thatthose Members wishing todosowould
provide written contributions inrelation toquestions raised indocument S/WPGR/W/15 onemergency
safeguard measures.
21. Thediscussions intheWorking Party onthesubject ofgovernment procurement inservices
haveaddressed various aspects ofpossible disciplines, particularly inrelation totransparency. In
addition, Members haveconsidered theimplications oftheexistence oftheAgreement onGovernment
Procurement (GPA) foranydisciplines thatmight bedeveloped inGATS, aswellassome ofthereasons
given byMembers astowhytheyarenotsignatories oftheGPA. Members arealsoengaged, on
avoluntary basis, inaninformation-gathering exercise inrelation tonational procurement regimes
affecting trade inservices.
22. TheWorking Party'sdeliberations onthesubject ofsubsidies havesofarbeenofapreliminary
nature. Many delegations havenoted theinherent complexity ofthesubsidy issueinservices, urging
acareful andsystematic approach tothenegotiating mandate. Some discussion hastaken place on
thequestion whether adistinction should bemade between broad-based subsidies ofgeneral applicability
andnarrower, sector specific subsidies. TheWorking Party hasbegun toconsider themodalities of
theinformation exchange exercise called forinthenegotiating mandate. Aworking paper onconceptual
issues relating tosubsidies wassubmitted totheWorking Party byChile (S/WPGR/W/10).
Negotiations onBasic Telecommunications
23. TheNegotiating Group onBasic Telecommunications, established byMinisterial decision at
Marrakesh, completed itsworkon30April 1996. TheNegotiating Group hadheld17meetings between
May1994 andApril 1996. Fifty-three WTO Members werefullparticipants inthenegotiations and
24governments participated asobservers. TheNGBT submitted itsfinalreport totheCouncil for
Trade inServices (S/NGBT/18) on30April; toitwereattached alistoftheresults ofthenegotiations,
intheform of34Schedules ofCommitments representing 48WTO Member governments andone
ListofArticle II(MFN) Exemptions. Also on30April, theCouncil adopted theDecision on
Commitments inBasic Telecommunications (S/L/19) andtheFourth Protocol totheGeneral Agreement
onTrade inServices (S/L/20).
24. Ofthe34Schedules attached totheProtocol, 32offermarket access commitments invoice-
telephony; 28relate tolocaltelephone services, 27todomestic longdistance and25tointernational
services. Other services onwhich commitments were offered included data-transmission services
(31schedules), cellular/mobile telephone markets (28),private-leased circuit services (27)other types
ofmobile services (22)andsatellite services (16). Inanumber ofcases these commitments would
bephased-inovertime.Thirtyofthe34Schedulesincludecommitmentsrelatingtoregulatorydisciplines
onsuchmatters ascompetition safeguards, interconnection, licensing andtheindependence ofregulators
-matters which hadbeenextensively discussed inNGBT meetings devoted toconceptual andtechnical
issues.S/C/3
Page6
25. TheSchedules andExemption Lists attached totheFourth Protocol willenter intoforce on
1January 1998 provided thattheProtocol hasbeenaccepted byallMembers concerned. However,
theDecision bywhich theCouncil adopted theProtocol alsoprovided thatduring theperiod from
15January to15February 1997theSchedules andExemption Listsmaybesupplemented ormodified,
andestablished anewGroup onBasic Telecommunications toconduct consultations onthe
implementation ofthisprovision.
26. TheCouncil Decision alsoincluded astandstill provision calling upontheMembers concerned,
tothefullest extent consistent withtheirexisting legislation andregulations, nottotakemeasures which
would beinconsistent withtheirundertakings resulting fromthese negotiations. TheCouncil, which
willmonitortheacceptanceoftheProtocol,willalsoexamineanyconcernsraisedbyMembersregarding
thestandstill.
27. TheGroup onBasic Telecommunications (GBT) helditsfirstmeeting on19July1996. At
thatmeeting, theGroup decided tobeopentoallMembers oftheWTO. Participants recognized the
importance oftheresults achieved inApril, interms ofcreating abenchmark forfurther liberalization
andestablishing newregulatory disciplines. Participants suggested thattheprincipal issues before the
GBTincluded thedesirability ofimproving thequantity andquality ofSchedules offered, andtheneed
toaddress possible distortions intrade resulting fromthecoexistence ofopenmarkets andmonopoly
markets ininternational telecommunications services andtoclarify commitments ontheprovision of
satellite-based services.
28. TheGBTapproved atimetable ofmeetings andactivities leading uptothe15February 1997
deadline forthemodifications. Thetimetable comprised monthly meetings inSeptember, October
andNovember 1996 andamore intensive programme ofmeetings tobeheldduring the15January
to15February period, theconduct ofbilateral negotiations inassociation withthese meetings, and
indicative datesforthesubmission totheGroup ofproposals forneworimproved draftoffers throughout
theprocess. Itwasalsoproposed thattheGBTshould holdahigh-level meeting inNovember 1996.
Negotiations onMaritime Transport Services
29. TheMinisterial Decision onNegotiations onMaritime Transport Services andtheAnnex on
Negotiations onMaritime Transport Services provided amandate forMembers tonegotiate, bythe
endofJune1996, commitments relating tomaritime transport services leading totheelimination of
restrictions within afixed timescale. TheDecision established theNegotiating Group onMaritime
Transport Services tocarry outthenegotiations. TheNegotiating Group held16meetings andreported
periodically totheCouncil onTrade inServices.
30. InOctober 1994, theNegotiating Group issued aQuestionnaire onMaritime Transport Services
covering market structure andregulatory issues. TheGroup reviewed participants 'responses tothe
questionnaire. Inall,35ofthefullparticipants andtwoobserver governments submitted questionnaire
responses. Another activity oftheGroup wastoexamine outstanding technical andconceptual issues.
Amongissuesdiscussedweretechnicalmattersrelatingtotheschedulingofcommitmentsoninternational
shipping, auxiliary services, access toanduseofportfacilities andmultimodal transport services.
AttheendofJune1995,participantsbegansubmittingdraftoffersofcommitmentsonmaritimetransport
services toserve asthebasis fornegotiations.
31. Atitsmeeting on28June1996, theCouncil forTrade inServices adopted aDecision tosuspend
thenegotiations onmaritime transport services andtoresume them withthecommencement of
comprehensive negotiations onservices, inaccordance withArticle XIXoftheGATS, andtoconclude
them nolaterthanattheendofthisfirstround ofprogressive liberalization (S/L/24).S/C/3
Page7
32. After thesuspension ofthenegotiations, twoMembers, Iceland andNorway, consolidated their
bestoffers, i.e.transformed theiroffers intospecific commitments tobeinscribed intheirschedules.
Two Members, Austria (inthecontext ofitsaccession totheEuropean Union) andthe
DominicanRepublic,withdrewtheircommitments,whiletwoMembers,CanadaandMalaysia,modified
theircommitments slightly. Currently, 35Members havecommitments onmaritime transport services.
This includes: 29Members who made commitments intheUruguay Round, 4Members
(PapuaNewGuinea,SaintChristopherandNevis,SierraLeoneandSlovenia)whoaccededsubsequently,
and2Members (Iceland andNorway) whomade commitments aftertheextended negotiations.
33. Atthetimeofsuspension ofthenegotiations, 56governments (including theEuropean
Communities andtheirMember States) hadelected toparticipate fullyinthenegotiations. Another
16governments wereparticipating intheprocess asobservers. Bythattime24conditional offers had
beensubmitted.
Committee onTrade inFinancial Services
34. Theactivities oftheCommittee onTrade inFinancial Services in1996 focused onfivemain
issues: monitoring oftheacceptance andimplementation oftheresults ofthefinancial services
negotiations concluded inJuly1995; exchange ofinformation onrecent developments infinancial
services trade; consideration ofsome technical issues regarding theschedules ofspecific commitments
andArticle II(MFN) exemptions; availability offinancial services data; andorganization offuture
work. The work oftheCommittee in1996 was conducted under theChairmanship of
Mr.Frank Swedlove ofCanada. TheCommittee heldtwoformal meetings in1996.
35. Onthemonitoring oftheacceptance andimplementation oftheresults ofthefinancial services
negotiations, theCommittee provided transparency onthestatus ofacceptances oftheSecond Protocol
totheGATS toallMembers, andcontributed tothecompletion oftheacceptance process bythe
Members concerned.1Although notallMembers concerned wereabletoaccept theProtocol bythe
initial deadline of30June1996, itentered intoforce on1September 1996byvirtue ofadecision taken
on30July1996 byMembers which hadaccepted it.Thiswasinaccordance withtheprocedures
inscribed intheProtocol adopted bytheCommittee inJuly1995. Adecision bytheCouncil forTrade
inServices wasalsotaken onthesame daytoextend theperiod foracceptance oftheProtocol until
30November 1996, allowing theremaining Members toaccept. TheCommittee continues tomonitor
theacceptance oftheProtocol bytheremaining Members.
36. Concerning theexchange ofinformation onrecent developments infinancial services trade,
several Members reported recent liberalization measures. These developments werewelcomed, and
Members were encouraged toreport anyrelated developments totheCommittee fortransparency
purposes.
37. Regarding theconsideration oftechnical issues, theSecretariat produced anoteindicating issues
fordiscussion ontwotechnical questions; thedistinction between Modes 1and2infinancial services
andsectoral classification offinancial services. Other technical issues, suchashowtoimprove the
verification ofschedules andMFN exemptions afternegotiations, havealsobeenraised. TheCommittee
agrees topursue these discussions.
1TheMembersconcernedare:Australia,Brazil,Canada,Chile,Czech Republic,DominicanRepublic,Egypt,
European Communities andtheir Member States (15), Hong Kong, Hungary, India, Indonesia, Japan, Korea,
Kuwait,Malaysia,Mexico,Morocco,Norway,Pakistan,Philippines,Poland,Singapore,SlovakRepublic,South
Africa, Switzerland, Thailand, Turkey, Venezuela. Members who have notaccepted theProtocol asof
5November 1996 were Belgium, Brazil, Egypt, Greece, Portugal andSpain.S/C/3
Page8
38. Ontheavailability offinancial services data,theCommittee encouraged theSecretariat towork
inclose cooperation withother international organizations intheirefforts toimprove theavailability
ofstatistics, andrequested ittoreport onanyfuture developments withrespect tothissubject.
39. TheCouncil forTrade inServices haddecided inJuly1995 thatallMembers begiven the
opportunity tomodify orwithdraw allorpartoftheirspecific commitments andtolistArticle II(MFN)
exemptions under theGATS infinancial services during aperiod of60days beginning on
1November1997.TheCommitteewilloverseenegotiationsundertakeninaccordancewiththisdecision,
andhasdecided thatsuchnegotiations willresume inearly April 1997.
40. Ontheorganization offuture work, theCommittee recognized theimportance ofproper early
preparation fortheresumption ofnegotiations in1997. Ittherefore agreed todraw upatimetable
forsuchnegotiations leading totheirconclusion inDecember 1997. Suchatimetable willbepresented
tothenextmeeting oftheCommittee tobeheldinearly April 1997.
Movement ofNatural Persons
41. During 1996, theCouncil reviewed thestatus ofacceptance oftheThird Protocol totheGATS.2
TheProtocol hadbeenopen foracceptance until30June1996. Atthatpoint, there remained five
Members which hadnotaccepted theProtocol duetoprocedural delays. Atitsmeeting on30July
1996 theCouncil reviewed thesituation andadopted the"Decision ontheAcceptance oftheSecond
andThird Protocol totheGeneral Agreement onTrade inServices" (S/L/28) which provides an
additional period foracceptance, until30November 1996.
2Members whoattached aschedule totheThird Protocol were: Australia, Canada, European Communities
andtheir Member States (15), India, Norway andSwitzerland. Members who, asof5November 1996, have
notaccepted theThird Protocol: Belgium, Greece, Portugal, Spain andSwitzerland.S/C/3
Page9
PartII:Future work
Negotiations onBasic Telecommunications
42. Itisrecommended thatMinisters stress theircommitment tobring thenegotiations onbasic
telecommunications toasuccessful conclusion by15February 1997, urgeallWTO Members tostrive
forsignificant,balancedandnon-discriminatoryliberalizationcommitmentsonbasictelecommunications
bythatdateandrecognize theimportance ofresolving theprincipal issues before theGBT.
Committee onTrade inFinancial services
43. Itisrecommended thatMinisters stress theircommitment tobring thenegotiations ontrade
infinancial services, toberesumed inearlyApril 1997, toasuccessful conclusion within theprescribed
timeframe.
Working Party onGATS Rules
44. Itisrecommended thatMinisters notethatmore analytical work willberequired onemergency
safeguard measures, government procurement inservices, andsubsidies. They agree thattheWorking
Party onGATS Rules should aim, inaccordance withtheprovisions ofArticle X,tocomplete
negotiations onthequestion ofemergency safeguard measures by31December 1997. Ifnegotiations
havenotbeenconcluded bythatdate, theCouncil forTrade inServices mayextend theprovisions
ofArticle XoftheGATS toanappropriate time. Ministers agree toreview thereport oftheCouncil
onprogress intheGATS Rules negotiations attheirmeeting in1998, bearing inmind theneedtocarry
forward thenegotiations expeditiously.
Working Party onProfessional Services
45. TheWorking Party onProfessional Services should:
- Aimtocomplete itswork ontheaccountancy sector bytheendof1997.
- Pursue workontheArticle VI.4work programme asitrelates toprofessional services,
examining,asappropriate,bothhorizontalaspectsofthisworkandspecificissuesrelated
toparticular services withdueconsideration forthediversity ofprofessional services.
- Pursueworkonvoluntaryguidelinesformutualrecognitionagreementsorarrangements.
- Cooperate withUNCTAD initswork onprofessional services, particularly onthe
accountancy sector.
- Encourage theefforts made byother relevant international organizations asdefined
bytheGATS, including theInternational Accounting Standards Committee andthe
International Organization ofSecurities Commissions, toformulate international
standards intheaccountancy sector which areaimed atachieving greater comparability
infinancialstatementsandfacilitatingtheeffectiveliberalizationofaccountancyservices.S/C/3
Page10
Committee onSpecific Commitments
46. TheCommittee onSpecific Commitments should pursue itsmandate, including work relating
tothescheduling ofcommitments, andshould make recommendations forimproving thetechnical
accuracy andcoherence ofschedules ofspecific commitments andlistsofexemptions fromArticle II
oftheGATS before thecommencement ofthenextround ofnegotiations onservices liberalisation
pursuant toArticle XIXoftheGATS.
