RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG/M/31
5 April 2002
(02-1768)
Committee on Regional Trade Agreements
Thirty-First Session
NOTE ON THE MEETING OF 19 FEBRUARY 2002
Chairpersons:  Mrs. L. Dubois Destrizais and Mr. B.G. Chidyausiku
A. ADOPTION OF THE AGENDA
1. The Thirty-First Session of the Committee on Regional Trade Agreements (CRTA) was
convened in Airgram WTO/ AIR/1714, dated 6 February 2002.
2. The Chairperson proposed a slight change in the order of examination of regional trade
agreements (RTAs) and announced that the Chairperson would introduce four items under "Other
Business":  a progress report on the preparation of the information seminar on RTAs and the
multilateral trading system, organized by the Secretariat;  information on a request transmitted by the
Chairman of the Committee on Trade and Development (CTD);  the CRTA's work programme in
2002;  and the schedule of meetings.
3. The following Agenda was adopted:
A. Adoption of the Agenda
B. Systemic Implications of Regional Trad e Agreements for the Multilateral Trading
System and Relationship between them
C. Examination of Regional Trade Agreements
I. Status of the examination of regional trade agreementsII. Free Trade Agreement between Turkey and the Former Yugoslav Republic of
Macedonia
III. Free Trade Agreement between Turkey and Latvia
IV. Free Trade Agreement between the EC and Mexico
V. Euro-Mediterranean Agreement between the EC and Israel
VI. Euro-Mediterranean between the EC and Morocco
VII. Free Trade Agreement between the EFTA States and the Former Yugoslav
Republic of Macedonia
D. Election of Officers
E. Other Business
4. The Chairperson recalled that the Latin American Integration Association (LAIA) had been
granted observer status to the CRTA on an ad hoc  basis and sought confirmation to extend an
invitation to LAIA to attend the Committee's next meeting.  It was so agreed.
B. SYSTEMIC IMPLICATIONS OF REGIONAL TRADE AGREEMENTS FOR THE MULTILATERAL
TRADING SYSTEM AND RELATIONSHIP BETWEEN THEM
5. The Chairperson recalled that at the 30th Session delegations had had a preliminary exchange
of views on the two surveys prepared by the Secretariat at the Committee's request, entitled Coverage,
Liberalization Process and Transitional Provisions in RTAs ;  and Rules of Origin Régimes in RTAs ,
which had been distributed as JOB(01)/132 and JO B(01)/131, respectively.  She suggested that the
day's comments on those studies be structured so that delegations addressed the following topics:WT/REG/M/31
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factual aspects of the surveys;  the context in which they should be inserted;  and their objectives and
possible follow-up.
6. The representative of the United States said that his delegation had raised several questions
relating to the papers at the last meeting.  He then noted that it was rather unusual to have job
documents under discussion in a formal meeting, and he requested that these documents be formallycirculated, as had other Secretariat documents of this type which similarly had received formal
document citation.
7. The representative of India said that his delegation appreciated the effort undertaken by the
Secretariat in carrying out the two background surveys.  While the issues were no doubt complex, he
stressed that it was important to clinically analyze that RTAs had provided additionalities and
complementarities  but also stripped comparative advantage and proved to be trade diversionary.
Turning to the survey on preferential rules of origi n, he underlined, as did the Director-General in his
Annual Report, that preferential rules of origin added a significant dimension to RTAs' trade
diversionary impact;  as well as, in certain cases, contributing to the undermining of other WTO
disciplines such as the TRIPS agreement, etc.  Careful and comprehensive consideration of these
issues was important for fully assessing their implic ations for the growth of the multilateral trading
system.  The survey highlighted the need for harmonization of preferential rules of origin, particularlyin RTAs in which participating countries were at different stages of development.  He also said that
the survey brought into focus rules that contravened the WTO Agreements, such as the diagonal
cumulation schemes under preferential rules of origin regimes, which favoured certain non-
participants to a particular RTA, while discriminating against the rest.  It was his delegation's view
that this aspect needed to be examined in further detail.  With respect to the survey on coverage andliberalization process, he noted that it highlighted that, even under preferential regimes, products of
developing country export interest, mainly in the ag ricultural sector, were not liberalized to the same
extent as non-agricultural products, indicating that the trade liberalization under RTAs was certainly
skewed.  The impact of such differential sectoral coverage on the trade pattern within RTAs needed to
be fully evaluated.  He also observed that most of the surveyed RTAs provided for tariff reductions inthe range of 50-75 per cent, which reflected a substantive margin of preference and which, again,
raised concerns that it might be an incentive for trad e diversion.  That appeared to be the more likely
in relation to products for which tariff peaks remained among RTA partners, as indicated in the
survey.  He added that, when considering RTAs' coverage and liberalization, not merely tariff
reductions should be taken into account, but also other mechanisms providing preferential treatment,
including preferences as to trade rules (e.g. in the application of safeguard action), or the
establishment of mechanisms for mutual acceptance of standards or the conformity testing procedures.He stressed that the impact of those mechanisms was no less important and needed to be documented
fully.  Finally, he noted that the new RTAs also included provisions relating to non-trade issues,
which suggested that it would be useful if the Secretariat could compile an inventory of such
provisions and the conditions they imposed on participating developing countries.
