WORLD TRADE
ORGANIZATIONG/SG/58
18 November 2002
(02-6366)
Committee on Safeguards
CHAIRMAN'S REPORT TO THE COUNCIL FOR TRADE IN GOODS
ON TRANSITIONAL REVIEW OF CHINA
1. The Committee on Safeguards undertook the first transitional review of China's
implementation of the Agreement on Safeguards pursuant to Paragraph 18 of the Protocol on theAccession of the People's Republic of China (WT/L/432) at its meeting on 28 October 2002.
2. Annex 1A to the Protocol requires China to submit information regarding the implementation
of its Regulation on Safeguards.  The information provided by China in this regard is contained in
document G/SG/W/193.  The Committee also reviewed the notifications made by China in documents
G/SG/N/1/CHN/1; G/SG/N/1/CHN/2; G/SG/N/6/CHN/1; G/SG/N/7/CHN/1; and G/SG/N/11/CHN/1.
3. Members submitted questions in the context of the transitional review relating to China's
notification of legislation in G/SG/N/1/CHN/2.  The questions pos ed by Members can be found in
documents G/SG/Q1/CHN/1; G/SG/Q1/CHN/2; G/SG/Q1/CHN/3; G/SG/Q1/CHN/4; and
G/SG/Q1/CHN/6.  Questions were also submitted re garding certain safeguard action taken by China.
These can be found in document G/SG/Q2/CHN/1.
4. The statements made at the meeting of 28 October 2002, at which the transitional review was
Item C of the agenda, are reflected in the minutes of the meeting, which will be circulated as
document G/SG/M/20.  The relevant paragraphs which reflect the statements made and the discussion
at the meeting are annexed.G/SG/58
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ANNEX
C. TRANSITIONAL REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF
ACCESSION OF THE PEOPLE' S REPUBLIC OF CHINA TO THE WORLD TRADE
ORGANIZATION.
1. The Chairman noted that paragraph 18 of the Protocol of Accession of the People's Republic
of China to the World Trade Organization provides that all subsidiary bodies, including this
Committee, "which have a mandate covering China's commitments under the WTO Agreement or
[the] Protocol shall, within one year after accession, review, as appropriate to their mandate, the
implementation by China of the WTO Agreement and of the related provisions of [the] Protocol."
China was to provide relevant information in adva nce of the review, including information specified
in Annex 1A to the Protocol.  China could also raise issues relating to any reservations under
Section 17 or to any other specific commitments made by other Members in the Protocol, insubsidiary bodies which have a relevant mandate.  The Chairman further noted that the Committee
must report the results of the review promptly to the Council for Trade in Goods, and that review is to
take place after accession in each year for eight years, with a final review in year 10 or at an earlier
date decided by the General Council.  The Chairman stated that there were no procedures set out for
the conduct of the transitional review in the Prot ocol, except that China is to provide relevant
information in advance of the review.  In accordance with section IV.6 of Annex 1A to the Protocol,
China was required to notify the Committee of its implementation of its Regulation on Safeguards.
2. The Chairman noted that China had made a number of notifications, consistent with the
obligations of all Members under the Agreement.  China had made two legislative notifications,
which can be found in documents G/SG/N/1/CHN/1 and G/SG/N/1/CHN/2.  China had also madeseveral notifications regarding safeguard action taken in respect of imports of steel.  These notifications
could be found in documents G/ SG/N/6/CHN/1, G/SG /N/7/CHN/1, and G/SG/N/ 11/CHN/1.  China had
also sent a fax on 24 October 2002 concerning the implementation of its Regulation on Safeguards.
3. The Chairman stated that a number of Members had submitted questions in the context of the
transitional review, both in respect of China's legislative notification G/SG/N/1/CHN/2, and in respect ofits notifications of safeguard action.  These que stions can be found in documents G/SG/Q1/CHN/1,
G/SG/Q1/CHN/2, G/SG/Q1/CHN/3, G/SG/Q1/C HN/4, G/SG/Q1/CHN/6, and G/SG/Q2/CHN/1.
4. The representative of the United States asked whether China would be providing any written
replies to questions.
5. The representatives of the EC and Japan  suggested that China should respond to follow-up
questions at this meeting, and requested clarification in  this regard.  The EC stated that written replies to
the questions would certainly be helpful.
