RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/69
7 May 2003
(03-2417)
Council for Trade in Goods
12-13 March 2003
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS
12-13 MARCH 2003
Chairman:  H.E. Ambassador Supperamaniam
The meeting of the Council for Trade in Goods  was convened by airgram WTO/AIR/2044 and
the proposed agenda for the meeting was containe d in document G/C/W/450.  The agenda was adopted.
I. TRADE FACILITATION WORK PROGRAMME: ARTICLES V, VIII AND X
OF THE GATT 1994 ............................................................................................................... .2
II. TRADE FACILITATION NEEDS AND PRIORITIES OF MEMBERS,
PARTICULARLY OF DEVELOPING AND LEAST DEVELOPED
COUNTRI ES...................................................................................................................... .....29
III. TRADE FACILITATION: TECHN ICAL ASSISTANCE AND CAPACITY
BUILDING ....................................................................................................................... .......36
IV. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER
ARTICLE 9 ...................................................................................................................... .......43
V. REGIONAL TRADE  AGREEM ENTS ................................................................................47
A. FREE TRADE AGREEMENT BETWEEN CANADA AND COSTA RICA –
NOTIFICATION FROM THE PARTIES TO THE AGREEMENT
(WT/REG147/N/1, WT/REG147/1).........................................................................................47
B. FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND
SINGAPORE –  NOTIFICATION FROM THE PARTIES TO THE AGREEMENT
(WT/REG148/N/1, WT/REG148/1).........................................................................................47
VI. APPOINTMENT OF OFFICERS TO CTG SUBSIDI ARY BODIES...............................47
VII. ELECTION OF CHAIRPERSON OF THE COUNCIL FOR TRADE IN
GOODS.......................................................................................................................... ..........48
VIII. OTHER BUSINESS............................................................................................................ ....49G/C/M/69
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I. TRADE FACILITATION WORK PROGRAMME: ARTICLES V, VIII AND X OF
THE GATT 1994
1.1 The Chairman noted that, as agreed by Members in the course of the CTG meeting of 6
December 2002, the Council would now meet for a fifth session on trade facilitation, which would be its
first meeting on this subject this year. When deci ding on how to structure work for the time until the
Fifth Ministerial Conference, Members had opted  for keeping the agenda items of the 2002 Work
Programme, while trying to have a more focu ssed discussion on certain issues. The only requested
modification had been to address all three GATT Ar ticles under the first item, rather than focus on one
particular article at each meeting as it had been done the previous year. In line with this agreement,
Members would therefore now take up the following three issues: (1) Articles V, VIII and X of theGATT 1994; (2) Trade facilitation needs and priorities of  Members, particularly of developing and least
developed countries; (3) Technical assistance and capacity  building. He informed th at with respect to the
first agenda item, GATT Articles V, VIII and X, two communications had been received by delegations,
taking up various aspects of the matter. A first submission from Canada addressed possible linkages
between trade facilitation principles, measures, potenti al benefits and trade-related technical assistance
and capacity building (G/C/W/448).
1.2 The representative of Canada introduced his delegation's latest paper, expressing Canada's
satisfaction with the progress Members had achieved so far in their work on trade facilitation as
mandated by paragraph 27 of the Doha Declaration. Canada was of the view that work has reached afair degree of progress that Members should all be pleased with. What Canada had tried to do in its
paper was to build on some of the results achieved to-date. Canada had also looked at Members'
submissions of a general nature, the latest one being the paper presented by Australia at the December
meeting. In addition, Canada had carefully reviewed and considered the oral interventions made by
delegations in the context of their review of the three GATT Articles. In light of all this impressiveamount of information, Canada had considered it useful to present in a synthetic fashion how these
various elements could be linked together. In Canada's view, Members' work was aimed at
progressing towards the elaboration of trad e facilitation commitments post-Cancun. All the
discussions on the types of measures that could contribute to further facilitating the exchange of goods
had been very useful in that regard. His delegation had wanted to step back a bit and had tried to
present in a table the linkages between the various elements at stake.
1.3 Without wanting to go into the details of the paper's introduction section, he would like to
further explain how Canada saw the flow of issues. The best way to do so could be to take one
example of a row in the table. For example, what Canada had tried to do in the first row dealing with
transparency, was to first look at the compendium, Members' submissions and the points raised in the
interventions, thereby noticing that all that mate rial made reference to some trade facilitation
principles. Those were the principles that were also very often mentioned in international fora and in
economic literature when discussing trade facilitation. One of the most frequently mentioned
principles was that of transparency. Canada had tried to capture in a few words the essence of that
principle, to highlight what it came down to. As  for the second column entitled 'measures to be
promoted through trade facilitation commitments', wh at Canada had tried to do was to look at the
compendium of the  proposals and take some examples. It was purely illustrative, just to see what
were the measures that had been mentioned in the compendium or in the proposals, that could be
related to these broad principles. Canada had not intended to imply that each of these measures
necessarily had to be promoted. It didn't want to impose any value judgment. All Canada had done
was to extract selected measures from the compendi um to establish the link with those principles.
Certainly, as had been recognised in Members' prev ious discussions over the last few months, if these
measures were implemented, one could see the potential benefits accruing by that implementation,
and that was what Canada had tried to show in the third column. Also this column was onlyG/C/M/69
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illustrative without intending to be exhaustive in any way. Given the different levels of development
amongst WTO Members, it was of course necessary to keep in mind that implementation of such
types of measures may necessitate trade-related technical assistance or capacity building initiatives.
Here, Canada had put some illustrative examples of what could be done. Canada was surely not in the
best position to assess the trade-related technical assistance and capacity building possibilities thatcountries needed at different levels of development. The Canadian delegation was very open-minded
on this matter. This had to be Member-driven and was something that could be expanded significantly
and tailored to what each delegation saw as pertinent in their specific case. The intention therefore
was only to provide some food for thought.
