RESTRICTEDWORLD TRADE
ORGANIZATIONTN/RL/M/7
11 April 2003
(03-2000)
Negotiating Group on Rules Original:  English
SUMMARY REPORT OF THE MEETING
HELD ON 19-21 MARCH 2003
Note by the Secretariat
1. The Negotiating Group on Rules ("the Group") held a formal meeting on 19-21 March 2003.
A. ADOPTION OF THE AGENDA
2. The Group adopted the following agenda:
A. ADOPTION OF THE AGENDA .........................................................................................................1
B. ANTI -DUMPING ............................................................................................................................1
C. SUBSIDIES AND COUNTERVAILING MEASURES , INCLUDING FISHERIES SUBSIDIES ......................5
D. REGIONAL TRADE AGREEMENTS .................................................................................................8
E. OTHER BUSINESS .........................................................................................................................9
-     Date of the next formal meeting of the Group
B. ANTI -DUMPING
3. The first paper introduced was entitled "Proposal of the People's Republic of China on the
Negotiations on Anti-Dumping" (TN/RL/W/66). The sponsor stated that the ambiguity of the Anti-
Dumping ("AD") Agreement gave enormous discretion to investigating authorities and allowed AD
measures to be used for protectionist purposes.  As the leading target of AD, the sponsor attached
great importance to these negotiations.  Its proposal was in two parts. The first related to the
provisions that needed to be clarified or improved.  Since much of this part echoed viewpointsexpressed by other participants, the sponsor explained elements of its proposal which had not yet been
touched on by others, i.e., the issue of "particular market situation", where the lack of a definition
gave rise to a possibility of misuse, and the so-called "non-market economy" clauses in Article 2.7
and the second supplementary provision of  para graph 1 of Article VI in Annex I to GATT 1994,
which contradicted with the real situation of WTO members and should be revoked. The second partof the proposal focused on special and differential treatment for developing countries ("S&D").
Developing countries had always been the main target of AD measures, contrary to the WTO's goal of
securing a share of trade for developing countries commensurate with their development needs.  The
sponsor supported proposals on S&D by other participants.  It further proposed the mandatory
acceptance of price undertakings and the automatic sunset of AD measures in cases where developedcountries took action against imports from developing countries.
4. Various participants noted similarities between many of the sponsor's proposals and those
contained in their own submissions to the Group.  However, these participants' proposals regarding
lesser duty, price undertakings, de minimis margins, negligible import volumes and sunset were of
general application, whereas the sponsor's paper focused on these elements solely in the context ofTN/RL/M/7
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S&D; in the view of these participants, these proposals merited general applicability in all AD cases,
regardless of the WTO Member concerned.  Many participants welcomed the sponsors' S&D
proposals, but one participant noted that many AD ac tions were taken by developing countries against
each other, and queried whether it mattered to a developing Member whether  its exports were kept
out of a developed or developing country market.  This participant opined that it might be helpful toagree on a transparent and better-tailored differentiation among developing countries, as equal
treatment of Members with fundamental differences was not conducive to creating a competitive edge
for, nor to fostering the trade interests of, the poorest countries.
5. Comments were made and/or questions posed regarding a number of specific proposals.  As
regards back-to-back investigations, several particip ants sought clarification regarding the relationship
between the sponsor's proposal and paragraph 7.1 of the Decision on Implementation-Related Issues
and Concerns.  On "all others" rates, where the sponsor proposed inclusion of de minimis dumpingmargins, it was queried whether the sponsor considered that zero margins and margins based upon
best information should also be included in the calculation.  One participant submitted its questions in
document TN/RL/W/74, entitled "Comments from Australia on the People's Republic of China's
Paper on Anti-Dumping (Document TN/RL/W/66)".  This paper raised questions regarding causality;
"all others" rates; the non-market economy clause; lesser duty rule; negligible import volumes;de minimis  dumping margins and the automatic sunset of AD measures.  One participant  was of the
view that any further complication of the AD Agreement would widen the existing gap between
developed and developing countries.