6. The representative of China stated that his delegation would make a general presentation
regarding China's implementation of the Safeguards  Agreement, and then provide oral responses to
TRM questions received in advance.  China would not provide written responses to questions raised in
the context of the TRM, since there was no requir ement for written answers in China's Protocol of
Accession.  China would answer follow-up questions when China's legislative notification
G/SG/N/1/CHN/2 is forma lly reviewed by the Committee at the April 2003 meeting.  China was keen
not to duplicate the legislative review process that will take place at the April 2003 meeting.
7. The representative of China addressed the following statement to the Committee (see document
G/SG/W/192):G/SG/58
Page 3
Thank you, Mr. Chairman.  Let me first take this opportunity to thank you
and the Secretariat for preparations and arrangement for this first review by the
Committee on Safeguards at today’s meeting pursuant to paragraph 18 of the
Accession Protocol of China.
Mr. Chairman, it is the consistent policy of the Chinese government to pursue
and uphold a fair and open trading policy. China’s accession to the WTO, despite the
enormous challenges it poses, is a genuine reflection of our strong quest in this
regard. We believe this review by the Committee is important and useful. It gives us
an opportunity to look into, and to exchan ge views on all the commitments that have
been made in accordance with the WTO Agreement on Safeguards during the process
of China’s WTO accession.
Mr. Chairman, in my statement today, I will focus on three aspects. The first
is an overview on China’s implementation of WTO Agreement on Safeguards since
China’s accession to the WTO. The second part will be responses to those questions
of common concern addressed to us by some Members prior to this meeting, andlastly, Mr. Chairman, I would also like to raise China’s concerns with regard to
safeguard.
Regarding China’s implementation of WTO Agreement on Safeguards,
Mr. Chairman, in paragraph 154 of the Working Party Report on China’s Accessionto the WTO, China made the following commitment, “China would implement its
Regulations on Safeguards by which the future safeguard measures would be
regulated. The contents of this new regulation would be fully consistent with the
Agreement on Safeguards.” Based on this commitment and in accordance with
relevant provisions in the Law of the People’s Republic of China on Foreign Trade,China formulated its Regulations on Safeguards, which was adopted by the State
Council on 31 October 2001. The regulation was promulgated by the State Council in
Decree No. 330 on 26 November 2001 and it went into effect on 1 January 2002.
Apart from this main dedicated regulation, China also enacted two
administrative rules on safeguard. They are the Provisional Rules on Initiation of
Safeguard Investigation, and Provisional Rules on Hearing in SafeguardInvestigation. Both of them were promulgated by the Ministry of Foreign Trade and
Economic Cooperation (“MOFTEC”) on 10 February 2002 and came into effect on
13 March 2002.
China initiated one case of safeguard investigation after accession, which is
still in process now. China Iron and Steel Association (“CISA”), together with five
major iron and steel companies in China, filed an application with the Ministry of
Foreign Trade and Economic Cooperation (MOFTEC) on 19 April this year,
requesting safeguards investigation into import of certain steel products and
application of provisional safeguard measures.
Based on the preliminary determination made thereafter that there was
evidence proving that the import increase had caused serious injury and threat of
serious injury to the Chinese iron and steel industry, MOFTEC announced on
20 May 2002 to initiate a safeguard investigation into certain steel products, and thata provisional safeguard measure against certain steel products would be effective
from 24 May 2002. The provisional safeguard measure took the form of tariff rate
quota and would last 180 days. The safeguard investigating authorities will decide
whether to apply a final safeguard measure according to the investigation results.G/SG/58
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Regarding these regulations, administrative rules and measures I mentioned
above, China has met its obligation to notify WTO and its Members.  China notified
the existence of the Regulations on Safeguards and the two administrative rules to the
WTO on 6 June 2002. Full text of the regulation itself in English was provided laterin a second notification on 27 August 2002. The two administrative rules are still in
the process of translation and the English texts will be provided once available.
On the safeguard measures regarding certain steel products, China also
notified the initiation of the safeguard investigation, pursuant to Article 12.1(a);
application of the provisional safeguard measure, pursuant to Article 12.4; and
developing Member exemption pur suant to Article 9, Footnote 2.
