RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/40
26 July 1999
(99-3138)
Council for Trade in Goods
MINUTES OF THE MEETING
Held in the Centre William Rappard
on 2 July 1999
Chairperson: Ambassador R. Farrell
The meeting was convened by WTO/AIR/ 1122.  The proposed agenda contained in
document G/C/W/157 was adopted.
_______________
Page
1. H ARMONIZATION WORK PROGRAMME PROVIDED FOR IN PART IV OF THE
AGREEMENT ON RULES OF ORIGIN .................................................................................. 2
-P ROGRESS REPORT BY THE COMMITTEE ON RULES OF ORIGIN
(G/RO/38)
2. P ERIODIC REPORT OF THE COMMITTEE ON MARKET ACCESS TO THE COUNCIL FOR
TRADE IN GOODS (G/MA/62)............................................................................................ 5
3. T RADE FACILITATION – STATUS REPORT ON WORK CARRIED OUT UNDER
PARAGRAPH 21 OF THE SINGAPORE MINISTERIAL DECLARATION (G/C/W/156) ........ 5
4. A PPLICATION OF THE WTO A GREEMENT ON CUSTOMS VALUATION .......................... 10
-R EQUEST FOR WAIVER BY PERU (G/L/311, G/C/W/155)
5. F REE TRADE AGREEMENTS .............................................................................................. 11
A. A CCESSION OF THE KYRGYZ REPUBLIC TO THE CUSTOMS UNION
BETWEEN THE RUSSIAN FEDERATION , BELARUS AND KAZAKHSTAN ................... 11
-N OTIFICATION FROM THE KYRGYZ REPUBLIC (WT/REG71/N/1
AND WT/REG71/2)
B. F REE TRADE AGREEMENT BETWEEN TURKEY AND BULGARIA ............................. 11
-N OTIFICATION FROM THE PARTIES TO THE AGREEMENT
(WT/REG72/N/1 AND WT/REG72/1)
C. F REE TRADE AGREEMENT BETWEEN THE KYRGYZ REPUBLIC AND
THE RUSSIAN FEDERATION ..................................................................................... 11
-N OTIFICATION FROM THE KYRGYZ REPUBLIC (WT/REG73/N/1 AND
WT/REG73/1)G/C/M/40
Page 2
D. F REE TRADE AGREEMENT BETWEEN THE KYRGYZ REPUBLIC
AND UKRAINE ......................................................................................................... 11
-N OTIFICATION FROM THE KYRGYZ REPUBLIC (WT/REG74/N/1 AND
WT/REG74/1)
E. F REE TRADE AGREEMENT BETWEEN THE KYRGYZ REPUBLIC
AND UZBEKISTAN ................................................................................................... 11
-N OTIFICATION FROM THE KYRGYZ REPUBLIC  (WT/REG75/N/1 AND
WT/REG75/1)
F. F REE TRADE AGREEMENT BETWEEN THE KYRGYZ REPUBLIC
AND MOLDOVA ....................................................................................................... 12
-N OTIFICATION FROM THE KYRGYZ REPUBLIC (WT/REG76/N/1 AND
WT/REG76/1)
G. A GREEMENTS BETWEEN THE REPUBLIC OF ESTONIA , THE REPUBLIC OF
LATVIA AND THE REPUBLIC OF LITHUANIA ........................................................... 12
-N OTIFICATION FROM LATVIA (WT/REG77/N/1 AND WT/REG77/1)
_______________
1. H ARMONIZATION WORK PROGRAMME PROVIDED FOR IN PART IV OF THE AGREEMENT
ON RULES OF ORIGIN
-P ROGRESS REPORT BY THE COMMITTEE ON RULES OF ORIGIN (G/RO/38)
1.1 The representative of Canada, Mr. Moroz, reporting to the Council on Trade in Goods on his
own responsibility as Chairman of the Committee on Rules of Origin (CRO), recalled that in
July 1998  the Council for Trade in Goods (CTG) and the General Council approved the
recommendations of the CRO contained in docu ment G/RO/25.  The recommendations included,
amongst other things:   that the Technical Committee on Rules of Origin (TCRO) should submit the
final results of its work on the Harmonization Work  Program (HWP) to the CRO by the end of May
1999; that in June 1999 the CRO should review the status of the HWP and make a recommendation on
a deadline for completing the HWP, and that also in June 1999 the CRO would provide the CTG witha second report on the progress made. He noted that the CRO had completed its second report during
its formal meeting on 1 July 1999 and circulated it as G/RO/38.   He said that since March, when the
CRO provided its first progress report to the CTG,  the CRO  had held two meetings, in April and on
1
st July.  During these meetings, the CRO discussed issues relating to the overall architecture of the
harmonized rules of origin and the implications on the implementation of the harmonized non-preferential rules of origin for other WTO Agreements.