Further work bytheCouncil
47. Itisrecommended thatMinisters reaffirm theimportance ofprogressive liberalization oftrade
inservices asmandated inArticle XIXandother relevant provisions oftheGATS. Therequisite work
tofacilitate suchnegotiations, taking intoaccount theneedforappropriate flexibility, shallinclude,
interalia,:
- TheCouncil forTrade inServices willdevelop aninformation exchange programme.
Theaimofthisprogramme istofacilitate theaccess ofallMembers, inparticular
developingcountryMembers,toinformationregardinglaws,regulations,administrative
guidelines andpolicies affecting tradeinservices inorder tocontribute totheassessment
oftrade inservices which would assist future negotiations intheservices sector. The
structure should besimple andabletoprovide acommon standard andconcise
multilateral basis tounderstand thestateandevolution oftheregulations governing
theservices sector avoiding anyunnecessary burden totheMembers ingeneral and
developing country Members inparticular. During 1997, theCouncil should agree
tothemodalities andthetiming forthisprogramme.
- TheCouncilshouldbegintheconsiderationofguidelinesandproceduresfornegotiations
mandated under Article XIXatanappropriate time.
- TheCouncil should examine, asappropriate, under Article VI:4oftheGATS, measures
relating toqualification requirements andprocedures, technical standards andlicensing
requirements withaviewtotaking theworkasfaraspossible before thecommencement
ofthenextround ofliberalization negotiations referred toabove.
Negotiations onMaritime Transport Services
48. Itisrecommended thatMinisters takenoteofthecurrent status ofthesuspended negotiations
onmaritime transport services andconfirm their commitment toproceed according totheagreed
conclusions.SECTION VI
COUNCIL FOR TRADE-RELATED ASPECTS OF
INTELLECTUAL PROPERTY RIGHTS (TRIPS)WORLD TRADE IP/C/8
6November 1996
ORGANIZATION(96-4704)
Council forTrade-Related Aspects
ofIntellectual Property Rights
REPORT (1996) OFTHE COUNCIL FOR TRIPS
I General
1. Since theperiod covered byitslastreport1,theCouncil forTRIPS hasheldsixformal meetings,
on11December 1995andon22February, 9May, 22-25 July,18September and5November 1996.
Theminutes ofthese meetings aretobefound indocuments IP/C/M/5-10.2Thisreport covers this
period, butalsocontains references tothework donebytheCouncil forTRIPS in1995.
2. Thefirsttwoofthemeetings referred toabove were chaired byMr.Stuart Harbinson
(Hong Kong). Theremainder were chaired byAmbassador Wade Armstrong (New Zealand).
3. Meetings oftheCouncil wereopentoallWTO Members. Inaddition, government observers
toWTO bodies wereinvited. WIPO wasinvited toallmeetings, inaccordance withtherecommendation
ofthePreparatory Committee asconfirmed bytheGeneral Council. Pursuant totheinterim procedure
onobserverstatusforintergovernmentalorganizationsevolvedundertheauspicesoftheGeneralCouncil,
theFAO, theIMF, theOECD, UNCTAD, theUnited Nations, UPOV (International Union forthe
Protection ofNewVarieties ofPlants), theWorld Bank andtheWCO were invited tomeetings of
theCouncil.
II Implementation
(i) Notifications andNotification Procedures
(a) Article 63.2
4. Atitsmeeting inNovember 1995, theCouncil adopted thefollowing decisions togiveeffect
totheobligation tonotify implementing legislation under Article 63.2: Procedures forNotification
of,andPossible Establishment ofaCommon Register of,National Laws andRegulations under
Article 63.2(document IP/C/2); Format forListing of"Other Laws andRegulations" tobeNotified
under Article 63.2(document IP/C/4); andChecklist ofIssues onEnforcement (document IP/C/5).
5. These procedures require that,asofthetimethataMember isobliged tostartapplying a
provision oftheTRIPS Agreement, thecorresponding lawsandregulations shallbenotified without
delay. Averysubstantial volume oflegislation hasbeennotified under these procedures. Asofthe
dateofthisreport, 30Members havenotified some oralloftheirimplementing legislation. Most
1Document WT/GC/W/25, Section VI
2Document IP/C/M/10 tobeissuedIP/C/8
Page2
ofthematerial tobenotified byMembers whose legislation, intheareaofcopyright andrelated rights,
wasthesubject ofreview attheCouncil 'sJulymeeting (seeparagraph 14below) hasbeennotified;
threeothercountries havenotified some oftheirlegislation while indicating thatthisiswithout prejudice
totheirtransition period under theprovisions ofArticle 65;and11Members havenotified legislation
relating totheimplementation ofArticle 70.8and,insome cases, Article 70.9oftheTRIPS Agreement.
These notifications arecirculated intheIP/N/1/COUNTRY/- series ofdocuments.
6. AtitsNovember 1995meeting, theCouncil alsoagreed thatMembers would provide responses
toachecklist ofissues onenforcement (IP/C/5). Inrecognition ofthefactthatpreparation ofthe
responses would taketime, theprocedures require them tobesubmitted "assoonaspossible" after
thetimethataMember isobliged tostartapplying theprovisions oftheTRIPS Agreement on
enforcement. Eight Members havenotified responses. These responses havebeencirculated inthe
IP/N/6/COUNTRY/- series ofdocuments. AttheJuly1996 meeting oftheCouncil, theChairman
urged theMembers concerned toprovide theirresponses soonandinanycasebefore theendof1996.
7. Thenational treatment andMFN obligations ofArticles 3,4and5oftheTRIPS Agreement
became applicable toallMembers from1January 1996. Sofar,nonotifications havebeenreceived
under Article 63.2relating specifically totheimplementation ofthese provisions, except insofaras
suchnotifications haveformed partofthecomprehensive notifications bydeveloped country Members
oftheirgeneral implementing legislation. TheCouncil hasconsidered whether theremaybetechnical
difficulties withmeeting thisnotification requirement. AttheCouncil 'sJulymeeting, aproposal was
made forasimplified procedure inthisconnection andtheCouncil agreed thatthematter betaken
upininformalconsultations.Followingtheseinformalconsultations,theCouncilagreedatitsSeptember
meeting thattheMembers concerned hadarange ofoptions astohowtomeet these notification
requirements inawaybestsuited totheirnational circumstances. Three options were identified in
particular:
- notifying thespecific provisions oflawsandregulations thatimplement theobligations
setoutinArticles 3,4and5;
- notifying allintellectual property lawsandregulations; or
- making ageneral statement thatnationals ofother WTO Members enjoy non-
discriminatory treatment, together withalistofanyexceptions tothatprinciple.
TheCouncil invited theSecretariat toprepare apaper which would recognize these three options and
contain adraftformat forthelastoption. Thispaper willbeconsidered bytheCouncil atitsmeeting
scheduled for11-15 November 1996.
(b) Articles 1.3and3.1
8. Articles 1.3and3.1oftheTRIPS Agreement, relating tothedefinition ofbeneficiary persons
under theAgreement andtonational treatment, allow certain exceptions tothenormal rulesonthese
matters, provided thatnotifications aremade totheCouncil forTRIPS. 24Members havesubmitted
notifications under these provisions. These notifications arecontained intheIP/N/2/COUNTRY/-
series ofdocuments.
(c) Article 4(d)
9. Article 4(d)oftheTRIPS Agreement requires aMember seeking tojustify anexception to
theMFN ruleonthebasisofaninternational agreement relating totheprotection ofintellectual property
which hadentered intoforcepriortotheentryintoforceoftheWTO Agreement tonotify thatagreementIP/C/8
Page3
totheCouncil forTRIPS. Atthemeeting oftheCouncil inNovember 1995, theChairman drew the
attention ofMembers totheneedtomake notifications under Article 4(d)by1January 1996ifMembers
wished tohavelegalcover fromthatdateforanyexceptions toMFN treatment thattheyseektojustify
byreference totheprovisions ofArticle 4(d). Todate, 28Members havemade notifications under
thisprovision. These notifications arecontained intheIP/N/4/COUNTRY/- series ofdocuments.
10. Indiscussions attheCouncil 'smeetings ofFebruary, MayandJuly1996, some Members
expressed concern about some ofthenotifications made, inparticular thattheabsence ofsufficient
guidelines forsuchnotifications meant thatthenotifications didnotalways enable theother Members
tounderstand thespecific element ofdiscrimination thatwasbeing sought tobejustified. Asagreed
attheCouncil 'sFebruary meeting, theChairman heldinformal consultations onthismatter. Tofacilitate
these consultations, hecirculated aninformal background notebytheSecretariat. Itwasgenerally
feltintheCouncil thatitwould bevaluable tocontinue work onthedevelopment ofcriteria thatcould
assist individual Members inmaking orreviewing theirnotifications, butthatsuchcriteria could not
addtoordiminish therights andobligations ofWTO Members under theprovisions ofArticle 4(d).
Further consultations onthismatter willbeheld.
(d) Article 69
11. Article 69oftheTRIPS Agreement requires Members toestablish andnotify contact points
forthepurposes ofcooperating witheachother withaviewtoeliminating international tradeingoods
infringing intellectual property rights. Procedures forsuchnotifications wereagreed bytheCouncil
inSeptember 1995. Todate,67Members havenotified contact points. Themostrecent compilation
ofthese iscontained indocument IP/N/3/Rev.2.
(e) Notifications Under Other Provisions oftheAgreement
12. Anumber ofnotification provisions oftheBerne andtheRome Conventions areincorporated
byreference intotheTRIPS Agreement butwithout being explicitly referred toinit.Atitsmeeting
inFebruary 1996, theCouncil invited eachMember wishing tomake suchnotifications tomake them
totheCouncil forTRIPS, eveniftheMember inquestion hadalready made anotification under the
Berne ortheRome Convention inregard tothesame issue, anddrew theattention ofMembers tothe
discussion relating tothetiming ofsuch notifications inparagraphs 16through 21of
document IP/C/W/15, aSecretariat background noteonthesubject. Todate,oneMember hasmade
anotification under thisprocedure. Notifications ofthiskind arebeing circulated inthe
IP/N/5/COUNTRY/- series ofdocuments.
(ii) Monitoring theOperation oftheAgreement
(a) Review ofNational Laws andRegulations
13. Atitsmeeting inNovember 1995, theCouncil adopted a"Schedule fortheConsideration of
National Implementing Legislation in1996/1997" (IP/C/3). Thisprovided forlegislation inthearea
ofcopyright andrelated rights tobereviewed bytheCouncil inJuly1996. Following informal
consultations, theCouncil agreed atitsMay1996meeting onprocedures fortheCouncil 'sreview of
legislation inthisarea. These procedures provided forwritten questions andreplies priortothereview
meeting, withfollow-up questions andreplies during thecourse ofthemeeting.
14. AttheCouncil 'smeeting of22-25 July1996, thelegislation intheareaofcopyright andrelated
rights of29Members wasreviewed. Anumber ofthese Members indicated thattheystillhadsteps
totaketocomply fully withtheirTRIPS obligations inthisarea. Therecord oftheintroductory
statements made bydelegations, thequestions puttothemandtheresponses given isbeing circulatedIP/C/8
Page4
intheIP/Q/COUNTRY/- series ofdocuments. Atsubsequent meetings oftheCouncil, anopportunity
willbegiven tofollow-up points emerging fromthereview session which delegations consider have
notbeen adequately addressed. Inthisconnection, itwasrecognized thatthereview ofnational
implementing legislation implied quiteaheavy workload andthatitwasimportant toallow anadequate
opportunity, consistent withtheprovisions ofArticle 63oftheAgreement, forafollow-up toall
Members, inparticular todeveloping country Members thathadconstraints ontheirresources affecting
theirability toanalyse anddigest some ofthematerial.
15. Theprocedures adopted bytheCouncil forthereview provided thatthereview would apply
tothecopyright andrelated rights legislation ofMembers obliged tocomply withtheTRIPS Agreement
under Article 65.1andofanyother Members notstillavailing themselves inrespect ofthisareaof
legislation ofanylonger transition period towhich theymaybeentitled. During thecourse ofthe
review, questions wereputtoanumber ofMembers which didnotconsider thattheyfellintoeither
ofthese categories andwhich didnotprovide answers intheCouncil 'smeeting.
16. Inaccordance withthe"Schedule forConsideration ofNational Implementing Legislation in
1996/1997" (IP/C/3), theCouncil willreview legislation intheareas oftrademarks, geographical
indications andindustrial designs atitsmeeting scheduled for11-15 November 1996. Legislation in
theareas ofpatents, layout-designs ofintegrated circuits, undisclosed information andthecontrol of
anti-competitive practices incontractual licences isscheduled forreview inthefirsthalfof1997, and
thatintheareaofenforcement inthesecond halfof1997.
(b) Implementation ofArticle 70.8and70.9
17. Atitsmeetings inFebruary, May, JulyandSeptember 1996, theCouncil considered the
implementation ofArticle 70.8andtherelated provisions ofArticle 70.9. Atthesemeetings theCouncil
tooknoteofstatementsbysomeMembersoftheirconcernthatnotallMemberstowhichtheseprovisions
applied weregiving effect tothemor,intheevent thattheyhaddoneso,hadnotnotified therelevant
legislation under Article 63.2. AttheCouncil 'smeetings ofMayandJuly1996, some Members
informed theCouncil thattheywere engaged indispute settlement proceedings onthismatter with
twoother Members (IP/D/2 andIP/D/5).
(c) Implementation ofArticle 70.2
18. AttheCouncil 'sFebruary meeting, statements were made concerning compliance with
Article 70.2inregard tothepatent termandinrespect ofrights insound recordings. Dispute settlement
proceedings initiated inconnection withthese matters havebeennotified totheTRIPS Council in
documentsIP/D/1,3and4.On3October1996,theCouncilwasinformedofamutuallyagreedsolution
reached between theparties onthefirstofthese issues (document IP/D/3/Add.1). Inthisnotification,
which wasmade totheCouncil forTRIPS foritsinformation andwithout prejudice totherights and
obligations ofother Members, theparties involved expressed theirunderstanding thatArticle 70.2in
conjunction withArticle 33requires developed country parties toprovide apatent termofnotless
than20years fromthefiling dateforpatents thatwereinforce on1January 1996, orthatresult from
applications pending onthatdate. Thenotification alsoindicates thattheaffected party hastaken the
necessary stepstoconfirm thatallaffected patents willenjoy atermthatisthelonger of15years from
thedateofgrant or20years from thedateoffiling.