Mr. Chairman, prior to this meeting, questions were put forward by several
Members to us regarding China’s legislation on safeguard and its enforcement. I
would like now to respond to those which are of common concern to Members.
1. Function of various government authorities in safeguard investigations.
Presently, three government agencies in China are involved in safeguard
matters. They are the Ministry of Foreign Trade and Economic Cooperation
(MOFTEC), the State Economic and Trade Commission (SETC) and the TariffCommission of the State Council (TCSC).
According to the Regulations on Safegu ards, MOFTEC is in charge of the
investigation and determination of increase of imports. If a definitive safeguard
measure takes the form of quantitative restriction, a decision shall be made andpublished by MOFTEC as the foreign tr ade administrative authority. SETC is
responsible for investigation and determination of injury. TCSC is to decide whether
to increase tariff level as provisional or final safeguard measure, upon proposal made
by MOFTEC on the basis of the investig ation findings. The specific provision
governing the responsibility of TCSC is found in Article 24 of the Regulation.
According to the said Article, safeguard measures shall be limited to the extent
necessary to prevent or remedy serious injury and to facilitate the adjustment of thedomestic industry. The reason that MOFTEC and TCSC decide upon different forms
of safeguard measures is to ensure the uniformity in administration of trade laws and
regulations, as required by Article 10 of GATT 1994. While MOFTEC is the
government agency to formulate and enforce administrative measures concerning
trade, TCSC is in charge of matters relating to formulation of customs tariffs.
Other than the above functions carried out by SETC and the Tariff
Commission, MOFTEC deals with the other issues related to safeguard, including
consultation, notifications, dispute settlement concerning safeguard measures and etc.
2. Implementation of Article 32 of the Regulations on Safeguards.
Mr. Chairman, some Members are concerned that China may take the
“corresponding measures” under Article 32 of the Regulations on Safeguards. I
would like to make it clear here that firstly, China has not yet applied Article 32 ofthe Regulations on Safeguards and therefore has not taken any “corresponding
measures”; secondly, being a WTO Member, China will first resort to the dispute
settlement provisions provided in the Safeguard Agreement and the dispute
settlement provisions under Annex II of the WTO Agreement before taking theG/SG/58
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“corresponding measures”, if the other party is also a WTO Member; thirdly, if any
rebalancing measures would be taken, China will abide by the provisions of Article 8
of the Safeguard Agreement.
3. On issues related to “developing country Members”.
Article 23 of the Regulations states that safeguard measures shall be applied
to a product irrespective of its origin. However, I would also like to make it clear here
that nothing prevents China from enforcing Article 9.1 of the Safeguard Agreement,
that is, to exclude those developing Members meeting specified conditions from the
application of the safeguard measures. In practice, developing Members meeting the
requirements of Article 9.1 of the Safeguard Agreement had been excluded fromChina’s provisional measures on certain imported steel products, as has been notified
to this Committee. To define and identify a developing Member, China will make
reference to regulations and practices of other WTO Members. In this regard, I would
also like to say that it is an indisputable fact that China itself is a developing country.
The European Communities and Canada recognized this fact and treated China as adeveloping Member in their recent safeguard measures on certain imported steel
products. I would like to take this opportunity to express our appreciation. In this
regard we are greatly concerned that the United States did not take a fair and
objective approach of treating China as a developing Member in its Section 201
investigations against certain imported steel products, despite the fact that China’sdeveloping country status has been recognized by each and every other WTO
Member and consolidated by China’s WTO accession.
4. Implementation of Article 11 of the Safeguard Agreement.
Some WTO Members hope that China would clarify that it will not
implement the “grey measures” prohibited under Article 11 of the Safeguard
Agreement. I would like to confirm here that China will abide by Article 11 of the
Safeguard Agreement.
However, I must bring Members’ attention to such a fact that some Members
imposed upon China what are exactly prohibited by Article 11 of the SafeguardAgreement, by inserting paragraph 16 into China’s Protocol of Accession to WTO.
With that paragraph, voluntary export restraints on the part of China were provided
for as an alternative to product-specific safeguard measures.
