RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/RL/M/16 
12 July 2004 
 
 (04-2995) 
Negotiating Group on Rules  
  
 
SUMMARY REPORT OF THE MEETING 
HELD ON 29 JUNE 2004 
 
Note by the Secretariat
 
 
 
1. The Negotiating Group on Rules ("the Group") held a formal meeting on 29 June 2004. 
A. ADOPTION OF THE AGENDA  
2. The Group adopted the following agenda: 
A. Adoption of the Agenda 
B. Regional Trade Agreements (RTAs) 
C.  Other Business 
 B. R
EGIONAL TRADE AGREEMENTS  
3. The Chairman indicated that the main issue fo r the formal meeting was the consideration of 
the joint submission presented by the ACP Group  of participants and distributed as document 
TN/RL/W/155, which had already been addressed in a preliminary manner at the Group's previous 
meeting (TN/RL/M/15). 
4. In introducing this joint submission, one spons or, speaking on behalf of all the proponents, 
thanked the delegations that had supported, comment ed, and/or raised questions regarding the joint 
submission, and those that subsequently forwarde d their preliminary questions in writing.  These 
preliminary questions, as well as others raised during the May meeting, were currently being 
examined by the sponsors and had indeed been us eful.  The proponents had decided to refine the 
paper and would submit a revision at  a later date.  That revision w ould take into consideration the 
breadth, depth and scope of the issues; the concerns  raised by delegations; the critical importance of 
the development aspects of RTAs; and Special and Di fferential (S&D) Treatment in the WTO rules in 
general, as well as in GATT 1994 Article XXIV and the Enabling Clause in particular.  The sponsors' 
intent was not only to address some of the preliminar y concerns highlighted by delegations but also to 
ensure the necessary clarity and focus in their proposals.  In this regard, the discussions and 
substantive questions at this meeting raised would prove to be instructive.  He called on Members to 
be cognisant of the fact that arriving at a consen sus document agreeable to all sponsors could be a 
delicate and time consuming exercise.  However, where possible, the proponents would attempt to 
address some of the preliminary questions at this meeting.  In streamlining the proposal, it was hoped 
that both the political message and substantive cont ent would be better crystallized, thereby assisting 
in moving the process forward in a meaningful way while at the same instance taking into account the 
development dimension of RTAs.  He reiterated that from the proponents' perspective, RTAs 
represent a fundamental instrument of developm ent and economic integration which required a 
multilateral framework supportive and complementary to their formation and functioning.  With TN/RL/M/16 
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 respect to the Enabling Clause, it should be made cl ear that the proponents supported its preservation, 
since it provided the requisite legal cover for RTAs between developing countries.  Of  equal 
importance was to explore options for the provision  of additional S&D treatment and flexibility for 
developing countries, cutting across paragraphs 5 to 8 of Article XXIV of GATT 1994.  The determination of trade and product co verage threshold levels in respect of the "substantially all trade"  
requirement and the interpretation of the term "o ther restrictive regulations of commerce" (ORRCs) 
was also central in this regard.  The proponents had also taken note of some of the interesting 
proposals submitted by Members, particularly those relating to transparency and notification; they 
were reflecting on them and paying specific attenti on to the recent proposal regarding examination of 
RTAs.  It was hoped that Members would take the in itial paper in the spirit in which it was presented, 
