RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG/M/30
19 December 2001
(01-6393)
Committee on Regional Trade Agreements
Thirtieth Session
NOTE ON THE MEETING OF  26-27 SEPTEMBER 2001
Chairpersons: Mrs. Laurence Dubois Destrizais and Mr. A. J. Dumont
A. ADOPTION OF THE AGENDA
1. The Thirtieth Session of the Committee on Regional Trade Agreements (CRTA) was
convened in Airgram WTO/AIR/1618, dated 24 September 2001.
2. The Chairman indicated that the Chairperson would deal with the Committee's schedule of
meetings for next year under "Other Business".
3. The representative of the United States indicated that he would raise two items under "Other
Business", namely the United States-Jordan Free-Trade Area Agreement and notification of
agreements.
4. The following Agenda was adopted:
A. Adoption of the Agenda
B. Examination of Regional Trade Agreements
I. Free Trade Agreement between Estonia and Ukraine
II. Free Trade Agreement between the EFTA States and the Former Yugoslav
Republic of Macedonia
III. Free Trade Agreement between Turkey and Poland 
IV. Free Trade Agreement between Turkey and the Former Yugoslav Republic of
Macedonia
V. Free Trade Agreement between Turkey and Latvia
VII. Free Trade Agreement between the EC and Mexico
C. Reporting on the Operation of Agreements
-  Australia and New Zealand Closer Economic Relations Trade Agreement
   (ANZCERTA)
-  European Free Trade Association (EFTA)
-  EFTA – Turkey Free Trade Agreement
-  EFTA – Czech Republic Free Trade Agreement-  EFTA – Slovak Republic Free Trade Agreement
D. Systemic Implications of Regional Trad e Agreements for the Multilateral Trading
System and Relationship between them
-  Secretariat's Surveys on (I) Coverage and Liberalization Processes and (II) Rules of
   Origin in RTAs
E. Annual Report to the General Council
F. Other BusinessWT/REG/M/30
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5. The Chairman recalled that the Latin American Integration Association (LAIA) had been
granted observer status to the CRTA on an ad hoc  basis and sought confirmation to extend an
invitation to LAIA to attend the Committee's next meeting.  It was so agreed.
B. E XAMINATION OF REGIONAL TRADE AGREEMENTS
6. The representative of Australia noted that in preparing for this Session, his authorities had
again been grappled in difficulties in assessing the true coverage of RTAs on a sector-by-sector basis.
There were two aspects to this problem: first, the question of annexes and protocols, which were
generally very extensive and not always easily available.  The list of excluded items, which
unfortunately normally concerned agricultural products, was part of an extensive documentation - e.g.
the tariff elimination schedule of the EC-Mexico Agreement comprised over 430 pages.  Concerning
the availability of annexes and protocols, while for some RTAs these where available in the Internet,
that was not the case for all of them.  He was aware that under the current arrangements annexes andprotocols were not circulated to all delegations but copies were available at the Secretariat for
interested Members.  He sought confirmation of that and requested the Secretariat to give some
background to that.  A second aspect related to the difficulty in assessing the true coverage of RTAs,
which had also been identified by the Secretariat on its survey on coverage of RTAs, related to the
statistics on trade occurring under MFN, less than MFN and duty-free rates which were provided byparties to RTAs.  Often, the information provided typically covered years leading up to the entry into
force of the agreement which did not necessarily give an indication of what happened once the
agreement entered into force.  One way to deal wi th that could be that trade statistics provided
included some information on the proportion of the trade for the year prior to the entry into force of
the agreement, on a sector-by-sector basis, where duties would be reduced or completely eliminated.He was not seeking a repetition of the debate on tariff-line information nor wanting to place undue
extra burden on the parties or the Secretariat.
7. A representative of the Secretariat recalled that the Committee had already held a discussion
about the distribution of annexes and protocols which were integral part of the agreements.  The
Secretariat had at that point explained how much work and paper the distribution would imply, and
therefore it was decided to maintain the procedure as outlined by the representative of Australia – i.e.
they were available at the Secretariat for  interested  delegations.
8. The Chairman noted that a way could probably be found for improving the distribution of
information without making it an extra burden on both the parties to RTAs or the Secretariat.  He
proposed that Australia make a formal proposal on the kind of information his delegation would like
to see distributed in the Committee.
(Minutes of the examination of the RTAs are being distributed separately.)C. R
EPORTING ON THE OPERATION OF AGREEMENTS
9. The Chairperson said that according to item 1( b) of the Committee's terms of reference, a
schedule for the presentation in 2001 of periodic reports on the operation of agreements had been
submitted to the CRTA in February of this year, in document WT/REG/W/42.  At that same meeting,
the Committee had postponed the consideration of the report on the Australia-New Zealand CloserEconomic Trade Agreement (ANZCERTA), distributed  as WT/REG111/R/B/1, which referred to the
1999 schedule and had given a time delay for the submission of written questions.  To date none had
been received.  The schedule presented in February covered 21 RTAs, of which 4 had been received,
namely reports on the European Free Trade Associ ation (EFTA), distributed as WT/REG85/R/B/2,
the EFTA – Turkey Free-Trade Agreement (FTA), distributed as WT/REG86/R/B/2, the EFTA –Czech Republic FTA, distributed as WT/REG87/R/B/2, and the EFTA – Slovak FTA, distributed as
WT/REG88/R/B/2.  Thanking Members which had fulf illed their obligations within the set deadlines,WT/REG/M/30
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she noted that periodic reports were extremely useful for all Members.  She asked delegations with
specific questions to submit them in writing to the Secretariat by 12 October so that the parties
concerned could reply before 30 November.