1.2 As called for in the recommendations contai ned in G/RO/25, the TCRO had submitted the
final results of its technical work on the HWP.  While the TCRO had made a significant contribution
to the HWP, there remained a substantial amount of  work for the CRO to complete the program.  As
of the end of June 1999, there remained five outstanding issues relating to overall architecture,
including the important issue of the relationship between the primary and residual rules, and 462
unresolved product-specific rules.  The report identified these outstanding issues.  As noted earlier, in
accordance with Paragraph 4 of G/RO/25, the CRO was required in June 1999 to review the status of
the HWP and to make a recommendation on a deadline for completing it.  During the CRO's recentmeeting, delegations expressed differing views on how to proceed.  Two proposals were made
regarding a recommendation.  The first proposed continuing the HWP on the basis of the current work
plan set out in G/RO/25 and postponing the reco mmendation on a deadline for completing the HWPG/C/M/40
Page 3
until the end of the CRO's meeting in October 1999.  The second proposed that the CRO make a
recommendation now on a deadline of July 2000 for completing the remaining work under the HWP.
1.3 In the course of the discussion, there was consensus on a number of elements:  all Members
emphasized the importance of the continuation and completion of the HWP; all Members agreed thatthere remained a substantial amount of work for the CRO to complete the HWP;  all Members agreed
that they wanted to continue the substantive work on all outstanding issues, including the overall
architecture and product-specific rules, as early as possible; all Members agreed that they wanted to
continue the substantive work on the issue of the implications of the implementation of the
harmonized non-preferential rules of origin on other WTO Agreements; all Members emphasized the
importance of early establishment of harmonized non-preferential rules of origin for facilitating trade.
However, the CRO could not reach agreement on the two proposals mentioned earlier for thecontinuation of work, including on the recommendation of a deadline.
1.4 The representative of Hong Kong, China said  that his delegation had agreed to join the
concensus in adopting the progress report but expre ssed disappointment that the CRO could not reach
agreement on various proposals including on the recommendation of a deadline.  There were alsomany outstanding items under the HWP remaining to be done.  The original deadline,  one of the
many commitments made in the Uruguay Round,  was missed  by one full year. He attached great
importance to an early conclusion of the HWP and appealed to all Members that in the interest of the
credibility of the WTO, the CRO should approach all the outstanding issues with a view  to
completing the whole program as soon as possible.
1.5 The representative of India, believed that this report reflected in part the frustration and regret
that delegations  had had regarding the manner in which the HWP had been proceeding as well as  the
fact that the CRO was  still not able to reach agreement on when to complete its  mandated task.  India
was committed to timely completion of the HWP and had been pressing for expeditious resolution ofall pending issues in view of the main objective of the Agreement, i.e. that clear and predictable rules
were required to facilitate the flow of trade.  In view of the concern that the HWP should be
completed urgently, the CRO had mandated the TCRO to complete the technical work and to submit
the final results by May 1999.  It was commendable that the TCRO had lived up to this mandate and
forwarded to this Committee the final results, clear ly indicating the precise areas of disagreement and
reasons for this disagreement.  She believed that it was now time for the CRO to address these
concerns which primarily needed policy inputs and the requisite will for their early resolution.  It wasis in this context that her delegation had  been urging the CRO to take up all remaining issues,
including architecture and product specific issues for discussion as soon as possible given that this was
a  process where resolution of one issue benefited from discussions and clarifications of differences on
other issues.  In her  view the CRO could discuss and finalize all the pending issues once it
demonstrated its political will to address them.  The CRO should schedule a number of meetings oflonger duration between now and the given deadline of November 1999 as she felt that without
discussing the substantive issues it was  not possible to prejudge at this stage, how much time was
needed to complete the work.  She noted with regret  that certain Members were  not willing to take an
informed view of how to proceed and to conclude the work expeditiously.
1.6 Comparing certain aspects of the work on trade facilitation and the harmonization of non-
preferential rules of origin, she recalled that in the area of simplification of trade procedures, it had
been said by some Members that an agreement or an understanding to negotiate rules in this area
would be a reflection of necessary political will by national authorities.  She noted that this had been
so characterized by these Members despite two key facts.  First, national authorities had beenautonomously undertaking simplification of trade procedures, usually under a program of action under
the aegis of international organizations, such as the World Bank, the IMF, UNCTAD and/or the WCO.
How a program of action after being negotiated in the WTO could be deemed to be a reflection of
necessary political will, while autonomous initiatives or programs under the aegis of otherG/C/M/40
Page 4
international organizations were  not, was not evident to many Members of the WTO, including her
own.  Second, predictable and transparent rules of origin were critical to trade facilitation. The
so-called necessary political will had been enshri ned in the UR negotiations in the form of a
commitment to develop harmonized rules of origin by July 1998.  She noted with regret the failure of
the CRO to agree to conclude the remaining work on harmonizing non-preferential rules of origin byNovember 1999 and the progressive erosion of political will in the CRO to complete this task since
the UR agreements were negotiated.  The TCRO had forwarded to the CRO the final results of its
detailed and comprehensive work as was mandated by the CRO, but the CRO itself was  not able to
reach agreement on how it should proceed further.  Her delegation regretted this lack of will in the
CRO to complete the task, itself having spent  time and resources on trying to push forward the
completion of  the remaining work despite the fact that this had meant utilisation of resources that
developing countries like hers  could ill afford.  In light of the above, it would appear that there wereno compelling reasons or indeed rationale for embarking on any further analysis aimed at assessing
the scope for rules in the area of trade facilitation in the WTO.