and that delegations would accept the path the pr oponents had chosen to follow, with respect to 
improving the proposal using concerns raised as essential building blocks. This notwithstanding, 
additional comments were welcomed, and the proponen ts stood ready to work with the Chairman and 
other delegations in support of the continuation of the Group's work. 
5. Another representative from that same delegati on provided preliminary answers to questions 
raised by delegations, to capture and clarify certa in elements in the document submitted.  Regarding 
questions on paragraph 11(ii) of the document, he e xplained that the aim was to point to the need to 
allow longer transitional periods for developing coun tries, where legitimately warranted.  This could 
be achieved, inter alia , by explicitly clarifying the method of approach to determining "exceptional 
circumstances"; the reference to "not  less that 18 years" should merely be considered to be indicative, 
given that the actual permissible length of the exte nded period would have to be determined through 
the negotiation process.  The elements of that proposal  would be refined further to ensure that there 
was a mechanism to allow for compatibility and tran sparency during the transition period.  Regarding 
questions relating to the developmental aspects of the proposals, he said that the intention had been to 
adhere to paragraph 29 of the Doha  Mandate which explicitly stated th at "the negotiations shall take 
into account the developmental aspects of regional trading agreements".  In reply to questions 
regarding the "Cotonou Partnership Agreemen t" (CPA) and regional Economic Partnership 
Agreements (EPAs) currently under negotiation be tween the ACP Group of States and the European 
Union (EU), he noted that these were still at a preliminary stage.  Without prejudging their outcome, he provided an indication of their scope.  First,  the CPA was a broad-based co-operation agreement 
covering a diverse number of themes, including  political dialogue, development co-operation and 
economic and trade relations; its major objectiv e was to reduce and eradicate poverty, promote 
sustainable development and to support the gradua l integration of the ACP countries into the world 
economy.  Second, while the CPA in effect c ontinued much of the co-operation relationship 
established under preceding Lomé Agreements, the ne w approach undertaken under the trade chapter 
provided for the conclusion of new trading arra ngements between the ACP and the EU, which would 
be WTO compatible and progressively remove barriers to trade between them.  This was a new step in 
their relations:  while previous trade arrange ments under Lomé consisted of non-reciprocal 
preferential market access for the ACP, the new arra ngements, still in the process of being negotiated, 
would not require a WTO waiver and would be, as they were intended to be, WTO compatible.  
Third, Annex V of the CPA Trade Chapter provided for a time-bound continuation of the non-reciprocal preferential market access for ACP prod ucts until the new trading arrangements were in 
place;  such access was under WTO waivers fro m Article 1.1 of the GATT 1994 in general,
1 and 
Article XIII.1-2 of the GATT 199 4 for one particular product,2 both of which were agreed to in Doha.  
Fourth, negotiations for the new trading arrangeme nts began in 2002 and were expected to conclude 
in December 2007, entering into force in January 20 08; in this respect, the waiver from Article 1.1 of 
the GATT 1994 would continue until December  2007.  Fifth, the new arrangements would go beyond 
tariffs and goods to include also services and trad e-related subjects such as intellectual property, 
technical barriers to trade and sanitary and phyto sanitary measures.  Finally, responding to a question 
                                                      