(iii) Revocation ofPatents
19. AttheCouncil 'sJulyandSeptember meetings, anumber ofMembers stated theirviews on
thegrounds thatcould justify therevocation ofapatent. TheCouncil tooknoteofthestatements.IP/C/8
Page5
(iv) Technical Cooperation
20. Inaccordance withadecision taken bytheCouncil inNovember 1995, theChairman made
available fortheFebruary 1996 meeting oftheCouncil aninformal discussion noteoutlining and
structuring theissues which hadbeenraised intheCouncil 'svarious discussions onthesubject of
technical cooperation andidentifying possible options forcarrying forward theCouncil 'swork inthis
area(subsequently distributed asIP/C/W/21). Asaresult oftheensuing discussion, theCouncil agreed
onthefollowing:
- thattheCouncil would seektheannual updating bydeveloped country Members of
information ontheir technical cooperation activities pursuant toArticle 67ofthe
Agreement, andthatin1996 theupdating would besought intimefortheCouncil 's
meeting scheduled forSeptember 1996;
- thattheCouncil 'sSeptember 1996 meeting would haveaspecial, butnotexclusive,
focus ontheissue oftechnical cooperation;
- thattheSecretariat would prepare ananalytical summary oftheinformation ontechnical
cooperation activities already presented and,onthisbasis, consideration would begiven
towhether Members would beinvited touseacommon listofbasic headings in
presenting anoverview oftheirtechnical cooperation activities;
- thattheSecretariat would beinvited topresent asuggestion foraspecific pilotproject
foraworkshop, tobeheldinthemargins oftheCouncil meeting, thatwould permit
amore in-depth, thematic discussion ofaparticular aspect oftechnical cooperation.
21. AtitsMaymeeting, theCouncil considered aproposal forapilotproject foranin-depth
discussion ofaspecific aspect oftechnical cooperation. TheCouncil agreed thattheSecretariat should
goahead, hopefully incooperation withtheInternational Bureau oftheWIPO, toorganize aworkshop
onborder enforcement, tobeheld immediately before orafter theCouncil 'smeeting of
18September 1996. Theworkshop, organized jointly bytheWTO Secretariat andtheInternational
Bureau ofWIPO, washeldontheafternoon of17September 1996.
22. AttheCouncil 'sJulymeeting, itwasagreed thatdeveloped country Members, insubmitting
updated information ontheirtechnical cooperation activities priortotheCouncil 'sSeptember meeting,
would notify acontact pointorcontact points which could beaddressed byadeveloping country Member
seeking technical cooperation. Thecontact pointcould bethesameastheonethatthedeveloped country
Member inquestion hadnotified under Article 69oftheAgreement, oritcould bedifferent, depending
onthestructure oftheMembers 'administrations.
23. TheCouncil 'sSeptember meeting hadaspecial focus ontheissue oftechnical cooperation.
Forthatmeeting, ninedeveloped country Members supplied updated information ontheirtechnical
cooperation activities andinformation wasalso supplied bytheWTO Secretariat andsix
intergovernmental organizations. Thecontact points notified bydeveloped country Members arebeing
compiled inasingle document (IP/N/7). Inaddition toreviewing thisinformation, theCouncil assessed
theexperience withtheworkshop onborder enforcement, organized jointly bytheWTO Secretariat
andtheInternational Bureau ofWIPO on17September. Anumber ofdelegations saidthattheissue
oftechnical cooperation should bebrought totheattention ofMinisters atSingapore. TheCouncil
hasagreed tocontinue itsdiscussion ontechnical cooperation atitsmeeting scheduled for
11-15 November 1996, when itisexpected thatfurther information ontechnical cooperation activities
willbeavailable from other developed country Members.IP/C/8
Page6
(v) Cooperation withWIPO
24. Article 68oftheTRIPS Agreement provides thattheCouncil shall, inconsultation withWIPO,
seektoestablish, within oneyearofitsfirstmeeting appropriate arrangements forcooperation with
thebodies ofthatOrganization. AtitsDecember 1995 meeting, theCouncil forTRIPS approved a
draftagreement drawn upasaresult ofconsultations between theChairman oftheCouncil forTRIPS,
assisted bytheWTO Secretariat, andtheChairman oftheWIPO Coordination Committee, assisted
bytheInternational Bureau ofWIPO. Thedraftagreement wasapproved bytheGeneral Council at
itsmeeting of13and15December 1995. Following approval bythecompetent bodies ofWIPO and
thesignature bytheDirector 's-General ofthetwoOrganizations, theAgreement between theWorld
Intellectual Property Organization andtheWorld Trade Organization (IP/C/6) entered intoforce on
1January 1996. TheAgreement provides forcooperation inthefollowing threeareas: thenotification
of,access toandtranslation ofnational lawsandregulations; theimplementation ofArticle 6terof
theParis Convention (relating tonational emblems) forthepurposes oftheTRIPS Agreement; and
legal-technical assistance andtechnical cooperation.
25. AtitsDecember 1995 meeting, theCouncil adopted adecision ontheimplementation ofthe
obligationsundertheTRIPSAgreementstemmingfromtheincorporationoftheprovisionsofArticle6ter
oftheParis Convention 1967(IP/C/7). Thisdecision hasasitspurpose giving legaleffect under the
TRIPS Agreement totheprocedures relating totheadministration ofTRIPS obligations regarding
Article 6teroftheParis Convention thatareincorporated intheAgreement between WIPO andthe
WTO.
III Built-in Agenda
(i) Article 24.1
26. Under Article 24.1, Members agree toenterintonegotiations aimed atincreasing theprotection
ofindividualgeographicalindicationsunderArticle23.Notime-frameisspecifiedforsuchnegotiations.
AttheJulymeeting oftheCouncil, some Members addressed Article 24.1, butnospecific suggestions
havebeenmade asyetintheCouncil withregard tosuchnegotiations.
(ii) Article 24.2
27. Article24.2requirestheCouncilforTRIPStokeepunderreviewtheapplicationoftheprovisions
oftheSection oftheAgreement ongeographical indications, andstates thatthefirstsuchreview shall
takeplace within twoyears oftheentry intoforce oftheWTO Agreement. AttheCouncil 'sMay
andJulymeetings, theChairman raised thequestions ofwhen andhowthisreview should beundertaken.
Asmentioned inparagraph 16above, theCouncil willreview legislation intheareas oftrademarks,
geographical indications andindustrial designs atitsmeeting scheduled for11-15 November 1996.
TheCouncil atitsSeptember meeting received some proposals inconnection withthereview under
Article 24.2. Itagreed totakeupwork onthismatter byincluding ontheagenda oftheNovember
meeting anitem"Review oftheApplication oftheProvisions oftheSection onGeographical Indications
under Article 24.2" which willbeaddressed afterandtaking intoaccount thereview oflegislation
intheareas referred toabove, itbeing understood thatthiswould permit theconsideration ofthe
proposals putforward inSeptember together withanyother inputs from delegations.
(iii) Article 23.4
28. Article 23.4 calls ontheCouncil forTRIPS toundertake negotiations concerning the
establishment ofamultilateral system ofnotification andregistration ofgeographical indications forIP/C/8
Page7
wines eligible forprotection bythose Members participating inthesystem, butdoesnotspecify atime-
frame forsuchnegotiations. AttheJulyandSeptember meetings oftheCouncil, some delegations
addressed thequestion ofhowandwhen these negotiations might beinitiated.
(iv) Article 27.3(b)
29. Article 27.3(b) states thattheprovisions ofthissubparagraph shallbereviewed fouryears after
thedateofentry intoforce oftheWTO Agreement. AttheCouncil 'smeeting inJuly,some delegations
addressed thequestion ofwhen thiswork should beinitiated.
(v) Article 64.3
30. Article 64.3requires theCouncil forTRIPS toexamine, during thefiveyears from thedate
ofentry intoforce oftheWTO Agreement, thescope andmodalities forthecomplaints provided for
under subparagraphs 1(b)and1(c)ofArticle XXIII ofGATT 1994 made pursuant totheTRIPS
Agreement, andtosubmit itsrecommendations totheMinisterial Conference forapproval. No
suggestions regarding thisaspect oftheCouncil 'swork were made during thecourse of1996.
(vi) Article 71.1
31. Article 71.1requires theCouncil forTRIPS toreview theimplementation oftheTRIPS
Agreement aftertheexpiration ofthetransitional period referred toinparagraph 2ofArticle 65,namely
after1January 2000.
IV. Issues, Problems andRecommendations tobeBrought totheAttention ofMinisters
32. Members reaffirm theimportance offullimplementation oftheTRIPS Agreement within the
applicable transition periods andthateachMember willtakethesteps which itconsiders appropriate
sothattheprovisions oftheAgreement willbeapplied.
33. Members alsoreaffirm theimportance ofthenecessary provision oftechnical andfinancial
cooperation bydeveloped country Members infavour ofdeveloping country andleast-developed country
Members, inaccordance withArticle 67oftheTRIPS Agreement, inorder tofacilitate implementation
oftheAgreement.
34. Members further reaffirm theircommitment totheTRIPS built-in agenda agreed during the
Uruguay Round, including anytime-frames specified intherelevant provisions, andtocarrying out
asandwhen appropriate analytical work andinformation exchange soastoallow Members abetter
prior understanding oftheissues involved without prejudice tothetiming orscope ofthereviews or
negotiations envisaged inthatbuilt-in agenda. Inregard togeographical indications, theCouncil has
agreed thatareview oftheapplication oftheprovisions ofthesection ongeographical indications as
provided forinArticle 24.2would taketheformoutlined inparagraph 27above, which permits inputs
fromdelegations ontheissueofscope, andtheCouncil willinitiate in1997preliminary work onissues
relevant tothenegotiations specified inArticle 23.4 oftheTRIPS Agreement concerning the
establishment ofamultilateral system ofnotification andregistration ofgeographical indications for
wines. Issues relevant toanotification andregistration system forspirits willbepartofthispreliminary
work. Alloftheabove work would beconducted without prejudice totherights andobligations of
Members under theTRIPS Agreement andinparticular under thespecific provisions oftheTRIPS
built-in agenda.SECTION VII
COMMITTEE ONTRADE AND DEVELOPMENTWORLD TRADE WT/COMTD/9
4November 1996
ORGANIZATION(96-4637)
Committee onTrade andDevelopment
REPORT (1996) OFTHE
COMMITTEE ONTRADE AND DEVELOPMENT
TOTHE GENERAL COUNCIL
Introduction
1. TheCommittee onTrade andDevelopment (CTD) heldeightmeetings in1996; on16February
(Fifth Session), 24May(Sixth Session, continued on7June), 18June(Seventh Session), 12July(Eighth
Session), 12and23September (respectively Ninth andTenth Sessions), 4and15October (respectively
Eleventh andTwelfth Sessions). TheTwelfth Session briefly resumed on31October. Another meeting
willtakeplace inNovember. There hasalsobeenaseries ofinformal consultations atthebilateral,
plurilateral andCommittee levels.
2. TheSub-CommitteeonLeast-DevelopedCountriesheldthreemeetingsin1996;on27February
(Second Session), 13and23September (respectively Third andFourth Sessions). TheSecond Session
waschaired byMiss Anne Stoddart, andthesubsequent sessions byMr.Nacer Benjelloun-Touimi,
onaninterim basis inhiscapacity astheChairman oftheCTD.
3. Thehighlevelofactivity oftheCTD in1996 reflected theimportance attached byMembers
toproposing practical recommendations fortheSingapore Ministerial Conference (SMC). Asaresult,
itbecame clearintheearlypartofthisyearthattheCTD work programme for1996would beadjusted
inthelightofMembers 'priorities inrelation totheSMC. Accordingly, Members oftheCommittee
identified fourpriority tasksfortheCommittee 'swork: (a)review oftheimplementation ofprovisions
intheWTO Agreements andlegal instruments infavour ofdeveloping country Members; (b)the
preparation ofguidelines forthetechnical cooperation activities oftheWTO; (c)working towards
increasing theparticipation ofdeveloping countries inthemultilateral trading system, including the
evaluation ofimpact oftheUruguay Round onthese countries; and,(d)within these three tasks,
recommend -onapriority basis -positive measures aimed atensuring thatleast-developed country
Members achieve theirdevelopment objectives.
4. Thisreport isdivided intothreesections. Section Isummarizes thework doneineachofthese
fourpriority areas, including thework oftheSub-Committee onLeast-Developed Countries, aswell
asonother issues falling within themandate oftheCTD; Section IIidentifies priority areas forthe
future work oftheCTD andtheSub-Committee; and,Section IIIincludes elements thatcould be
integrated intotheSingapore Ministerial Declaration.WT/COMTD/9
Page2
Section I-Work oftheCTD during 1996
(a) Review oftheimplementation ofprovisions infavour ofdeveloping country Members
5. TheCommittee agreed toreview theimplementation ofprovisions infavour ofdeveloping
country Members onthebasisofcontributions fromMembers andfromtheWTO Bodies responsible
formonitoring theimplementation oftheUruguay Round commitments. Toassist inthisexercise,
theChairman invited theChairpersons ofother WTO Bodies tosubmit information onhowprovisions
infavour ofdeveloping countries hadbeendealtwithintheirrespective Committees. Onthebasis
ofthese responses, theSecretariat prepared background documentation presenting thereplies received
inananalytical format.
6. Thework oftheCommittee hasthusfocused onahorizontal overview oftheimplementation
ofprovisions infavour ofdeveloping countries. TheCommittee noted that,duetothefactthatthe
WTO wasnewly established, theimplementation process wasstillatanearly stage andfurther work
wasrequired fortheCommittee tobeinaposition tofullyevaluate overall progress. TheCommittee
alsoacknowledged thebroad scope andcomplexity oftheconcepts, principles andrulescontained in
theWTO instruments andthat,insome instances, themeans wereyettobeelaborated toprovide an
operational content tothespecial provisions infavour ofleast-developed andother developing country
Members.
7. TheCommittee recognized thatalthough theimplementation oftheprovisions intheWTO
instruments infavour ofleast-developed andother developing country Members hadbeeningeneral
moving ahead inthefirsttwoyears ofexistence oftheWTO, available information pointed toarelatively
lowuseofthose provisions. Many oftheprovisions required action onthepartofdeveloping country
Members tosetinmotion theirapplication. Inthisrespect, theCommittee emphasized theimportance
toimprove theflowofinformation todeveloping, andinparticular least-developed country Members,
ofprovisions intheirfavour which were dependent upon specific requests ontheirpart.
8. Concerns were alsoexpressed astowhether developing country Members hadbeenableto
draw fullbenefit from provisions intheirfavour byincorporating them intotheirtrade policy and
developmentprogrammes.Thepointwasmadethat,evenwhenprovisionswereadequatelyimplemented,
theirimpact ondeveloping country Members remained tobeseen. Some Members referred tothe
importance oftheTrade Policy Review Mechanism fordeveloping countries inthiscontext, andto
thepositive effects oftheirparticipation inthatexercise.
