RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG/W/40
9 November 2000
(00-4745)
DRAFT REPORT (2000) OF THE
COMMITTEE ON REGIONAL TRADE AGREEMENTS
TO THE GENERAL COUNCIL
Chairman:  Mr. Edsel T. Custodio (Philippines)
I. INTRODUCTION
1. The terms of reference of the Committee on Regional Trade Agreements (CRTA) are:
"(a) to carry out the examination of agreements  in accordance with the procedures and terms
of reference adopted by the Council for Trade in Goods, the Council for Trade in
Services or the Committee on Trade and Development, as the case may be, and
thereafter present its report to the relevant body for appropriate action;
(b) to consider how the required reporting on the operation of such agreements should be
carried out and make appropriate recommendations to the relevant body;
(c) to develop, as appropriate, procedures to facilitate and improve the examination
process;
(d) to consider the systemic implications of such agreements and regional initiatives for the
multilateral trading system and the relationship between them, and make appropriate
recommendations to the General Council;  and
(e) to carry out any additional functions assigned to it by the General Council."1
2. At its first meeting in 2000, the CRTA elected Mr. Edsel T. Custodio (Philippines) as
Chairman of the Committee, and Ambassador Silvia Ávila Seifert (Bolivia), Ambassador Lee Jae Gil(Korea) and Dr. Vassili Notis (Greece) as Vice-Chairpersons.
3. During 2000, the Committee held three sessions, each including meetings devoted to the
examination of individual regional trade agreements (RTAs) and to discussions on systemic and
general matters.  The minutes of those meetings are listed in Attachment 1.  A number of informal
consultations have also been held, in an effort to reach convergence in the Committee's reporting onthe examination of agreements.
II. OBSERVER STATUS
4. The Committee agreed to grant observer status in the CRTA to the Latin American
Integration Association (LAIA), on an ad hoc  basis.  Definitive decisions on the requests for observer
status listed in document WT/REG/W/11/Add.3 will be made in accordance with the guidelines to be
defined by the General Council.
                                                     
1 Document WT/L/127, paragraph 1.  The footnote attached to that paragraph is not reproduced here.WT/REG/W/40
Page 2
III. EXAMINATION OF REGIONAL TRADE AGREEMENTS
5. To date, 220 RTAs have been notified to the GATT/WTO.2  O f  t h e s e ,  1 9 1  R T A s  w e r e
notified under GATT Article XXIV, of which 109 are still in force today; 18 agreements were notified
under the Enabling Clause;3 and 11 RTAs were notified under GATS Article V.
6. The Committee has currently under examination a total of 86 RTAs.4  The examination of
79 of these agreements has been referred to th e Committee by the Council for Trade in Goods, and
six by the Council for Trade in Services.
7. These examinations are at different stages in the process:  for seven RTAs, the Committee has
not yet started the factual examination.  Nineteen other RTAs are currently subject to such factual
examination.  The remaining 60 RTAs have already undergone factual examination and the draft
examination reports are in various stages of consultation and finalization.  (See Attachment 2.)
8. During 2000, the Committee continued its efforts to consolidate Members' support in favour
of a format for examination reports which would re spect the individual integrity of each agreement
examined and allow for the expression of differences in views.  However, the finalization of
examination reports has been hampered by the difficulties of form and substance experienced by the
Committee regarding the conclusions to be draw n.  At the Twenty-Seventh Session, the Chairman
submitted, for the formal consideration of the Committee, draft examination reports on fouragreements,
5 the examination of which had been initiated in 1996 and 1997.  In considering the drafts,
Members … [to be completed]
IV. REPORTING ON THE OPERATION OF AGREEMENTS
9. At its Twenty-Sixth Session, the Committee considered twenty reports on the operation of
agreements which had been submitted to the WTO in accordance with the schedule for the submission
of biennial reports on  RTAs for the year 1999 contained in document WT/REG/W/33.  An additional
biennial report, submitted in October 2000, is yet to be reviewed by the Committee.  (See
Attachment 3.)
