RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/49
17 September 2001
(01-4378)
Council for Trade in Goods
MINUTES OF THE MEETING
Held in the Centre William Rappard on 5 and 17 July 2001
Chairperson:  Ambassador István Major (Hungary)
_______________
I. TRIMS AGREEMENT:  REQUESTS FOR EXTENSION OF THE
TRANSITION PERIOD PURS UANT TO ART ICLE 5.3 ....................................................2
II. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER
ARTICLE 9 ...................................................................................................................... .........3
III. REQUEST FOR A WAIVER BY SWITZERLAND – PREFERENCES FOR
ALBANIA AND BOSNIA-HERZE GOVINA (G/C /W/257) .................................................3
IV. CUSTOMS VALUATION AGREEMENT:  DRAFT DECISION BY
MADAGASCAR FOR A WAIVER UNDER ARTICLE IX OF THE WTOAGREEMENT (G/C/W/268) ...................................................................................................4
V. NOTIFICATION OF PREFERENTIAL TARIFF TREATMENT BY
MOROCCO FOR LEAST-DEVELOPED COUNTRIES (G/C/6 –
WT/LDC/SWG/IF/18) .............................................................................................................. 4
VI. REQUEST FOR A WTO WAIVER – NEW ACP-EC PARTNERSHIP
AGREEM ENT ...................................................................................................................... ....4
VII. REQUEST BY COSTA RICA, INDIA, INDONESIA, PAKISTAN, PERU AND
HONG KONG, CHINA:  CTG'S OVERSIGHT FUNCTION PURSUANT TO
ARTICLE IV OF THE AGREEMENT ESTABLISHING THE WTO –
TRANSPARENCY REGARDING NEW RESTRICTIONS ON TEXTILE AND
CLOTHING PRODUCTS COMMENTED UPON BY THE TEXTILES
MONITORING BODY (G/C/W/260/REV.1).......................................................................11
VIII. WORK PROGRAMME ON ELECTRONIC CO MMERCE.............................................14
IX. DRAFT DECISION ON CONCESSIONS UNDER THE HARMONIZED
COMMODITY DESCRIPTION AND CODING SYSTEM - A PROCEDURE
FOR INTRODUCTION OF HARMONIZED SYSTEM 2002 CHANGES TO
SCHEDULES OF CONCESSI ONS (G/MA/W/28) .............................................................15
X. INTERIM AGREEMENT BETWEEN THE EFTA STATES AND THE
PALESTINE LIBERATION ORGANIZATION FOR THE BENEFIT OF THE
PALESTINIAN AUTHORITY – NOTIFICATION FROM THE EFTA STATES
(WT/REG79/N/1, WT/REG79/1)...........................................................................................16
XI. OTHER BUSINESS.............................................................................................................. ..17G/C/M/49
Page 2
The meeting of the Council for Trade in Goods was convened by WTO/AIR/1580;
Document G/C/W/272 contained the agenda for the meeting.  The meeting was suspended on agenda
item 1 and reconvened on 17 July 2001.
Before the proposed agenda was adopted, informal consultations were held to discuss a
clarification sought by the representative of Panama concerning the nature of the waiver request put
forward by the European Communities.  Follow ing resumption of the formal meeting, the
representative of the European Communities noted that the European Communities and the ACP had
two requests:  one on GATT Article I and one on Article XIII and he wanted them to be treatedsimultaneously. He considered that Article 9:3 of the WTO Agreement was mandatory in so far as the
waiver request had been submitted correctly.  He would make the case for opening the period of
examination under agenda item 6 and he stated that the mere inscription on the agenda did not haveany bearing on the outcome of the discussion on the date of the opening of the period of examination.
The representative of Panama said on the understanding that the inclusion of this item on the
agenda did not imply a determination as to when the examination period would start, Panama would
present its arguments on the two requests for a waiver under item 6 and could thus proceed to theadoption of the agenda.  This view was supported by Guatemala and Honduras
.  The representative of
Nicaragua also expressed support and readiness to proceed on the understanding that the acceptance
of this item on the agenda did not prejudice the initiation of the 90-day examination period.
The agenda was adopted.
I. TRIMS AGREEMENT:  REQUESTS FOR EXTENSION OF THE TRANSITION
PERIOD PURSUANT TO ARTICLE 5.3
1.1 The Chairman said that since the last meeting he had been conducting informal consultations
with the main parties concerned on the basis of th e so-called "2+2" approach.  This approach would
have to be tailored to some extent to the specific cases of each of the countries that had requested
extensions of the transition period, bearing in mind the particular needs for extensions that they
requested and also the responses to these requests that had been received from these countries' main
trading partners.  This would result ultimately in separate decisions being proposed for adoption
although the eventual package would be based on the same substantive considerations, and on parity
of treatment for all.
1.2 One of the delegations engaged in the consultation process continued to have difficulty in
accepting a fundamental premise of the proposed compromise solution:  namely, that by the end of
this year, the maximum time remaining for any of th e countries concerned to eliminate definitively its
TRIMs would be two years, which was the essence of  the "2+2" approach, and for the time being the
only viable basis for a compromise solution that was available.  Consequently, the consultation
process was still not complete.  He therefore requested Members' agreement to continue the
consultation process with a view to circulating draft proposals as soon as possible, hopefully in the
form of draft decisions for Members' consideration and approval in due course, but if not, in the form
of Chairman's non-papers for the information of Council Members.
1.3 He added that in conformity with the General Council Decision of 8 May 2000 on TRIMs
Transition Period Issues, it remained his intention to conduct consultations on a priority basis on the
means to address the concerns of those Members who did not notify TRIMs under Article 5.1 of the
TRIMs Agreement or whose request for an extension had not been received at the time of the GeneralCouncil Decision of 8 May 2000.  His first priority had been to seek consensus solutions for those
Members that did notify their TRIMs and did request extensions of the transition period before
8 May 2000, but he remained committed to holding consultations on these other Members' concernsG/C/M/49
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as soon as possible.  The consultations on the extensions of the TRIMs transition period, and the
possible results of those consultations, were without prejudice to the review called for in Article 9 of
the TRIMs Agreement.
1.4 The meeting was reconvened on 17 July 2001 following informal consultations by the
Chairman.  He proposed that a new meeting of the CTG be scheduled for 27 July 2001 in order to take
up the requests for extension of the transition period under Article 5.3, now in the form of draft
decisions, as well as a request by Thailand for a waiver of the requirements of Article 5.2 of the
TRIMs Agreement.
It was so agreed.
II. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER
ARTICLE 9
2.1 The Chairman noted that while the Council formally initiated the review under Article 9 of
the TRIMs Agreement in October 1999, so far no specific papers from Members had been received
regarding issues which they wished to see taken up in the context of this review.  He reiterated the
invitation to delegations to submit such papers.  The most recent discussion had centred on a proposal
for a joint WTO/UNCTAD study that would assist dele gations in the conduct of the Article 9 review.
