RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG/M/25
4 May 2000
(00-1828)
Committee on Regional Trade Agreements
NOTE ON THE MEETINGS OF 29-30 MARCH 2000
Chairman: Mr. E. T. Custodio (Philippines)
A. ADOPTION OF THE AGENDA
1. The Twenty-fifth Session of the Committee on Regional Trade Agreements (CRTA) was
convened in Airgram WTO/AIR/1268 and Corrige ndum 1, dated 16 and 22 March 2000, respectively.
2. The following Agenda was adopted:
A. Adoption of the Agenda
B. Election of OfficersC. Procedures to Facilitate and Improve the Examination Process
D. Systemic Implications of Regional Trad e Agreements for the Multilateral Trading
System and Relationship between them
E. Work Programme of the Committee for 2000
F. Examination of Regional Trade Agreements
I. Free Trade Agreement between Turkey and the Czech Republic
II. Free Trade Agreement between Turkey and the Slovak Republic
III. Free Trade Agreement between Turkey and Estonia 
IV. Free Trade Agreement between Turkey and Bulgaria
V. Free Trade Agreement between Estonia and the Faeroe Islands (Government
of Denmark)
VI. Free Trade Agreement between Croatia and SloveniaVII. Free Trade Agreement between Israel and Poland
VIII. Free Trade Agreement between Israel and Slovenia
IX. Free Trade Agreement between the Former Yugoslav Republic of Macedonia
and Slovenia
G. Other Business
B. E
LECTION OF OFFICERS
3. Acting as Chairman, Mr. Andrew Stoler explained that as the last remaining member of last
year's team of CRTA Officers, it was his role to formally propose the election of
Ambassador Edsel T. Custodio of the Philippines as Chairman of the CRTA for the year 2000.
4. The Committee agreed to elect Ambassador E.T. Custodio as Chairman of the CRTA.
5. The new Chairman said he was honoured to be elected and he intended to carry on the work
of his predecessors, Ambassador Krirk-Krai Jirapaet  (Thailand) and his able team of Vice-Chairmen.
Prior to his election he had had the opportunity to consult with a number of delegations and heWT/REG/M/25
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proposed that the Committee elect Ambassador Silvia Ávila Seifert (Bolivia),
Ambassador Lee Jae Gil (Korea) and Dr. Vassili Notis (Greece) as Vice-Chairpersons of the CRTA.
6. The Committee agreed to elect the three Vice-Chairpersons.
7. The Chairman said that he was aware of the hard work and challenges faced by the CRTA
and that he was fortunate to have the able and enthusiastic support of his Vice-Chairpersons.  Before
proceeding with the meeting he drew atte ntion to document WT/REG/W/11/Add.2, dated
8 March 2000, which updated the list of international intergovernmental organizations which had
requested observer status in the CRTA.  As the Committee was aware, the Latin American Integration
Association (LAIA) had been granted observer status to the CRTA on an ad hoc basis.  It was agreed
to extend an invitation to LAIA to attend the Committee's next meeting.
C. PROCEDURES TO FACILITATE AND IMPROVE THE EXAMINATION PROCESS
8. The Chairman noted that delegations had recently had an opportunity to exchange views on
an informal basis on procedures to facilitate and improve the examination process.  As Members were
aware the CRTA found itself at a critical point in its history.  At the date of its creation in
February 1996, the CRTA had inherited the examination of a number of individual agreements
previously mandated to working parties.  Since th en, the backlog of examinations under the purview
of the CRTA had more than doubled, to 82.  About two-thirds of the agreements ever notified to the
GATT/WTO (and still in force today) were currently being considered by the CRTA.  The CRTA had
significantly advanced the factual examination of th e agreements under its purview.  Nonetheless, it
had been unable to fulfill its mandate, since despite countless efforts, no agreed report had been
produced on any of the inherited examinations or on any of the examinations referred to it since 1996.
The current impasse on the examination front tended to handicap other aspects of the Committee's
work as well.  Over the past couple of weeks the Chairman had held a number of informal discussions
with delegations in an effort to try and reorgani ze the examination procedures, in an endeavour to
facilitate the examination process and assist the Committee in fulfilling its mandate.  The Chairman
moved to the meeting to informal mode to allow de legations to express further views on this subject.
