RESTRICTEDWORLD TRADE
ORGANIZATIONG/IT/M/28
17 December 2001
(01-6346)
Committee of Participants on the Expansion of
Trade in Information Technology Products
MINUTES OF THE MEETING OF 24 SEPTEMBER 2001
Chairperson: Mr. Hiromi Yano (Japan)
Agenda of the Meeting  Page
1. Review of the Status of Implementation of the Ministerial Declaration on Trade in
Information Technology Products (G/IT/1/Rev.20)...........................................................1
2. Non-tariff Measures Work Programme (G/IT/SPEC/Q2/1, G/IT/SPEC/Q2/2,
G/IT/SPEC/Q2/3, G/IT/SPEC/Q2/4, G/IT/SPEC/Q2/5, G/IT/SPEC/Q2/6,
G/IT/SPEC/Q2/7)................................................................................................................ ..1
3. Divergences in Classifying Informat ion Technology Products (G/IT/14/Rev.1,
G/IT/W/6) ...................................................................................................................... ........5
4. New Participants............................................................................................................. ......5
5. Draft Annual Report of the Committee (2001) (G/IT/W/7) ..............................................5
6. Other Business............................................................................................................... ........6
Introduction
The Chairperson stated that the proposed agenda for this meeting was circulated in
WTO/AIR/1624 on 14 September 2001.  He asked if there were any other matters to be raised under
"Other Business".  Hearing no requests, he stated he would take up the "review of product coverage"
and the date of the next meeting of the Committee under this agenda item.  The agenda was adopted
with these additions.
1. Review of the Status of Implementation of the Ministerial Declaration on Trade in
Information Technology Products (G/IT/1/Rev.20)
1.1 The Chairman pointed out that an overview of the implementation of the Ministerial Declaration
on Trade in Information Technology Products was contained in G/IT/1/Rev.20. This document showed
the participants and the implementation issues pertaining to the WTO procedures for implementation.
1.2 The Committee took note of the Chairman's statement.
2. Non-tariff Measures Work Programme (G/IT/SPEC/Q2/1, G/IT/SPEC/Q2/2,
G/IT/SPEC/Q2/3, G/IT/SPEC/Q2/4, G/IT/SPEC/Q2/5, G/IT/SPEC/Q2/6,
G/IT/SPEC/Q2/7)
2.1 The Chairman stated the Committee had proceeded with work on the Non-Tariff Measures'
Work Programme, as contained in G/IT/19.  He noted that since the issuance of the airgram, there had
been a new submission, by Chinese Taipei, which was recently circulated in G/IT/SPEC/Q2/8.  Thus,
there were now eight submissions to the inventory, which had been circulated to the Committee in
documents G/IT/SPEC/Q2/1 through 8.  He noted that since the last meeting in July, there had been fewG/IT/M/28
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developments, and he was looking for a way to proceed.  He realized that the work in the WTO had
intensified in recent months, and there was likely little time to conduct an in-depth analysis of the
submissions.  At the last meeting he noted that some delegations indicated they would like to go through
the submissions or make comments on the submissions.  He hoped that the Committee could do some in-
depth analysis at this meeting, but from his consultations, perhaps it was premature.  He asked theCommittee how work should proceed with the NTM work programme.
2.2 The delegate of Australia stated that this issue remained very important to his delegation and it
was important for the Committee to continue its work on the assessment of non-tariff measures
impeding trade in information technology products.  He looked forward to a substantive discussion on
how to proceed, noting the final meeting this year in November.  While a limited number of
participants had made submissions to the NTM inventory, those that had contributed had identified awide range of concerns for a number of NTMs effecting several participants.  He noted that his
delegation would be circulating an assessment paper as part of phase II of the work programme this
week, which contained commentary on the impact of those NTMs.  He noted that it was a very
difficult process to quantify the economic or developmental impact but he hoped that after circulation
of their paper, the Committee could have a detailed discussion of how trade took place and wasimpeded.