10. The representative of the European Communitie s informed the Committee that the reports due
from his delegation with its trading partners, which accounted for a substantial part of those due in the
current year, were being prepared and hopefully they would be submitted to the Committee before the
end of the calendar year.  Referring to Secti on II.7 of the ANZCERTA report, he noted that a
mechanism existed for situations where either govern ment considered that there was a possibility that
industry-specific measures, such as bounties, subsidies or other financial support had an effect on the
operation of the FTA.  He was interested in knowing if there had been any concrete experience in the
operation of such mechanism.
11. The representative of Australia asked that the question be submitted in writing so that a
written response could be provided.  He informed the Committee that the Parties were in the process
of preparing the 2001 biennial report for ANZCERTA and also the biennial reports on Australia-
Papua New Guinea Agreement.  He hoped to be able to submit these reports within the coming few
weeks.
12. The Chairperson indicated the Committee had taken note of the information provided by the
EC and Australia delegations that outstanding biennial reports on RTAs would be submitted soon.
D. S YSTEMIC IMPLICATIONS OF REGIONAL TRADE AGREEMENTS FOR THE MULTILATERAL
TRADING SYSTEM AND RELATIONSHIP BETWEEN THEM
13. The Chairperson said that the Secretariat had drawn up two surveys, entitled Coverage,
Liberalization Process and Transitional Provisions in RTAs ;  and Rules of Origin Régimes in RTAs ,
which had been distributed very recently as JOB(01)/132 and JOB(01)/131, respectively.  She
indicated that following a brief presentation by the Secretariat of the contents and findings of the
surveys, the Committee could have a preliminary discussion on them.
14. A representative of the Secretariat indicated that the surveys distributed had sometimes
required tortuous work which revealed some serious problems that need to be addressed in the
Committee.  The two surveys made use of inform ation that had been notified to the CRTA by
Members, often very substantially complemented by information gathered from outside sources.  This
had been necessary because, in many cases, the information provided by Members through the
notification and information exchange process was either insufficient to carry out the work or simply
non-existent.  This indicated a serious need to take a fresh look at the requirements for and process of
notification and information, and its fulfilment as part of this Committee's mandate on transparency.
Referring to the coverage survey, he pinpointed the considerable variations in coverage andliberalization indicators among the RTAs surveyed and in particular the very marked differences in
liberalization as between industrial and agricultural products.  While this had been disguised in the
Committee under the debate on "substantially all the trade" issues and the willingness of Members to
provide information on the extent of liberalization of potential trade, it also indicated that many of the
problems seen in multilateral liberalization of trade in goods also persisted in RTAs.  That might notbe a surprising conclusion, but should give all pause for thought.  He wondered whether the
distortions in trade liberalization as between agriculture and industry both in WTO and in regional
agreements were being multiplied and what kind of negotiating and real-world economic problems
were being created for the future.  On the rules of origin survey, he called attention to the fact that
although it was clear that rules of origin were necessary in RTAs, there were very considerabledifferences among their various current "families".  In addition, these rules were often highly complex
and could act as potential barriers to trade in themselves. Lastly, noting that harmonization and
simplification of rules of origin would be a positive force both for trade within RTAs and for theWT/REG/M/30
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multilateral system, he urged for more thinking and positive work to be done on this issue, and not
only on non-preferential rules of origin.
15. Turning to the problems concerning the collection of data, the representative of the Secretariat
indicated that a number of major difficulties had been encountered for the coverage survey.  The
survey made use of data from four sources, namely RTAs' legal texts;  individual Members' WTOtariff schedules as notified to the Integrated Data Base (IDB);  other sources in WTO and outside;
and data on imports provided by RTA parties in the course of the examinations.  None of these
methods, taken alone, had been altogether satisf actory.  Annex 1 attempted to show the tariff
treatment of imports into parties to selected RTAs, based on data showing the percentages of trade
subject to tariff concessions submitted by RTA partie s in the course of the examination in the CRTA.
Although this had been a useful source of information, it was far from uniform in nature.  Some
Members had provided a breakdown of imports from their RTA partners at zero-duty rates, less-than-MFN duty rates, and MFN rates;  others had lumped zero-duty rates and reduced duty rates together;
others had provided no statistics at all.  He regretted that, in the case of the European Communities'
(EC) RTAs, very little data on preferential trade had been made available.  The indicators of tariffs
applied to MFN imports and imports from selected RTA partners, contained in Annex 2, had been
gathered from the in-house IDB and Trade Policy Review (TPR) databases, UNCTAD's TradeAnalysis and Information System (TRAINS) data base and the Free-Trade Area of the Americas
(FTAA) database.  Expressing his amazement that the Secretariat had to scratch around among so
many sources to get this information, he noted that there were potentially at least major problems of
consistency that could occur from the use of multiple sources and indicated that from all these
sources, it had been possible to obtain information on preferences from a total of only 18  reporting
Members' tariff schedules.  Given that most WTO Members were engaged in RTAs, this represented
an unbelievably minuscule sample.  Annex 5, showing transition periods and calendars of
concessions, had been based on RTAs' legal texts, which were readily available, although sometimes
the accompanying annexes and protocols were either missing or incomplete.  One major handicap to
analysis had been that these annexes and protocols rarely existed in the WTO in electronic form, andthus the categorization of transitional periods for the 72 RTAs analyzed proved a Herculean task.
