RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/70
19 August 2003
(03-4320)
Council for Trade in Goods
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS
12-13 JUNE 2003
Chairman:  H.E. Ambassador Hovorka (Czech Republic)
The meeting of the Council for Trade in Goods  was convened by airgram WTO/AIR/2114 and
Corr.1 and the proposed agenda for the meeting was contained in documen t G/C/W/464.  The agenda
was adopted.
I. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER
ARTICLE 9 ...................................................................................................................... .........1
II. MARKET ACCESS MATTERS .............................................................................................6
A. PERIODIC REPORT OF THE COMMITTEE (G/MA/149).....................................................6
B. INTRODUCTION OF HARMONIZED SYSTEM 1996 CHANGES INTO WTO
SCHEDULES OF TARIFF CONCESSIONS  – REQUESTS FO R A WAIVER.......................6
C. EXTENSION OF WAIVER FOR THE PURPOSE OF ESTABLISHING A NEW
SCHEDUL E....................................................................................................................... .........6
III. FREE TRADE AG REEMENTS..............................................................................................7
IV. TRADE FACILITATION WORK PROGRAMME:  ARTICLES V, VIII AND
X OF THE GATT 1994 ............................................................................................................7
V. TRADE FACILITATION NEEDS AND PRIORITIES OF MEMBERS,
PARTICULARLY OF DEVELOPING AND LEAST DEVELOPEDCOUNTRI ES...................................................................................................................... .....36
VI. TRADE FACILITATION:  TECHNICAL ASSISTANCE AND CAPACITY-
BUILDING ....................................................................................................................... .......37
VII. WORK PROGRAMME ON ELECTRONIC CO MMERCE.............................................45
VIII. OTHER BUSINESS............................................................................................................ ....46
I. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER
ARTICLE 9
1.1 The Chairman recalled that the Council had received a written communication from Brazil
and India concerning the review of the TRIMs Agreement under Article 9, which was circulated in
document G/C/W/428.  The Council held discussions on this proposal at its meetings of
November 2002 and March 2003, which were reflected in the minutes of those meetings in documents
G/C/M/66 and G/C/M/69, respectively.  In addition, at the last meeting several views were expressed
on the scope and possible outcome of this review.G/C/M/70
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1.2 The representative of Colombia attached cons iderable importance to the review of the TRIMs
Agreement.  Colombia was aware of two elements to be considered in the review process.  The first
was an implementation exercise which contained interesting proposals regarding more flexible
treatment for developing countries.  The second element was that part of the study focused on possible
complementarity with provisions relating to investment and competition.  This second element wasnow the subject of in-depth discussion in the WTO.  Given those two elements, Colombia had been of
the mind that one should await the outcome of the work done in these two areas before taking the
review further.  Having reflected on the matter, he now suggested that the actual exercise of reviewing
the Agreement be completed after Cancun.  Although documents G/C/W/307 and 428 may be
regarded as important contributions, he believed that the review should be supplemented by a
document clearly showing the notifications reported, the sectors covered, some statistics of trade
flows under the relevant measures, and similar deta ils on extensions granted.  All that information
should be analysed with care and used as a basis for preparing an orderly and methodical discussion to
make progress in the review of the Agreement.  Co lombia considered it essential to move ahead with
this process regardless of whether a consensus could be reached on the desired outcome of the review.
It would be important, therefore, to know whethe r Members were ready to advance the process in a
serious manner which would call for valuable input from the Secretariat.
1.3 The representative of Pakistan attached importance to this ongoing review of the TRIMs
Agreement because it had implications on the socio-economic development of developing countries,
and in this regard he believed that the joint submission by the WTO and UNCTAD Secretariats was
an important document which provided impetus to the ongoing work.  It gave a good insight aboutwhat had happened in developed country economies, how they had used TRIMs measures for
investment purposes as well as for developmental purposes.  Subsequently there was a joint
submission from India and Brazil.  At this juncture he was concerned as to how to carry forward the
work.  The Colombian request for certain further background information was a good suggestion.
There had been submissions, oral interventions and wr itten submissions, but there was a need to break
the impasse and move forward.  He suggested informal consultations and asked the Chairman to use
his good offices and consult the Membership in an informal mode and seek their views and opinions
as to how to carry on this work.  The report to the Cancun Ministerial Conference in terms of this
review would have an important bearin g on the future work of this review.
1.4 The representative of Brazil said that regarding the review there were a lot of interventions, at
least two substantive papers that indicated some divergence as far as the understanding of the scope of
the review was concerned, and many other elements that had been brought to the attention of this
Council on this issue.  There was a broad-based group of suggestions and ideas from which one could
try to take elements of convergence, and together with the proposal made by Colombia this could be a
very good basis for trying to work on a new background paper.  For a long time now the CTG had
worked on this review but little progress had been made towards its conclusion.  By holding somekind of informal consultations, there might be a more focused approach on this issue.  One could
perhaps take into account the experience of other WTO bodies facing more or less the same situation,
bodies that had unfinished business from the Uruguay Round, such as the GATS Rules Committee in
which three different work programmes were prepared to tackle three different Articles of the GATS.
In conclusion, Brazil was willing to stress the importance that it attached to this track as far as theTRIMs review was concerned.  Under this proposal of trying to structure the discussion delegates
should not understand that Brazil was willing to leave behind other tracks in which this issue had been
raised.  The Chair could help by holding informals and the Secretariat by preparing some background
paper in order to focus on discussions at future meetings.
1.5 The representative of India said that Brazil and India had introduced a joint submission
concerning the review of TRIMs under Article 9 last November, and there had beene some exchanges
of views on the proposal in November last year and in the last meeting in March.  Apart from thatG/C/M/70
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joint submission, there was also the joint UNCTAD and WTO Secretariat study on TRIMs and other
performance requirements which provided a basis for discussion under this agenda item.  Of course
Members also contributed to the debate and shared at various times their national experience.  Like
Pakistan, Brazil and Colombia, India attached a lot of importance to the TRIMs review under
Article 9.  It was in this context that India ha d, along with Brazil, made a proposal last year,
essentially seeking to have some flexibility for developing countries which was lacking in the TRIMsAgreement, to enable developing countries to purs ue their developmental objectives.  Progress on this
TRIMs review had been slow.  As Brazil mentioned, th is issue had been on the agenda for the last two
and a half years, but in terms of outcome one could not derive satisfaction.  The suggestion made by
Colombia in terms of further background notes by the Secretariat was welcome and he supported that
initiative.  As pointed out by Brazil and Pakistan, in order to give a little more focus to the discussions
under Article 9 TRIMs review, it would be useful if the Chair could hold consultations in terms of
how the CTG could organise its work on this agenda item in terms of time-frame and a focused workprogramme.  In terms of different tracks, as mentioned by Colombia and Brazil, he recognised that
there were different tracks on TRIMs issues in the WTO.  There was the paragraph 12 track of the
Doha Ministerial Declaration on TRIMs issues and the Article 9 TRIMs review track.  These were
different tracks in the WTO, and Members should pursue this matter on the different tracks
independently.
1.6 The representative of Argentina agreed with Brazil that the CTG needed to chart a path or
some procedure for dealing with this task in order to make progress.  He thought Colombia's proposal
was appropriate.  The two elements which Colombia pointed out, having some kind of document from
the Secretariat or some compilation outlining what had taken place, and starting up an informalprocess to have an approach that would be more focused, were welcome and would help Members to
make progress.
1.7 The representative of Canada said that as  some Members had pointed out, the CTG had been
engaging for quite some time in this review of the TRIMs Agreement, and one delegation pointed out
that there had been ample opportunity to discuss the papers and submissions.  In their view there had
been an orderly and methodical discussion of the propos als, and in terms of the status of the review at
this stage, some Members questioned what was the status of the review or what conclusions could be
drawn.  In Canada's view, the only conclusion was that there was no consensus on the need to change
anything to the TRIMs Agreement.  The lack of consensus was not due to process but rather related tothe substance of the proposals put forward.  Article 9 stipulated that "the CTG shall review the
operation of this Agreement and as appropriate propose to the Ministerial Conference amendments to
this text".  Amendments should only be made if appropriate, and the review did not mandate
amendments to the text.  On the link with implementation or other tracks on implementation, there
had been a lot of work in the last year and since Seattle and reports existed on the four implementation
tirets, and these reports had been submitted to the TNC.  The conclusion of these reports was that
there was no consensus on the proposals in these tirets.  The TRIMs Committee had carried outextensive work over the last two years on tirets 37-40, and there had been substantive reports with the
conclusion that there was no consensus, so there was no need for a different process for the review.
1.8 The representative of the European Comm unities (EC) agreed in substance with the
procedural remark that Canada had made.  Could Members not agree that they had already gone into
the issue in depth and had ample opportunities to express themselves on the substance?  As far as the
substance was concerned there was no need for a new paper from the Secretariat.  On procedure,
Colombia had raised two justifications for keeping this review alive during the DDA negotiations.
The arguments were the following:  first, there was an implementation exercise which had been
undertaken and therefore Members needed to continue discussions in this forum because thediscussion was outstanding on implementation.  He could not see the link between the two.  The
implementation review process was before the TNC.  The Director-General was involved in the issue
so this matter was already in safe hands.  The second argument was that there were working groups onG/C/M/70
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possible negotiations on investment and competition, and Colombia was very optimistic and believed
that Members needed to continue discussing TRIMs in this Council because there were obvious
linkages with those Singapore issues.  He did not see any linkage between a negotiation on
competition or investment and the review process which was being carried out here in the CTG.  The
question of renegotiation or revamping of TRIMs was not on the agenda of the DDA negotiations.
The Article 9 review process was an in-built review provision in the TRIMs Agreement, which had itsown logic, and had no mandate to report to the Cancun Ministerial.
1.9 The representative of the United States associated himself with Canada and the EC on this
question.  This was not a process problem but a substance problem.  Members had reviewed this issue
extensively and had come to the conclusion that what was being sought here was a fundamental
modification of the TRIMs Agreement which would requ ire modification of Articles III and XI of the
GATT, which was something that the US was not willing to do.  He did not see any utility in takingthis process further.  The Article 9 review was a review to determine how the Agreement was
operating, but there was no consensus that had developed to modify in any way how the Agreement
was operating and there were no prospects for that consensus developing.
1.10 The representative of Pakistan said that it was an interesting comment from Canada that since
there was a lack of consensus one should just stop the work.  Going by the same analogy the whole
work of the WTO should be stopped, because it was not only the Article 9 review which lacked
consensus.  There was a lot of work in the General Council where there was a lack of consensus.  The
WTO method was to try to converge, to build in some common positions, to try to come to certain
conclusions and to show a sense of understanding and respect for each other's point of view.  Therewere many other reviews going on in other bodies.  There were divergences of views there also, but
he had never heard the argument being put forward that since there was a lack of consensus, one
should stop the work.  He would have appreciated some positive comments coming from developed
countries who would have said that this was an important review from developing countries'
perspective.  They did not have to agree with what  Pakistan or Brazil or India or any other developing
country had said in substance, but if even on a small thing like a procedural issue in which Colombia
had just asked for some Secretariat documents, Members were being told that it could not be done, he
considered this a counterproductive argument.  All work related to investment or TRIMs had its own
mandates.  The Article 9 review, in terms of the language in the Agreement, had its own mandate.
The work going on in the Working Groups on investment and competition policy had a differentmandate, as did the Singapore issues that had been going on since 1996.  The Colombian proposal for
coming out with certain supplementary documents as a means to an end was a good proposal, and he
strongly supported it, and he reiterated Pakistan's proposal for consultations.
1.11 The representative of Japan said that Japan was of the view that the CTG needed more views
on this review mechanism from the proponents' side.  In this regard he thanked Brazil and India for
their submissions, which were detailed ideas and which could be a good basis for discussions, but inspite of that there was a need for more detailed ideas from other proponents who would like to
proceed with this review.  As for the document which Colombia had requested from the Secretariat,
the document should be factual and should not prejudge the outcome of the discussion.  His
delegation was neutral to the idea of the new document.
1.12 The representative of Brazil agreed with Pakistan.  It was necessary to undertake some further
informal work to see if there is room for some kind of middle ground between the positions.  From the
informal discussions being requested one could discuss the terms of reference of a potential
background paper of the Secretariat, as was done with the other paper requested from UNCTAD and
the WTO.
1.13 The representative of India said that the WTO was based on consensus and everything that
came out in terms of decisions had to be based on consensus.  It was very clear that there was aG/C/M/70
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divergence of views on issues raised by Members under this agenda item.  India strongly disagreed
with the notion that one should give up because after discussion in two meetings there was no
common ground.  India had tabled its proposal in November 2002 and there had been discussion in
the last two CTG meetings.  To say that the CTG had exhausted discussions and should give up the
whole issue of the TRIMs review was unfair.  He only urged Members to understand and appreciate
different Members' positions on this agenda item and the proposals made in this body, and try and seehow best to move forward and find common ground.  He  agreed to discuss this matter in informal
mode and in terms of how one could structure the discussion under this agenda item in terms of time-
frame or work plan.  That was the spirit in which he proposed these informal consultations.
1.14 The representative of the United States said that Pakistan's point was that once an issue got
into the WTO, it basically went on forever until ther e was some sort of an agreement.  Sometimes that
was the case, but sometimes not.  For example, if one were to look at the rules of origin negotiations,a mandated negotiation that had gone on far longer than expected, Members continued to grind away
at the issues because there was the will on all sides to reach a successful conclusion.  In the second
stage of the review for the Agreement on Textiles and Clothing, something on which there was
disagreement on both sides, in the end the conclusion was that there simply was no consensus.
Members could not even draft a report because there was no consensus on what the content of thereport reflecting the failure was going to be.  The Article 9 review was something that was never
designed for a fundamental rewrite of obligations under the WTO Agreement.  It was something that
was more modest in that if there were a common view that the Agreement could be made to operate
better, then this was an opportunity to look at the Agreement, to see if there was this common view,
and to move forward.
1.15 The representative of Cuba agreed with Pakistan that the Colombian proposal and the
proposal made by Brazil and India last October were proposals that warranted consideration.  She
reiterated the request that the Chair hold informal consultations which would enable Members to
make some progress.  She was pleased to hear from Japan that it was prepared to listen to otherproposals and ideas on the whole question of the TRIMs review.  This was a position that was very
different from that of other developed countries.  Unfortunately these other countries were adamant
that there was only one position that should be accepted and regrettably at this stage in proceedings
that was not really an advisable position, particularly looking to the Ministerial.
1.16 The representative of Colombia said Members needed to distinguish between the review itself
and the outcome of that review;  in the results of the review there could be differences of opinion
between Members with regard to links with s ubsidies or other elements.  Subsidies were not
mentioned in Article 9 of the TRIMs Agreement, whereas competition and investment were.  With
regard to the nature of the document requested of the Secretariat, she would like to have a factual
document.  She thought it was a good idea for the Chair to conduct informal consultations with
Members to have more information and to have greater understanding as to why for Colombia andother developing countries it would be interesting to have other elements to supplement this review
exercise.
1.17 The representative of Japan said that the joint paper by India and Brazil was a good basis for
discussion, but his delegation would like to reserve the right to show its final position concerning this
issue.  He wanted to hear comments or views on this joint paper from other developing Members or
other proponents so as to seek a middle ground or convergence in this Council.
1.18 The Chairman said that the CTG had had a useful discussion, although the discussion had not
brought Members closer.  Indeed there were rather substantive differences both on the nature and the
scope of the Article 9 review.  Delegations also differed on how to proceed further.  There were a
couple of suggestions made by a number of delegations, including those calling for a new paper from
the Secretariat, or having a kind of informal process based on consultations to be conducted by theG/C/M/70
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Chair.  Those proposals had not met with a general consensus.  At the same time he had been
encouraged by the sentiment of support for the Ch air, and the readiness to work with him.  He
proposed for consideration a kind of very informal consultation conducted by the Chairman, the
purpose of which would be to enable him to better understand the situation and the interests of
delegations and to take stock.  He was not suggesting that there was something as a result of which
one would have a kind of work programme, nor that the purpose of the consultations should be tomake an attempt to find common ground.  He was simply proposing for consideration that Members
be ready to join him for very informal discussions on this issue, without prejudice to anyone's position
or to any result of the discussion.  He asked whether this way of proceeding would be acceptable to
Members.  It was so agreed.
II. MARKET ACCESS MATTERS
A. PERIODIC REPORT OF THE COMMITTEE (G/MA/149)
2.1 The Chairman said that the Market Access Committee had forwarded the waivers accompanied
by the periodic report of the Committee.  As the report was factual in nature, and reflected the work
undertaken in that body, he suggested the C ouncil take note of it.  It was so agreed.
B. INTRODUCTION OF HARMONIZED SYSTEM 1996 CHANGES INTO WTO
SCHEDULES OF TARIFF CONCESSIONS – REQUESTS FOR A WAIVER
Argentina - G/L/606, G/ C/W/452, El Salvador - G/L/ 608, G/C/W/454, Israel -  G/L/620,
G/C/W/462, Malaysia - G/L/ 615, G/C/W/460, Morocco - G/L/616, G/C/W/461, Pakistan -
G/L/612, G/C/W/458, Panama - G/L/607, G/C/W/453, Thailand - G/L/611+Corr.1,
G/C/W/457, Venezuela - G/L/609, G/C/W/455
2.2 This item concerned requests for waivers in connection with the introduction of HS96
changes into WTO Schedules.  The Market Access Committee had agreed some time ago that
extensions of the waiver on a collective basis would no longer be granted.  However, this would notpreclude Members from requesting waiver extensions on an individual basis.  Nine Members had
forwarded to the Secretariat requests for waivers in connection with the introduction of HS96 changes
to their schedules of accessions.  Pursuant to Article IX of the WTO Agreement, these requests for
waivers were before the Council for Trade in Goods for its consideration;  in each case, draft
decisions had been circulated in G/C/W/- documents to assist the Council in its consideration of theserequests.
2.3 The Council approved the waiver requests for the nine listed Members and recommended
 that
the draft decisions contained in the cited G/C/W/- documents be forwarded to the General Council for
adoption.
C. EXTENSION OF WAIVER FOR THE PURPOSE OF ESTABLISHING A NEW
SCHEDULE
2.4 The request from Sri Lanka had been circulated in document G/L/610 and a draft decision in
document G/C/W/456.  The Council approved an extension of the waiver for Sri Lanka until
31 October 2003 and recommended that the draft decision contained in document G/C/W/456 be
forwarded to the General Council for adoption.G/C/M/70
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III. FREE TRADE AGREEMENTS
Free Trade Agreement between Bulgaria and Estonia
- Notification from the parties to the Agreement  (WT/REG149/N/1, WT/REG149/1)
Free Trade Agreement between Bulgaria and Israel
- Notification from the parties to the Agreement  (WT/REG150/N/1, WT/REG150/1)
Free Trade Agreement between Bulgaria and Latvia
- Notification from the parties to the Agreement  (WT/REG151/N/1, WT/REG151/1)
Free Trade Agreement between Bulgaria and Lithuania
- Notification from the parties to the Agreement  (WT/REG152/N/1, WT/REG152/1)
3.1 The four Agreements listed under this item had been notified under GATT Article XXIV.
The texts of the Agreements and their notifications had been circulated in the documents listed.
3.2 In the absence of any comment, the Chairman proposed that the Committee on Regional
Trade Agreements carry out the examination of the above-quoted four 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 just referred to and to s ubmit a report to the Council for Trade in Goods.  It
is understood that the understanding 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, ascontained 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."  It was so agreed.