6. The next paper introduced was entitled "Negotiations on Anti-Dumping and Subsidies -
Reflection Paper of the European Communities on a Swift Control Mechanism for Initiations"(TN/RL/W/67).  The sponsor recalled the problems relating to initiations, especially the work burden
for exporters implied by an unjustified initiation and the fact that a Member had to wait 18 months to
challenge the WTO-consistency of an initiation.  It referred to three basic models which did not
represent an exhaustive description of possible solutions to address unjustified initiations.  The first
and most ambitious was the fast-track initiation panel, which would allow panel review of aninitiation to be conducted within a short period of time, under procedures similar to those under
Article 21.5 of the DSU.  The second model, arbitration, could be more suitable in cases that were
straightforward, such as cases involving the absence of evidence.  The third model, which was
grounded in the SCM Agreement, was a standing advisory body that would issue a non-binding
opinion.  The sponsor was of the view that a swift syst em to deal with initiations should not be viewed
as an extra burden, as it just meant that one specific issue could be reviewed earlier.
7. Some participants considered the paper to be useful and to provide food for thought; its
suggested models could be an important complementary tool to reduce unwarranted and frivolous
initiations at an early stage.  One participant had an initial preference for a mechanism based on a
mixture of the second and third models and mentioned the importance of previously identified issues
relating to initiation such as initiation standards and standing.  It also stressed the importance of public
interest as a concept to be taken into consideration at the initiation stage.  Another participant was ofthe view that the application of this mechanism should be limited to objective aspects of initiation
such as standing, the existence of prior notificati on to the government of the exporting Member and
the existence of information relating to normal value and export price.  This participant was
concerned about the possible proliferation of disputes, abusive challenges to initiations, and negative
implications on developing countries with scarce financial and human resources.  There was a need tostrike a proper balance between the legitimate possibility to question initiation and the equally
legitimate right to initiate investigations.  One pa rticipant considered that this proposal could not be
considered a mere clarification or improvement of the current rules, and thus fell outside the scope of
the negotiating mandate.  Furthermore, the proposed mechanisms could be abused and the
combination of an investigation and a dispute could lengthen investigations and make it even moredifficult for investigating authorities to complete in vestigations within the deadlines set forth in theTN/RL/M/7
Page 3
AD and SCM Agreements.  Several participants suggested that a system within a Member for the
independent review of initiations might be a more effective way to address the problem of unjustified
initiations.
8. Questions and requests for clarifications were posed.  One participant submitted its questions
in document TN/RL/W/75, entitled "Comments from Australia on the European Communities Paper -Reflection Paper of the European Communities on a Swift Control mechanism for Initiations
(Document TN/RL/W/67)".  Participants enquired a bout the general concept of a swift mechanism; its
elements; how Members could set up such a mechanism outside the traditional dispute settlement
system; whether investigations should be suspended during the course of these proceedings; at what
stage of the investigation the proposed mechanism could issue rulings; whether or not these rulings
should be binding; the relationship between the three models and Article 13 of the AD Agreement;
and whether such a mechanism could lead investigat ing authorities to shift at least some of the
investigation to the pre-initiation stage in order to  prevent a negative outcome if it were challenged.
One participant queried how effective these models might be in reducing the burden on parties in the
case of unwarranted initiations.  Did the sponsor envisaged that a fast-track panel could complete its
work before an exporter incurred the expense of preparing its questionnaire response?  What incentive
did a Member have to enter into binding arbitration when it had just determined that the informationcontained in the application was sufficient to warrant initiation? Another participant asked whether
the sponsor intended to pursue the first two models in the ongoing DSU negotiations, and whether
these models could delay the investigation, thereby causing a negative impact on exporters.  With
respect to the standing advisory body model, it wondered whether the credibility of such a body
would be affected if its advisory opinion differed from that of panel or Appellate Body rulings when
the investigation in question was challenged later under the DSU.