1.7 The representative of the Philippines, speaking on behalf of ASEAN, welcomed the fact  that
the TCRO was able to deliver on its mandate to submit to the CRO various technical inputs. He
regretted  that during the course of the week  the CRO had not been able to come up with a definite
deadline for completing this very important work.  He noted that completion of the HWP was a trade
facilitation measure and in this context agreed with the statements made by India.  ASEAN was
committed to continue the substantive discussion during the months of July to October of this year to
enable the CRO to assess when the HWP could be completed.
1.8 The representative of the European Communities said  that the  report was a detailed and
precise reflection of the different points of view that  still remained  within the  CRO.  He shared the
regret that the CRO had not managed to come to an agreement on a new timetable for completing its
work, as required by the mandate given last July.  The EC was  fully committed to the process ofdrawing up non-preferential rules of origin that were clear and transparent and aimed at facilitating
trade amongst the Members.  He considered that one of the key elements to move this process forward
was  to be found in solving,  as soon as possible,  general architectural issues which concerned the
basic concepts of the definitions and question of the rules of origin.   It is was not his delegation's
intention to enter a discussion  which belonged to the CRO (in which a detailed debate had occurred)
and he noted that  the report by the Chairman gave  a precise idea of the disagreements which still
remained.   The Indian delegation had repeated the point of view that they had defended in the CROwhich was  not necessarily shared by all delegations. In the discussions that had taken  place until now
he did not think there was anything that could  ca ll into doubt the EC's  full commitment to making
this program move forward.
1.9 The representative of Canada  emphasised  that there was  much work to be done to complete
the harmonization of rules of origin. Attempts were made to establish a deadline and two proposals
were put on the table, but there was no consensus in the CRO on either of these proposals.  Canada's
position was  that the CRO needed to be realistic and prudent in setting the deadline while recognising
that it needed to get the rules right the first time since it was very difficult to re-open them at a later
date.  The CRO needed a high quality product which would facilitate  trade and reduce burdens fortraders.  Canada considered that even in the absence of such a deadline the CRO could get on with the
work of harmonizing rules of origin.  Canada would like to emphasise its commitment to work with
others to achieve the completion of these harmonized rules of origin.
1.10 The representative of the United States  expressed regret and frustration with respect to the
lack of progress and in particular with the discussions of  the past week. He hoped to avoid repeating
this experience in the coming months as the CRO  continued with the HWP.  Along with other
Members,  the United States  had worked  hard in moving the program forward and he found it
regrettable that it was  not yet finished.  It had been his delegation that had pressed for the CRO toG/C/M/40
Page 5
pick up issues that were still under discussion and had been under discussion for quite a long time in
the TCRO.  Good results had already been produced  and  the TCRO had done a very good job in
presenting its work according to the mandate of the CRO's current program.  Finally, he pointed out
the importance of implementation of all aspects of the Agreement on Rules of Origin, including  very
important provisions such as Article 2h on advance rulings which were outside the scope of the HWP,Members needed to make urgent progress on all fronts related to implementation of the Agreement.
1.11 The representative of Hungary expressed appreciation for the effort made by the Chair and
other delegations by participating at meetings and trying to put together an agreed proposal which,
regrettably, was not possible.  He thought that to make meaningful progress the CRO needed to
concentrate on the subject and to avoid procedural debate and  discussions to the extent possible and
in this sense his delegation had made a proposal aimed at advancing the process.
1.12 The Chairman  said it was  clear that th e work of the CRO was widely appreciated.  He
proposed that the Council take note of the statements that had been made and  of the report by the
CRO contained in document G/RO/38.
1.13 The Council so agreed.
2. P ERIODIC REPORT OF THE COMMITTEE ON MARKET ACCESS TO THE COUNCIL FOR
TRADE IN GOODS (G/MA/62)
2.1 The Chairman of the Committee on Market Access, Mr. Costa E Silva, introduced the report
contained in document G/MA/62. He said that at the Market Access Committee meeting of
27 November 1998, the then Chairman of the Committee had agreed to hold open-ended consultations
in order to discuss the subject of the modalities an d operation of the Integrated Data Base (IDB), in
particular the question of submission to and dissemination of the IDB, where some issues neededfurther clarification.   Four informal meetings were held for this purpose: on 23 February, 11 March,
5 May and 21 May 1999.  During these consultations, the Committee reviewed the IDB submissions
made and requests for technical assistance.  Members were encouraged by the increase in IDB
submissions as well as the requests for technical assistance, both formal and informal.  During the
course of these consultations, discussions were also held on the dissemination practices of the IDB.