1 See WT/MIN(01)/15. 
2 See WT/MIN(01)/16.  TN/RL/M/16 
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 by another delegation regarding the relationship between Article XXIV of GATT 1994 and Article V 
of GATS, he stated that the proposal merely hi ghlighted the degree of incongruence between these 
Articles:  while the latter explicitly provided fo r S&D treatment for developing countries, such a 
philosophy was not contained in Article XXIV.  Hen ce the parallel drawn in the proposal.  He added 
that this aspect of the proposal would also be  revisited in order to provide more clarity. 
6. Some participants expressed sympathy for th e idea of introducing greater flexibility for 
developed-developing country agreements within  Article XXIV of the GATT 1994, so as to support 
the development and integration of developing countr ies into the multilateral trading system.  It was 
however noted that while the negotiations were to  take into account the developmental aspects of 
RTAs, any flexibility agreed upon would have to be  well defined and targeted, and should not allow 
that agreements be outside the rules-based syst em.  In particular, the need for respecting the 
requirements of paragraph 4 of Article XXIV of  the GATT 1994 was stressed.  The point was made 
that the clarification of rules resulting from the Doha Development Agenda should lead to rules 
providing for the maximisation of RTA benefits a nd minimization of its costs.  One delegation 
expressed concern with the fact that the proposal app eared to provide for the consolidation, within the 
WTO system, of existing unilateral preferences. 
7. Some participants noted that there was a n eed to explore the concept of "development-
friendly" RTAs, e.g., by grasping which RTA characte ristics would be positive for development.  It 
was observed that it could not be assumed that th e flexibility provided by the Enabling Clause was 
beneficiary to developing countries; and that Article XXIV of GATT 1994 might contain more 
appropriate criteria in that respect. 
8. Participants also commented upon numerous spec ific issues.  The point was made that it 
would not be acceptable that no obligations (incl uding notification requirements) would apply during 
the transition period.  A few participants noted that it would not be appropriate  to provide for different 
transparency rules for developed-developing country agreements, and that tec hnical assistance should 
be envisaged instead.  Some participants also hi ghlighted that recourse to dispute settlement should 
always be possible, irrespective of discussions  and assessment made in the Committee on Regional 
Trade Agreements (CRTA).  Questions were rais ed concerning the proposal regarding ORRCs in 
paragraph 11(i) of document TN/RL/ W/155, which could give rise to ambiguity; in that respect, one 
participant questioned the assertion that rules of or igin constituted an ORRC.  Some participants 
highlighted the fact that the scope of the En abling Clause was limited to goods, and that services 
agreements concluded among developing countries were subject to the disciplines of GATS Article V. 
9. Regarding EPAs, some participants enquired whet her the intention was th at these agreements 
be compatible with existing WTO rules or whet her the proposal sought new rules to ensure the 
compatibility of these agreements. 
10. A co-sponsor of the proposal noted that the negotiation of legally-based, consistent and 
predictable rules on Article XXIV of the GATT 1994 for the benefit of developing countries 
constituted one of the Group's more substantive proposals on transparency, as the proponents could 
not depend on the sometimes arbitrary interpretation of  Article XXIV to chart their development path.  
While the proposal needed further refining, he highli ghted that its fundamental basis was the need to 
integrate meaningful S&D treatment within Artic le XXIV of the GATT 1994.  There was a need to 
recognize the different levels of development a nd capacity of developing countries involved in 
developed-developing country RTAs;  this should be consolidated in the rules, through, for example, 
longer transition periods, flexible in terpretation of "substantially all tr ade" and rules of origin, and the 
preservation of the Enabling Clause for RTAs between developing countries.  Finally, he highlighted 
the appropriateness of this Group as a forum for ap plying the concepts of the Doha Development 
Round and  of a meaningful S&D treatment, through the recognition of the joint proposal's request for 
asymmetry for developed-developing country RTAs. TN/RL/M/16 
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 11. One participant argued that discussions related to S&D treatment should be held after the 
Group had been able to clarify WTO rules on RTAs.  
12. Replying to the comments made, one co-spons or noted that EPAs and WTO negotiations 
were being held in parallel, and th at the former were only in a prelim inary stage.  In that sense, he 
cautioned against jumping into conclusions regardin g the relationship between the proposal made and 
EPAs' compatibility with WTO rules.  He stressed that the aim of the proponents was to create a 
framework that would foster development throu gh RTAs.  He reiterated that all questions and 
comments made by participants would be taken in to account in the revision of the joint proposal, 
which would be of a more precise nature. 
13. Regarding EPAs, a representative of a group of  countries involved in this partnership 
confirmed that the aim was to have WTO compatible RTAs, and that it was premature to discuss the 
waiver issue at that point in time. 
14. Following that discussion, the Group reverted into an informal mode.  To guide the informal 
debate, the Group had at its disposal three in formal papers, namely (i) the Chairman's Roadmap for 
Discussions on RTAs "Systemic Issues – Rev.1, with discussions focusing on RTAs coverage 
questions; (ii) a Secretariat's Draft outline for a factual presentation on individual RTAs (Services) ; 
and (iii) a Secretariat's background note entitled CRTA – Establishment and Functioning  (Job(04)/83).  
At the end of the informal discussions, the Group reverted back to formal mode. 
C. 
OTHER BUSINESS  
15. The Chairman announced that a room had been booked for the next Group's meeting on 22 
July 2004.  He requested that this date be retained in principle but that participants keep in mind that it 
might be changed depending on the overall progress of the negotiations. 
 
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