9. TheCommittee offered recommendations forfuture work onthese areas (seeSection II).It
alsoemphasized theimportance ofmaintaining thehorizontal nature ofitsroleinthisareaanditsclose
relationship withwork developed inother WTO Bodies.
(b) Guidelines forWTO Technical Cooperation
10. Inaccordance withtheterms ofreference oftheCTD andinthelightoftheMarrakesh
Declaration calling forincreased andstrengthened technical cooperation, theCTDattached considerable
priority todrafting theGuidelines forWTO Technical Cooperation. Indoing so,Members tookinto
account thetrading environment within which theWTO istooperate (i.e.when compared tothatof
theGATT), andstressed theneedtoadapt thetechnical cooperation activities oftheWTO toimprove
itseffectiveness inhelping recipient country Members tointegrate intothemultilateral trading system.WT/COMTD/9
Page3
11. Thepreparation ofthese Guidelines wascarried outonthebasis ofthefollowing premises:
(i)technicalcooperationshouldaimatcapacity-building,inparticularofhumanresourcesandinstitutional
andadministrative structures; (ii)theWTO should concentrate itsassistance onitsareasofcompetence;
(iii)aneffective response totheincreasing needs ofdeveloping countries fortechnical cooperation
intrade-related matters required thecoordination oftechnical cooperation activities provided bythe
various international organizations; (iv)there wasaneedtoremove anyunnecessary overlap with
thetechnical cooperation programmes ofrelevant international organizations andtoensure thatrecipient
countries fully benefit from thecomplementary nature oftheir respective competencies; and,
(v)Members should become more involved intheplanning andmonitoring ofWTO 'stechnical
cooperation activities.
12. Inorder toassist theCommittee inassessing thepriority areas forWTO technical cooperation,
theCommittee benefited fromthree major inputs; namely, aChairman 'squestionnaire senttoWTO
Members, which served toidentify theoverall technical cooperation needs ofMembers; thecontribution
oftheHeads ofInstitutions andotherBodies whoaddressed theCommittee onvarious occasions, thereby
helping toclarify howthetechnical cooperation activities could becoordinated among therelevant
institutions; and,acomprehensive non-paper bySwitzerland.
13. Based ontheseaswellasonindividual written andoralcontributions fromvarious delegations,
theCommittee adopted on15October asetofGuidelines fortheWTO 'sTechnical Cooperation (see
Attachment 1).TheGuidelines elaborate thescope oftheWTO 'stechnical cooperation; serve toensure
thattheassistance provided willbeadapted totheevolving needs ofrecipient countries andfocus on
capacity-building; andprovide foranevaluation oftheWTO 'stechnical cooperation.
(c) Participation ofdeveloping country Members inthemultilateral trading system, including
thereview oftheimpact oftheUruguay Round ondeveloping country Members
14. During thefirsthalfof1996, theCommittee elaborated anoutline forastudy tobeprepared
bytheSecretariat, which would address thereasons whysome developing countries hadperformed
better thanothers inintegrating intothemultilateral trading system. Theobjective ofthestudy was
toprovide background material foracomprehensive discussion intheCommittee onthese issues and,
ifpossible, todraw conclusions onhowtofacilitate theintegration ofdeveloping country Members
intothemultilateral trading system. Thestudy, distributed inearly August (WT/COMTD/W/15),
addressed bothdomestic (macroeconomic policies, infrastructure problems, etc.)andexternal factors
(barriers totrade inimporting markets, restrictive business practices, etc.).
15. Given thecomplexity ofthetopics addressed, sometimes divergent comments weremade and
different conclusions reached byMembers. Inparticular, various views were expressed onthe
importance ofappropriate domestic policies andofmarket access possibilities fortheeconomic
development ofdeveloping countries. Forsome Members, themainconclusion wasthatthedifferent
ratesofgrowth ofdeveloping countries wasprimarily related totheirdomestic policies -thatis,while
market access wasimportant todetermine theexport performance ofcountries, littlecould beachieved
iftheappropriate domestic policies werenotinplace (e.g.astable economic environment andaliberal
trade regime). Other Members, however, while recognizing theimportance ofdomestic policies, felt
thatthese didnotconstitute themain reason forthedivergent performance ofdeveloping countries,
andthattradebarriers hadplayed amore significant rolethandomestic policies. Anumber ofspecific
comments weremade withrespect tothecontent ofthestudy; inparticular, themanner inwhich foreign
direct investment wasdealtwithandtothefactthatinsufficient attention waspaidtotheimportance
ofdomestic savings fortheprocess ofeconomic development andtheproblems faced bythenet-food
importing countries.WT/COMTD/9
Page4
16. Anumber ofMembers drew attention tothepositive relationship between investment and
development. Inthisrespect, theCommittee noted thatbothitsterms ofreference aswellasthose
oftheSub-Committee onLeast-Developed Countries provide thepossibility forthesebodies toconsider
measures andinitiatives toassist developing andleast-developed country Members intheexpansion
oftheirtradeandinvestment opportunities fromadevelopment perspective, andthatthisisofrelevance
fortheCTD'swork.
17. Indiscussing thisitem, some Members reiterated thefactthatanumber ofleast-developed
countries,whilehavingliberalinvestmentandtraderegimes,werenotabletotakeadvantageofinitiatives
intheareaoftrade andinvestment duetosupply-side constraints anddifficulties inadopting adequate
domestic policies. Itwasfeltthatthisproblem could betackled, interalia,through theprovision of
technical cooperation inconjunction withotherinternational organizations aimed atbuilding thecapacity
ofhuman andother resources inthese countries. Thecommitment toimplement measures tointegrate
least-developed countries intothemultilateral trading system (see(d)below) wasalsoreferred toon
numerous occasions.
(d) Least-developed countries
18. Asmentioned above, under eachofthepriority areas, particular attention wasdevoted tothe
difficulties oftheleast-developed countries. Work wasinitiated through areview oftheproblems,
concerns andspecial measures infavour oftheleast-developed countries made bytheSub-Committee
onLeast-Developed Countries. Various background documents wereprovided forthereview ofthe
situation oftheleast-developed countries. These included summaries ofthespecial provisions contained
inUruguay Round Agreements andlegal instruments infavour ofleast-developed countries
(COM.TD/LLDC/W/54),andinparticular,thoseprovisionswhichrequiredspecificactionbyMembers
(WT/COMTD/W/10). Adocument wasalsoprepared anddiscussed outlining recent international
initiatives launched infavour ofleast-developed countries tofacilitate theexpansion oftheirtrade and
investment opportunities (WT/COMTD/LLDC/W/1). Thestudy referred toin(c)above, while not
exclusively devoted toleast-developed countries, provided insights intofactors which might havehad
abearing ontheireconomic, andinparticular trade, performance. Further, first-hand information
ontheworkinfavour ofleast-developed countries carried orplanned forthefuture byotherinternational
organizations wasmade available toMembers through presentations totheCTDandtheSub-Committee
(see(e)below) byvarious invited speakers.
19. Thereview pointed tothedifficult economic situation ofleast-developed countries andtothe
risksoftheirmarginalization inthemultilateral trading system. While theinternational community
waswellawareoftheseproblems,includingtheneedtodevelopdomesticinitiativesaddressingstructural
problems, andhadundertaken numerous initiatives intheareaoftradeandinvestment (both bilaterally
andthrough multilateral institutions), theseingeneral havenotbeensufficient toarrest thedeterioration
oftheeconomic conditions ofanumber ofleast-developed countries. Consequently, theSub-Committee
identified twomaincontributions thattheWTO could make tobetter integrate least-developed countries
intothemultilateraltradingsystem:first,toensurethattechnicalcooperationprovidedtoleast-developed
country Members would aimatinstitutional andhuman capacity-building: andsecond, preparing a
WTO PlanofAction forLeast-Developed Countries thatwould becomprehensive innature andfully
integrated withtheinitiatives planned orunderway elsewhere.
20. Asaresult aDraft WTO PlanofAction forLeast-Developed Countries wasdistributed toCTD
Members atitsEleventh Session. ThePlanofAction reaffirms commitments thatWTO Members
hadalready undertaken withrespect toleast-developed countries andproposes acoordinated strategy
toassist least-developed countries andidentifies many areaswhere practical measures could beadopted.
AttheCommittee 'sTwelfth Session, theCTD considered thedraftPlanofAction andforwarded itWT/COMTD/9
Page5
forconsiderationtotheGeneralCouncilandsubmissiontoMinistersforadoptioninSingapore(circulated
indocument WT/COMTD/W/20).
21. Inaddition, Members feltthat,while theWTO PlanofAction pointed intherightdirection,
more wasneeded toincrease coordination ininternational actions infavour ofleast-developed countries
andefficiency withrespect totheassistance offered tothem. Thus, theCommittee alsoagreed that
theGeneral Council recommend thatMinisters inSingapore callforahigh-level meeting inGeneva
assoonaspossible in1997, inprinciple tobeorganized jointly byWTO, UNCTAD andITC, with
theparticipation ofnational aidagencies, international financial institutions andother relevant
organizations, tofoster anintegrated approach tothetrade-related aspects ofleast-developed countries '
economic development, which willneedtobeobserved intheimplementation oftheWTO Planof
Action. Special emphasis should begiven toincreasing efficiency intheprovision oftechnical assistance
forhuman andinstitutional capacity building.
22. Given thatonlyalimited number ofleast-developed countries arerepresented inGeneva, the
Government ofNorway accepted tofinance, through itsTrust Fund, theparticipation ofrepresentatives
fromleast-developed countries fromtheEuropean capitals attheFourth Session oftheSub-Committee
on23September 1996 andrelated briefings bytheWTO Secretariat on24September 1996. These
activities werewellattended bybothGeneva andnon-Geneva based least-developed country delegations.
(e) Trade anddevelopment activities ofintergovernmental organizations
23. TheCommittee hasactively engaged inpursuing theobjective ofcloser institutional cooperation
byinviting toitsSeventh Session theSecretary-General ofUnited Nations Conference onTrade and
Development (UNCTAD), theExecutive-Director oftheInternational Trade Centre andtheChairman
ofbothWTO 'sGeneral Council andUNCTAD 'sTrade andDevelopment Board. Thisdialogue
continued attheCommittee 'sTenth Session, where theChairman oftheJointInternational Monetary
Fund (IMF)/World Bank Development Committee addressed theCTD. Thisintensified dialogue has
provided Members oftheCommittee withanumber ofpositive contributions, inparticular, withrespect
tobetter appreciating thework ofeachofthese organizations.
24. Onthese occasions, theDirector-General oftheWTO hasalsoaddressed theCommittee on
theresults oftheUruguay Round; theSingapore Ministerial Conference; hisinvitation toparticipate
intheG7Summit; and,technical cooperation.
25. TheChairman oftheJointIMF/World BankDevelopment Committee andtheDirector-General
oftheWTO alsoaddressed theSub-Committee onLeast-Developed Countries atitsFourth Session.
Onthatoccasion, Members oftheSub-Committee wereinformed bytheChairman oftheDevelopment
Committee ofthejointIMF/World Bank initiative fordebtrelief ofhighly-indebted poorcountries.
Inhisaddress, theDirector-General oftheWTO referred tosome actions thatWTO Members should
taketoenhance thedevelopment oftheleast-developed countries, andthatthese should come together
inaPlanofAction forLeast-Developed Countries.
(f) Other elements addressed bytheCommittee
26. AtitsFifthSession, theCommittee reviewed andtooknoteoftheactivities oftheWTO during
1995intheareaoftechnical cooperation. Members alsocommended Norway foritsspecial contribution
totechnical cooperation activities through theestablishment ofaTrust Fund, andtheEuropean
Communities 'financing ofatechnical cooperation programme infavour ofAfrican, Caribbean and
Pacific countries ontheresults andopportunities created bytheUruguay Round.WT/COMTD/9
Page6
27. AtitsTwelfth Session, theCommittee wasinformed ofaninitiative bytheSecretariat tohold
aMeeting ofMinisters from Least-Developed Countries on13-15 November 1996 tobriefthem on
theSingapore Ministerial Conference. TheMeeting istobefinanced bycontributions from the
Governments oftheCzech Republic, Korea andNorway.
Section II-Future Work Programme
28. Initsfuture work, theCTDwillcontinue toaddress allitems included initsterms ofreference.
Itwill,inparticular, continue tofulfilitsmandate ofkeeping under review theimplementation ofthe
Uruguay Round provisions infavour ofdeveloping andleast-developed country Members. Inthis
context,theCommitteewillexplorewaysofensuringgreaterdisclosureoftheapplicationoftheUruguay
Round provisions infavour ofdeveloping andleast-developed countries1;andofincreasing efforts
todisseminate information relating tothose provisions. In1997, theCommittee willalsoneedtodecide
howtoimplement therecently adopted Guidelines forWTO 'sTechnical Cooperation withrespect to,
forexample, themonitoring, managing andevaluating technical cooperation activities oftheWTO.
29. Members stressed that,inaddressing thedifferent items oftheworkprogramme, theCommittee
should attempt tomake fulluseofthemany background documents prepared bytheCTD during its
firsttwoyears ofexistence (seeAttachment 2).
Section III-Elements forIntegration intoSingapore Ministerial Process
30. Ministers takenotewithsatisfaction oftheadoption ofGuidelines forWTO 'sTechnical
Cooperation andreiterate theircommitment tocontinue ensuring theavailability offinancial andhuman
resources fortechnical cooperation activities asoneelement tofacilitate theparticipation ofdeveloping
country Members inthemultilateral trading system and,inparticular, reverse thetrend ofthe
marginalization ofanumber ofleast-developed country Members.
31. Ministersrecognizethattheimplementationofthespecialprovisionsinfavourofleast-developed
andother developing country Members, though stillatanearly stage, hasbeenmoving intheright
direction. Ministers recognize theimportance ofincreasing theawareness ofdeveloping country
Members ofthespecial provisions relating tothem, inparticular those designed toenhance trade
opportunities. They notethatthese provisions facilitate asmoother integration ofdeveloping country
Members intotherules-based multilateral trading system while theyproceed withthenecessary domestic
adjustments.
32. Ministers adopt theWTO PlanofAction fortheLeast-Developed Countries transmitted by
theGeneral Council.
33. Ministers callforahigh-level meeting inGeneva assoonaspossible in1997, inprinciple to
beorganized jointly byWTO, UNCTAD andITC, withtheparticipation ofrelevant institutions, to
foster anintegrated approach tothetrade-related aspects ofleast-developed countries 'economic
development, which willneedtobeobserved intheimplementation oftheWTO PlanofAction, with
special emphasis onincreasing efficiency intheprovision oftechnical assistance forhuman and
institutional capacity building.