9. In reaction to some of the comments and questions, the sponsor stated that it had deliberately
left the relationship between the proposed mechanism, the DSB and the ongoing DSU negotiations
open to encourage discussion.  It saw merit in discussing issues relating to disputes in the areas of AD
and CVD in the Group, but did not exclude discussing these issues in the DSU negotiations as well.Regarding the non-binding nature of the third model and its credibility, the sponsor noted that panel
rulings may be either upheld or reversed by the Appellate Body, yet no Member questioned panels'
authority or credibility.  As regards the relationship between a fast-track initiation panel and
questionnaire procedures, it would be ambitious to expect that such a panel could deliver its opinion
within 37 days, but costs continued after completion of the questionnaire so such a mechanism
remained useful.  As for the possible suspensive effect of such a mechanism on an investigation, this
would provide an incentive to invoke the mechanism and posed a risk of abuse.  Thus, while it couldbe considered, it was probably not the right track to follow.
10. The next paper introduced, entitled "Proposal on Sunset" (TN/RL/W/76), was sponsored by
14 participants.  One of the sponsors stated that this was the first negotiating proposal elaborating on
one of 32 issues previously identified by the co-sponsors; more such negotiating proposals could be
expected.  A co-sponsor explained that there were two approaches to address difficulties regardingsunset reviews under Article 11.3 of the AD Agreement: a "nuanced" approach based on an indicative
list of factors to be considered in determining likelihood of dumping and injury, or a "simple"
approach based on automatic termination of all AD measures after five years without exception and a
ban on new cases for one year thereafter (six months in exceptional circumstances).  The sponsors
submitted that the "simple" approach would be more consistent with the object and purpose ofArticle 11.3 and was a better solution to balancing of interests between exporters and domestic
industries.  Other co-sponsors stated that, althoug h the AD Agreement stipulated that any extension
beyond five years should be exceptional and based on the recurrence of dumping and injury, the
exception had swallowed the rule and the sunset review mechanism was fundamentally flawed.  The
realities of the market-place and the desire to achieve profits should normally prevent companiesselling at a loss over an extended period of five years.  In the same vein, several co-sponsors were ofTN/RL/M/7
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the view that prohibiting back-to-back investigations for one year following sunset was essential to
prevent the abusive use of AD measures.  One co-sponsor regarded the period of 5 years to be quite
long and suggested it have to be reduced to 2 or 3 years maximum.
11. Some participants welcomed the paper and expressed agreement with many of its aspects,
while others made comments or requested further clarifications.  One participant mentioned that theproposal was ambitious.  It noted that the likelihood standard was not an easy one as there were no
detailed rules in the AD Agreement and each Member was left to its own devices when developing a
workable methodology.  This participant was ready to  share its experience in this area and to discuss
problems linked to the likelihood standard with a view of strengthening the instrument.  Another
participant noted that under the proposal a Member could not maintain an AD measure in place even
where dumping had continued throughout the 5-year  period.  Some participants enquired whether it
would be appropriate to prohibit a Member from initiating an investigation for six months from expiryof a duty even in cases where there was clear evidence of dumping.  One participant requested the
proponents to provide statistics underlying their vi ew that the record of termination of AD measures
was "miserable".  One participant suggested that par ticipants should seek to clarify, on the basis of an
indicative list of factors, when an AD measure could be extended.
12. One of the co-sponsors responded to some of these questions and comments.  It emphasized
the difference between a simple and a simplistic approach.  As for statistics supporting what they
described as a "miserably poor record", the co-sponsors had considered including such data in their
paper, but finally refrained from doing so as the figures were very poor and could cause sensitivity to
some Members.  The co-sponsor, nevertheless, referred to statistics in support of its position.
Regarding the question of recurrence of dumping and injury, it stated that it would be illogical thatafter five years exporting firms would continue to sell below normal value after suffering the negative
effects of an AD measure.  It regarded the paper to be a balanced contribution that struck a balance
between the interests of exporters and that of the domestic industry.