2.3 He stated that his delegation would welcome the assessments of other participants in
accordance with the parameters of phase II.  Furthermore, he welcomed the contribution that has been
circulated today by Chinese Taipei on phase I, and encouraged others to continue to makesubmissions on phase I, but also to move toward s making submissions on phase II.  He noted that
most of the non-tariff  measures identified so far were subject to WTO disciplines, and perhaps one
useful way that the Committee could continue with its work was by giving consideration on how
those might be referred to the work of other rele vant WTO bodies, whether by way of making various
recommendations to those Committees or making an assessment as to how work in the Committeesmight be structured to take account of the outcomes of this work programme.
2.4 The delegate of New Zealand indicated that her delegation was now in a position to make a
submission to phase I of the work programme.  As indicated in earlier meetings, their particular
concern was about non-tariff measures in the area of government procurement and their submission
would outline some of their concerns in this area.  She noted the document would be submitted
shortly and any reaction to the submission that participants may wish to include in their analysiswould be welcomed.
2.5 The delegate of Canada stated that he would like to do a quick introduction to the two papers
they had submitted.  But before doing so he supported the point made by Australia that one of the
things the Committee needed to consider was how to refer some of these issues to other WTO bodiesand whether it should be in the form of recommendations or how they should structure their work.
For example, the Australian paper raised the im portant point about lack of transparency for
government regulations and the possibility that a number of bodies were given responsibility for
administering those regulations.  The Australian paper had suggested the publication of an accurately
detailed and accessible regulatory information facili ty, which could help facilitate this.  Perhaps this
was something to take up with the relevant Committees, or something to be done here in this
Committee.
2.6 In referring to their paper on conformity assessment of IT products/components for EMC, he
noted that this was based on their discussions with industry and with regulators with respect to theproblems posed by different conformity system  requirements.  He noted that world-wide
electromagnetic compatibility requirements for IT products were based on international standards, so
he thought the problem was with conformity assessment.  As these products often had a short life
cycles and needed to be marketed rapidly, any delay in getting them to the market-place had real
costs.  Furthermore, most IT products with regard to  EMC were low risk in terms of safety.  ThereforeG/IT/M/28
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he saw merit in seeing what could be done to unify and harmonise the conformity assessment
requirements of IT products.  In this respect, he suggested that it could be useful to have a workshop
with regulators with a view to identifying the regulatory concerns.
2.7 As concerned their paper on import licensing, he noted that this was based on their
consultations with industry.  One of the facts that emerged was there were a lot of countries that
required import licensing for IT products, and at least one of the problems that emerged was the
problem of tariff classification.  It was not a direct classification problem, but rather the bodies or
agencies responsible for the certification itself often did not agree with customs on where the products
were classified.  Therefore, the importer and the exporter were often waiting for two government
agencies to decide where the product was classified, and this lead to delays.   For example, an import
licence indicated a tariff classification that was not accepted by customs, or visa versa.
2.8 Secondly, another problem was the number of administrative bodies that often must approve
the import licences.  For example, it was not uncommon to have to go to the customs department, the
transport department, and the communications department, as well as others.  This created real costs
as the trader waited for the import licence to get approved.  Furthermore, he suggested there may beways to improve the transparency with regard to administrative procedures.  The longer the wait to
clear the licence, the longer the trade could not ship the product.  If the problem arose at the border,
the longer it has to sit in inventory, and warehousing costs were not insignificant.  There was also the
fact that many IT products had relatively short life cycles, therefore the exporter may lose the market.
For example, a two month delay could be equivalent to an additional import duty of 4 to 6 percent ofthe value of the product.  He stated that this issue was not about the right to have an import licence as
that was clearly set out in the Agreement.  He wanted to address ways of reducing costs associated
with import licences.
2.9 The delegate of Australia noted the explanation provided by Canada on their import licensing
paper with the need to reduce the burdens of administration of import licensing systems in order to
facilitate trade in IT products.  However, he sought clarification on the point of tariff classification
and the disagreement that could arise with customs over where the product was classified.  He asked
if the matter concerned those products covered under Attachment B, because he believed it did not
matter where those products were classified in Attachment B, as they were still covered by the
agreement.
2.10 The delegate of Canada responded to Australia and stated that it was an issue not related to
Attachment B.  The problem arose when the trader had to fill out an import licence form with a tariff
classification code and if they could not find out from the administrators of licences where they were
classifying a product or if they disagreed with customs, this was a problem.  For example, he noted
that a trader may have a product that customs indicated was classified in a particular tariff line, andthat tariff line was not covered by the import licensing requirements of an importing country.  But
upon importation, the licensing agency indicated that a licence was required based on the product
description.  The importer had to wait to see if the product is covered or not and this often caused real
delays, particularly if the issue came up when the goods were at the border.