8. The representative of Hong Kong, China wished to add a few observations to the preliminary
comments made by his delegation on both studies at the previous CRTA meeting.  Regarding the
study on rules of origin regimes in RTAs, he recalled that his delegation had pointed out that many
preferential rules of origin regimes were very complicated and many exporters from developing
countries faced practical difficulties with these rules.  He also urged delegations to agree to the early
formal circulation of the paper.  The study showed that preferential rules of origin regimes in theworld were of various levels of restrictiveness across RTAs and even across different sectors or
products within a single RTA.  He said that it could be argued that the differences among RTAs were
the result of the lack of harmonization in related WTO disciplines in that area.  Nevertheless, the gross
differences in origin rules for different sectors and products within an RTA, be they named as
exceptions or otherwise, could hardly be explained by reasons of technical and objective nature:protection of domestic industries looked more probable for the selective imposition of such restrictive
rules.  His delegation fully agreed with the Secretariat's observation, in the highlights of the survey,WT/REG/M/31
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that "regimes containing multiple exemptions and tailor-made provisions appeared in themselves to
act as potential barriers to trade".  He also noted in paragraph 6 of the survey that some economists
had observed that preferential rules of origin were usually more stringent than MFN rules of origin,
the more so for products with higher margin of ta riff preference.  He said that that seemed to be
contrary to the objective of enhancing and facilitating trade between RTA parties, and it increased thelikelihood of economic inefficiency and the possibi lity of trade and investment diversion.  He
observed further that all different methods of origin determination seemed to have their benefits and
limitations, but, in particular, there appeared to be more problems or flaws with respect to the
percentage criterion or value-added method.  That, he said, should give more food for thought for
Members adopting or considering the adoption of such  methods.  It was his delegation's view that, to
address the above problems, Members should positively explore the possibility of applying
harmonized rules of origin to RTAs in the long run.
9. Turning to the study on Coverage, Liberalization Process and Transitional Provisions in
RTAs , the representative of Hong Kong, China addressed the problems raised by the Secretariat and
certain Members concerning the availability and completeness of data.  His delegation appreciated the
benefits of soliciting detailed information and data from RTA parties to facilitate greater
understanding of the RTAs concerned.  Further t houghts would, however, be required to strike a
balance between the quest for transparency and the possibility of imposing undue burden on RTA
parties and the Secretariat in meeting any additional notification and reporting requirements.  He
recalled that his delegation had already pointed out in the previous meeting the need for giving further
attention to the finding that analysis by traded g oods (i.e. trade shares) tended to overestimate product
coverage in comparison with tradeable goods (i.e. tariff line shares), and that the Secretariat's surveyalso pointed out that that aspect deserved future research.  He concluded by suggesting that, if the
Secretariat could consider figuring out, within existing limits, the magnitude of difference and the
conditions under which such disparity was magnified, a more meaningful reading on the coverage of
RTAs would be possible in the future.
10. The representative of Turkey thanked the Secretariat for preparing the two background
surveys and expressed his delegation's confidence that the documents would assist the Committee in
its discussions on systemic issues.  He remarked that his delegation was still considering some of the
technical points contained in the documents and wanted, therefore, to reserve the  right to come back
to them at forthcoming meetings.
11. The representative of Chile was of the opinion that the two surveys would make a major
contribution to the work that lay in store for the Committee, with reference to the mandate entrusted
to it by the Ministers at Doha.  He said that in addressing those issues, he would deviate from thenormal approach taken by delegations, who usually reviewed those topics from a highly defensive or
aggressive posture, depending on whether they wished to defend the legality, or challenge the
unlawfulness, of a particular regional agreement.  He wanted to offer some admittedly theoretical
observations, to discuss some deficiencies that existed in the area, and to point out suitable courses of
action for the Committee to follow in order to ob tain the information needed to fulfil the Doha
mandate.  Recalling what had been stated many times in the past, he noted that the existing disciplines
were clearly insufficient and failed to establish an operational frame of reference for RTAs under the
WTO, with the legal certainty which that implied.  He said that it should be the Committee's ultimate
goal to acquire the maximum degree of legal certainty regarding the room for manoeuvre available to
governments within the field, and stressed the importance of the issue, in view of the well-knownconsequences in terms of trade diversion and of the challenges that lay ahead.  With respect to the
survey on the Coverage, Liberalization Process and Transitional Provisions in RTAs , he noted that
the Secretariat had made distinctions regarding "scope" or "coverage" and liberalization (i.e. the depth
of the process).  He pointed out that the measurement of how much trade or how many products were
covered by an agreement could either be calculated on the basis of the number of tariff lines, or bequantified in terms of the value of trade.  Th e latter method, in turn, allowed for two options to
measure coverage:  (i) to determine whether a bilateral agreement had more than 90 per cent coverageWT/REG/M/31
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in terms of the value of bilateral trade;  or (ii) on the basis of the value of trade with the world.  As
pointed out by the representative of Hong Kong, Ch ina, that amounted to distinguishing the parties'
traded  goods from their tradable  goods (i.e., the entire potential associated with the agreement, which
did not necessarily show up in current trade flows) .  He acknowledged that he could not say which
was the right way to measure the coverage of an agreement, adding that the time factor was a furtherconsideration, to which he would return later.  With respect to liberalization, he stated that there was
no room for ambiguity or discussion, no matter how weak the current rules were.  The obligation was
to provide 100 per cent liberalization for products that were covered by agreements:  customs duties
had to be eliminated, not reduced.  Thus, for example, some agreements envisaged preferential market
access on the basis of tariff rate quotas (TRQs).  However, that standard, in his opinion, was not
designed to achieve 100 per cent liberalization, unless designed as a transitional measure intended to
ensure that the liberalization program could reach a level of 100 per cent at the end of a given period,when the quota would no longer exist and the customs tariff would have been eliminated.  In sum,
when designing and implementing an agreement to deepen the liberalization process, the criterion to
follow should be whether, by the end of a transition period, there would be zero tariff and no quotas
for the products covered.