IV. TRADE FACILITATION WORK PROGRAMME:  ARTICLES V, VIII AND X OF
THE GATT 1994
4.1 The Chairman noted that the Council woul d now meet for its second session on trade
facilitation in 2003, in line with the Trade Fac ilitation Work Programme adopted by Members in
December 2002.  As agreed upon in this programme, Members would take up the following threeagenda items:  (i) Articles V, VIII and X of the GATT 1994;  (ii) trade facilitation needs and priorities of
Members, particularly of developing and least deve loped countries;  and (iii) technical assistance and
capacity building. With respect to the first agenda item, GATT Articles V, VIII and X, where Members
had had an intense discussion in the course of thei r previous meetings with many contributions been
made, the Council received two new communications from Members, which both addressed specific
aspects of the subject-matter. Japan's submi ssion on the "International Architecture on Trade
Facilitation" (G/C/W/465) might seem familiar, si nce it was largely based on the non-paper the Japanese
delegation presented at the last meeting. The document attempted to set out a number of activities
carried out by international organisations in the area of trade facilitation, and to indicate the reasons why
the WTO would need to engage in this field.
4.2 The representative of Japan expressed his appreciation of the fact that all Members realised the
benefits of trade facilitation per se . Since he had already introduced the Japanese contribution in
length at the previous meeting, he would be very brief this time.  What his delegation had intended to
do in the paper was to answer the questions on the role of the WTO vis-à-vis  other international
organisations and to provide examples of how the rule-setting mechanism was necessary in order to
achieve the full merits of trade facilitation.  Japa n also wanted to show how the international rules ofG/C/M/70
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the WTO and those outside the WTO would be mutual ly complementary.  He expressed his hope that
the Japanese paper would contribute to both the discussions in the CTG and in capitals.
4.3 The representative of Australia introduced his delegation's submission on the benefits of a rules-
based system (G/C/W/466), noting that it was a contri bution in the context of what Australia saw as a
wrap-up on the issue of binding rules on trade facilitation in the WTO.  Previous discussions hadalready addressed this issue, especially Japan's paper on the three pillars approach, the US paper on
special and differential treatment and Canada's very useful illustration of what binding commitments
may mean in practice.  These papers put this issue into perspective and, taken in conjunction with the
World Customs Organization's Capacity Building Stra tegy, took much of the emotion and heat out of
this issue. Major international institutions, su ch as the World Bank, were moving ahead and
undertaking significant Customs reform and modernization work as part of an overall trade facilitation
programme.  Initiatives such as the World Bank's Global Facilitation Partnership and the Trade andTransport Facilitation project in South-Eastern Europe, demonstrated the practical steps that were
being taken.  A Customs Modernization Handbook by the World Bank intended to address a gap that
was also being addressed by the WCO's Diagnostic Framework.  Those projects demonstrated the
need for a strict methodology that can be applied to reform and modernization – ideally one that could
be applied globally.  To be successful, projects had to be tightly bound to strict rules with measurableoutcomes to instil the sort of disciplined approach that one would expect from a WTO rules-based
process.  Australia had successful case histories for customs modernization programmes – some
entirely domestic in origin and others with a more international flavour.  Developments in countries
like Mauritius, India, South Africa and Malaysia represented practical steps taken at government
initiative and sometimes assisted with overseas aid.  Unfortunately, there were more failures thansuccesses. Members' goal should be to create an environment for sustainable and ongoing
development of modern and effective customs business systems and administrations. Operational
trade facilitation measures should be applied across the entire spectrum of border management
processes.  In this regard, it had been said that binding rules were not required, and that members of
the WCO and APEC had put rigorous processes volunt arily into place.  However, the facts did not
entirely support this contention. Signatories to the WCO's Kyoto Convention were well below the
number required for ratification, and there was no verification process to measure how far signatories
actually applied the Convention's principles. Clearly, more was needed – donors and other
international bodies were looking for a strict methodology to apply for their capacity building
measures.  While the WCO had formulated a useful strategy in this regard, Australia would argue thatWTO rules would give added direction and consistency to trade facilitation initiatives underway in
international and regional fora.  Australia believed that the WTO was the only international
organization with a sufficiently broad mandate that could cover all aspects of this task.  Australia
would be interested to hear from other delegations about their concerns and thoughts on the issue.
4.4 The representative of the Secretariat noted that the Secretariat paper contained a selection of
literature on GATT Article V. It had been prepared  at the request of the European Communities.  As
already indicated by it's title, the bibliography was by no means comprehensive, but merely offered an
illustration of the type of the research work carried out in this area.  The document was basically
structured in two parts:  A first section refered to Article V in the more narrow sense. The second part
dealt with the more general transport and transit issues. Both sections were closely related, as there
was a natural link between Article V and transport and transit issues in the broader sense. It hadtherefore been considered useful to allow for a look  at the bigger picture. In order to avoid repetition,
the document, as a general rule, did not contain documents which had already been prepared for and
submitted to the Goods Council.
4.5 The representative of Paraguay expressed his thanks for the papers prepared by Japan,
Australia and the Secretariat, which would assist Members in their current discussions on trade
facilitation.  He emphasized the great interest Paraguay took in trade facilitation, the importance of
which was reflected in Secretariat document G/C/ W/463, which contained a selective bibliography ofG/C/M/70
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work on GATT Article V.  The paper contained many references to the problems faced by landlocked
developing countries such as Paraguay under the current multilateral trading system.  This situation
was amply recognized in the extensive bibliography, for which Paraguay would once again like to
express its appreciation.  The importance that Paraguay  attached to the subject of trade facilitation had
been underscored by its Ministers in two Ministerial Declarations, which set out in clear and precise
terms how this matter should be dealt with, and which highlighted the problem that besets thedeveloping countries.  The problem was principally that of "marginalization" – a situation faced by
many developing countries that found themselves relegated, left behind and cut off from the
advantages and benefits that the multilateral trading system now offered - and with the risk of falling
into the situation faced by other developing countries, including those landlocked developing
countries like Paraguay.  The extremely high extra costs involved in the transit of its foreign trade
goods prevented Paraguay from becoming competitive within the system, so that despite the
advantages it may had in other sectors, it could not benefit from them.  This was why Paraguay was ofthe view that those issues should receive attention in the WTO.  As Ministers had stated in Singapore
in 1996 and reaffirmed in Doha in 2001, such issues should be addressed, and trade should be
facilitated through appropriate treatment under WTO rules.  The matter was not just a customs
problem.  Paraguay was working with the specialized organizations in this field as well as with some
Members to modernize its customs services.  What Paraguay basically required was clear:straightforward and simple rules.  Trade facilitation needed to receive proper attention in the WTO.
4.6 The representative of Brazil thanked all delegations for their past and present contributions to
Members' work on this issue since the beginning of last year, and for the specific proposals, which
had favoured a very constructive and interesting debate over the months. Brazil remainedunconvinced of the need for binding rules in the area of trade facilitation.  In the course of the debate
in the run-up to the Doha period, Members were given very strong assurances that no new obligations
would be required for which corresponding technical assistance and capacity-building measures were
not forthcoming.  Since Doha, the tune had chan ged. What one was hearing now was that technical
assistance and capacity-building measures must be needs-based, i.e. it was up to developing countriesto request specific assistance measures.  Members were also told that technical assistance and
capacity-building were not really appropriate fo r any kind of specific commitment from anyone.
Brazil's experience from the Uruguay Round showed wh ere that kind of story would lead.  One ended
up adopting binding rules, and, if anything, one was given some transitional periods in which to
implement such new commitments. Technical assistance was usually insufficient, and many Memberswere unable to live up to the commitments they had signed on to.  This often ended up in dispute
settlement, or in threats of dispute settlement.  There was a kind of chicken and egg situation: What
must come first, the binding rules or the assistan ce, that allowed Members to implement such rules?
It was for this general perception that Brazil favoured a different kind of approach to trade facilitation.
His delegation had stressed from the outset that perhaps the most productive way forward would be to
work towards some non-binding guidelines on trade facilitation.  How could such an idea be
implemented?  Brazil saw those non-binding guidelines as a kind of target for Members, somethingfor which they should aim and work towards.  On the basis of such targets, Members could identify
precisely what it was they needed in terms of technical assistance and enhance their internal
procedures with a view to meeting the criteria of the guidelines.  At a certain stage, when Members
felt that they had developed their internal capacities sufficiently to meet those guidelines
autonomously, be it on a financial basis, be it on a human resources basis, be it on an institutionalcapacity basis, one could then move towards transfor ming such guidelines into binding rules.  That
was how his delegation saw the procedure most productively moving forward.
4.7 The representative of Costa Rica thanked the delegations of Japan and Australia for their
contributions, which clearly showed the benefits that could arise from trade facilitation, as well as the
Secretariat for its note. Costa Rica had been waiting for a mandate for negotiations on trade
facilitation since 1996.  At Doha, a study programme had been established, and Members had made
substantial progress on the work programme. All of them now had a better knowledge of the issuesG/C/M/70
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with regard to potential multilatera l rules in this area.  In Costa Rica's view, the issues of the work
programme agreed in Doha had been exhaustively studied.  In this context, Costa Rica agreed with
Australia that there existed a general understanding among Members of the potential benefits resulting
from the implementation of trade facilitation measures .  Furthermore, his country recognized that the
technical assistance programme of the WTO Secretariat, operating in conjunction with other
organisations, and the initiatives taken by some Members, had enabled all Members to achieveprogress in the preparations of negotiations.  Costa Rica regarded trade facilitation as a key element in
a country's development policy. For a country with a small, but open economy, such as Costa Rica,
whose economic growth was based on expanding foreign trade and attracting foreign direct
investment, it was of vital importance that enterprises improved their competitiveness by increasingly
simple and rapid import and export procedures that contributed to the reduction of costs and waiting-
times at ports, airports and land borders.  Trade facilitation measures helped increase and facilitate
trade and strengthened the participation of developing countries, as well as of small- andmedium-sized enterprises, in international trade.  To Costa Rica, it was certainly possible to eliminate
procedures with a negative impact on trade through negotiations on trade facilitation.  The
harmonization and simplification of trade procedur es would promote trade, reduce costs and open
doors for developing countries.  While the ability of developing countries to implement trade
facilitation measures was clearly limited, a market such as Costa Rica's could only operate efficientlyto the extent that there was a clear framework of principles and obligations, designed to facilitate trade
that would enable their enterprise s to participate effectively and with security in the global economy.
Consequently, Costa Rica believed that technical assistance and capacity building had a vital role to
play in that field.
4.8 Costa Rica provided a striking example of the benefits that might be achieved through the
establishment of disciplines on trade facilitation.  It had signed a Free Trade Agreement with Canada,
in which, under the chapter on trade facilitation, Costa Rica had undertaken commitments on risk
assessment, the facilitation and simplification of the processes and procedures for the release of
high-risk merchandise, coordination between agencies, the implementation of international standards,consultation mechanisms, automation, advance rulings and other areas.  In doing so, Costa Rica
managed to achieve a high level of implementation as a result of the cooperation provided by the
Government of Canada under the terms of the Agreement, as well as by other Members and
international organisations.  He invited Members to refer to document WT/REG147/N/1 in order to
examine that chapter, which could provide a good basis for future negotiations.  Like Australia andJapan, Costa Rica was of the view that regional agreements were not sufficient in themselves, and
what was required was a multilateral framework.  Therefore, to achieve greater clarity and
transparency with regard to import and export procedures and formalities, Members needed to take
steps at Cancun to initiate substantive negotiations that would lead to changes in the rules in the areas
which were currently vague and permissive.  In this context, he noted that proper technical assistance
was needed, which would increase during the negotiating process and the implementation stage, so
that each Member could take advantage of the benefits of such commitments.  Capacity-building wasof fundamental importance for developing countries as well.  Assistance for modernizing customs
information systems was important to enable them to concentrate official controls in a single
government body, and to fully comply with the rules Members would agreed on.
4.9 The representative of Egypt thanked all delegations and the Secretariat for their submissions
and presentations.  Egypt could agree with what had been mentioned in the conclusion of the
Australian submission, that following the discussions that had taken place last year on trade
facilitation, it was obvious that no one had a major problem with the principles that had been raised,
and no one denied the benefits that can be realized from trade facilitation, especially if one saw it as a
development building activity, designed to help all parties to benefit through laying the ground forlong-term growth in trade for all countries, developed and developing.  But, when talking about
enhancing transparency, uniformity of procedure, simplifying international trade documentation and
procedures and due process, one should take into account that each country had its specificity, its ownG/C/M/70
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local human, institutional resources, and that the a pproach that had been successfully implemented in
one country might not bring the same success in other countries, since it was not appropriate for the
domestic institutional realities and capabilities.  Therefore, it would be necessary to ensure that the
required factors for an efficient achievement of those principles were available.  One had to ensure,
inter alia , the effectiveness of administration of human and institutional resources, as well as the
ability to apply and use information technology and techniques.  Only in this case trade facilitationcould be an effective tool for development and economic growth, and at the same time allow for
better control.  It was Egypt's conviction that trade facilitation was not simply about setting standards,
rules and procedures, but about how to implement and apply it in a way that it produced satisfactory
results for all stakeholders.  So, to determine the way to achieve those results, Egypt saw that there
were two approaches, first, to simply to incorporate these standards in a legal binding agreement,
keeping in mind that there had been difficulties in implementing the trade system of the WTO for
developing countries, and the doubts about the effectiveness of the dispute settlement mechanism inpreventing retaliation and reducing trade disputes.  The second approach was to have these principles
as guidelines, best practices.  Egypt believed that this approach would have the advantage of being
flexible and adaptive, so that it would allow all countries the chance to test and control before
considering translating these standards into a binding agreement.
4.10 The representative of China expressed his appreciation of the efforts made in the CTG
concerning trade facilitation, and of the bibliography prepared by the Secretariat. Several sessions had
been held in the Goods Council to  review and, as appropriate clarify and improve relevant aspects of
Articles V, VIII and X of the GATT, as mandated by the Doha Ministerial Declaration. China
maintained its view that the establishment of multilateral principles on trade facilitation was in linewith the WTO objectives, and would help to enhan ce transparency of cross-border control, improve
predictability of trade, simplify cross-border trade procedures, speed up customs clearance, lower
trade and administration costs and promote the deve lopment of global trade.  China supported WTO
negotiations aimed at improving multilateral principles regarding trade facilitation which would take
place on the basis of modalities agreed on by Ministers by explicit consensus.  It was appropriate forthe WTO to make full use of the achievements of other relevant international organisations, such as
the WCO, in promoting multilateral principles on trade facilitation in order to avoid an overlap.  As
far as cross-border clearance facilitation was concerned, for example, legal documents administered
by the WCO could serve as supplements and instruments for the implementation of basic WTO
principles.
4.11 China supported the effort to promote the adoption of WCO technical regulations by WTO
Members.  The revised Kyoto Convention, for exam ple, which aimed at simplifying and harmonising
customs procedures, included provisions which corresponded with those of GATT Articles V, VIII
and X, and could be used to clarify and improve relevant aspects of those articles.  With regard to
WTO achievements in trade facilitation negotiations, China proposed to negotiate and reach an
understanding first on GATT Articles V, VIII and X, taking into consideration the significantdifferences between Members in terms of economic development level and capacity building, and
from the pragmatic perspective to achieve negotiation results.  Related WCO regulations should be
introduced as multilateral principles, but not as binding rules enforceable by the WTO dispute
settlement mechanism.  Paragraph 27 of the Doha Ministerial Declaration clearly directed the CTG to
"identify the trade facilitation needs and priorities of Members, in particular developing and leastdeveloped countries".  In this context, China proposed the compilation of a questionnaire by the
Secretariat on Members' practices concerning Articles V, VIII and X.  This would reveal the
differences in Members' practices and the kinds of difficulties they were facing, and would enable
Members to consider S&D treatment in their commitments.
4.12 The representative of Switzerland thanked Australia for their contribution, noting that, as a
preliminary comment, her delegation shared its view with respect to the advantages of WTO rules on
trade facilitation.  Switzerland would like to make further comments on the latest submissions byG/C/M/70
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Canada (G/C/W/448), the US (G/C /W/451) and Japan (G/C/W/465), which the Swiss delegation had
studied in depth. Switzerland had come to the preliminary conclusion that they contained converging
ideas that may be suited for combination.  As a preliminary step, Switzerland wished to hold some
specific elements from the diverse contributions.  The Swiss delegation was comfortable with an
approach that would incorporate a number of high-level principles for formalities and procedures into
WTO Articles, such as those proposed in the submission by Canada.  In Switzerland's view, suchprinciples and rules would underpin other existing and modern multilateral instruments for facilitating
trade.  As Japan had put it, the division of labour, based on each organisation's expertise, was vital.
Specialised international organisations would deal with sector-specific technical rules, whereas the
WTO would cover cross sectoral rules or high-level principles.  Her delegation shared the view that
those high-level principles, and more broadly, the work of the WTO on trade facilitation, should not
be limited to customs procedures.  It was very important to Switzerland that all WTO Members were
bound by the same obligations, on the one hand, and that Members' different situations, capacities andneeds were not ignored, on the other.  Thus, Switzerland considered a "one-size-fits-all approach" as
rather inappropriate.  The challenge faced by Members would be to find the correct balance between
the need for flexibility in implementing the obligations and the fundamental principle of equal
treatment. In this context, it might be useful to recall a statement in the last US submission which
suggested that "…these divergent situations could be reflected in the development of individualdetailed packages..…..".  Switzerland furthermore wished to recall the WCO's "Custom Capacity
Building Diagnostic Framework".  With this inst rument, the WTO would be given a methodology that
would allow Members to identify and analyse country or region specific problems.  One of Japan's
complementary synergetic three pillars, the action plan, could also be of use here.  If all the before-
mentioned elements, the US tailor-made approach, the methodology for analysis, the identification ofhigh-level trade principles and the action plan, were combined, it should be possible to bundle
packages adapted to Members' capacities and needs.  More precisely, within the high-level trade
principles one could seek for a limited number of clusters, which would require a similar
implementation.  Some of them might have to be applied by all Members immediately, others might
be introduced progressively depending on the results of the diagnosis referred to earlier. This processwould be guided by an action plan.  Obviously, the whole process should be complemented by
consultations with public and private stakeholders.
4.13 With respect to technical assistance and capacity building, Switzerland recognized its
importance. Switzerland’s own capacities and need s would determine the transition periods necessary
to implement the action plan.  In addition, some WTO Members would need external technical and
project support in order to implement the action plan and enhance their capacities.  A WTO body
should periodically review those action plans and the quality of the technical assistance associated
with it.  With regard to the division of labour suggested by Japan, there were many specialised
multilateral bodies that were already active in this field.  This was also clearly highlighted by the EU's
submission (G/C/W/394) in 2002.  In Switzerland's view, such a combined approach could allow
Members to find the necessary freedom to tailor progress in trade facilitation to reflect nationalmotivations and establish ownership of the reform process.  The Swiss delegation would welcome
further discussion on "high-level principles", based on the contribution of Canada, as well as on the
compilation document of Members' proposals established by the Secretariat.  The table proposed by
Canada provided a very suitable tool to structure the discussions on additional proposals.  Finally,
there was the sensitive question on whether the non-observation of disciplines would be subject todispute settlement.  Switzerland understood the concerns of some delegations in this regard and
therefore joined the US reflection that the WTO' s undertaking into this area would require some
creative thinking.  But Switzerland also shared the view that the results of the negotiations on trade
facilitation should be brought into the sphere of WTO rights and obligations.