Mr. Chairman, apart from my responses above to some common concerns to
other Members, I would also like to voice our great concerns over the resort to the
transitional product-specific safeguard mechanism under paragraph 16 of China’s
Protocol of Accession by an y other WTO member. The transitional product-specific
safeguard mechanism itself goes against the basic WTO principle of non-
discrimination, and China took note of the fact that many Members of the Working
Party on China’s Accession expressed that utmost restraints will be exercised in
having recourse to the said mechanism and that it will only be applied under very
special circumstances where other trade remedy measures are not effective. We hope
that other WTO Members will honour this understanding. Frequent recourse to this
mechanism of such nature can only damper China’s enthusiasm to take an active and
constructive role in the multilateral trading system.
Mr. Chairman, China notes with concern that the substantive and procedural
requirements intended for due process and fair treatment to China’s exports are notG/SG/58
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fully reflected in implementing legislations of some WTO members. We hope that
those substantive and procedural requirements for the imposition of product-specific
safeguard measures incorporated in China’s Accession Protocol, Working Party
Report, as well as the WTO Safeguard Agreement will be observed in conducting the
investigations concerned.
Thank you.
8. The representative of the United States thanked China for its presentation, and made the
following statement to the Committee:
The remedies authorized by the Agreement on Safeguards ("SGA") form an
essential part of the current rules-based international trading system.  Transparency,predictability, and adherence to the rule-of-law are all critical to the WTO-consistent
application of these remedies, as well as to ensuring that they don't act as an
unjustifiable barrier to trade.  Hence, it is in all Members' interests to ensure that each
Member promptly and effectively implements its WTO obligations in this area.
Our joint goal in this transitional review mechanism should be to conduct a
thorough and meaningful review, both to highlight to China its successes, and to
identify areas where more work needs to be done.  As China has already begun to
apply its safeguards law, it is important that it lay out its plan for bringing its
practices into better conformity with its WTO commitments where there are gaps.We want to do our utmost to facilitate such a review and urge China to join in the
review in the spirit in which it is intended.  A key part of the review is for Members
to ask questions about areas of China's practices that they do not understand.  We and
five other Members posed such questions, and we thank China for the information
concerning its implementation of the SGA that it recently circulated to Members ofthis Committee.
We recognize and applaud China's efforts to implement trade remedy laws
and regulations consistent with WTO requirements.  China has been prompt in
promulgating new regulations and implementing rules, with new regulations having
gone into effect on 1 January 2002, followed by two sets of provisional rules
implemented in March.  We are disappointed, though, by the delay in China'snotifying these regulations and rules – the safeguard regulations were not notified
until June (by name only in G/SG/N/1/CHN/ 1) and the text of the regulations not
until August (G/SG/N/1/CHN/2).  As indicated in the information China recently
provided to the Committee, China has not yet notified the text of its provisional
implementing rules on initiations and hearings (referred to in G/SG/N/1/CHN/1).
1
With regard to transparency, we urge both the Ministry of Foreign Trade and
Economic Cooperation (MOFTEC) and the State Economic and Trade Commission
(SETC) to intensify their efforts to make non-confidential information submitted
during safeguard proceedings available to interested parties and to the public.Moreover, at both agencies, there appears to be little or no disclosure of their
respective analysis and decision-making process.  We hope China takes advantage of
this early stage in its administration of its safeguards law to further develop
transparency in its proceedings.
                                                     
1 The United States reserves comment and the right to pose additional questions on the provisional
rules and the topics that they cover once China formally submits the text of the rules to the Committee.G/SG/58
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We are encouraged that the notified regulations generally embrace the
principles of rule of law and due process.  However, the regulations provide little
elaboration of these principles.  In particular, China should identify the specific
statute or statutes that govern its safeguard actions and notify those laws to the
Committee.  China also should clarify the respective roles of Chinese Governmententities involved in China's safeguard regime – MOFTEC, SETC and the State
Council Tariff Commission – and the rules to which the latter is subject in rendering
final safeguard determinations.