That was clearly unsatisfactory in these days of the Internet.  He strongly urged delegations to provide
all information in electronic form in future and hoped that the Committee could make such a
recommendation.  Turning to the survey on rules of origin, data gathering had also been a major task.
While for many of the 93 RTAs examined the Secretariat had in its possession, mostly in paper form,
the relevant protocols or annexes dealing with rules of origin, in a number of cases these were
outdated and the current regulations had to be searched for outside WTO.  The existence of nationalweb sites containing rules of origin regulations had been extremely helpful in that instance, but this
should surely not have been necessary.  During the search for the most recent information, it had
become clear to the Secretariat that the requireme nts to notify changes to the existing regulatory
framework of RTAs were not being complied with;  that applied both to RTAs under examination and
to those subject to the biennial report exercise.  This seriously detracted from the transparency of theRTA process.  Numerous discussions dealing with the issue of notification, and the provision of
statistics, had taken place in this Committee, and it was obvious that Members hold divergent views
on this issue.  However, if the systemic work of the Committee was to be carried out properly, it was
clear that these issues would need to be addressed.  The Committee had to look seriously at the issue
of how Members could provide clear and comprehensive information, if possible in a harmonizedformat, that could add value to the transparency part of the Committee's mandate.  The present
situation was highly unsatisfactory.  Merely identifying this as a systemic issue and collectively
wringing hands was not enough.  It was time that Members addressed this topic seriously.  He
encouraged all Members which were party to RTAs to submit full data on preferential tariffs and trade
flows to the IDB database, to make every effort to  comply with delegations' requests for information
in the course of RTA examinations, and to noti fy regularly to the Committee any changes to RTA
regulations as these occurred.  He noted that in the context of the Generalized System of Preferences
(GSP) most Members were already complying with the latter point and he wondered why that was notWT/REG/M/30
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the case under RTAs.  It was clear that the Secretariat could assist the Committee by producing
meaningful and balanced surveys only if it had access to a broad sample of data for comparison and
analysis;  only then could the CRTA fulfill its role in promoting the transparency of  RTAs within the
multilateral trading system.
16. Another representative of the Secretariat made on oral presentation of the survey on
Coverage, Liberalization Process and Transitional Provisions in RTAs .  She said that the survey had
two main objectives: to provide the most complete and coherent picture of product coverage and the
degree and pace of liberalization in RTAs;  and to identify patterns and compare RTA provisions
across the RTA universe and vis-à-vis  the relevant multilateral disciplines.  The scope of the survey
was limited by the relatively scarce availability of data;  a larger sample of data would have yielded
more discernible patterns that those observed.  She then highlighted two main findings of the survey.
First, RTAs differed considerably in terms of their coverage and liberalization processes;  while someprovided for full elimination of all duties on entry in to force of the agreement, others did not.  Often
tariffs on the more sensitive products were progressively eliminated or reduced to a level less than
MFN but greater than zero over the transition period of the agreement.  Transition periods varied from
one RTA to another;  some were ten years or more, others were considerably less.  Some RTAs
provided for asymmetries in the transition period for one party, which was usually the less developedof the two in the case of a bilateral RTA, while ot hers accorded symmetric treatment for both or all
parties.  Second, the treatment of agricultural and industrial products varied considerably.  Most
RTAs had the objective of the creation of a free-trade area for industrial goods, while for agricultural
products this was rarely the case.  Average tariffs and tariff peaks on agricultural products remained
high.  She then gave a more detailed explanation of three of the charts contained in the survey.
17. The representative of Australia said that the two surveys were very useful contributions in
bringing to the fore emerging trends in the negotiation of trade agreements.  He asked that they be on
the agenda of the next CRTA meeting so that the Committee could hold a more in-depth discussion of
them.  In his delegation's view, the survey on Covera ge highlighted the widespread deficiencies in the
coverage in a high proportion of RTAs, particularly with respect to agriculture.  The tendency toexclude agriculture to a large extent had often led to  discriminatory treatment of those Chapters of the
Harmonized System, for example, through the positive list approach, which often excluded tariff
peaks, and through duty reductions, rather than duty elimination.  This substantiated his delegation's
long-standing concern that many parties to RTAs had made only very limited progress in liberalizing
trade in agricultural products.  Given that agricu lture was very often the most protected sector, this
discriminatory treatment led to doubts as to whether such RTAs could be said to liberalize
"substantially all the trade" in the sense of Article XXIV.  While parties often pointed to the relativelylow proportion of trade in agriculture with respect to total trade as justification for the coverage of the
RTAs, the deficiencies of this argument were well known and had been discussed in the CRTA.  The
survey usefully pointed out these deficiencies.  Th at should encourage parties to current and future
RTAs to reconsider this discriminatory coverage .  His delegation agreed with the suggestion that
further work be undertaken at a disaggregated level to the approach taken by different countries to theconcessions made on agriculture.  The survey also pointed out that some parties had not provided a
breakdown of the treatment of agricultural products in the examination process, for example in terms
of trade at MFN rates, reduced rates and duty-free.  Furthermore, statistics provided were often for the
years preceding the entry into force of the RTA and therefore it was impossible to judge the impact of
the RTA on trade flows.  He encouraged parties to continue to provide that information in the yearsfollowing the entry into force of the agreement in their biennial reports.  He supported the
Secretariat's suggestion that annexes and protocols be made available electronically as this would
assist Members in assessing the true coverage of RTAs.  Secondly, he encouraged parties to submit to
the Committee trade statistics for a few years predating the entry into force of the agreement, but also
to indicate what percentage of the latest year's trade would face MFN, less-than-MFN and duty-freerates under the agreement.  This data should be separated into agricultural and industrial products.