He was  pleased to inform the Council that these discussions provided a basis for an agreement on
guidelines concerning the dissemination of the IDB.  The guidelines were adopted by the Committeeat its meeting of 31 May 1999 and are contained in document G/MA/IDB/3 which was  annexed to the
periodic report (G/MA/62) now before the Council. Additionally, at that meeting the Committee took
note of the information provided by the Secretariat that thanks to the support of the United Kingdom,
the Secretariat had obtained the necessary technical co-operation funds to carry out the Consolidated
Tariff Schedules database technical cooperation project.
2.2 The representative of  India  informed the Council that India would be writing to the trade
policy review division of the WTO Secretariat to transfer to the IDB such data as was  mandated to be
notified to the IDB.
2.3 The Chairman  proposed the Council take note of the report and the statement.
2.4 It was so  agreed.
3. T RADE FACILITATION – STATUS REPORT ON WORK CARRIED OUT UNDER PARAGRAPH 21
OF THE SINGAPORE MINISTERIAL DECLARATION (G/C/W/156)
3.1 The Chairman noted that this item related to the adoption of a status report on work carried
out in the area of trade facilitation.  He recalled that Paragraph 21 of the Singapore MinisterialG/C/M/40
Page 6
Declaration directed the CTG to undertake exploratory and analytical work on the simplification of
trade procedures in order to assess the scope for WTO rules in this area.  At the meeting of
8 July1998, Members had agreed to structure this work in line with a Chairman's proposal (contained
in G/C/M/34), which provided that four dedicated informal meetings of the Goods Council were to be
held.  At the fourth of these meetings, on 21 June 1999, Members informally agreed that it was timelyto submit a report on the status of work undertaken since the Singapore Ministerial to the General
Council.  A factual summary of the discussions in the three prior meetings was provided by the
Secretariat (G/C/W/153) and it was agreed to include this  in the status report. A draft of the status
report was discussed at an informal meeting last  Friday, 25 June 1999.  At that meeting, Members
informally agreed to a few changes in the structure of the report, and most importantly it was agreed to
incorporate the full text of the factual summary into the body of the status report, rather than
incorporating it through an annex.  While many delegations stated that they could accept the draft textof the report as it was initially prepared, some delegations also made content-related suggestions.
After a detailed discussion of these suggestions, it appeared that views on these content-related
suggestions differed widely.  He therefore proposed to delegations to consider accepting the draft
without content-related changes, which  was accepted.  The draft status report, taking into account the
changes made at the Friday meeting, was circulated as document G/C/W/156.
3.2 The representative of Thailand speaking on behalf of ASEAN thanked the Chairman, for his
work on trade facilitation thus far  and for the draft status report in G/C/W/156.   It was apparent at the
last informal meeting on 25 June 1999  that there were  still some Members who considered that there
were issues needing further discussion.  To his astonishment, the informal meeting had been abruptlydrawn to a close with a presumption that the draft text would  be forwarded to this meeting. It was
necessary to provide an opportunity for Members to  exchange their views, especially on an informal
mode so that rough edges could be smoothed out before placing the issue to its test or the forum would
no longer be multilateral.  Since that informal meeting, there had been some changes in the format of
the draft report.  Document G/C/W/153 was now part and parcel of the draft report; his delegation had
not been aware of this nor had it been consulted.  On a more substantive matter regarding the draft
status report, ASEAN was of a view that the report needed to be more balanced and reflect the actual
discussions on trade facilitation.  Also it had been agreed that  the report would be factual which
would normally mean that it should reflect only the procedural matters which transpired during the
discussion.  He noted with  concern that emphasis had been put on the importance of WTO rules but
the report failed to reflect the most important aspect of the discussion concerning duplication.  Since
the very beginning of the discussion, Members had expressed their serious concerns that an initiativeof this kind would not only duplicate the on-going work of the existing WTO bodies, but also of other
intergovernmental organizations.  On this point he cited document G/G/W/149 which highlighted that
existing WTO Agreements already facilitated trade but only if Members were committed to a fuller
and a more faithful implementation of the existing agreements.
3.3 For example, both the TBT and the SPS Committees recognized that their regular work was
closely related to trade facilitation.  One of the two Committees concluded that it was not even
necessary to add an additional agenda to its regular agenda because the issues were  already covered.
The preamble of the Agreement on Rules of Origin st ipulated that its prime objective is to facilitate
trade.  He concluded by stating that  duplication in WTO work would  not only overload the existing
burden concerning  Members' rights and obligations but might also lead to an extinction of other
intergovernmental organizations.  As for the Chairman's proposal to attach document G/C/W153 as an
annex to this draft report,  he thought that this would  reduce the complexity of this report but he was
not in a position to agree that its summary was factual.  Further discussion might be needed before its
adoption.  While he appreciated that the norm in the WTO did not require written records of informalmeetings, it would be useful to have one, similar to the present practice in a discussion on the DSU
Review work.  Finally, ASEAN requested that the Chairman hold further informal discussions  with
informal summary records of discussion, to reconsider the draft status report before its presentation to
the General Council as it would be premature to adopt such a report at this time.G/C/M/40
Page 7
3.4 The representative of India stated  that she had transmitted the document to capital for
instructions and was not yet in a position to comment on the document.  She  recalled that India had
made some suggestions for changes in the introduction as well as in the summary and evaluation part
of it and also recalled that the Chairman had at the end of the most recent meeting proposed thatMembers adopt the text as it was  because the changes in content would attract various and even more
far-reaching differences.  She had at that time expressed her  difficulty with paragraph 56 as  that
particular language could lead to different interpretations.  When she had  presented her interpretation
of that paragraph, she recalled at that stage that another delegation had made a different interpretation
and had reserved its rights.  She believed that since such differences in interpretation existed it would
be prudent to discuss this draft text further as proposed by Thailand.
