RESTRICTEDWORLD TRADE
ORGANIZATIONG/VAL/M/8
25 August 1998
(98-3304)
Committee on Customs Valuation
MINUTES OF THE MEETING OF 26, 30 JUNE AND 2 JULY 1998
Chairman:  Mr. Mohamed Bentaja (Morocco)
The agenda proposed for the meeting, circul ated in WTO/AIR/868, was adopted as follows:
1. Terms and conditions of Morocco's reservation concerning minimum values under
paragraph 2, Annex III (G/VAL/W/27).
1. The Chairman stated that this meeting was called in order to examine the terms and conditions
of the reservation presented by Morocco at the meeting of the Committee on 8 May 1998, in
accordance with paragraph 2, Annex III of the Agreement on Customs Valuation.  He recalled thatMorocco had made a declaration at this meeting,  subsequently circulated in document G/VAL/W/27,
which specified the terms and conditions sought by Morocco.
2. He noted Morocco's stated intention to apply the Agreement on Customs Valuation as of 4
July 1998.  The Committee was therefore tasked with finding agreement on the terms and conditions
of Morocco's reservation before this date.  Informal consultations had taken place among the
Members concerned.  However, these Members were not able to come to a mutually satisfactoryagreement on the terms and conditions of the said reservation.  For this reason, he proposed that the
Committee suspend its meeting in order to allo w all Members concerned to continue their
consultations on this issue.  He invited all Me mbers which wished to join these multilateral or
bilateral consultations to take part.
3. The Working Party agreed to suspend the meeting and reconvene on 30 June 1998.
Reconvening of meeting on 30 June 1998
4. The Chairman informed the Committee that no agreement had been reached among interested
Members on the terms and conditions of Morocco's reservation.  The Committee agreed to further
suspend the meeting and reconvene on 2 July 1998.Reconvening of meeting on 2 July 1998
5. The Chairman noted that intensive informal consultations had been on-going among
interested delegations in order to reach agreement on the terms and conditions of the Moroccan
request.  He believed that progress had been achieved thanks to the concessions made on all sides and
circulated a Chairman's Draft Decision containing the resulting terms and conditions.  He opened the
floor for comments on this text.
6. The representative of Morocco recalled her delegation's statement at the 8 May meeting of the
Committee on Customs Valuation which explained Morocco's intention to apply the Agreement as ofG/VAL/M/8
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4 July 1998 except for a limited list of products on which it wished to establish official minimum
values for a period of at least three years, in accordance with paragraph 2, Annex III of the
Agreement.  Since 25 June 1998, Morocco had engaged in a series of informal consultations with a
number of Members.  It appeared that there were reservations regarding the transitional period
requested.  In the spirit of compromise, Morocco was prepared to show good will and accept the 2
year period as indicated in the Chairman's text.  She reiterated that her delegation would spare noefforts to bring about the full elimination of minimum values by the agreed deadline.
7. The representative of the United States stated that his delegation was able to agree to a
reservation for Morocco to maintain a system of minimum values because of the steps Morocco had
taken to implement the Agreement by the expiration date of its transitional period.  His delegation
understood that Morocco had been, de facto, im plementing the Agreement for sometime with the
exception of those products listed in the Moroccan request for which minimum values were used.  Inaddition, his delegation understood that Morocco had finalized its legislation for implementing the
Agreement.  It was his delegation's expectation that Morocco would progressively phase out its use of
minimum values and that the status reports referred to in paragraph 1 of the Chairman's Decision
would include information on removal of products.
8. The representative of New Zealand stated that, in discussing the terms and conditions of
Morocco's reservation, his delegation had also taken into account Morocco's considerable efforts in
implementing the Agreement on Customs Valuation by the expiration date of its delay period, except
for the small list of products which were under discussion.  Like the United States delegation, it was
also his delegation's expectation that Morocco's reports to the Committee on Customs Valuationwould inform the Committee of the removal or phased elimination of products from the list in
G/VAL/W/27.  This would add transparency to the process both for Morocco's domestic constituency
and for other WTO Members.  For the former, namely the industries affected, a clear and detailed
phase-out plan would signal the Government's determination to not apply minimum values;  these
industries would, therefore, be better placed to prepare themselves for the benefits of free trade.
9. The representative of the European Communities stated that her delegation could agree to the
request made by Morocco given the commitments that it had made and the tremendous efforts already
undertaken.  Her delegation understood that Morocco would inform the Committee of a phase-out
programme and would provide status reports that w ould ensure further transparency in this process.