1.4  Canada was of the view that not only the autonomous adoption of trade facilitation measures
would bring benefits. The adoption of a multilaterally agreed set of commitments on trade facilitationwould further support trade facilitation. Canada saw a clear relevance of promoting such types of
measures to further support the multilateral trading system, and to facilitate the exchange of goods
and services. It provided a clear indication of political commitment among all the WTO Members,
which would be extremely valuable in terms of securing technical assistance and capacity building. In
this context, he would like to offer one of the conc lusions Canada had drawn from the very interesting
seminar that had been held last fall on Customs Valuation and Technical Assistance, where both
developed and developing countries, donors and beneficiaries, repeatedly remarked that the key to the
success of any technical assistance was a degree of commitment at the highest level of government
and administration. If Members had an appropriate set of trade facilitation commitments, taking due
account of Members' different levels of development and their needs and priorities, that would furtherenhance the benefits Members could all draw from trade facilitation. Canada was looking forward to
comments on its paper which it hoped to be a helpful contribution to Members' dialogue.
1.5 The representative of Japan apologised for the late submission of the Japanese non-paper.   His
delegation had wanted to present a contribution on the international architecture of trade facilitation,
but then realised the complexity of the issue, and therefore finally opted for circulating the document
as a non-paper for the time being. The document contained the conceptual model of Japan's view on
the international architecture of trade facilitation, and was inspired by the previously raised question
of why the WTO should engage in trade facilitation while there were similar initiatives in other fora
such as the WCO, or regional initiatives such as APEC or ASEM. Japan engaged in different trade
facilitation initiatives, not only in the WTO, but also on a national and regional level.  There was a
need to determine why it was necessary to take in itiatives in different frameworks. Japan would like
to contribute to these discussions. The Japanese paper attempted to set out a number of activities
carried out by international organisations in the field of trade facilitation. The WTO Secretariat had
already prepared a paper on activities undertaken by various international organisations in the area of
trade facilitation (G/C/W/80 and G/C/W/80/Rev.1). There were a lot of on-going initiatives in this
field. Japan recognised the importance of trade facilitation.
1.6 In considering the merits of trade facilitation, such as the expansion of trade and investment
and the improvement of government efficiencies in raising revenue and controlling cargoes, Japan had
thought about the approach Members should take in order to realise these benefits. He noted that
when this delegation had tried to sort out the different initiatives Japan was engaged in, the thought ofa three pillar approach had come up, namely, (i) the action programme, covering things like voluntary
or peer pressure initiatives, (ii) capacity building and (iii) rule setting. The action programme had
been defined as an approach with no binding obligation where participants would promptly set
themselves fairly high objectives, seeing that there were no serious concerns of failure. That would set
a common direction among the participants. Due to this lack of binding commitments and the settingof high objectives, the goals would have to be seen in the long term. Even a failure in meeting the
objectives would not matter, since their main purpose was to set the direction. Any achievement in the
action programme would be legally fragile since the participants were free to withdraw them at any
time. This was a weakness in the legal stability of the achievements of the action program.G/C/M/69
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1.7 The second pillar was capacity building, which may contain both technical assistance and
other forms of assistance, like support with respect to infrastructure. This would help to improve the
efficiency of trade flows. However, the efficiency of capacity building might be low or at least lower
if there were no benchmarks. It was like in the case of students, which would study hard because of anupcoming examination, but if there was no examinat ion, they might still study, but would do so more
slowly. The existence of some sort of benchmark would motivate to actually implement the trade
facilitation measures. The third pillar was rule setting, which should provide legal stability and
predictability. Rule setting was always faced with the risk of lacking capacity to comply with the
rules. The objectives tended to be limited to challenging, but achievable ones. Also, the process of
setting rules tended to be somewhat lengthy. Therefore, it was necessary to set up some kind of
follow-up framework to ensure that all participants  were in conformity with the rules. The second
page of the Japanese non-paper contained a conceptual chart of these three pillars. The pillars were
complementary and there were a number of synergies. Capacity building could, for example, enhance
a country's capacity to observe the rules in its motivation to set objectives . High  objectives such as the
long term objectives in the action programme could indicate a future set of rules to be established.
The objectives of the action programme and of the rules could become tangible benchmarks toimprove the efficiency of capacity building, as well as Members' motivation to build up their capacity.
The Japanese representative noted that over the course of the last three-years of discussion in the
Council, some Members had pointed out that possible WTO rules in the area of trade facilitation
would provide the necessary high political will to pursue the improvement of trade procedures. This
was one of the synergy effects between the three pillars of rule setting, capacity building and theaction programme. The lack of one pillar would undermine the benefits of trade facilitation.
1.8 Turning to the role of the WTO, the Japanese representative noted that each international
organisation had their own expertise and raison d'etre. The WTO's expertise was to set multilateral
rules on trade regulations. This was its comparative advantage vis-à-vis other internationalorganisations. It was hardly appropriate to argue that improvements in infrastructure, technical
assistance or computerisation/EDI alone would be sufficient to fully realise the benefits of trade
facilitation . Some delegation had raised the question of why one needed WTO rules if there were rules
on customs procedures, like the ones in the revised Kyoto Convention. There was a clear answer to
that question. One had to distinct the sectoral approach and the horizontal approach. The WCO was
certainly playing an important role as regards customs procedures, but it could not cover the necessary
cooperation and coordination among various stakeholders such as customs, port authority or portmanagement. Each specialised international organisation usually worked within its sphere.  It was
therefore necessary to have some sort of framework to coordinate cooperation among these various
specialised international organisations. One key word might be trade. The WTO was definitely the
one to look at the trade procedures, regardless of the sector, such as customs procedures, port
management or any other kind of trade procedure. Japan believed that WTO work on trade facilitationshould not be narrowly limited to customs procedures alone. Members should recall that GATT
Article VIII carefully used general terminology su ch as formalities connected with importation and
exportation. One should keep this general concept of trade procedures, since trade facilitation was not
only about customs procedures, but also about trade procedures for importation and exportation.
Otherwise, the benefits of trade facilitation would become very limited in scope.
1.9 At the same time, one should take advantage of the particular expertise of each specialised
international organisation. A WTO Trade Facilitation Technical Committee consisting of all Members
and international specialised organisations could discuss technical aspects of trade facilitation. This
was one idea Japan wanted to explore in the possible negotiations after Cancun. Turning to regionalinitiatives, the representative noted that Japan was an active member in APEC's work on pursuing
trade facilitation. But regional initiatives would, by their very nature, bring benefits only to the limited
number of countries of a particular region, and they would do so differently in every region. The
WTO, on the other side, could provide equal rules for all 145 Members and eliminate any kind ofG/C/M/69
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discrepancy or differences among different regions. One of the core element of trade facilitation was
harmonisation among different ports in a country, and it different regions. Members needed some idea
of international harmonisation in the field of trade facilitation.