4.14 The representative of Zimbabwe noted that, as a land-locked country, her delegation had
particular problems.  Zimbabwe attached a lot of importance to trade facilitation.  Zimbabwe felt at
present that a lot could be done through the WCO by strengthening their initiatives.  While there wasG/C/M/70
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reference of capacity building, such assistance woul d also have to include institutional building, and
the provision of required systems.  At present, Zimbabwe was not ready for binding commitments due
to its different level of development.  The reference which had been given on S&D treatment was
mostly on transitional periods, which was not adequate.  It was necessary to strengthen and build
more capacity through customs cooperation.
4.15 The representative of Cuba underlined that his country attached great importance to trade
facilitation and remained ready to work in the Counc il for Trade in Goods to fulfil the Doha mandate.
To Cuba, trade facilitation was much broader and more comprehensive than the content of Articles V,
VIII and X of the GATT, and, as stated by his dele gation on other occasions, Cuba was of the opinion
that the main objective of the WTO was, precisely, to facilitate international trade.  Consequently, the
best contribution the WTO could make at that point was to contribute to eliminating unilateral trade
policies and measures which hindered, and, in some cases, prevented trade between Members.  Cubadid not think that it was possible to make real progress in trade facilitation if no progress was made in
ensuring true and effective access to the markets of the leading industrialized countries, which were
currently well protected by fairly restrictive measures which limited trade.
4.16 As regards the contributions by Japan and Australia, the only very recent presentation of the
Australian paper restricted him to comments of a preliminary in nature, while reserving the right to
revert to it once additional comments were received from the capital.  Nevertheless, Cuba wished to
express its thanks to Australia for its technical contribution.  The paper had the merit of recognizing
that a country, which was not able to meet its commitments due to a lack of capacity should not be
penalized.  This showed that for a multilateral framework to be effective, the capacity of all itsmembers had to be brought at an even level.  In doing so, Australia supported the debate directed at
ensuring appropriate technical assistance and capacity building.  However, while Cuba felt that at
least the first part of the conclusions they were arriving at might be viable and actually along the same
path as the Doha Declaration, the instruments used seemed to go beyond the Doha mandate in
suggesting to have binding rules for all countries and dispute settlement.  It was necessary to think alot more about all that, since it exceeded the mandate given to Members at Doha.  But Cuba was still
studying this contribution and had not yet had time for a more in-depth analysis.
4.17 With respect to the Japanese proposal,  Cuba appreciated the effort made by Japan to offer an
approach aimed at improving trade procedures and their efficiency, using the comparative advantageof each of the international organizations involved in  trade facilitation.  With respect to its three pillar
approach, the pillar referring to rule setting and th e need to have binding rules to give impetus to
meeting the objectives exceeded the scope of the Doha mandate, and, in fact, prejudiced the results of
the review exercise currently being undertaken in the Goods Council.  Furthermore, the principle of
the need for binding obligations to realize the set ob jectives, that was included in that pillar, did not
apply to the second pillar, technical assistance and capacity building, which was key to achieving any
progress in that area, as recognized by the ministers in Doha.  Here, this principle could be of use,since many deadlines had already been missed with respect to S&D treatment, which was also
included in the Doha Declaration.  Many developing countries failed to understand why it was not
possible to have binding rules in this area.  Therefore, Cuba would like to propose that the same
principle Japan proposed with respect to rule setting be applied to the negotiations on S & D, in order
to make the provisions on special and differential treatment for developing countries more precise.
4.18 The representative of Korea noted that his delegation shared the views expressed in the papers
by Australia and Japan for the most part.  He woul d not repeat the points already made on the benefits
of trade facilitation itself, but briefly comment on three points, considering some concerns expressed
by Members.  First, in the light of past experience, one could enjoy more benefits from moretransparent, secure, predictable systems based on binding commitments among Members.  Second,
Korea's intention in the negotiation was to share the gains with all Members. Therefore, in the future,
a large part of its resources for this matter would be allocated to issues such as S&D treatment,G/C/M/70
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technical assistance, capacity building and transitional periods. Lastly, Korea believed that
multilateral rules can produce more effective means for technical assistance and capacity building
than voluntary-based cooperation. Korea fully supported the comprehensive views expressed by
Switzerland.
4.19 The representative of the European Communities commented on the papers submitted by
Japan, Australia and the Secretariat.  With respect to the Japanese contribution, he noted that, as
mentioned at the previous meeting, the EC genera lly shared the thrust of the arguments made by
Japan with regard to the design of what they called an "international architecture".  His delegation was
of the opinion that the Japanese proposal articulated well the potential relationship between the WTO
and the WCO, as well as with other organizations within a WTO framework.  This was not a new
approach to the WTO.  Several existing WTO Agreements made references to the work carried out by
other organizations such as the WCO, the ISO, the FAO, etc.  In those cases, the WTO set the basiccommitments and other organisations, which had the particular expertise, supplied more detailed
instruments and standards.  To the EC, there was no reason why this model would not be applicable in
the area of trade facilitation and customs procedures.  However, the Communities tended to agree on
the point made by China that it would be difficult and unduly constraining if the specific standards
that had been drawn up in and by other organisations were to become fully mandatory.  Like China,the EC considered the use of standards rather for benchmarking or best principles, default standards or
best practices.  This again was a familiar approach within the WTO, as could be seen in the TBT
Agreement.
4.20 As regards the Australian paper, the EC shared its argument for multilateral binding
commitments.  The EC saw no reason why an approach should be adopted in the area of border
procedures, import/export as well as transit rules and regulations that was different from the one the
WTO had taken in all of its agreements.  What had been discussed in the context of trade facilitation
in the CTG for the last few years fitted very well within the range of a number of existing agreements
dealing with trade in goods.  His delegation did not see a reason for departing from the standardapproach of developing multilateral commitments.  That was the only way to achieve predictability
for traders by ensuring that procedures and  processes were irreversible.  It was also the best way to
ensure that all Members adopted common principles and moved in a common direction.  However, his
delegation recognized that there was concern amongst some developing countries, although not all,
with regard to the issue of binding WTO commitments.  These had to be addressed seriously. Inearlier submissions, the EC had identified three or four ways in which they hoped to take those
concerns fully into account.  First of all, flexibility in the design of rules would be necessary.  His
delegation had suggested that, rather than setting very prescriptive, harmonized and absolute
standards, which might be difficult for all Members to aspire to, it would be more appropriate to set
broader framework principles, which would give a reasonable amount of leeway and flexibility with
regard to the manner in which they were implemen ted.  Therefore, when referring to the example of
establishing a concept of standard times for the release of goods across borders as he had done at thelast meeting, this would not imply the need to establish a single release time in the WTO that all
Members had to comply with.  This was neither possible, nor desirable, and could not be expected.
Rather, the EC would seek a commitment whereby, for example, all Members would establish
standard times for the release of goods, notify them  to the trade, and seek progressively to reduce
those processing times as their capacities developed.  What was important was the direction ofchange, rather than its ending point.
4.21 Secondly, the EC understood that time was ne eded in order to implement any commitment,
particularly those that were resource-intensive.  With respect to the third point, the question of
technical assistance accompanying or supporting the implementation of any future WTOcommitments, he wished to answer some of the issu es raised by the delegate from Brazil.  The EC
agreed with Brazil that the Uruguay Round had revealed difficulties.  One thing that could be learned
from that experience was that it was not adequate to simply negotiate a set of WTO commitments andG/C/M/70
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then hope that, magically, they would implement themselves.  Only at a later stage the EC had began
to  understand that for commitments that required time, effort and resources, there had to be a
meaningful programme of development aid or assist ance accompanying it.  This would be the case
even in the absence of WTO commitments of trade facilitation.  In the past two or three years, the EC
had learned to mainstream trade into their aid programmes.  At that point, it had been new to them, as
it was new to many Members and other players such as the World Bank, the WCO and the UN.  Now,trade had been mainstreamed into all of their programming.  Commenting on the metaphor of the
chicken and the egg used by Brazil earlier, he expressed his conviction that, parallel to the process of
designing and implementing commitments, technical assistance had to be provided.  Those Members
who had seen the EC paper on their current aid cycle would understand that the EC took the
commitment made at Doha extremely serious.  The fourth element to address developing countries'
concerns with regard to binding commitments and the fear of dispute settlement, which were fully
understood, could be found in the paper by the US presented in March, which suggested that, in caseswhere a developing country was unable to meet a commitment due to lacking capacity or lacking
resources, dispute settlement should not be an opti on.  At the last meeting, the EC had put on record
that it would favour trying to develop a solution which provided for constructive alternatives to
dispute settlement in the mentioned situations.  Basically, this would mean to provide assistance to
support and speed up the implementation.  That was something that should be worked on, andMembers should try to devise such a mechanism, which would be applicable in those particular
situations and only when trade facilitation matters were concerned.
4.22 Turning to the bibliography compiled by the Secretariat, he noted that he found it to be an
extremely useful piece of work.  His delegation would be using it in preparing for the forthcomingUN conference on landlocked countries, where issues  of transit and GATT Article V were looked at.
When looking briefly at the bibliography, three main issues arose.  The first one was, supported by
many of the studies and articles described, that there was certainly scope for revision and
modernisation of Article V GATT.  Secondly, the paper made clear, as had been clear from previous
discussions, that the scope of technical assistance and development aid in the area of trade facilitationwent well beyond what could ever be captured in a WTO rule-making exercise.  Members needed to
be aware of the fact that the scope of potential co mmitments would by definition be narrower than the
scope of development aid in areas related to trade and transport facilitation.  The third lesson learnt
was that autonomous reform was not enough.  Some WTO Members had suggested that it was quite
sufficient to continue simply with autonomous nationa l measures.  In the EC's view, the area of transit
quite clearly demonstrated that without international engagement, it was not possible to develop
successful transit systems, it was not possible to reduce the non-tariff barriers that landlocked
countries experienced.  Developing transit rules, freeing transit corridors, developing management of
transit systems required international cooperation, multilateral or regional cooperation by definition.
Autonomous measures, by definition, did not suffice.  This was a particularly useful indicator from
the Secretariat paper.  With respect to references to the possibility of non-binding guidelines as an
alternative to multilateral commitments, he noted that the EC was not convinced that there was anyreason to depart from the standard established GATT practice.  If Members wished to remain solely
on the level of non-binding guidelines, the out come could be seen in the Columbus UNCTAD
declaration of the mid-1990s, whose implementation rate left a lot to be desired.  This time, Members
had a chance to go further than that and see some commitments put in place, which would serve the
interests of all Members.
4.23 The representative of the United States
 thanked Members for commenting on the paper on
S&D treatment the US had submitted in March and welcomed any further responses.  The US
considered trade facilitation critical to Members' abilities to create a stable border transaction
environment that would attract investment opportunities and increase trade.  Recognition of thebenefits of trade facilitation was evident in the gr eat deal of work towards reform that was already
taking place autonomously, regionally and in various international organisations.  The paper by Japan
helpfully described the complementary relationship of those various organisations.  The United StatesG/C/M/70
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agreed with China and the EC on the particular aspects of the relationship between the WCO and the
WTO.  Trade facilitation was an issue that related to improving manufacturing, enhancing ways to
attract investment and ultimately, to ensuring greater development through integration into the world
trading system.  Nothing would contribute more to wards a rapid growth of South-South regional trade
than ensuring a rules-based border regime that was transparent and efficient.  Commenting on the
Australian paper, she noted that it provided a helpful review of the importance and the advantages ofhaving WTO rules.  The US did not see any reason why the target-oriented or tailor-made approaches
suggested by some Members as appropriate to technical assistance and trade facilitation could not be
pursued under the rubric of general rules as contemplated by Switzerland's intervention.
Commencing negotiations on trade facilitation would be a real win-win outcome from Cancun.
Achieving a WTO agreement on trade facilitation would be one of the most important development-
related outcomes emerging from the Doha Development Agenda.  Several Members had suggested
some very interesting and helpful possible approaches to start work in a negotiation.  The USdelegation looked forward to discussing them.  At this point, they wished to emphasize that trade
facilitation negotiations should not be foreseen as a highly complex undertaking.  The United States
looked forward to working with  all Members to embrace the opportunities presented by the
undertaking in that area.
4.24 The representative of Lithuania noted that trade facilitation was a very important issue to his
country.  In previous meetings, Lithuania had already had the opportunity to share its experiences in
cross-border trade issues, including the losses the country had suffered due to some cross-border
measures applied by other countries in a trade-distorting way.  Therefore, Lithuania was in favour of
negotiations on strengthening WTO rules in the area of trade facilitation.  To his delegation, thepapers presented for the meeting were further positive contributions to the process.  Turning to the
Japanese paper, he noted that his delegation appreciated the document.  The suggested three-pillar
approach was very positive and useful for implementing an appropriate agreement.  Moreover, it
showed the position of a future WTO Agreement in respect to the agreements on cross-border issues
and the possible relationship between the WTO and other international organisations in this area.  Thepaper answered these important questions.  Turning to the submission by Australia, he noted that it
contained ideas which had been floating around in the discussions for some time.  The fact that the
document presented general issues such as the advantages of rules in general, and the advantages of
the WTO rules in this area in a rather concentrated manner, made it a very useful contribution to the
process.  The papers by Japan and Australia as well as those presented in previous meetings, such asthe US paper on S&D treatment and others, together with specific submissions presented and
discussed earlier, created a good basis for negotiations aimed at reaching an appropriate agreement.
Turning to the paper prepared by the Secretariat, he noted that it was very good in helping Members
in negotiations and in implementing future rules.
4.25 Lithuania understood the concerns of developing countries regarding the lack of capacity and
the additional burden of implementing new commitments.  His own country also had had concernsand difficulties when building up its customs system a decade ago, almost from zero.  But it had
succeeded in building up a quite efficient and transparent system.  For Lithuania, the benefits of trade
facilitation measures were evident.  It was doable, if there were domestic efforts and adequate
technical assistance from other countries.  Regarding the different approaches in the sense of binding
rules versus guidelines, Lithuania preferred and strongly voted for binding commitments on tradefacilitation, including recourse to dispute settlement.  In Lithuania's experience, guidelines were not
efficient.  Sometimes, as in the case where a country had made general political commitments to
implement certain recommendations as a result of a regional framework, but then refused to
implement them, clear binding rules were needed.  On the other hand, it was clear that implementation
was impossible overnight.  Because of that, transitional periods, in some cases quite long periods,were necessary.  Parallel to that, a clear process for the provision of technical assistance should be
established, taking into account the individual needs of each Member.  He concluded by reiterating
Lithuania's strong support for clear and concrete rules on trade facilitation.G/C/M/70
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4.26 The representative of India informed Members that her delegation had been discussing the
operations of GATT Articles V, VIII and X at length over the last year.  Her intervention would focus
on recapitulating India's position on trade facilitation after those discussions.  She would further like
to react to some points made in various submissions to the CTG.  While recognising the benefits of
trade facilitation, her delegation nonetheless still believed that these measures were best left toMembers for autonomous implementation, as that would be in tune with their own needs and
priorities.  The argument that had been put forward that a voluntary approach might be slow and
ineffective, was unacceptable to the Indian delegation because they felt that it was in the developing
countries' interests to make haste slowly in order to be able to balance cost and benefits of trade
facilitation according to their ability, technological and institutional infrastructure.  India wished to
underline that, before getting into new areas, Members first needed to look at what was already on the
table, at the areas the WTO already dealt with, which had a direct bearing on trade facilitation.  In thiscontext, she referred to various WTO Agreements which were all trade facilitating in nature,
particularly the one on Rules of Origin and the one on Customs Valuation.  A number of issues
needed to be addressed and resolved there, which were still on the table.  Since India did not see any
commitment by Members on those issues, it was very wary of getting into new areas.  Much had
already been said about the recognition of developing countries' concerns, but, from past experience,India was not very encouraged by this, and therefore very wary.  For the moment, the Indian
delegation seriously believed that developing countries in particular would require a flexible approach
when harmonising their national systems with intern ational guidelines, as opposed to a set of binding
obligations.  India believed that progressive trade facilitation and integration was a better option than
one which lead to a loss of policy autonomy and caused additional institutional burdens fordeveloping countries.  Implementation costs were also a very important factor, as India had reiterated
in earlier interventions.  In this context, India furt hermore wished to flag the security concerns which
developing countries, particularly India, also had.  While working out trade facilitation strategies,
these had to be taken into account.  They had to be taken as seriously as those which might drive
developed countries to apply measures that affected the trade facilitation environment in developingcountries' key markets.
4.27 Turning to the US paper submitted in March 2003, the Indian representative noted that it
singled out the review and clarification of GATT Articles V, VIII and X.  In this context, India wished
to know how the US proposed to deal with the iden tification of trade needs and priorities of Members,
in particular those of developing countries and LDCs.  Reference had been made to a more focussed,
responsive and tailored approach.  The one-size-fits-all approach had been rejected and it had been
proposed that Members would implement their commitments based on diagnostic and benchmarking
programmes.  Therefore, her delegation requested the US to elaborate what were the particular
parameters of the diagnostic mechanism that they were referring to.  Furthermore, India wished to
know what kind of alternative approaches they feel could be used as an alternative to dispute
settlement, when enforcing possible commitments .  With respect to the suggestion by the US
regarding differentiation and graduation among developing countries with regard to S&D treatment,
her delegation had serious concerns with regard to such an approach, because it had bearings on other
areas as well.  India strongly opposed that approach and believed that this should not be introduced in
any of the discussions.
4.28 The representative of Chile noted that since his delegation had not had a chance to look at all
the new papers in due detail, reference would be made to the document by Australia only.  To Chile, it
reflected very clearly and precisely the arguments for the launching of negotiations on trade
facilitation in the WTO.  This was a very timely matter. Members were coming to an end of a certain
process of discussion on this topic and begin at a new stage, which might include some more globalstatements, recapping where the CTG stood and where it should be going in the future.  One first
thing to be noted was that, at this stage, there seemed to be consensus amongst almost all, if not all
Members of the WTO with respect to the benefits linked to the concept of trade facilitation.  TheseG/C/M/70
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benefits went beyond the mere trade area and also effected broader areas such as competition and
public policy.  To Chile, it seemed that trade facilitation was a development topic, the benefits were
obvious, particularly in the case of a country like Chile, which was small and highly dependant on
foreign trade.  Therefore, it seemed that, as a concept, the benefits of trade facilitation were not
questioned at all at this stage.  More important, however, was to tackle the concerns of various
developing countries with respect to the difficul ties involved in meeting disciplines of a future
agreement, and their binding character.  In Chile's view, these concerns were legitimate and relevant,
and they should be taken properly into account.  These concerns were not just concerns of other
countries.  Also Chile, as a developing country with its own financial, institutional and even
technological limitations, had concerns with regard  to implementing or meeting disciplines which
might be included in a future trade facilitation agreement.  Therefore, the best approach would be to
ensure that the disciplines for a future agreement were aimed at achieving a continuing process of
facilitating the trade flows.  This process should be guided by certain general basic concepts. TheChilean delegation felt that the reform of the border procedures should be seen as a binding, but
gradual process.  All Members would undertake to be bound to a reform process, but at the pace
determined by their actual resources and capacities.  Excessively prescriptive obligations and an
immediate application had to be avoided to the extent possible.  Therefore, Chile had been interested
in what the EC had said earlier.  They had stated that they shared the same philosophy in entering into
the negotiations, and that technical and financial assistance from developed Members was an essential
aspect of the overall process.  From now on, the topic would be dealt with in another forum, under the
direct leadership of the General Council.  The CT G would be involved as well, but it would be a
separate process.  He concluded by reiterating Chile's enthusiastic support for launching trade
facilitation negotiations at the next Ministerial Conference.