In reconvening the formal meeting, the Chairman sa id it was clear that divergences of view remained
and it was his intention to continue informal consultations.
D. SYSTEMIC IMPLICATIONS OF REGIONAL TRADE AGREEMENTS FOR THE MULTILATERAL
TRADING SYSTEM AND RELATIONSHIP BETWEEN THEM
9. The Chairman drew the Committee's attention to two documents inscribed in the Airgram.
The first was the Secretariat's paper, entitled a 'Synopsis of "Systemic" Issues related to Regional
Trade Agreements', document WT/REG/W/37.  The purpose of the Synoptic Paper had been to
prepare a comprehensive review of the debates which had taken place within the Committee related to
systemic issues, as well as the relevant findings in Panel and Appellate Body reports.  He conceded
that it was a difficult paper to digest, but that it contained valuable information that could be a useful
tool for the Committee's discussions.  The second document was a contribution from the
European Communities on Systemic Issues related to Article V of the GATS, document
WT/REG/W/35, which had been submitted du ring the last Session of the Committee.
10. The representative of the European Communities (EC) said that his delegation had briefly
introduced this paper during the Committee's last Session in October, but given that his head of unit
for services was present, he would ask him to briefly comment on it.  He recalled that the Committeehad not had a substantive discussion on the paper and his delegation was eager to receive other
delegations' views on it.WT/REG/M/25
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11. Another representative of the European Communities said, by way of introduction, that in his
delegation's view, Article V of the GATS was a finely-balanced text which did not need to be
re-opened.  However, some questions of interpretation remained.  GATS Article V had been drafted
in an open way leaving flexibility for implementa tion and interpretation; for his delegation, the key to
interpretation, and the guiding concept in Article V, was the notion of integration.  Thus, hiscomments were essentially based on this concept of integration.  Given that negotiations on services
were currently underway, the discussion on GATS Article V was timely and it would be useful if the
Committee could clarify some issues.  His delegation favoured a step-by-step approach, following that
used by the delegation of Hong Kong, China.  He had three comments to make on Articles V:1(a),
V:1(b), and V:2.  First, as regards Article V.1(a), while his delegation was of the view that the essence
of "substantial sectoral coverage" was that some sectoral exclusions were permitted, no mode of
supply could be excluded.  In terms of sectors, coverage should be as broad as possible and volume oftrade should be the indicator for the substance of the sectoral coverage.  The Committee needed to
look for some parameters or indicative criteria to determine whether the volume of trade covered was
substantial enough.  Second, regarding Article V:1(b), he agreed with the delegation of Japan that a
standstill was not sufficient to achieve the requirement of the elimination of substantially all
discrimination.  On timing, his delegation was in favour of fixing an indicative target or timetable forthe completion of liberalization.  Third, his delegation's view was that Article V:2 was a recognition
of integration agreements, in particular those in which there was an alignment of legislation, as in the
European Union's agreements with its candidate countries.  Such agreements should be given a clearer
profile or higher status, perhaps through recogn ising that the requirements of Article V:1 were
automatically met when an agreement resulted in the alignment of legislation.
12. The representative of the United States said his delegation had reviewed the
European Communities' paper closely.  He agreed that the objective should not be to revisit the text of
Article V itself, but to consider how the required reporting on the operation of agreements should be
carried out and make appropriate recommendations, pursuant to the CRTA's terms of reference.
Precisely because GATS Article V was a finely balanced text, he failed to see adequate rationale for adiscussion aimed at clarifying its scope or interpretation.  GATS Article V imposed certain constraints
with regard to regional trade agreements (RTAs) in or der to ensure that they were beneficial to trade
and to the overall goals of multilateral trade liberalization.  But it also provided for appropriate
flexibility in elaborating the terms on which RTAs could be judged in conformity with GATS
obligations.  It was not evident that there was a systemic problem relating to the clarity or the
interpretation of its obligations.  In his delegation's view it might be more appropriate to focus on
other more pressing and systemic issues, such as the lack of timely notifications to the Council forTrade in Services (CTS), pursuant to GATS Article V: 7(a).  It was interesting to note that notification
problems did not seem to be consonant with the level of development of the parties to respective
agreements.  For instance, the CTS had still not received the final EC-15 Schedule of Specific
Commitments.  The fact that developed country Members could have difficulties with such a basic
requirement suggested that notification might be a systemic issue that needed to be addressed.  Theproblem was in conforming with the basic obligations of GATS Article V, not the clarity or
interpretation of its provisions.