12. The representative of Chile continued, making two further observations on that point.  The
first one, which he clarified as being less a matter of substance than of experience, was based on the
observation that the great majority of RTAs, albeit not all, had exceptions.  Products were excluded
from preferential access for various reasons, though often because they pertained to extremely
difficult sectors, e.g. agriculture, or to sectors subject to so many distortions on international markets
that it made little sense to open up markets bilaterally and allow those sources of instability to spreadacross, e.g. sugar.  In his view, some level of ex clusions would always remain:  when a bilateral or
plurilateral free trade agreement liberalized over 90 per cent of the volume of bilateral trade or of
trade with the world, he reckoned that it could be considered to be substantively eliminating
reciprocal trade barriers.  He also recalled, in this context, that access was also affected by non-tariff
measures (anti-dumping actions, sanitary measures, technical barriers to trade, etc.), as well as byrules of origin, and remarked that, apart from anti-dumping provisions, WTO rules that were
relatively good in the sense that those rules were being adopted, or ought to be adopted, without
creating a barrier to trade.  His second observation referred to the elements of gradual change that
existed in most agreements.  Since RTAs might take a number of years to reach their ultimate goal of
free trade among the parties, they ought not to be judged purely on the basis of current performance.
Simple parameters used to analyse the agreements referred to products which had not been included
and their impact on trade among countries.  Then, rather than focusing on the current status ofexcluded products, it would be more appropriate to look ahead and determine how many would still
be excluded at the end of the transition period, so as to clarify whether a free trade agreement was on
the right track and the extent to which it served as a benchmark in terms of coverage and
liberalization.  He acknowledged that not even the Secretariat, which had easy access to information
contained in the agreements, could attempt anything other than an approximation.  He added that theCommittee had nothing to fear from approximations, as hard-and-fast data were not needed to attain
the right track for achieving certain results.
13. Looking to the future, the representative of Chil e said that the Committee should consider the
possibility of requiring governments to provide the Secretariat (and therefore Members) with
relatively uniform trade data related to their agreements, which would allow the Secretariat, as well asthe academic community and other international institutions, to process the information and thereby
achieve greater transparency.  It would also allow the Committee to draw conclusions and assess the
impact of the agreements on trade.  The ideal situation would be a database through which
information on trade treatment could be obtained for a particular product from a particular country in
a particular market.  For instance, in order to know where Chilean apples stood in the EC market, thedatabase would show not only how Chilean appl es were performing in terms of MFN or in
preferential terms under a free trade agreement, but it  would also show the tariffs applied by the EC to
apples imported from other countries which participated in the EC's large network of tradeWT/REG/M/31
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agreements.  The next step would be to generate research to facilitate trading operations and to assess
the relative status of competition in a given market at a given time.  He remarked that, though that
task might not be requested of the Secretariat but could be fulfilled by other international agencies,
such a database would provide an invaluable information service for business operators.  He added
that the study prepared by the Secretariat was based to a large extent on data concerning RTAs signedby countries of Central and Eastern Europe;  herein, he said, lay the most serious constraint in terms
of obtaining the data the CRTA needed to perform an impact assessment, and those deficiencies
should show the direction to be followed by Member s in their rule-making efforts.  Referring to the
data quality constraints reported by the Secretariat in its survey on coverage, which had hampered
progress in the analysis, he wondered about the condi tions facing those officials who were required to
carry out the examination of particular agreements within the Committee.  It seemed obvious that very
few governments actually read the agreements in depth and detail and very few were capable ofasking relevant questions.  To improve transparency, he suggested that the Committee could
contemplate introducing a set of parameters pursuant to which the agreements could be read, or
entrusted to others for reading, rather than by those governments that generally lacked the time or
analytical tools required to do the job.  The Secr etariat, or even a network of independent trade
experts, could read the agreements and ask those questions which would help Members reach aninformed decision on the matter.