China has made a deliberate effort to conform its regulations to the
provisions and requirements of the SGA.  The language in China's notified
regulations appears generally to follow that in the SGA, although there are certainareas where key provisions are omitted or are worded in an ambiguous manner.  In
addition, China included certain provisions that do not appear in the SGA.  The most
prominent example is Article 32 of the notified regulations, which indicates that
China may take "corresponding" measures when another country "discriminatorily"
imposes safeguard measures on exports from China.  This provision appears to haveattracted widespread comment and expressions of concern.  In that regard, we note
that China indicated that it would first revert to dispute settlement if the other party is
a WTO Member.  Under what circumstances would China then revert to application
of Article 32?  What outcome of dispute settlement would result in application of
Article 32?
We and other Members also have questions about such topics as:
• How confidential information is treated under Article 13 of the notified
regulations so that it complies with the provisions of Article 3.2 of the SGA;
• Whether increased tariffs and quotas are the only types of safeguards relief
permitted by Chinese law, and how they are treated by Articles 20 and 21 of thenotified regulations;
• Application of the injury factors outlined in Articles 8 and 11 of the notified
regulations;  and
• The terms and conditions governing the extension of a safeguard measure.
The questions we and other Members have posed attempt to seek clarification
and understanding of the issues noted above.  We are disappointed that China
apparently is not yet in a position to provide written answers to those questions.  Such
responses would have greatly facilitated the review during these meetings.  In orderto make the review useful to all, includin g China, we urge China to submit in a timely
manner written responses to the questions posed by the Members.
We also want to stress that the United States does not take issue with China's
use of safeguard remedies, so long as such actions comport with WTO rules.  We
look forward to continued cooperation with China, such as through technical
assistance exchanges, as it continues to develop its trade remedy regime.
9. The representative of the EC thanked China for its statement, and asked China when its two
implementing regulations would be notified to th e Committee.  He also asked China to respond to
questions 1 and 4 in document G/SG/Q1/CHN/2.G/SG/58
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10. The representative of Japan thanked China for the information it had provided in the context
of the TRM, and asked China to reply to quest ions I.2.1, I.7.1(a), I.7.2(a) , I.7.3, I.8.1(b), and I.10.1(b)
and (c) in document G/SG/Q1/CHN/3 regarding China's Regulation.
11. The Japanese delegate made the following statement regarding China's provisional safeguard
measures on imports of certain steel products:
The provisional safeguard measures, which China imposed last May on
certain steel products, are protectionist measures, whatever the background of such
measures might be.  Those measures could also trigger further developments to the
chain reactions by other Members that began with the safeguard measures by the
United States.  Japan is strongly concerned about those measures.
Such serious concern prompted the Japanese Government to enter into two
series of consultations with the Chinese Government pursuant to Article 12.4 of theSafeguards Agreement.  However, we have to point out that the explanations
provided by the Chinese Government regarding the WTO-consistency of those
measures were far from convincing.  Japan maintains its strong doubt about the
WTO-consistency of those safeguard measures.
Those provisional safeguard measures are scheduled to expire on
19 November.  If China advances to definitive safeguard measures, then what has
been feared becomes a reality, which is the further proliferation of safeguard
measures on steel products around the world.  This will lead to further obstruction of
world trade in steel products, and furthermore it will undermine the momentum for
successful negotiations towards further trade liberalization under the DDA.  I have tomake it clear that Japan cannot and will not overlook matters advancing into such
serious circumstances.
On behalf of the Japanese delegation, I would like to express my strong
expectation to the Chinese delegation that China takes such concerns into serious
consideration and that China makes a prudent decision on whether to advance intodefinitive measures.
12. The representative of Japan asked China to reply to questions II.1.1, II.2.1, II.2.2, II.4.1,
II.7.1, II.8.1 and II.8.2 in document G/SG/Q2/CHN/1 regarding China's provisional safeguard
measures on imports of certain steel products.
13. The representative of Chinese Taipei thanked China for the information it had provided, and
welcomed the opportunity provided by the TRM to clarify certain issues with China.  He asked China
to respond to question 4 in document G/SG/Q1/CHN/4.
14. The delegate of Turkey thanked China for its efforts in responding to Members' questions,
and looked forward to receiving those answers in writing.
15. In response to Members' request for written responses, the representative of China reiterated
China's position that within the framework of the transitional review mechanism China is not obliged
to provide responses to Members' questions in writing, however, his statement may be circulated toMembers after the meeting.  He then responded to the additional questions identified by Members.