At the last meeting, he had informed the Council of consultations which he had conducted on the
terms of reference for such a study.  The draft terms of reference that had resulted from consultationswith interested delegations had been circulated for comments on 14 May.  As no comments were
received by the specified deadline of 25 May, the terms of reference  were deemed approved by the
Council as of that date, on the understanding that the conduct of the study would take place in the
context of the review called for in Article 9 of the TRIMs Agreement and was not linked to work
underway in the Council or any other WTO body on TRIMs transition periods.  The text of the termsof reference had been circulated in document G/C/W/266 dated 31 May 2001, and the two
Secretariats had started their work, which they aimed to make available as soon as possible after the
summer break.
2.2 The Council for Trade in Good agreed to revert to this matter at its next meeting.
III. REQUEST FOR A WAIVER BY SWITZERLAND – PREFERENCES FOR ALBANIA
AND BOSNIA-HERZEGOVINA (G/C/W/257)
3.1 The representative of Switzerland recalled at the last meeting the Council for Trade in Goods
was not able to adopt a decision on the granting of a waiver because one delegation had a reservation
and wanted to ask additional questions related to the nature of the agreement and whether or not theagreement covered non-tariff measures.  He said the preference regime granted to Albania and Bosnia
and Herzegovina only included tariff measures.
3.2 The representative of the United States appreciated the response from Switzerland that the
regime dealt with tariff preferences and not any other type of treatment and therefore agreed to CTG
recommendation of the decision. Her delegation commended Switzerland for taking steps to
unilaterally improve market access for Albania and Bosnia and Herzegovina where this should
contribute to developing healthy economies there and integrating them into the global trading system.
3.3 The Council took note of the statements made and agreed to the request for a waiver by
Switzerland, recommending that the draft decisi on granting this waiver, contained in document
G/C/W/257, be transmitted to the General Council for adoptionG/C/M/49
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IV. CUSTOMS VALUATION AGREEMENT:  DRAFT DECISION BY MADAGASCAR
FOR A WAIVER UNDER ARTICLE IX OF THE WTO AGREEMENT (G/C/W/268)
4.1 The Chairman drew attention to a draft decision by Madagascar for a waiver under Article IX
of the WTO Agreement concerning the retention of minimum values.
4.2 The representative of Madagascar thanked all Members for the understanding shown with
regard to the draft decision requesting maintenance of certain minimum values on a temporary basis.4.3 The Council took note of the statement made and agreed to the request for a waiver by
Madagascar and recommended that the draft decision granting this waiver, contained in document
G/C/W/268, be transmitted to the General Council for adoption.
V. NOTIFICATION OF PREFERENTIAL TARIFF TREATMENT BY MOROCCO FOR
LEAST-DEVELOPED COUNTRIES (G/C/6 – WT/LDC/SWG/IF/18)
5.1 The  Chairman drew attention to the docume nt from Morocco entitled "Preferential tariff
treatment for least-developed countries" which had been notified to the Council for Trade in Goods
and the Sub-Committee on Least-Developed C ountries (G/C/6 and WT/LDC/SWG/IF/18).  He
recalled that at the Council for Trade in Goods m eeting in March the CTG agreed to a proposal for
handling notifications such as the one from Morocco made under the 1999 Waiver on Preferential
Tariff Treatment for LDCs.  It was agreed that such notifications be referred for advice by the CTG tothe Sub-Committee on Least-Developed Countries.  The Sub-Committee would then report back to
the CTG on its discussions.  It was clear that this approach did not preclude the CTG from engaging
in discussions of any matter in regard to the 1999 waiver.  He proposed that the CTG refer Morocco's
communication to the Sub-Committee on Least-Developed Countries and await its report on the
matter.
It was so agreed.
VI. REQUEST FOR A WTO WAIVER – NEW ACP-EC PARTNERSHIP AGREEMENT
6.1 The Chairman recalled that the first discussion of the subject took place at the CTG meeting
on 5 April 2000, and subsequently there had been several meetings as well as informal consultations
with a broad range of interested parties on the outstanding procedural issues.  This was clear on the
one hand that no Member objected to the granting of tariff preferences for ACP countries and all
delegations were in principle ready to grant a waiver at the appropriate time.  On the other hand,
however, the predominantly procedural problems that were identified last year persisted.  They
concerned the question of "how" and "when" the re quest should be examined, i.e. the sufficiency of
documentation and the starting date of the 90-day examination period pursuant to Article IX of the
Marrakesh Agreement.  Some time ago, Members had recognized that they had reached a deadlock in
the process relating to the examination of the wa iver request due to continued divergent positions.
More recently there was a detailed discussion of this item at the CTG meeting of 18 April.  Since that
meeting, he had held further consultations among interested Members on the issue of the examinationof the waiver request as called for under Article IX.3(b) of the WTO Agreement.  The aim of the
consultations was to help Members to make a decision regarding the start of the examination.  It
seemed that there were still divergent views among Members as to when to begin the waiver request
examination process.  If the Council so wished, it would be his intention to continue consultations
with a view to reaching a consensus which took account of the interests of all Members.
6.2 The representative of Paraguay stated that the government of Paraguay had removed the
objections it had raised earlier regarding the preferential treatment agreement in the Partnership
Agreement (PA) between the European Union and the 77 states from ACP.  This government decisionG/C/M/49
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had taken into consideration two major factors:  First, the consultations held recently in Brussels with
the European Union presided over by the Minister of Foreign Affairs from Paraguay, and, second, he
believed in the statement by the European Comm unities that they were prepared to give full
consideration to arguments by WTO Member states in  case of injury and would be prepared to study
the possibility of granting certain advantages.  Paraguay was fighting against the present trend of adrop in its GDP due to the lack of access to goods because of existing restrictions particularly as
regards agricultural products and because many measures in the Cotonou convention detracted from
the competitiveness of many of its agricultural products.  Furthermore, it had a disadvantage of being
a land-locked country which increased freight rate costs in reaching ports to ship its agricultural
products of great volume but of relatively low value.
6.3 The representative of the European Communities said that the EC had consistently repeated
that nothing prevented the examination of its requ est for an Article I waiver.  The Cotonou Agreement
covered a range of products which were important for many countries and it would have been plainly
unreasonable to block its examination solely on the basis of one Member's considerations.  Moreover,
the argument that information on the new banana regime was incomplete was no longer valid as
Members could see from the submissions put to the C ouncil.  From a legal point of view, the EC and
ACP emphasized their right under Article IX:3 of the Marrakesh Agreement to have their request
considered a considered.  The text of Article IX:3 was mandatory as it clearly said that "a request for a
waiver shall be submitted for consideration during a time-period which shall not exceed 90 days".  It
had been alleged that that the EC did not provide all necessary information for a substantial
examination of the request.  Now all the elements were on the table;  indeed, to meet the concernsexpressed by some Members, the European Communities had provided additional documentation on
bananas going beyond the tariff aspect concerned by the Article I request, including the text of the
understandings the European Communities had reached with the US and Ecuador.  This text, together
with the obligations contained in the Cotonou Agr eement, provided the detailed road map for the
future of the banana regime. There was no valid reason to prevent the initiation of the examination ofthe waiver, but there was a risk of making any waiver examination impossible in the future. Members
might have concerns on the substance of certain points which was understandable in the context of the
history of the banana dispute.  However, the examination process was expressively designed to
provide a forum of exchange of views allowing Members to discuss these concerns in good faith and
discuss amendments such as the one tabled by Ecuador.  The EC had submitted another request for a
waiver in relation to Article XIII paragraphs 1 and 2; he asked that both requests be considered
simultaneously as a single undertaking.  The understanding reached by the EC, Ecuador and the USprovided for a temporary global quota allocations for ACP banana-supplying countries under clearly
specified conditions.  In the light of the exceptional circumstances surrounding the resolution of the
banana dispute, he believed that such a limited waiver was necessary to afford sufficient protection to
the ACP banana-supplying countries during a short transition period.  In conclusion, he wished to ask
this CTG to decide to initiate the period of examination of 90 days as stipulated in Article IXparagraph 3 of the Marrakesh Agreement.