13. The representative of Canada said that the Secretariat's Synoptic Paper was much improved
from the previous draft.  It was more detailed and included a reference to the positive effects of RTAs,
as well as references to the recent Panel on the Turkey-Textiles  case, which was a landmark decision
with respect to the CRTA's work.  She noted that the EC paper, which was also before the CTS for
consideration, raised a number of interesting issues of interpretation. Although the EC had stated in
paragraph 2 that re-opening the text of the GATS was not an objective, some of the opinions
expressed in the paper clearly verged on rewriting the GATS Agreement (for instance, in paragraph 8,
with respect to the interpretation of the words "and/ or").  Although the CRTA had a role to discuss
broad policy questions associated with GATS Article V, GATT Article XXIV, and other systemicWT/REG/M/25
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issues, her delegation did not consider it appropriate for the CRTA to develop interpretations of
GATS Article V.  Such work should be done in the CTS.
14. The representative of Hong Kong, China said that given that another meeting on services was
taking place concurrently, her delegation's participation in the CRTA would be limited.  She recalled
that her delegation had made some substantive comments on the EC paper, which had been recordedin the minutes.  Regarding the comments made by the representatives of the United States and
Canada, she said that while GATS Article V might be a finely balanced text, there was still scope for
clarification.  Although an agreement had not yet been reached to proceed with clarification in the
context of negotiations, the mandate of the CRTA required the Committee to continue with work in
both the goods area on GATT Article XXIV, and in the services area on Article V of the GATS.  She
agreed with the representative of the United States that prompt notification of RTAs with sufficient
and relevant information was an important issue.  However, the issue of notification was closelyrelated to the issue of clarification.  In examinations of agreements in the goods area, the Committee
had witnessed examples of disagreement among Parties and non-parties, as to what kind of
information was to be submitted to the CRTA.  So the two issues were in a way related.  Turning to
the Secretariat's Synoptic Paper, she said it was an improvement on the previous draft.  The inclusion
of additional cross-references and footnotes was useful and would facilitate future research andreference for Members.  The paper contained a number of references to comments or submissions
made by her delegation which would be useful in order to reflect on what had been done and what
might be done in future, without the need for repetition.  If appropriate, she wondered if the paper
could be updated to take account of future discussions.  Her delegation also welcomed the inclusion of
the references to the findings in the Panel and Appellate Body reports on the Turkey-Textiles  case.  In
many areas, the Secretariat had helpfully drawn Members' attention to the useful guidelines provided
in these reports.  She referred to the Appellate Body's remarks contained in paragraph 60 of its report
on the Turkey-Textiles  case, with respect to the jurisdiction of Panels to assess the overall
compatibility of a customs union.  While recognizing that the Synoptic Paper was a Secretariat's
paper, she suggested that those remarks be includ ed in Section II.A.3 dealing with the examination
and WTO compatibility of RTAs.
15. The representative of Uruguay agreed that the Secretariat's paper was an improvement on the
previous version in terms of detail, presentation, drafting and user-friendliness.  He asked that it be
translated into Spanish so that it could be taken into account in his capital.  As regards the EC paper,
he had noted that the introductory part contained topics and themes that were similar to those which
had arisen in the area of goods.  For example, on the issue of substantial sectoral coverage, the EC had
pointed out the need to define what level or volume of trade would be adequate.  But, given thateveryone knew there were statistical problems and no method was acceptable to all, it was difficult to
provide such information.  If this inadequacy had already been solved elsewhere, perhaps the
Secretariat could provide information on it to the Committee.  In the meantime, overcoming these
intrinsic difficulties to trade in services was a major obstacle.  Just as the Committee could not agree
on how to determine the volume of trade and define the term "substantially all the trade" in goods, thesame problem existed with the term "substantial sectoral coverage" in services.