4.29 The representative of Pakistan commented on the statements by Brazil, stating that his
delegation could see the merit in the points that had been made.  All Members realized the importance
of trade facilitation.  One should concentrate on technical assistance and capacity building and then
move towards binding rules, rather than the other way around.  To Pakistan, the three pillars in theJapanese paper revealed that they had tried to work on the three elements simultaneously, and link the
work by the international organisations concerned.  His delegation could see why some countries
pushed for binding rules, since they felt it would expedite trade facilitation work.  This was how the
WTO worked and moreover, unless there was some external momentum, things would not move.  In
the case of his own country, all the problems cu stoms was creating for their own economy had been
realized, but they would not really reform thei r system until they had some commitment from some
donor organisation.  For two years, Pakistan had been doing a lot of trade facilitation work, and it now
realized how things had changed, and how useful it was for the economy.  However, they had
problems and concerns when looking at dispute sett lement.  Referring to the comments by the US, the
EU and some others that trade facilitation should not be seen as a highly complex undertaking, the
representative invited them to answer to some of Pakistan's concerns.  However, at this stage, his
delegation wished to go along with the proposal by China that the WTO should adopt WCOrecommendations as non-binding.  This would meet the objectives of expediting the implementation
of useful conventions.  Normally, the Kyoto Convention might take ten or 15 years to implement, but
perhaps, if the WTO put in some political effort, it would be only three, four or five years.  This
would prepare the ground for a future more active role of the WTO.
4.30 The representative of the Czech Republic noted that the discussions in the CTG on how to
review and, as appropriate, clarify and improve relevant aspects of Article V, VIII and X of the GATT
1994 had emphasized the importance of trade facilitation in the overall picture of multilateral
relations.  It had become clear how important that issue was for Members.  The discussions had also
underlined its importance for business.  It was encouraging that work in the CTG had made a fairdegree of progress.  That work had helped to reach a better understanding of the substance.  No one
had rejected the direct link between trade facilitation and the benefits.  This was also encouraging.
Differences still remained on issues such as what needed to be done after Cancun, whether the aimG/C/M/70
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should be a multilateral solution or one based on autonomous and voluntary principles.  Regarding the
framework for the outcome, all Members recognized that through trade they could raise standards of
living, ensure full employment and a steadily growing volume of real income and effective demand,
develop the full use of resources and expand the production and exchange of goods.  All Members
were in the position of being exporters and importers at the same time, operating in given conditions.
The task in front of Members was to find an appropriate solution for improving the given conditions.In this context, his delegation had systemic doubts regarding proposals to pursue an unilateral and
voluntary approach.  Such an approach had been  called for on the grounds that certain developing
countries had only been able to join trade facilitation initiatives on the regional level because they
operated on a voluntary basis and that subscribing to them therefore preserved each country's policy
space, and did not involve the concern of being brought to dispute settlement.  While this sort of
concern was legitimate and pertinent, it  should not be a general excuse for limiting ambition.  In this
context, his delegation was attracted to the concept presented by the United States regarding somealternatives to dispute settlement in certain cases.  The Czech Republic was of the view that this
concept could be transformed into WTO rules.  His delegation would remain open for discussion on
disciplines for situations where a Member did no t have enough capacity to implement commitments,
in which recourse to dispute settlement would be inappropriate.
4.31 With regard to technical assistance and the educative process, some delegations had
mentioned that the work accomplished so far had been a good educational exercise, and that it should
be continued in that way.  The Czech Republic, from own experience, fully subscribed to the notion
of continuous education.  Thirteen years ago, all state administration staff, including customs officers,
had to study new rules in order to be able to work under the new conditions.  Referring to study in thiscontext meant referring to study from the very beginning, i.e. studying foreign languages.  In this
respect, many developing countries did not have those kinds of problems.  This process had been
facilitated, and successful results had been achieved thanks to the assistance provided by developed
trading partners from, for example, Europe, North America and Japan.  He personally had had the
opportunity to participate in JICA courses in Japan, which focussed on trade promotion activities.  He
remembered that the first question had been about Japan's most important and dynamic sector.  The
participants had suggested different sectors such as electronics, automotive sector, steel or fishery –
all of them being wrong.  Japan's most important and most dynamic sector actually was:  education.
But education was not the only matter developing countries were in need of.  The ability to
accommodate changes was mainly a question of political will.  The Czech Republic was aware of theconcerns regarding different starting points for the implementation of multilateral rules on trade
facilitation.  The way out may be to work on rules that could accommodate the differences in
Members' starting positions while at the same time providing a dynamic mechanism for promoting
continued improvements.  Moreover, he wished to  emphasize the element of promotion, which was
very important since new rules should not be viewed as a burden but as a benefit available to all
Members, particularly when considered in conjunction with relevant programmes of technical
assistance.  To the Czech Republic, the WTO was the obvious home for a set of rules governing allthe above-mentioned aspects of international trade.  As for the submission by Australia, its only very
recent reception had not allowed his delegation to analyse it in depth.  However, it was clear from the
first reading that the paper contained many ideas that were fully supported by the Czech Republic.  It
was a useful and timely submission which focused on the very heart of the issue i.e., the benefits of a
rule-based system.
4.32 The representative of Colombia noted that, as her delegation had already commented on
Japan's non-paper at the previous meeting, which was the basis for Japan's current paper, she would
not refer to the comments already made.  Colombia welcomed the submission by Australia, which, in
their view, reflected very practically and effectively the prevailing situation in the CTG, andexplained the benefits of a binding rules-based system for trade facilitation.  It was not clear how this
could be achieved in another way.  Australia did recognize the shortcomings of developing countries
in terms of capacity building and technical assistance and pointed to the need of having a specialG/C/M/70
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programme in this area, complemented by S&D measures, which would enable them to bring their
realities in line with the commitments arising from any future negotiation.  Columbia had pointed out
on various occasions that these elements were crucial in order to build greater confidence amongst
their authorities with regard to negotiating and building new commitments.  Her delegation believed
that, at present, they did not have enough information in order to develop an action plan, as suggested
by Switzerland.  Columbia supported the idea put forw ard by that delegation with respect to the use of
Canada's document as a basis for initiating work to identify principles and measures to be developed.
Furthermore, her delegation believed that it was important, as stated by Switzerland, to introduce the
remaining documents, for example those of the US and Japan, as a complementary element in order to
develop an action plan.  She expressed her thanks to the EC for their comments in response to the
concerns flagged by various countries with respect to the possible consequences of dispute settlement
system in cases of non-compliance with trade facilitation measures, especially in situations linked to
lacking implementation capacities.  Columbia welcomed the ideas, suggestions and informationprovided by the Communities on how to tackle that very important topic which would certainly play a
major role in future work.  Colombia also supported the ideas expressed by Chile.
4.33 The representative of Zambia noted that Zambia, being a developing country and also
landlocked, was not yet ready for any binding commitments.  His delegation's position was that, for
the moment, what Zambia needed was more capacity building for its people to be better equipped to
understand the implications of binding commitments.  He would like to believe that his friends from
developed countries that had the capacity to negotiate, would understand and appreciate the concerns
of developing countries that did not yet have the capacity to negotiate, and that they would assist them
with capacity building and technical assistance.  It was Zambia's request and desire to be assisted tomove at the same pace.  Like India, Zambia also felt that one should do first things first before going
to new issues.  He expressed his thanks to both the delegations who had spoken in favour of
negotiations and who were ready for binding commitm ents and those who were not yet ready for that,
for the manner in which they had articulated issues with  clarity.  He trusted that in the very near future
and before Cancun, Members shall be able to harmoni se the two different positions in order to ensure
a successful outcome at Cancun.
4.34 The representative of Jamaica noted that trade facilitation figured on the political and
economic agenda of her government.  Her country was committed to implementing measures which in
the long-term would be beneficial to its economy.   Jamaica was autonomously undertaking necessary
reforms to enhance and modernize the trade facilitation practices within the country.  But the key
factor in carrying out the reforms was the pace at which the changes were made.  This pace was
clearly set by the level of development of an economy, reflecting its ability to make and sustainchanges from an infrastructural, human and fina ncial resources point of view.  Therefore, her
delegation was of the opinion that binding rules with prescribed time periods for their implementation
were not the best route to take in order to promote improved trade facilitation practices.  Everybody
would understand that there were constant comp eting demands on a government's budget.  Whilst
technical assistance from bilateral and multilateral donors was welcomed and appreciated, the fact
remained that a significant portion of resources had to be provided by government itself.  A national
assessment conducted Jamaica had found that the first year leading up to the implementation of theCustoms Valuation Agreement had costed the country almost 1 million USD.  And that was the first
year alone.  The cost of beginning with the implementation of three WTO Agreements – Customs
Valuation, TRIPS and SPS – had been estimated to be as much as about 10 million USD.  These costs
included, among other activities, staff training, upgrading equipment, passing legislation and public
education campaigns.  Even though this amount might be small change for some delegations, this wascertainly not the case for small developing economies such as Jamaica.  Trade facilitation required a
multi-sector approach for reform, involving many other agencies and sectors.  The paper by Australia
mentioned some of them.  For this very reason, her country was of the view that binding WTO rules
would not be appropriate in order to effect the multi-sector reform necessary to enhance tradeG/C/M/70
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facilitation measures.  Therefore, her delegation was interested in the proposal by Brazil to work
towards the establishment of non-binding guidelines.  This, complemented with targeted technical co-
operation, would be a more effective and productive means to encourage countries to raise their
standards.
4.35 The representative of Canada recalled that trade facilitation had been added to the WTO
agenda in December 1996, when the Singapore Ministerial Declaration had 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 that area.  Since then, and particularly since the Fourth Ministerial
meeting in Doha, the Council had undertaken the work as directed by Ministers.   In Canada's view,
this brought some very positive and productive results.  Canada continued to believe that Members
could take a degree of satisfaction in what had been accomplished in the various meetings of the CTG
since Doha.  There had been broad agreement in the CTG that effective and efficient clearance ofgoods increased the participation of the national industry in the global market-place, contributed
significantly to the economic competitiveness of nations, that it encouraged investment and the
development of industry, and that it acted to increase the participation of small and medium sized
enterprises in international trade.  A wide range of Members, developing and developed, had voiced
that modern trade practices made it essential for countries to provide simple, predictable and efficientborder procedures for the clearance of goods.  At the same time, these countries were also tackling
increasingly complicated national and international requirements to ensure compliance with national
laws, international agreements and to meet security challenges.  Canada was of the view that
Members could also take a degree of satisfaction that efforts since Singapore had led to a very
positive elevation of trade facilitation to the attention of governments and the private sector acrossmultilateral and regional agencies, with a very direct and positive translation to increase technical
assistance and capacity-building.  The Canadian delegation saw direct evidence of that in the CTG,
where Members had benefitted from very helpful work contributed by, for example, the WCO, the
OECD and others, including the UNECE.  In the cu rrent international business environment, simple,
predictable and cost-effective formalities for cross-border movement of goods had become central toincreasing economic growth through national partic ipation in international trade.  The volumes of
goods that moved across borders had increased exponentially due to changes in the international
trading environment, stemming from the global integration of modern production and delivery
systems as well as from new forms of electronic commerce.  The GATT, and now the WTO, had
taken part in this growth, including through the various principles that were espoused in GATTArticles V, VIII and X.  Canada maintained its position that time had come to look at these Articles,
and build on and improve them to bring Members' past practices up to date with the business
environment of the 21
st century.  Therefore, Canada suggested that the way to best do this was to take
a leadership role in the house, such that they would look to simplifying and standardising border-
related practices in a manner under which Members could offer their business communities enhanced
trade facilitation combined with efficient and effective border controls.
4.36 The Canadian delegation was cognisant of the many discussions that had taken place in the
CTG and in the many bilateral meetings Members had conducted among themselves, particularly in
the last year.  Those discussions had echoed th e Doha mandate, where many Members had offered
suggestions on needs and priorities.  In the view of the Canadian delegation, very productive
discussions had taken place on the importance of technical assistance and capacity building and, morepractically, various suggestions of how to best integrate technical assistance and capacity-building
into the work had been heard.  Canada was confident that Members could look to practical means
under which a variety of multilateral and regional agencies might be involved to add their weight in
support of the wider aims of trade facilitation in the multilateral system.  Over the past few months,
and perhaps more importantly, even that afternoon, a number of interesting discussions andsuggestions had been heard and a variety of Members had expressed their willingness to be creative,
to consider possible new approaches that seek to negotiate practical solutions to potential problems.
Some Members had suggested that consideration should be given to possible models of mediation,G/C/M/70
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conciliation or even arbitration when it comes to dispute settlement.  Moreover, suggestions of
suitable implementation periods matched by tailored technical assistance had been made.  The
Canadian delegation was convinced of Members' willingness to think "out of the box".  This was a
very viable manner in which to proceed, and there was every reason to be optimistic here.
4.37 Turning to the statement made by Costa Rica, the Canadian representative noted that her
delegation certainly wished to echo the comment that the Canada-Cost Rica Free Trade Agreement,
especially the chapter on trade facilitation, stood as a good example of trade facilitation.  In particular,
it demonstrated that developing and developed countries could undertake facilitative efforts together
to the mutual benefit of their trading communities.   In addition to the text of the Free Trade
Agreement that would be available on the WTO web-site, the text of the FTA would be easily
downloadable from Canada's own departmental web-site.  In this context, she offered to provide
interested Members with the address.  As for the road ahead, post-Cancun, Canada saw it as one thatheld promise for governments, for traders, and for the multilateral trading community.  While this
journey would be no doubt be challenging, Canada sa w significant benefits for all players.  According
to an ancient Chinese proverb, a journey of 1,000 leagues began with one step.  Canada was prepared
to begin this journey by taking the first step forward.
4.38 The representative of New Zealand commented on  some points that flew from the Australian
paper and the surrounding discussions.  Clearly the Australian paper was an attempt to spell out the
advantages of rules in the area of trade facilitation, and an attempt to show that benefits should accrue
to both sides.  Multilateral rules would provide a point of focus on a framework for resources and
coordination of effort, and of course had to try to avoid piecemeal and fragmented efforts and
approaches in this area.  The issue of regional appr oaches was related to this point.  To New Zealand,
regional approaches had certainly been very valuable.  This was a systemic position that the country
took across all trading areas.  It was very active at the regional level and would continue to be so, but
at the end of the day, the important thing for them was not to deny the primacy of the multilateral
trading system.  New Zealand always came back and tried to remember the role that the multilateral
trading system could play in providing guiding principles and objectives, to help ensure that regionalinitiatives were coherent with themselves and with other regional initiatives, and that the benefits of
these actions taken at the regional level could accrue to everybody across the multilateral trading
system.  Another generic position of New Zealand in the multilateral trading system was the strong
value they placed on a rules-based system – security, predictability, a degree of harmonization.  They
were convinced that these benefits applied equally to trade facilitation as they did to other areas,where they already had more developed thoughts.  In talking about the development of rules in this
area, Australia had made the important point that with respect to implementation capabilities, the
development of rules should explicitly take into account the concerns and needs of developing
countries.  In theory, this was what should have happened in the past with the development of WTO
rules in the Uruguay Round and before.  However, New Zealand had learned through the raising of
the S&D and implementation agendas over the last few years that it had not always been successfully
done, particularly not in an operational manner.  New Zealand had learned from those debates onimplementation and S&D treatment that Members had a chance now to try and to be more creative
and more flexible in coming up with more effective and operational approaches, to assist with the
implementation of any new rules or of existing rules.  In New Zealand's view, a start had been made
in the CTG process by thinking of some of these creative ideas, as, for example, the ones introduced
by the United States on dispute settlement.  New Zealand hoped that there would be a chance tocontinue this work through advancing negotiations on trade facilitation.
4.39 The concerns of developing countries about their ability to implement new rules were of
course heard.  In New Zealand's view, this in it self should not preclude the development of trade
facilitation disciplines that were mutually beneficial to everybody.  All Members had a self-interest inmaking sure that rules were implementable by each and every Member.  When developing new rulesG/C/M/70
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it would be important to take into account the implementation ability of developing countries,
knowing this would of course influence the substantive ambition of the new rules, and would
moderate and inform the development through a process of negotiation.  But New Zealand still felt
that, in order for full benefits to be felt across th e Membership, there had to be some level of reach or
stretch, some aspiration towards improved and higher benchmarks that presently existed under the
three Articles that had been discussed in the CTG, and of course at national and regional levels.  Thechallenge would be to find creative means to help countries bridge that gap. It was the task of the
negotiating partners to assist in a similar way.
4.40 Turning to the comments made by Brazil, the New Zealand representative thanked the
Brazilian delegation for what he considered a very useful conceptual framework suggested.  While it
was not consistent with New Zealand's own pr eference for binding rules, the way Brazil had
suggested the need for targets to aim for, was very helpful.  Technical assistance had to be looked at
to try to meet these guidelines and to ensure that  they were implementable.  New Zealand believed
that, with binding guidelines, Members were more likely to meet and close that gap and to allow
countries to implement those new rules.  As for autonomous measures or autonomous liberalisation,
all Members realized that countries were undertaking trade facilitation efforts at their national level,
just like some countries were undertaking tariff reductions autonomously.  Economic theory taughtthat it was in their self-interest, without the need for negotiations.  In theory, this led to the conclusion
that an organisation such as the WTO was not needed.  In reality, this was not the case.  All Members
had to negotiate with each other across their own national interests in order to make these
liberalisation initiatives actually happen.  It was very important to keep that reality in mind. With
respect to the security issue, which had been mentioned by several delegations, New Zealand was ofthe view that trade facilitation should assist countries in their pursuit of security issues at the border.
It should provide a common framework and principles for helping national authorities to pursue
diligent objectives, through promoting closer customs cooperation and capacity building.
4.41 The representative of Indonesia underlined that, like others, Indonesia did not question the
benefits of trade facilitation.  Trade facilitation would create and improve growth of trade and
services, furthermore investment, and it would lead to  transparency and simplified procedures.  At the
same time, many developing countries had concerns with respect to implementation and dispute
settlement.  There was a gap between the recognition of the importance of trade facilitation, and the
way to reach that objective.  Indonesia noted that since the last meeting, the discussion in the CTGhad shifted from the substance to more procedural issues.  Here, his delegation saw that many issues
concerning Articles V, VIII and X GATT were still not clarified.  This was of course a complex issue,
and Members should first have a specific understanding of each element before starting negotiations.
Without it, negotiations could not start.  His delegation felt that the discussion had jumped to the next
step, while leaving some unsolved issues behind.  Turning to the Japanese paper, he noted that, with
respect to the procedural aspects, the three pillar approach was quite interesting.  For Indonesia, the
commitment in the action programme, to, for example, capacity building and rules setting, such as in
the WCO and FTA, was already a huge commitment.  If this approach was taken as a comprehensive
programme, the result would be quite positive for all Members.  Then, one should wait until Members
were ready to make commitments in the WTO.  In Indonesia's view, all Members should begin with
national, regional and multilateral programmes outside the WTO for the moment.  Then, after seeing
the results, and if there was a need for WTO rules, Members could discuss the next step.  With respectto the Australian paper, Indonesia took note of the benefits of a binding system.  At the same time, it
was still not clear to his delegation why non-binding rules were not suitable.  In this context,
Indonesia wished to receive further explanation.  His delegation hoped that a mutual, democratic,
creative and flexible agreement could be reached before Cancun, in order to advance work on this
subject.G/C/M/70
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4.42 The representative of Uruguay noted that, while listening very carefully to what had been said
that afternoon, it seemed to him that the expressed positions were well known to all Members.