10. General issues concerning reporting on RTAs were also addressed during the Twenty-Sixth
Session, in particular with respect to procedures for considering biennial reports.  Members stressed
that the consideration of such reports should be based on three imperatives:  enhancing transparency
of RTAs in force, contributing to the work under systemic issues and keeping the exercise
manageable.  At the Twenty-Seventh Session, the Committee devoted some time to discuss how
future work on biennial reports (in particular, the scheduling of those due in 2001)  should be
tackled.  [to be completed]
V. PROCEDURES TO FACILITATE AND IMPROVE THE EXAMINATION PROCESS
11. In May 1997, the CRTA had taken note of Chairman's Guidelines on Procedures to Improve
and Facilitate the Examination Process  (document WT/REG/W/15).  Experience has shown that
                                                     
2 This figure corresponds to notifications of new RTAs, as well as of accessions to existing RTAs.
3 Differential and More Favourable Treatment, Reciprocity and Fulle r Participation of Developing
Countries , Decision of 28 November 1979.
4 Two RTAs notified under GATT Article XXIV are yet to be transmitted to the Committee for
examination.
5 NAFTA, Goods and Services; EFTA-Hungary;  and ANZCERTA, Services (WT/REG4/W/1,
WT/REG13/W/1 and WT/REG40/W/1, respectively).WT/REG/W/40
Page 3
these guidelines needed to be partially reviewed.  Informal consultations were initiated in early 2000
aiming at facilitating the examination process and assisting the Committee in fulfilling its mandate.
For such consultations, the Chairman circulated informal papers suggesting elements for both a
reorganization of the examination procedures and guidelines on the format of examination reports.  At
a time when the Committee was confronted with an increasing backlog of reports on the examination
of individual RTAs, informal discussions were mainly centered on the latter issue.  On the basis of
these discussions, the Chairman formally circulated draft reports on four RTAs in September, for
consideration by the Committee.
12. At its Twenty-Seventh Session, the Chairman stated that the rationalization of the
examination exercise went beyond finalizing a few reports.  It also included clearing the large backlog
of examination reports in process, and efficiently dealing with a relatively greater number of
agreements notified to the WTO, compared to the past.  This pointed to the need for breaking the
impasse on examination reports, held up for one reason or another, by adopting a  practical way of
addressing the backlog and reorganizing the examination procedures, so as to ensure in particular that
substantive debate takes place in each round of examination of individual RTAs.
VI. SYSTEMIC IMPLICATIONS OF REGIONAL TRADE AGREEMENTS AND
INITIATIVES FOR THE MULTILATERAL TRADING SYSTEM AND THE
RELATIONSHIP BETWEEN THEM
13. Based on Members' written submissions made in 1999, the Committee continued to address
specific systemic issues during the year 2000.  Two background documents were also prepared by the
Secretariat and distributed to the Committee: a Synopsis of "Systemic" Issues Related to Regional
Trade Agreements  (document WT/REG/W/37) and Basic Information on Regional Trade
Agreements - Agreements Notified to the GATT/WTO and in Force as of 14 July 2000 (document
WT/REG/W/39).
14. At the Twenty-Fifth Session, the Committee continued the debate initiated in 1999 on
systemic issues in services, in particular on the basis of a submission by the European Communities(WT/REG/W/35).  While Members agreed that Article V of the GATS was a finely-balanced text
which should not be re-opened, disagreement existed on whether a discussion in the Committee aimed
at clarifying its scope through interpretation would be useful.  It was noted by some Members that
controversial issues were similar to those in the ar ea of goods, and it was suggested that clarification
could be made with respect to, for example, "substantial sectoral coverage", "substantially all
discrimination" and the provision of statistical information.  Others favoured focusing the systemic
discussion on conformity with basic obligations of GATS Article V, such as notification.