1.10 With respect to the relationship between possible WTO rules and other international
commitments, the Japanese representative noted that the idea of simply picking out pieces of existing
international commitments should be carefully addressed. This approach could be observed in the
TRIPS Agreement when addressing some of the provisions of the WIPO agreements. That this type of
approach had the risk of undermining the motivation to subscribe to such a specialised international
agreement. The importance of using internationally accepted standards was commonly recognised in
order to reduce the burdens of business to comply with trade procedures.  One  appropriate approach
might be to address a soft relationship between possible WTO rules on trade facilitation and existinginternational commitments. A basic concept could already be found in the TBT Agreement. One
could have some sort of mechanism to link the existing technical regulations and instruments with
possible WTO rules. The later were to set some sort of basic principles to improve trade procedures in
Member countries in order to fully realise the benefits of trade facilitation.  His delegation welcomed
any comments and inputs on its paper.
1.11 The representative of the United States noted that his delegation's submission could have been
put forward under any element of the current agenda. This was purposeful and there was a logic to it.
The paper was an attempt to share some of the thinking that the United States had been undertaking,
as well as the results of some informal consultations the US delegation had had with many Memberson the challenges of implementing new and streng thened WTO disciplines. The US submission also
included some questions, which held several answers. The United States hoped to trigger a robust
discussion on these questions, which would help take Members forward in their work on trade
facilitation. Like Canada, the United States was pleased with the progress made so far, particularly
with regard to the mandate to clarify and improve GATT Articles V, VIII and X. It was fair to say thatthere was already some shape of potential new and strengthened WTO disciplines and commitments
emerging in this area. That work needed to continue. Equally important was the challenge of ensuring
implementation.  It had often been said that trade facilitation was a win-win situation, and the United
States certainly agreed with that. Every Member shared the goal of achieving implementation of any
results of negotiations that would commence in this area. Since every Member was both an importer
and an exporter, there was great significance to bringing this area more comprehensively into the
WTO rules-based system.
1.12 In the paper, the United States had put forward what it believed to be three core elements
regarding the challenge of implementation, which had shaped the US thinking. These three elements
related to how to best deal with a country's needs, which varied from Member to Member. They were
also about how to best create a partnership and a working environment for joint work, both between
Members and other relevant organisations. Furthermore, they were also about how to best  ensure
effective enforcement of any results of negotiati ons commencing in this area. The first point the
United States set out related to the use of transitional periods. As this was the case with the subject-
matter in general, the United States saw opportunities for some creative thinking in this area. There
was an opportunity for using a comprehensive and detailed approach, which could be merged orintegrated with technical assistance. The US paper raised some questions that all Members should
think about. The United States did not have answers at this point, but would hope that Members could
all start thinking in terms of the types of provisions that could give shape to future work, how to
approach the question of transition mechanisms in this area and how to best integrate these transition
periods with how technical assistance was provided, as well as how it was targeted to bring aboutimplementation. The second point raised by the United States related to technical assistance itself.
Members had had a constructive exchange of views on this matter during Doha preparatory process
and since the Fourth Ministerial Conference. There had been advancement in thinking on how to best
tackle the challenge of ensuring effective support for capacity building and technical assistance. TheG/C/M/69
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United States had put forward several questions al l Members should think about. Also here, the US
did not necessarily have immediate answers, but would invite an exchange of views, such as on how
to best establish a mechanism that one could refer to as a steering committee type approach by
providers and users of technical assistance. Such a mechanism would ensure that the required
resources were there, and that there was not a lack of coordination in order to ensure that there was atargetting towards needs-related implementation. At the core of all this was the basic presumption that
implementation was something that all Members should and could achieve, and that it was in
everyone's interest to make sure that everyone did implement. There were also questions Members
needed to think about in terms of developing a mechanism for pooling technical expertise and
ensuring that, as Members went forward, there was an appropriate role for other international
organisations. Here, World Custom s Organisation would certainly come to mind, but, as Japan and
others had noted, there were also some significant regional initiatives taking place in all parts of theworld. The question was  to how best merge and utilise these initiatives in the whole area of technical
assistance.
1.13 Another element the United States would foresee was something that was perhaps in a
nascent stage. With regard to a growing volunteerism by the private sector, there was a question ofmatching expertise to ensure that the needs were met. This was a pool that Members should also think
about how best to draw upon. Here, the United States had laid out some questions leading to an
integrated approach. Finally, the United States had raised the question of enforcement of
commitments. It was very important to ensure that the results of any negotiations in this area were
brought into the sphere of WTO rights and obligations. The United States also believed that where itwas established that there were issues related to capacity and compliance, one should undertake some
creative thinking in the context of negotiations. The United States had put forward several questions
and would invite exchanges on that. He concluded by noting that the United States had prepared this
submission to stimulate  discussions on what was clearly going to be a challenge for all Members,
namely meeting the challenge of ensuring implementation by everyone. The United States saw anexceptional opportunity in this area and the potential for immediate positive effects for every Member
in implementing the results of Members' work. It was in the spirit of seeing this exceptional
opportunity, that the United States had made this submission to stimulate further thinking. He
concluded by noting that the United States woul d look forward to comments and to working with
others to advance Members' work in this area.
1.14 The representative of Singapore noted that her delegation liked the Canadian paper to the
extent that it would like to co-sponsor it. Singapore joined in with most of what Canada had
mentioned in their introduction to the paper. One further point she would like to make was that the
synthesis and linkages of the paper's chart could also assist delegations in their cost-benefit analysis of
trade facilitation measures – a factor that had b een mentioned by various delegations at the early
stages of trade facilitation discussions in 2002. Moving onto Japan's paper, she noted that it was quitea bit to digest. Obviously a lot of thought had gone into drawing up the three-pillar-approach.