Regarding Article 3 of the Regulation, he explained that the concept of "other organization" includes
those organisations (such as chambers of commerce, business associations, and trade unions) that do
not have legal personality, but which may nevertheless be interested in the investigation.  While such
"other organization" need not be a producer, it must be related to the relevant domestic industry.  HeG/SG/58
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also explained that rules governing the contents of  applications / petitions are contained in China's
implementing / administrative rules (not yet notified to the Committee).
16. Regarding the consistency of Article 8 of the Regulation with Article 4.2 of the Safeguards
Agreement, he asserted that the investigating aut hority was required to examine all factors having a
bearing on the state of the domestic industry.  The factors listed in Article 8 are non-exhaustive.
17. Regarding Article 9 of the Regulation, he indicated that there was no provision governing the
duration of China's safeguard investigations.  Nor was there any provision imposing a minimum
period before provisional measures may be applied.  This was because there are no such requirements
in the Safeguards Agreement.  However, investigations would be carried out in an expeditious
manner, and preliminary determinations would only be made after some form of investigation had
been carried out.  For example, all available domestic industry performance data had been studied
before China imposed provisional safeguard measures on imports of certain steel products.
18. Regarding Article 10, and the issue of like and directly competitive products, he referred to
China's notification of its provisional measures on  certain steel products (G /SG/N/7/CHN/1).  In that
case, factors such as physical characteristics, consumer perception, use and interchangeability were
considered.
19. Regarding Article 12, the Chinese delegate stated that the reference to "other interested
parties" included all natural and/or legal persons and "other organizations" that might have interests in
the investigation, such as consumer organizations and industrial users.  Furthermore, the phrase
"present views and supporting arguments" was consiste nt with Article 3 of the Safeguards Agreement,
which requires the investigating authority to provide opportunities for interested parties to respond to
the presentations of other parties.  By virtue of Article 17 of the administrative / implementing rules,provision was made for a pre-hearing brief, a public hearing, and a post-hearing brief.
20. Regarding the meaning of the phrase "appropriate means" in paragraph 2 of Article 12, he
gave the example of an on-the-spot investigation.
21. Concerning the term "justifiable" in paragraph 2 of Article 13, he indicated that it could be
understood to mean warranted.  Furthermore, confidential information would not be made available toparties other than the party that submitted it.  There was no mechanism like the US system of
administrative protective orders.  Summaries of confidential information had to be made available to
other interested parties, and had to be meaningful to allow other interested parties to understand the
substance of the confidential information.  If a request for confidential treatment were rejected, the
relevant party could withdraw the relevant informa tion from the record, and that information would be
disregarded by the investigating authority in making its determination.
22. Regarding Article 14, he confirmed that that provision was intended to implement Articles 3.1
and 4.2(c) of the Safeguards Agreement.  Article 14 requires the Chinese investigating authority to
publish a report setting forth its findings and reasoned conclusions reached on all pertinent issues of
fact and law.
23. Concerning Articles 15 and 16, he asserted that in practice the investigating authority's
published determination would include a recommendation for relief.
24. Regarding Article 20, he indicated that other types of safeguard measures would include tariff
quotas, as was the case in respect of the provisional measures on imports of certain steel products.
25. Concerning Article 21, he indicated that different authorities were responsible for different
types of safeguard measures in order to maintain uniformity in the administration of the relevant law.G/SG/58
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26. With respect to Article 22, he indicated that in Chinese the term "country" implies
sovereignty, whereas the term "region" does not.  Safeguard measures may need to be imposed on
entities that are not "countries", such as separate customs territories and customs unions.  Regarding
quota allocation in the absence of a negotiated settlement, he stated that China would allocate quotas
on the basis of Article 5 of the Safeguards Agreement.
27. Regarding Article 24, he stated that a translation error had been identified.  The correct
translation should read "[s]afeguard measures shall be limited to the extent necessary to prevent or
remedy serious injury and to facilitate the adjustment of the domestic industry".
28. Regarding Article 27, he stated that the duration of provisional measures, and any extension
thereof, would be counted as part of the duration of the final measure.  Although there was no explicit
rule to this effect, the relevant provisions of th e Safeguards Agreement would be adhered to.  He also
stated that the notification and consultation obligations provided for in Articles 8 and 12 of theSafeguards Agreement would be applied in respect of the possible extension of safeguard measures.