1Forexample, byimproving theflowofinformation, inparticular (a)from Members offering thebenefits
toMembers potentially using them and(b)from allMembers totheCommittee.WT/COMTD/9
Page7
ATTACHMENT 1
GUIDELINES FOR WTO TECHNICAL COOPERATION
Adopted bytheCommittee onTrade andDevelopment on15October 19961
Bearing inmind theMarrakesh Declaration of15April 1994 andtheDecision onMeasures
inFavour ofLeast-Developed Countries, WTO Technical Cooperation istobeprovided inconformity
withtheprinciples setoutbelow:
I. OBJECTIVES AND PRINCIPLES
- Assist inthefullintegration ofbeneficiaries intothemultilateral trading system andcontribute
totheexpansion oftheirtrade;
- Strengthen andenhance institutional andhuman capacities inthepublic sector foranappropriate
participation inthemultilateral trading system; whenever possible andinconsultation with
thegovernmentconcerned,capacitybuildingactivitiescouldincluderepresentativesoftheprivate
sector;
- Bedemand-driven andadapted torecipient needs, inparticular withrespect tothebestsuited
modes ofdelivery;
- Becomplementary toandsupportive ofrecipients 'efforts toidentify theirownrequirements;
- Keep ageographical balance, while giving priority toleast-developed countries, inparticular
African countries, andtolow-income economies;
- Cover subject matters within thecompetence andexpertise oftheWTO, inparticular:
- Toimprove knowledge ofmultilateral trade rulesandWTO working procedures and
negotiations; and
- Toassist intheimplementation ofcommitments inthemultilateral trading system and
fulluseofitsprovisions,includingtheeffectiveuseofthedisputesettlementmechanism;
- Befullyandclosely coordinated withother assistance provided bymultilateral andbilateral
institutions;
- Beadministered bytheSecretariat andreviewed byMembers, inaccordance withoperational
directives andimplementation modalities tobeestablished bytheCommittee onTrade and
Development.
1TheGuidelines forWTO Technical Cooperation were circulated asWT/COMTD/8.WT/COMTD/9
Page8
II. OPERATIONAL DIRECTIVES
1. Modes ofDelivery
- Themodes ofdelivery shallbechosen tofitboththerequirements oftherecipient country
andtechnical cooperation programmes;
- Modes ofdelivery shallbeassessed inthelightofprinciples anddirectives tobeagreed upon
bytheCommittee onTrade andDevelopment andontheprogress indevising newmeans for
anefficient dissemination ofknowledge;
- Modes ofdelivery shallbeelaborated withtheaimof:
- Extending assistance onasbroad andcost-effective abasis aspossible, e.g.:
- Training courses ofaregional orlinguistic format;
- Development ofinformation andtraining material, inparticular withthehelp
oftechnology based aids;
- Emphasizing in-depth andconcrete training onWTO matters suchas:
- Specialized technical seminars andworkshops ofaregional orlinguistic format;
- Practical training programmes.
2. Long-Term Engagement
- Follow-up ofindividual programmes andassessment oftheireffectiveness;
- Development oftraining capabilities withparticular emphasis onthetraining oflocal
trainers, theuseoflocalorregional technical expertise, andtheestablishment oflinks
withacademic andresearch institutions.
3. International Coordination
a) International andRegional Institutions Dealing withTrade-Related Matters
- Close institutional dialogue withother international organizations, inparticular with
ITCandUNCTAD, andwithother regional institutions toensure acoherent approach,
toidentifyareasofcompetenceandcomplementarity,todefineandexecutejointprojects
andavoid duplication;
- Dissemination ofinformation ontheWTO technical cooperation programmes, and
establishment withother relevant organizations ofacentral inventory ofprogrammes.WT/COMTD/9
Page9
b) Bilateral Development Assistance inTrade-Related Matters
- Exchange ofinformation withdonor andrecipient governments, including participation
inbilateral programmes.
4. Management
a) Transparency
- Three yearplanadjusted onanannual basis, including budgetary implications, tobe
approved bytheCommittee onTrade andDevelopment andtobesubmitted tothe
appropriatebodiesofWTO,accordingtoagreedproceduresanddecisionsoftheGeneral
Council;
- Annual Secretariat reporting onprogramme implementation, andfinancial report;
- AdhocSecretariat status reports.
b) Funding
- Regular Budget oftheWTO, within thelimits specifically assigned byMembers;
- WTO Trust Fund fortechnical cooperation: Voluntary contributions byMembers and
international financial institutions;
- International ornational cost-sharing, whenever appropriate.
c) Monitoring andEvaluation
- BytheCommittee onTrade andDevelopment based onannual evaluation oftheresults
oftechnical assistance activities inorder toensure optimum useofresources according
toappropriate evaluation criteria;
- TheWTO Trust Fund shallbemanaged according totherecommendations contained
inthedecision taken bytheGeneral Council of18July1996 (WT/GC/M/13) andto
theFinancial Regulations andFinancial Rules indocuments WT/L/156 andWT/L/157
of5August 1996.WT/COMTD/9
Page10
ATTACHMENT 2
BACKGROUND DOCUMENTS PREPARED FOR
MEETINGS OFTHE CTD AND OFTHE SUB-COMMITTEE DURING 1995-96
WT/COMTD/W/1 - Preliminary Information onNotifications toberequired from
WTO Members (First Session -April 1995)
WT/COMTD/W/1/Add.1 - Addendum
WT/COMTD/W/2/Rev.1 - Draft Programme ofWork for1995 -Revision
WT/COMTD/W/4 - CreditandRecognitionforAutonomousLiberalizationMeasures
WT/COMTD/W/4/Corr.1 - Corrigendum
WT/COMTD/W/5 - URcommitmentsundertakenbyDevelopingCountryMembers
WT/COMTD/W/6 - RegulatoryObligationsandOtherImplicationsURAgreements
WT/COMTD/W/6/Add.1 - Addendum
WT/COMTD/W/7 - Technical Cooperation oftheWTO Relations withother
International Organizations
WT/COMTD/W/10 - WTO Measures relating toDeveloping Country Members
WT/COMTD/W/11 - Notes ontheParticipation ofDeveloping Countries inthe
World Trading System
WT/COMTD/W/11/Add.1 - GSP-Addendum
WT/COMTD/W/11/Add.1/Corr.1 GSP-Addendum -Corrigendum
WT/COMTD/W/12 - Technical Cooperation withDeveloping Countries
WT/COMTD/W/14 - Report onTechnical Cooperation
WT/COMTD/W/14/Add.1 - Addendum
WT/COMTD/W/15 - Participation ofDeveloping Countries inWorld Trade:
Overview ofMajor Trends andUnderlying Factors
WT/COMTD/W/16 - Implementation ofUruguay Round Provisions inFavour of
Developing Country Members
WT/COMTD/W/16/Add.1 - Implementation ofUruguay Round Provisions inFavour of
Developing Country Members
WT/COMTD/W/16/Add.2 - Implementation ofUruguay Round Provisions inFavour of
Developing Country Members
WT/COMTD/W/17 - Textiles Monitoring Body
WT/COMTD/8 - Guidelines forWTO Technical Cooperation
WT/COMTD/LLDC/W/1 - Measures toAssist andFacilitate theExpansion ofTrade and
Investment Opportunities ofLeast-Developed CountriesSECTION VIII
COMMITTEE ONREGIONAL TRADE AGREEMENTSWORLD TRADE WT/REG/2
6November 1996
ORGANIZATION(96-4701)
Committee onRegional Trade Agreements
REPORT (1996) OFTHE
COMMITTEE ONREGIONAL TRADE AGREEMENTS
TOTHE GENERAL COUNCIL
Introduction
1. Nearly allMembers oftheWorld Trade Organization (WTO) areParties toatleastoneregional
trade agreement notified totheGATT ortheWTO; some Members participate inother regional
initiatives. Thenumber ofsuchagreements hasincreased inrecent years.
2. InameetingoftheGeneralCouncilheldon15November1995,itwasproposedthatacommittee
onregional trade agreements beestablished intheWTO asameans toimprove theorganization of
thework oftheWTO inthisarea,inparticular, withrespect tothereplacement ofmore than20active
working parties examining regional trade agreements, aswellastoprovide aforum intheWTO to
examine theimplications forthemultilateral trading system ofthegrowing number ofregional trading
agreements andinitiatives. Should suchacommittee becreated, therights andobligations ofMembers
would notbeaffected, andtheterms ofreference oftheexisting working parties would notbechanged.
TheGeneral Council, atitsDecember 1995 meeting, agreed inprinciple toestablish aCommittee on
Regional Trade Agreements, subject toagreement onitsterms ofreference andrelated matters.
3. TheCommittee onRegional Trade Agreements wasestablished bythefollowing Decision of
theGeneral Council on6February 1996 (WT/L/127):
"Having regard toagreements1which arerequired tobenotified, asthecase
maybe,under Article XXIV oftheGeneral Agreement onTariffs andTrade
(GATT) 1994, Article VoftheGeneral Agreement onTrade inServices orthe1979
Decision onDifferential andMore Favourable Treatment, Reciprocity andFuller
Participation ofDeveloping Countries;
Having regard tothebiennial reporting envisaged inParagraph 11ofthe
Uruguay Round Understanding ontheInterpretation ofArticle XXIV ofthe
GATT 1994; and
Acting pursuant toparagraphs 1and7ofArticle IVoftheAgreement
Establishing theWorld Trade Organization (WTO),
1Theterm "agreements" inthisDecision refers toallbilateral, regional, andplurilateral trade agreements
ofapreferential nature.WT/REG/2
Page2
TheGeneral Council hereby decides :
1. Toestablish aCommittee onRegional Trade Agreements, opentoallMembers oftheWTO,
withthefollowing terms ofreference:
(a) tocarry outtheexamination ofagreements inaccordance withthe
procedures andterms ofreference adopted bytheCouncil forTrade
inGoods, theCouncil forTrade inServices ortheCommittee onTrade
andDevelopment, asthecasemaybe,andthereafter present itsreport
totherelevant body forappropriate action;2
(b) toconsider howtherequired reporting ontheoperation ofsuch
agreements should becarried out and make appropriate
recommendations totherelevant body;
(c) todevelop, asappropriate, procedures tofacilitate andimprove the
examination process;
(d) toconsider thesystemic implications ofsuchagreements andregional
initiatives forthemultilateral trading system andtherelationship
between them, andmake appropriate recommendations totheGeneral
Council; and
(e) tocarry outanyadditional functions assigned toitbytheGeneral
Council.
2. ThattheCommittee shallreport annually totheGeneral Council onitsactivities."
Officers oftheCommittee were appointed bytheGeneral Council on16April 1996. These are:
Mr.Weekes (Canada) asChairman oftheCommittee, andMr.Berthet (Uruguay), Mr.Harbinson
(Hong Kong), Mr.Ravaloson (Madagascar) andMr.Willems (Belgium) asVice-Chairmen.
4. TheCommitteewillhaveheldsevenmeetingsbytheendof1996;on21-22May(FirstSession),
2-3July (Second Session), 29-31 July (Third Session), 17-20 September (Fourth Session);
7,10-11 October (Fifth Session); 31October (Sixth Session); and5-6,8November (Seventh Session).
There hasalsobeenaseries ofinformal consultations.
Work oftheCommittee during 1996
5. TheCommittee adopted itsRules ofProcedure (WT/REG/1) andprogramme ofwork for1996
atitsSecond Session. Thework programme provided foralltheitems ofitsterms ofreference to
beaddressed inabalanced manner, allowing theCommittee toprogress more effectively inallareas
ofitsmandate asaresult ofthesynergies which developed.
2TheCommittee willalsocarry outtheoutstanding work oftheworking parties already established bythe
Council forTrade inGoods, theCouncil forTrade inServices ortheCommittee onTrade andDevelopment,
within theterms ofreference defined forthose working parties, andreport totheappropriate bodies.WT/REG/2
Page3
(a) Examination ofregional trade agreements
6. Members drew attention totheneedfortheCommittee toassign apriority todealing with
thebacklog ofoutstanding examinations. Bytheendof1996, theCommittee willhavestarted, or
continued, theexamination of21regional tradeagreements outofthe32outstanding asofJune1996,
thusworking towards removing thebacklog (seeAttachment 1).
7. Theexaminationsofregionaltradeagreementsduring1996ledtoquestionsfromsomeMembers
concerning theinterpretation ofsome oftheWTO provisions pertaining toregional tradeagreements,
inparticular, ofArticle XXIV oftheGATT 1994, theUnderstanding ontheInterpretation of
Article XXIV oftheGATT 1994 andArticle VoftheGeneral Agreement onTrade inServices. In
some instances, theobservation wasmade thatexaminations were hampered bythelack, orlate
submission, ofrelevant information.
(b) Reporting ontheoperation ofagreements
8. Preliminary discussions onthisitemwere based onachecklist ofpoints prepared bythe
Secretariat (WT/REG/W/3). Members were oftheview thatthefulfilment ofthelegal obligations
toprovide forbiennial reporting ontheoperation ofagreements could helptoincrease thetransparency
ofregional trade agreements. They considered thattheprocedures togiveeffect tothisobligation
shouldbedesignedtooperateinanefficientmanner,takingintoaccountotherrelevantWTOprocedures.
(c) Procedures tofacilitate andimprove theexamination process
9. TheCommittee requested theSecretariat toprepare astandard format fortheprovision of
informationonregionaltradeagreementstofacilitateandstandardizetheprovisionofinitialinformation.
AtitsThird Session, theCommittee tooknoteofthenon-binding, voluntary Chairman 'sGuidelines
assetoutinthe"Standard Format forInformation onRegional Trade Agreements" (WT/REG/W/6).
Membersconsidereditanimportantcontributiontoimprovingtheproceduresforexaminationofregional
trade agreements, asitisintended toprovide timely andaccurate information asasubstitute forthe
initial question andreplyprocess. TheCommittee isconsidering theappropriate timeforthesubmission
oftheStandard Format. TheStandard Format hasbeendeveloped forgoods agreements; following
arequest bytheCommittee, theSecretariat ispreparing asimilar draftstandard format forinformation
onservices agreements foruseasappropriate.
10. TheCommittee isconsidering ajointsubmission bythedelegations ofAustralia, Hong Kong
andKorea (WT/REG/W/5), which proposed theadoption bytheCommittee ofguidelines forthe
examination ofregional trade agreements. TheCommittee isalsoconsidering asuggestion byJapan
fortheadoption ofguidelines fortheexamination ofregional trade agreements aimed ataddressing
thekindofproblems that,inJapan'sview, result from different interpretations ofArticle XXIV.