Singapore shared the point that trade facilitation was more than just customs procedures. With respect
to the US paper, she noted that it was a very good attempt to try to address the challenge of
implementation for trade facilitation measures. The questions were quite stimulating for Members'
discussion. Singapore had no answers, and was looking for some clarifications. A first questionrelated to the section at the end of the paper, where the US had posed some questions about creative
thinking on the idea of pursuing some sort of mediation or conciliation procedure. Singapore was
wondering whether that was is to be considered as a full alternative to the existing dispute settlement
mechanism, or whether it was meant to be a precedent step in the sense that one would first go
through a mediation and conciliation process before going to dispute settlement procedures. Would itbe a compulsory or a voluntary step and how was it  linked with the DSU? As for the other aspects of
the monitoring or coordination mechanism, Singapor e quite agreed that it would be useful to have
some kind of coordination and monitoring. Otherwise efforts may be dissipated and one could not
reap the full benefits of the technical assistance rendered. The only comments Singapore had wereG/C/M/69
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that such a monitoring mechanism should be balanced in the way that it was effective without
becoming unduly burdensome and without creating a new bureaucracy.
1.15 The representative of Pakistan expressed his appreciation of the written and oral presentations
given so far. Since his delegation had only just received these submissions, his comments could be
nothing but preliminary. Pakistan would make more detailed comments later on. His delegation
appreciated the way Canada had summed up the trade facilitation benefits in tabular form. The
Canadian paper provided a nice checklist to see how one's own administration was doing certain
things. The three pillar approach proposed by the Japanese delegation was also very appealing.
Pakistan would like to draw the Council's attention to the proposal made under section VII,
"consideration of possible WTO rules and existing international commitments", suggesting an
approach of a soft relationship between the possible WTO rules on trade facilitation and the existinginternational commitments. The reference to the TBT Agreement as an example was specially
noteworthy. This could be a way out to have a transitional arrangement as a majority of developing
countries had many misgivings about having a specific agreement immediately. There was a lot a
confusion in the minds of many developing countries on this point, because they thought there were
already those international conventions, rules and regulations, and they were asking themselves whythe WTO was getting involved, and how it would work. The idea put forward by Japan was very
much appreciated. So far, Members were only talking about 3 particular articles. But there were a lot
of other things which were necessary for trade facilitation, such as the application of the Harmonized
System. There were a lot of problems in this regard, as some Members were implementing the 92
version, while others implemented the 96 or the 2002 version. If everybody was using the sameversion, things would be much easier. This approach  may also answer some of the questions raised in
the US paper. These questions were very pertinent and needed to be carefully examined. Pakistan did
not know the answers yet, but it was useful to have  such a set of clearly specified questions, and one
could then start to look for appropriate answers.
1.16 The representative of Hong Kong China noted that his delegation was pleased with the
progress Members had made so far with respect to the three GATT Articles V, VIII and X. The papers
presented by Canada, Japan and the United States were excellent and useful for further advancing
Members' discussions in the Goods Council. Canada's submission was a very good attempt to
consolidate the proposed principles and measures suggested by Members, and to integrate technical
assistance and capacity building needs regarding trade facilitation. With respect to the proposed
measures, Hong Kong China would like to indicate  its general support to the suggested principles.
Many of these principles were the principles Hong Kong China was aspiring to in its customs
operations, and for which it had been promoting for with other Members in regional fora. Hong Kong
China was prepared to work closely with Canada to take forward this proposal. His delegation would
suggest to build in flexibility regarding the requi rements of the suggested measures since Members
needed to take care of their unique situation. There were no one-size-fits-all measures. Turning toJapan's paper, the representative noted that his delegation had yet to study it in detail. It was certainly
a very useful paper, which put trade facilitation in a proper perspective, not only from the WTO angle
but also by indicating different approaches to help  advance the cause of trade facilitation. On the US
paper, he noted that it contained a lot of useful and noble ideas. Also here, his delegation had yet to
give it more detailed study. Hong Kong China was very interested to hear other Members' views onthe paper.
1.17 The representative of Brazil noted that Brazil was also appreciative of the extensive and
constructive discussions held in 2002 under the mandate given by Ministers in paragraph 27 of the
Doha Ministerial Declaration. The debate had, at the very least, given all Members a very clearperception of the scope of the measures that the proponents would like to address under that mandate,
a scope that had been somewhat murky prior to Doha. At the current stage of Members' deliberations,
there were two central aspects one had to keep in mind: Firstly, it was worth recognising that one had
perhaps worked under a too accelerated rhythm. Proposals had been submitted and discussed, and yet,G/C/M/69
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negotiations, if they were to take place, were still months away. The very best that could be hoped for
was that the remaining time until the Cancun Ministerial would provide an opportunity for promoting
a greater convergence of views on the work, if any, to be undertaken after Cancun. It seemed clear,
however, that there was very little flexibility in the positions of delegations that would allow for any
optimistic outlook on achieving such convergence, particularly in light of the context of the DohaRound in its entirety. Brazil saw little scope for significant progress in that area for a number of
reasons. The proposals put forward were generally characterised by an excessive level of ambition,
and reflected unrealistic expectations from the proponents. Progress in trade facilitation would require
progress in other areas that had been on the agenda for at least as long, if not longer, than the trade
facilitation mandate, such as the Harmonisation Work Programme on Non-Preferential Rules of
Origin, efforts to enhance cooperation among customs agencies to combat fraud under the
implementation mandate, the lack of transparency in the administration of tariff rate quotas, which inthemselves were contrary to the spirit of trade faci litation, and the excessive recourse to specific and
mixed duties, which tended to penalise more efficient suppliers and therefore worked against
facilitating trade.
1.18 The representative of Romania commented on the Canadian paper, which her delegation had
had the possibility to look at more deeply, noting that it was really helpful only to see how one could
proceed in order to fulfil the Doha mandate, but also to identify those areas where the authorities
could further work on facilitating the trade. The most problems the Romanian authorities currently
encountered in their efforts to facilitating trade were presented in the Canadian paper. There was only
one area where perhaps something could be added: the table addressing cooperation. While it wasvery important to have such cooperation between government authorities, business and trading
community, the Romanian experience shows that enhanced cooperation between custom
administrations in different countries was equally important. Many of the problems encountered by
customs authorities could have been solved much easier if the other customs administration had been
more cooperative. Maybe Canada could add something on this matter in their paper.
1.19 The representative of Colombia noted that after the dynamic Members had achieved last year,
the new papers submitted by various delegations would allow Members to continue their work in this
area. Canada had set forth, in a didactic manner, possible links between the main GATT/WTO
principles and the provisions of the three articles under consideration, identifying several measures
which could be adopted in order to obtain a series of benefits, and the possible needs for technical
assistance and capacity building, which would ensure that these benefits are realized. Colombiaapproved of this approach being used as a basis to specify the programmes and projects that will be
required in order to proceed with the possible commitments, and the provisions that Members would
be able to push for as part of special and differential treatment for developing countries and LDCs.