13. The next paper introduced was entitled "Identification of Certain Major Issues Under the
Anti-Dumping and Subsidies Agreements" (TN/RL/W/72).  The sponsor stated that its paper touchedupon various issues including the misuse of the new shipper review process, repeated/persistent
dumping and/or subsidization, and special problems faced by industries that produce perishable,
seasonal and cyclical products.  In its oral intervention, the sponsor focused on three issues to give a
flavour of its paper.  The first was new shipper reviews, where the sponsor gave an example of how in
its view Article 9.5 of the AD Agreement could be abused.  The second was the calculation of the "all
others rate": the sponsor asked whether it might be appropriate for administrators in some
circumstances to use margins that incorporate minimal facts available when calculating the "allothers" rate.  The third, related to the establishment of an overall weighted average dumping margin,
including zeroing.  The sponsor enquired how many Members had changed their practice to conform
to the Appellate Body decision on zeroing, and of those which had conformed, how many were now
re-examining their position on the use of the targ eted dumping provision in Article 2.4.4 of the AD
Agreement.  It added that dispute settlement panels and the Appellate Body, when interpretingobligations related to trade remedy laws, should not impose obligations to which Members had not
agreed.
14. A number of participants indicated that the paper has identified practical issues that were
worthy of consideration.  Certain other participants noted that the proposals addressed certain issues
previously identified by other participants, but from a different perspective; one participant remarkedthat the thrust of the paper was to make AD easier.  Participants also enquired whether the sponsor
wished to apply an element of temporal segmentation to the definition of domestic production and
whether the sponsor would be prepared to do the same in injury investigations.  On overall weighted
average dumping margins, one participant emphasized that zeroing is prohibited for all comparison
methods under the AD Agreement and requested that this be explicitly clarified in these negotiations.TN/RL/M/7
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On "all others" rates, the same participant saw merit in clarifying the issue of facts available under
Article 6.8 and Annex II of the AD Agreement, i.e., in what situation and how facts available could be
used.  As for new shipper reviews, some participan ts asked the sponsor to elaborate on how often this
problem had arisen, what impact it had, and whether it could be addressed through clarifying and
improving the AD Agreement.
15. The sponsor denied that its paper was an effort  to facilitate the imposition of AD duties.  It
was rather a step towards identifying areas where clarity was needed. It added that it was not using the
issue of cyclical products to the disadvantage of the exporters nor to achieve benefits for the
administrator only, but for the benefit of the exporter and importer as well.
16. One participant reported to the Group on the latest developments in the OECD-led Initiative
on Steel, which could have a bearing on and relevance to work being done on Rules issues under the
DDA.  The OECD' s Steel Disciplines Study Group had held its first meeting on February 2003 tocarry out the high-level instruction to develop the elements of a steel subsidies agreement.  In advance
of that meeting, eighteen delegations had submitted written comments and views on issues identified
by the OECD Secretariat.  On this basis, the OECD Secretariat was working on a consolidated text
that would provide the basis for further discussion.  An informal meeting of interested delegations
was scheduled for April in Washington and the next official meeting of the Disciplines Study Groupwould take place in May 2003.  The participant was hopeful that progress could be made on an
expedited basis, and that the work done in the OECD would be of interest and use to negotiators in
this Group and to Ministers as decisions were taken in Cancún regarding the next phase of
negotiations under the DDA.
17. In reaction to this intervention, one participant responded that, although it was itself an active
participant in the OECD process, it did not see merit in raising these developments in this Group,
which should focus on necessary clarifications in the Rules area generally rather than on sector-
specific issues.
C. 