3.5 The representative of the European Communities  was  surprised by comments that had  been
made, particularly by the delegation of Thailand.  He had the impression that it had been agreed in the
meeting of 21 June 1999 that it would be useful  for the CTG to make a report to the General Council
on the work that had been carried out.  He also thought that the consensus included that fact that the
report to the General Council should be largely based on the factual summary of the Secretariat.   Thereport as it stood did  not fully satisfy his delegation but given the divergent nature of the different
amendments that had been presented by various delegations, the Chairman  had sensibly called for an
exercise of moderation.  The prospect of a renegotiation of the report, if that what was being
suggested, was not thrilling given that the Secretariat text was fairly balanced and reflected the
discussions that took place.  He recalled that India had insisted in the course of the work programmeon the fact that the Secretariat should carefully take note of all oral statements  so as not to give
excessive weight to the written contributions that had been made by  delegations.  He warned that if
Members were  going to embark upon a course that might lead  into a dead-end where they  could not
agree on the report, the Council might be left with only  the written submissions from the EC, Canada,
Korea, Japan, Switzerland and Hong Kong, China.
3.6 The representative of the United States found the report very useful.  Regardless of the ability
of the  Council to agree to its contents, his delegation  planned  to use it in their  internal deliberations
because it was a frank assessment of the discussion s that did occur in informal meetings of this
Council.  He was a disturbed by suggestions that Members  might begin negotiating this report, which
was his understanding of the suggestion by Thailand.  Particularly given the fact that there was very
important work ahead in areas like rules of origin,  where discussions over the last week had not beenfruitful, he feared  that an effort along the lines th at were  being suggested to negotiate the contents of
the report would be similarly fruitless and would take up much  time.  He would be content to have a
report of one paragraph which said that the Council  met,  discussed trade facilitation and  could not
agree on the scope for WTO rules in this area. He believed that the discussion on trade facilitation
should be  taken up in the General Council at this point in time as part of the preparatory  process forSeattle.
3.7 The representative of Hungary thought that it was  not so important what was  in this report
because Members had been through a very important learning exercise.  What was important was  that
Members realised the importance of this issue from different aspects and he did not think that at thistime it would be appropriate and useful again to engage in procedural discussions and not to try to
deal with substantial issues.  His delegation was r eady to continue the substantial discussion according
to the Chairman's advice or according to a decision which might be taken  later.
3.8 The representative of  India  said that the report by the CRO was  a status report and it was
intended to include in it a recommendation for a deadlin e.  The fact that there was no agreement on a
deadline was because of largely procedural issues.  The report on trade facilitation was intended to be
a report on the results of the exploratory and analytical work mandated by the Singapore Ministerial
Declaration. Her delegation believed that this distinction was  enough to merit a deeper considerationG/C/M/40
Page 8
of a report on analytical and exploratory work and her  delegation was ready to give it further thought.
In her delegation's view it would not be va luable time lost if the Council did so.
3.9 The representative of  Switzerland thought that the draft status report in document G/C/W/156
was  good  and fairly reflected the discussions held so far on the topic of trade facilitation. He  did  not
think that the last informal meeting had been stopp ed abruptly, but that it had been decided that the
changes would be made in the structure but not in the contents,  given that opinions varied widely
which would lead to  a long discussion which was not necessary at this stage.   Switzerland strongly
supported  the adoption of this text as it was and that it should be forwarded to the General Council.  It
would  then be up to the General Council to decide on the future work in this area and whether the
discussion could continue on  content.
3.10 The representative of  Canada recalled that, in the informal meeting, Mexico had made a
structural proposal which  had been agreed upon.  There had also been a consensus on merging
G/C/W/153 into  the document that was on the table at this meeting.  A number of delegations had
proposed changes and Canada was prepared to propose changes also, particularly on the issue of
duplication. Canada throughout the entire discussion over the last four meetings had referred to thevalue added rule of the WTO in terms of what was going on in other organizations.  Seeing the WTO
threatening the extinction of other international orga nizations was certainly an interesting idea given
the close cooperation between the WTO and the WCO and the efforts of the WTO to improve
cooperation and coordination with other organizations.  It would seem that the last thing that was
being brought about by the fact that the WTO was  already involved in areas of trade facilitation wasextinction of other international organizations.  Nevertheless, different views in that regard were
understood and acknowledged.