Colombia also welcomed the contribution by the United States. The Colombian delegation valued the
innovative approach it proposed for identifying S&D provisions, which took into account the realneeds and the particular situation of each of the developing economies. It had done so in response to
the questions posed by various delegations which had expressed concern that the traditional form of
S&D with its longer implementation periods would continue - an approach which, as Colombia
believed, had demonstrated its limitations and minimal benefits. Colombia would study the questions
put forward in the paper with a view to incorporating S&D into the Work Programme and intotechnical assistance and capacity building, in such a way that each economy felt it was receiving the
support necessary to take on the commitments to be adopted. As far as the specific points were
concerned, Colombia approved of a monitoring scheme, but was not sure about the convenience of
creating yet another body within the Organization. Colombia considered the first question in point
three to be very valid. The Colombian delegation would like to see this question explained in greaterdetail, as it might provide a response to the concerns that had been raised regarding the adoption of
new disciplines, and the pressure that they might exert on the WTO dispute settlement process.
Finally, Colombia also welcomed Japan's very thorough statement. The theoretical aspects that were
considered and their interaction in areas beyond simple customs procedures were very useful, as wasG/C/M/69
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the linking of the three pillars and the coordinatio n between various organizations in the spheres of
technical assistance and the establishment of rules.
1.20 The representative of Norway noted that, although it had not been able to examine the papers
submitted by Canada, the United States and Japan in detail due to their late arrival, the Norwegian
customs experts had taken a brief look at them and found that they were positive contributions to
Members' current discussions. Those papers would contribute to a better understanding of the
complex, but at the same time very practical, issues  they were dealing with in the Council. Norway
found Canada's paper particularly useful in that it tried to give an overview of the different principles
showed how much they could be promoted, as well as the benefits of such arrangements, and very
clearly highlighted the need for technical assistance and capacity building to implement these
principles. The Norwegian delegation also found the US paper very interesting. It had not yet beenpossible to look at it in detail, which was why Norw ay would probably revert to it at a later meeting.
Norway did however note that it would be necessar y at some point to consider possible suggestions
for special and differential treatment for developing  countries, particularly in the form of grace
periods and with respect to implementation periods. The US paper raised a number of interesting
questions in this regard to further the discussions on special and differential treatment for developingcountries. Norway had the same question as Singapore with respect to dispute settlement and would
appreciate some more elaboration from the US on this matter.
1.21 Norway would like to revert to a few points raised in its previous intervention at the last
meeting in December. The consultations with the Norwegian business community had underlinedthree aspects of particular importance for their business, namely predictability, consistency and
transparency. Norway had noted that the Canadian paper mentioned all of these principles, and a
number of other delegations had underlined them as well in their interventions. The Norwegian
delegation was fully aware of the difficulties faced by developing countries in implementing trade
facilitation measures. Norway saw technical assistance as crucial in this regard, and would revert tothe issue of how one could best assist in that regard. Close cooperation between all relevant
international organisations was also essential. The Norwegian delegation would like to point out that
it was its firm belief that improved measures on trade facilitation would benefit everyone, developed
and developing countries, since it enhanced trade internationally and regionally and was necessary for
economic development. From the Norwegian prospective, improved rules on trade facilitation would
be of great benefit to the economy and should be seen as a matter of priority.
1.22 The representative of Switzerland noted that the papers presented by the delegations of
Canada, Japan and US were excellent. The Canadian paper was very interesting and a useful
contribution as it helped to better understand what measures had been or could be taken and
implemented, what the expected benefits would be and where technical assistance and capacity
building was needed to ensure that all Members actually received the benefits of the measuresdescribed. Switzerland had only preliminary comments on the Japanese non- paper as it had only been
received in the morning. The Swiss delegation t hought that the three pillar approach was a very
innovative and interesting approach. The three pillars were complementary and should not be
considered as exclusive. On the US paper, Switzerland supported the idea of being creative. The
Swiss delegation would examine the US submission in greater detail in its capital and try to proposeanswers in the future. With respect to special and differential treatment, Switzerland was of the view
that transition periods were not enough. S & D treatment should be more than that. A transition period
should not be applied in a "one-size-fits-all" manner but adapted according to the situation of each
country. Switzerland also had the same question as other delegations regarding the mechanism of
consultation/mediation. One of the possible solutions Switzerland had seen in the area ofimplementing the Customs Valuation Agreement was to have an implementation work programme
together with technical assistance. Capacity bu ilding would help a lot to implement any future
commitments that would be agreed among Members in trade facilitation. Switzerland supported theG/C/M/69
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idea of having improved measures in trade facilitation and thought that they would benefit everyone,
in particular small and medium size enterprises.
1.23 The representative of Nigeria welcomed the papers by Canada, the US and Japan, noting that
he could not comment on the two later ones, due to their late submission. As for the Canadian paper,
he commended the efforts of the Canadian delegation in tabulating  the various aspects of trade
facilitation in a very clear and concise manner, ranging from the trade facilitation principles, measures
to be promoted, benefits that would accrue and the technical assistance and capacity building
measures that could be taken. In Nigeria's view, the Canadian tabulation simplified the various issues
involved for Members in a more graphical manner, thereby making them more understandable.
Nigeria had quickly run through the document and found that it did not find it difficult to go along
with the format used. Nigeria agreed with the poin ts highlighted under the heading of trade facilitation
principles, whether it was transparency, non-discrimination, simplification, consistency and
predictability, or cooperation and consultation. These were basic principles all delegations would
agree with. Likewise, Nigeria agreed with the possible benefits that were accruable such as simplified
processes of administering border procedures, cost reductions, greater transparency, consistency and
predictability, increased confidence in the system, closer cooperation between all stakeholders, bothgovernments and the business community. No Member would disagree with the many benefits of
improved trade facilitation procedures. Neither the principles nor benefits were difficult to conceive.