SUBSIDIES AND COUNTERVAILING MEASURES , INCLUDING FISHERIES SUBSIDIES
18. The Group first discussed a paper entitled "Subsidies Disciplines Requiring Clarification and
Improvement" (TN/RL/W/78).  In its paper, the sponsor had identified provisions of the SCM
Agreement which were ripe for further clarification, improvement and strengthening.  A next step in
the progressive deepening of subsidy disciplines was expansion of the existing category of prohibited
subsidies to include government interventions that had a distortive impact on competitiveness or trade
similar to that of export and import substitution subsidies, such as the practices listed in the now-
lapsed provisions of Article 6.1 of the SCM Agreement.  With respect to serious prejudice, the
disciplines should be strengthened: the causation provisions should be reviewed, and the remedycould be simply and exclusively the withdrawal of the subsidy programme at issue.  Regarding
indirect subsidies, it might be useful to clarify the government control standard, the definition of
public body, the "entrusts or directs" provision in Article 1, situations involving government
intervention in bankruptcy or near bankruptcy proceedings, and industry restructuring.  In addition,
natural resources and energy pricing were an area for further consideration; one problem was dualpricing which benefited exporters that used these res ources intensively.  With regard to the provision
of government equity, the sponsor suggested that  Members notify the Subsidies Committee regarding
any intended provision of equity capital and provide a detailed explanation as to how the investment
was consistent with the usual investment practice of private investors. In respect of taxation, the
sponsor called for more equal treatment of various tax systems that have only superficial differenceswith regard to their subsidy-like effects, but noted that it was only identifying the issue as it was too
early to discuss specific ideas.  The sponsor also raised the issue of royalty-based financing and
requested more clarity on numerous measurement-related concepts, such as when and how to allocate
subsidy benefits over time, the selection of commercial interest rate benchmarks, and the attributionTN/RL/M/7
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of subsidy benefits to specific categories of a company's sales and among related companies.  As to
CVD procedure issues, the sponsor was of the view that all Members would benefit from
development of "model" questionnaire and verification outlines to be used in CVD investigations.
Finally, the sponsor recognized the burden on developing and least developed Members in satisfying
notification obligations, and supported continued efforts of the Subsidies Committee to providetechnical assistance in this regard.
19. Several participants welcomed the paper, noting that submissions to the Group on subsidies
lagged behind other areas.  One participant noted that the submission overlapped somewhat with its
own submission on subsidies, and that it shared the sponsor's overall approach of strengthening
subsidies disciplines.  Another participant indicated that it was ready to examine on their merits
proposals to expand the scope of the prohibition where appropriate in light of the scale of the
distortion or adverse effects caused by the subsidies.  It was also ready to examine on their meritsproposals to address inadequacies in the current serious prejudice provisions, which were difficult to
apply effectively and had fallen into disuse.  In respect of taxation, the participant enquired regarding
how the sponsor's proposal would impact GST or VA T regimes; it would be surprising if revenue
ministers were prepared to reopen these arrangements.  It suggested discussing the issues of indirect
subsidies; natural resources /energy pricing and equi ty capital in an informal mode to help obtain a
clearer picture of the sponsor's goals.
20. The next paper was entitled "Preliminary Replies to the Questions of Australia contained in
Document TN/RL/W/61" (TN/RL/W/70).  The spon sors noted that no non-actionable subsidy had
ever been notified under Article 8 of the SCM Agreement, and one possible starting-point for
negotiations in this area could be a discussion as to why this was the case.  It added that the non-useof these provisions could be attributed to the level of ceilings or benchmarks that were indicated for
each of the categories in Article 8 and also to the fact that these categories were designed, to a certain
extent, for Members that had at their disposal considerable economic resources.  Although the current
stage was one of preliminary discussions and it could not yet envisage what concrete changes could
be introduced to this Article, it did not rule out the possibility of discussing some proposals formodifications, amendments to the text and different types of approaches to see how these could
become a reality.  In reaction to this intervention, one participant asked how the development
dimensions of subsidies were to be evaluated a nd whether these would necessarily include subsidies
with a view to promoting research and develo pment; regional growth; disadvantaged regions and
environmental restructuring.  It also enquired about the criteria that could be adopted to allow the
effective use of the category of non-actionable subsidies.
