RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/50
17 September 2001
(01-4381)
Council for Trade in Goods
MINUTES OF THE MEETING
Held in the Centre William Rappard on 27 and 31 July 2001
Chairperson:  Ambassador István Major (Hungary)
The agenda was contained in WTO/AIR/1597 and Corrigendum 1.  The Chairman proposed
that Item 1 of the proposed agenda be revised so as to include a complete list of the Members that had
submitted requests for an extension of the TRIMs transition period under Article 5.3 of the TRIMs
Agreement, and all of the documents associated with their requests.  Document G/C/W/285/Rev.1
contained the revised proposed agenda.  The Chairman said that following informal consultations he
intended to deal first with Items 1 and 2 on TRIMs and to come back to Item 3 on the ACP-EC waiver
request later.  On the basis of this understanding, the revised proposed agenda was adopted.
I-II. TRIMS AGREEMENT:  REQUESTS FOR EXTENSION OF THE
TRANSITION PERIOD PURSUANT TO ARTICLE 5.3 AND REQUEST BYTHAILAND FOR A WAIVER OF THE REQUIREMENTS OF ARTICLE 5.2
OF THE TRIMS AGREEMEN T ............................................................................................1
III. REQUEST FOR A WTO WAIVER – NEW ACP-EC PARTNERSHIP
AGREEM ENT ...................................................................................................................... ....3
IV. OTHER BUSINESS.............................................................................................................. ....3
I-II. TRIMS AGREEMENT:  REQUESTS FOR EXTENSION OF THE TRANSITION
PERIOD PURSUANT TO ARTICLE 5.3 AND REQUEST BY THAILAND FOR A
WAIVER OF THE REQUIREMENTS  OF ARTICLE 5.2 OF THE TRIMS
AGREEMENT
The Chairman noted the close substantive link between Item 1:  "TRIMs Agreement:
Requests for Extension of the Transition Period Pursuant to Article 5.3" and Item 2:  "Request by
Thailand for a Waiver of the Requirements of Article 5.2 of the TRIMs Agreement".  He suggested
that both items be discussed at the same time to ensure parity of treatment.  He noted first that the
CTG process of considering requests for extensions of the TRIMs transition period was withoutprejudice to the review called for in Article 9 of the TRIMs Agreement;  second, 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 had not notified TRIMs under Article 5.1 of the TRIMs Agreement or whose request
for an extension had not been received at the time of the General Council Decision of 8 May 2000.Questions on Egypt's request for an extension of the transition period, contained in G/C/W/249, had
recently been submitted by the EC, and had been circulated as document G/C/W/284.  He intended to
conduct consultations on Egypt's request as soon as answers to these questions were received.G/C/M/50
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Coming back to the Members whose requests for extensions of the transition period had been the
subject of his recent consultations, he recalled that at the meeting on 17 July 2001, the CTG had
agreed that he would continue consultations in the hope of finding consensus on the requests for
transition period extensions.  Regrettably, the consultations had not produced the consensus he had
hoped for.  It would appear that differences could no t be bridged at this time in respect of a suitable
solution acceptable to all of the Members requesting an extension of the transition period.  One option
would be to continue consultations to ensure that all of the decisions that would make up the eventual
compromise package were based on the same substantive considerations, and on equity and parity of
treatment for all.  Another option would be for the Chairman to inform the General Council of the
situation and seek new instructions.
The EC, Japan  and the US  proposed adoption of the draft decisions.  The Chairman
suspended the meeting to carry out informal consultations.
At the resumed meeting on 31 July 2001, the Chairman reported that his consultations had
proved fruitful and that there was an additional draft decision for Pakistan, which had been made
available in document G/C/W/279.  He proposed that the draft decisions already circulated on thissubject for Argentina, Colombia, Malaysia, Mexico, the Philippines, and Romania, as well as the draft
decision attached to Thailand's request for a waiver on this subject, be revised to incorporate the same
language as that found in paragraphs 2 and 3 of the draft decision for Pakistan.  Revised drafts
containing this suggested language were available as advance copies.  At this stage he proposed a
minor change to the draft decisions mentioned.  In paragraph 2, in line 3, the first three words"internal and external" should be replaced by "internal or external".  He then invited comments.