6.4 The representative of Ecuador said that once the EC applied its transitional quota regime for
the import, sale marketing and distribution of bananas, Ecuador would have no objections for the
Council to initiate the examination period of the waiver request made by the ACP countries and theEC.  Ecuador was in a position to remove its reservations on substance and procedure related to the
requirements contained in the Understanding in respect of Waivers of Obligations under GATT 1994
(hereafter referred to as the Understanding).  On 22 June 2001 the EC submitted to Members the
documentation identified by Ecuador as being missing.  Ecuador had made a contribution which
consisted of a draft decision contained in document G/C/W/267 that could be adopted by the GeneralCouncil in accordance with Article IX of the WTO Agreement.  This document did not rule out in any
way any future contributions which may be made by Ecuador in the course of the waiver request
examination. The EC, recognizing that the transitio nal regime for the imports of bananas was not
compatible with Article XIII of GATT 1994, had ma de a new request for a waiver for that article.G/C/M/49
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Ecuador believed that such waivers should be strictly interpreted by the EC in order to ensure the
correct application of the banana regime for ACP countries.  The decision which the Council might
take should clearly identify the following elements: first, countries and products covered by the
waivers; second, in the case of bananas, there should be a clear indication of the tariff preference and
the volume of bananas covered by the preference; third, the duration of the waiver should be , as far asbananas were concerned, in line with the duration of the regime itself;  fourth, the condition that there
should be a transfer of 100,000 tons of bananas from the C quota to the B quota; and finally, the
requirement that, as from the year 2006, the banana regime had to be applied on a single tariff basis.
The EC had requested two waivers:  one under Article I of GATT and the other under Article XIII of
GATT. The EC had demanded that the two requests s hould be considered simultaneously during the
same procedure.  It would therefore be appropriate for the CTG to take one single decision, which in a
single legal action, and be taken to the General Council for adoption.  He  requested that when theCouncil for Trade in Goods passed to the discussion of the draft decision concerning the granting of
the waivers, it deal first with the proposal put forward by Ecuador.
6.5 The representative of Colombia said the Council for Trade in Goods should determine
whether the waiver request was appropriately described as set out in paragraph 1 of the Understanding
in order to initiate the period of examinati on. The  EC request did not comply with those
requirements. Document G/C/W/269 referred to the regulations issued by the EC which established
the conditions for the entry of bananas to that market, and it included a draft text which would
establish the scope of the waiver to be granted. In both regards there were still aspects which gave rise
to doubts and which did not enable Members to evaluate the real conditions of access for bananas.Amongst the essential elements still missing for a full analysis of the request, he referred to the
internal legislation which would be applied in the second phase of the banana regime and the tariff
which would be applied as from January 2006. He could not ignore the countless legal precedents and
controversies that had already occurred  in the de velopment of this whole issue. The key issue, in
order to evaluate the compatibility of the regime with WTO commitments, related to the scope of the
obligations which were the subject to the waiver. He was aware of the dilemma which existed as
regards the sequencing between the granting of the waiver and the issuance of internal legislation. In
the light of the situation, he believed that document G/C/W/267, introduced by Ecuador, represented a
contribution which could be adopted as a starting-point. With the scenario outlined by Ecuador he
believed it would be possible to initiate the analysis which would enable the Council for Trade in
Goods to reach a decision which would take into consideration the interests of all Members.
6.6 The representative of the United States confir med the understanding with the EC as a result of
which on 1 July 2001, the US suspended retaliatory duties on EU goods resulting from the dispute.
However she did not agree that the understanding constituted a mutually agreed solution under
article 3.6 of the DSU but though the understanding provided a hopeful means by which the dispute
could be resolved.  She supported the immediate init iation of the CTG review of the EC request for an
Article I waiver.  Normal WTO procedures obviously included negotiation in the CTG of the
duration, terms and conditions of the ultimate waiver decision.  Her delegation had differences over
the substance of the waiver decision; in fact it supported the changes proposed by Ecuador. However,
it would be more constructive for all concerned if the CTG could begin to discuss and negotiate the
terms and conditions of the waiver.  Regarding the EC request for an Article XIII waiver with respectto bananas, she supported that request with some changes in drafting along the lines suggested by
Ecuador.
6.7 The representative of Costa Rica recognised the progress achieved thanks to the agreements
between the EU and Ecuador and the EU and the US . However, there were still elements on which
further discussion was required. Ecuador had proposed an alternative text which he believed took up
some of these elements and which could contribute further to that discussion. Bilaterally he had
expressed his readiness to carry out consultations which would make it possible to resolve the banana
dispute once and for all and also deal with the question of the waiver request which was closely linkedG/C/M/49
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to the banana dispute, whether one liked it or no t. Consultations had already been held between
delegations concerned and the EU and he hoped that these would continue and lead to a satisfactory
solution for the Members concerned.