Thirdly, in their submissions of biennial reports, parties to RTAs should continue to provideWT/REG/M/30
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information on trade in agricultural and industri al products occurring at MFN, less-than-MFN and
duty-free rates to indicate how bilateral trade had been liberalized with the entry into force of the
agreement.  Fourthly, parties should provide inform ation on a tariff-line basis, for both agricultural
and industrial products, setting out the number of tariff lines where duties were being applied, had
been eliminated or reduced.  This could include projected figures with actual data subsequentlyprovided in the biennial reports.  He emphasized that his delegation's intention was not to increase the
burden on parties and on the Secretariat, but rather to address the serious deficiencies in data which
existed.
18. The Chairperson confirmed that the surveys would be included on the Agenda of the
Committee's next meeting and noted that it would be useful if the representative of Australia could
submit his suggestions in writing to the Secretariat.
19. Given that his capital had not had time to consider the surveys in detail, the representative of
Hungary reserved his right to comment on them and respond to delegations' statements at a later
stage.  In his opinion it was premature to have a detailed discussion of these two surveys.  Therepresentatives of Japan and the Czech Republic
 also reserved their right to comment on the surveys
at a later stage
20. The representative of Hong Kong, China concur red with the assessment that the surveys were
timely and agreed that the Committee should revert to a more substantive discussion at a future CRTA
meeting.  He also agreed that the issue of transparency needed to be addressed at a future stage.
Wondering which areas of the survey merited Members' attention in more depth, he referred to the
fact that different results had been obtained in measuring coverage on the basis of tariff lines versus
imports, and noted that this was one of the areas which might merit further attention.
21. The representative of the European Communities said that there was a clear need for further
reflection and consideration of these two surveys and that his comments at that meeting stemmed
from the Secretariat's introductory remarks and comments made by other delegations.  First, it was
important to take account of the way in which RTAs had evolved over time, particularly in the context
of coverage since the survey treated all RTAs equally, irrespective of whether they had entered intoforce recently or fifty years ago.  He noted that the ambitions and practices of Members had changed
over time in respect of the free-trade areas (FTAs) they had negotiated.  Second, it appeared to him
that some of the comments made by delegations ha d referred to changes in the legal obligations of
parties and seemed to imply that an interpretation or even a change in the wording of Article XXIV
had already been enacted which was not actually the case.  Third, his delegation disagreed with the
assessment that some RTAs had the goal of a FTA in industrial products but not for agricultural
products.  His delegation set out to create a FTA which was consistent with the obligations of theGATT and the WTO.  While he understood that some countries wished to focus attention on
particular sectors, the Committee needed to bear in mind to what extent such attention was required in
order to help it in determining the compatibility of  RTAs with the tests of Article XXIV.  One of the
early achievements of the CRTA had been to reach agreement on the Standard Format for the
presentation of information on RTAs, which had replaced the old system of working parties and thedetailed question-and-answer process.  While he understood delegations' wishes to improve the
Standard Format, this was not a topic of the day's discussion.
22. The representative of New Zealand thanked the Secretariat and the representative of Australia
for having identified a key blockage in the work of the Committee, namely the provision of data, and
stated that her delegation look forward for discussi ons on that.  As for the conclusions of the survey,
she noted that they confirmed her delegation's concerns that discriminatory treatment of industrial and
agricultural liberalization existed in a number of RTAs.  The survey helped in sharpening the issue
and substantiated existing concerns.  Her delegation was open to the suggestions made in the surveyWT/REG/M/30
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for further work in agriculture as these would be useful complements to the Committee's work on the
compatibility of RTAs with Article XXIV.
23.  The representative of Chile noted that the surveys could be equally useful for other WTO
bodies, for example in the context of agricultural negotiations or other activities that might be
launched in the future.  His delegation would like to revert to the surveys once his capital would haveanalyzed them, perhaps in the context of a specia l session of the Committee.  He agreed that the
Committee should look into certain aspects of the surveys in a more detailed manner.  He also noted
the need for a dynamic approach to such analysis, giving that RTAs were constantly evolving and
proliferating.
24. The representative of Canada indicated that her delegation was amazed and overwhelmed
with the detailed information provided in the surv ey which was still being examined. One point which
was evident was that there were gaps in transparency and that should be addressed in furtherelaboration of information and data provided to  the Committee.  The ideas put forward by the
Secretariat and the delegation of Australia were worth exploring and her delegation looked forward
contributing to this debate.
25. The representative of the United States noted that the Secretariat had taken great lines to get
the needed basic factual information for the survey and that should not have been necessary.  He
agreed that the surveys should be considered in detail at another meeting under the Committee's
regular agenda item on systemic issues but saw no need for a special meeting.  He concurred with the
suggestion made by the Secretariat that annexes and protocols be provided electronically, and noted
that such request should be made with respect to both existing and future RTAs.  His delegation had a
few preliminary comments and questions on the surv ey.  Noting that the survey made no reference to
WTO provisions on trade coverage, the addition of a reference to Article XXIV:8 legal requirement
that duties and other restrictive regulations of commerce be eliminated with respect to substantially all
the trade would help placing the survey in its cont ext.  It seemed that the survey had very little
information on RTAs involving developing countries and no information on RTAs among developing
countries only, which seemed to be an important omission.  Noting that the rules of origin survey didinclude such types of RTAs, he wondered why a similar approach had not been used in this survey.