2.11 The delegate of the European Communities encouraged participants who had not yet made a
submission in phase I to do so.  He noted that a ddressing NTMs was important, as they complemented
the benefits of the tariff reductions and ensured that these concessions were not compromised.
Furthermore, he noted that his delegation was preparing a contribution to phase II which involved
consultation with industry on the impact of the NTMs identified in phase I.  In this respect, hisdelegation was analyzing the submissions made by other participants and also work done in other
forums.  He expected to make a contribution towards the end of November 2001.  He commented that
the idea of a seminar was a good idea and it could, for example, take place after phase II.  He
suggested participants could be from regulatory authorities, industries, conformity assessment bodies,
international standard bodies, etc.  One particular issue to discuss might be to clarify the respectiveG/IT/M/28
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concerns and expectations of the authorities, in particular in the developing countries, and for industry
with regard to regulating products covered by the ITA.
2.12 The delegate of the Philippines sought clarification from Canada about the tariff classification
issue.  She thought there was clear tariff specification of the products where there was agreement, and
the Committee was continuing to work on the outstanding Attachment B classification issues.  She did
not understand the issue raised by Canada, further noting that the Import Licensing Agreement
specifically had rules that were being followed.  Sh e noted that if Canada had problems with what was
being notified to the Import Licensing Committee, perhaps it was relevant for Canada to make a
counter-notification to the Committee on Import Licensing.  She noted that is was important to avoid
duplication of work in the various WTO bodies, and if it was an import licensing problem, it should
be raised in that Committee.
2.13 Furthermore, she commented on the issue of seminars, and this respect it was important to
bear in mind the resources required.  She asked if the organization had the resources to have this kind
of seminar, as there were undoubtedly financial implications involved.
2.14 The delegate of Canada responded to the Philippines.  While noting the sensitivity of the
import licensing issue, he stated that most issues involved some aspect of the work of other WTO
bodies, but he also understood that the work progra mme would allow the Committee to look at these
issues with a particular focus from the IT sector.  Based on his delegation's consultation with
industry, there were real problems with respect to  import licensing.  He noted that Canada would look
into the issue of making a notification, but he pref erred to examine the issue in this Committee first as
this Committee had expertise with this industry.  He noted that the Canadian paper pointed out that it
was unfortunate that some countries had failed to respond to inquiries in the Import Licensing
Committee. Given that this work programme focused on IT products, he wanted to pursue this issue in
this Committee along the same lines that was being done with standards and regulatory matters.
2.15 With respect to the tariff issue, it was not disagreement amongst customs services of the
participants, but rather an issue of finding out from the import licensing body what was the customs
code for a product in order to identify whether or not this product was on their list.  For example, the
product would show up at the border and it would be classified in a heading that was not on the list
requiring an import licence, but subsequently it was found that the import licensing agency required
an import licence because it was on a  list no one had seen before.  So it was a matter of finding waysto reduce this kind of uncertainty as to whether an import licence was required or not.
2.16 The delegate of India stated that her delegation hoped to make a submission very shortly.
With respect to the proposal to hold either a se minar or workshop , she preferred to first try and
analyze the submissions that were submitted and then to see how such a seminar or workshop couldfeed into the work under the NTM work programme.  She was flexible on the issue, but thought it was
important to discuss it more before endorsing it.
2.17 Lastly, with respect to transferring or referrin g some of the NTMs identified to relevant WTO
bodies, she thought there needed to be a better assessment of what these NTMs were and this shouldhappen during the assessment in phase II.  Furthermore, she thought that the idea of preparing a list of
NTMs could be a useful first step.
2.18 The delegate of Chinese Taipei referred to their recent submission which proposed that
technical regulations on IT products should be posted on the internet to ensure it was readily
available.  Since most countries required that IT products meet certain technical regulations before
they were allowed to be imported, it was crucial to make this information readily available.  From
their experience, it was difficult and involved a lo t of time to gather all the information needed to
make IT products in conformity with the technical regulations of some countries.  The lack of readily
accessible technical regulation information could become a non-tariff measure in certain instances.G/IT/M/28
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His delegation suggested that ITA participants post their technical regulations on the internet to
facilitate trade on IT products.  He suggested that the Secretariat propose a standard format for each
posting for the benefit of compatibility.  If so agreed, such a format could be discussed and endorsed
at a future meeting.
