RESTRICTED
WORLD TRADE WT/BOP/R/19
5November 1996
ORGANIZATION(96-4664)
Committee onBalance-of-Payments Restrictions
REPORT (1996) OFTHE COMMITTEE ON
BALANCE-OF-PAYMENTS RESTRICTIONS
1. Thisreport hasbeenprepared inpursuance oftheProcedures foranAnnual Overview ofWTO
Activities andforReporting under WTO (WT/L/105).1
2. Since 1December 1995 theCommittee hasheld consultations withfiveMembers under the
Chairmanship ofMr.Peter Witt(Germany).2
3. During theDecember 1995consultations withIndia, theCommittee recalled India'sstated aim
tomove, by1996-97, toatrade régime under which quantitative restrictions areretained onlyfor
environmental, social, health andsafety reasons, provided sustained improvement wasshown inits
balance ofpayments. TheCommittee noted theview expressed byIndia that,inthecontext ofa
deteriorating balance-of-payments situation, itwould beneither prudent norfeasible toconsider the
general lifting ofquantitative restrictions onimports atthisstage. Asthere weredivergent views on
India'sbalance-of-payments situation andontheconclusions tobedrawn, theCommittee welcomed
India'sreadiness tonotify totheWTO allremaining restrictions maintained forbalance-of-payments
purposes soonaftertheannouncement ofthe1996/97 Export-Import Policy andtoresume consultations
inOctober 1996.3Following arequest bytheIMFtoreschedule theconsultation, theCommittee agreed
thatthisconsultation would beheldon20-21 January 1997. InJuly1996, India submitted alistof
allitsquantitative restrictions maintained forbalance-of-payments purposes.4
4. During theconsultations withNigeria inFebruary 1996, theCommittee welcomed Nigeria 's
commitment toconvert allmeasures taken forbalance-of-payments purposes toprice-based measures,
toeliminate these andthereby todisinvoke Article XVIII: B.5Theconsultations resumed in
September 1996. TheCommittee tooknoteofthestatement byNigeria thattechnical andlegislative
processes hadbeeninitiated withaviewtoeliminating theimport prohibitions based onbalance-of-
payments grounds asof1January 1997, andthatpositive recommendations hadbeenmade tothis
end,subject tofinalGovernment approval. Itrequested Nigeria tonotify therelevant decisions to
theCommittee assoonastheyaretaken. Ifallmeasures were removed bythe1997 Budget, there
1TheAnnual Report fortheCommittee for1995 iscontained inWT/BOP/R/10.
2Since theentry intoforce oftheWTO, theCommittee hasheldconsultations with13Members (Table 1).
3WT/BOP/R/11, 23January 1996.
4WT/BOP/N/11, 23July1996.
5WT/BOP/R/13, 1March 1996.WT/BOP/R/19
Page2
would benoneedforfurther consultation; ifnot,theCommittee would resume itsconsultation with
Nigeria inFebruary 1997.6
5. During theJune1996 consultations withSlovakia, theCommittee welcomed thedecision of
theGovernment ofSlovakia, dated 25June1996, committing itself toeliminate thesurcharge with
effect from1January 1997, andtodisinvoke theprovisions ofArticle XIIofGATT 1994atthesame
time.7Slovakia reduced itsimport surcharge from 10to7.5percent, effective 1July1996.
6. Consultations wereheldwithTunisia inJune1996. TheCommittee recognized thatTunisia 's
balance-of-payments situation wasfragile. Itnoted Tunisia 'sclarification oftheonlyremaining
restrictionsforwhichitclaimedbalance-of-paymentsjustificationandtheagreementofTunisiatoprovide
anotification ofthese restrictions totheWTO within onemonth. Thislistsupplied byTunisia is
contained inWT/BOP/N/10.8TheCommittee discussed whether these restrictions could bejustified
forbalance-of-payments purposes. Opinions differed astowhether thisbalance-of-payments situation
constituted athreat ofaserious decline inTunisia 'smonetary reserves. Some Members, considering
thatthese residual measures represented thefinalstage inphasing outquantitative restrictions, stated
thatTunisia needed thefiveyears envisaged initsPlantocomplete thisprocess. Others recalled that,
under theUnderstanding onBalance-of-Payments Provisions oftheGATT 1994, the1979Declaration
onTrade Measures Taken forBalance-of-Payments Purposes andGATT Article XVIII:9, preference
should begiven toprice-based measures, andthatmeasures should beapplied tocontrol thegeneral
level ofimports, without sector-specificity; onthese grounds, theyrequested Tunisia toliftthe
quantitative restrictions promptly. Bearing inmind allthese factors, theCommittee agreed toresume
theconsultations withTunisia inJune1997onthebasisofanewmacroeconomic analysis bytheIMF.9
7. During consultations inSeptember 1996, Hungary confirmed itsfirmintention toeliminate
thesurcharge anddisinvoke balance-of-payments provisions by1July1997, atthelatest.10Hungary
notified theWTO thatitwasreducing the8percentimport surcharge, introduced inMarch 1995,
to7percenton1July1996 andto6percenton1October 1996.11
8. Theconsultations scheduled withTurkey andPoland inJuneandJuly, respectively, were
cancelledfollowingcommitmentsonthepartoftheseGovernmentstodisinvokethebalance-of-payments
provisions by1January 1997.12
9. InaccordancewiththeconclusionsoftheCommitteeinNovember1995,thePhilippinesnotified
theWTO thatithadliberalized itsrestrictions onagricultural products.13
6WT/BOP/R/18, 16October 1996.