He also wondered whether, in performing its analysis, the Secretariat had included information on
RTAs that had not been notified to the WTO or that had been notified but not referred to the
Committee for examination.  He noted that in Annex 2, numerous "not applicable" notations appeared
in almost all categories with respect to RTAs having the EC as a party.  Given the considerable role
played by the EC in RTAs, he wondered how the charts presented throughout the document dealt with
that apparent absence of information.  Regarding Annex 3, which contained more columns than rows,he wondered why there was not a row heading for the EC.  Also in that Annex, he wondered whether
the importing countries were the ones in the columns or in the rows.  Annex 4 was the most
interesting of the survey, providing information on du ty-free shares for agricultural imports.  It would
seem that the liberalization afforded to RTA partners was inversely proportional to the geographical
distance separating them.  That was somewhat perplexing giving that there were probably the greatesttrade creation opportunities in trade between neighbor ing countries.  As an example to that, Norway
seemed to provide considerably more liberal market access for agricultural products from Eastern and
Central European States - over 75 per cent of its agricultural tariff lines - than from its Baltic
neighbors, where it did not appear that any agricultural liberalization occurred. Likewise, the EC
provided greater liberalization, while still at low levels, for agriculture coming from Algeria, Moroccoand Tunisia than from countries like the Czech Republic, Hungary and Poland, which had applied for
membership of the European Union.  Given the importance of agriculture to those economies and the
close political relationship they had with the EC, one would expect a relative higher level of
agricultural liberalization.  He wondered whether the Secretariat had any information to explain that
anomaly.  He requested that clarification be provided on what the white bars contained in the graphsof Annex 4 represented.  Responding to the comment made by the EC representative, questioning theWT/REG/M/30
Page 8
focus made in the survey to the agricultural sector, he recalled that originally several Members had
requested that a study be made on the agricultural sector itself.  However, at the request of European
Members, the Secretariat had indicated that it would include agriculture as a separate element within
the overall coverage survey.  The fact that considerable amount of effort had been devoted to
agriculture should not thus come as a surprise for anyone.
26. The representative of the Slovak Republic indicated that the surveys would help to structure
the debate and agreed that the substantive debate should be held at the forthcoming meeting of the
CRTA.
27. The representative of Norway indicated his delegation's appreciation for the surveys which
presented the results of all the information gathered in an accessible manner.  His country was in
favour of transparency and it was his hope that finding information on its agreements had not proved
difficult.  He seconded the comment made by the representative of the EC that the aim of improvinginformation and transparency was to help the Committee in fulfilling its mandate.
28. The representative of India sought clarification on whether in Chart 5 the gaps meant that the
Secretariat had no information on those RTAs or wh ether the coverage was zero. Concerning Chart 8,
he wondered whether the dots reflected a situation where no concessions were in force, and if that was
the case, he wondered what was the coverage of the agreements.  He also asked whether the datareflected in both Charts 5 and 8 related to the same set of RTAs.  Replying to those questions, the
representative of the Secretariat said that the gaps  in Chart 5 meant that coverage was very close to
zero.  As for Chart 8, the dots represented the tariff peaks and the bars the maximum MFN applied;  if
the dot was at a lower level than the end of the bar, that meant that the tariff peak within a particular
agreement was lower than the one applied under MFN trade.  She noted that while that was a ratheruncommon situation in agricultural trade, it was much more frequent with respect to industrial trade,
where the tariff peaks themselves were also much lower.  As for the last question, she replied in the
negative.
29. The Chairperson noted that at that preliminary stage it appeared that three types of questions
and comments had been expressed, namely factual questions on the survey itself, such as the ones
raised by India and the United States;  questions relating to the environment of the survey, which
would allow to consider the conclusions of the survey in today's RTAs context;  and what to do with
the survey and why was it done.  On that last point, some Members had mentioned that the surveys
could be used as an input to the work of the Co mmittee;  it was also mentioned that they could be
useful for the work of other WTO bodies and any future negotiations.  The reflection had also been
made of whether the survey would be a tool for fu rther reflection with a view to modifying the rules
only or whether it could also have some other side-effect such as for example the electronicsubmission of data, which should be encouraged on a voluntary basis.  Noting the preliminary nature
of that day's debate, even if some delegations had already received reactions from their capitals and
others were able to react spontaneously, she requested that the debate be continued at the next meeting
of the Committee not to increase the discrepancy among delegations.  With respect to the special
session mentioned before, she thought that there was no need for a special meeting;  rather, she was ofthe view that time should be specially allocated within a normal Committee's meeting for discussing
the surveys.  In that way, the debate would not mix with routine work and it would be simpler for
delegates who did not follow the Committee's work to join in for the discussion.
30. A representative of the Secretariat thanked delegations for the comments already made and
requested that questions posed be sent to the Secretariat in writing.  Responding to the question by the
representative of the United States on why RTAs among developing countries only had not been
included in the survey, she spelled out some reasons for that, namely RTAs which were partial in
scope had been purposely excluded from the survey and availability of data for developing countries
was very limited.  However, information on the Mexico-Costa Rica Free Trade Agreement and on theWT/REG/M/30
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Central American Common Market, both of which were full-fledged RTAs, had been included.
