RESTRICTEDWORLD TRADE
ORGANIZATIONTCA/TSC/3
21 November 2000
(00-4953)
Technical Sub-Committee of the
Committee on Trade in Civil Aircraft
NOTE BY THE CHAIRPERSON
Mr. Didier Chambovey (Switzerland)
1. The Technical Sub-Committee of the Committee on Trade in Civil Aircraft (the "Technical
Sub-Committee") met on 14 November 2000 to consid er the update of Harmonized System ("HS")
headings in the Product Coverage Annex of the 1979 Agreement on Trade in Civil Aircraft (the"Agreement") and the expansion of product coverage of the Annex.  The draft revised Protocol and
Product Coverage Annex in document TCA/W/5/Re v. 2 formed the basis of the discussions.
2. The discussion was divided into two parts:  first, the changes to be made to the Product
Coverage Annex; and second, the timing and modalities  for the entry into force of the Protocol and
Product Coverage Annex.
3. With respect to the Product Coverage Annex, the Technical Sub-Committee addressed
outstanding issues relating to the draft text.  The Signatories concerned confirmed their ad referendum
agreement at the October 2000 meeting relating to subheadings 8522.90, 8525.40 and 8543.89.  The
Technical Sub-Committee discussed the proposed insertion of the term "aircraft ground maintenance
simulators" at three points on page 3 of the draft document.  One Signatory indicated that it had noproblem with the inclusion of aircraft ground maintenance simulators per se  on the duty-free list, but
that it had concerns about the inclusion of the term "aircraft ground maintenance simulators" on
page 3 of the draft document because of the implications for "parts" of such simulators.  This
Signatory questioned how such "parts" could be differentiated from parts not for use in such
simulators.  One Signatory clarified that it was seeking duty-free treatment only for the simulators
themselves.  Certain Signatories also expressed co ncern about the relationship between the inclusion
of "aircraft ground maintenance simulators" in the Product Coverage Annex and the scope of productcoverage under Article 1 of the Agreement.  The Technical Sub-Committee agreed to remove
references to "aircraft ground maintenance simulators" on page 3 of the draft document and to address
the aspects of this issue relating to a consideration of the need to amend Article 1 of the Agreement
under the relevant agenda item at the regular Committee meeting on 15 November 2000.  With
respect to HS sub-heading 8471.30, several Signatories indicated they were flexible as to whether ornot this item was included in the Product Coverage Annex.  While certain Signatories were of the
view that the list should tend toward inclusiveness, the views were expressed that there could be
problems with the customs administration of this item, and that there was a concern that the
Agreement's provisions could be used to circumvent tariffs in other areas.  The Chairperson stated that
this item would be removed from the current draft Product Coverage Annex, while remindingSignatories that this was not the last occasion to revert to this issue, as the HS 1996 exercise would
not be the last such exercise conducted by the Committee and Technical Sub-Committee.  Several
Signatories identified concrete examples of the use in civil aircraft of products under HS sub-heading
8502.31, and the Technical Sub-Committee was therefore of the view that it should be included in the
Product Coverage Annex.  A typographical error was identified in the description relating to sub-heading 8453.90.
4. With respect to the timing and modalities for the entry into force of the Protocol and Product
Coverage Annex, the Chairperson recalled that at the meeting of the Technical Sub-Committee onTCA/TSC/3
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24 October 2000, certain Signatories indicated that they may not be in a position to accept the
Protocol (2000) Ame nding the Annex to the Agreement on Trade in Civil Aircraft, either within the
timeframes being discussed, or at all.  In the case of one Signatory, the difficulties seemed to arise due
to an apparent perception that the acceptance and entry into force of the Protocol might have an
impact upon the existing legal relationship of the Agreement on Trade in Civil Aircraft with other
WTO Agreements.  The Chairperson emphasized that, as he had already stated, it was his
understanding that this exercise of transposition of the Harmonized System 1996 changes into the
Product Coverage Annex and the extension of product coverage through the addition of aircraft
ground maintenance simulators was being conducted under the understanding that this was a neutral
exercise, that did not change the existing relationship of the Agreement with other WTO Agreements
including the Agreement on Subsidies and Countervailing Measures.  In addition, it was his
understanding that this exercise did not prejudge any other issues currently being considered withinthe Committee, including the technical rectification of the Agreement to bring it into the WTO
framework.  He believed that his understanding reflected also the understanding among Signatories as
to the nature of this exercise.  He reminded Signatories of his statement at the last meeting of the
Technical Sub-Committee that such an understanding could be reflected in the minutes of the meeting
at which the Committee adopted the Protocol, or could be reflected in any other manner thatSignatories might agree upon.