21. The next paper introduced was entitled "Possible Approaches to Improved Disciplines on
Fisheries Subsidies" (TN/RL/W/77).  The sponsor  considered that excessive subsidization had
significantly contributed to overfishing and threatened the economic and environmental health of the
world's fish stocks.  By improving WTO disciplines on harmful fisheries subsidies, participants could
demonstrate that trade liberalization benefits the environment and contributes to sustainable
development.  In its paper, the sponsor had identified some key issues and offered some ideas forinitial discussion.  It stressed that programmes that help to reduce overcapacity and overfishing, and
contribute to fisheries sustainability, were not the focus, nor were programs that benefited artisanal
fisheries in developing countries.  In terms of the structure of disciplines, the sponsor saw merit in
discussing the possibility of expanding the category of prohibited subsidies under the SCM
Agreement to cover fisheries subsidies that directly contribute to overcapacity and overfishing or haveother direct trade-distorting effects.  Another possi bility would be to shift the burden of proof to a
subsidising Member to demonstrate that certain subsidies, perhaps above a certain level, did not
contribute to overcapacity or overfishing.  The sponsor also suggested exploring means to improve the
quality of fisheries subsidies notifications under the SCM Agreement.  It noted the importance of
benefiting from the expertise of relevant governmental organizations such as the FAO and regionalTN/RL/M/7
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fisheries management organizations, as well as obtaining the views of non-governmental groups and
individuals interested in the issue, including the fisheries industry and the environmental community.
22. The next paper introduced was entitled "Korea's Views on the Suggested Categorization of
Fisheries Subsidies" (TN/RL/W/69).  In its paper, the sponsor raised several questions regarding the
submission TN/RL/W/58 provided by a group of six participants at the last meeting.  It questioned thesufficiency of the reasons for categorizing fisheries subsidies, given that no convincing arguments has
been made to date to justify the sectoral treatmen t of fisheries subsidies.  It also questioned the
objectives of this categorization and the forum where such categorization should be conducted.
23. Many participants welcomed the first submission, which moved in the right direction by
making concrete proposals and by building on the existing disciplines of the SCM Agreement.  These
participants supported the approach of the paper, which distinguished between different types of
fisheries subsidies based on their effects, and agreed with the objective of targeting those subsidiesthat caused over-capacity and over-fishing or had other trade-distorting effects.  In this respect,
various delegations understood the paper to focus on trade-distorting subsidies, and several liked the
focus on subsidies that reduced costs or increased revenues for fishers.  Some participants linked the
effects-based approach to suggestions to categorize fisheries subsidies; categorization was a way to
establish which subsidies had such effects and should be disciplined.  One participant suggested thatoperational subsidies for fishing fleets were an example of subsidies that had negative effects, while
subsidies for fisheries management and R&D were  examples of subsidies that did not.  Many
participants reacted positively to the idea of e xpanding the "red light" (prohibited) category of
subsidies for fisheries subsidies with negative effects, but did not rule out exploring the "dark amber"
approach.  In the view of certain participants, the key question was deciding which subsidies hadnegative effects and should be included in these categories, with several delegations suggesting a
comprehensive approach.  In this respect, one participant queried how the sponsor's suggestion to
include in the prohibited category subsidies to fisheries that were overfished could work in practice.
Some delegations appreciated the sponsor's statement that artisanal fisheries in developing countries
were not the focus of the negotiations, with one participant noting that some developing countries hadfisheries sectors that, although not artisanal, were small by international standards.  The importance of
improved notifications was emphasized by some participants.
24. Certain participants expressed doubts regarding the appropriateness of a sector-specific
approach, noting the possible negative effects on developing countries, and questioning the
intellectual basis for the distinct treatment of fisheries subsidies.  Certain other participants did not
rule out horizontal improvements to disciplines as part of a package to improve disciplines on
fisheries subsidies.  Some participants considered that the necessary ground for further work had notbeen laid because many questions had not been answered; the paper was based on unproven
assumptions that fisheries subsidies were causing resource depletion and that categorization was
necessary in order to make progress.  As for the objective of disciplining subsidies that promote over-
capacity and overfishing, one participant suggested that this differed from the "traffic light" approach
in the SCM Agreement, which focused on trade effects. It was queried whether the sponsor hadreasonable grounds to believe that fisheries subsidies were as trade-distortive as export subsidies, and
why the sponsor wanted tighter disciplines for fisheries subsidies than for other products.  One
participant questioned the appropriateness of sh ifting the burden of proof from the complaining
Member to the allegedly subsidising Member and asked whether the sponsor thought it necessary to
establish a "bright green" category to include subsidies which had no adverse effects on trade,environment and sustainable development.  This participant also noted the importance of aquaculture
to developing countries and enquired whether fisheries subsidies on all activities, including subsidies
to the fishery industry and aquaculture, should be subject to the possible disciplines.