3.11 It seemed that these other views were  reflec ted in all the documents that were referenced in
this document.  On the question of balance, his delegation did not like parts of it either but wasprepared to go along with this text because, gi ven the report and all the references to the other
documents, anyone reading it would have a good over all view of everyone's positions;  in short, it
provided  overall balance.  Members could engage in further negotiations on this text but he was not
sure what that would lead  to apart from a longer text. He  suspected that  the same views would  just
be repeated. Alternatively, Members could  get on with the substantive discussion.  The report,
combined with all the documents it referred t o, including those documents that were written
contributions by Members as well as the incorporation of oral statements by Members,  provided asum total in which he saw little purpose in adding to all of that again.  His delegation was not
interested in getting involved in a negotiation of this text  and all the other documents because it
reflected the full divergences of views.  Canada wo uld be content that this text to go forward and
allow the discussion to proceed in the General Council.
 3.12 The representative of  Australia expressed her disappointment at what appeared to be a rather
unfortunate confusion.  Her understanding of the meeting had been that the structural changes to the
report as proposed by Mexico including the incorporation of document G/C/W/153 had been agreed,
as opposed to changes on issues of substance where it was clear that there was no agreement. Her
delegation was satisfied with the document as a factual summary of the meetings that had beenundertaken under the work program on trade facilitation and could accept a purely factual report
which, as India noted, would fairly reflect the fact that divergent views clearly remained.
3.13 The representative of Norway  agreed with Canada, Switzerland and Australia and considered
document  G/C/W/156   to be a fair reflection of the work which had taken place in this Council. He
was somewhat disappointed in the eagerness of some delegations to re-open parts of this report at this
stage and it was his view that the report should be adopted as it was  and that any further opinions
could  be expressed in the General Council.G/C/M/40
Page 9
3.14 The representative of the European Communities, in response to India's concern that the
European delegation's remarks might be construed  to mean that it was wishing away the useful work
done by the Secretariat  as well as the divergences of views on issues,  said that his position was
similar if not identical to that expressed by Canada, Switzerland, Australia and Norway. The EC
supported the adoption of the report by the CTG for transmission to the General Council as such in itscurrent state and he certainly did not wish to disregard either the discussions which took place in the
course of the work programme nor the divergences of views which had emerged during the process.
The report was not  altogether perfect but it appeared to be at this stage the only way to reflect and to
carry to the General Council  the discussions and divergences of views which had taken place.  He did
not believe that any further discussion or attempt to re-negotiate the text of this report would lead
anywhere.
3.15 The Chairman  said  that of those delegations that had spoken, a large proportion proposed to
adopt the draft status report despite there being elements of dissatisfaction on their parts.  They also
indicated however that they would be reluctant to devote more time to further negotiation of the text
and were doubtful about the outcome of such efforts in any case.  One delegation sought more time
because the report in its final form was only recently available and then there were delegations whopreferred  to continue negotiation of the text of the status report.  Given the number of delegations
who had spoken in support of adoption of the draft text as it was, the Chairman asked whether those
delegations with reservations about adopting the text would have any further views in the light of the
comments that had been made, bearing in mind  the point that  if the text went  to the General Council,
delegations would of course be able to elaborate on their positions at the time that report was receivedby the General Council.
3.16 The representative of  India  wondered whether the Chairman's point constituted a significant
departure from the earlier approach of adopting documents by consensus.  She  would need to refer
this proposal also to her capital for instructions.  The Chairman  said that his concern was that the
discussion that had just taken place should not be overlooked in reaching a final decision at this
meeting  on the question of adoption of the draft status report.  Clearly that would have to be adopted
by consensus and  the views of every single Member in the room had to count in that respect.
3.17 The representative of  Thailand said that, in the recollection among the ASEAN Members  of
the discussion at the June 25 informal meeting, Members  would have another chance to look at the
changes to  and structure of the document before finalizing the matter.  He agreed with his Americancolleague that the report should be very brief .  WTO bodies needed consensus to adopt any document,
especially at the Council level and therefore he coul d not agree to the suggestion to send this text to
the General Council in order to have another opportu nity to say something about it.  Regarding the 25
June meeting,  his and other delegations had under stood that document G/C/W/153 was to be added as
an annex to the original draft report with the deletion of the reference to the summary of thesymposium. Maybe there was some mis-communication on this point  but, more generally, he
maintained the position that document G/C/W/156 would require further  examination.
3.18 The Chairman said it was  clear that there was  not a consensus for the adoption of the draft
status report.  He  therefore proposed that the Council work towards the adoption of the draft status
report at the next meeting of the CTG.  The Council ag reed.  He further said that he  would convey the
appreciation expressed during this discussion about Ambassador Saborio's contribution to the work on
trade facilitation in the Goods Council and in the informal discussions.  Before concluding this item,
he  welcomed Mr. Tweddle, Director for Compliance and Enforcement of the WCO,  to take the floor
to advise the Council of the adoption by the WCO of a revised Kyoto Convention.