5. In this regard, one Signatory indicated that a statement by the Signatories recorded in the
minutes would not be satisfactory; rather, the stat ement would have to have a co-equal status and be
reflected in the Protocol itself.  Another Signatory proposed language for insertion into the Protocol,
probably as paragraph 6 thereof, indicating that nothing in the Protocol shall have the result ofchanging Signatories existing rights and obligations under the WTO, and, after discussion within the
Technical Sub-Committee, suggested adding the idea that this was except in respect of the duty-free
treatment of the goods covered by the Agreement.  Another proposal was to specify in the Protocol
that the Protocol dealt only with customs duties and charges under Article 2 of the Agreement, and
then to make it clear that nothing in the Protocol  shall have the result of changing the existing
relationship between the Aircraft Agreement and the other WTO Agreements, including the SCM
Agreement.  The Chairperson emphasized that these proposals required reflection by Signatories.
6. One Signatory observed that the Committee would not be in a position to adopt the Protocol
at its regular meeting on 15 November 2000 because of this outstanding issue, but wondered whether
there was some step that could be taken to consolidate all of the work that had been done with respect
to this exercise.  The Signatory pointed out that many Signatories had already transposed the HS 1996
changes into their domestic legislation.  With respect to the aircraft ground flight simulators, therewas a Committee decision to include it in the list of duty-free items in December 1999, so the
question was how to achieve that.  The Signatory suggested that the Committee could decide to urge
or recommend its Signatories to apply immediately, on an interim basis and until the revised Annex is
formally adopted by the Committee, duty-free treatment to the goods of the proposed product
coverage Annex outlined in WTO document Rev.3, the next draft revision.  This would seal it to acertain extent, while not imposing a specific obligation.  Then, at the next meeting, the Committee
could deal with the Protocol itself to try to get it adopted.  This would allow the Committee to move
forward with the HS 2002 changes.
7. The Chairperson invited comments on this proposal.  One Signatory indicated that, as far as
his delegation was concerned, they already extended duty-free treatment to all of the items underdiscussion and had no real difficulties with the pr oposal.  The Chairperson stated that it was his
understanding that this type of language would not be legally binding but would invite Members to
undertake all possible strides, or strongly endeavour to undertake some steps;  by agreeing to this
language, Signatories were expected to act in good faith and to implement even if there were no
legally binding commitments to implement the re ductions on the products listed in the Annex.
Several Signatories expressed the view that this proposal might be viable, although the preciseTCA/TSC/3
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language required reflection.  One Signatory suggested adding the idea that Signatories should report
back to the Committee on steps they had taken to implement the decision.
8. The Chairperson urged Signatories to consider these proposals overnight with a view to being
in a position to adopt a decision at the Committee meeting on 15 November 2000.  Clearly, this was
just a step towards the objective of the formal adoption of the Protocol, but there were somedifficulties that would have to be overcome and it might take some time to arrive at this result.  The
Chairperson was of the view that the Technical Sub-Committee had been able to move forward and
thanked Signatories for their cooperation.
9. The Technical Sub-Committee took note of the statements made and agreed to instruct the
Secretariat to produce a further revised draft Protocol and Product Coverage Annex
1, taking into
account the results of the meeting.
10. One Signatory observed that 1 January 2002 was drawing closer and that a number of
Signatories were already in the process of transposing their current tariffs, which included the
Agreement on Trade in Civil Aircraft, into the HS 2002.  If the Secretariat could identify those
headings which might be relevant in an HS 2002 exercise, it might be possible for Signatories to start
discussing those changes and to finish off the HS 1996 and HS 2002 exercises at the same time.  This
might simplify the administrative situation for Signatories.  The Chairperson recalled that the issue ofupdating the Product Coverage Annex with respect to the HS 2002 changes was on the agenda for
discussion at the regular meeting of the Committee on 15 November 2000.
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1 Circulated as document TCA/W/5/Rev.3.