6.8 The representative of Panama  had taken note of the statement made by the EC arguing that
the consideration of a waiver request was automatic.  He was not convinced by the argument which
ignored the requirements in paragraph 1 of the Understanding which set out the requirements for the
initiation of an examination.  The CTG was not in a position to examine the two requests made by the
EC and the ACP countries to obtain waivers for Article I and XIII of the GATT. The Government of
Panama had sympathy and understanding for the aspirations of the ACP countries wishing to find a
substitute for the Lomé Agreement in the Cotonou Convention. This understanding and sensitivity
manifested by the Panamanian Government did not mean the granting of waivers from multilateralobligations which went beyond what was strictly necessary in order to grant the trade preferences
included in the Cotonou Convention, nor did it mean the granting of waivers in such a manner that
Panama and many other developing countries, would have this trade interest a seriously impaired. The
EC request had not met the requirements set out in  Article I of the Understanding in respect of
waivers. The EC had not adequately described preferences in such a manner that it would be enablethe CTG to examine the scope and the objectives sought by the EC. His reading of the request for a
waiver under Article I of GATT put forward together  with the annexed documents led him to believe
that the request sought to obtain what would in fact be an unlimited waiver to Article I of GATT for
all products contemplated in the Cotonou Convention.  In the Partnership Agreement the list of
products and the level of preference sought could be modified at any time at the will of the parties, insome cases not even both parties, in so far as the modification was considered necessary to guarantee
more favourable treatment even after the waiver had been granted. Without a clearer definition of the
products covered and the level of preferences for which this waiver was being sought and which
would be applied for the rest of the life of the Partnership Agreement there was not a satisfactory
description of the preferences for which a waiver  was being sought.  The Government of Panama
believed that CTG had a waiver request which covered not only duty free access without clearly
defining the level of tariff preference but also covered any other measures which the EC would
consider and defend as constituting more favourable treatment or treatment which would enable ACP
countries to continue to enjoy tariff advantages comparable to those which they enjoyed in the past. In
other words, the waiver would give a blank check. In this request, the EC referred to the existence of
special treatment for ACP bananas during the transition regime for tariff quotas which should end at
the latest on 31 December 2005. This special treatment referred to in the request was so broad-rangingand vague that it might in fact lead to an unbinding of the tariff of 75€/t for quotas A and B or a
discriminatory division within quota B or even discriminatory import licensing. Without this type of
detail, which had been so important in the past regarding the preferences which were given to ACP
countries, Members would understand that  Panama could not consider that the EC and the ACP
countries had in fact presented a description of preferences which would make it possible to initiatethe examination of this request. The Government of Panama was equally preoccupied by the fact that
in its request the EC and the ACP countries persisted in wishing to obtain preferential treatment for an
import regime which would be implemented in 2006 and not before. The EC recognized that it could
not be described until negotiations had been undertaken under Article XXVIII of GATT 1994 and on
which negotiations had not been initiated. He welcomed the presentation of a draft decision byEcuador what contained several elements which would make it possible to make progress in this
process and further clarify the preferences which would actually be covered by the waiver. In the case
of the request for a waiver to the obligations stemming from Article XIII of GATT, the Government
of Panama would prefer the procedural approach offered by the Ecuador proposal and would be in a
position to accept the initiation of the waiver request examination of this particular request for awaiver to Article XIII only.  The Government of Panama concluded by making an appeal to the EC
and the ACP countries to further supplement the pres entation of their request in a manner in keeping
with the different provisions of the Understanding so that the CTG could consider the request to the
benefit of the ACP trade partners.G/C/M/49
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6.9 The representative of Guatemala outlined the procedural objections which prevented the CTG
from initiating the examination. The waiver to Article I of the GATT 1994 was an exemption which
was totally open because, through references in the text covering all of the Partnership Agreement, it
could be made to cover to all the conditions contained in the Agreement. Also, this waiver to the
Partnership Agreement was unacceptable because it introduced uncertainty.  For example, in annex 5of this Agreement it was established that the trade regime applicable during the preparatory period,
apart from a waiver for the customs tariff, also included other charges of equivalent effect.  In the case
of products originating from the ACP states subscrib ing to this Agreement, the EC took the necessary
measures in order to guarantee more favourable tr eatment than that granted to third countries and it
was clear that without a definition of the measures in question once the waiver is granted, the EU
itself would define which measures were necessary. The waiver granted in 1994 to cover the Lomé
Convention also suffered from this lack of specificity; she recalled that the EU applied extensively thewaiver granted for the provisions of Article I of the GATT and the EU considered that it was
authorized to include Article XIII of the GATT as well as various provisions contained in other
Agreements.  Under the waiver for the Lomé Convention, it was recognized that the EU had wide a
margin of discretion.  This had been confirmed by  the Appellate Body which considered that there
was no definition of which type of measure was necessary:  the EU could have selected another typeof more favourable treatment. It was evident that the text of the waiver request did not overcome the
ambiguity of the former Lomé waiver and hence went against the degree of legal certainty which was
demanded of a waiver to a WTO obligation. As conc erns bananas, more favourable treatment might
include any measure from the violation of a bound tariff of 75 Euro for quotas A and B including also
a tariff quota for the ACP countries or discriminatory licensing or any other measure which the EUmight decide on later. In defence of the credibil ity of the multilateral trading system and in the
interests of all, it would be better if the examination of this waiver was postponed. As long as the
procedural requisites were not met, Guatemala could not start the examination of this waiver.
6.10 The representative of Honduras said his delegation had received no information which would
allow it to leave aside the objections it had raised based on paragraph 1 of the Understanding.  He
reiterated the objections he had raised had not been settled in the  EC communication of 22 June 2001.
The text which referred to bananas at the beginning was replaced by language which alluded in
general to preferential treatment which was not defined in the text as it referred to the applicable
provisions of the Partnership Agreement. Likewise it alluded to the transitional regime which ran to
31 December 2005 without giving any description of the regime.  Finally, according to the 22 June
communication, the single tariff regime would be entering into force on 1 January 2006 recognizingthat the negotiation would be carried out according to Article XXVIII. In other words, the EU itself
admitted that at this time, it was impossible for the EU to spell out the level of preferences. The
Understanding required that the measure be described in the request.  Members had on the table a
waiver text which referred to other documents bu t it was not clear in which document the measure
was described.  The waiver requested included the regimes subject to a tariff quota and a futureregime subject to a single tariff. For this reason he had insisted that the waiver for bananas should be
concluded at the end of 2005 and any future regime should be subject to a separate waiver which
would be examined in the light of the tariff  which would be negotiated to this effect.
6.11  The representative of Nicaragua considered that the EU so far had not described the measures
to be implemented as concerns the banana regime.  These were systemic problems which had been
summarized by Panama, Guatemala and Honduras.
6.12 The representative of Gabon thanked those who had spoken in favour of examining the
request presented by ACP and the EC.  The ACP gr oup had shown flexibility and a constructive spirit
in listening to its partners and other developing countries.  She believed that the examination would
allow all the countries who had questions or objections to discuss them.  She encouraged the
Chairman to hold further consultations according to a short time-period of 15 days before starting the
examination.G/C/M/49
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6.13 The representative of Zimbabwe said he had been subjected to the same arguments for the
past 20 months and, technically, some delegations had already started the examination of the request,
Examining the request did not necessarily mean the granting of the request.  He wanted to appeal to
trading partners to be reasonable, and initiate the examination so that those who had queries and
reservations could then express their views.  The act of examining the waiver did not necessarilymean it would be granted.
6.14 The representative of Barbados said her position was that there was adequate and sufficient
documentation to support the request.  Also, that there was no legal basis for refusing to proceed with
the examination.  However, in the spirit of compromise her delegation was prepared to support the
proposal by Gabon and Zimbabwe that there should be a further period for consultation and that
period should not extend beyond 15 days.
6.15 The representative of Belize said that Belize and Suriname also supported the request for a
consultative period. Belize and Suriname fully supported the Article I waiver request for the ACP/EU
partnership Agreement and the principle of Article XIII request for bananas which would facilitate
transition to the proposed future banana regime.  Belize and Suriname formally requested and lookedforward to the opportunity to hold further consultatio ns with the EC before final decisions were taken
in order to facilitate clarifications on points of interest of both Belize and Suriname.  The
representative of Suriname supported the statement made by Belize.
6.16 The representative of Trinidad and Tobago said that when the waiver request was first tabled
it quickly became apparent that a few countries meant to pursue a strategy of holding the request
hostage to a satisfactory resolution of the banana dispute.  There was a mechanism and a forum for
discussing and resolving the banana dispute and it was not in the CTG when considering the waiver
request for ACP/EU Partnership Agreement. The AC P countries had shown a great deal of flexibility
and patience but at some point the delay could have serious repercussions not only for the countriesconcerned but for its entire organization and the examination of future waiver requests.  He supported
the proposal made by Gabon that the chair pursue consultations over a limited period after which the
CTG had to move to adopting a final decision on initiating the examination of the request.