15. The Committee took stock of the fact that the systemic debate had stimulated extensive
discussions of the legal aspects of the relationship between RTAs and the multilateral trading system,
and devoted time to discuss how to further deal with systemic issues.  On the basis of the informal
discussions held, the Chairman circulated a document (WT/REG/W/38) in June, entitled Further
Work on Systemic Issues , which indicated inter alia  that the Secretariat would prepare horizontal
studies on the treatment of various policy provisions or measures in RTAs,
6 the first of which would
address internal trade liberalization in RTAs.7
                                                     
6 Document WT/REG/W/38 was circulated under the Chairman's sole responsibility, but the
consultations held on it had showed a great degree of support for the approach it set.
7 That includes coverage and exceptions, rules of origin régimes and denial-of-benefits rules, as well as
the liberalization processes and transitional provisions.WT/REG/W/40
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16. At the Twenty-Seventh Session, the Committee wa s also informed by the Secretariat of the
progress made regarding the first horizontal study, which is to be made available to Members by the
end of the year.  At that same Session, the Secretariat reported on its work on the "mapping" of RTAs,
providing global and regional factual information on RTAs, both in force and in progress.8
Subsequently, the results of the Secretariat's study were distributed in document WT/REG/W/41.  The
document provides a snapshot of the rapidly increasing number of trade agreements spanning a web
of relationships across sub-regional, regional and cross-regional levels.  As of 31 July 2000, the study
identified 172 RTAs in existence, a number which will increase to 240 after five years despite
significant consolidation of some agreements in that period.  This illustrates the robust dynamism in
the whole phenomenon of RTAs after the Uruguay Round.
VII. FINAL REMARKS
17. The Committee has pursued its examination work and succeeded in concluding the factual
examination of a number of RTAs, but has been unable to finalize reports on any of the examinations
before it.  Progress in this regard was slowed, inter alia , [by disagreement among Members on the
interpretation of certain elements of those rules relating to RTAs, as well as on procedural aspects].
18. Similarly, the Committee is not in a position to make recommendations to the General
Council under item 1(d) of its Terms of Reference, although new direction has been given to work on
systemic issues.
                                                     
8 This document complemented a Secretariat note, distributed informally in November 1998, on
Mapping of Regional Trade Agreements , which provided a historical view of RTA developments.WT/REG/W/40
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ATTACHMENT 1
Minutes of the Meetings held in 2000
Twenty-Fifth Session – 29-30 March 2000
WT/REG/M/25
WT/REG67/M/2 Turkey and the Czech Republic
WT/REG68/M/2 Turkey and the Slovak Republic
WT/REG70/M/2 Turkey and Estonia WT/REG72/M/1 Turkey and Bulgaria
WT/REG64/M/1 Estonia and the Faroe Islands (Government of Denmark)
WT/REG55/M/3 Croatia and Slovenia
WT/REG65/M/1 Israel and Poland
WT/REG66/M/1 Israel and SloveniaWT/REG36M/1 Former Yugoslav Republic of Macedonia (FYROM) and
Slovenia
Twenty-Sixth Session – 6-7 July 2000
WT/REG/M/26WT/REG65/M/2 Israel and Poland
WT/REG66/M/2 Israel and Slovenia
WT/REG55/M/4 Croatia and SloveniaWT/REG36/M/2 FYROM and Slovenia
WT/REG69/M/3 EC and Tuni sia (Euro-Mediterranean)
WT/REG91/M/1 EFTA and Morocco
WT/REG72/M/2 Turkey and Bulgaria
WT/REG90/M/1 Bulgaria and FYROM