3.19 The representative of the WCO said that work on the revision of the International Convention
on the Simplification and Harmonization of Customs Procedures (the Kyoto Convention) had been
proceeding for four years involving the contracting parties, the customs administrations who were  notG/C/M/40
Page 10
contracting parties and a wide variety of trade representatives.  The work resulted in a revised
Convention covering the use of information technology, the involvement of risk assessment
techniques, the use of transparency for customs administrations with better communication and
consultation between customs and those affected by customs procedures. There were  600 different
provisions covering all aspects of customs, import and export procedures.  When this revisedConvention would be  implemented, it would  give the consistency and certainty to international
traders which they had been seeking and would make it easier for SME's to become involved in
international trade.  The important role of the WTO had also been recognized in the revised
Convention and all WTO Members would  have the right to participate in the work of the
Management Committee which would  meet regularly to keep the Convention up to date and relevant
to the needs of the international trading community.  The revised Convention consisted of a body
covering how the Convention operated, a general a nnex covering the main principles of customs
procedures and which would  be obligatory without the possibility of putting reservations forward for
all contracting parties, plus 10 specific annexes covering particular aspects of procedures. This had
been adopted by consensus by the annual Council meeting of the WCO.  The Protocol of Amendments
which would  bring the revised Convention into force was open for signature and already  four states
had signed it. (Algeria signed without reservation; and Sri Lanka, Zambia and Zimbabwe had signed,subject to ratification).  The WCO was optimistic that it would  get the necessary number of 40 states
to sign the Protocol without reservation by next  year and the revised Convention would then come
into force.  The revised Kyoto Convention might not solve all the problems caused by unsatisfactory
customs administrations but it was a big step forwar d and he believed that widespread implementation
would  significantly reduce the barriers to international trade caused by out of date and inefficientcustoms procedures.  The WCO would be promoting adoption of the revised Convention by holding a
series of seminars for the existing contracting par ties and future contracting parties and hoped that in
time all Members of the WCO would  be operating the simplified and harmonized procedures.  The
WCO Members also hoped that the WTO and its Members would appreciate the benefits that came
from the adoption of the revised Kyoto Convention and that the WTO and its Members would supportwidespread implementation.  The revised Convention was  available on the WCO web site.
4. A
PPLICATION OF THE WTO A GREEMENT ON CUSTOMS VALUATION
-R EQUEST FOR WAIVER BY PERU (G/L/311, G/C/W/155)
4.1 The Chairman noted the communication from  Peru contained in document G/L/311
containing a request for an extension of the delay in applying the Customs Valuation Agreement.  This
request had been made in conformity with  paragr aphs 3 and 4 of Article IX of the WTO Agreement.
Pursuant to Article IX.3(b) of the WTO Agreement, th is request for a waiver extension was  before the
Council for consideration.  A draft decision granting this waiver extension had been circulated in
document G/C/W/155 to assist the Council in its consideration of this request.
4.2 The representative of Peru introduced the waiver request.  Peru requested Members to grant it
a waiver concerning the implementation of the Customs Valuation Agreement from 1 April 1999 to
1 April 2000 in order to enable it to complete the process of implementing the necessary measures for
application of the Agreement.  It followed the request for an extension of the delay in the application
of that Agreement submitted by Peru on 25 March 1999 (G/VAL/W/31 and G/VAL/M/10) andinformal consultations with interested Members.
4.3 Peru had made serious efforts of customs reform, including in particular the
professionalization of customs staff, the facilitation of trade and the automation of customs
procedures.  These efforts had received wide international recognition. Customs valuation was adelicate and complex issue and therefore called for a customs administration that had an appropriate
infrastructure and staff trained in handling the t echnical aspects of the Valuation Agreement.  The
waiver was requested in order to complete the process of implementing the necessary measures for the
adoption of the new valuation system and thus be able to ensure that the Agreement was properlyG/C/M/40
Page 11
applied.  The waiver would enable Peru to adopt the necessary measures for implementation of the
Agreement.  Immediate implementation of the system could give rise to certain problems in the
valuation of goods as between officials and opera tors, owing to the transition from the valuation
methods currently used to that of transaction value, considering that there was not yet sufficient
experience in managing the Agreement nor the nece ssary legal framework for implementing it.  Full
details of the request were contained in document G/L/311.
4.4 The representative of  Sri Lanka  supported Peru's request.  The reasons attributed by Peru for
an extension appeared fully justifiable in view of the substantial progress it had made towards
implementation of the Agreement.  His delegation as a developing country could very well understand
the problems and delays Peru had confronted in implementation of the Customs Valuation Agreement
which called for major changes in the valuation pr ocedures.  Despite the extended time provided for
implementation of the Customs Valuation Agreement for developing countries, the challenges to
introduce the new procedures were formidable in the context of the very significant technical
assistance needed in that respect quite apart from  the legislative procedures associated with that.
4.5 The Chairman suggested that the Council take  note of the request and the statements, and
proposed that  the Council approve the request for a waiver extension by Peru and recommend  that
the draft decision granting this waiver and contained in document G/C/W/155 be transmitted to the
General Council for adoption.
