RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/37
17 December 1998
(98-5099)
Council for Trade in Goods
30 November 1998
MINUTES OF THE MEETING
Held in the Centre William Rappard
on 30 November and 7 December 1998
Chairperson: Ambassador R. Saborío Soto
The meeting was convened by WTO/AIR/ 984.  The proposed agenda contained in
document G/C/W/131 was adopted, with the inclus ion of items 5, 6, 7, 8 9, 10 and 11 under “Other
business.”
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I. EC/FRANCE – TRADING ARRANGEMENTS WITH MOROCCO –
REQUEST FOR AN EXTENSION OF THE WAIVER (G/L/275, G/C/W/130) ............2
II. REPORTING ON REGIONAL TRADE AGREEMENTS –
RECOMMENDATIONS BY THE COMMITTEE ON REGIONAL TRADE
AGREEMENTS (W T/REG/4).............................................................................................2
III. CONSIDERATION OF ANNUAL REPORTS OF SUBSIDIARY BODIES OF
THE COUNCIL FOR T RADE IN GOODS .......................................................................2
IV. ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE
IN GOODS TO THE GENERAL  COUNCIL (G/C /W/129).............................................5
V. MALAYSIA – APEC MI NISTERIAL ME ETING ...........................................................5
VI. KOREA – PERU'S TAX REGIME RELATING TO THE IMPORT OF USED
CARS ........................................................................................................................... ...........6
VII. TURKEY – FREE TRADE AGREEMENT BETWEEN TURKEY AND
ESTONIA ........................................................................................................................ ......6
VIII. WORK PROGRAMME ON ELECTRONIC COMMERCE...........................................7
IX. TRADE FACILITATION (PARAGRAPH 21 OF THE SINGAPORE
MINISTERIAL DECLARATION (WT/MIN(96)DEC)) ..................................................7
X. REPORT ON CONSULTATIONS ON THE ISSUE OF THE
DISSEMINATION OF  THE IDB........................................................................................8
XI. DATE OF THE NE XT MEETING.....................................................................................8G/C/M/37
Page 2
I. EC/FRANCE – TRADING ARRANGEMENTS WITH MOROCCO – REQUEST FOR
AND EXTENSION OF THE WAIVER (G/L/275, G/C/W/130)
1.1 The Chairman drew attention to the communi cation from EC/France (G/L/275) containing a
request for an extension of a waiver concerning France's trading arrangements with Morocco.  This
request had been made in accordance with paragraph 1 of the Understanding in Respect of Waivers of
Obligations under the GATT 1994.  Pursuant to Article IX.3 (b) of the WTO Agreement, this request for
a waiver extension was before the Council for its c onsideration;  a draft decision granting this waiver
extension had been circulated in document G/C/W/130 to  assist the Council in its consideration of this
request.
1.2 The representative of the European Communities st ated that the reasons behind the request for
the waiver extension were provided in documen t G/L/275.  This waiver expired on 31 December 1998
and the entry into force of the Euro-Mediterranean  Agreement between the European Communities and
Morocco had been suspended awaiting the ratificati on of the Agreement by two member states of the
European Communities.  It was a process which the European Communities hoped to conclude rapidly
in the course of next year.
1.3 The Council took note of the statement, approved  the request for a waiver extension by
EC/France (G/L/275), and recomme nded that the draft decision granting this waiver extension and
contained in document G/C/W/130 be transmitted to the General Council for adoption.
II. REPORTING ON REGIONAL TRADE AGREEMENTS – RECOMMENDATIONS
BY THE COMMITTEE ON REGIONAL TRADE AGREEMENTS (WT/REG/4)
2.1 The Chairman drew attention of the Coun cil to document WT/REG/4 which contained
recommendations by the Committee on Regional Trade Agreements (CRTA) with respect to how the
required reporting on the operation of regional trade agreements should be carried out.  This was doneby the Committee in fulfilment of its mandate under item 1(b) of its terms of reference, which was:
"To consider how the required reporting on the opera tion of such [regional trade] agreements should
be carried out and make appropriate recommendations to the relevant body" (WT/L/127).    As noted
in the cover note to the document, these recomm endations were contained in the Annex to this
document.