6.17 The representative of Senegal also supported Gabon.  It would seem more appropriate to
begin an examination of this request so that all the different arguments could be examined in detail.
He believed that there should be a constructive approa ch in conformity with the spirit and letter of the
request which related to a transitional regime and which would open up other possibilities once the
waiver had expired.
6.18 The representative of St.Lucia said her delegation did not see merit in the proposal by
Ecuador but Ecuador should be given the opportunity during the consultations to present its
arguments in favour of its proposed amendments. The issues raised were appropriate matters for
discussion in the course of consultations during the 90-day period.  The rules and procedures of the
multilateral trading system had to take into account the circumstances of all Members including the
ACP, a large group of vulnerable and small developing countries.  The legitimacy of a system which
effectively frustrated the rights of a patient majority was challengeable.  The trading arrangements ofthe Lomé convention were not about diverting trade but providing opportunities for countries that
otherwise would have little or no possibility of part icipating in a global trading system. Restricting the
content of the Agreement as Ecuador proposed would be disturbing development particularly coming
from Ecuador, a fellow developing country, which was competitive in the export of certain products
and now sought to curtail access rights which the ACP enjoyed for many decades.  ACP exports overthe past decade had declined by more than one half and the ACP countries were scarcely in a position
to access quotas A and B.  She urged all WTO Members to facilitate expeditious and favourable
consideration of the waiver request submitted in respect of both the ACP/EC Partnership AgreementG/C/M/49
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and the revised EC banana regime noting that ACP countries were among the most marginal
participants in the international globing trading system.
6.19 The representative of the Philippines said that ASEAN Members considered that in the
context of the waiver request under Article I, nothing had stopped the parties to the waiver request
from implementing the preferential trade arrangements provided under the Partnership Agreement.
Likewise,  there appeared valid queries posed by certain for Members regarding the prerequisites
necessary to launching the examination of the waiver request concerning for instance the sufficiency
of the description of preferences to be given and also on certain other elements deemed necessary to
pave the path for an expeditious examination of the waiver request. ASEAN Members did not wish to
block the waiver request nor unduly delay the process of examining it.  The time which the CTG had
spent so far in preparing for the examination had likewise allowed the EC and its affected trading
partners to continue consultations particularly in the light of the guiding principles to be followed in
considering applications for waivers adopted by the GATT on 1 November 1956 and cited by the EC
in its submission of 14 April 2000, the relevant portion of which said: the party that is requesting the
waiver must afford and in fact engage the other Members in consultations to ensure that the concerns
of these Members who may suffer consequences as a result of the proposed waiver are adequatelytaken into consideration.  This same 1956 decision was cited in the proposed draft decision contained
in the submission by the delegation of Ecuador. Further, regarding the request for a waiver under
Article XIII he cited the last statement of the EC in annex 1 of their submission in G/C/W/269, that
the EC was prepared to give full consideration to representations made to them by other WTO
Members or to engage in consultations with them as may be necessary.  He wished to emphasize that
the concerns of Members who may suffer adverse consequences should be adequately taken into
consideration in the context of the waiver request and not deferred to consultations in the context of
tariff negotiations.  He pointed out that the relevant products affected by the proposed waiver request
were not limited to bananas especially in the context that other products appeared to be contained in
the proposed trade preference arrangement contained in the submissions of the EC/ACP.
6.20 The representative of Jamaica said that the waiver request had been on the table for some
time.  The waiver request was fully within the rules of the WTO and the continued use of manoeuvres
to block the process was a dangerous precedent to establish.  He regarded this blockage of the waiver
request as a matter that would create a poor climate for the Doha Ministerial process because it
revealed the unpreparedness to deal with issues of primary concern to many countries including many
of the poorest and most vulnerable.  He supported the proposal for further consultations to be carriedout which should not extend beyond the 15 days proposed by Gabon.
6.21 The representative of the Czech Republic said the situation in connection to this waiver
request was worrying.  All necessary elements were on the table and the Chair should declare the
examination process started today.
6.22 The representative of New Zealand concurred with those delegations who believed that
sufficient elements were now finally on the tabl e for the Council to start a simultaneous thorough
examination of the request for GATT Article I and Article XIII waivers.  In this context he also
believe the proposed amendments to the waiver request from Ecuador should be given due andappropriate consideration.  Like Gabon and other ACP states, he encouraged the Chairman to pursue
time-bound informal consultations to find a way forward.
6.23 The representative of Madagascar believed the CTG should initiate the period of examination
of the request for a waiver which was important to all ACP countries, the majority of which were
LDCs. This impasse was of great concern and it was difficult to understand why this process had been
blocked given that the concerns expressed clearly showed that Members were already involved in an
examination of this issue.  He therefore support the proposal made by Gabon.G/C/M/49
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6.24 The representative of Mauritius said his delegation fully supported the statement by Gabon.
Since April 2000, the ACP Members had shown flexibility and understanding and he expected the
same sort of flexibility and realism from other trading partners who had difficulties with this waiver
request.  There was no substantive or legal reason why the examination of this waiver request should
not start.  The representatives of Nigeria and Kenya  supported the proposal by Gabon.
6.25 The representative of Canada said as a principle Canada supported preferences for developing
countries and wanted to begin this review as early as feasibly possible to ensure every opportunity and
sufficient time to fully review the issues.  Canada's systemic concern at this stage was transparency, a
core principle of the WTO system. It was important that all requests for WTO waivers be as clear and
specific as possible. In order to provide this transparency, Members needed to engage in the review.
This view was supported by Australia.
6.26 The representative of the European Communities said there could be no doubt that,
collectively, the ACP and the EU had described the measures which they proposed to take in great
detail, specifying the policy objectives and exploring the reason why this policy objective could not
be achieved by measures consistent with the obligation of GATT 1994.  In the presentation of therequest, the EC  had submitted documentation which went far beyond what normally was submitted.
Moreover, the EC had tried  to give every possible additional clarification in consultations. For these
reasons, he expected that the period of examination would be initiated now. All the substantive
arguments that had been heard could be put forw ard during the period of examination.  There had
been delay after delay with dealing with the waiver request and the ACP countries had shownexemplary patience.  He supported the proposal made by Gabon.  The representative of Poland
supported the view of the EC.
6.27 The Chairman said that this had been a long and divisive discussion.  The request for a waiver
was a longstanding one and as the months had passed the issue had become more divisive.  It was
important to find a solution because of the acute sensitivity of this issue for a number of delegations.
He proposed to organize further consultations in the coming days and invited all the parties concerned
to intensify their efforts to reconcile the differences.
6.28 The representative of Panama, supported by Guatemala and Honduras, noted that there was
no consensus as to beginning the examination of the waivers requested by the EU and the ACP
countries.  It should be understood that the Chai rman's consultations would be undertaken without
prejudging their results concerning the starting-point of the examination;  that the consultation period
should not be deducted from the 90-day examination period, and that the decision to start the
examination should not be retroactive.
6.29 The Chairman proposed to carry out further c onsultations, taking into account the views
expressed.
It was so agreed.