Everybody acknowledged the importance and the qualities of trade facilitation, but at the same time,
certain doubts and questions were raised when it came to the nitty-gritty of the discussion, especially
when looking at Members' different levels of deve lopment.  This had been mentioned more than once.
Uruguay wished to express its agreement on the point that had been made by other delegations thattrade facilitation could not remain restricted to a question of standards, rules etc.  If the issue of
market access was not solved, the issue of trade facilitation would become rather limited regarding its
positive results.  That was why it was very intimately associated with the question of market access.
Another preliminary comment Uruguay wanted to make at that stage was that, by listening to the
various statements made, it seemed that Members were already at the negotiation stage.  Those
positions moved along too rapidly, since it was fo r the ministers in Cancun to decide how Members
were going to proceed on that matter.  The CTG was not a negotiation forum. Rather, it was a placefor analysing the topic of trade facilitation, focusing on GATT Articles V, VIII and X and the
possibilities of capacity building for developing countries in this area.  The various references to
things like action plans or dispute settlement, went well beyond the scope of the work of the Council,
which was a study group, rather than a negotiating group.  The Chairman of the General Council,
together with the friends of the Chair, was planning to hold consultations on the four so-calledSingapore issues, one of them being trade facilitation.  With that in mind, his delegation wished to
know what the Chairman thought about the particular  issue of trade facilitatio n within that particular
scope, taking into account the fact that these informal consultations would be starting very soon.
What was the Chairman's view on that?  A response to that question would help his delegation
prepare for their future work.
4.43 The representative of Norway stressed her conviction that improved trade facilitation
measures benefitted everyone, developed as well as developing countries, since they enhanced trade
internationally and regionally, which was necessary for economic development.  A rules-based system
was a necessary platform in this development, as it provided, among other things, predictability,consistency and transparency.  In the future, Members needed to discuss, and also agree upon special
and differential treatment for developing countries.  As mentioned by New Zealand, this was a
difficult process, and a lot a creative thinking was needed to actually come up with a good agreement
on this matter.  In this context, the thoughts pr esented by Switzerland and by the EC were very
practical.  It was indeed the direction, and not th e end-point, that Members should look at.  Norway
wished to thank Japan for their updated paper, which was a very useful one, and Australia for their
contribution.  While her capital had only been able to take a brief look at it in the morning, it had
already noted that it contained a lot of points Norw ay could agree to.  She also expressed her thanks to
the Secretariat for its useful compilation and all the work put into it.
4.44 The representative of Malaysia thanked Japan, Australia and the Secretariat for their papers.
Having looked through the Australian paper, he had noticed that it was a very clear synthesis of points
that had been discussed over time.  It made certain conclusions which, while not always shared byMalaysia, were relatively accurate.  Malaysia had several points it wanted to discuss.  The first one
was that, while no one disagreed that trade facilitation was beneficial for all Members, it was too
simplistic to say that trade facilitation in itself wo uld help to increase trade and investment.  There
could be some spill-over effect, but it was not the factor that would particularly help in that respect.
That link was tenuous at best.  There were other factors that would contribute more towardsincreasing trade and investment.  One of them had been referred to by Uruguay when noting that there
should be more market access, especially in areas that had not seen market access ever since the
inception of the GATT, namely in agriculture.  There were also other industrial products of interest to
developing countries where they faced high tariffs.  Even if one had a good trade facilitation regime, it
was still not possible to export one’s agriculture products, which was the factor that would reallyG/C/M/70
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increase trade.  One should put things into perspe ctive and not just make a simplistic argument that
good trade facilitation would automatically increase trade.
4.45 The second point was actually a question, a question Malaysia hoped could spur some
discussion.  Had the case really been made for new or more strengthened rules?  Members had had
some discussions over the last year about the three articles that were stated in the Doha mandate.  Thediscussions had shown that perhaps the case had not really been made as to whether one needed
strengthened rules.  There had been a lot of arguments that the existing rules were adequate.  There
was also the question what were the actual problems that countries faced in terms of trade facilitation.
One had heard some general remarks about goods not being able to move a little bit faster than people
would hope to.  Perhaps one should have a look at  some of the rules and see whether those rules
would apply to those kind of situations.  This had no t really been done.  And if one said that the rules
were not adequate, there was the question how one wanted to use those rules.  Article X, for example,was actually a fairly comprehensive rule.  If someone felt that some countries were not transparent
about it, then one needed to test as to whether th at current rule in Article X still had its validity.
Malaysia still believed that this was the case.  Then there was always the question whether the rules
had to be of a non-discriminatory nature, whether everybody had to abide by them.  If one had certain
procedures that discriminated between one country against the other, there was the possibility ofdispute settlement.  That was what the whol e WTO system was about.  Non-discrimination
underpinned everything.  If Malaysia discriminated against another Member, that Member could bring
Malaysia to the DSU, and would win the case.  He therefore did not understand the question about
non-discrimination.  The non-discrimination require ment was already there, it was an enshrined
principle in the WTO.  In its introduction, the Australian paper summed up fairly adequately theconcerns of those who were not really yet in favour of trade facilitation rules, or any new rules.  But
there were even more than just those underlined by Australia in their three bullet points in the
introduction part of their paper.  One would also have  to look at other areas in terms of the concerns.
It was really the fear of the unknown.  Malaysia did not know the parameters the negotiations if
negotiations were to take place after Cancun.  The matrix prepared by Canada at the last meeting wasa very helpful guide.  Looking at the part that talked about the scope of measures, and the kind of
measures that Members may want to look at, and th e kind of rules that Members may want to develop
based on those measures, it caused concern because even in the matrix showed the amount of
measures that one had to deal with in the future.  And that matrix was not even the end of the story, it
was a non-exhaustive list of measures.  So, Malaysia did not know what would eventually come out inpossible negotiations.  Malaysia had learnt from lessons of the past, from success and failures.  There
had been certain negotiations in the past that had moved from one objective to a completely different
one.  Malaysia was not saying that this would be the case for trade facilitation, but nobody knew.
Negotiations were dynamic in nature and things did change as one moved along.
4.46 A third point was that Members were actually overburdening the agenda.  Meeting rooms
were often half empty because many developing countries were just not able to service them.  Onehad to give some thought to that.  In addition, as also highlighted by other Members, there were still
many other unsolved trade facilitation matters, such as rules of origin etc.  This was not a comfortable
situation to be in.  Another point his delegation would like to stress was that perhaps one was jumping
the gun, at least in this particular meeting.  The point raised by Indonesia that one was looking at
procedures as if Members were ready to negotiate, while the mandate actually only called for aclarification process, was very accurate.  As far as the clarification process was concerned, Members
had not done enough.  Members really had to get back on track in terms of what they were supposed
to do. There was still a need for more clarification on the issues that had been raised.  When talking
about possible negotiations, one still had to look into the question of the explicit consensus.  It was
certainly not a done deal.  There were many other factors that needed to be taken into account.Leaving aside all the other concerns that had been ra ised, if one just looked into the paper and listened
to what the proponents were looking for in terms of an harmonised approach to trade facilitation, that
in itself raised a number of questions.  He took the point by the EC that they were looking at certainG/C/M/70
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objectives, and that it was not required for every Member to do certain things within a certain time,
but the Commission had still stated that every Member had to somehow reach that objective at some
point in time.  So it was a harmonised approach, it was a question of when to reach that time, and he
did not believe if Members were to be in negotiations, the standards would be low.  Rather, they
would be high since most of the developed countries,  if not all, had very high standards, and there
were some developing countries who had also very high standards.  So one would have to reach acertain point of that particular standard.  That was how Malaysia looked at it.  He was trying to derive
some comfort from what the Commission had said but he still believed that one was looking at a
harmonised approach of measures that were supposed to help the turn around of goods.
4.47 Another issue was the question of compliance.  There was the feeling that just because it was
on a voluntary basis, people would not comply with trade facilitation measures, which was why one
needed rules, needed the carrot and stick approach.  One had to listen to the fears of quite a number ofdeveloping countries, that binding rules would cause a lot of problems.  If one looked at it properly,
the question had never been answered why one needed binding rules.  Many developing countries had
done fairly well in terms of trade facilitation, and they had done so in the absence of binding rules.
One did not need those binding rules, because those countries believed that trade facilitation was good
for them, which is why they did it, and they did it because they could afford to do it.  This was alsothe case for Malaysia.  Malaysia may not be that rich, but his delegation took the loans, and paid them
back, it tried to improve its trade facilitation measures, and hoped this was on par with its neighbours
in the region.  Malaysia did not see the link that if there were binding rules, people would comply
with trade facilitation measures, and if there were no binding rules, people would not do it.  Everyone
said that trade facilitation was good.
4.48 The Australian paper listed down the countries that had notified the Revised WCO Kyoto
Convention.  Members had heard that only 14 contracting parties had acceded to this Convention.
Why was that so?   Could the reason be that the principles, the standards that had been set, were pretty
high, so that many countries could not accept them?  Assuming that one wanted to have binding rules,
and that they were somehow linked to, for example, the Kyoto protocol, then it was really difficult.
There were only very few countries who were able to ratify since they were not able to implement
those standards and principles.  This would put a lot of countries in a very difficult position, because
if one had to comply with binding rules, and thes e binding rules were somehow linked to standards
based on that particular multilateral instrument, this would cause a lot of concern.  Malaysia thereforesaw a concern there.
4.49 The Japanese paper talked about several initiatives, including non binding instruments, while
mentioning that such non-binding initiatives were  not enough.  The fact was however, that in fora
such as APEC or ASEM, which operated on a voluntary basis, had achieved quite a lot in terms of
trade facilitation.  And why had Malaysia decided to join those groupings?  It had joined because it
felt that it was one way to improve its situation.  Secondly, Malaysia joined because was on avoluntary basis, and Malaysia knew that if it could not do so, it would not be punished.  He did not
see the rationale of the argument that regional initiatives were not enough.  They were enough for
Malaysia.  Malaysia was not going to be pressured just because somebody said something was good
for them, and then it had to comply with it.  That  would be counter-productive.  Malaysia still needed
to test the actual situation against the principles or measures that people wanted it to undertake atsome point in time.
4.50 With respect to special and differential treatment and capacity building, the paper by the
WCO about capacity building in customs showed that ca pacity building in itself had a lot of problems.
It was an enormous problem because there was a lot of money involved, and it was not reallysomething that could be done in a light-mannered fashion.  Could one have a guarantee from the
proponents that the money would be available for capacity building, given the enormity of the
problem that had been cited in the WCO paper?  When talking about special and differentialG/C/M/70
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treatment, reference had been made to the fact it would not be able to have a one-size-fits-all
approach.  But the paper talked about some differential treatment for only certain developing
countries.  They talked for example of countries that had a lower level of development, which was
subjective.  It created a division Members should try to avoid.  Malaysia had mentioned that at the last
meeting with respect to the US pape r.  The last thing Members needed if they were to negotiate were
rules with some kind of differentiated treatment for certain developing countries.  As much as it wassaid that it was not a graduation, it would in fact be a de facto graduation.  There would be certain
countries that would qualify for special and differential treatment while others would not.  Where
were Members right now?   Currently, the Membership was divided.  There was a group that said no
to negotiations, and another which supported negotiations, but with a number of caveats, such as no
binding rules, no link to dispute settlement etc.  And then, there were the proponents, that were of the
view that there should be negotiations with binding rules and a linkage to the DSU, or a variation of
such a linkage.  But by the end of the day, Members would still be tied to the DSU system.  Peoplehad talked about creative thinking. Members needed to sit down further and discuss this.  Brazil had
come up with a novel approach.  China had also pointed out to some kind of alternative approach.
Members had heard earlier approaches, not on this particular issue, but on the Singapore issues, such
as an opt-in opt-out approach.  He was not suggesting this, but merely wanted to note that this was an
idea that had been floated. Members had to take into account that there were difficulties.  It was not aforegone conclusion that negotiations would have to start.  There were many issues on the table that
still had to be clarified and resolved.
4.51 The representative of the Philippines noted that when preparing for the current meeting she
had asked herself where Members were with regards to the Doha mandate for the period until the
Fifth Ministerial Conference.  The mandate called for Members to review and, as appropriate clarifyand improve relevant aspects of GATT Articles V, VIII and X.  She had heard a rather  disconcerting
note the other day that that was not a complex undertaking.  For the Philippines, it was very much a
complex undertaking.  It was also uncomfortable to hear that remark in the sense that it gave the
impression that Members were to decide in this particular meeting whether to take a decision by
explicit concensus that negotiations will take place after the Fifth Ministerial Conference.  That wasnot what Members were here for.  The Philippines could agree that there was consensus that trade
facilitation was good for all Members, which was why developing countries would undertake
unilateral and autonomous measures with technical assistance from bilateral, regional and multilateral
donors.  The technical assistance that had been provided so far had not gone to waste.  The
Philippines continued to  receive technical assistance from the same donors, for which they were verygrateful.
4.52 For the Philippines, the issue was whether they were ready to turn the trade facilitation
measures they had adopted autonomously into a set of rules and obligations with all their
implications.  It would come as no surprise to anyone  to hear that, at this stage, the Philippines still
had a lot of catching up to do to ensure efficient compliance with its Uruguay Round obligations, such
as in the area of customs valuation, which was trade facilitating.  The experience from the UruguayRound had shown that the learning curve can be quite  slow.  Also, there was still unfinished business
in the area of rules of origin, which was also going to facilitate trade.  If there was that unfinished
business and the difficulties in complying, it was because many developing countries felt
overburdened with all the things they had on their plate.  Therefore, the Philippines were of the view
that they should continue to undertake trade facilitation measures autonomously.  The Philippineshoped that technical assistance would continue until they had reached a level of comfort that they
were ready to turn those autonomous measures into a set of rules and disciplines.  That was why she
agreed with the proposal by Brazil to start with non-binding guidelines to increase the level of
comfort, and to transform those non-binding guidelines into a set of rules and disciplines, if Members
were prepared to do so.  That was in line with what Canada had  said about "thinking out of the box".That would be very innovative.  Members should continue to think out of the box, and perhaps, out ofG/C/M/70
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the WTO box.   The contribution made by Canada in their paper G/C/W/448 on some principles could
be a starter for those non-binding guidelines, and could be complemented by perhaps two of the three
pillars outlined in Japan's paper G/C/W/465.
4.53 The representative of Thailand  noted that in the preceeding part of the current meeting,
Members had commented on different proposals submitted by various Members as well as restated
their positions on this issue.  Thailand did not wish to repeat its position, especially on issues such as
binding rules, the fear of dispute settlement, special and differential treatment, the need of technical
assistance and capacity building and different approaches to strengthen trade facilitation.  However,
the Thai delegation would like to reiterate that trade facilitation was a very important issue and would
like to continue to discuss this issue according to the Doha mandate to review, clarify and improve
relevant aspects of Article V, VIII and X, to identify the needs and priorities of Members, especially
developing and least developed countries and to ensure technical assistance and support for capacitybuilding in this area.  The negotiations would take place after the Fifth Session of the Ministerial
Conference on the basis of a decision to be taken on the modalities of negotiations.  Thailand had
noted with interest the proposal made by China to prepare a questionnaire/checklist for Members to
respond on the current practices on Trade Facilitation under GATT Articles V, VIII and X.  This
would assist Members in meeting their tasks and help them understand the current situation, as well asthe real need to strengthen the rules and procedures on this issue.  The outcome of this exercise may
provide a basis for further work and negotiation in this area.
4.54 Thailand also recognized the importance of other multilateral organization's activities in the
area of trade facilitation, such as WCO, IMO and World Bank, that would strengthen the standard oftrade facilitation measures, rules and procedures.  However, Thailand would like to reiterate that
Members' exercise was limited to the area of customs only.  His delegation further shared the view
expressed by Uruguay and Malaysia, that trade facilitation was also associated with market access,
which was very important for both developing and least-developed country Members.
4.55 The representative of Mexico noted that the written contributions by Australia, Japan and the
Secretariat had enriched the already extensive input of information on the issue of trade facilitation.
Throughout the exercise, which had lasted for almost a year, elements had been identified which gave
a clear idea of the interests and concerns of Members.  It had occurred thanks to the contributions,
both oral and  written, by Members and the Secretariat, which had provided useful input for thediscussions on this matter.  Mexico believed that the document recently submitted by Canada, listing
the main trade facilitation principles;  the document presented by the United States on ways of
exploring an integrated and comprehensive approach to special and differential treatment, including a
more flexible dispute settlement mechanism;  and the documents submitted by Australia and Japan,
highlighting the importance of binding rules on trade facilitation within the WTO framework,
contained elements which would be useful for future discussions.  As his delegation had already
stated on previous occasions, if ministers decided to launch negotiations on trade facilitation inCancun, full consideration should be given to the concerns of the countries that did not have an
adequate infrastructure or sufficient human and budgetary resources.  On no account should Members
loose sight of the important role of customs in speeding up foreign trade transactions and in
safeguarding legitimate national interests such as security and the prevention of smuggling.  He
concluded by expressing Mexico's support for the statements made by the European Union andColombia.
4.56 The representative of the United States noted that she was glad to hear that APEC members
recalled the benefits of trade facilitation.  There had been a very broad and positive discussion of
those benefits.  She was convinced that both APEC members and other delegations could understandand see the benefits of not only having their neighbours undertake trade facilitation measures, but also
some of each Member's major export markets outside their region.  Turning to the point raised by one
delegation about dispute settlement, that instead of engaging in negotiations, the United States shouldG/C/M/70
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bring a case under GATT Article X, she noted that if there was a positive momentum and a broad
support for negotiation, and all Members could agree on better rules that could bring them all to a
situation in which they had an easier trading system for all traders, that would be much more
beneficial and efficient than bringing a dispute settlement case.  The United States therefore would
prefer to engage in negotiations.  The United States appreciated some of the concerns that had been
raised regarding other areas of the DDA.  The US also had an interest in market access.  However,this did not mean that it made sense to say they would not want to engage in that negotiation.  The US
delegation appreciated the concerns and fears raised that morning.  Some of those points would
actually be very good meat for a negotiation.  Those things could all be discussed fruitfully in a
consensus based organisation.