2.2 The Chairman also drew attention to the fact that the nature of these recommendations was
essentially procedural and that their implementation would not entail any change in Members' legal
rights and obligations.  The recommendations were geared towards standardizing, as much as
possible, the presentation of reports on regional trade agreements to WTO Members, ensuring a
provision of consistent information to the CRTA on developments in such agreements. This might be
useful to the Committee's work under its terms of reference and make the implementation of reportingrequirements contained in WTO legal texts operational.
2.3 The Council approved the recommendations
1 contained in the Annex to document WT/REG/4
concerning the reporting on the operation of regional trade agreements.
III. CONSIDERATION OF ANNUAL REPORTS OF SUBSIDIARY BODIES OF THE
COUNCIL FOR TRADE IN GOODS
3.1 The Chairman stated that pursuant to the "Procedures for an annual overview of WTO
Activities and for reporting under the WTO" (WT/L/105) which were adopted by the General Council
                                                     
1 Issued as G/L/286.G/C/M/37
Page 3
on 15 November 1995, all bodies constituted under agreements in Annex 1A of the WTO Agreement
were required to submit annually a factual report to  the Council for Trade in  Goods. Also pursuant to
these procedures, the Council was to take note of these reports.
3.2 He drew attention to the fact that the report from the Committee on Market Access was not
before the Council at this meeting.  The Committee had suspended its meeting on 27  November 1998,
and needed to resume at an appropriate time in or der to adopt its report.  He proposed that the Council
take up under item 3 all the other reports of subsidia ry bodies before the Council, and when the Council
reached the end of this meeting's agenda i.e. afte r "other business", the Council suspend the meeting and
resume when the Committee on Market Access was in a position to forward its report to the Council.
3.3 It was so agreed.
3.4 The Council considered the reports of its subsidiary bodies as follows:
3.5 The Council took note of the report of the Chairman of the Committee on Agriculture  contained
in document G/L/276.
3.6 The Council took note of the report of the Committee on Anti-Dumping Practices  contained in
document G/L/268.
3.7 The Council took note of the report of the Committee on Customs Valuation  contained in
document G/L/277.
3.8 The Council took note of the report of the Committee on Import Licensing  contained in
document G/L/264 in the French and Spanish version, and G/L/264* in the English version2.
3.9 The Council took note of the report of the Committee on Rules of Origin  contained in
document G/L/271.
3.10 The Council took note of the report of the Committee on Safeguards  contained in
document G/L/272.
3.11 The Council took note of the report of the Chairman of the Committee on Sanitary and
Phytosanitary Measures containe d in document G/L/274 and Corr.13.
3.12 The Council took note of the report of the Committee on Subsidies and Countervailing
Measures contained in document G/L/267.
3.13 The Council took note of the report of the Committee on Technical Barriers to Trade  contained
in document G/L/278.
3.14 The Council took note of the report of the Textiles Monitoring Body  contained in
document G/L/270 and Corr.14.
3.15 The Council took note of the report of the Committee on Trade-Related Investment Measures
contained in document G/L/259.
                                                     
2 Document G/L/264* cancels and replaces document G/L/264 in the English version only.
3 English version only.
4 French version only.G/C/M/37
Page 4
3.16 The Chairman stated that the Working Party on Preshipment Inspection was established by the
General Council at its meeting of 7, 8, and 13 November 1996, "to conduct the review provided for
under Article 6 of the Agreement on Preshipment Inspection and to report to the General Council
through the Council for Trade in Goods in December 1997".
3.17 The Working Party had presented its report to the General Council at its meeting of
10 December 1997, and the General Council  had agreed, based on the recommendations made by the
Working Party, that the life of the Working Party be  extended for another year to exchange views on a
Code of Conduct/Practice for PSI entities;  a standa rd inspection format;  selective examination of
shipments;  auditing of PSI entities;  the promotion of competition among PSI entities;  fee structures for
PSI entities; and the use, to user Members, of building price data bases.
3.18 The current report of the Working Party was contained in document G/L/273, and the Chairman
noted that in paragraph 5 of its report, the Workin g Party recommended that its life be extended until
31 March 1999 in order to conclude its work.
3.19 The Council took note of the report of the Working Party on Preshipment Inspection  contained
in document G/L/273, approved the recomme ndation contained therein, and forwarded  the report to the
General Council for appropriate action.
3.20 The Chairman recalled that the Independent Entity  was foreseen under Article 4 of the
Agreement on Preshipment Inspection for the administ ration of the independent review procedures set
out in that Article.   The report of the Inde pendent Entity was contained in document G/L/269.