VII. REQUEST BY COSTA RICA, INDIA, INDONESIA, PAKISTAN, PERU AND HONG
KONG, CHINA:  CTG'S OVERSIGHT FUNCTION PURSUANT TO ARTICLE IV
OF THE AGREEMENT ESTABLISHING THE WTO – TRANSPARENCY
REGARDING NEW RESTRICTIONS ON TEXTILE AND CLOTHING PRODUCTS
COMMENTED UPON BY THE TEXTILES MONITORING BODY
(G/C/W/260/REV.1)
7.1 The Chairman recalled that this item was first raised in the Council in February 2001, during
the Council's consideration of the report of the Textiles Monitoring Body for the year 2000.  The
specific issue was the presence of a bilateral re straint agreement between the United States andG/C/M/49
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Turkey on Turkey's exports of one category of clothing as a part of a wider understanding between
these two countries.  The  concern related to the relationship of this bilateral restraint agreement to the
Agreement on Textiles and Clothing, and more generally to the TMB's responsibility for supervising
the implementation of the ATC and the CTG's role in overseeing this process.  Following the initial
consideration in the Council in February and informal consultations which were not successful infinding an acceptable solution, the matter was further discussed at the CTG meetings of 14 March and
18 April 2001.  The details and the actions being proposed to the Council were contained in document
G/C/W/260/Rev.1.  This item had been included in the agenda at the request of Hong Kong, China on
behalf of the group of Members.
7.2 The representative of Hong Kong, China said his delegation requested this item because of
serious systemic concerns about the implications of a bilateral restraint measure on the functioning of
the Agreement on Textiles and Clothing.  While the matter was raised at the last two CTG meetings,
he regretted that the two Members involved in the restraint measure had refused to discuss the
substantive issues.  To briefly recap, at the Council meeting on 15 November 2000, in the context of
discussing the TMB's report for the year 2000 (G/L/3 98), Hong Kong, China had raised the issue of a
new restraint introduced by the US on imports of category 352/652 products (i.e. cotton and man-made fibre underwear) from Turkey for the period 01.06.1998 to 31.12.2002.  This restraint measure
had been found by the TMB to be not in conformity with the provisions of the ATC.  He was
concerned that the restraint measure still remained  in force more than one year after the TMB had
reached its conclusion.  More importantly, he had serious concerns that the restraint measure had
significant systemic implications for the functioning of the ATC.  It would set precedents for aproliferation of new bilaterally agreed restraints outside of the ATC's transitional safeguard and a de
facto return to the MFA regime, and would undermin e the disciplines of the multilateral trading
system.  Moreover, the effective functioning of the TMB had been hampered by the failure of the
parties concerned to notify the Body properly and to provide essential information for its review.  He
regretted that, so far, no substantive discussion had taken place at this Council.  The delegation of theUS had said at the meeting of 14 March 2001 that "the measure as notified was consistent with the
ATC and that there were grounds under the ATC for such a measure".  He asked the Member
concerned to explain which precise provision that was, especially when the TMB, after its detailed
examination, ruled that this restriction could not be  justified under any provisions of the ATC.  His
delegation would also like to hear the intentions of the parties with respect to a measure that the TMB
had already found inconsistent with the ATC.  A Member had said at the last meeting that this matter
really did not belong in the CTG at this time and that the CTG should wait until it conducted thecomprehensive review of the implementation of the ATC later this year.  It had also been said that
there had not been a breach of benefits and that the restraint was not contrary to the interests of others.
On the first point, his delegation had made clear in its written communication to the CTG
(G/C/W/269) that under Article IV:5 of the Marrakesh Agreement, as reiterated in the Singapore
Ministerial Declaration and the CTG decision after the first major review of the implementation of theATC, the CTG shall oversee the functioning of the Multilateral Trade Agreements including the ATC.
There was no provision in the WTO Agreement that  confined the CTG's overseeing role in the
implementation of the ATC, or the functioning of the TMB, only to the major review.  On the second
point, the proliferation of bilaterally agreed restraints outside of the ATC had seriously impeded the
attainment of the objective of the ATC, which was the eventual integration of the textiles and clothingsector into GATT on the basis of strengthened GATT rules and disciplines.  To restore confidence in
multilateral disciplines, he asked this Council to request all Members, particularly the restraining
countries, to promptly provide detailed information to the TMB of any new restraints which had not
been properly notified and to take necessary steps to  bring them into conformity with the provisions
of the ATC.  His delegation would support the Chair convening consultations at the earliest possiblemoment.
7.3 The representative of the United States thanked the Chairman for noting that he was supposed
to consult with interested parties on whether this issue should be on the agenda, but time andG/C/M/49
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schedules did not permit it.  She quoted from the minutes of the last meeting: "the representative of
Hong Kong, China understood that there was a disagreement with the US on whether this item should
be kept on the agenda for the next meeting".  Because the item was on the agenda she thought that the
suggestion which had been made by Hong Kong, China in the last meeting was also suitable today
because the Chairman was not able to consult and the positions had not changed nor had thearguments.  The US said that if substantive discussion was necessary there was another option for
discussing it in the CTG, as had been said many times before.
7.4 The representative of India recalled that the relevant part of the minutes of the last meeting,
established that Hong Kong, China had suggested that the Chairman hold informal consultations on
whether the item should be kept on the agenda for this meeting. However, speaking thereafter, her
delegation had noted that, in the course of discussions, the US itself had raised a number of questionson substantive issues, and thus suggested that during his consultations the Chairman should cover all
aspects that had been raised. This suggestion of her delegation was uncontested and, therefore, the
conclusion would be that the Chairman would hold consultations on all aspects of the matter. On the
substantive aspects, she endorsed the statement by Hong Kong, China, noting in particular that the
TMB had already found that the restraint measure applied by a Member was not in conformity withthe provisions of the ATC. Despite the TMB making this finding many months ago, the measure still
remained in place. In earlier meetings of the CTG as well, her delegation, along with others, had
urged the two Members party to the measure to clarify and rectify promptly the measure that had
already been the subject of a TMB finding. She once again urged the CTG, in the course of its normal
process of business, to advise the concerned Members to clarify and rectify promptly the measure.She expressed serious concern that the functioning of the TMB had already been impaired because of
lack of proper notification by the concerned Members and the non-implementation of the findings of
the TMB. The CTG, which was the body that oversaw the functioning of the ATC, was the
appropriate body to take the matter further.
7.5 The representative of the United States agreed that the CTG had competence over this issue.
There was a special provision in the ATC for a comprehensive CTG review of the implementation of
the ATC, and that review would take place later this year and the TMB would be submitting its
comprehensive report for the CTG's deliberation shortly. Therefore, she was not prepared at this stage
to engage in a discussion of substance on this topic.
7.6 The representative of Turkey said that this issue would be brought to the attention of the CTG
during the normal process of the ATC's second stage implementation review.  He did not see any
logic in concentrating on this single issue in the CTG and asked to have it taken off the agenda of the
next meeting.
7.7 The representative of Brazil agreed with the comments made by Hong Kong, China and India.
He would be concerned by any interpretation that would limit the CTG's oversight role, as mandated
by the Marrakesh Agreement, to that of the major review.  His reading of Article 8.11 of the ATC was
that this specified one particular mechanism for this oversight function to be exercised in the context
of the major review.  It was in no way a limitation to the broader oversight function of the CTG.