Concerning the EC data in Annex 2, the notations should have indicated "not available", given that
the source of the EC tariff schedule used, namely UNCTAD's TRAINS database, did not provide all
the information needed for generating data in that Annex.   That same explanation applied to the lack
of information on the EC in the table included in Annex 3, and in which importing countries werethose listed in the rows.  She finally indicated that the white bars included in Annex 4 represented
Switzerland.
31. Another representative of the Secretariat noted that it was not his intention to single out any
Member with respect to provision of information, and recalled that he had made a general point on
that at his introductory remarks.  The issue of in formation to be given to the IDB had been raised in
other WTO bodies, and he reiterated that such data would also be extremely useful for analyzing the
structure of RTAs.
32. The Chairperson noted that even when data existed they were not always compatible.  She
further noted that while it was Member's obligation to notify RTAs and provide relevant information
in the context of the examination, that obligation did not extend to supplying data for the purpose of
preparing a survey.  She encouraged Members to address the Secretariat directly for specific
clarifications that they might wish to receive.
33. Commenting the reply provided by the representative of the Secretariat according to whom
partial scope RTAs had been excluded from analysis, the representative of the United States said it
was apparent from some of the charts in the survey that a good number of the RTAs analyzed were ofa partial scope nature.  He requested that more information be provided on the TRAINS database, and
in particular whether the preferential rates drawn from it referred to those applied by the EC under its
GSP scheme or rather under contractual RTAs.  The representative of the Secretariat noted that the
WTO's databases, namely the IDB and the TPR, were used as first and second resort.  The TRAINSdatabase was used for additional information.  That database was organized by reporting country and
contained information on preferences granted under GSP and individual RTAs.
34. Another representative of the Secretariat made an oral presentation of the survey on Rules of
Origin Régimes in RTAs .  She noted that rules of origin régimes were of a very technical and detailed
nature.  While in many instances the texts of the Protocols might seem clear, and that despite its
technical nature, the specifics concerning products and tariff headings tended to be very complicated.
In that context, presenting a user-friend summary of the issues involved and the definition of a general
framework for comparison purposes had been a major task.  Highlighting the main findings of the
survey, she said that rules of origin were necessa ry to administer differentiated trade régimes, in
particular free-trade areas.  It was very rare that RTAs used a single method for conferring origin, thenormal situation being that of co-existence of at leas t two types of criteria for determining origin;  this
could be explained by the fact that while one method could be better suited to a particular sector or
situation, it would not be easily adaptable to ot her sectors or situations.  Further, a number of
exceptions and derogations supplemented the general criteria, which added to the complexity of, and
sometimes significantly modified, rules of origin régimes.  Currently, two major models of rules oforigin existed, namely the pan-European system of cumulation - which according to the Secretariat's
account was applied in 50 RTAs - and the NAFTA-model of rules of origin, increasingly being used
in RTAs concluded by North American countries.  Those two methods differed significantly.
Although out of the 93 RTAs analyzed, a few RTAs applied very simple and quite liberal rules of
origin, over-complicated origin determination seemed to be the rule.  The analysis led to the question
of whether tailor-made ROO régimes might act as potential barriers to trade, in particular whether
rules of origin might become a trade policy instrument per se ;  whether rules of origin might be
considered as a factor of production, in the same manner as cost of capital or availability of primary
resources;  and whether rules of origin could be viewed as an instrument of managed trade.  She noted
that the linkage between the coverage of an RTA and its rules of origin should not be forgotten;  thereWT/REG/M/30
Page 10
could exist an RTA with extensive coverage but in which very strict rules of origin did not allow
much trade to be carried under preferential treatment.  She also noted that any attempt to harmonize
preferential rules of origin should not be at the cost of their simplicity and efficacity.  She then gave a
more detailed explanation of two tables presented in the survey and used an hypothetical case to
illustrate both diagonal and full cumulation.
35. Noting the more technical nature of this survey, the Chairperson requested delegations to
restrain their comments or questions to those that were of a factual nature and not to address at that
meeting issues of a more philosophical nature such as whether rules of origin were an instrument of
managed trade.
36. The representative of Hong Kong, China highlight ed the fact that many preferential rules of
origin régimes were very complicated.  That was not only a problem for some Members but for all
Members, given that there were more than 130 RTAs in force and more were coming, as illustrated bythe Secretariat's mapping paper.  All Members had common interest to see how this complicated issue
could be addressed in order to facilitate trade and respond to the problems faced by the exporters.
Many exporters from developing countries, and even small exporters from major economies, had
faced practical difficulties with these complicated rules.  His delegation supported an early circulation
of the survey as an official WTO document and was looking forward for a more focused discussion onthe survey at the next meeting.