2.19 The Chairman thanked Canada for refreshing memories about the submissions, as well as
giving food for thought for ways to proceed.  He noted the importance of other WTO bodies,
including the possibility of referring issues to other bodies where necessary and appropriate.  He
encouraged participants to submit to phase I, and also phase II, but realized the difficulties posed by
Doha.  He noted that the issue of seminars and workshops was mentioned, and responded that if the
Committee was to decide on a seminar, the funding aspects would have to be examined.  However, he
noted that other bodies, like TBT, held seminars quite often and have been able to find the funding.Furthermore, as a way forward, he suggested an in formal meeting before the next formal meeting at
the end of November, where the work programme would need to be evaluated.
2.20 The Committee took note of the statements made.
3. Divergences in Classifying Information Technology Products (G/IT/14/Rev.1, G/IT/W/6)
3.1 The Chairman recalled that the Committee had made good progress on the issue of classification
divergences.  There were good discussions in  the Committee on the basis of  document G/IT/W/6, and its
revision, G/IT/W/6/Rev.1.  He  recalled that the Committee was able to send List III to the WCO, and he
confirmed that the WCO had received the communication and had initiated work on this matter.  In fact,the items were included on the agenda of the next meeting of the WCO Harmonized System Committee,
scheduled to meet in mid-November 2001.  As concerned the other lists contained in the document, and
possible further work of the customs experts, he believed the Committee was awaiting further inputs from
delegations on how to proceed on these fronts.
3.2 The delegate of the European Communities noted the importance of continuing this work, and
he thought that this should be done in parallel with Harmonised System Committee (HSC) of the
WCO.  He confirmed that the HSC would be lookin g at these questions in mid-November but he also
thought that in some cases, they may not proceed rapidly.  It was important to encourage customs
administrations to provide examples of the products, because it was easier for the Committee and the
HSC to work on the basis of examples to have concrete results.  Given the fact there would be another
meeting of the Committee in November this year, he  thought it would be worth while to postpone a
decision on a way forward for several reasons.  He noted that the upcoming Doha agenda could have
an impact.  Furthermore, he fully supported the idea of having another meeting of customs experts,
and one of the items which they could reflect upon was how to modernise the Harmonised System
nomenclature.  He noted there was some urgency if the Committee wanted to introduce amendments
to the Harmonised System in 2007, as there were only two meetings per year at the WCO.
3.3 The Committee took note of the statements made.
4. New Participants
4.1 The Chairman noted that this item was placed on the agenda in case there were any new
schedules that would be forthcoming.  However, at this point in time there were no new schedules, nor
any new participants to consider.  The Committee took note of the statement.
5. Draft Annual Report of the Committee (2001) (G/IT/W/7)
5.1 The Chairman recalled to delegations that the Committee reported annually to the Council for
Trade in Goods.  The draft report for this year had been circulated in document G/IT/W/7.  The reportG/IT/M/28
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was a factual summary of the work undertaken in the Committee during the year and he noted that it
would likely need to be updated in light of the outcome of the discussions in the Committee.
5.2 The delegate of Slovenia proposed, that in paragraph 6, it would be useful to have more
numbers for the different situations, instead of general texts.5.3 The delegate of India noted that paragraph 4 should be changed to reflect the recent
submission from Chinese Taipei which was introduced  today.  There were eight submissions and not
seven submissions.  Furthermore, in the next sentence, she noted the phrase "the Committee then
examined the economic and developmental impact", in which she sought confirmation that the
wording match that in the NTM Work Programme.
5.4 The Chairman noted that the report would take into account the developments at this meeting,
and agreed to the changes suggested.
6. Other Business
6.1 The Chairman stated that the issue of the review of product coverage continued to be a matter
under consultation, and he encouraged delegations to continue their efforts.
6.2 Furthermore, he proposed that the Committee's next regular meeting be held on
29 November 2001, subject to confirmation.  It was so agreed.
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