14. Turning to the survey on rules of origin, the representative of Chile commended the
Secretariat for its useful observations, in particular  with reference to the existence of two models of
rules of origin, though, there were generally equivalencies available between the two.  He explained
that a rule of origin was usually expressed in terms of either value added or "tariff jumps";  those twouniverses could be connected, and equivalencies found, through a detailed (but admittedly not
straightforward) analytical process.  He added that, more recently, rules of origin tended to involve
less reliance on value-added and greater reliance on tariff jumps, as the latter method was more
user-friendly, although harder to design and prepare at the outset.  However, not all rules of origin
could be expressed in terms of tariff jumps;  in his view there should still be room for some of them to
contain a necessary component of value-added.  Referring to the idea suggested by the representative
of Hong Kong, China, concerning harmonization of preferential rules of origin, he expressed doubts
as to whether that was a generally workable solution;  the industrial structure in place between two
countries, as well as the actual characteristics of that structure, were important factors to be
considered in that respect.  He cited as an exam ple the reference made in the Secretariat's survey to
the rules of origin applied to the automotive sector  in the Chile-Canada Agreement, where the value
was obtained through the net-cost method, rather than  the transaction-value method.  In fact, the rules
of origin embodied in the Chile-Canada Agreem ent were those of the NAFTA, and reflected NAFTA
conditions of related automotive industries based on net cost, with no market generating transaction
prices.  He was not sure whether the same held true for all trade activity in the automotive sector
around the world, and it was for that reason that he had doubts whether a harmonized rule would be
appropriate in all cases.  The interesting issue, in his opinion, which was also referred to in theSecretariat's survey, was the varying degree to which rules of origin might create trade obstacles vis-
à-vis  third countries.  He cited as an example the rules of origin that applied to the textiles and
clothing sector in the Chile-Canada Agreement, which had, as a practical effect, made it difficult for
Chile to obtain inputs from third countries and process them into textiles for export to the Canadian
market;  these were closed rules of origin which had a great impact on trade vis-à-vis  third countries.
He remarked that, in the final analysis, rules of origin in a free trade agreement could play a similar
role as the common external tariff in a customs union, although the WTO had no parameters for
evaluating the impact of specific rules of origin on trade vis-à-vis  third countries, nor were there any
mechanisms for consolidating rules of origin to ma ke them less trade restrictive, or for negotiating
their liberalization when they affected third-country trade.  That was one of the serious deficienciesthat Members faced when dealing with the subject.  Fi nally, the representative of Chile referred to the
Committee's responsibility for RTAs covering trade in services as a further point deserving
consideration.  With the increasing number of this type of agreement, he foresaw that tensions with
the provisions of the GATS would become more explicit and would show those areas where actionWT/REG/M/31
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was needed.  He therefore found it advisable that the Committee begin focusing on those issues
forthwith, in an effort to anticipate problems rather than simply react to them when they occurred.  He
referred, as an example, to the fact that the Committee had never examined, in detail, the large section
on services contained in the Chile-Canada Agreement.
15. The Chairperson thanked the representative of Chile for his very thought-provoking
intervention and had no doubts that his delegation would make an important contribution to the
negotiations on RTA rules, as well as on anti-dumping provisions.
16. The representative of the European Communities sa id that, with respect to the survey on rules
of origin, he had a number of technical comments and corrections which he would submit to the
Secretariat and he suggested that the survey be updated to reflect those points before circulation.
More generally, he concluded, from the findings of the survey and from some delegations'
interventions, that the questions raised by the Secretariat in the area of preferential rules of origin andtheir relationship with regional agreements definitively deserved further discussion either in the
CRTA, or in the Negotiating Group on Rules.  Drawing from the experience within Europe, he
pointed out that the harmonization of rules of origin could certainly make a positive contribution to
simplicity and predictability for all economic operators whether they were parties to an agreement or
third parties.  At the same time, he acknowledg ed the shortcomings pointed out by the Chilean
representative concerning the possible limits of harmonization, insofar as there were RTAs
comprising countries which participated in separate families of approaches to rules of origin.  He
referred to the RTAs that Mexico had with the United States and Canada, and with the EC, as an
example.  He remarked that a general concern was to ensure that rules of origin operated in a
transparent way for economic operators in the parties and non parties, and that they operated in a waywhich was to the greatest possible degree neutral in terms of their impact.  He added that those were
considerations that could certainly be explored in the broader context of the Doha Development
Agenda negotiations, in particular in light of the objective of improving the integration of developing
countries into the global system and of the promotion of regional integration among developing
countries in a way that contributed to the multilateral system.  Turning to the Coverage paper, herecalled that in the previous CRTA meeting his delegation had expressed surprise about the
difficulties encountered by the Secretariat in locating or presenting information concerning the EC's
RTAs.  He indicated that a considerable amount of information had been supplied to the Secretariat in
the context of the trade policy review two years earl ier, and hinted that the recent reorganization of
the Secretariat should mean that the information would become more readily available.  He stressed,
however, that the EC was certainly not seeking to obscure information related to its agreements from
either the CRTA or WTO Members generally.  He assured the Committee that, in fact, given theamount of labour that went into preparing bie nnial reports, notification of RTAs, and other
documents, plenty of time was spent in trying to promote transparency.  He expressed his willingness
to discuss what information should be presented and how it could be done more usefully.  At the same
time, the information that was presented had also to be connected with the purpose of the CRTA
examination to determine the consistency of an agre ement with the legal provisions of GATT Article