3.21 The Council took note of the report of the Independent Entity  contained in document G/L/269.
3.22 The Council took note of the report of the Working Party on State Trading Enterprises
contained in document G/L/281.
3.23 The Chairman stated that the report of the Comm ittee of Participants on the Expansion of Trade
in Information Technology Products was contained in document G/L/280.
3.24 The representative of India proposed that the sentence beginning with "On 20 November …" in
the last part of paragraph 4 of this document be changed to read as follows:  "On 20 November, the
Committee met again wherein the Chairman offered a "Proposal" on product coverage put forth by a
number of participants.  It was decided that dele gations should have time to consider the "proposal".
The Chairman suggested that such delegations that  could agree with the product coverage may address
the issue of staging, including extended staging.  The Chairman also suggested that such tables of
staging could be submitted by 4 December 1998 by these delegations.  The Committee agreed toconvene a meeting on 11 December to take a decision on the proposal and the Review."
3.25 The representative of the United States requested  that India's proposed text be circulated and
that his delegation be given time for reflecti on before the Council took action on this report.
3.26 The representative of Malaysia indicated that his delegation supported the changes proposed by
India.
3.27 The representative of the European Communities st ated that he anticipated no problem with the
changes proposed by India.  Nevertheless, he enquire d whether it would be for the Council to change the
report of the Committee or for the Committee itself to review its own report and to make changes to it.
3.28 The representative of Thailand stated that his delegation supported the statement made by India.
In his view, India's statement reflected exactly what  happened at that meeting. Participants of thatG/C/M/37
Page 5
Committee did not have the opportunity to look at this section of the report because it was an update and
reflected work which took place at that meeting.
3.29 The Chairman proposed that this matter be reve rted to the Committee of Participants on the
Expansion of Trade in Information Technology Pr oducts, and that the report of the Committee be
considered at the time of the resumed meeting of the Council.
3.30 It was so agreed.
3.31 At its resumed meeting on 7 December 1998, the Council took note  of the report of the Market
Access Committee contained in document G/L/284 and of the report of the Committee of Participants
on the Expansion of Trade in Information Technol ogy Products contained in  document G/L/280/Rev.1.
IV. ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE IN
GOODS TO THE GENERAL COUNCIL (G/C/W/129)
4.1 The Chairman drew attention to the draft annua l report of the Council circulated in document
G/C/W/129.  In accordance with the "Procedures fo r an annual overview of WTO Activities and for
Reporting under the WTO" (WT/L/105) which was adopted by the General Council on
15 November 1995, it was agreed that "The respec tive sectoral Councils should report in November
each year to the General Council on the activities in th e Council as well as in the subsidiary bodies" and
that the reports of the sectoral councils should be "f actual in nature, containi ng an indication of actions
and decisions taken, with cross references to reports  of subordinate bodies and could follow the model
of the GATT 1947 Council report to the CONTRACTI NG PARTIES".  The draft report covered the
period starting from 5 December 1997 to the present ti me, and would be updated in light of today's and
the Council's resumed meeting.
4.2 On Section 8 of the draft annual report, the repr esentative of Japan recalled that at the Council
meeting of 1 October 1998, his delegation had presented its view with regard to the desirability for the
expeditious introduction of HS96 changes;  this was recorded in paragraph 1.34 of document G/C/M/36.
He requested that Japan's position be duly reflected in the annual report.
4.3 On Section 9 of the draft annual report, the repres entative of India wished to seek clarification
that the sentence: "These activities were important for firstly assessing implementation of market access
commitments and secondly for preparing future ma ndated negotiations" reflected only the statement of
the United States to this effect.
4.4 The Chairman confirmed that this was the case.
4.5 The Council adopted the report5 subject to the updating which would be required to take
account of the Council's work at this meeting and its resumed meeting, and the addition proposed by
Japan.
V. MALAYSIA – APEC MINISTERIAL MEETING
5.1 The representative of Malaysia, speaking under "other business, stated that in the interest of
transparency, he wished to bring to the attention of Members one of the significant outcomes of the
APEC Ministerial meeting held in Kuala Lumpur on 14-15  November 1998.  At that meeting
Ministers of participating economies agreed that the APEC early voluntary sectoral liberalization
initiative be brought to the WTO.  More information would be provided in due course.
                                                     
5 Issued as G/L/285.G/C/M/37
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5.2 The Council took note of the information.