7.8 The representative of India endorsed the view expressed by Brazil on the CTG’s oversight
role and stated that it was not appropriate for the two Members to urge that the issue should be taken
up only under the major review mechanism.  The CTG’s responsibilities for overseeing the
functioning of certain WTO Agreements were neither limited to such reviews nor limited in terms of
timing. Article IV:5 of the WTO Agreement did not provide that a particular measure may bereviewed by the CTG only at the time of its comprehensive review of the ATC.  She noted that similar
wording in the same Article provided for the re sponsibilities of other WTO bodies, including the
TRIPs and Services Councils.  She asked if her delegation was to understand that if a single situation
was to be raised by any Member in any body, that Member was obliged to raise it only in the contextG/C/M/49
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of mandated reviews that may be set out in the relevant Agreement?  If that was the understanding of
the two Members party to the measure at issue, she would like a clearer understanding as to how they
derived this understanding.  It had also been suggest ed by them that this item should be taken off the
agenda of the next meeting;  she would like to understand the basis for this request and noted that the
Chairman was already committed to holding consultations on all aspects of the issue raised.  Shehoped that these consultations would not limit her delegation’s and other proponents’ rights to raise a
matter in the CTG which was of serious concern to them.
7.9 The representative of the United States said her delegation had nothing more to say on this
agenda item and did not agree with the delegations that thought that the CTG should be engaged in
some process to answer questions that went counter to the process that had been established already to
deal with these issues.  She could only repeat the statement that she had made in the other meetings.If the idea was to keep an item on the agenda simply to restate what the proponents wanted to say, that
was up to the proponents but her delegation had nothing more to say on this item.
7.10 The representative of India stated that she could agree with the proposal that the Chairman
should hold consultations on the substantive aspects and on the issue of whether or not the item
should be on the agenda only on the understanding that in these consultations consensus would be
required not to put the item on the agenda, but not vice versa.  That is, the item would be on the
agenda unless there was consensus not to put it on the agenda.  She elaborated that if there was a
divergence of views and that all the substantive issues were not addressed in the consultations, her
delegation would retain the full right to put the item on the agenda and seek further clarification onthose substantive issues.  Regarding the second part of the matter, that one delegation may have
nothing more to add, she recalled that one of the outstanding questions posed by her delegation was to
know under which provision of the ATC the specific measure had been put in place.  This question
had been posed pursuant to an assertion by that delegation that the measure had been put in place
under ‘a’ provision of the ATC.  Her delegation was simply seeking further elaboration and notrepetition from that delegation.  There was still scope to address substantive issues where, indeed,
both Members party to the measure could clarify the matter further in a constructive spirit.
7.11 The Chairman proposed that, before the next meeting, he would organize consultations on how
to deal with this issue in the future.
It was so agreed.
VIII.  WORK PROGRAMME ON ELECTRONIC COMMERCE
8.1 The Chairman provided a factual overview of the situation in the CTG since the last meeting.
As a result of the meeting of the General Council on 8 May 2001, the General Council invited the
subsidiary bodies to continue their work on this matter and report back to it.  Since the last meeting of
the CTG, there had been two informal meetings on the subject and a written submission from Cuba in
document G/C/W/264. As a result of the meeting of 30 May 2001, the Secretariat prepared an
informal factual note on the issues raised which was circulated to delegations on 5 June 2001.
Subsequently, the CTG also met in an informal session on 29 June 2001, whereby discussionscontinued.  In general, delegations noted that discussion on certain issues in the area of competence of
the CTG could proceed irrespective of the greater classification debate in the General Council.  In
particular, the issues of market access, trade facilitation, and standards-related were mentioned.
Furthermore, with respect to the cross-cutting i ssues being addressed in the General Council, and
especially classification, delegations preferred to get further direction or guidelines from the GeneralCouncil on what, if anything, should be examined in this respect in the subsidiary bodies.  One
suggestion was to update the Secretariat document referencing papers and other relevant documents of
other international organizations in work related to the issues before the CTG.G/C/M/49
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8.2 The representative of Canada noted the need to settle the issue of classification of electronic
deliverables before embarking on a detailed examination of how the GATT applied to them.  The
CTG nonetheless could go ahead to consider other issues such are the ones mentioned: market access,
standards and trade facilitation.
8.3 The representative of Japan said Japan considered that it had a very meaningful discussion
during the dedicated discussion on e-commerce under the auspices of the General Council held on
15 June.  At this dedicated discussion Japan submitted a paper and underlined that in cases where
cross-border transactions of a digital content through a carrier media such as diskette were subject to
GATT disciplines, the same digital content transmitted through Internet should also be granted GATT
level treatment, e.g., unconditional application of MFN, national treatment, the general prohibition of
quantitative restrictions.  At the same time, there were e-commerce related issues which could bediscussed further in the goods area such as rules of origin and trade facilitation which could be
discussed in parallel with a discussion on horizontal issues.
8.4 The representative of Cuba referred to access of products related to electronic goods and
access to these goods.  For Cuba it had been difficult to be able to accede to technologies which were
commercially available but which could not be used for these ends.  The details of these restrictions
could be found in the document G/C/W/264.  She unde rscored that the problem of access to products
related to electronic commerce was a matter which limited the full participation of the developing
countries in this trade and consequently it was necessary to eliminate these restrictions be they of a
trade, technological or political nature.
8.5 The representative of the United States also supported updating the Secretariat's study but
wanted to have a better idea of what would be included in the update.  Perhaps there could be an
update in certain areas concerning what other organizations were doing in the area of taxation and so
forth.
8.6 The representative of Brazil  said that before deciding to take up any further issue under the
work programme of the CTG, Members should await further discussions in the General Council
concerning the cross-cutting issues, particularly classification.  He do not think there were many
topics that could be discussed under the work programme in the CTG regardless of the definition on
the question of classification, but his delegation was open to continued discussions on standards
related to e-commerce.  He disagreed with the delegation of Japan that there could be room to deependiscussions in rules of origin;  he did not think there was need for further work in the CTG on this
topic given the lack of definition on the question of classification.
8.7 The Chairman said that in light of what had been said by different Members, it seemed
appropriate for the time being to wait for the outcome of the General Council meeting on
18 July 2001.  In the light of that debate, Members should make efforts to agree on a program in the
CTG.  He proposed to ask the Secretariat to go ahead with the updating of the reference papers which
he mentioned in his introduction.
It was so agreed.