XXIV and GATS Article V.  He agreed with the Chilean representative that RTAs covering trade in
services needed more attention than they currently received, though he was conscious that the
statistics available in the services area were not always as comprehensive as one might have liked.  A
further point with respect to the assessment of RTA coverage concerned the difficulty of taking into
account non-tariff measures, whether in the form of standards, safeguards or sanitary andphytosanitary measures.  He observed that it would be rather arbitrary to say that a product was
excluded from an RTA because a party was unable to meet the standard of another party due to
questions of public health or product safety;  the aim was certainly not that an RTA should provide a
waiver from the normal product standards applying to domestically produced goods, or to goods
imported on a MFN basis.  In his opinion, that was certainly a question to explore in the future,though perhaps with a note of caution.WT/REG/M/31
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17. The representative of the Philippines welcomed the Secretariat's surveys and regarded them as
the twin foundations of the objectives of the WTO as far as RTAs were concerned, both in terms of
the future work on the disciplines concerning RTAs operations, and as guidance to future proliferation
of RTAs.  He emphasised that rules of origin were the main source of trade diversion or trade
promotion aspects of RTAs.  Coverage and its relationship to trade liberalisation was also a veryimportant aspect, and he was glad to note that the survey on Coverage has made an initial attempt to
present the picture by tariff lines in different RTAs in existence and operation.  An RTA's impact on
trade liberalization could be assessed on the basis of tariff lines but, more importantly, on the basis of
its effects on trade flows.  He acknowledged that it was not possible at that point for the Secretariat to
relate liberalization or coverage to trade flows, while hinting to the possibility of considering that
issue under another item in the CRTA's mandate, which dealt with the report on the operations of
RTAs.  He said that it was presumptuous to expect at that point to achieve some harmonization ofpreferential rules of origin although, depending on the Committee's perceptions, that aspect might be
seen as an input for further work either in the CRTA, the Negotiating Group on Rules, or the Trade
Negotiating Committee.  Moving on, he recognized that with the impasse in the CRTA on the
examination front, the second best objective was transparency.  As had already been indicated by the
EC representative, he noted that the restructuring of the Secretariat might be an opportunity to pursuethe transparency mandate further.  He added that he looked forward to receiving the EC's comments to
the Secretariat with respect to the Pan-European Cumulation System, hoping that this would allow a
fairer assessment of how it had affected trade flows, whether it functioned as trade impeding or trade
promoting, and whether it was discriminatory in some ways.
18. The representative of Hungary said that his delegation considered the surveys as the first
background papers for the negotiations on RTAs launched under the Doha Development Agenda
mandate.  Consequently, he was of the view that, in the future, overlapping between the deliberations
of the CRTA and the mandated negotiations should be avoided.  At the same time, he noted that the
reading of the surveys under a negotiating mood was likely to be quite different from their reading
under the working context prevailing when the Secretariat had been requested to prepared the studies.In these circumstances, he suggested that any guid elines to the Secretariat for future work on the
surveys under discussion, or other studies, should bear in mind two points.  First, for surveys to be
used as a basis from which to draw conclusions, more data was needed, and on a much wider scope;
for example, the survey on Coverage lacked info rmation on almost all of the RTAs concluded among
developing countries.  Second, there was a need for more in-depth analysis of certain situations and
less value judgement;  this was a particularly sensitive point during negotiations, to avoid the risk of
prejudging a country's position.  Turning to the question of rules of origin, the representative ofHungary agreed, in principle, on the need to harmonize preferential rules of origin, especially in view
of the possible complications arising when a country was party to RTAs with different origin rules.
However, he stressed that harmonization had to begin with non-preferential rules before being
extended to preferential rules.  He recalled that  that point had been clearly made during the Uruguay
Round.  With respect to coverage, he highlighted what his delegation had proved several times withstatistics, i.e., that Hungary's RTAs had created trade opportunities to third countries.  He also
welcomed the merging of the Regional Trade Agreements Section with the Trade Policies Review
Division (TPRD), and indicated that some data appearing in the survey on Coverage as not available,
were, in the case of Hungary, currently available in the Integrated Data Base.  He added that the
overall issue of RTAs could not be looked upon in an isolated and static way, and that the conditions,
political, legal or otherwise, prevailing when an RTA was concluded had to be taken into
consideration also.  He concluded by asking the Secretariat to update the studies on the basis of
remarks made, to widen the statistical basis on which they were working, and to come up with an
aggregate level of statistics which would not pre-judge the individual positions of certain countries,
and that would allow drawing certain conclusions with regards to the trends they were faced with.
19. The representative of the United States said that the issue with respect to the use of a job-
number document in a formal meeting of the Committ ee remained unresolved.  He recalled that the
mandate given to the Secretariat had been to prepare a document to be provided to the Committee.WT/REG/M/31
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Other documents of that type had been submitted and had all received official citation, and he
questioned why there had been a departure from that practice.  He asked the Chairperson how she
intended to deal with that issue given the legal limbo of discussing a document that did not have an
official citation in a formal meeting.  Also, in that context, he noted that the document was to be
prepared by the Secretariat, not negotiated.  Thus, he questioned the approach taken by the ECdelegation of submitting their comments to the Secret ariat for incorporation into the document.  His
delegation would welcome the opportunity to read the EC's comments and clarifications, but they
should be submitted as the EC's document, not as a modification to the Secretariat's study.  Lastly,
with respect to the comments made relating to the availability of information in the TPRD, he
observed that Members were responsible for providing information to the CRTA in a legal context.  A
legal separation applied with respect to the use of information provided in the context of a trade
policies review, irrespective of its value, and in a dispute settlement situation.