25. In response to questions posed in document TN/RL/W/69, the sponsor considered that
categorization of fisheries subsidies was necessary because different subsidy programmes requiredTN/RL/M/7
Page 8
different disciplines.  For example, government  financing of management regimes ought not be
considered as a subsidy per se, or in any event should be subject to lesser disciplines.  Its paper was
aimed at putting discussions on a more concrete basis rather than arguing about the meaning of the
Doha mandate.  As for a suitable definition for the "red light" category, the sponsor had no specific
examples but believed that it should focus on subsidies causing overcapacity and overfishing or othertrade-distorting effects.  Regarding a "bright green category" mentioned by one participant, the
sponsor had no specific ideas, but its paper did not cover artisanal fisheries in developing countries as
they were unlikely to cause overcapacity and overfishing and were not an appropriate object of
increased disciplines.  Regarding expertise from other governmental or non-governmental
organizations, the sponsor did not intend to detract from the intergovernmental nature of the WTO,
but was of the view that such expertise could enrich the discussions.
26. One participant expressed its support for the second paper and shared the sponsor's concerns
and questions.  It stated its objection to the categorization of fisheries subsidies and enquired how
such an approach could contribute to the clarification of SCM Agreement disciplines.  It submitted
that a horizontal approach should be taken unless it was demonstrated that there was a specific trade
distortion caused by subsidies granted to the fisheries sector and that the SCM Agreement could not
effectively address these trade distortions.  It wondered if any Member have ever requestedconsultations pertaining to injury caused to its domestic industry, nullification or impairment or
serious prejudice as a result of fisheries subsidies.
D. 
REGIONAL TRADE AGREEMENTS
27. The Chairman proposed to give participants the opportunity to express views or make
comments in formal mode and then turn to informal  discussions.  He noted that since the last formal
meeting, the Group had not received any new subm issions on regional trade agreements (RTAs).  At
the Group's request, the Secretariat had recently distributed a note entitled Issues Related to the
Retroactive Application of Possible New WTO Rules on Regional Trade Agreements
(Job(03)/44/Rev.1) and a draft outline for a Factual Presentation on Individual RTAs, which was
distributed informally.
28. One participant recalled that his delegation had earlier put forward reservations on having the
Secretariat or independent experts present a report on individual RTAs.  It was the duty of the parties
to take the political responsibility of presenting a report on their RTA on the basis of their own
judgement.  Despite such reservations, his delegation had gone along with other participants in
considering the proposal and the Secretariat's informal paper as an experimental move, without
prejudicing his delegation's position vis-à-vis  the outcome of the work being done.  He asked whether
or not the draft outline for a factual presentation completely followed the Standard Format.  He alsoindicated that his delegation would have two systemic concerns if agreement were reached on having
an independent report on individual RTAs.  First, it should be clarified whether the parties would still
be required to present a report on the RTA.  Second, there was a need to find a way to deal with those
RTAs examined within the CRTA prior to any such decision.
29. Replying to the question posed, a representative of the Secretariat clarified that the draft
outline was very similar to the Standard Format; adjustments made aimed at reflecting questions that
have traditionally been posed in the context of the examination of RTAs.
30. In the absence of any other request for the floor, the Chairman turned the meeting into
informal mode.TN/RL/M/7
Page 9
E. OTHER BUSINESS
31. The Group agreed that it would hold its next meeting on 5-7 May 2003, with Regional Trade
Agreements to be discussed on Monday 5 May 2003.
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