IX. DRAFT DECISION ON CONCESSIONS UNDER THE HARMONIZED
COMMODITY DESCRIPTION AND CODING SYSTEM - A PROCEDURE FOR
INTRODUCTION OF HARMONIZED SYSTEM 2002 CHANGES TO SCHEDULES
OF CONCESSIONS (G/MA/W/28)
9.1 The Chairperson of the Market Access Committee in  introducing this item said that one of the
responsibilities of the Committee on Market Access, was to ensure that the Harmonization System
changes were introduced into Members' schedule of concession on goods.  This process dated backG/C/M/49
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many years with the first HS changes to Memb ers' schedule of concession on goods occurring in
1992.  Subsequently there was another major revision of the HS by the World Customs Organization
in 1996 which again required changes to Members schedule of concession on goods.  Through the
experience gained by the Committee, in introducing Harmonized Systems changes to Members
schedules, especially the HS96 changes exercise, it had become apparent that the Members decidedchanges or improvements to the existing procedures in order to ensure implementation of the new
HS2002 changes.  The Committee was still working on many Members' schedules for the introduction
of the HS96 changes and as of today, over five years later, there were still 21 Members under waiver
for this exercise and still a number of others, that while not under waiver, had still to complete the
exercise.  Members have thus sought improvements to the procedures so as not to have a repeat of this
same lengthy process for the HS2002 changes.  The Committee had been working on new procedures
for the HS2002 exercise and had reached a concensus on the text on the procedures for HS2002changes which were being forwarded to the CTG and then to the General Council for ultimate
adoption.  The documents G/MA/W/28 and G/MA/W/28/ Corr.1, contained the operative text of the
procedures.  In short, the matters of electronic verification and multilateral review had been
incorporated so as to keep the matter under review and to hopefully shorten the approval time.
9.2 There were no statements.  The Chairman suggested that the CTG recommend that this draft
decision be forwarded to the General Council fo r adoption as a document in the G/C/W series.
It was so agreed.
X. INTERIM AGREEMENT BETWEEN THE EFTA STATES AND THE PALESTINE
LIBERATION ORGANIZATION FOR THE BENEFIT OF THE PALESTINIAN
AUTHORITY – NOTIFICATION FROM THE EFTA STATES (WT/REG79/N/1,
WT/REG79/1)
10.1 The Chairman recalled that this item was on the agenda of the CTG of 15 October 1999, but
its consideration was postponed to a future meeting of this Council.
10.2 The representative of Israel wished to place on record its reservations with regard to this
agenda item.  First concerning the fact that the "interim Agreement between the EFTA states and the
Palestine liberation organization for the benefit of the Palestine authority" had been placed on today's
agenda, and secondly with regard to the substance of the Agreement itself.  In brief, Israel found thisAgreement questionable, in light of the Oslo and other Agreements between it and the Palestinians.
Furthermore, Israel held that in its particulars, the present Agreement did not conform with certain
terms of the Israel-Palestine Agreements, especially the Protocol on Economic Relations, signed in
Paris in April 1994, which regulated economic and trade relations between the two sides.  Finally,
Israel was of the view that the present Agreement did not fall into the sphere of the WTO, and thusneed not be notified.  This protocol specified that with a few limited expectations, both sides would
maintain the same import policy and regulations as applied by Israel.  It established the maintenance
of a single customs envelope without any customs borders between the two sides.  As such, the
territories under the jurisdiction of the Palestine Authority did not appear to be a customs territory
within the meaning of Article XXIV (2) of the GAT T.  In contrast, the Agreement between EFTA and
the PLO appeared to be based on the opposite assumption – the existence of a customs border.  In
view of the existing Agreements, including that between EFTA and Israel, more appropriate and more
satisfactory ways could have been found to prov ide for trade relations between EFTA countries and
the Palestine Authority, in order to assure duty free treatment for Palestine exports.  Other countries
had found such ways.  While Israel welcomed the promotion of economic relations between theEFTA States and the Palestinian Authority, it believed the present Agreement was unnecessary and
out of place, and therefore need not be notified nor discussed within the WTO.  Israel had presented
its reservation to EFTA before and after the signing of the present Agreement.G/C/M/49
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10.3 The representative of Egypt welcomed the notification from the EFTA states concerning the
interim Agreement between the EFTA states and the Palestine Liberation Organization for the benefit
of the Palestinian Authority.  He took note of the statement made by the delegation of Israel but saw
no inconsistency between the Interim Agreement and various Agreements concluded by the
Palestinian Authority over the last few years including the Oslo and Washington Agreements.Notifying the interim Agreement as well as other Agreements concluded between the Palestinian
authority and other countries and regional groupings, was a step in the right direction and conformed
with WTO commitments.  These Agreements provided better market access for Palestinian exports,
contributed to improving the livelihood of Palestinia ns and enhanced the integration of the Palestinian
economy in the world economy.  He believed that the interim Agreement should be transmitted to the
Committee on regional trade arrangements for examination.
10.4 The representative of Switzerland, speaking on behalf of the EFTA states, said his authorities
and the authorities of the EFTA states believed that this Agreement was of the type that should be
notified in the usual way to the CRTA for examination.
10.5 The representative of Jordan, supported by Cuba , supported the statement made by Egypt
given the fact that such an Agreement, furthered economic integration in the region and therefore the
peace process.
10.6 The Council took note of the comments.  The Chairman proposed that the Committee on
Regional Trade Agreements carry out the examinati on of this agreement with the following terms of
reference:  "to examine, in light of the relevant  provisions of the GATT 1994, the Interim Agreement
between the EFTA states and the Palestine Liberation Organization for the benefit of the Palestinian
authorities and to submit a report to the Council for Trade in Goods.  It is understood that the
understanding read out by the Chairman of the CTG under item 7 of the agenda of the meeting of the
CTG on 20 February 1995, as contained in document WT/REG3/1, will apply mutatis mutandis to theexamination of the agreement.  It is also unders tood that during the examination due account will be
taken of the intrinsic differences between customs unions and free trade areas."
It was so agreed.
XI. OTHER BUSINESS
Trade Facilitation
11.1 The representative of Hong Kong, China referr ed to the APEC principles on trade facilitation,
circulated in document G/C/W/273.  The principles we re endorsed by APEC ministers responsible for
trade when they met on 6-7 June 2001 in Shanghai.  Hong Kong, China was privileged to have led anAPEC task force since early 2000 and the development of the principles.  Members would recall that
since the Singapore Ministerial a comprehensive work programme on trade facilitation had been
undertaken by this Council to assess the scope for WTO rules in this area.  Much useful background
and analytical work had already been done. Trade facilitation benefited all parties concerned,
regulators and traders, importers and exporters, businesses and consumers, SMEs and multinationalenterprises alike.  The APEC principles were the result of intensive and collective efforts of APEC
Member economies, including the experts in customs procedures and standards and performance.  The
principles were generic in nature and aimed to assist policy and decision makers in formulating and
implementing trade measures that were pro business .  Hong Kong, China looked forward to continue
to contribute to WTO deliberations and future work on trade facilitation.
11.2 The representative of Indonesia,  as a Member of APEC, said Indonesia fully supported the
initiatives of APEC Members to improve the flow of goods by encouraging all Members of APEC to
adopt policies and measures eliminating obstacles faced by business people at the custom border.G/C/M/49
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Recognizing the disparities among Members in thei r level of infrastructure and human resources as
well as APEC Members' capacity in their effort to improve facilities and services, Indonesia found
existing cooperation among APEC Members very useful especially in the area of technical
cooperation and capacity building.
11.3 Due to time constraints it was not possible for the Chairman to make an oral report on the
work of the CTG on trade facilitation. (The statement was subsequently sent to Members and
Observers on 5 July 2001).
Date of next meetings
11.4 The Chairman announced that the date of the next regular CTG meeting was scheduled for
Friday, 5 October 2001, the agenda is close on Tuesday, 25 September.  Before that, the date of
20 September was scheduled for a CTG meeting devoted to the major review of the implementation
of the ATC.
The meeting was adjourned.
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