20. The representative of Australia recalled that his delegation's comments on the two surveys at
the previous CRTA meeting, although of a preliminary nature, had in fact been relatively detailed.
The focus had been on the Coverage paper, where two types of comments had been made:  firstly, on
the discrepancy in many RTAs between the liberalization of agricultural and non-agricultural
products;  secondly, on the issue of information provided by RTAs' parties, including some concretesuggestions as to how that could be improved.  He restated that the Secretariat's surveys added weight
to his delegation's concerns about the tendency for agriculture, in particular, to be excluded from
RTAs to a greater or lesser extent.  Given the importance of agriculture to the trade of most countries,
it remained his delegation's position that RTAs not providing for a substantial coverage of agriculture
were unlikely to meet a reasonable standard, in terms of the substantially-all-the-trade requirement ofGATT Article XXIV.  To his mind, therefore, the Secretariat paper on Coverage highlighted the need
for disciplines on sectoral coverage to be considered in the context of the Doha mandated
negotiations.  In terms of next steps, he suggested that it would be useful if the two surveys were sent
to all the speakers at the proposed Seminar on RTAs scheduled to be held in April, and circulated as
background documents to the participants in the same Seminar.  Finally, he seconded the requestmade by the United States representative that the surveys be circulated as formal WTO documents as
soon as possible.
21. The representative of Japan considered the surveys very useful by allowing his delegation to
understand the various aspects of the RTAs in force.  It was the view of his delegation that, in light of
the mandate given by the Doha Ministerial Declaration to negotiate in order to clarify and improve the
disciplines and procedures under the existing WTO provisions applying to RTAs, it was essential to
understand the current overall status of existing RTAs.  Since the surveys were highly useful inunderstanding the scope and coverage of trade, as well as the depth of trade liberalization, it was
worth formalising them as official documents.  Turning to the Coverage paper, he noted that the study
contained the percentage of trade coverage in terms of trade flows of each party to an RTA in one
direction, but not necessarily in both directions.  The inclusion of such figures in Annex I would have
made it more useful, in particular when considering whether a given RTA met the substantially-all-the-trade criterion or not.  With regard to the rela tive margin of preference (RMP) ratio referred to in
page 6 and Annex 2 of the survey, he noted that it had been calculated as the difference between the
average applied MFN rate and the average applied tariff rate.  Since this method could result in high
RMP ratios even when there was no trade at all among the parties, his delegation considered that trade
volumes should also be taken into account.  He added that in order to facilitate the Committee's futurework in terms of clarifying and improving disciplines and procedures on RTAs, it would be useful if
the Secretariat would carry out similar surveys in connection with the non-tariff provisions in RTAs.
Such surveys might include safeguards, anti-dumping, standards and other trade measures.  He noted,
in that regard, that the Secretariat had already conducted research, the results of which were available
in document WT/REG/W/26, dated 5 May 1998.  Given that the number of RTAs had increasedgreatly since 1998, it would be appropriate to update the previous survey.  Finally, referring to some
comments made by Members with regards to the specific areas in RTAs which did not have high trade
coverage due to the sensitivity of the products contained within, he considered that that was one of theWT/REG/M/31
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systemic issues which would be addressed in future work either in the Committee, or in the mandated
negotiations on rules.
22. The representative of Norway acknowledged the difficulties encountered by the Secretariat in
respect of the surveys in finding and obtaining data, and said that his delegation would try to improve
the situation in that field.  In fact, he was of the view that in the last two examinations of EFTA'sRTAs, the provision of statistics had been improved, and he hoped that the new format had facilitated
the work of the Secretariat.  He indicated that he had no factual comments to make with respect to the
surveys and had no objection to them being officially circulated.  He added that it came as no surprise
to his delegation that the Coverage survey was very much focused on the differences between trade in
agricultural and industrial products, and he referred, in that context, to the WTO forum dealing
specifically with negotiations on trade in agricultural products.  He also noted that the surveys were
interesting reading, but that they had no particular impact on the systemic debate in the CRTA, sincein his delegation's view, all the trade meant all the actual trade, including trade in agriculture products.
23. The representative of Korea welcomed the Secretariat's surveys and echoed the need,
expressed by other delegations, to harmonize preferential rules of origin.  In that context, he said that
when setting up a RTA, rules of origin should not create new barriers to third parties, nor distort the
established trade or investment expectations in place before the RTA came into being.  In that sense,he was of the view that, to ensure predictability and transparency, preferential rules of origin would
have to be harmonized, either in the CRTA or in the mandated negotiations.  With regards to
coverage, he observed that all WTO Members had the responsibility to comply with the MFN
obligation to apply the same tariff rate to all Members.  Under that condition and basic presumption,
an exemption was allowed as long as RTA parties complied with the conditions stipulated in GATTArticle XXIV:(5).  In that sense, and in order to prove whether or not an RTA complied with the
substantially-all-the-trade criterion of GATT Article XXIV and the parallel criterion contained in
GATS Article V, countries had an obligation to provide statistics with regards to the RTAs to which
they were party.  That was all the more important in order to make progress in RTA negotiations.  He
concluded by supporting the request of other delegations to circulate the surveys as official WTOdocuments.
24. The representative of Canada recalled that her delegation had made some comments in the
previous meeting on the surveys, which she considered useful in the run up and during the mandated
negotiations on RTAs and on GATT Article XXIV in particular.  With regards to further work, she
suggested that the Secretariat should review the surveys and see whether others could be undertaken.