10. The representative of Australia welcomed the agreement that had been reached as reflected in
the Chairman's Draft Decision.  Her delegation placed great emphasis on the significant efforts that
Morocco had made to implement the Agreement in time, and shared the expectations that Morocco
would report on progress in implementing the Agreem ent including the phase-out of minimum values.
11. The representative of Hong Kong, China  stated  that his delegation generally could follow the
consensus of the Committee to agree to Morocco's retaining minimum values for certain products,
pursuant to paragraph 2, Annex III of the Agreement.  He highlighted the transitional and limited
nature of this provision, and in this regard, was pleased that Morocco had agreed to the 2 year time-
period for the reservation and to provide regular reports to the Committee, which he also requested
would include information on the removal of some of the listed products subject to minimum values.
12. The representative of Japan also welcomed the statement by the Moroccan delegation that it
would apply the Agreement as of 4 July 1998, and the consensus as contained in the Chairman's text.13. The representative of Korea stated that his delegation could accept the consensus of the
Committee and was pleased to see the Moroccan Government's efforts to implement the Agreement.
He also requested that Morocco make efforts to expedite the phase-out of the listed products subject
to minimum values.G/VAL/M/8
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14. The representative of Mauritius stated that the agreement reflected in the Chairman's text was
good testimony of how Members could assure continued respect for and upholding of the philosophy
and disciplines underlying the multilateral trading system.  The issue before the Committee was one
of implementation which had been the major problem for many developing countries, and which still
continued, despite the goodwill and genuine efforts at ensuring conformance with WTO rules andprovisions.  He noted that his Deputy Prime Mi nister had stressed this concern at the second
Ministerial Conference as contained in document WT/MIN/(98)/WS/M/1.  His delegation had
foreseen such problems in the area of customs valuation and was thankful to the WTO for recent
arrangements for technical assistance.  He cons idered the Moroccan case an example of these
difficulties.   Morocco's efforts were commendable considering that only a small percentage of its
implementation requirements in this area remained under derogation.  His delegation, therefore,
commended the transparency with which the issue had been handled and supported Morocco'srequest.  He saluted the spirit of understanding prevailing among Members especially as expressed by
the previous delegations.
15. The representative of Mexico stated that his delegation could go along with the consensus in
the Committee.  It was struck by Morocco's ambiti ous reform and adjustment programme in the area
of customs valuation in order to abide by its WTO obligations.  This was welcomed by his delegation,
particularly as the use of minimum values was foreseen to be eventually phased-out.
16. The representative of Norway welcomed the Chairman's text and stated that her delegation
supported the consensus in the Committee.17. The representative of Egypt welcomed the spirit of understanding and cooperation in the
Committee which, his delegation hoped, would continue in the future.  This would help developing
countries to fully implement their obligations in a timely manner.
18. The Committee took note of the statements made and adopted  the Chairman's Draft Decision
on the Moroccan reservation as follows:
MOROCCAN RESERVATION UNDER PARAGRAPH 2, ANNEX III OF THE
AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF THE
GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
Decision
Taking into account Morocco's request for a reservation under Article 21 of the Agreement,
and noting:
- the considerable efforts made by Morocco to fully apply the provisions of the
Customs Valuation Agreement, that its legislation has been finalised, and that Morocco is
ready to implement the Agreement from 4 July 1998;
- the fact that Morocco was a contracting party to the Tokyo Round Customs Valuation
Code and invoked paragraph 1, Article 21 of that Code on 4 July 1993, and is therefore
scheduled to apply the provisions of the WTO Agreement on Customs Valuation on 4 July
1998;
- the good cause for Morocco's request and its intention to make this reservation on a
limited and transitional basis;G/VAL/M/8
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the Committee decides pursuant to paragraph 2 of Annex III of the Agreement and paragraph
1 of the Ministerial Decision on Texts Relating to Minimum Values and Imports by Sole
Agents, Sole Distributors and Sole Concessionaires, adopted by the Committee in May 1995,
that Morocco may continue to use the officially-established minimum values listed in
G/VAL/W/27 for the valuation for customs purposes of the goods listed in that document
until 4 July 2000 according to the following terms and conditions:
1. Morocco will report at each formal meeting of the Committee on the status of its
implementation of officially-established minimum values for the products listed in
G/VAL/W/27;
2. Morocco will not apply minimum values to additional products;
3. This Decision shall not prejudice the rights and obligations of Morocco under the
WTO Agreements, in particular those rights and obligations under the Customs Valuation
Agreement.
19. The representative of Morocco stated her delegation's understanding that the application of
this Decision did not hinder Morocco from requesting a further waiver if necessary.  Pursuant to
paragraph 1 of this Decision, Morocco will report to all the formal Committee meetings on the
application of this Decision.
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