The representative of Chile said that in 1995, Chile had notified its TRIMs in conformity with
Article 5.1 of the TRIMs Agreement.  The particular situation of its automobile industry was
described in document G/TRIMS/N/ 1/CHL/1.  Chile had not submitted the notification within 90 days
as provided in Article 5.1 due to the fact that this legislation had been notified previously within the
framework of the Agreement on Subsidies and Countervailing Measures (document
G/SCM/N/2/CHL/1 and Ad d.1).  Some Members had expressed doubts as to Chile's manner of
notification, but he did not wish to enter into a discussion on coverage, terms or procedures.  In the
second half of 1999, the Government had initiated the legislative process to dismantle the measure.
As the legislative steps had not yet been completed, Chile had asked for an extension until the end of
this year, by which time he hoped the measure in question would have been eliminated.
The representative of the United States said her delegation welcomed Chile's statement that it
would eliminate its TRIMs by 31 December 2001.
The Chairman then stated that with regard to  the draft decisions for Argentina, Colombia,
Malaysia, Mexico, Pakistan, the Philippines, Romania and Thailand, which envisioned that the
Member concerned might request an additional extension of the transition period beyond 1 January
2002, it should be understood that if the CTG failed to act on any of these requests by 5 October 2001,
as called for in the draft decision, it should not be taken to mean that the requests were not approved.
Furthermore, the "2 plus maximum 2" approach was the basis for the elimination of the remainingTRIMs, based on the extension provisions provided for in the TRIMs Agreement.  The CTG would
take these Decisions based on the information available and the expectations resulting from that
information.  Members agreed that the Decisions were without prejudice to the rights and obligations
of Members under the relevant provisions of the WTO Agreements, including Article IX of the WTO
Agreement.  Members were all in agreement that th ey should continue to give positive consideration
to difficulties developing country Members might face in the future and to provide equitable treatment
now and in the future as provided for in the WTO Agreements.  He proposed that the CTG take note
of the statements made and adopt the draft decisions and at the same time agree to recommend thatG/C/M/50
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the General Council grant Thailand's request for a waiver1.  For the CTG's report to the General
Council on this waiver request, he proposed that, following the WTO practice, he would make an oral
statement as follows:  "This request for a waiver was considered at the meeting of the Council for
Trade in Goods on 27 and 31 July 2001, and the draft decision contained in document
G/C/W/276/Rev.1 was the subject of a recommendation that it be sent to the General Council foradoption."
It was so agreed.
III. REQUEST FOR A WTO WAIVER – NEW ACP-EC PARTNERSHIP AGREEMENT
The Chairman said that, as agreed at the last meeting on 5 July, he had held consultations with
all interested parties on the question of the examination of the waiver request as called for under Article
IX.3(b) of the WTO Agreement.  The aim of these consultations had been to see how Members could
come to an agreement regarding th e start of the examination.  From listening to the different views
among Members as to when to begin the waiver re quest examination process, he had been encouraged
to continue consultations in the first days of Se ptember and it seemed that if Members could reach an
agreement regarding the start of the examination th at all concerned delegations would be willing to
make a best endeavours effort to complete the exam ination of the waiver request by the time of the
Doha Ministerial meeting.
The representative of Honduras hoped, along with all the other parties involved, that during
those consultations Members would be able to fi nd a positive solution to his concern regarding the
description of the measure.  On that premise, H onduras would be able to determine whether it could
initiate this review or not.
The Council took note and agreed that the Chai rman  would resume consultations after the
August break.
IV. OTHER BUSINESS
The representative of the Slovak Republic reacted to the notification made by Poland under
Article 12.5 of the Agreement on Safeguards circulated in document G/SG/35 dated 2 July 2001.  In
this notification Poland informed the CTG of its intention to suspend concessions in line with the
provisions of Article 8.2 of the Agreement on Safeguards.  This retaliatory measure to be applied 90
days after the Slovak Republic introduced its safeguard measure in the notification G/SG/N/11 dated2 May 2001.  In this respect the suspension of concessions should enter into force on 1 August 2001,
depriving Slovakia of the right stipulated in paragraph 3 of Article 8 of the Agreement on Safeguards.
The Slovak Republic strongly rejected any calls for compensation or suspension of concessions which
were based only on unilateral decisions without any prior authorization made by the relevant WTO
bodies.  In this connection I would like to empha size that any unilateral decisions on WTO issues
were very dangerous for the multilateral trading system and such practices could undermine the
multilateral based system.  Moreover the retaliatory action presented in the Polish notification did not
accept the very important aspect relating to the substance of safeguard measures under the Agreement
on Safeguards.  The Slovak Republic had taken the safeguard measure as a result of absolute increases
in imports during the last few years.  In this regard the unilateral decision made by Poland ignored theright established in paragraph 3 of Article 8.  Under this paragraph the right of suspension referred to
in paragraph 2 of Article 8 should not be exercised for the first three years that the safeguard measure
was in effect, provided that this measure had been taken as a result of an absolute increase in imports
under the Agreement on Safeguards.