One had to look at the column showing the measures that needed to be promoted in trade facilitation
commitments, to see were the challenges were. As Nigeria had continued to maintain, the problem
was not the signing of multilateral trade agreement. There was ample evidence on the benefits of tradefacilitation, they would speak for themselves, and virtually all countries had continued to embark on
reform or modernisation programmes. For the developing countries, this had assumed the dimension
of urgency. Those countries had not been compelled by international agreements to do so, but by the
sheer benefits of improved ways of doing business. But the challenges of reform and modernisation
were enormous, and in Nigeria's view, that was the area where emphasis must be placed, not instampeding members into undertaking commitments . Nigeria welcomed the acknowledgement of the
need for technical assistance and capacity building. That was the other aspect of the trade facilitation
work programme that needed urgent attention. A nd that certainly went beyond the competence of the
WTO. Nigeria would continue to support the work of improving trade facilitation procedures in other
international organisations which had more competence and relevance.
1.24 The representative of the Czech Republic noted that the documents submitted by Canada,
Japan and the United States had been a very useful tool for facilitating Members' further work on
trade facilitation. As his delegation had received them only recently, the Czech Republic would limit
its comments to some general remarks, while planing to revert to the specifics of those papers at a
later stage. His comments were not structured according to these three papers, but related to some
trade facilitation elements addressed in that papers from different angels. The Czech Republicbelonged to the group of countries whose economy very much depended on foreign trade. That was
why his delegation was strongly interested in further trade facilitation, which the Czech Republic
understood as a two-way process, i.e. providing tran sparent, predictable and simplified procedures to
its trade partners, with the expectation of obtainin g equal treatment for its businesses in return. The
Czech delegation agreed with the points raised by Canada, that the appropriate way to address thiskind of concerns would be a multilateral solution. The Czech Republic was open to consider carefully
the question of special and differential treatment,  and of how to best ensure further progress in
Members' work. The principle of flexibility would be useful.
1.25 One of the important principles for trade facilitation was standardization, which would bring
benefits to the business. Experience showed that where differences in regulations and procedures were
considered legitimate by relevant national authorities, the chances for standardization was weak.
Economic development, technological disparities or administrative capabilities might be considered
such legitimate reasons for maintaining differences in applied requirements and procedures. TheG/C/M/69
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Czech Republic agreed that much could be done in that respect through trade related technical
assistance and capacity building. In this context, he noted that his delegation would consider it useful
to receive specific suggestions from delegations, based on the principle of a demand-driven needs
assessment.
1.26 With regard to simplification, the Czech Republic fully supported arrangements designed to
prevent the maintenance of procedures, requirements and formalities if the circumstances which had
given rise to their introduction no longer existed. In practice, such procedures were often used to give
additional protection to domestic producers. Since businesses operated in a real, rather than a virtual
world, the Czech delegation supported a simplifica tion which would not allow for a legitimate room
to circumvent agreed standards. The Czech Republic wanted to contribute constructively to Members'
work on trade facilitation.
1.27 The representative of Mauritius noted that the recently presented papers and other
contributions were instructive and very helpful in the current phase of work, which he would qualify
as an educational one. Mauritius was particularly impressed by some of the points raised. In this
context, he wanted to draw attention to the second pillar of Japan's approach, which seemed quitelaudable in the sense that it took an extensive approach to the concept of technical assistance. In his
introduction to the paper, the Japanese representative had noted that technical assistance should also
include infrastructure. That was a very important point. Without infrastructure, trade facilitation
would be meaningless, especially in developing and small countries with resource constraints. He was
certain that Japan would want to develop this idea further in due time. He had also been impressed bywhat the delegation of Hong Kong China had said about recommending to build in flexibility in the
system in order to make trade facilitation beneficial to all Members, and especially to developing
countries. Hong Kong China had said in this context that there was no "one-size-fits-all" solution.
Members could be grateful to the Hong Kong dele gation for having elaborated their own thinking on
this matter and for how they thought of it, and for giving consideration to the question of how toaccommodate the concerns of various countries at various stages of development. The United States
had been very clear on this matter, and he was thankful to the US delegation for having mentioned
their concept of one-size-fits-all, which related particularly to the question of transition periods and
technical assistance and capacity building, where the US recommended a case-by-case approach. All
Members stood to benefit from the discussions. The US itself had noted that they did not have any
clear or immediate answers to most of their questions yet. He hoped that the Council would be able to
provide much insight on this matter in due course.
1.28 The representative of Korea noted that his delegation was also pleased to note the progress in
Members' discussions on trade facilitation. The debate had been very constructive. With respect to the
papers presented by several delegations, he noted that they had all been very useful. The Canadian
paper was very informative, especially by suggesting the expected benefits rendered through tradefacilitation principles, and also by incorporating technical assistance capacity building possibilities for
developing countries. Korea firmly believed that it would contribute to helping developing countries
further understand the necessity of trade facilitation, and invited their participation in the trade
facilitation discussions. With respect to technical assistance and capacity building, one had to further
develop and proceed the discussions, to take into account the needs and priorities of developingcountries. Such a demand-driven approach was a core element of the discussion.   Concerning special
and differential treatment, Members also had to further consider its elements. It was more appropriate
to further elaborate some elements to each of the principles suggested in the paper. Turning to the
Japanese paper, he noted that since it had only been just received, his comments were limited to
preliminary ones. Korea would revert to it in more detail at a later stage. Korea shared the view of thecomplementarity of the three pillars. They should be approached in a complementary, rather than an
exclusive manner. Korea also thought that the WTO was the most appropriate organisation for rule
setting. Other organisations had also set certain steps in that direction, but in Korea's view, the WTO
was the most appropriate organisation to do so.G/C/M/69
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1.29 The US paper envisaged a framework of a binding nature for trade facilitation issues. Its
coverage was wide and comprehensive, including standardisation, simplification and automation of
trade procedures. That might invoke concerns by some developing countries. However, trade
facilitation would contribute to world-wide economic growth by eliminating unnecessary obstaclesand barriers to freer trade. In that sense, eager participation of all Members was needed. The US paper
suggested three points to special and differential treatment, which was quite informative and
indicative for future discussions. Korea believed that it would help all Members understand the
contents of trade facilitation. Like other delegations, Korea would like to have more clarity with
respect to what the US referred to as the need  for "creative thinking" of the enforcement issue.
Members needed more clarification on that aspect in order to know whether the US was thinking
about some kind of implementation- or grace period, or whether there should be some areas ofreservation for dispute settlement procedures.