37. The representative of the United States said that both surveys should be treated in the same
manner as past documents and be circulated as official WTO documents, particularly given the
considerable amount of work that had gone into their preparation.  His delegation had a few
preliminary comments on the survey.  First, he took note of the "Highlights" section of the survey and
in particular point 4, which stated that there were  two major models of rules of origin and compared
the pan-European system of cumulation of origin and the "NAFTA-model of rules of origin".  He
agreed with the point made that these differed significantly from each other, in that the NAFTA was a
free-trade agreement which included preferential rules of origin, while the pan-European system  was
not a free-trade agreement but rather a "system".  The pan-European system of cumulation was servedto change with very little and often no notice the operation of previously existing free-trade
agreements and the treatment of goods from non-parties to those agreements.  Throughout the survey,
there were continuous references to the pan-European system of cumulation as if it was a free-trade
agreement, even giving it an acronym - PESC -  as if that system was the same as agreements such as
CARICOM, MERCOSUR, COMESA, ANZCERTA or ev en NAFTA.  He reiterated his delegation's
view, confirmed by the EC and others, that the PESC was not a regional trade agreement and stated
his delegation's difficulties in understanding the comparison of the PESC with NAFTA or any other
RTA.  Referring to the presentation made on the differences between full and diagonal cumulation, he
wondered whether it was possible to have full cumulation without a single RTA.  A reply on that
would be important because if countries had more than a single RTA it would be possible for them to
craft individual RTAs to suit their individual needs and still have an overall coverage
38. Commenting on the point made by the United States about differences in cumulation systems,
a representative of the Secretariat noted that, as it had been indicated, the PESC applied to a variety of
FTAs concluded by the EC and crossed the border between the single market and an FTA, while theNAFTA was an FTA and the "NAFTA-model of rules of origin" related to rules of origin applied by
NAFTA partners in their relations with others and, in that context, the FTA between EC and Mexico
could be of interest.  Another representative of the Secretariat noted that the acronym had been used
only for simplification purposes and not as a qualif ication.  The expression "NAFTA-model" of rules
of origin had been used, given that NAFTA, Canada-Chile, Mexico-Chile and Mexico-Israel shared
similar concepts relating to their rules or origin while applying them differently.  Regarding full
cumulation, it was currently applied within the European Economic Area (EEA), which was a single
RTA within the pan-European system of cumulation.  Concerning  its application outside a singleWT/REG/M/30
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RTA, she noted that it appeared that consideration had been given to the introduction, at a later stage,
of full cumulation vis-à-vis  other countries participating in the pan-European system of cumulation.
Annex 5 of the survey contained information on the type of cumulation applied by individual RTAs.
39. Concerning the circulation of both surveys as official WTO documents, the Chairperson
stated that given the preliminary nature of the debate held that day, it would seem premature to agree
on it at that meeting.  She suggested that such question be left for the next Committee meeting, where
she hoped a more structured debate could be held.  She encouraged delegations having factual
questions to contact directly the Secretariat or to pu t them in writing, so that at the next meeting the
Committee could move more rapidly to a substantive debate on the surveys, as well as what to do with
them and how their results could help the Committee's work.
40. The representative of Chile agreed that a special session of the Committee was not needed,
but requested that the date and time allocated for the discussion of the surveys be clearly specified in
the convening airgram.  He noted that having th e surveys translated in the other two WTO official
languages would facilitate discussions, irrespective of when they would become official documents.
The representative of the United States favored an early circulation of the surveys as official
documents, since that would solve the language question and facilitate access to the surveys.  Therepresentative of Hungary noted that job documents could also be translated.  He was of the view that
the Committee should decide at a later stage on the status of the documents, and that because his
delegation had to study carefully all data, aggregate or not, before agreeing to its circulation as an
official document.  The representative of the Eu ropean Communities, while sympathizing with the
translation question, agreed with the statement made by the representative of Hungary and noted that
the Secretariat might wish to clarify and/or am plify some points contained in the surveys before
officially distributing them in the REG series.  The representative of the United States said that while
he was flexible on when the surveys should be circulated as official documents, he had been troubledby the latest two interventions according to which the surveys contained information that they did not
expect.  Bringing Members' attention to the fact that those were Secretariat's documents, he noted that
they were not subject to negotiations and he would not like to see Members decide to censuresomehow certain points contained therein.
41. Noting the dynamism in the area of RTAs, the representative of Venezuela suggested that the
surveys could remain in the Committee's agenda and be subject to frequent updating.  Replying to
that, the Chairperson noted that the question of updating the surveys could be tackled at the next
meeting when the Committee would discuss what to  do with the surveys and what follow-up should
be foreseen.
42. Reacting to the comment made by the representative of the United States, the representative
of Hungary stated that he appreciated the work made by the Secretariat and that he had never tried to
exercise any type of censorship on a Secretariat's paper.  It was however his right to check theaccuracy of data relating to Hungary contained in the surveys and discuss any relevant issue with the
Secretariat.
43. The Chairperson noted that it appeared that consensus could not be found on the circulation of
the surveys as official documents as from that meeting.  She confirmed that job documents could be
translated, and that the Secretariat would proceed in that manner so that the French and Spanish
translations would be available as soon as possible but sufficiently in advance of the next meeting.
Delegations having particular questions should refer them to the Secretariat, so that at the next
meeting the Committee could have the first substa ntive meeting on the surveys.  She thanked the
Director of the Development Division and his team for the excellent and major work done and the
lively presentations made, and noted that while the Committee had to wait for some time before
having the surveys distributed, they had met delegations' expectations.WT/REG/M/30
Page 12
E. A NNUAL REPORT TO THE GENERAL COUNCIL
44. The Chairperson noted that this year the Committee had to adopt its annual report very
rapidly because of the November Ministerial Conference.   The draft report for 2001 had been
recently circulated as WT/REG/W/43.  She indicated a minor factual error in paragraph 6, which
should be corrected to read "The examination of 93 of these agreements has been referred to theCommittee by the Council for Trade in Goods, 13 by the Council for Trade in Services and 1 by the
Committee on Trade and Development".
45. The representative of the United States sa id that he would raise an item under "Other
Business" which his delegation would like to have reflected in the Committee's annual report.  He
therefore requested whether he could raise the point now so that procedurally it could be included in
the annual report.  The Chairperson said that statements made under "Other Business" in that meeting
could also be reflected in the annual report, unless any delegation objected to that.