4.57 Turning to the questions posed by India, she reminded Members that the United States had
been asked for some clarifications regarding their March paper on S&D treatment.  India had askedthem to explain how they contemplated identifying the needs and priorities of developing countries,
and, moreover, what kind of parameters for a diagnostic mechanism they had in mind for providing an
assessment of capacity.  Furthermore, there had been a question about dispute settlement. In response
to those questions, she reiterated that, as known by Members, the US paper had not been intended as a
negotiating proposal, but simply laid out elements that, in their opinion, needed to be addressed toface the basic challenges in trade facilitation at the multilateral level.  There were challenges that
arose from countries' different situations.  She did not want to use the word "starting-point" because it
suggested that there was a single trajectory to facilitation or modernisation.  In fact, she had recently
heard a trade official of a group of developed Members say that some ports in developing country
Members were the envy of customs authorities in his own member state.  That illustrated clearly thatsituations among countries were very different, not even based on whether they were developed or
developing countries, but just on the way things had occurred in the last 50 years or more.  To address
the matter of different situations, Members were guided by two principles.  First, no developing
country should be required to comply with WTO rules until it had the capacity to do so.  The second
principle, not being a WTO principle, but one of the development agencies and driven by developedand developing countries alike, was that assistance had to be demand-driven.  In recent experience
however, demand-driven assistance had produced piecemeal and incoherent results.  Therefore, as the
Doha mandate already contemplated, a parallel pr ocess could be useful by which, while Members
discussed ways to clarify and improve WTO trade facilitation principles, developing countries could
identify their own difficulties and lack of capacity to meet what might be a more precise standard thanone which might be under consideration during the negotiations.  The US was of the view that the task
of ensuring that the challenges faced by developing country Members were squarely addressed was as
compelling as the task of forging provisions that represented improvements and clarifications to the
GATT Articles.  For that reason, the US had advocated work concurrent with and integrated into the
negotiations related to technical assistance and capacity building, that would be included in the
development and establishment of an agreement on trade facilitation.  Coming back to the specific
question posed by India, she noted that the US had not had any particular ideas on how precisely onemight identify the needs and priorities, or what the parameters of the mechanism would be, but that in
their view, some of those ideas that had been put forward in the CTG, such as questionnaires or
check-lists used by international assistance agencies might be helpful.  Obviously, India's thoughts on
this, based on its own experiences, would be of interest to all Members in a negotiation.
4.58 As for dispute settlement, the US paper had asked whether it might be useful to have some
kind of consultation or mediation process for disputes that arose because of non-compliance resulting
from an individual Member's capacity limitations.  In the US view, it would be a shame to undergo a
full formal dispute settlement procedure, only to find out that another Member's problem in
implementing trade facilitation reforms simply reflected a failure of international assistance agenciesto provide the necessary help at the right time and place.  Under such circumstances, a mediation or
conciliation process could probably resolve the problem to both Members' absolute satisfaction in a
much more predictable and timely manner. The US had no further details in mind, but theyG/C/M/70
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appreciated that others had found it to be of interest.  The US delegation hoped to hear the views of
India and others in the future.
4.59 The representative of Brazil noted that in preparing for the meeting he had not expected such
a rich and constructive debate as Members were actually having, taking into account the stage of
work.  He was very gratified that Members had had such a useful discussion.  He wished to comeback with some comments on what he perceived to be one of the key issues underlying the whole
debate since the day before, namely the nature of any rules or any understanding that might arise in
the area of trade facilitation.  Before doing that, he wished to first recognize the very useful statement
that had been made by the delegate from Uruguay, reminding Members very clearly of where they
were in their current work programme.  Members should not try to advance beyond their mandate at
this stage.  He further associated himself with comments made by India and the Philippines on a
certain difficulty they had in understanding the importance some delegations attached to tradefacilitation in the CTG, and the lack of interest the same delegations had when discussing trade
facilitation issues in other fora, such as those dealing with rules of origin and customs valuation.
4.60 With respect to the central point of the nature of the potential outcome, Brazil had taken note
of the statements regarding the fact that there were  three other international organisations which could
perhaps be better placed  to deal with certain aspects of a trade facilitation agenda, due to the fact that
they had a more specialized mandate.  When putting this fact side by side with an insistence on
bringing those issues to the WTO and to the dispute settlement mechanism through binding rules,
Brazil could not help but be wary of the dire ction Members were going.  Members had heard
arguments that there was a need for binding rules in order to ensure an equivalent level of rights andobligations among all Members.  Unfortunately, that was not something that practice would bear out.
The example of trade in agricultural products showed that binding rules can be perpetuating a
situation of gross imbalance among Members.  It showed that binding rules were not an automatic
solution.  From Brazil's point of view, the bottom lin e in the debate of the day before had been that
there was a fundamental divergence of perspectives in the CTG.  Some Members regarded bindingrules as essential, while another group of Members felt that they were not yet in the position to
undertake such commitments at this stage.  Brazil regretted the fact that many delegations presented
this as an either/or situation.  He feared that such a divisive interpretation of the situation could lead to
a repetition of the very frustrating debate Members had the morning before on another agenda item.
He recalled that under that item, an opinion was put forward which, in the case of a divergence ofviews among Members on whether to continue discussions on one item, recommended that the issue
itself should be put aside permanently.  This point was made despite a very clear mandate for the CTG
to review and, as appropriate, propose to the Ministerial Conference amendments to its text.  That
mandate was not very different from the mandate regarding trade facilitation, which directed
Members to "review and as appropriate, clarify and improve relevant aspects of Articles V, VIII and
X of the GATT …"  It was not necessary to point out the logical consequences for the work in the
CTG if that opinion were to prevail.  That general evaluation had been the basis for Brazil'ssuggestion the day before, which had been made in a very tentative manner, and with a very
constructive spirit to find an intermediary path on which to move forward.  His delegation took note
with gratitude of the expressions of support and the positive reactions to this proposal in the Council.
In Brazil's view, such an approach would allow all Members to progress in their trade facilitation
efforts in an agreed path, in an agreed direction with common targets, without fear of retaliatorymeasures in case they had difficulties in implemen ting such measures within prescribed deadlines.  It
would allow for positive movement forward until all Members were comfortable with the concept of
transforming these targets, or these guidelines, into binding commitments.
4.61 The representative of Canada remarked that her delegation had noted Members' differing
perspectives on the nature of commitments, whether they should be binding or non-binding.  Canada's
views on this issue were well-known:  they saw considerable promise of building on the traditional
role of the WTO as the primary rules-based organisation.  There were many arguments forG/C/M/70
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commitments. WTO commitments added impetus to dome stic reforms, locked them in and made them
irreversible to the benefit of all players and, if entered into under a single undertaking, they promoted
a balance of rights and obligations overall, thereby better allowing governments to make the necessary
political commitments in areas that were more politically challenging.  Multilateral binding rules that
were based on some core principles underpinning trade facilitation, such as transparency, consistency
and predictability, non–discrimination, simplification and avoidance of unnecessary restrictiveness,due process, etc. would in fact give impetus to ensuring the consistency required for tailoring
facilitation commitments to the needs, priorities and capacities of all countries concerned at any level.
Perhaps most of all, it was Canada's very own experience in the area of trade facilitation that lead
them to assert that commitments should lie at the very heart of Members' work.  As many in room
were aware, Canada had been active in a wide variety of fora in promoting the benefits of trade
facilitation.  Its wide and very extensive experience in these fora had been that only a top-down
commitment, both to rules and reforms, delivered the necessary benefits for all concerned,governments, traders and the wider trading community.  Simply speaking, bottom-up approaches,
those that were non-binding in nature, simply did not deliver the goods.  Referring to statements on
dispute settlement made the day before, Canada believed that the very useful Australian paper tackled
many of the questions posed.  Various Members had spoken about this issue and provided concrete
examples of how Members might, in a creative way, address the ranges of concerns raised.  Canadasimply wished to remind all parties that the negotiation process itself provided the best opportunity to
address these concerns and to promote the necessary balance of rights and obligations.
4.62 The representative of Australia thanked Members for their comments on the Australian paper.
While there was a divergence of views, it had certainly been very constructive to see the robust debate
which had taken place.  He wished to comment on some of the matters raised, and perhaps try to
address some of the concerns that had been expres sed.  He certainly did not want to cross over ground
that had already been covered by the US and the EC.  In the context of the issue of dispute settlement
and S&D treatment, Australia had just taken up the suggestions that had been made by the US.  The
EC's outline and the alternative approach of providing a layer between the DSU and developingeconomies on matters dealing with trade facilitation, expressed those views very well.  One of the
issues raised that went to the heart of a number of concerns was the potential marginalization of
developing economies and their potential insufficiency to meet commitments.  In their December
paper, Australia had noted that an integral and essential part of implementing customs reform and
modernisation, a process described by GATT Articles V, VIII and X, would be a targeteddevelopment process for the benefit of all WTO Members.  It was useful to remind Members that
there were analytical tools available to make that process a reality.  There was the WCO's diagnostic
framework, which was referred to in the capacity-bu ilding strategy that had been distributed the day
before.  Auditable outcomes were being put into place by the World Bank for its projects.  One of the
documents that were listed in the very excellent bibliography produced by the Secretariat referred to a
specific World Bank study, "Trade and Transport Facilitation:  An Audit Methodology".  This was a
document that put out very clear guidelines for all aspects of trade and transport, not just customs.  Itwas fair to say that those instruments only were a sa mple of the tools available, and that they would
become the basis for targeted specific capacity-building and technical assistance measures.
4.63 One of the  aspects that needed to be factored into that process was a note of reality that, as
mentioned by Jamaica, customs reform and modernization did actually require resources, financial,personal and other.  That obviously had to be a part of the capacity building and technical assistance
process.  Equally, customs-related technical assistance had to be regarded as a part of a wider process
of economic development.  That became more than evident from the EC document that had been
circulated in December 2002 and updated in March 2003.  A number of delegations had expressed
concerns about capacity-building and a reference to benchmark parameters and the issue of whowould set them had been made.  He was convinced that there was a certain amount of
misunderstanding in that regard.  A number of comments had been made about the complementarity
of the work of the WCO and the WTO.  China had put that very well in noting that regarding the issueG/C/M/70
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of raising or identifying Members' trade facilitation needs, Members could go back to work that had
already been put in place by the WCO and draw on it.   More useful work had been done in APEC, and
a checklist had been produced within APEC whic h drew on some of the principles that had been
discussed in the Canadian compilation.  It was fair to say that the WCO would be setting parameters
for customs development tasks.  Those issues, such as release times for goods at import or the
provision of transparent advice to business, had been discussed the day before.  In Australia's view,the WCO was obviously the proper place for those parameters to be set.  That led to the stimulating
suggestion made by Switzerland about making best use of the first pillar that had been mentioned in
the Japanese paper, the action plan, in addition to taking input from the US paper on S&D dating from
December 2002, and to applying the descriptive illustrations from Canada's high-level core principles.
That process lead to looking at a cluster process that could be developed with like economies and to
looking at it in a targeted capacity building a nd technical assistance context.  If Members were
looking for a road map in this context, a useful summary was provided in the OECD's paper that had
been given to Members the day before.
4.64 A number of delegates had expressed that Members had strayed from their path and ventured
into dangerous and uncharted waters of policy development.  He had only been associated with the
CTG process since late last year, but he had seen considerable technical details on the clarification ofGATT Articles V, VIII and X.  In his view, Members had gone a long way to identify the mandate
that they had been given. It was only natural, given the progress Members had been making, that they
had been looking at the next steps.  In this context, he would like to come back to the OECD
summary, which was a very useful document.  There was a description in the paper between pp. 4-9
of the core principles that the OECD had taken from the various technical papers that Members hadbeen considering for clarifying and improving those GATT Articles.  Obviously, there was a long way
to go before Members could settle the arguments about non-binding guidelines or WTO rules.  In its
conclusions part (p. 20ff) , the OECD paper outlined a good summary of arguments for WTO rules.
There were some very pertinent questions which would probably benefit from further consideration.
4.65 The representative of the European Communities noted that it was a pity that Members had
spent so much time engaging in what was becoming a rather fruitless debate about binding and
non-binding.  It seemed inevitable to go through th at masochistic exercise from time to time, but it
certainly would have been the EC's preference to focus on the substance.  The EC's position was not
that contrary to the suggestions by some colleagues.  Every Member was trying to predetermine,discuss and reach consensus on questions of modalities or the post-Cancun work, but there was a
mandate to follow, and Members should complete the task and focus on the substance.  He agreed that
there was no consensus on some quite important things, and, while he hoped that Members would be
able to decide how to deal with trade facilitation on the merits of the case, he was of course conscious
of the other issues at play, which would have a bearing on the substance of that debate.  Recognising
that, it was nevertheless essential to focus on the substance.
4.66 Malaysia had made an extremely thoughtful and skilful intervention, in which the Malaysian
representative had stated that with respect to the three GATT Articles, the case for change had not
been made.  That might or might not be true.  With respect to Article X, which had been referred to by
Malaysia, a case for modernisation had been made in at least four respects, with no serious
counter-propositions been in the last five years of discussions in the CTG:  First, greater transparencyof customs procedures; secondly, the right of appeal against customs decisions, which was not an
absolute obligation, thirdly, the possibility of getting advance rulings and consultations with the
business community on changes to procedures, and fourthly, non-discrimination, which, as the
Secretariat paper demonstrated, was not provided for in Article X of the GATT.  In those four areas,
and, in the EC's assessment, in many others, there was a good argument for a review andimprovement of Article X.  Any delegation believing that those issues were not relevant, and that they
had real problems in pursuing improvements to Arti cle X on that basis should put up their flag.  There
was a genuine case for improvements to that Article, and there was an equally convincing case forG/C/M/70
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change with respect to GATT Articles V and VIII.  Article VIII was full of hortatory, best endeavour
provisions.  Members who followed the debate on implementing S&D treatment knew very well the
limitations of best endeavours.  They remained best endeavours and did not get implemented.  He
hoped that that Members could apply the same consistency of argumentation when it came to best
endeavour provisions in GATT Article VIII.
4.67 With respect to Malaysia's reference to the EC's position on the harmonisation of rules or
standards, there seemed to be a certain amount of misunderstanding on the part of his colleague.
Contrary to what may have been perceived to be the Communities' position, the EC did not believe
that it was useful, desirable, and feasible to aim for a prescriptive, harmonizing approach in trade
facilitation.  His delegation was convinced that there was a case for establishing some targets, some
ojectives that all Members would progressively work towards.  But those objectives and targets
should not be expressed in terms of absolute quantitative standards, because for Members at differentdevelopment levels, this would be difficult to attain.  The EC was more interested in the process and
the direction of progressive simplification and modernization, the reduction of barriers, than in
prescriptive standards.  The one area where one might wish to vary from that road was in the field of
existing international standards, such as those regarding customs data and documentation.  It seemed
that all Members had a very strong interest in working towards adopting, in their own domesticlegislation, regulations, procedures and existing international standards to the extent that it was
feasible for them to do so.  That was hardly an innovative idea, both in terms of saving costs for
governments, and certainly for traders.  Members s hould have a common interest in adopting in their
domestic legislation, as far as possible, existing international standards of the WCO and the UN
regarding data and documentation.
4.68 The fourth point he wished to make was on the question of differentiation, since it had been
suggested, rather unfairly, by one delegation that those Members, who had proposed the concept of
individual, tailor-made technical assistance plans or implementation plans would seek to divide the
membership. Nothing could be further from the truth.  For several years, ever since the introduction ofthe TRIPS Agreement, Members had heard that a kind of one-size-fits-all approach was not suited to
the diversity of the WTO's Membership.  That argument was fully supported by his delegation.  In an
attempt to ensure that in the future, in any pot ential agreement on trade facilitation, implementation
would be suited to the capacities of individual Members, the idea had been put on the table by several
delegations that rather than a one-size-fits-all approach, or a single transitional period, or a veryinflexible set of arrangements, there should be scope  for very individualized paths to implementation
and to the provision of technical assistance.  This seemed the best way to respond to the individual
needs of every WTO Member.  Nothing could be more different from the rather sterile debate about
graduation and differentiation which was, frankly, irrelevant to the work Members were doing in the
CTG on trade facilitation.  Some delegations had said that there was an extremely wide divergence
between Members on that issue.  He hoped that behind the public positioning, the divergences would
be slightly less wide, and was grateful for the statement made by Brazil that rather than, or as analternative to the rather black and white either/or debate, Members should try to find some kind of
intermediary path.  The EC believed that all Me mbers were takers for constructive compromise
solutions and in that light, his delegation would certainly be very happy to hear more from Brazil
about the extent to which Brazil's proposal was indeed a middle way, a third way, a compromise
proposal.  He understood that Brazil had suggested to opt for a number of non-binding principles or
guidelines which Members would autonomously start to implement, and when each individual
Member felt that it was in a position to lock th em in place in the WTO, each individual Member
would then unilaterally take on itself that commitment.  If that was the proposal, he – to use a phrase
often used by the Brazilian representative – remained to be convinced that that would in fact be a half-
way compromise between the binding /non-binding pos ition.  He would be happy to be corrected if he
had misunderstood the proposal, and was genuinely open to any kind of constructive compromise that
Members might be able to develop in the CTG or elsewhere.G/C/M/70
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4.69 The representative of Japan expressed his appreciation of the statement made by Uruguay,
which had been like a breath of fresh air after a very long discussion.  It suggested that Members
should try not to go beyond the CTG's mandate, and should not start texting negotiations that were
supposed to take place post-Cancun.  He also welcomed the EC's proposal that Members should try to
focus on substance.  He would like to focus on some interventions that had been made on the Japanese
paper.  In the paper, Japan had tried to show one aspect, the division of labour amongst theinternational organisations, and the use of each organisation's expertise, experiences and instruments.
Japan had no intention of asking the WTO to take the role of other international organisations.
Rather, Japan was trying to get some idea about the specific role of each international organisation,
and the way they could assist each other. In this regard, he expressed his country's concerns about
making use of WCO instruments as a whole by importing those non-binding guidelines, because the
WTO was not a specialized organisation in that particular field.  Referring to WCO instruments as an
international standard might be fine, but Members should try to avoid taking other internationalorganisations' instruments as WTO ones, because maintaining and building of capacity should remain
the task of specialised agencies.  The WTO might have a role in maintaining and strengthening the
coherence among these international organisations and their instruments.  That was why in the WTO,
through high level political will, some impact could be made.
4.70 The representative of Egypt expressed his delegation's conviction that there was a serious lack
of interactive discussions, both in the CTG and in many other fora.  Many developing countries,
including his own, had made the very specific and clear argument that they would accept binding
commitments, but that the timing would be problem, the question of when they should be applied.
Egypt was of the view that this should be done after the establishment of guidelines, and after
financial and capacity building assistance had been provided, so that developing countries had the
chance to abide to these guidelines.  But all Egypt had been hearing during those past two days were
reasons for binding, and against non-binding rules.  Up to now, he had not heard a clear discussion or
a clear comment on that very specific suggestion.  This slowed down negotiations.  An interaction
was needed, not just a repetition of positions.
4.71 The representative of the OECD introduced the OECD's paper, noting that it was the fourth of
a series of papers, the other three of which had already been distributed in the CTG during the past
year.  These papers referred to GATT Articles X, VIII and V respectively.  The fourth paper was
some kind of a consolidation of the previous papers.  It had been requested by the OECD delegates fortwo reasons.  Firstly, there had been a wish to have a very brief and handy manual for the delegates
that needed to remind themselves of what those reflections had been.  The idea had been to prepare
something that avoided big chunks of paper, with the details to be obtained from the three previous
documents.  Its second objective was to further advance the reflections on the architecture of a
possible WTO endeavour.  In this context, she noted that, in the OECD, there had been no discussion
on binding or non-binding.  This was absolutely not an issue that the OECD had a right to look at.
Rather, it was the prerogative of Members.  The OECD Trade Committee joined what had beendiscussed  in the CTG, in that there was a series of core trade facilitation principles that were more or
less indispensable for any endeavour, whatever nature it might have.  Without those core principles,
such as transparency, consistency and predictability, non-discrimination, simplification, avoidance of
unnecessary restrictiveness and, lastly, due process, any trade facilitation effort would be difficult to
imagine, regardless of its nature, be it national, re gional or multilateral.  Those principles already
existed in varying degrees in WTO provisions.  In order to give concrete expression to them, the
OECD Trade Committee had thought of a series of implementation tools which, interestingly, showed
very well that there was not a single way for pursuing transparency, simplification or any of the other
principles.  Rather, there was a whole range of possible approaches that countries could choose
according to the specific circumstances at hand, such as regarding development, time, region,geography or other.  To make any effort work, coherence was needed, which could be achieved by
respecting core principles.  In addition, implementation tools had to be customized to the needs,
priorities and capacities of individual implementing countries.  Those tools concerned informationG/C/M/70
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channels, predictability mechanisms, review mechanisms for updating measures, appeal mechanisms,
public consultation, standardization, risk management techniques and cooperation between involved
authorities.