                                                     
1 Decisions are contained in the following documents:  G/L/460 (Argentina), G/L/461 (Colombia),
G/L/462 (Malaysia), G/L/463 (Mexico), G/L/464 (Philippi nes), G/L/465 (Romania), G/L/466 (Pakistan) and
WT/L/410 (Thailand).G/C/M/50
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The Slovak Republic was convinced that its safeguard measure was introduced in accordance
with the Agreement on Safeguards to avoid further significant increases in imports of sugar, causing
serious injury to the domestic industry.  The quantitative level of imports was established with respect
to preventing further injury.  The decision was made as a result of investigation carried out by
competent authorities which had all the necessary documents and evidence to prove that imports ofsugar increased very rapidly in absolute value and also that these increases were caused mainly by
imports from Poland during the last three years.  She noted that the Slovak Republic did not agree
with the Polish notification.  To provide complete  and full information she informed the CTG that
Poland had asked her delegation to hold consultations under Article 4.4 of the DSU on the same
safeguard measure notified in document N/SG/N11.  The first consultation would be held in the
period 16-17 August in Bratislava.  She requested to put on the agenda of the next meeting of the
CTG the notification of Poland circulated in document G/SG/35 dated 2 July 2001 in order to seek adecision.  She reserved all rights under the DSU.
The representative of Poland said that on 27 June 2001 Poland submitted in pursuance to
Article 12.5 of the Agreement on Safeguards a notification to the CTG on intended suspensions of
concessions.  In the notification which was circulated by the WTO Secretariat as documents G/L/453and G/SG/35 Poland explained its intentions and motivations.  Suspension of concessions and other
obligations would take the form of quantitative restrictions on import of products originating in
Slovakia as described in the documents referred to.  The measure would take effect from 1 August
2001.  Such date falls in line with the provisions of Article 8.2 of the Agreement on Safeguards.  The
calculation of the value of suspensions was explained in Annex 1 to the document referred to.  Polandwas of the view that paragraph 3 of Article 8 of the Agreement on Safeguards was not applicable in
this case, as the safeguard measure imposed by Slovakia on imports of sugar did not conform to the
provisions of the Agreement on Safeguards.  The most serious violations by Slovakia of that
Agreement were listed in Annex 2 of the notification.  Poland did not preclude that further violations
by Slovakia of the Agreement on Safeguards might be found after detailed examination of the case.As stated in the notification, "suspension of the concessions and other obligations proposed did not
preclude further action by Poland under Article 14 of the Agreement on Safeguards".  Poland was
interested in the removal by Slovakia of the WTO-inconsistent measure and did not treat its
suspension of concessions against Slovakia as an objective in itself.  Therefore Poland requested, on
11 July, consultations with Slovakia with respect to the quantitative restrictions imposed by Slovakia.
The request was made pursuant to Article 4 of the DSU, Article XXIII of the GATT 1994 and Article
14 of the Agreement on Safeguards, as cont ained in documents WT /DS235/1, G/L/456 AND
G/SG/D18/1 of 17 July 2001.  Poland had acted in conformity with the Agreement on Safeguards.
The CTG had been notified by Poland and Members were given an opportunity to react to it.  Neither
Slovakia nor any other interested party had put the issue on the agenda of the CTG.  The Agreement
on Safeguards did not require Poland to ask it for approval of the suspension of concessions and
Poland could not be expected to demonstrate any initiative in putting the issue on the agenda of theCTG.  According to the Agreement on Safeguards, if the CTG did not disapprove the suspension
within the period prescribed in Article 8.2 Poland would be free to put the suspension into effect from
1 August 2001.  Such was the situation now.  Moreov er Poland did not consider that there could have
been any ground for such disapproval by the CTG.  As stated above, Poland was firmly of the view
that paragraph 3 of Article 8 of the Agreement on Safeguards was not applicable in this case.  Article8 of the Agreement on Safeguards contained a built-in procedure for the suspension of concessions
and made no reference to any other procedures or conditions.  Poland had the right under the WTO
Agreements to defend its trade interests and had duly made use of the procedure set by the Agreement
on Safeguards in the light of evident inconsistency of the Slovak measure with the Agreement on
Safeguards.
The Council took note of the statements made.  The meeting was adjourned.
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