46. The representative of Hong Kong, China stated that he would like the tone of paragraph 8 to
be more neutral in describing difficulties encountered in concluding examination reports, since there
was no consensus that these were fundamental in nature.  In line with that, he proposed a new
formulation for the second sentence:  "In spite of some progress made through informal, bilateral and
multilateral consultations, Members views remained divided particularly with respect to  theconclusions that should be drawn from the results of the examination."  As for the next sentence, he
suggested that it should read:  "In July 2001, the Chairperson reported to the General Council on the
continued deadlock …".  He was glad to see that  the proposal by his delegation to organize an
educational seminar was reflected in the draft report, but he though that more information should be
reflected to indicate both that other delegations had supported this idea and that the Secretariat wasfurther exploring the timing and format for such even t.  Finally, he stated that reference should be
made in paragraphs 15 and 16 to the fruitful but yet preliminary discussions held on the horizontal
surveys presented by the Secretariat so as to provide a more balanced picture of the work of the
Committee.
47. With respect to the last sentence of paragraph 8, the Chairperson noted that she had been
authorized by the Committee to report to the Gene ral Council on her own responsibility, and her view
was that the formulation "persistently deadlocked situation" was closer to the reality that the
suggestion made by the representative of Honk Kong, China.
48. The representative of the United States said that his delegation could accept either
formulation on that part of paragraph 8.  With respect to the first proposal on paragraph 8, he was of
the view that the new proposed version would no longer convey the message that the Committee
could not reach conclusions with respect to the examinations that had been finalized.  He proposed amerged formulation that would read:  "In spite of some progress made through informal, bilateral and
multilateral consultations, Members remained divided on the conclusions to be reached on the results
of the examination."  He suggested that paragraph 15 be moved upwards to become part of paragraph
13, and noted that the titles of the surveys could be included therein.
49. The Chairperson asked whether the changes to paragraph 8 suggested by the representatives
of Hong Kong, China and the United States were acceptable.  The Committee so agreed.  She then
asked the representative of Hong Kong, China whether he could accept to keep her formulation of the
last part of paragraph 8.  The representative of Hong Kong, China replied in the affirmative.  As to
paragraph 14, the Chairperson suggested to keep the text unchanged, though adding the fact that the
Secretariat was working on the timing and format of the Seminar.  She then asked whether themerging of paragraphs 13 and 15 could be accepted.  A representative of the Secretariat suggested that
paragraph 14 be completed to say:  "At its 30th Session, the Committee had a preliminary discussionWT/REG/M/30
Page 13
on the two surveys that it had requested and this item will be on the agenda of the next Committee's
meeting".  The representative of the United States said that he could accept the formulation suggested.  
50. The Chairperson said that the Secretariat would circulate a revised version of the draft report
incorporating the amendments that had been agreed.  She then proposed that, in light of the fact that
only minor changes had been made, the Committee adopt the report ad referendum , on the
understanding that any problems could be dealt with the Secretariat.  The Committee so agreed.
F. O THER BUSINESS
51. The Chairperson indicated that the Committee would hold three meetings next year, in
February, July and October.  The specific dates for the meetings would be communicated later.  She
brought the Committee's attention to the list of RTAs notified to the GATT/WTO and in force,
regularly provided at Committee's meetings, and which was available in the room.  This list would
from now on be placed at the WTO web site, where it would be subject to regular updating.
52. The representative of the United States said that the United States Senate had very recently
ratified the United States-Jordan Free-Trade Area Agreement, which would be promptly notified to
the WTO.  He also indicated his delegation's appreciation of the fact that 238 RTAs had been notified
to the GATT/WTO under relevant provisions.  However, he was also aware through press reporting
that a significant number of RTAs remained to be notified by WTO Members.  His delegation wasopen to ideas on how the notification requirements could be brought to the attention of Members but,
as a first step, the Chairperson could write to each WTO Member with a reminder of that obligation.
He then proposed to add the following at paragraph 5 of the draft annual report: "Members noted that
a significant number of RTAs remained to be notified by WTO Members and possible steps were
raised as a means to enhance compliance with this obligation".  If that addition was controversial, he
would not insist on that.  He suggested that the reference to the Committee holding three meetings in
2002 could also be included in the annual report.
53. The Chairperson indicated that she saw no problem on adding the reference to the three
meetings.  A representative of the Secretariat indicated that it was his impression that recent RTAs
concluded between developed countries, and between developed countries and transition economies
and developing countries, i.e. those forwarded to  the Committee by either the Council for Trade in
Goods and the Council for Trade in Services were being notified reasonably promptly.  As for
agreements among developing countries notified under the Enabling Clause and considered at the
Committee on Trade and Development, the situation as regards notification had improved if compared
to the past.  On that basis, he thought that a more serious look had to be given to the question before
sending any letter.
54. The representative of the United States said that the issue did not amount to the referrals of
RTAs from the relevant bodies to the Committee but rather to notifications that appeared to be
lacking, and he thought that the Committee could encourage Members to notify existing RTAs.
However, he would agree to leave this question for a future discussion.  The Chairperson asked
whether there existed a large number of RTAs which had not been notified. A representative of theSecretariat replied in the affirmative, noting that this had been shown at last year's mapping paper,
circulated as document WT/REG/W/41.
55. The Chairperson indicated that the question deserved a closer look so that the Committee
might have a more instructed debate at its next meeting.
56. The Committee took note of the comments made.
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