4.72 OECD countries had started to think about the possible approaches at the multilateral level,
and why it could be interesting to have an endeavour in the WTO.  The main points that they hadmade in that context was that a WTO undertaking could give impetus and direction.  This point had
already been made in the CTG, impetus not only to help sustain domestic reforms at home, but also to
shape and ensure coherence of technical assistance and capacity building, to ensure that these two
were mutually supportive.  With respect to direction, it had been stressed that it was very important to
establish a meaningful diagnosis of the situation in each country concerned, and to verify that all the
necessary steps were taken in order to achieve the expected benefits.  The OECD Trade Committee
had looked at the issue of tailored approaches to implementation, and wished to share with Members anumber of questions.  These were:  (i) whether any customisation options should be defined in the
context of an eventual WTO instrument, or whether this should be left to individual Member
countries;  (ii) what criteria would apply, and what the modalities would be for differentiation in case
of individual action plans for different types of countries being devised in context of the WTO
instrument;  (iii) how an objective assessment of compliance could be achieved, if flexibleimplementation was left to individual Member countries; (iv) whether there was scope for mentoring
progressive enhancement of facilitation measures, for example in the context of the Trade Policy
Review Mechanism;  and (v) how capacity-related shortcomings could be prevented from being
caught in the dispute settlement mechanism.  As a final point, the OECD representative reminded
Members that all four papers could be found on th e OECD web page on trade facilitation.  In addition,
she informed Members about a Global Forum on market access issues, including trade facilitation,
that had been held in Paris the week before.
4.73 The representative of the WCO noted that during the discussion under the first agenda item,
many speakers had referred to the relationship with the work of other international organizations and
in particular the WCO instruments, including the revised Kyoto Convention.  As often stated, the
WCO saw that the WTO/ GATT Articles set out high principles for trade facilitation, while the WCO
instruments provided standards to help Customs implement those high principles.  In this connection,
a question had been raised as to why the revised Kyoto Convention had been ratified by only fourteen
WCO Members as of present.  He noted that while these fourteen Members included both developedand developing countries, there had been good progress in the ratification process since the last CTG
meeting in March.  The European Council had appr oved the Convention later in March for its fifteen
member states.  Then the US President had also signed the Convention in May upon the completion of
the administrative review.  Now both the EU and the US were expected to complete their legislative
procedures in an expeditious way, which would be followed by other Members.  With the mounting
momentum for trade facilitation generated by the Doha Agenda, he expected that those encouraging
movements will result in early entry into force of the Convention.
4.74 The representative of Malaysia thanked th e WCO and the OECD for their interventions,
which had been very useful.  Turning to what the EC had commented in response to an earlier
Malaysian statement by noting that there was no legal principle of non-discrimination in GATT
Article X, the Malaysian representative noted that he could not believe that.  Article I of the GATTwas the core principle that underpinned the organisation since its beginnings in 1947, which is why he
could not see how the European Communities could argue that the principle of non-discrimination
was absent in GATT Article X.  If that really was to be the legal interpretation of this Article,
Malaysia would start acting accordingly.  The second point the Malaysian delegation wanted to make
was that Article X was very broad.  A close look at the Article showed that some of the suggestedmeasures, such as those referred to in the matrix presented by Canada like availability of information
on laws, regulations and administrative policies and procedures, were already found in Article X.  The
Articled already required Members to publish that sort of information.  He could therefore not see theG/C/M/70
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deficiency in that provision.  If one did not publ ish that information, one would be brought to dispute
settlement.  Responding to an earlier comment by the United States, he noted that the US delegation
had misunderstood his position.  He clarified Malaysia’s position that an article, which prescribed
mandatory actions, was not bad just because some Members did not comply.  Such non-compliance
was the violator’s fault, rather than the Article's.  All of that lacking clarity showed why it was
important to continue the ongoing clarification exercise.
4.75 The representative of Uruguay thanked th e OECD and the WCO for their presentations.
Turning to the OECD paper, he noted that in paragraph 56 (fourth bullet), it raised the question
whether there was "scope for mentoring progressive enhancement of facilitation measures, e.g.
following discussions in the Trade Policy Review Mechanism" .  That was not a new idea.  It had been
held by the OECD with respect to other areas, such as services.  The idea had already been presented
in some papers by the OECD concerning domestic regulation discussions on negotiations underArticle 6(4) of the GATS.  In his view, the TPR mechanism was a mechanism for transparency
purposes only, and was not meant to enhance facilitation measures or other things.  This could be the
answer to the question raised in the OECD paper.  As a final point, he wondered whether the
Secretariat could provide the two papers in elec tronic format, as this would facilitate work.
4.76 The Chairman asked the representatives of the OECD and the WCO whether they would be
willing to provide those contributions electronically, so that Members could effectively work with
them.
4.77 The representative of the OECD noted that the papers were available on the website.  In case
any Member had a problem accessing them, there would be other appropriate ways to forward them.
This was absolutely no problem.
4.78 The Chairman noted that Members seemed to have exhausted their discussions on this agenda
item.  He would not summarize the discussions, at leas t not at this stage.  He might be willing to offer
some thoughts once Members had gone through the remaining two trade facilitation items.
4.79 The Council took note of the statements made.
V. TRADE FACILITATION NEEDS AND PRIORITIES OF MEMBERS,
PARTICULARLY OF DEVELOPING AND LEAST DEVELOPED COUNTRIES
5.1 The Chairman noted that with respect to this agenda item, Members had had an interesting
exchange of views in the course of their previous meetings, with delegations sharing their national
experiences with implementing certain trade facilitation measures and several Members identifying
their particular needs in this context.  Reference had been made to the gains and benefits from such
measures, as well as to potential challenges, especially for developing countries. Written contributionshad been submitted by Chinese Taipei an New Zealand, whose national experiences had been
generally considered to provide valuable insights. The CTG had also been informed about the
activities carried out by other intergovernmental organizations in this area, most recently on an
initiative launched by the WCO.  As part of an effort to develop a Customs Capacity Building
Strategy, the WCO had conducted a survey among its Members to establish an inventory of keycapacity building needs, barriers and challenges.  The results of that survey were now available.  He
wondered whether the WCO representative might be in a position to share some of the insights
obtained in this process, specifically on the needs elements.
5.2 The representative of the WCO noted that earlier this year, the had WCO conducted a
comprehensive survey among Member Customs administrations to determine their key capacity
building needs, barriers and challenges. The result  of that survey was summarized in the CapacityG/C/M/70
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Building Strategy he was going to introduce under agenda item three, but he would make a brief
account of its findings also at this stage. Through the capacity building survey, Member Customs
administrations had identified priority areas of capacity building assistance.  While responses varied
significantly in terms of detailed requirements, Members had highlighted the following four
categories of particular relevance: (i) improvement of Customs systems and procedures, (ii)
management issues, (iii) implementation of or improvement in information and communicationtechnology systems and infrastructure, and (iv) improvement in the level of cooperation,
communication and partnership with external stakeh olders including other government agencies and
the private sector.
5.3 The first category included:  (a) the compliance of systems and procedures with international
and regional commitments.  In this connection, proper implementation of the WTO Valuation
Agreement had often been identified as a main concern, since customs followed the priority set bynational governments that placed importance on revenue collection and dealing with revenue fraud;
(b) bringing systems and procedures in line with modern and internationally accepted practice as
outlined in the revised Kyoto Convention and other WCO instruments;  (c) preparation and
implementation of customs legislation to support these principles contained in the international
commitments and standards.  The second category of capacity building needs related to managementissue in a broad sense.  It included improvements in:  (a) competency of customs personnel, including
the management;  (b) organizational and administrative structures;  (c) strategic and operational
planning capacity;  and (d) the level of integrity, which should also be pursued as part of the efforts in
improving customs systems and procedures.  The third category was implementation of or
improvement in information and communication technology systems and infrastructure.  The fourthcategory was improvement in the level of cooper ation, communication and partnership with external
stakeholders including other government agencies and the private sector.  Albeit important, customs
was only a part of trade supply chain and trade facilitation should be pursued together with other
stakeholders.
5.4 In addition, due to the current focus on heightened national security concerns, customs
administrations also identified capacity build ing needs associated with the implementation of
measures to enhance security and facilitation of the trade supply chain.  Among others, one of the key
components was enhanced risk management in order to identify high-risk cargo at an early stage.
This was the technique developed in the revised Kyoto Convention and well integrated in thecontinuous efforts to improve trade facilitation.  The WCO believed that security and facilitation are
two sides of the same coin, as both of them aimed at more efficient and effective customs
administrations.  In this connection, it was noteworthy that a number of respondents correctly
identified the significant degree of overlap between security issues and the wider capacity building
needs highlighted earlier.  A broad and comprehensive capacity building process involving all aspects
of customs administration was vital to improve the capacity of customs to discharge any of its allotted
functions and achieve its objectives.
5.5 The Council took note of the statements made.
VI. TRADE FACILITATION:  TECHNICAL ASSISTANCE AND CAPACITY-
BUILDING
6.1 The Chairman recalled the constructive discu ssions Members had had on this item in the course
of the previous five CTG sessions, in which delegations had highlighted the importance they attach to
this subject.  Several donors had briefed the Counc il on their respective activities in this area, and
identified a number of lessons they had drawn in th e course of their execution.  Written contributions
had been received from Members and international or ganizations, in particular the WCO, which had
presented a compendium of its capacity building tool s. The WCO had also again contributed a documentG/C/M/70
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for the current meeting, this time addressing capac ity building in customs, which he invited the WCO
representative to introduce.
6.2 The representative of the WCO introduced the WCO's Customs Capacity building Strategy.
He noted that during the WCO Council Sessions  in June 2002, Directors General of 161 Customs
administrations had discussed the issue of capacity  building and concluded that it was timely for the
Secretariat to formulate a comprehensive Customs Capacity Building Strategy.  To assist the
Secretariat in this endeavour, a special High  Level Working Group on Capacity Building with
representation from each WCO region, as well as stakeholders, including international organizations
such as the WTO Secretariat and the World Bank, and trade bodies, had been established.  They met
twice to discuss and agree on the content, scope a nd format of the Strategy document, which would be
submitted to the WCO Council in two weeks for approval.  The document before Members was an
advance draft version of the Strategy. The Customs Capacity Building Strategy was designed as abusiness case to convince the donor community and governments of well-targeted investments in
comprehensive capacity building in customs.  The WCO saw WTO work on trade facilitation as
providing a great opportunity for the realignment of resources into more appropriate and coherent
capacity building.  The Strategy included:  (a) an in troduction to what capacity building means in both
the customs and the global context, particularly focusing on the WTO trade facilitation agenda, aswell as issues such as the customs contribution to revenue collection, social protection and national
security;  (b) an overview of why Customs was a vitally important national asset and why its poor
performance could be a significant barrier to economic development and increased participation in the
global economy;  (c) a summary of lessons learned from previous capacity building activities and why
some of them may not have met the expectations.  By way of example, he noted that in some cases,the failure was due to the lack of accurate diagnostic studies, while in other cases, it was due to the
lack of political will to sustain such a reform;  (d) a brief inventory of critical Customs capacity
building needs;  and (e) based on the above findings, a summary of collective recommendations about
what could be done to improve capacity building activities in customs, including an introduction to
the WCO Customs Capacity Building Diagnostic Framework.  The Strategy was an attempt torespond to the WTO Doha Ministerial Declaration in November 2001 where the role of capacity
building was highlighted in customs-related areas, including the trade facilitation agenda.  He
expressed his hope that it would serve as a contribution from the customs community to the trade
facilitation discussions in the WTO and ultimately, to the Ministerial Conference in Cancun in
September 2003.
6.3 The Chairman noted that the paper seemed to touch upon a number of elements of importance
to Members' discussions, which is why he would like to suggest to have it turned into an official
WTO document as Members had decided to do in case of the previous WCO submissions.
6.4 There was no objection.
6.5 The representative of Pakistan thanked the WCO for sharing the advance document with
Members.  It was a very comprehensive paper which touched upon various aspects, most of which his
delegation tended to agree with. Pakistan understood how important political will was with regard to
capacity building.  There were many aspects in  the WCO paper which delved into the capacity
building ambit, especially for developing countries.  On one of those points, he would like to seekfurther elaboration.  With regard to pre-shipment  inspection companies, the paper recommended that
the service of private companies should be employed in a complementary capacity, to help customs
administrations enhance revenue collection, or to improve their customs operations.  In this context,
he wished to share his country’s national experience when employing PSI companies.  The PSI
companies had failed to deliver what had been employed for, and this while having been givencontracts at very good rates and while charging exorbitant fees. His country had paid those companies
more than the revenue enhancement expected from them. With regard to combating fraudulent
imports or mis-declarations, he could not remember even one particular significant case which everG/C/M/70
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had been detected by the PSI companies. Maybe there were some Members who had better
experiences.  He could comment on many other aspects of the paper but would just confine himself to
that particular aspect of the document for the moment.
6.6 The representative of Japan thanked the WCO for submitting what he considered to be a very
important document, which his delegation had long been waiting for.  The paper’s comprehensiveness
had not allowed him to study it in detail.  While there was therefore no possibility to provide any
inputs to the paper, he would like to note that it tried to respond to the Doha Declaration, and was
therefore trade-related.  Japan was working for and with the WTO, which had a role in looking at
trade-related capacity building, and to function as a clearing-house with regard to that particular
aspect.  Therefore, he would like to see the WTO to some extent assist in customs procedures, as well
as in the areas of other border agencies.  The WCO only had a limited scope, which was customs.
Japan hoped that Members would have some kind of work on that subject after Cancun and parallelwith negotiations.
6.7 The representative of the European Commun ities thanked the WCO for what looked like an
extremely useful paper.  It was only the tip of th e iceberg in terms of the enormous effort being made
by the WCO and other international organisations to review and put in place more effectivemechanisms and instruments for future aid and technical assistance.  One of the positive results of the
work undertaken in the WTO on that subject in the last  three or four years had been that international
organisations had started to give real priority to trade facilitation in a very broad sense.  They had all
re-engineered their activities, whether it was in the UN, UNCTAD the World Bank, the IMF or the
WCO, in order to be better placed to contribute to develop capacity in parallel with whatever workemerged or continued in the WTO. His delegation therefore certainly welcomed that and, as Members
had seen from the papers produced by the EC in Ma rch, the EC also had mainstreamed trade into their
own development aid, and, within the broad field of trade-related assistance, given quite a degree of
priority to trade facilitation, in a broader sense, because the feedback received from their development
partners was a priority area for the EC as well.  One thing that had become very clear was that whenlooking at technical assistance, institution-building and development aid, one had to go well beyond
the scope of customs.  He wished to recall the poin t made the day before that, even if the work in the
WTO was confined to Articles V, VIII and X, which in a sense defined the scope of Members' work,
as regards development aid and technical assistance, trade facilitation went well beyond anything that
could possibly be captured in the future by any WTO commitments.
6.8 Turning to Jamaica’s observations about cost s and priorities with respect to the capacity
building dimension of trade facilitation, he noted that those points were very well made.  The EC
agreed that many developing countries had competing development priorities, and that it was not
always the case that priority would be given to trade-related assistance, customs reform or trade
facilitation.  This was absolutely true.  What could be seen in practice from the EC's perspective as a
major development partner in that area was that most of their developing country partners wereeffectively giving priority to trade facilitation, along perhaps with SPS and TBT issues.  Those two or
three subjects did appear to be among the top priorities in terms of development assistance at the
moment, which was in part due to the recognition from Doha, from Monterrey etc., that trade needed
to be mainstreamed into development aid and development policy.  With regard to the question of
costs, Jamaica had made some interesting comments about the difficulties and the high costs thatmight be associated with putting in place even very necessary or obviously welcome customs reforms.
In this context, the EC delegate wished to draw hi s colleagues' attention to interesting recent research
done by the World Bank, which had been based on th e Bank's own experience over the last two years
or so in carrying out technical assistance projects in trade facilitation.  Their reassessment was that the
infrastructure dimension, which was the costly part, had been exaggerated.  Experience showed that alot could be done with fairly limited cost implications.  Many countries were bidding for projects
which would comprise 75 per cent hardware automation, bricks and mortar, and 25 per cent human
resources development or management re-engineering.  The reverse would be a better proportion,G/C/M/70
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25 per cent of the costs of a project for the hardware, the hardwiring, the automation etc., and 75 per
cent devoted to management change, reorganisation and the like.  The study gave some interesting
evidence about costs. What could be seen in some very interesting World Bank studies and in what
the EC took from its own experience was that many of the reforms or improvements that were being
discussed in the Goods Council were cost-reducing rather than cost-increasing.  Reducing,
simplifying and standardising data reduced costs.  Having a minimum degree of convergence, ofcontrols at the border, reduced costs.  There was ample evidence that some very basic organizational
changes in ports, in airports, at border posts, in basic coordination between two sides of a border post,
rearrangement of traffic lanes, very simple things, were cost-reducing.
6.9 With regard to official controls, one of the problems all exporters and importer faced was that
there was often a lack of coordination at border points between different agencies. By a certain
up-front effort at improving that coordination, for both, agencies concerned and traders, costs could bereduced.  In this context, he noted that in a meeting earlier that week, a US official had asked
participants if one of them knew how many regulatory agencies were potentially involved in border
interventions for trade in and out of the United States, how many agencies could have some kind of
regulatory intervention on the movement of goods.  Guesses had been around 5, 10, 20, but at the end,
the US official had to reveal that the number of regulatory agencies that potentially had a role at theborder was 104.  This figure had been quoted by the US administration.  This clearly showed that all
Members, developed and developing countries, could reduce costs, both to their own administrations'
and obviously their traders' benefits if they managed to put in place a certain amount of rationalisation
and coordination, and thereby do more with less and reduced costs. Turning to the remarks by
Pakistan on the issue of PSI, he noted that experience showed that it rarely had the intended beneficialeffect. PSI did raise the costs for traders and tended to retard the development of fully functioning
customs administrations.  Therefore, one of the objectives of the EC in the work on that subject was to
see PSI for official purposes gradually wither on the vine, as it was replaced by more effective
customs procedures supported by technical assistance that the EC and others were committed to
provide.
6.10 The representative of Brazil made a procedural comment. Immediately subsequent to the
presentation of the representative of the WCO, for which his delegation was grateful, the Chairman
had proposed to circulate this document as an official document, and there had been no objections in
the Council. He reminded Members that late last year, the WCO had presented another interestingpaper to the Committee on Customs Valuation on an implementation-related issue that was being
discussed in that Committee. At that stage, the same proposal had been made by the Chair of that
body and there had been strong objections to that undertaking, because of the fact that the document
had not been finally approved by the members of the WCO. In the present case, as he had taken from
the intervention of the representative of the WCO, the current document was also pending final
approval by WCO members. He wish ed to place on record that Brazil did not have any objections to
the document being circulated as an official document, he only wished to note that his delegation wasconcerned by the lack of consistency certain Members showed with regard to contributions from other
organisations, depending on their point of view on a particular subject.