VI. KOREA – PERU'S TAX REGIME RELATING TO THE IMPORT OF USED CARS
6.1 The representative of Korea, speaking under "other business",  stated that his delegation was
concerned about the Peruvian tax regime relating to imports of used cars which had been in operation
since November 1996.  The Peruvian Government had imposed, in accordance with the Legislative
Decree No. 843 of 30 August 1996 and the Suprem e Decree No. 078-96 EF of 3 October 1996, a 45
per cent special consumption tax or luxury tax on imported used cars.  Meanwhile, it exempted used
cars from this tax if they were unloaded in harbours in the Southern region of Peru such as Ilo or
Matarani, and substantially transformed or repaired in the special zone named the Centre of
Transformation, Industry, Commercialization and Se rvices (CETICOS) in the same Southern region.
Most of the imported cars under this system were right-hand drive cars which were transformed toleft-hand drive.
6.2 The Korean Government noted with great concern that this system had a discriminatory effect
in favour of imports of right-hand drive cars transformed to left-hand drive in CETICOS, which
originated from certain countries.  The cost for such a transformation was estimated to be around18-24 per cent of the FOB price, while the difference of total amounts of duties and related taxes
levied on the imports for the two categories of used cars was around 60 per cent of the FOB price.
6.3 As a result, according to statistics available in Korea, the total number of used cars imported
in Peru through CETICOS, most of which were right-hand drive, during the first half of 1998, was22,343 units compared with only 5,871 units for used cars imported through other harbours.  Korea
would examine further the effect of this preferenti al tax system of Peru, and thought that the system
affected even Korea's new car exports to Peru.
6.4 The Korean Government was of the view that this Peruvian tax system went, in particular,
against the MFN principle stipulated in Article I of the GATT.  It hoped that the Peruvian
Government would respond to Korea’s concerns in a positive manner.
6.5 The representative of Peru stated that she would convey the concerns expressed by Korea to
her authorities.  However, she noted that several months ago Peru had responded to a similar concern
raised by Korea on this issue and was surprised that additional questions were being asked now.  She
added that it was important to realize that in Peru for reasons of law and security, right-hand drivecars were forbidden on roads.  In any case, Pe ru was ready to answer any questions submitted in
writing.
6.6 The Council took note of the statements.
VII. TURKEY – FREE TRADE AGREEMENT BETWEEN TURKEY AND ESTONIA
7.1 The representative of Turkey, speaking under "other business",  stated that a Free Trade
Agreement between Turkey and Estonia was concluded in conformity with Article XXIV of the
GATT 1994. This Agreement was signed on 3 June 1997 and came into effect on 1 July 1998.
Pursuant to paragraph 7 of Article XXIV, a joint notification with Estonia would be made to theCommittee on Regional Trade Agreement as soon as possible.
7.2 The Council took note of the statement.G/C/M/37
Page 7
VIII.  WORK PROGRAMME ON ELECTRONIC COMMERCE
8.1 The Chairman, speaking under "other business",  recalled that at the Council's last meeting on
1 October 1998, he had indicated his intention to hol d open-ended informal consultations on the way to
proceed with regard to the work mandate on elect ronic commerce.  These consultations took place on
8 October 1998 and Members informally agreed on the way to proceed in the C ouncil with work on
electronic commerce, as set out in document WT/L /274.  Consensus was reached that the Council
shall hold three informal meetings to discuss the matters indicated in the work programme, before the
General Council was to undertake its interim review of progress in the implementation of the work
programme, which was due for completion by 31 March 1999.
8.2 It was also agreed that the three meetings would be scheduled for 9 November 1998, 26 January
and 8 March 1999, and that in accordance with paragraph 3.1 of the work programme, the examinationmight include any other aspect of electronic comm erce relevant to the provisions of GATT 1994, the
multilateral trade agreements covered under Annex 1A of the WTO Agreement, and the approved work
programme.  It was understood that delegations were free, at any meeting, to address any issue assigned
to the Council under the work programme.  If considered  useful in the course of the discussions, relevant
subsidiary bodies of the Council might be requested to contribute to the work on specific issues under
examination in the Council.