11. TheCommittee discussed anumber ofmatters relating tothenotification ofregional trade
agreements. With respect tothetiming ofnotifications, theCommittee isexamining thepossibility
ofestablishing ameans toconvey preliminary information relating toregional trade agreements prior
tothenotification itself. TheCommittee alsodiscussed twoapproaches todealing withnon-compliance
withnotificationobligations;eitherthroughtheCommitteeurgingMemberswhicharepartiestoregional
tradeagreements tocomply withtheirnotification obligations orthrough providing forthepossibility
ofcounter-notification. TheCommittee alsohadapreliminary discussion onthepossibility of
establishing asimplified examination procedure forregional trade agreements having minimal effects
oninternational trade. With respect tothereports ontheexamination ofregional trade agreements,
theChairman proposed anewformofreporting involving separating thereport intwoparts, whereby
theCommittee would takenoteofitsfactual part-reflecting thediscussions oftheCommittee -andWT/REG/2
Page4
adopt theconclusions afterhaving considered adraftversion. Thisremains amatter forconsideration.
TheCommittee alsodiscussed othermatters dealtwithintheSecretariat document "Note onProcedures
toFacilitate andImprove theExamination Process" (WT/REG/W/9).
(d) Systemic implications ofregional trade agreements andinitiatives forthemultilateral
trading system andtherelationship between them
12. TheCommittee hadapreliminary, inconclusive discussion onthisissue. Forthisdiscussion,
ithadbeforeitthe1995Secretariatpublication,RegionalismandtheWorldTradeSystem,whichprovides
anoverview oftherelationship between regional tradeagreements andtheGATT/WTO system during
thepast50years. Korea made asubmission (WT/REG/W/4) dealing withwhatitconsidered tobe
thechallenges, systemic issues, andobjectives fortheMinisterial Conference withrespect toregional
trade agreements andtheWTO system; itincluded awork programme onregionalism fortheWTO
in1997-98. Inthediscussion there weredivergent views. Members emphasized theimportance of
therelationship between regional trade agreements andtheWTO system. Some Members stressed
theneedtoaddress therelationship between regional trade agreements andtheWTO rules. Others
wereequally clearthatconclusions could notbedrawn ahead ofthenecessary examination oftheissues.
Theneed forMembers tocomply withtheir notification obligations withrespect topreferential
agreements wasalsonoted.
13. Inthecourse oftheexamination ofregional trade agreements carried outattheThird Session
oftheCommittee, Members identified anumber ofsystemic andhorizontal issues related totherelevant
WTO rules. Upon therequest oftheCommittee, these havebeenincluded inaninformal checklist
bytheSecretariat which willbeupdated toinclude other horizontal issues ofthesame nature referred
toinother Sessions oftheCommittee.
14. Following theChairman 'sproposal onhowtheavailable information could bepresented to
assist consideration ofsystemic implications, theCommittee requested theSecretariat toprepare material
forhorizontal (pilot) studies ontechnical barriers totrade andsanitary andphytosanitary measures
astheyappear inthetexts oftheregional trade agreements under examination. Inapreliminary
discussion based ontheSecretariat 'smaterial (WT/REG/W/8), various views wereexpressed regarding
theimplications fortheWTO. Further discussions wereneeded onthissubject. Inthatcontext, the
Chairman invited Members tosubmit relevant information withrespect towork being doneontechnical
barriers totradeandsanitary andphytosanitary measures inthecontext ofregional initiatives. Interest
wasexpressed bysome Members inexpanding thisexercise tocover other provisions.
15. Indiscussing theCommittee 'sreport totheMinisterial Conference, Members emphasized the
importance ofthecompatibility ofregional trade agreements withthemultilateral trading system.
16. AttheFourth Session, Korea tabled adraft decision fortheMinisterial Conference. The
United States hasalsotabled adraft recommendation. Discussions willtakeplace shortly onboth
proposals.
(e) Additional functions
17. Noadditional functions wereassigned bytheGeneral Council totheCommittee onRegional
Trade Agreements during 1996.WT/REG/2
Page5
Future Work Programme
18. There exists considerable scope fortheCommittee todevelop itswork within theexisting terms
ofreference. TheCommittee 'sfuture work programme willbuild onwork begun thisyear. Members
consider itimportant forMinisters inSingapore toendorse thefollowing aspects ofitsfuture work.
19. TheCommittee should continue theexamination ofregional trade agreements asoneofits
priority tasks fortheyears ahead. TheCommittee should make every effort towork toremove the
backlog andensure thatsuchabacklog doesnotreoccur.
20. TheCommittee should work towards early agreement onprocedures fortheeffective
implementation ofbiennial reporting ontheoperation ofagreements, inanefficient manner, taking
intoaccount other relevant WTO procedures.
21. Onprocedurestofacilitateandimprovetheexaminationexercise,theCommitteeshouldcontinue
thework already initiated. Thisshould include, interalia,thedevelopment ofavoluntary Standard
Format forInformation onServices Agreements, thedevelopment ofguidelines fortheexamination
ofregional trade agreements, andtheconsideration ofthenature andcontent ofreports.
22. TheCommittee should explore measures thatcould helpinincreasing theeffectiveness of
notifications -withrespect totheirtiming aswellastotheircontents -andexamine theoptions available
forensuring thatallregional trade andeconomic integration agreements involving WTO Members
arenotified totheappropriate WTO bodies.
23. Onsystemic matters, theCommittee should continue itsconsideration building onwritten
submissions andinterventions byMembers; ontheevolving checklist ofsystemic issues identified
inthecontext oftheexamination ofregional tradeagreements; andonhorizontal comparative studies
onselected elements ofregional agreements andinitiatives. Aspartofthiswork, theCommittee should
analyse, inanon-prejudicial manner, whether thesystem ofWTO rights andobligations, asitrelates
toregional trade agreements, needs tobefurther clarified with aview tomaking appropriate
recommendations totheGeneral Council, inaccordance withthemandate oftheCommittee.WT/REG/2
Page6
ATTACHMENT 1
Status ofExamination ofRegional Trade Agreements
Regional trade agreements examined in1996 (21)
Agreement Date ofExamination Round of
Examination
ECEnlargement -Goods 29/7/96 First
NAFTA -Goods 30/7/96 Second
EFTA-Hungary 17/9/96 First
EFTA-Israel 17/9/96 First
EFTA-Poland 17/9/96 First
EC-Czech Rep. 18/9/96 First
EC-Hungary 18/9/96 First
EC-Poland 18/9/96 First
EC-Slovak Rep. 18/9/96 First
MERCOSUR 20/9/96 Second
NAFTA -Services 10-11/10/96 Second
ECEnlargement -
Services11/10/96 First
EC-Bulgaria 5/11/96 First
EC-Romania 5/11/96 First
EC-Estonia 5/11/96 First
EC-Latvia 5/11/96 First
EC-Lithuania 5/11/96 First
EFTA-Bulgaria 6/11/96 First
EFTA-Romania 6/11/96 First
EFTA-Slovenia 6/11/96 First
EC-Turkey 8/11/96 FirstWT/REG/2
Page7
Other regional trade agreements already notified, tostart examination in1997 (14)
(a) Regional trade agreements notified before June1996 (8)1
- Central European FreeTrade Agreement (FTA)2
- Czech Rep.-Slovenia FTA2
- Slovak Rep.-Slovenia FTA2
- Hungary-Slovenia FTA2
- EC-Faroe Islands FTA
- Iceland-Faroe Islands FTA
- Switzerland-Faroe Islands FTA
- Norway-Faroe Islands FTA
(b) Newnotifications (6)
- Czech Republic-Romania FTA. Theterms ofreference fortheexamination ofthe
Agreement were adopted bytheCouncil forTrade inGoods on5July1996.
- Slovak Republic-Romania FTA. Theterms ofreference fortheexamination ofthe
Agreement were adopted bytheCouncil forTrade inGoods on5July1996.
- EFTA States-Estonia FTA.1Theterms ofreference fortheexamination ofthe
Agreement wereadopted bytheCouncil forTrade inGoods on19September 1996.
- EFTAStates-LatviaFTA.1ThetermsofreferencefortheexaminationoftheAgreement
were adopted bytheCouncil forTrade inGoods on19September 1996.
- EFTA States-Lithuania FTA.1Theterms ofreference fortheexamination ofthe
Agreement wereadopted bytheCouncil forTrade inGoods on19September 1996.
- Establishment oftheEuropean Community, Services. Theterms ofreference forthe
examination oftheAgreement wereadopted bytheCouncil forTrade inServices on
23September 1996.
1Three bilateral FreeTrade Agreements between Switzerland andtheBaltic countries, previously notified
totheGATT, were replaced bytherelevant EFTA Agreements, notified totheWTO after June 1996.
2TheCommittee wasinformed orally ofthereplacement ofthethree bilateral FreeTrade Agreements between
Slovenia andCzech Republic, Hungary andSlovak Republic bytheAgreement onAccession ofSlovenia tothe
Central European Free Trade Area.WT/REG/2
Page8
ATTACHMENT 2
Documents fortheCommittee onRegional Trade Agreements
WT/REG/1 - Rules ofProcedure forMeetings oftheCommittee onRegional Trade
Agreements
WT/REG/W/1 - GATT/WTO Documents Issued fortheExamination ofRegional
Agreements
WT/REG/W/2 - Draft Rules ofProcedure forMeetings oftheCommittee onRegional
Trade Agreements
WT/REG/W/3 - Checklist ofPoints onReporting ontheOperation ofRegional
Agreements
WT/REG/W/4 - Communication from Republic ofKorea
WT/REG/W/5 - Communication from theDelegations ofAustralia, Hong Kong and
Korea
WT/REG/W/6 - Standard Format forInformation onRegional Trade Agreements
WT/REG/W/7 - Checklist ofPoints Raised byDelegations onProcedures toFacilitate
andImprove theExamination Process
WT/REG/W/8 - Systemic Implications ofRegional Trade Agreements andRegional
Initiatives fortheMultilateral Trading System
WT/REG/W/9 - NoteonProcedures toFacilitate andImprove theExamination ProcessSECTION IX
COMMITTEE ONBALANCE-OF-PAYMENTS RESTRICTIONSRESTRICTED
WORLD TRADE WT/BOP/R/19
5November 1996
ORGANIZATION(96-4664)
Committee onBalance-of-Payments Restrictions
REPORT (1996) OFTHE COMMITTEE ON
BALANCE-OF-PAYMENTS RESTRICTIONS
1. Thisreport hasbeenprepared inpursuance oftheProcedures foranAnnual Overview ofWTO
Activities andforReporting under WTO (WT/L/105).1
2. Since 1December 1995 theCommittee hasheld consultations withfiveMembers under the
Chairmanship ofMr.Peter Witt(Germany).2
3. During theDecember 1995consultations withIndia, theCommittee recalled India'sstated aim
tomove, by1996-97, toatrade régime under which quantitative restrictions areretained onlyfor
environmental, social, health andsafety reasons, provided sustained improvement wasshown inits
balance ofpayments. TheCommittee noted theview expressed byIndia that,inthecontext ofa
deteriorating balance-of-payments situation, itwould beneither prudent norfeasible toconsider the
general lifting ofquantitative restrictions onimports atthisstage. Asthere weredivergent views on
India'sbalance-of-payments situation andontheconclusions tobedrawn, theCommittee welcomed
India'sreadiness tonotify totheWTO allremaining restrictions maintained forbalance-of-payments
purposes soonaftertheannouncement ofthe1996/97 Export-Import Policy andtoresume consultations
inOctober 1996.3Following arequest bytheIMFtoreschedule theconsultation, theCommittee agreed
thatthisconsultation would beheldon20-21 January 1997. InJuly1996, India submitted alistof
allitsquantitative restrictions maintained forbalance-of-payments purposes.4
4. During theconsultations withNigeria inFebruary 1996, theCommittee welcomed Nigeria 's
commitment toconvert allmeasures taken forbalance-of-payments purposes toprice-based measures,
toeliminate these andthereby todisinvoke Article XVIII: B.5Theconsultations resumed in
September 1996. TheCommittee tooknoteofthestatement byNigeria thattechnical andlegislative
processes hadbeeninitiated withaviewtoeliminating theimport prohibitions based onbalance-of-
payments grounds asof1January 1997, andthatpositive recommendations hadbeenmade tothis
end,subject tofinalGovernment approval. Itrequested Nigeria tonotify therelevant decisions to
theCommittee assoonastheyaretaken. Ifallmeasures were removed bythe1997 Budget, there
1TheAnnual Report fortheCommittee for1995 iscontained inWT/BOP/R/10.
2Since theentry intoforce oftheWTO, theCommittee hasheldconsultations with13Members
(Table 1).
3WT/BOP/R/11, 23January 1996.
4WT/BOP/N/11, 23July1996.
5WT/BOP/R/13, 1March 1996.WT/BOP/R/19
Page2
would benoneedforfurther consultation; ifnot,theCommittee would resume itsconsultation with
Nigeria inFebruary 1997.6
5. During theJune1996 consultations withSlovakia, theCommittee welcomed thedecision of
theGovernment ofSlovakia, dated 25June1996, committing itself toeliminate thesurcharge with
effect from1January 1997, andtodisinvoke theprovisions ofArticle XIIofGATT 1994atthesame
time.7Slovakia reduced itsimport surcharge from 10to7.5percent, effective 1July1996.
6. Consultations wereheldwithTunisia inJune1996. TheCommittee recognized thatTunisia 's
balance-of-payments situation wasfragile. Itnoted Tunisia 'sclarification oftheonlyremaining
restrictionsforwhichitclaimedbalance-of-paymentsjustificationandtheagreementofTunisiatoprovide
anotification ofthese restrictions totheWTO within onemonth. Thislistsupplied byTunisia is
contained inWT/BOP/N/10.8TheCommittee discussed whether these restrictions could bejustified
forbalance-of-payments purposes. Opinions differed astowhether thisbalance-of-payments situation
constituted athreat ofaserious decline inTunisia 'smonetary reserves. Some Members, considering
thatthese residual measures represented thefinalstage inphasing outquantitative restrictions, stated
thatTunisia needed thefiveyears envisaged initsPlantocomplete thisprocess. Others recalled that,
under theUnderstanding onBalance-of-Payments Provisions oftheGATT 1994, the1979Declaration
onTrade Measures Taken forBalance-of-Payments Purposes andGATT Article XVIII:9, preference
should begiven toprice-based measures, andthatmeasures should beapplied tocontrol thegeneral
level ofimports, without sector-specificity; onthese grounds, theyrequested Tunisia toliftthe
quantitative restrictions promptly. Bearing inmind allthese factors, theCommittee agreed toresume
theconsultations withTunisia inJune1997onthebasisofanewmacroeconomic analysis bytheIMF.9
7. During consultations inSeptember 1996, Hungary confirmed itsfirmintention toeliminate
thesurcharge anddisinvoke balance-of-payments provisions by1July1997, atthelatest.10Hungary
notified theWTO thatitwasreducing the8percentimport surcharge, introduced inMarch 1995,
to7percenton1July1996 andto6percenton1October 1996.11
8. Theconsultations scheduled withTurkey andPoland inJuneandJuly, respectively, were
cancelledfollowingcommitmentsonthepartoftheseGovernmentstodisinvokethebalance-of-payments
provisions by1January 1997.12
9. InaccordancewiththeconclusionsoftheCommitteeinNovember1995,thePhilippinesnotified
theWTO thatithadliberalized itsrestrictions onagricultural products.13
6WT/BOP/R/18, 16October 1996.