4.6 It was  so agreed.
5. F REE TRADE AGREEMENTS
5.1 The Chairman drew Members' attention to the seven agreements listed under this item that
had been notified under Article XXIV.  The texts of the Agreements had been circulated in the
documents listed. He said that at the last meeting of the CTG in April, he had announced that he
intended to look at Council procedures, in particular regarding repetitive elements such as adopting
terms of reference for the examination of Free Tr ade Agreements with a view to streamlining work
without encroaching on opportunities for delegations to make comments as they wished.  He therefore
proposed today to reduce the repetition by asking for comments on the agreements and then asking
Members  to adopt the terms of reference for all agreements at once rather than for each one as had
been done in the past.  He invited delegations  to take the floor,  proceeding  in the order in which theagreements were  listed:
A. A
CCESSION OF THE KYRGYZ REPUBLIC TO THE CUSTOMS UNION BETWEEN THE RUSSIAN
FEDERATION , BELARUS AND KAZAKHSTAN
-N OTIFICATION FROM THE KYRGYZ REPUBLIC (WT/REG71/N/1 AND WT/REG71/2)
B. F REE TRADE AGREEMENT BETWEEN TURKEY AND BULGARIA
-N OTIFICATION FROM THE PARTIES TO THE AGREEMENT (WT/REG72/N/1 AND
WT/REG72/1)
C. F REE TRADE AGREEMENT BETWEEN THE KYRGYZ REPUBLIC AND THE RUSSIAN FEDERATION
-N OTIFICATION FROM THE KYRGYZ REPUBLIC (WT/REG73/N/1 AND WT/REG73/1)
D. F REE TRADE AGREEMENT BETWEEN THE KYRGYZ REPUBLIC AND UKRAINE
-N OTIFICATION FROM THE KYRGYZ REPUBLIC (WT/REG74/N/1 AND WT/REG74/1)
E. F REE TRADE AGREEMENT BETWEEN THE KYRGYZ REPUBLIC AND UZBEKISTAN
-N OTIFICATION FROM THE KYRGYZ REPUBLIC  (WT/REG75/N/1 AND WT/REG75/1)G/C/M/40
Page 12
F. F REE TRADE AGREEMENT BETWEEN THE KYRGYZ REPUBLIC AND MOLDOVA
-N OTIFICATION FROM THE KYRGYZ REPUBLIC (WT/REG76/N/1 AND WT/REG76/1)
G. A GREEMENTS BETWEEN THE REPUBLIC OF ESTONIA , THE REPUBLIC OF LATVIA AND THE
REPUBLIC OF LITHUANIA
-N OTIFICATION FROM LATVIA (WT/REG77/N/1 AND WT/REG77/1)
5.2 As there were no comments, he proposed th at the Committee on Regional Trade Agreements
carry out the examination of the Agreements in accordance with the following terms of reference:
"to examine, in light of the relevant provisions of the GATT 1994,  the Free Trade
Agreements  - on the accession of the Kyrgyz Republic to the customs union between theRussian Federation, Belarus and Kazakhstan; between Turkey and Bulgaria; between the
Kyrgyz Republic and the Russian Federation; between the Kyrgyz Republic and Ukraine;
between the Kyrgyz Republic and Uzbekistan;  between the Kyrgyz Republic and Moldova;
and between the Republic of Estonia, the Republic of Latvia and the Republic of Lithuania -
and to submit a report to the Council for Trade in Goods".  It is understood that theunderstanding read out by the Chairman of the Council for Trade in Goods under item 7 of the
agenda of the meeting of the Council for Trade in Goods on 20 February 1995, as contained in
document WT/REG3/1, will apply mutatis mutandis  to the examination of the Agreements.  It
is also understood that, during the examination, due account will be taken of the intrinsic
differences between customs unions and free-trade areas.
5.3 The Council  so agreed.
5.4 Under Other Business the Chairman  called Members' attention to the requirement in Article 9
of the TRIMS Agreement that: "Not later than five years after the date of entry into force of the WTO
Agreement, the Council for Trade in Goods shal l review the operation of this Agreement and, as
appropriate, propose to the Ministerial Conference amendments to its text.  In the course of this
review, the Council for Trade in Goods shall consider whether the Agreement should be
complemented with provisions on investment policy and competition policy."  In order to ensure that
the Council meet its responsibility and, at a minimum, initiate the review that is  called for before the
end of this year, it was his  intention to place this matter on the CTG agenda for the next meeting.  In
the meantime, he invited delegations to communicate to him or the Secretariat any suggestions theymight have in this regard.
5.5 The delegation of the European Communities supported  the initiative on the question of the
TRIMS review and pointed out that this had been raised in the TRIMS Agreement and the TRIMS
Committee.  He wanted to remind delegations of the provisions of Articles 5.2 and 5.3 -  the phase outand possible examination of  case by case extension of the Agreement - which should be the starting
point for any review activity in the future.  He noted that delegations in whose countries TRIMS were
still applied  would either be in non-conformity on 1 January 2000 or they would have to have had
behind them a process of examination of a request for extension.
5.6 Finally, the Chairman announced that the date of the next meeting of the CTG was scheduled
for Thursday, 14 October 1999.  The agenda would close by close-of-business on
Friday,  1 October 1999.   The meeting was adjourned.  
__________