In terms of enlarging the studies to include more countries, that, in her view, was a good idea, but was
not a task that should hold up the issuance of the surveys being currently considered.  With regards to
distribution, she agreed with the suggestion made by the representative of Australia that the studies
should be given the broadest possible distribution, including to the speakers and participants in the
Seminar.  She also agreed that they should be issued as formal documents as soon as possible, taking
technical errors on board.  However, since the surveys had been issued under the Secretariat's own
responsibility, that task should be left to them, in terms of taking comments from Members anddeciding whether or not to incorporate them.
25. The representative of Hong Kong, China agreed with the suggestions made by previous
speakers, that the two surveys be formally circulated and distributed to speakers and participants in
the Seminar.
26. The representative of the European Communities said that his delegation agreed with what
had been said by the representative of Canada and other Members concerning the wide circulation of
the surveys.  At the same time, it seemed sensible to ensure their greatest possible quality and
accuracy, and it was in that sense, he explained, that the EC had comments to offer on the paper on
rules of origin, particularly in the light of his delegation's experts' experience with the operation of
origin rules, including the Pan-European System of Cumulation.  He was unclear about the questionWT/REG/M/31
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raised by the United States regarding the relation ship between the documentation for a trade policies
review and for the purposes of the CRTA.  He noticed that an essentially pragmatic approach had
been employed in the current discussion on the availability of information and indicated that the same
approach had been followed by the Secretariat in obtaining data for the surveys, by employing sources
other than simply the legal text of the agreements or the information provided by countries whoseRTAs were under examination in the Committee.  On that basis, he questioned whether the
representative of the United States was suggesting that any information contained in the surveys from
third sources be removed.  In his view, that would lead to a reduction in the range and value of the
documents concerned.  He added that it was clear that the legal texts were the responsibility of the
Committee, either in terms of GATT Article XXIV or GATS Article V, and that those had to be
carefully and consciously assessed on the basis of information needs and information submitted by the
parties during the formal examination.  He acknowledged that some Members had different viewsfrom his delegation's with regard to the range of information that might be required to support the
examination, and he reiterated his delegation's willingness to enter such discussions.  However, in the
spirit of pragmatism demonstrated in the context of the current discussion, he did not see the benefits
of drawing those sort of precise legal distinctions.
27. Referring to the Secretariat survey on Coverage, the representative of Lithuania echoed and
supported the views expressed by some delegations concerning the need for more data and wider
scope of analysis in order to have a more accurate picture of the coverage of  RTAs.  He referred as an
example to Annex V of the document, where 13 pages were devoted to descriptions of agreements
related to the European region and only half a page to other agreements.  He also remarked that data
which had been officially notified to the CRTA was not reflected in the survey.  That was the case inAnnex 4 of the document, for example, where no reference had been made to the RTA between
Estonia, Latvia and Lithuania, which set zero import duties for all products including agriculture.  He
was of the view that space should be left for commen ts and for these to be reflected in the survey in
order to have a better and more objective assessment of coverage.
28. Referring to the intervention made by the EC representative, the representative of the
United States observed that should the EC be allowed to introduce comments and clarifications with
respect to their agreements, then all Members should likewise be offered the possibility to follow thesame approach.  He raised concerns about such an approach, as it would render moot the entire
discussion, both at that meeting and previously, since the modified document might end up being
entirely different.  As to the approach to follow, he reiterated his initial suggestion that the EC submit
a paper highlighting what it saw as inaccuracies in the document.  If clarifications were introduced, it
would be necessary to come back to the document at the next meeting and provide Members with acrossover text, to allow them to identify the changes that had taken place and discuss them in depth.
Given the sensitivity of the Pan-European Cumulation System, he was sure that his delegation was
likely to have some follow-up questions in that regard.
29. The Chairperson noted that the Committee had shown a willingness to be effective and
pragmatic, and to render the surveys WTO formal documents as soon as possible.  She referred to the
useful application of the documents to the future work of the Committee and hoped that, following
exchange of views, a swift solution could be reached without having to leave the matter to
consultations.  Given that the surveys were the work of the Secretariat, she offered the floor to the
latter for additional comments.
30. A representative of the Secretariat welcomed the opportunity to reiterate that the surveys had
been prepared under the Secretariat's own responsibility.  He explained that the documents had been
initially issued with a job-number in anticipation of certain factual corrections that might be needed.
As a result of the views and comments that had been expressed during the current and past meetings,
he said that the Secretariat now had the factual basis to issue the documents.  He added that the papers
would be reviewed and issued as formal documents as soon as possible.  The Chairperson requestedWT/REG/M/31
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the Secretariat to incorporate the factual comments that had been voiced and to circulate the studies
formally.
C. EXAMINATION OF REGIONAL TRADE AGREEMENTS - STATUS REPORT ON THE EXAMINATION
OF AGREEMENTS
31. The Chairperson gave an update on the Committee's examination work.  At that moment
115 RTAs were under examination.  Draft reports on the examination of 12 agreements were under
consultation, although the consultation process had not been actively pursued in the last months.