7WT/BOP/R/15, 7July1996.
8WT/BOP/N/10, 10July1996.
9WT/BOP/R/14, 8July1996.
10WT/BOP/R/17, 16October 1996.
11WT/BOP/N/12, 6August 1996.
12WT/BOP/R/16, July1996; WT/BOP/N/7, 19June1996; WT/BOP/N/8, 27June1996.
13WT/BOP/N/9, 3July1996 (cf.BOP/312/Add.1/Rev.1, 1November 1994).WT/BOP/R/19
Page3
10. Inaccordance withtheconclusion oftheCommittee inNovember 1995, SriLanka notified
theWTO thatithadremoved import restrictions onfourtarifflines(potatoes, redonions, "B"onions
andpeppers).14
11. AreportonotherbusinessconductedbytheCommitteeiscontainedindocumentWT/BOP/R/16.
12. Inaccordance withtheannual notification requirement, contained inparagraph 9ofthe
Understanding, theCommittee adopted anotification format (WT/BOP/14) on21October 1996.
13. Pending afinaldecision bytheGeneral Council, theCommittee hasgranted adhocobserver
status tothefollowing intergovernmental international organizations: ACP, EFTA, EBRD, OECD,
UNCTAD andWorld Bank.
14. From1997,fourMembersareexpectedtobeconsultingunderArticleXVIII:12(b):Bangladesh,
India, Pakistan andTunisia. Nigeria andSriLanka willalsocontinue consultations ifanymeasures
justified onbalance-of-payments grounds remain inforce.
14WT/BOP/N/13, 30September 1996.WT/BOP/R/19
Page4Table 1
BOP CONSULTATIONS CONDUCTED SINCE THE ENTRY INTO FORCE OFTHE WTO
Member LastConsultation Follow up
Bangladesh March 1995 Thenextconsultations willbeheldinthespring of1997.
Brazil October 1995 Following consultations withtheCommittee, Brazil withdrew theprovisions forimport quota onmotor vehicles introduced in
June, witheffect from 27October 1995.
Egypt June1995 Egypt disinvoked Article XVIII:B witheffect from 30June1995.
Hungary September 1996 The8percentimport surcharge introduced inMarch 1995, hasbeenreduced to7percentasof1July1996 and6percentas
of1October 1996. Hungary confirmed itsfirmintention toeliminate thesurcharge by1July1997, atthelatest.
India December 1995 Theconsultation willresume on20-21 January 1997.
Israel June1994 Israel disinvoked thebalance-of-payments provisions asof15December 1995.
Nigeria February/September 1996 Nigeria committed itself toconvert allbalance-of-payments measures toprice-based measures andtodisinvoke
Article XVIII:B.
Pakistan November 1994 Thenextconsultation willbeheldon18-19 November 1996.
Philippines November 1995 ThePhilippines undertook todisinvoke Article XVIII:B subject totheliberalization ofremaining restrictions by
31December 1997. Restrictions onagricultural products were lifted inMarch 1996.
Poland June1995 Poland informed theCommittee inJune1996 thatitwould eliminate the3percentsurcharge anddisinvoke Article XIIby
1January 1997.
Slovakia June1996 Slovakia informed theCommittee inJune1996 thatitwould eliminate thesurcharge, lowered from 10to7.5percent asof
1July1996, anddisinvoke Article XIIby1January 1997.
South Africa May1995 South Africa disinvoked thebalance-of-payments provisions witheffect from 1October 1995.
SriLanka November 1995 Members questioned thebalance-of-payments justification ofremaining restrictions oneight fooditems andrecommended that
SriLanka nothaverecourse toArticle XVIII:B. InSeptember 1996, SriLanka notified theelimination ofrestrictions onfour
tariff lines.
Tunisia June1996 Opinions differed astothejustification ofbalance-of-payments grounds forquantitative restrictions onmotor vehicles. The
consultations aretoresume inJune1997.
Turkey June1995 Turkey informed theCommittee inJune1996 thatitwould reduce itsremaining duties tobound levels anddisinvoke the
balance-of-payments provisions asof1January 1997.SECTION X
COMMITTEE ONBUDGET, FINANCE AND ADMINISTRATIONWORLD TRADE WT/BFA/29
4November 1996
ORGANIZATION(96-4640)
Committee onBudget, Finance andAdministration
ANNUAL REPORT (1996)
1. Inaccordance withtheprocedures foranannual overview ofWTO activities andforreporting
under theWTO adopted bytheGeneral Council on15November 1995, areport ontheactivities of
theWTO Committee onBudget, Finance andAdministration in1996 ishereby submitted.
2. Itwillberecalled thattheCommittee metonanumber ofoccasions andhaspresented reports
totheGeneral Council onaregular basis.15Thisreport willthencover themajor areas theCommittee
hasdealtwithinthecourse oftheyeartodate.
I. ON-GOING RESPONSIBILITIES
3. TheCommittee monitored onaregular basis thefinancial andbudgetary situation ofthe
Organization, thereceipt ofcontributions including theimplementation oftherelated schemes and
measures pertaining toreceipt ofcontributions, andexamined theFinal Position ofthe1995 Budget
andtheDirector-General 'sFinancial Report onthe1995Accounts andReport oftheExternal Auditor.
ItalsodealtwiththeDirector-General 'sbudget proposals for1997.
II. MAJOR AREAS OFACTIVITIES
A. External Auditors
4. TheJointWTO/GATT Committee recommended thatacallforcompetitive tenders forthe
external audit oftheaccounts oftheOrganization bemade in1995. After approval oftheterms of
reference forthecompetitive bids, theSecretariat sentoutacallfortenders thesame year. The
Committee formed aworking group in1996 withtheSecretariat toexamine thecandidatures ofnine
national courts ofaudit. Onthebasis ofareport presented bytheworking group, theCommittee
recommended totheGeneral Council toextend theon-going contract withtheAustrian Court ofAudit
foroneyeartoinclude theauditofthe1996accounts andtonominate theNetherlands Court ofAudit
forauditing theWTO accounts effective asfromtheauditofthe1997accounts forathreeyearterm.
B. General management of,andoverhead costs on,Trust Funds
5. TheWTOCommitteehad,onseveraloccasions,examinedthequestionofgeneralmanagement
andoverhead costsofTrust Funds. In1996, indocument WT/BFA/21, itrecommended totheGeneral
Council thatastandard overhead rateof13percentontrustfundexpenditures becharged. The
recommendations onthegeneral management ofTrust Funds werecontained indocument WT/BFA/26.
./.
15Repor ts:WT/BFA/20 coveringthemeetingof29Januar y1996; WT/BFA/21 coveringthemeetingof29February1996;
WT/BFA/22 covering themeeting of26March 1996; WT/BFA/24 covering themeeting of2May 1996; andWT/BFA/26
covering themeeting of27June1996. Inaddition, theCommittee sentaspecific recommendation totheGeneral Council
indocument WT/BFA/19.WT/BFA/29
Page2
C. Relationship between theInternational Trade Centre (ITC) andtheWTO
6. TheCommittee monitored theimplementation ofthedecision taken in1995 toconsult with
United Nations Headquarters onanewarrangement onbudgetary issues related tothefunctioning of
theITC. In1996, theCommittee examined theproposed 1997budget fortheITCwhich forthefirst
timewasexpressed inSwiss francs andfollowed thepresentation oftheWTO budget.
D. NewWTO Members
7. Inthecourse of1996, theCommittee formulated recommendations totheGeneral Council
onassessments tothebudget andadvances totheWorking Capital Fund upontheaccession totheWTO
ofthefollowing newMembers: (i)Angola, (ii)Benin, (iii)Chad, (iv)Ecuador, (v)Fiji,(vi)Gambia,
(vii)Grenada, (viii)Haiti, (ix)Papua NewGuinea, (x)Qatar, (xi)Rwanda, (xii)SaintKittsandNevis,
(xiii) Solomon Islands, and(xiv)theUnited Arab Emirates.
E. Conditions ofservice ofWTO staff
8. While notintheformal framework oftheCommittee, twoworking groups under theGeneral
Council chaired bythepresent andformer Chairmen oftheCommittee tookupthematter ofconditions
ofservice again in1996. Onedealt withsalaries andtheother withpensions. Theresult ofthese
discussions andconsultations provided thebasisforthedraftdecision providing fortheestablishment
ofWTO -specific conditions ofservice tabled bytheChairman oftheGeneral Council in
September 1996.SECTION XI
PLURILATERAL TRADE AGREEMENTSWORLD TRADE WT/L/190
17October 1996
ORGANIZATION(96-4315)
REPORT (1996) OFTHE COMMITTEE ONGOVERNMENT
PROCUREMENT (1994 AGREEMENT)
I. General
1. Thisreport issubmitted pursuant toArticle XXIV:7(a) oftheAgreement onGovernment
Procurement, which requires theCommittee toreview annually theimplementation andoperation of
theAgreement andtoinform annually theGeneral Council ofdevelopments intheimplementation
andoperation oftheAgreement during theperiods covered bysuchreviews.
2. TheAgreement onGovernment Procurement entered intoforceon1January 1996. Theperiod
covered inthisfirstReport isJanuary-September 1996, butthereport alsoreflects, where necessary,
thepreparatory work oftheInterim Committee onGovernment Procurement priortotheAgreement 's
entry intoforce. TheCommittee onGovernment Procurement heldthree meetings in1996: on
27February, 4June and20September (GPA/M/1-3). TheInterim Committee onGovernment
Procurement heldsixmeetings in1994 and1995 (GPA/IC/M/1-6). Itsreport totheCommittee was
circulated indocument GPA/IC/9.
3. ThefollowingWTOMembersarePartiestotheAgreement:Canada,theEuropeanCommunities
andfifteen Member States, Israel, Japan, Korea, Netherlands withrespect toAruba1,Norway,
Switzerland andtheUnited States. Seven WTO Members haveobserver status: Australia, Colombia,
Iceland, Liechtenstein, Singapore andTurkey. Twonon-WTO members haveobserver status: Chinese
Taipei andLatvia.
II. Implementation oftheAgreement
Modifications ofAppendices totheAgreement
4. Article XXIV:6 oftheAgreement requires Parties tonotify rectifications ofapurely formal
nature orother modifications relating toAppendices Ithrough IV,which setoutthemutually agreed
coverage provided under theAgreement. Consequential rectifications ormodifications become effective
oncetheyareagreed topursuant totheprocedures under thisArticle.
5. PriortotheentryintoforceoftheAgreement, theUnited States andNorway made rectifications
ofapurely formal nature pursuant totherelevant Decision oftheInterim Committee (GPA/IC/M/1,
Annex 2).TheUnited States rectification toitsAppendix IIregarding State Publications witheffect
asof23December 1994wasaccompanied byalistofsuchpublications (GPA/IC/W/10) andNorway 's
rectification witheffect asof15December 1994related tothechange ofnames ofentities inAppendix I,
Annex 1(GPA/IC/W/8).
1Asof25October 1996WT/L/190
Page2
6. Atthetimeofthesignature oftheAgreement inMarrakesh inApril 1994, theEuropean
Communities andtheUnited States negotiated abilateral agreement extending theirmutual benefits
under theAgreement, therelevant details ofwhich, including theintended modifications, werecirculated
totheInterim Committee on15June1994. Atitsmeeting of7December 1995theInterim Committee
accepted thattheEuropean Communities andtheUnited States hadmettheprocedural requirements,
interms oftherelevant Decision oftheInformal Group onNegotiations (GPA/IC/3), necessary for
theincorporation ofmodifications totherespective Annexes toAppendix I,which weresubsequently
submitted on22December 1995 (GPA/IC/10).
7. After theentry intoforce oftheAgreement, Japan andtheUnited States notified modifications
toAppendix Iwhich followed theirbilateral agreement reached ontheenlargement ofthecoverage
oftheAgreement (GPA/W/1 andGPA/W/2). Consequential modifications toAppendix Ientered into
forceon25February 1996. Following thebilateral agreement reached between Norway andtheUnited
States, further modifications toAppendix Ientered intoforce on17August 1996 (GPA/W/22 and
GPA/W/23). Discussions currently being heldbetween some other Parties mayresult infurther
expansion ofthecoverage oftheAgreement.
8. TheCommittee alsodiscussed thefollow-up toCanada 'soffer, contained initsAppendix I,
Annexes 2and3,tocover sub-central government entities andenterprises inalltenProvinces, onthe
basisofcommitments received fromtheProvinces, withafinallisting tobeprovided within 18months
aftertheconclusion oftheAgreement. Atthelasttwomeetings oftheInterim Committee, Canada
linked thetabling ofitsschedule atthesub-central leveltoachieving increased market access insectors
ofpriority interest toCanadian suppliers andimproving security ofaccess through circumscribing the
useofsmall business andother set-aside exceptions under theAgreement (GPA/IC/M/5-6). Canada
maintained thisposition atthefirstthreemeetings oftheCommittee heldin1996(GPA/M/1-3). Some
other Parties expressed theirdisappointment overthesituation, stressed theneedforCanada tohonour
itscommitments andconsidered thattheproblems raised byCanada withrespect toexpanded coverage
oftheAgreement could onlybeaddressed onceCanada hadcome forward withoffers pursuant toits
commitments initsAnnexes 2and3.Canada hasasserted thatitdidnotundertake obligations regarding
Annexes 2and3,andhasreiterated thatitscoverage wastobebased oncommitments received from
theProvinces. Canada hasalsoasserted that,asnocommitments havebeenreceived, itisunder no
obligation toputforward anoffer under these Annexes.
Accession
9. Atitsfirstmeeting on27February 1996, theCommittee concluded theaccession process of
twoadditional WTO Members totheAgreement, which hadbeeninitiated priortotheentry intoforce
oftheAgreement, byadopting theDecisions ontheaccession ofLiechtenstein andtheKingdom of
theNetherlands withrespect toAruba onthebasisofthereports oftheInterim Committee (GPA/IC/6
andGPA/IC/7), andinviting these Members toaccede totheAgreement ontheterms foraccession
attached totherespective Decisions (GPA/2 andGPA/3). TheKingdom oftheNetherlands forAruba
hasdepositeditsinstrumentofaccessionon25September1996(WT/Let/111andGPA/7).Liechtenstein
hasnotyetdeposited itsinstrument ofaccession.