16. The representative of Australia welcomed the Secretariat's comprehensive Synoptic Paper as a
useful reference document which he hoped would contribute to a greater focus on systemic issues and
provide a solid foundation on which to bridge gaps in the systemic debate.  A key recurring issue
identified in the paper was the problem of the interpretation of WTO rules on RTAs.  As regards theEC paper on GATS Article V, his delegation agreed with the tenor of it and the need to clarify the
interpretation of GATS Article V provisions.  It would be a good idea to commence early work on the
clarification of "substantial sectoral coverage" and "substantially all discrimination", along the lines of
the EC proposal.WT/REG/M/25
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17. The representative of Norway said that as a relatively small and open economy, his country
was extremely vulnerable to arbitrary trade practices and thus placed the utmost importance on the
development and strengthening of the rules-based multilateral trading system as an instrument to
ensure fair and predictable trade policies.  His delegation was of the opinion that RTAs were
complementary to, and promoted the global trade re gime; it thus welcomed any effort which clarified
the relationship between RTAs and the WTO.  The Secretariat's revised Synoptic Paper on Systemic
Issues was certainly an important contribution to this work as it provided a useful overview of crucial
issues without in any way pretending to draw conclusions.  It was obvious to anyone reading the
paper that substantial and difficult work remained before a clear and common understanding could be
reached on the WTO rules for RTAs.  His delegation looked forward to continuing the work on
systemic issues on the basis of the Secretariat's paper.
18. The representative of Japan welcomed the Secretariat's paper and hoped that it would help
with the clarification of the interpretation of the WT O Agreements.  With regard to the EC's paper, his
delegation shared the view expressed in paragraph 9 of the difficulty in defining "substantially all
discrimination".  He said that his delegation would welcome the opportunity to discuss this issue
further and that it might submit further comments in writing.
19. The representative of the European Communities made three points in response to the issues
raised about his delegation's paper.  First, in response to the comments made by the representatives of
Hong Kong, China and the United States on notificati on, he said that he shared the view of the former
that notification was dependent on the clarification of issues.  This was why his delegation attached
importance to the systemic work of the Committee.  Second, he made it clear that his delegation did
not want to re-open the text of GATS, as it was his delegation's view that things could be sorted outthrough interpretation.  There was scope for interpretation which would avoid a re-negotiation of
Article V:1(b), as raised by the representative of Canada.  Finally, he shared the concerns expressed
by the representative of Uruguay on the issue of statistics.  It was his delegation's view that the
situation in services was worse than that faced in the goods area, as at times there was a total lack of
statistics.  Therefore there was work to be done in this area and the Committee should try to find somerelevant indicators.  Another representative of the European Communities thanked the Secretariat for
its Synoptic Paper, adding that given its length, a prioritization of issues was important.
20. The Chairman moved the discussion to informal mode for a preliminary exchange of views
on future work on systemic issues.
E. WORK PROGRAMME OF THE COMMITTEE FOR 2000
21. The Chairman moved the discussion back to formal mode to discuss the work programme of
the Committee.  He said that the Vice-Chairpersons would soon begin work on the factual
examination of a number of RTAs.  He drew the Committee's attention to the issue of the biennial
reports and recalled that in December 1998 the Committee had drawn up a Schedule for the
Submission of Biennial Reports on the Op eration of Regional Trade Agreements  (document
WT/REG/W/33).  A total of 24 biennial reports had been due in the course of 1999:  ten in mid-Mayand a further 14 in mid-October.  Of the ten reports due in May, seven had been received thus far; of
the 14 due in October, 13 had been received.  These reports were currently being processed by the
Secretariat and would be distributed shortly.  He proposed to include these reports on the Agenda of
the next formal meeting of the Committee to enable  interested Members to exchange views.  This
would be a useful step in enhancing RTAs transparency.  As regards the work programme, heindicated that the Committee was working on the basis of a three-pronged approach as far as the
discussion of systemic issues was concerned.  He urged delegations to be flexible in their approach
and not to link the examination process with the discussion of systemic issues, in order to enable the
Committee to make progress.  He informed the Committee that he had tentatively scheduledWT/REG/M/25
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two meetings for the current year on 6-7 July and 12-13 October.  In the meantime he would continue
informal consultations on some of the more intractable issues of the work programme.
22. (The minutes of the examination of the Agreements listed under agenda items F.I-IX are
being distributed as separate documents.)
F. OTHER BUSINESS
23. No items were raised under Other Business.
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