Factual examination had been concluded for 60 agreements, was still under way for 17 RTAs and had
not yet started for 26 other agreements.  In its examination work the Committee had been confronting
difficulties of a general nature, but there were also some specific problems which were to be
addressed on an ad hoc  basis.  Such a situation had arisen during the July 2001 Session, in the context
of the examination of several agreements notified by the Kyrgyz Republic.  It had been decided thatDr. Vassili Notis, the Committee's Vice-Chairman in charge of those examinations, would hold
consultations and report to the Committee on the best way of dealing with the situation.
32. The Vice-Chairman recalled that the examination of seven agreements notified by the Kyrgyz
Republic had been hampered by the difficulties encountered by the Kyrgyz Republic in providing the
information requested by delegations.  In July 2001 the question was raised of whether thoseexaminations could continue, with some delegations suggesting their postponement (see document
WT/REG/GEN/M/7).  Informal consultations had be en conducted to clarify the different aspects of
the issue at hand.  It was his understanding that delegations favoured a continuation of the
examinations according to standard procedures, while being ready to allow some flexibility in
defining the deadlines for answers to the questions posed;  some delegations also recalled that theKyrgyz Republic might benefit, if needed, from technical assistance, in particular from the Secretariat.
He added that he had taken the initiative to consult informally on the modalities to be applied in the
factual examination of seven other agreements, recently notified by the Kyrgyz Republic and Georgia,
which had not yet been initiated.  The consultations had revealed agreement among delegations that
the examination process should be normally engaged;  the need for more flexibility and/or assistanceshould be determined at a later stage, if the information submitted was judged insufficient.  He
concluded by suggesting, in light of the consultations, that the Committee should request the
Secretariat to include the first round of examinatio n of the agreements recently notified by Georgia
and the Kyrgyz Republic in the agenda the next CRTA Session, as well as the continuation of the
examination of the agreement between the Kyrgyz Republic and Moldova.  With respect to other
agreements notified by the Kyrgyz Republic under factual examination, written questions should be
submitted to the Secretariat, which would be in contact with the Kyrgyz Republic in order to facilitatetheir task of replying to such questions.  Examination of those agreements should continue in a
forthcoming CRTA meeting as soon as possible.
33. The Committee agreed on the proposed approach.
34. (The minutes of the examination of the Agreements listed under agenda items C.II-VII are
being distributed as separate documents.)
D. E LECTION OF OFFICERS
35. The Committee elected Mr. Boniface Guwa Chidyausiku (Zimbabwe) as Chairman of the
CRTA by acclamation.
36. The representative of India conveyed deep appreciation to the outgoing Chairperson for her
contribution to, and excellent handling of, the work of the CRTA.  He also congratulated and
welcomed the new Chairman and assured him that he would receive his delegation's full cooperation
in the work of the Committee in 2002.WT/REG/M/31
Page 12
37. The new Chairman thanked the outgoing Chairperson for the work she had done and
acknowledged the difficult task she had been faced with.  He looked forward to working with the
Members of the CRTA, and to the challenge he had been entrusted with.  He expressed determination
to pursue the work of the Committee and to meet the challenge that had been entrusted on it by the
Doha Development Agenda.
F. O THER BUSINESS
38. At the Chairman's invitation, a representative of the Secretariat reported on preparations for
the Seminar on "Regionalism and the WTO", organized by the Secretariat.  He indicated that the event
had been originally planned for 18-19 April 2002, just ahead of the scheduled Geneva Week for non-
resident Members.  However, lack of accommodation for participants on those dates had obliged the
Secretariat to change slightly the plans for both th e Geneva Week and the Seminar.  Accordingly, the
Geneva Week would now run from 20 to 25 April, and a one day Seminar on "Regionalism and theWTO" would be held on 26 April.  The Seminar, which would benefit from the presence of non-
resident delegations in the Geneva Week,
 would be highly focused on the systemic issues that arose
from RTAs and on their relationship with the WTO.  He added that the programme of the Seminar
would be faxed to all Members, upon confirmation from all the speakers of their participation.
39. The Chairman informed the Committee that, in December 2001, the outgoing Chairperson
had received a letter from the Chairman of the CTD concerning the work programme in relation to
special and differential treatment, established as a follow-up to the Doha Ministerial Meeting.  Similar
letters had been sent to various other WTO bodies.  In the case of the CRTA, the letter had requested
the Chairperson to inform the Chairman of the CTD of any discussions or other developments relating
to special and differential treatment taking place in the CRTA between the present date and July 2002.The CTD would also welcome any other contribution the CRTA might wish to make in that regard
before July 2002.  As the newly elected Chairman he admitted to not being too familiar with the
discussions held in the Committee, but said that it was his understanding that the question of special
and differential treatment had not been raised as such in the CRTA.  Having said that, he was of the
opinion that delegations should reflect upon this question and that the Committee would revert to it atthe next Session.  He also informed the Committee of his intention to rapidly finalize a work
programme for 2002, indicating when individual RTAs would be examined, and to communicate it to
delegations jointly with requests for submission of the relevant Standard Formats.  On the question of
the dates of the next meeting of the Committee, he recalled that the calendar of meetings for the
Negotiating Group on Rules had yet to be decided and that had a bearing on CRTA meetings as well.
He pointed out, however, that the next Session would take place in late May or June.
40. The Committee took note of the comments made.
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