10. Singapore applied foraccession inNovember 1995. Following bilateral consultations held
between Singapore andParties in1996, theCommittee adopted, atitsmeeting on20September 1996,
aDecision inviting Singapore toaccede ontheterms attached tothatDecision (GPA/6). Singapore
hasnotyetdeposited itsinstrument ofaccession.
11. Chinese Taipei applied foraccession totheAgreement inJune1994 (GPA/IC/5). Atits
February andJune1996 meetings, theCommittee wasinformed ofthebilateral consultations held
between thedelegation ofChinese Taipei andParties totheAgreement onChinese Taipei 'srevisedWT/L/190
Page3
offerinviewofitswishtoconclude thisprocess inthelatter partof1996. AtitsSeptember meeting,
theCommittee wasinformed offurther improvements thatChinese Taipei hadmade toitsoffer.
Decisions onProcedural Matters
12. Atitsfirstmeeting on27February 1996, theCommittee onGovernment Procurement adopted
thefollowing Decisions onprocedural matters: Participation ofObservers intheCommittee; Accession
totheAgreement; andInterim Procedures ontheCirculation ofandontheDerestriction ofDocuments,
Pending Definitive Procedures (GPA/1). These Decisions, which concern, interalia,possibilities
forMembers oftheWTO notParties totheAgreement toparticipate asobservers intheCommittee,
toreceiveCommitteedocumentsandtoaccedetotheAgreement,weretransmittedtotheGeneralCouncil
fortheinformation ofallMembers oftheWTO (WT/L/146). AtitsSeptember meeting, theCommittee
agreed toalignitsprocedures oncirculation andderestriction ofdocuments withthose adopted bythe
General Council on18July1996 (WT/L/160/Rev.1).
13. Atitsmeeting on27February 1996, theCommittee adopted aDecision onmodalities for
notifying threshold figures innational currencies (GPA/1). AllParties havenotified thresholds intheir
respective national currencies fortheperiods 1996-97 andthemethods employed fordetermining them
(GPA/W/12 andAddenda 1-6).
14. Atitsmeeting on4June1994, theCommittee adopted aDecision onProcedures forthe
Notification ofNational Implementing Legislation, including responses toachecklist ofissues
(GPA/1/Add.1). Thissetsatime-limit of31December 1996 forsuchnotifications.
Establishment ofaPractical Guide totheNewAgreement
15. Pursuant toitsdiscussion onthedesirability, thestructure andpresentation ofapractical guide
totheAgreement directed towards theprivate sector, theInterim Committee considered itappropriate
topostpone active consideration oftheestablishment ofsuchaguide inviewofitslinkages withvarious
other outstanding issues, suchastheprocedures fornotifying national implementing legislation and
theuseofinformation technology inprocurement procedures.
Loose-leaf System forUpdating Appendices
16. TheCommittee agreed, atitsmeeting on4June1996, toestablish aloose-leaf system, with
legal effect, toensure thattheAppendices totheAgreement arekeptuptodate. TheCommittee
requestedtheSecretariattoproduceanddistributeanupdatedsetofAppendices,withaviewtoproviding
astarting point fortheloose-leaf system. TheCommittee agreed tomake thisloose-leaf system, once
established, available tothepublic atlarge through theInternet.
Statistical Reporting
17. Article XIX:5 requires Parties tocollect andprovide onanannual basis statistics ontheir
procurements covered bytheAgreement. Withaviewtoensuring thatsuchstatistics arecomparable,
Article XIX:5 requires theCommittee toprovide guidance onthemethods tobeused. TheInterim
Committee established aWorking Group onStatistical Reporting topropose guidelines formeeting
thestatistical reporting requirements ofArticle XIX:5, inparticular inrespect oftheadoption ofuniform
classification systems andmethods tobeusedforproviding statistics onthecountry oforigin ofproducts
andservices.
18. Based onthereport ofthisWorking Group (GPA/IC/8), theCommittee agreed, atitsfirst
meeting on27February 1996, thattherulesoforigin ofproducts usedforthepurposes ofstatisticalWT/L/190
Page4
reporting inArticle XIX:5 oftheAgreement should bethesame asthose applied under Article IV,
which were those usedinthenormal course oftrade. Asfortherequirement toreport statistics on
theorigin ofservices, theCommittee postponed application ofthisrequirement untilpracticable rules
fordetermining theorigin ofservices hadbeendefined. Atitsmeeting on4June1996, theCommittee
adopted classification systems forgoods andservices tobeusedinstatistical reporting under the
Agreement (GPA/4). Some Parties asserted thattheobjective ofestablishing statistics, i.e.toprovide
informationandenablereviewasregardsobligationsofParties,mightbemoreappropriatelymetthrough
alternative means.
Other Matters
19. Inaccordance withtheprovisions oftheUnderstanding onRules andProcedures Governing
theSettlement ofDisputes (Annex 2oftheWTO Agreement), theCommittee notified theDispute
SettlementBody(DSB)ofspecialoradditionalrulesorproceduresondisputesettlementintheAgreement
onGovernment Procurement, namely Article XXII, paragraphs 2through 7(GPA/5).
III. Work under theBuilt-In Agenda
Information Technology
20. Article XXIV:8 oftheAgreement callsonParties toconsult regularly intheCommittee on
developments intheuseofinformation technology ingovernment procurement and,ifnecessary, to
negotiate modifications totheAgreement itself. Inpreparation fortheimplementation ofthefuture
responsibilities oftheCommittee inregard tothese provisions, theInterim Committee gathered
information ontheuseofinformation technology ingovernment procurement inthevarious Signatories
inreplytoaquestionnaire (GPA/IC/W/4/Rev.1) aswellasthrough discussion intheInterim Committee
(GPA/IC/M/1-6). Thisinformation raised anumber ofpolicy issues concerning, ontheonehand,
issues bothofaccess toprocurement opportunities onon-line databases andelectronic tendering or
commerce and,ontheother hand, questions bothofcooperation between andcoordination ofnational
systems (GPA/IC/W/18). Thework oninformation technology hasfocused ontheneedtoensure
thataccess toprocurement opportunities through theuseofinformation technology takes place ona
non-discriminatory basisandalsoonconsidering whatmodifications, ifany,maybenecessary tothe
Agreement toenable thebenefits ofinformation technology tobeharnessed. TheUnited States, the
European Communities andNorway submitted communications identifying anumber ofareasthatmight
require examination toaccommodate thedevelopments ininformation technology (GPA/IC/W/36,
GPA/W/13 andGPA/W/14). Inaddition theSecretariat prepared acompilation ofissues relating to
theimplicationsofthedevelopmentsofinformationtechnologywhichalsoidentifiedoptionsforcarrying
forward thework inthisarea(GPA/W/15). TheCommittee 'sdiscussion oftheseoptions atitssecond
meeting on4June1996 hadthefollowing outcome. First, theSecretariat revised thequestionnaire
oninformation technology (GPA/IC/W/4/Rev.1) asproposed indocument GPA/W/15 (GPA/W/24).
Second, theSecretariat prepared afactual noteontheaspects oftheAgreement thatithadbeensuggested
might needtobere-examined inthelightofinformation technology, setting outtherelevant provisions
oftheAgreement anddrawing attention toanypertinent information ontheir negotiating history
(GPA/W/25). Third, thedelegation oftheUnited States provided information onthepilotproject
launched intheAPEC framework onaccess tonational databases (GPA/M/3). Fourth, theEuropean
Community, incoordination withNorway, would prepare apaper identifying, interalia,thetechnical
issues relating toinformation technology thatmight needtobeexamined byexperts. TheCommittee
isdeterminedtopursueitsworkoninformationtechnologyexpeditiously,soastoensurethatthebenefits
ofinformationtechnologyareharnessedwhileatthesametimeprotectingand,wherepossible,enhancing
non-discriminatory access.WT/L/190
Page5
Three-year Review
21. Article XXIV:7(b) and(c)oftheAgreement callsontheParties, notlaterthantheendofthe
third yearfrom thedateofitsentry intoforce, toundertake further negotiations, withaview to
improving theAgreement andachieving thegreatest possible extension ofitscoverage among allParties
andeliminating anyremaining discriminatory measures andpractices. AttheCommittee 'smeeting
on4June1996, suggestions weremade that,withaviewtofacilitating accession bythewidest possible
number ofcountries andtoadjusting theAgreement tonewly-emerging technologies, suchnegotiations
should beinitiated in1997andcould include thefollowing mainelements: (i)expansion ofthecoverage
oftheAgreement, notably extending ittosectors notpresently covered; (ii)increased security ofmarket
access under theAgreement; (iii)elimination ofdiscriminatory measures andpractices; and(iv)
simplification andimprovement oftheAgreement. Some Parties expressed theview thatfurther
experience withtheoperation oftheAgreement should begained before initiating negotiations aimed
atincreased coverage.
IV. Issues tobebrought totheattention oftheMinisterial Conference
22. TheCommittee hasagreed toundertake anearlyreview, starting in1997withanexamination
ofmodalities, withaview totheimplementation ofArticle XXIV:7 (b)and(c)oftheAgreement.
Thereview will,inparticular, cover thefollowing elements:
- expansion ofthecoverage oftheAgreement;
- elimination ofdiscriminatory measures andpractices which distort openprocurement;
and
- simplification andimprovement oftheAgreement, including, where appropriate,
adaptation toadvances intheareaofinformation technology.
23. Thisreview shallseektheexpansion ofmembership oftheAgreement bymaking itmore
accessible tonon-Parties.
24. Members oftheCommittee notethework under wayunder theCouncil forTrade inServices
ongovernment procurement andtheproposals fortheSingapore Ministerial foramultilateral work
programme ongovernment procurement. TheParties totheAgreement onGovernment Procurement
intend tosupport andactively contribute toanymultilateral work ongovernment procurement that
maybedecided uponbytheMinisterial Conference, without prejudice totheirownefforts toimprove
andextend theAgreement onGovernment Procurement andtoencourage more WTO Members to
become Parties toit.WORLD TRADE WT/L/178
11October 1996
ORGANIZATION(96-4172)
INTERNATIONAL DAIRY COUNCIL
Report totheSingapore Ministerial Conference
TheInternational Dairy Agreement (IDA) entered intoforce on1January 1995. Thetwomain
functions oftheAgreement are(i)themaintenance ofminimum export prices forspecific dairyproducts
listed intheAgreement, and(ii)toprovide, withtheInternational Dairy Council, aforum forexchange
ofinformation ontheworld market situation andoutlook fordairy products. Asof17September 1996,
thefollowing wereParties totheAgreement: Argentina, Bulgaria, theEuropean Communities, Japan,
NewZealand, Norway, Romania, Switzerland andUruguay. Other governments andintergovernmental
organizations arerepresented atmeetings byobservers.
TheInternational Dairy Council heldmeetings on20-21 March 1995, 17October 1995 and
17September 1996. Inaccordance withArticle IV:1oftheIDA, theCouncil reviewed atitsmeetings
thesituation andoutlook intheworld market fordairy products onthebasis ofnotes prepared bythe
Secretariat (IDA/W/1, IDA/W/7 andIDA/W/12), aswellasthequestionnaires submitted byParties.
In1995, theCouncil also: (i)adopted Rules ofProcedure (IDA/1); (ii)adopted formats for
Questionnaires 1-5(IDA/4); and(iii)issued astanding invitation totheUnited Nations Economic
Commission forEurope (ECE), FAO, OECD andUNCTAD toparticipate initsmeetings inanobserver
capacity.
AtitsOctober 1995meeting, theCouncil noted thatthelimited membership intheAgreement,
andinparticular thenon-participation ofsome major dairy exporting countries, made theoperation
oftheminimum price provisions oftheIDAuntenable. Inlightofthissituation, theCouncil decided
tosuspend theoperation oftheAnnex totheAgreement thussuspending minimum prices foralldairy
products therein until31December 1997. Noting thatthetaskoftheCommittee onCertain Milk
Products wasdirectly related totheimplementation oftheprovisions oftheAnnex, theCommittee
wasalsosuspended.
Inviewofthefactthatcertain Parties expressed doubts about thecontinued usefulness ofthe
current Agreement inlightoftheUruguay Round results, theCouncil, atitsmeeting inSeptember 1996,
invited theChairperson toundertake informal consultations onthefuture oftheAgreement.
Thereports ofthemeetings oftheInternational Dairy Council arecontained inIDA/2, IDA/5
andIDA/7.WORLD TRADE WT/L/179
11October 1996
ORGANIZATION(96-4173)
INTERNATIONAL MEAT COUNCIL
Report totheSingapore Ministerial Conference
TheInternational Bovine Meat Agreement entered intoforce on1January 1995. Asof
11June1996 thefollowing were Parties totheAgreement: Argentina, Australia, Brazil, Bulgaria,
Canada,Colombia,theEuropeanCommunities(15),Japan,NewZealand,Norway,Paraguay,Romania,
South Africa, Switzerland, theUnited States andUruguay. Other governments andintergovernmental
organizations arerepresented atmeetings byobservers.
TheInternational Meat Council heldmeetings on21-22 June1995 and11June1996. Atits
firstmeeting, theCouncil: (i)adopted theRules ofProcedure (IMA/1) andagreed toholdoneregular
meeting inJuneofeachyear; (ii)adopted theformats forthequestionnaires ondomestic policies
(IMA/2) andstatistical information (IMA/3); (iii)agreed thatobserver governments would berequested
toreply tothestatistical andpolicy questionnaires onavoluntary basis; and(iv)issued astanding
invitation totheUnited Nation 'sEconomic Commission forEurope (ECE), FAO, theInternational
Trade Centre (ITC), OECD andUNCTAD toparticipate initsmeetings inanobserver capacity.
Inaccordance withArticle IV:1oftheInternational Bovine Meat Agreement, theCouncil
reviewed atitsmeetings theworld supply anddemand situation andoutlook inthebovine meatsector
onthebasis ofnotes prepared bytheSecretariat (IMA/W/1 andIMA/W/7, refer) aswellasthe
questionnaires submitted byParties. Parties alsohadageneral exchange ofviews onthefunctioning
oftheAgreement inthelightofpastexperience under theArrangement Regarding Bovine Meat and
theUruguayRoundoutcome.AtitsmeetinginJune1996,theCouncilinvitedtheChairmantoundertake
informal consultations onvarious issues, including thefuture oftheAgreement.