7WT/BOP/R/15, 7July1996.
8WT/BOP/N/10, 10July1996.
9WT/BOP/R/14, 8July1996.
10WT/BOP/R/17, 16October 1996.
11WT/BOP/N/12, 6August 1996.
12WT/BOP/R/16, July1996; WT/BOP/N/7, 19June 1996; WT/BOP/N/8, 27June 1996.
13WT/BOP/N/9, 3July1996 (cf.BOP/312/Add.1/Rev.1, 1November 1994).WT/BOP/R/19
Page3
10. Inaccordance withtheconclusion oftheCommittee inNovember 1995, SriLanka notified
theWTO thatithadremoved import restrictions onfourtarifflines(potatoes, redonions, "B"onions
andpeppers).14
11. AreportonotherbusinessconductedbytheCommitteeiscontainedindocumentWT/BOP/R/16.
12. Inaccordance withtheannual notification requirement, contained inparagraph 9ofthe
Understanding, theCommittee adopted anotification format (WT/BOP/14) on21October 1996.
13. Pending afinaldecision bytheGeneral Council, theCommittee hasgranted adhocobserver
status tothefollowing intergovernmental international organizations: ACP, EFTA, EBRD, OECD,
UNCTAD andWorld Bank.
14. From1997,fourMembersareexpectedtobeconsultingunderArticleXVIII:12(b):Bangladesh,
India, Pakistan andTunisia. Nigeria andSriLanka willalsocontinue consultations ifanymeasures
justified onbalance-of-payments grounds remain inforce.
14WT/BOP/N/13, 30September 1996.WT/BOP/R/19
Page4Table 1
BOP CONSULTATIONS CONDUCTED SINCE THE ENTRY INTO FORCE OFTHE WTO
Member LastConsultation Follow up
Bangladesh March 1995 Thenextconsultations willbeheldinthespring of1997.
Brazil October 1995 Following consultations withtheCommittee, Brazil withdrew theprovisions forimport quota onmotor vehicles introduced in
June, witheffect from 27October 1995.
Egypt June1995 Egypt disinvoked Article XVIII:B witheffect from 30June1995.
Hungary September 1996 The8percentimport surcharge introduced inMarch 1995, hasbeenreduced to7percentasof1July1996 and6percentas
of1October 1996. Hungary confirmed itsfirmintention toeliminate thesurcharge by1July1997, atthelatest.
India December 1995 Theconsultation willresume on20-21 January 1997.
Israel June1994 Israel disinvoked thebalance-of-payments provisions asof15December 1995.
Nigeria February/September 1996 Nigeria committed itself toconvert allbalance-of-payments measures toprice-based measures andtodisinvoke
Article XVIII:B.
Pakistan November 1994 Thenextconsultation willbeheldon18-19 November 1996.
Philippines November 1995 ThePhilippines undertook todisinvoke Article XVIII:B subject totheliberalization ofremaining restrictions by
31December 1997. Restrictions onagricultural products were lifted inMarch 1996.
Poland June1995 Poland informed theCommittee inJune1996 thatitwould eliminate the3percentsurcharge anddisinvoke Article XIIby
1January 1997.
Slovakia June1996 Slovakia informed theCommittee inJune1996 thatitwould eliminate thesurcharge, lowered from 10to7.5percent asof
1July1996, anddisinvoke Article XIIby1January 1997.
South Africa May1995 South Africa disinvoked thebalance-of-payments provisions witheffect from 1October 1995.
SriLanka November 1995 Members questioned thebalance-of-payments justification ofremaining restrictions oneight fooditems andrecommended that
SriLanka nothaverecourse toArticle XVIII:B. InSeptember 1996, SriLanka notified theelimination ofrestrictions onfour
tariff lines.
Tunisia June1996 Opinions differed astothejustification ofbalance-of-payments grounds forquantitative restrictions onmotor vehicles. The
consultations aretoresume inJune1997.
Turkey June1995 Turkey informed theCommittee inJune1996 thatitwould reduce itsremaining duties tobound levels anddisinvoke the
balance-of-payments provisions asof1January 1997.