WT/REG77/M/1 Estonia, Latvia and Lithuania
WT/REG80/M/1 Poland and Latvia
Twenty-Seventh Session – 12-13 October and 17 November 2000
WT/REG/M/27
WT/REG22/M/3 Turkey and the EC
WT/REG36/M/3 FYROM and Slovenia
WT/REG83/M/1 Hungar y and Lithuania
WT/REG84/M/1 Hungary and Latvia
                                 ( Accession of the Kyrgyz Republic to the Customs Union
       ( Kyrgyz Republic and the Russian Federation
       ( Kyrgyz Republic and Ukraine
WT/REG/GEN/M/5 ( Kyrgyz Republic and Uzbekistan
       ( Kyrgyz Republic and Moldova
       ( Kyrgyz Republic and Kazakhstan
                                 ( Kyrgyz Republic and Azerbaijan, Armenia, Belarus,
Georgia, Moldova, Kazakhstan, Russian Federation, Ukraine,
Uzbekistan, TajikistanWT/REG/W/40
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ATTACHMENT 2
List of RTAs Under Examination9
RTAs for which draft reports on the examination are under formal consideration (4):
                                                     
9 Unless otherwise indicated, the examinations of RTAs listed below refer to trade in goods only.ANZCERTA (services) EFTA-Hungary NAFTA (goods and services)
RTAs for which draft reports on the examination are under consultation (27):
CEFTA
EC-Bulgaria
EC-Czech Republic
EC-Enlargement (goods and
services)
EC-EstoniaEC-Hungary (goods and
services)
EC-LatviaEC- Lithuania
EC-Poland (goods and
services)
EC-Romania
EC-Slovak Republic (goods
and services)
EFTA-Bulgaria
EFTA-Estonia
EFTA-IsraelEFTA-Latvia
EFTA-Lithuania
EFTA-Poland
EFTA-Romania
EFTA-Slovenia
Estonia-Latvia-LithuaniaIceland-Faroe Islands
Norway-Faroe Islands
Switzerland-Faroe Islands
RTAs for which factual examinations have been concluded (29):
Canada-Chile
Canada-Israel
Czech Republic-Estonia
Czech Republic-LatviaCzech Republic-Lithuania
Czech Republic-Turkey
EC-P. of Andorra
EC-Slovenia
Israel-Czech Republic
Israel-HungaryIsrael-Poland
Israel-Slovak Republic
Israel-Slovenia
Poland-LithuaniaRomania-Moldova
Slovak Republic-Estonia
Slovak Republic-Latvia
Slovak Republic-Lithuania
Slovak Republic-Turkey
Slovenia-CroatiaSlovenia-Estonia
Slovenia-FYROM
Slovenia-Latvia
Slovenia-LithuaniaTurkey-Estonia
Turkey-Hungary
Turkey-Israel
Turkey-Lithuania
Turkey-Romania
RTAs under factual examination (19):
Bulgaria-FYROM
EC-Faroe Islands
EC-TurkeyEFTA-Morocco
EU-Tunisia
European Union (services)
Faroe Islands-Estonia
Hungary-LatviaHungary-LithuaniaKyrgyz Republic-Azerbaijan,
Armenia, Belarus, Georgia,
Moldova, Kazakhstan,Russian Federation, Ukraine,
Uzbekistan and Tajikistan
Kyrgyz Republic-Kazakhstan
Kyrgyz Republic-Moldova
Kyrgyz Republic-Russian
FederationKyrgyz Republic-Russian
Federation, Belarus and
Kazakhstan
Kyrgyz Republic-Ukraine
Kyrgyz Republic-Uzbekistan
MERCOSUR
Poland-Latvia
Turkey-Bulgaria
RTAs for which factual examination has not yet commenced (5):
EC-Palestinian Authority
EC-MexicoPoland-Faroe Islands
Estonia-UkraineTurkey-PolandWT/REG/W/40
Page 7
ATTACHMENT 3
1999 Schedule for the Submission of Biennial Reports on RTAs
Reports submitted and considered by the CRTA (20)
Caribbean Community and Common Market (CARICOM)
Central American Common Market (CACM)
Czech Republic/Slovak Republic Customs Union
European Free Trade Association (EFTA)EFTA/Czech Republic
EFTA/Slovak Republic
EFTA/Turkey
European Communities (EC)/Algeria
EC/CyprusEC/Egypt
EC/Iceland
EC/Israel
EC/Jordan
EC/LebanonEC/Malta
EC/Morocco
EC/Certain Non-Europ ean Countries and Territories II (PTOM II)
EC/Syria
EC/Switzerland and LiechtensteinEC/Tunisia
Report submitted to the WTO but not yet reviewed (1)
Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA)
Reports not submitted to the WTO (3)
Australia-Papua New Guinea Agreement (PATCRA)
EC/NorwayUnited States/Israel
__________