WORLD TRADE
ORGANIZATIONG/MA/W/30/Add.1
31 October 2002
(02-6018)
Committee on Market Access Original:  English
IMPLEMENTATION-RELATED ISSUES AND CONCERNS:
MEANING TO BE GIVEN TO THE PHRASE "SUBSTANTIAL INTEREST" IN
PARAGRAPH 2(D) OF ART ICLE XIII OF GATT 1994
Communication from Saint Lucia
Addendum
The following communication, dated 29 October 2002, has been received from the Permanent
Representation of Saint Lucia.
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1. Further to our communication of 2 June 2002 (G/MA/W/30) and oral statements in formal
and informal consultations in the Market Access Committee, the delegation of Saint Lucia views it as
timely to submit a written response to certain apparent misunderstanding reflected in G/MA/W/32,Communication from Ecuador.
The scope of developing country implementation concerns
2. Certain assertions made in WTO document G/MA/W/32 appear to question the legitimacy of
raising implementation concerns where there is an Appellate Body ruling on the issue.
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3. It should be noted that developing countries implementation concerns generally stem fromvarious perceived inequities in the rules.  Certain imbalances in the Uruguay Round Agreements have
arisen because Members, in some instances, have strictly adhered to the letter though not the spirit in
which commitments were undertaken.  Other complaints are based on the way in which rules have
been interpreted.  In this regard it may be noted, for example, that both concerns with respect to theimplementation of provisions of the GATT 1994 addressed in the Ministerial Decision on
Implementation-Related Issues and Concerns (WT/ MIN(01)/17, paras 1.1 & 1.2) arise, in part, from
an interpretation of the rules by the Appellate Body.  Decisions of the Appellate Body “cannot add to
or diminish the rights and obligations provided in  the covered agreements.” (DSU, Article 19)  The
appropriate balance of rights and obligations is  ultimately, and always , a matter for the decision of the
membership.
4. Article IX.2 of the Marrakesh Agreement provides that the “Ministerial Conference and the
General Council shall have the exclusive authority to adopt interpretations of this Agreement and of
the Multilateral Trade Agreements.”  It is generally accepted that inferences drawn by the Appellate
                                                     
1 G/MA/W/32, for example, reflects the following statement:  "We believe that it is not appropriate to state that
there are doubts about the contents of Article XIII:2(d) of the GATT 1994.  If anyone has any doubts as to thisthey should consult what the Appellate Body had to say on the banana case in paragraph 161 of its report.Obviously there are Members who do not like what the Appellate Body said, but that is not a reason to alter thebalance of obligations and rights under the GATT.” The issue is not whether or not there may be doubtsconcerning the Appellate Body’s decision but whether the given interpretation could lead to a manifestly
inequitable application of the provision.G/MA/W/30/Add.1
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Body in interpreting WTO rules in light of GATT 1947 jurisprudence could produce inequitable
results in the post-Uruguay Round era.  The issue is the merits of the substantive implementation
concern advanced.  The debate is best focused on the perceived injustices which could arise should a
similar interpretation be adopted in other cases.
5. It is submitted that the manifest injustices which could arise in a situation where Members
choose to allocate a quota among supplying coun tries are amply demonstrated in the empirical
analyses undertaken by the Secretariat.  The Secretariat analysis (JOB(02)/34) highlights, for
example, that even where 70% of a country’s export s entered a single market it may not be classified
as having a ‘substantial interest’ in supplying the product concerned in the context of Article XIII.2(d)
of the GATT 1994.
Clarifying the particular concern addresse d in the initial implementation proposal
6. Certain assertions advanced in G/MA/W/32 suggest a misunderstanding of the fundamental
concerns raised by Saint Lucia.  For example, it is asserted that the proposal to revise the meaning of
the expression ‘substantial interest’ is “ an attempt to alter the balance of rights and obligations under
that Article and circumvent the principle of non- discrimination among those not having a substantial
interest .”  The concern raised by Saint Lucia, however, is not with the principle of non-discrimination
but with the definition of ‘substantial interest’ in the context of Article XIII(2)(d).  One must arrive at
an agreed definition of the term before one is able to apply the principle of non-discrimination.
Reference to the issue of circumvention of this basic norm suggests that the fundamental substantiveargument has not been understood.
7. It seems somewhat surreal that a Member with even 70% of its exports entering a particular
market could be deemed by the WTO not to have a substantial interest in supplying the product to that
market (see also JOB(02)/34; G/MA/W/30).  The cred ibility of a system which is so far removed from
reality and equity would inevitably fall into disrepute.
8. Other misunderstandings evident in G/MA/W/32 are reflected in the assertion that “ the
proposal raised situations that were hard to accept, such as the following:  in the case of a country
the economy of which basically depended on a single crop, that country would automatically have a
substantial interest in all the markets of the world where quotas existed for that product.  In other
words, it would be in a more favourable situation than the main exporters of the product in question.”
9. It must be underscored that any Member can only be a substantial supplier to the market in
which a substantial portion of that Member’s exports are directed.  The limitation is inherent in the
reflection upon export share.
10. It should be noted that the term “substantial interest” in Article XIII.2(d) is defined in the
context of a single importing market.  The mere fact that a Member may have a ‘substantial interest’
in a particular market is of little import to its position in any other market.  Indeed, the particular
concerns which the initial proposal advanced by Saint Lucia sought to address related to the
circumstances of small developing country Members with undiversified markets, generally dependenton one or two principal markets for their exports.
11. Any agreement on the interpretation of the term “substantial interest” in the context of
Article XIII.2(d) of the GATT 1994 would only provid e a Member with the right to a country-specific
quota where an importing Member chose to allocate a quota among supplying countries and theexporting Member exceeded an established absolute threshold level in terms of percentage export
share.G/MA/W/30/Add.1
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The need for further consultations
12. In G/MA/W/30, the delegation of Saint Lucia reit erated that “our deliberations should focus
on the Chairperson’s “Possible Text on ‘Substantial Interest’ in Article XIII of GATT 1994”
(contained in Annex III to document WT/GC/50).  Consultations should be pursued with a view toclarifying the three principal issues suggested by the Chairperson in her Report to the Chairman of the
General Council, prior to the Doha Ministerial Conference (WT/GC/50), namely
• further clarification of wording that the Decision would apply only to new quota allocations;
• further definition or elaboration on what is meant by “major part of total exports”; and
• amendments to the last sentence of the text to make the notification optional and not mandatory.”
13. We are aware that deliberations within the Market Access Committee will continue in light of
other specific proposals which will be submitted by other Members.  We welcome the proposed
contributions and view it as a matter of importance that the clarification exercise continue.  We
believe that it would be unfortunate if the significant gains achieved in the consultations prior to Doha
should be lost because of certain misunderstandings of either the objectives sought to be achieved or
the possible implications of rebalancing the existing inequities of the system.
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