29. Concerning Japan's questions on China's provisional safeguard measure on imports of certain
steel products, he confirmed that imports from  Kazakhstan, Ukraine and Belarus were excluded
because China already imposed restrictions on steel from those countries.  The quota for those three
countries was established on the same basis as the level of the tariff quota for WTO Members, i.e., onthe basis of the volume of imports for the last three representative years.  Such exclusions were not
inconsistent with the principle of parallelism.  Regarding the question of critical circumstances, he
referred Japan to page 4 of China's notification (G/SG/N/7/CHN/1).  Since China was the third largest
importer of steel in the world, trade diversion to China would be imminent following the imposition
of safeguard measures by the EC and US.  Regarding the question of unforeseen developments, hereferred Japan to Article XIX:1(a) of the GATT 1994, whereby unforeseen developments and GATT
obligations were set as parallel conditions for the imposition of safeguard measures.  There was
therefore no need to separately identify the effects caused by those two factors.  He indicated that he
was not in a position to respond to Japan's detailed questions regarding data and statistics, but noted
that those questions had been addressed in the c ontext of two rounds of bilateral consultations.  He
stated that the concerns raised by Japan in the context of those consultations would be given serious
consideration when making a final determination in the steel investigation.
30. The representative of the European Communities thanked China for their detailed replies, and
asked for clarification as to when China expected to notify its administrative / implementing rules to
the WTO.  He stated that the EC was particularly  keen to have access to China's rules regarding
exporters' participation in hearings.  The EC also asked whether there was a mandatory deadline for
completion of China's steel investigation and, if so, the legal basis for that deadline.
31. The delegate of Japan thanked China for its answers to questions, particularly those
concerning China's Safeguards Regulation.  Regarding the questions on the steel investigation, he
noted that most of China's answers were the same as  had been provided in bilateral consultations, and
were therefore unconvincing.
32. The representative of China stated that the translation of its administrative / implementing
rules had been accelerated, and the relevant notification would be made to the WTO by the end of
2002.  He stated that there was no mandatory deadline for the investigation of the provisional
measures on steel, but it had been decided that they would expire after 180 days.  Accordingly, the
final determination would be made before expiry of the provisional measures.
33. China regretted that not all questions / issues could be addressed at this TRM session.  In
particular issues regarding the final determination on steel, which had not yet been made.  Rather thanG/SG/58
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making Members wait until the 2003 TRM, China expressed its willingness to consult bilaterally with
Members on any safeguard issues of interest to them.
34. The representative of the United States thanked China for its extensive replies to questions,
and wanted to respond to two concerns raised by China.  First, he indicated that he did not wish to
respond in detail to the issue of Article 9.1 and the exclusion of developing country Members sincethat issue was currently subject to dispute settlement proceedings.  However, the US had responded to
a question from China on this issue at the last regular meeting of the Committee, as reflected in
para. 103 of the minutes for that meeting (G/SG/M/19).  Second, he thanked China for expressing its
concerns regarding the transitional product-specific safeguard mechanism.  That mechanism was
agreed to by China and all Members by virtue of Article 16 of the Protocol of Accession, and the US
had followed the procedures set forth in the prot ocol and the Working Party Report in implementing
this mechanism under US law.  He noted that while China did not identify any particular Memberswith respect to its concerns, the US does ha ve a current proceeding under the product-specific
safeguard mechanism, and recently made a request to China for consultations, and then notified that
request to this Committee.  The United States was looking forward to consultations with China on this
matter.
35. The representative of China stated that his dele gation looked forward to consultations with the
United States in the context of the transitional product-specific safeguard mechanism.
36. The Chairman noted that there were no guidelines for the Committee's report to the Council
for Trade in Goods.  He indicated that in several other bodies that had recently undertaken the
transition review, the Chairman had, acting on his own responsibility, prepared a brief, factual report,
with references to the documents concerned, and at taching the portion of the minutes of the meeting
which relate to the transition review.  He proposed that the Committee adopt the same format for its
report.
37. The Committee adopted the Chairman's proposal for reporting to the Council for Trade in
Goods.
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