6.11 The representative of the Philippines noted that, like other delegations, the Philippines had not
had enough time to digest the contents of the WCO paper, but that on a cursory reading, she had been
attracted to the section on lessons learned from previous capacity building activities. With regard to
the lessons her country had learned, at least as far as customs was concerned, she wished to state that
capacity building was not only applicable to customs, but, at least for the Philippines, it was
applicable in all areas. There was no doubt about all the six lessons learnt.  Moving on to the specifics
of those lessons, she noted that it was of great importance to her country that adequate human andfinancial resources were devoted to capacity building initiatives.  Jamaica had given some interesting
figures on how much they had spent trying to train their people to meet some of the WTO obligations.
Since their financial resources were limited, the Philippines were a little hesitant to take on newG/C/M/70
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obligations.  Maybe their priorities were currently not yet in the trade facilitation angle because of the
points she had raised earlier.  Her colleagues, who were pro-trade facilitation advocates, should bare
in mind that the Philippines currently had limited human and financial to devote to trade facilitation,
precisely for the reasons cited in the WCO paper. Another very important point was the need for
enhanced cooperation, coherence and coordination, because the donor community needed to
coordinate.  Her country was hoping that there would be coordination in the technical assistance thatwas currently being provided. In this context, she was happy to inform Members that in case of the
Philippines, there was at least some movement, some effort to coordinate technical assistance.
Turning to the representative of the WCO, she rais ed a question concerning the needs and challenges,
specifically regarding the areas that had been identified to be of particular relevance by the Members
surveyed.  She was interested in the number of WTO Members that had replied to the survey,
because, if the same WTO Members had replied to a questionnaire issued by the WCO, their indicated
needs would not differ significantly from what they would indicate as such needs in the WTOframework. She would also like to know how many developing countries had answered the
questionnaire. The areas of particular relevance highlighted on page 13 already spoke volumes.
Issues such as developing and improving procedur es to accommodate the required changes to comply
with international and regional commitments would be something where the Philippines would be
having difficulties, if there would be a decision to start negotiations.
6.12 The representative of the United States sought a clarification based on the latest intervention
by Brazil.  She asked the Chairman to clarify exac tly the further proceedings with regard to the WCO
paper and what the practice was regarding circulating such documents in the CTG. Her delegation
was discussing this matter internally as they thought there had been WCO documents circulated
earlier, but they might have been circulated as WCO documents, or they might have been submitted
by a Member. She wondered whether that had happened here and what was the precise situation.
Normally, her delegation would prefer documents from other organisations to be either submitted byan individual Member, if it was going to be a WTO document, or as a document from that
organisation. Because of the fact that the WCO was an universal organisation that was open to all
countries, it might have some special status in that regard. She would like some clarification from the
Chairman or the Secretariat on the past practice in that regard.
6.13 The representative of Brazil noted that he was not able to shed light on the standard practice
in the WTO with regard to contributions by other organisations.  His delegation’s general view was
that each and every contribution to a substantive debate in a WTO body should be welcome.  In theincident he had referred to earlier, the WCO had come forward with a contribution, prepared by the
Secretariat of the WCO, regarding one of the implementation-related issues that had been discussed in
the Customs Valuation Committee pursuant to the Doha mandate.  At that stage, there had been a
strenuous objection to this document being circulated as an official WTO document under the
reasoning that it had not been finally approved by the WCO membership.  He reiterated that the only
point he had been trying to make was to take note of this lack of consistency in how Members
approached that procedure, taking into account that at the current session, no one objected to a
document being circulated as a WTO document, even though it had not been finally approved by the
WCO membership. He underlined once more that Brazil did not have any objection to the paper being
circulated as a WTO document.
6.14 The representative of the United States noted that there was some concern on the side of her
delegation if the WCO paper was still a draft document and was going to be circulated as a WTO
document. The United States would prefer to wait with such a circulation until it came out as a final
document. There was a concern about documents coming from various sources and being considered
as WTO documents. Her delegation did not have a problem with documents being available in the
room, but there was a concern about making something a WTO document when it had not been
submitted by a Member as of interest to the organisation.G/C/M/70
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6.15 The representative of Pakistan noted that he would like to get some clarification from the
WCO representative on a specific point.  Page 21 of the WCO document talked about developing a
customs capacity building diagnostic framework. Paragraph 2 elaborated to a certain extent thebuilding blocks for improving the efficiency and eff ectiveness of customs.  It stated that the WCO
maintained a range of internationally agreed conventions, instruments and best practice approaches
that collectively provided a sound blue print for modern customs administration.  The revised Kyoto
Convention had been alluded to as well as the Arusha Declaration and some other capacity building
initiatives. The subsequent paragraph stated that there was currently no standardized andcomprehensive approach available for identifying and addressing customs capacity building needs.  In
this regard, he wished to seek clarification on the correlation of the two paragraphs, and to hear what
kind of standardized and comprehensive approach the WCO sought.  He remembered that one of the
buzz words in the discussion had been a one-size-fits-all-approach and this was not the right one.
Pakistan was sure that capacity needs of Members were very different, be it in the WTO or in theWCO.  Paragraph 10 on page 19 talked about recommendations for change.  He was not sure whether
it was a matter of expression or semantics, but the opening paragraph said that "Based on the
conclusions of this Customs Capacity Building Strategy, the international Customs community
strongly recommends that …"  He wondered whether there was a substantial difference between the
customs capacity building strategy as compared to the capacity building framework the WCO was
talking about.  He would be very grateful for a clarification on that matter.
6.16 The Chairman asked the representative of the United States whether his understanding was
correct that the US delegation would have difficulties with the idea of circulating the WCO
contribution as a WTO document to the extent that it was still a draft, while the United States wouldhave no objection to such a circulation once the draft was made a final version.  He would investigate
the standard WTO practice on this matter and report back to the Council.
6.17 The representative of the United States noted that when she had first heard the Chairman talk
about the WCO document, she had not been aware that the document was going to be made a WTO
document without formal sponsorship by a Member. Because of that, she was afraid that her
delegation had to take the entire issue under advisement.  She was not sure about the standard position
of her delegation on this matter, but she could find out fairly soon.
6.18 The Chairman noted that before giving the floor to comments on the questions that had been
raised, he would like to spend a minute on the point made by Brazil that there was some inconsistency
in the way Members approached the question of submissions by other international organizations,
depending on the body and the nature of the issues.  He also thanked the representative of the United
States for her intervention, which had helped Members to look at this issue also from a systemic point
of view.  It had further enabled him to discover that the paper suggested for circulation had not yetbeen finally approved by the respective WCO body.  What he would therefore like to suggest was to
slightly change the agreement reached earlier in the sense that the paper would be distributed as an
official WTO paper, with the WTO symbol but on ly once it had been approved by the WCO and was
made a final version.  This was certainly without creating any precedent for any other occasion.  He
asked whether such an agreement would be acceptable to all Members.
6.19 It was so agreed.
6.20 The representative of the Secretariat noted that there were no uniform rules regarding the
circulation of documents from other intergovernmental organisations. Different councils and
committees adopted different ways of proceeding and have often done so in a ad hoc manner. A
Member could always circulate a document, including documents of regional groupings.  Brazil couldtherefore, for example circulate  a document by MERCOSUR, or an APEC member a document byG/C/M/70
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APEC.   Also, the Chairman could circulate a document, if he was of the view that it would contribute
to Members’ discussions. In cases like the present one, where the Chairman had suggested to circulate
a contribution by an international organization if that was agreeable to Members, Members’
consensus was required to allow for such a circulation.
6.21 The representative of the WCO expressed his appreciation for having been given the
opportunity to clarify several points of the capacity building strategy. In response to the questions
raised from WTO Members, he explained the methods the WCO had applied when conducting the
survey.  Detailed questionnaires had been distributed last year to all 161 Members.  Since it was
known from past experience that it would take a long time to retrieve the replies if it was left with
each individual Member to respond, vice chairs representing each of the WCO's six regional groups
were asked to coordinate the survey results among regional members.  Another advantage of this
regional approach was that it enabled Members to discuss the matter with colleagues of a similarbackground that might result in identifying common needs and solutions.  In response to the question
with respect to the preshipment inspection regime, he noted that that was an issue where views were
divided within stakeholders, including international financial institutions. The WCO kept on
discussing this matter with them. The WCO's major concern had been the long-term effects on
capacity building of customs, because PSI regimes had often been viewed as a substitute for customs,rather than as a stopgap measure, as initially planned.  The WCO recommended that the service of
private sector companies be employed in a complementary capacity to support customs activities,
while concerted efforts were made to establish the infrastructure necessary to manage customs in a
more sustainable manner.
6.22 In responding to another question on the Diagnostic Framework, he noted that, based on the
lessons learned from the past experience, the WCO felt the need for accurate diagnosis tools for
identifying and addressing customs capacity building needs for individual countries.  The Diagnostic
Framework included a checklist for this purpose and proposed a standardized and comprehensive
approach to tailor a country-specific design, implementation and monitoring of capacity buildingactivities, instead of “one-size-fits-all” solutions. At the same time it made a necessary linkage to
available internationally agreed instruments and best practices, including the revised Kyoto
Convention, other WCO tools, and relevant materials provided by other organizations, in order to base
Capacity Building activities on international standards.  The Framework would typically look like a
matrix comprised of four columns:  a series of detailed diagnostic questions;  common weaknessesfound from the past experience as a reference to diagnostic studies;  possible solutions and
improvement options linking to available material;  and useful resources material.  Finally, this
Customs Capacity Building Strategy, which included the introduction of the Capacity Building
Diagnostic Framework as a tool, put forward reco mmendations for change, based on findings of the
survey, research and lessons learned from the past.  Since the strategy including the tools were now
available, he hoped that the WTO work on trade facilitation would result in the implementation of
successful capacity building initiatives in Customs.
6.23 The Chairman noted that,
 while not intending to summarize the discussions, he would like to
offer some comments and reflections, which, in his view, reflected in general terms the views,
perspectives and insights that emerged from the discussion. Members had had a very constructive
exchange on all three items of the trade facilitation agenda. Those exchanges had been extremelyuseful not only from the point of view of presenting individual Member's positions and sharing with
others their perspectives, but also in terms of dealing with a  number of open questions.  He would
like to seize this opportunity to express his gratitude to all Members for their high level of
engagement and the great spirit of cooperation they had shown in an effort to search for a mutual level
of accommodation and in approaching open questions.
6.24 It was the Chairman's view that there were some non-negligible points of convergence on
which Members could build in the weeks and months to come. Firstly, whatever would be done in theG/C/M/70
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WTO in the area of trade facilitation would have to be sufficiently reflective of the needs and
particular situations of Members, and their ability to implement whatever will be agreed upon, to reap
the benefits accruing from trade facilitation. The discussions also had seen a lot of reference to the
benefits of trade facilitation, on which all Members seem to be in agreement.  Members also appeared
to be in broad agreement in wishing to further tr ade facilitation in the WTO and in working together
with a view to responding to the global trading en vironment for the benefit of all, and the better
integration of developing and least-developed countries into the multilateral trading system.  Where
Members differed was the issue of the nature of future WTO involvement.  Here, there were two
schools of thoughts: one that highlighted the benefits of a rules-based approach, while at the same
time expressing understanding for some concerns that had been raised in this context and indicating
readiness to pursue flexible approaches.  In this context, some clarifications were sought from and
given by the proponents on how to possibly go about certain issues, which helped provide a clearer
picture on certain matters.  Others had pointed at the difficulties they saw with respect to developingbinding rules, and had called for alternative approaches, such as the development of non-binding
guidelines, which could then perhaps be transformed into binding rules at a later stage, as suggested
by one delegation. Reference had been made to the crucial role of technical assistance in this area, as
well as to the importance of the benefits from cooperation among all stakeholders.  Members would
have to deliver on the promise to provide technical assistance and support capacity building.  Whatwas important was that, despite all differences, Members seemed ready to work together with a view
to improving the overall trading environment. He was encouraged by the indicated readiness to be
sufficiently creative to find an approach acceptable to everyone. This led to the question of where to
go from here.
6.25 In this regard, he wished to indicate his understanding of the road ahead, in particular in
connection with the opportunity to discuss trade facilitation issues and as regards the update of the
CTG's Annual Report that would have to go to the General Council. He emphasized that he was
entirely in the hands of Members as to how to proceed.  Members would recall that, when agreeing on
how to structure work in 2003, a possibility of having a third session, in addition to those held inMarch and June, had been envisaged, depending on the review, after the second meeting, whether or
not such session would be needed.  In line with this understanding, a slot for a two-day meeting of the
CTG had been scheduled for 22 and 23 July 2003.  That said, he had to note that, while Members had
had extremely rich and lively discussions on substantive elements of the trade facilitation work, no
Member had shown a specific interest in having a possible third meeting.  The same occurred in theinformal contacts he had had with a number of delegations before and in the course of the present
meeting.  He hoped that he was not mistaken in interpreting this as a signal that Members were
probably nearing the end of this phase of CTG work in the trade facilitation area, and that they had
advanced the discussions on the mandate given to them as far as they could.  To pave the way for any
decision by Ministers in Cancún on the further direction of the trade facilitation business was up for
Members to decide in the context of the consultations to be conducted by the Chairman of the General
Council, in cooperation with the Chairpersons of respective bodies dealing with Singapore issues.
6.26 As he had said, he was entirely in the hands of Members with regard to how to proceed.
However, should his perception be correct, he would suggest that there would be no meeting in July
do deal with trade facilitation, and that the Chairman of the CTG be asked to draft a factual report on
what happened on trade facilitation front since November 2002. With respect to reportingrequirements, he recalled that in the last year, trade facilitation had followed CTG rules in a sense of it
being included as one section of the Annual Report to the General Council.  He wondered whether
Members would be willing to continue this practice.  While the issue of reporting to the General
Council would be addressed under agenda item "O ther business", he considered it appropriate to
mention already at this time, that in case of Members consent with the idea of having trade facilitationas a section of an overall report, he would suggest to adopt the report ad referendum, namely that
Members would have five days to comment on the draft report once the Secretariat had made itG/C/M/70
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available to them, and if there were no major substantive comments on it, the draft would be
forwarded to the General Council.
6.27 The representative of the European Communities noted that since there seemed to be no
demand for an additional CTG meeting, the Communities could go along with not holding a further
session at the end of July.  As for the update of the Annual Report, he would see merit in a separate
report, but if that was not agreeable to parts of the membership, the document should at least make
proper reference to the relevant mandate, and ensure that the trade facilitation section was not simply
buried somewhere in the CTG’s overall report.
6.28 The representative of Brazil agreed with the Chairman's assessment that no additional CTG
meeting was required.  With respect to the update of the CTG's Annual Report, he noted that it had to
be practical.  One should not try to single out one particular issue, and it should not be a negotiatingexercise.  He recommended to follow the procedure applied last year.
6.29 The Chairman noted that when making his suggestion, what he had had in mind was
something that would not prejudge anyone's posi tion. With respect to how to present the trade
facilitation report, there was no major problem;  it would be one section of the overall updated CTGreport to the General Council, with the respective section being properly introduced, with a specific
reference to the Doha mandate.  Since there seemed to be no objection to this way of proceeding, the
Council would take note of the statements made and proceed as suggested by the chair.
6.30 It was so agreed.
6.31 The Council took note of the statements made.
VII. WORK PROGRAMME ON ELECTRONIC COMMERCE
7.1 The Chairman said that paragraph 34 of the Doha Ministerial Declaration, which dealt with
electronic commerce, instructs the General Council to  consider the most appropriate institutional
arrangements for handling the Work Programme and to report on further progress for the fifth sessionof the Ministerial Conference.  Pursuant to this, the General Council agreed at its meeting in October
2002 to maintain the current institutional arrangements for handling the Work Programme on
Electronic Commerce, namely that the Councils for Trade in Services, Trade in Goods and TRIPS and
the Committee on Trade and Development would examine and report on aspects of electronic
commerce relevant to their respective areas of competence.  Due to the fact that the General Councilwould need make its report on the E-Commerce Work Programme to Ministers in Cancun, as set out
in para. 34, the subsidiary bodies would therefore need to inform the General Council of  the work
undertaken or progress achieved.  The CTG had not taken up this matter directly for a long time due
to the fact that it had gone as far as it could on the technical goods matters given the unresolved
horizontal issues, most importantly the classificati on issue, that remained before the General Council.
Much work had continued on the classification issue under the auspices of the General Council since
the Doha Ministerial, but this body had not been directly involved.
7.2 There were no comments on any matter of substance  and the Chairman turned to the report to
be submitted to the General Council.  As there had been no, or very little, work on this subject in this
body since the Doha Ministerial, as most of the issues concerned cross-cutting issues being addressedin the General Council, it appeared that this would be a very brief report, which would essentially say
that there had been no substantial discussions on this matter in the CTG during 2002-2003 due to the
fact that the horizontal issues remain under discussion in the General Council and this Council had notG/C/M/70
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been asked to address any matter in particular.  He suggested that the Secretariat draft a brief factual
report and that the Council adopt the report ad referendum , namely that Members would have five
days to comment on the draft report once the Secretariat has made it available to them, and if there
were no major substantive comments on it, the report would then be forwarded to the General
Council.  It was so agreed.
VIII.  OTHER BUSINESS
8.1 With respect to the grace period for the dismantling of TRIMs, the representative of Canada
expressed concern that some Members that had benefited from this procedure still had to submit
reports on the progress of eliminating currently existing TRIMs measures.  He urged delegations that
had not yet done so to submit a report as soon as possible and requested that this item be put on the
agenda of the next CTG meeting.  He was supported by the delegations of the United States and theEuropean Communities.
8.2 Following the General Council decision of 16 May 2003, adopting the waiver concerning the
Kimberley Process Certification Scheme for Rough Diamonds, the Chairman, for transparency
purposes, indicated the Members that had made notifications to this Council pursuant to paragraphs 3
and 4 of the decision.  Under paragraph 3, these were, to date:  the European Communities,
Switzerland, the Czech Republic, Hungary, and the Separate Customs Territory of Taiwan, Penghu,
Kinmen and Matsu, in the following G/C/- series of documents, respectively:  25, 26, 27, 28, and 30
and Corr.1.  Pursuant to paragraph 4, there had been a notification by Canada circulated in document
G/C/31 and by Australia in document G/C/32.
8.3 Second, he raised the matter of the update to the annual report to the General Council.  The
General Council, at its meeting on 10 February 2003, took up the question of the preparation of the
annual report that the General Council is to submit to the Cancun Ministerial Conference.  It agreed
that the General Council submit to the Ministerial Conference a brief update to its annual report for2002, which would describe developments since December 2002.  The Chair clarified that this meant
only routine annual reports of a factual nature that all WTO bodies were required to make under
existing procedures, and not any specific reports that Ministers at Doha had requested to be submitted
to them.  The Ministerial Conference would therefore have before it, as the annual report of the
General Council, a compilation of the 2002 annual reports of all the WTO bodies together with anupdate report concerning developments in 2003.  Pursuant to this, he proposed that the Secretariat be
asked to prepare an update to the Goods Council's annual report for 2002 that would cover work so far
this year.  He suggested that the Council adopt the report ad referendum , namely that Members would
have five days to comment on the draft report once the Secretariat had made it available to them, and
if there were no major substantive comments on it the report would be forwarded to the General
Council.  This proposal was accepted by Members.
8.4 Finally, he said that the CTG was scheduled to meet next on 29 and 30 September 2003.
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