1.30 The  representative of Australia expressed his appreciation of the constructive discussion on
trade facilitation. Australia particularly welcomed the thoughtful, constructive and interesting papers
by Canada, Japan and the US. These submissions made a very significant contribution to Members'understanding of the measures available on trade facilitation and the place of such measures in the
process of reviewing and, if appropriate, clarifying and improving GATT Articles V, VIII and X.
Australia noted that Canada had sought to enumerate the many benefits of the proposed work.
Australia considered that, in order for all Members and traders to genuinely benefit from the work
Members were doing or envisaging on trade facilitation, it was important that attention was given tothe question of WTO rules. Australia appreciated the concerns of some Members on this issue, but
Members should recognise that they all stood to benefit from the predictability and certainty that
improved rules could deliver. Such rules should not be viewed as a burden, but as a benefit available
to all Members, particularly when considered in conjunction with commitments to provide substantive
and relevant technical assistance to ensure that Members had the capacity to implement futureobligations. In this regard, Australia encouraged Members to consider the questions posed in the US
submission with respect to the enforcement of commitments. In Australia's view, the submission
correctly recognised that Members needed to consider rules that would address concerns without
otherwise diminishing the fundamental role of disp ute settlement procedures. Australia agreed that
this might necessitate some creative thinking. The proposition of an agreement-specific process of
consultation or mediation was worthy of further consideration. Australia also would like to state that it
broadly agreed with Japan's view that the WTO was about rule setting, which could complement andstrengthen capacity building and other aspects. Canada's paper strikingly illustrated that point.
Australia was very pleased by Canada's excellent demonstration of practical linkages across various
GATT Articles and Japan's interesting statements on the linkages between the three pillars. Australia
welcomed all the contributions by Members in relation to these agenda items and looked forward to a
fruitful discussion.
1.31 The representative of the Philippines noted that this was his first attendance since a year of a
CTG meeting session on trade facilitation, which was a very interesting subject on which Members
were required to submit appropriate modalities for explicit consensus at the Cancun meeting before
negotiations could commence. Somehow, he was always tempted to start his intervention on thesubject by affirming the desirability of an efficient trade facilitation environment for all Members,
developed, developing and least developed countries. Indeed, how could one resist the dream of being
another Singapore, or Hong Kong or Kobe and guarantee a paperless, 24 hours turnaround time for
vessels carrying goods for regional or global destin ations. The reality, however, was that the marginal
benefits the Philippines got from hard revenues expended on trade facilitation would not equal thatspent on infrastructural or rural, agricultural development projects so essential for its peoples'
livelihood. One could consider trade facilitation as an “icing on the cake” of effective “market access”
conditions. Maybe he could further elaborate on Br azils’ previous statement that within the Doha
Development Agenda, there were other trade facilitation issues like rules of origin and customsG/C/M/69
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valuation which had been begging for resolution, and that there were more fundamental issues of
tariff and non-tariff matters in the negotiations, which took precedence for developing countries like
the Philippines in terms of their development impact.
 
1.32 Turning to the paper of Canada G/C/W/448, he noted that his delegation was thankful toCanada for providing a neat conceptual framework which presented the principles, the suggested trade
facilitation measures and the benefits which could be derived from these measures. One could not
dispute these sound principles, which were the cornerstone of the relationship among WTO Members,
nor the benefits which might be expected from the measures. But those principles were not the
disputable basis for the system of rights and obligations in the WTO framework. The basis, as Nigeria
had rightly pointed out, would be the specific measures in column 2, and that was where the devil
lied, particularly as the three papers by Canada, the US and Japan insisted that they were “promotedby an appropriate set of WTO commitments” and “bring the results … into the sphere of WTO rights
and obligations” which were subject to dispute settlement. There were elements in the measures
mentioned in the Canadian paper like risk assessment, advance clearance system, transparency, due
process etc. which had been adopted, albeit voluntarily, by most customs administrations to make
their regimes compatible with world class and modernized systems. Japan, Canada as well as the USshould know that in APEC, this was an advanced program to which they had contributed substantial
technical assistance and capacity building resources. But depending on these resources and internal
capability, on the unique situation and the development objectives and priorities of each country, the
degree of efficiency or inefficiency, the standards of implementation and performance, especially in
the eyes of interested trading partners, could be viewed with a huge dispersion and disparity. It will behardput to establish standards for dispute settlement purposes, which would not place developing
countries in a vulnerable position.
 
1.33 It was perhaps in recognition of this situation that the US had proposed its novel “customized
approach” to S & D. But this would, in fact, create the risk of imparting greater individualarbitrariness and discretion to the DSU process. In sum, the Philippines affirmed the desirability of
trade facilitation and was engaged in various international, regional, bilateral and domestic programs
promoting and enhancing these measures, albeit on a voluntary basis. The Philippines had advanced
and enhanced its domestic regimes from technical assistance and capacity building from these
sources. If the Japanese paper suggested that only if one committed to a WTO system of rights and
obligations one should qualify to continue to enjoy these technical assistance and capacity building
resources, Members would not be on the correct track. The Philippines would continue to supportWTO work on trade facilitation, but would not agree to any modalities for negotiations in trade
facilitation that would partake of the nature of specific commitments subject to dispute settlement.
1.34 The representative of India noted that her delegation would not be able to go into detailed
comments on the papers presented by Canada, the US and Japan due to their late submission, which
was why her remarks would be very preliminary. However, she would like make some general
observations on the current discussions. With respect to Canada's statement that there was some sort
of convergence of positions, she noted that India' s position had not changed at all since last year's
discussions. The ground realities of developing countries regarding the suggested measures had not
changed either. For India, trade facilitation was not about taking on commitments which eventuallycould lead to recourse to the dispute settlement mechanism. She could not help but agree with the
Philippines that until developing countries were on an even playing field, it could not be expected
from developing countries to have a customized approach. This was something that was extremely
baffling to her delegation, and something India could not agree to.
1.35 With respect to India's position on trade facilitation, she noted that there had been several
proposals seeking improvements of the three GATT Articles following the Doha mandate. It was
India's perception that neither of these Articles had outlived their utility nor was that the absence of
mandatory requirements a significant weakness in these Articles. The earlier study process on tradeG/C/M/69
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facilitation had revealed that the vast majority of Members had taken autonomous steps to simplify
and modernise their border clearance procedures. It had also been amply demonstrated that the
existing GATT Articles had been a guiding force for countries to modernise and simplify their
procedures, which in any case most countries considered as a trade necessity in the present
competitive environment. Therefore, in India's view, trade facilitation measures were to beimplemented in an autonomous manner, as this was currently the case for many developing countries.