8.3 The informal work process had already started and the Council had its first meeting on
9 November 1998 at which it took up the following items:  market access for and access to products
related to electronic commerce;  customs duties and other duties and charges as defined under Article II
of GATT 1994;  classification issues.   In accordan ce with what had been agreed at the informal
meeting, and in line with paragraph 1.4 of the work  programme, a discussion was held on how relevant
work of other intergovernmental organizations coul d be taken into account for the work of the Council.
Consideration was also given to possible ways of obtaining inform ation from relevant non-governmental
organizations.
8.4 At the next meetings, it was proposed to take up the items as follows:  on 26 January 1999
valuation issues arising from the application of the Agreement on Implementation of Article  VII of the
GATT 1994, and rules of origin issues.  On 8 Marc h 1999 standards in relation to electronic commerce,
and issues arising from the application of the Agr eement on Import Licensing Procedures.  It was also
proposed that at the meeting of 8 March 1999, Member s might wish to consider whether and how work
on relevant aspects of electronic co mmerce should proceed in the Council.
8.5 As requested, the Secretariat had circulate d, before the meeting of 9  November 1998, a
background note on the subjects listed for discussion under paragraph 3.1 of the work programme
(document G/C/W/128).  Dele gations have also been invited to submit contributions to the discussions
of the various subject areas ahead of the informal meetings for informal circulation to other Members.
8.6 The Council took note of the statement and the agreement reached at the Council's informal
meeting on the way to proceed in the Council with work on electronic commerce.
IX. TRADE FACILITATION (PARAGRAPH 21 OF THE SINGAPORE MINISTERIAL
DECLARATION (WT/MIN(96)DEC))
9.1 The Chairman, speaking under "other business",  recalled that at the Council meeting of
8 July 1998, it was agreed to conduct further exploratory and analytical work on trade facilitation in a
series of regular informal meetings starting in Sept ember 1998.  It was further agreed that an evaluation
of the exploratory and analytical work to assess th e scope for WTO rules in trade facilitation would take
place in June 1999.G/C/M/37
Page 8
9.2 The first informal meeting of the Council on 28-29 September 1998 addressed import and
export procedures and requirements, including customs and border-crossing problems.
Representatives of the WCO Secretariat provided an overview of the Kyoto Convention and its
current revision process.  For this meeting, communications were received from the European
Communities (G/C/W/122), the Republic of Korea (G/C/W/123), Hong Kong, China (G/C/W/125),and Canada (G/C/W/126).
9.3 The second informal meeting was scheduled for 7-8 December 1998, and would examine
trade facilitation issues related to the physical movement of consignments (transport and transit), as
well as  payments, insurance and other financial requirements which affect the cross-border
movement of goods in international trade.  For th is meeting, and to support delegations’ analysis of
the scope for WTO rules on trade facilitation the Secretariat would produce a background note
6 which
related all concrete proposals for WTO disciplines on trade facilitation with existing international
instruments.  Furthermore, an update to the Secretariat’s note on work carried out by other
international organizations (G/C/W/80) had been circulated as document G/C/W/80/Add.1.
9.4 A third informal meeting on 1-2 March 1999 would examine issues related to electronic
facilities and their importance for facilitating international trade, as well as technical cooperation and
development issues relating to simplification of tr ade procedures, and would consider the relationship
of other WTO Agreements to trade facilitation.
9.5 The Council took note of the Chairman's statement.
X. REPORT ON CONSULTATIONS ON THE ISSUE OF THE DISSEMINATION OF
THE IDB
10.1 The Chairman, speaking under "other business",  recalled that at the last Council meeting,
following concerns voiced by the delegation of India, it was agreed that he would initiate
consultations with the Chairman of the Market Access Committee, and, as necessary with delegations
concerned, on the issue of the dissemination of the IDB.  Therefore, he had held consultations, both
with the Chairman of the Market Access Committee as well as with delegations interested in the issue.
He wished to inform Members that as yet no solution had been found to this situation.
10.2 The Committee on Market Access had considered the matter at its last meeting which was
held on 27 November 1998, and the Chairman of the Committee had decided to hold open-endedconsultations on this matter.  Given the foregoing, he was of the view that it would be preferable to
await the results of the open-ended consultations to be held by the Chairman of the Market Access
Committee before continuing his own consultations.
10.3 The Council took note of the Chairman's report.
XI. DATE OF THE NEXT MEETING
11.1 The Council took note that the next meeting of the Council was scheduled for 5 February 1999,
and that the agenda would close by noon time 25 January 1999.
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6 Issued as G/C/W/132.