After all, they had their own needs and priorities, and their focus with respect to the reforms needed,
would depend strongly on the available resources. India had seen that WCO had also recognised the
need for bringing about these changes and had felt the necessity of simplifying modernising customs
procedures world-wide. The WCO had come out with the revised Kyoto Convention which struck an
appropriate balance between trade facilitation and customs control. There were about 12 countries
which had already signed up to this Convention, and there were quite a few others which were in theprocess of doing so and had started implementing the new standards enshrined in the revised
Convention. Keeping all this in mind, India did not feel there was any duplication of efforts required
and that the trade facilitation proposals could best be left to the WCO for implementation.
1.36 The WTO agenda was already overburdened and it did not appear to be a wise idea to keep on
burdening it with just another subject, which was essentially of a procedural nature, and which was
competently being dealt with by another expert body. In this context, she noted that she could not help
mentioning that there were at least two other areas within the WTO which immediately came to her
mind, which had very important trade facilitation aspects, such as the agreement on rules of origin,
which was yet to be implemented after nearly eight years of coming into force. Brazil had also made areference to this. There was no justification for concluding additional agreements on trade facilitation
when existing agreements on trade facilitation were yet to be implemented. Likewise, she would like
to also draw the attention of the Council to facilitative customs clearance procedures which should go
hand in hand with the more liberal procedures for exchange of information of export values between
Member countries. There had been proposals made to operationalize the Ministerial mandatecontained in para 8.3 of the Doha Ministerial Declaration which related to the exchange of
information on export valuation. The elaboration of these elements would definitely add more value to
the GATT Articles.  She just wanted again to flag these issues and bring them out for Members to
reflect on. India would like to reiterate the points al ready repeatedly made in the Council, that major
issues for implementation of trade facilitation proposals were costs, infrastructural weakness and
resource constraints. These were major handicaps which developing countries faced. Given the
infrastructure weakness and resource constraints, developing countries would find it extremelydifficult to discharge various contractual obligations that may arise from the discussions which were
presently being held in this area. Most developing countries may simply not have the capacity to
implement all the trade facilitation measures that were being discussed in the WTO. The fact that the
cost of non-compliance with WTO obligations would be high due to costly trade disputes could not
even be mitigated through special and preferential  treatment provisions. Here, what the proponents
were at the most talking about were longer time frames. The US had helpfully put forward some
questions, but she really did see not where all that was leading to. Unless and until Members devoted
themselves to carrying out an exact cost benefit analysis of the individual measures to be undertaken,
one could not proceed further with  this matter.
1.37 The representative of Costa Rica noted that the documents prepared by Canada, Japan and the
United States provided a value added to what had been presented up to now, and was contained in the
compilation by the Secretariat.  Given the fact that Costa Rica had just received the non-paper from
Japan, his delegation would not be referring to it now, but at a later stage. Like other delegations,
Costa Rica was pleased with the results of the discussions on trade facilitation in the Goods Council.Many proposals had been made to clarify and improve disciplines under Articles V, VIII and X of the
GATT to facilitate trade. This would assist Member s to continue to proceed. Turning to the Canadian
paper, he noted that his delegation was happy with its approach, especially its linkage between the
principles of trade facilitation, possible measures that could be taken and th e possibility of  technicalG/C/M/69
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assistance to achieve benefits such as transparency, predictability, simplification, cost reduction and
improved efficiency. Costa Rica fully agreed that the development of policies to facilitate trade flows
and establish trade facilitation disciplines would bear fruit. Trade facilitation was a win-win situation
for the governments, for the productive sectors and for small and medium sized enterprises of
developing countries such as Costa Rica. His delegation also shared the view that WTO rules neededto include, inter alia , aspects of, transparency, non-discrimination, simplification, predictability and
due process. However, in order to achieve these benefits in the trade facilitation process established in
Doha, it was also necessary to establish appropriate technical assistance and capacity building
programmes.
1.38 Moving to the paper by the United States, he noted that the US contribution was quite useful
and opportune and contained elements that Members should be establishing at this stage. Costa Ricahad no concrete replies to the questions raised in the paper, but would like to emphasise the fact that,
in order to establish disciplines in this area, one needed to take into account the needs and priorities of
each country. This was especially the case regarding technical assistance, which should be based on
the particular needs of a country, and not simply try to transfer one particular experience or process to
another country.  It was important to recall that the levels of economic development varied greatly,
which was why technical assistance was not only required to assist with implementing changes in
import and export procedures, but also to adapt to these changes according to the domestic needs and
specific situation of each country. Hence, it was important for developing countries to identify their
needs, in order to decide what type of approach should be taken with respect to S&D. Developing
countries should therefore focus on the identification of these needs, just as Costa Rica had done inthe past. It was  necessary to develop appropriate technical assistance programmes, not just at the
implementation stage, but right now and in the negotiations stage.
1.39 The representative of Malaysia noted that the papers presented by delegations showed that the
task ahead was really enormous. Some delegations had claimed that there was convergence of ideas
and positions. In Malaysia's view, that was not true. He felt that there were many unsolved issues, and
that delegations were actually split on the underlying philosophy on how to approach that  particular
subject. While looking at the papers, one would see a whole range of complex issues. One had to
understand these issues first before being able to move on to the next step. Therefore, Malaysia
believed that those papers served a very useful purpose as part of an education process in trying to
understand what one was trying to achieve. It was only then that Members could decide what they
wanted to do when approaching the Cancun Ministerial and later on. In Malaysia's view, there was noagreement yet. Members were working towards understanding the complex issues and would then
reach a stage where they would have to decide what to do. With respect to the papers tabled, his
delegation could only make some preliminary comments at this stage.
1.40 He shared the view that the Canadian paper was a useful reference point if one looked at it
just in the context of it being a matrix of issues that required further discussion. There were several
points where he would like to get some clarifications from the Canadian side. First, Canada had
mentioned that the list of measures to be promoted was just illustrative, based on what had been
proposed by delegation and on economic literature. He took from that reference that there were other
issues that could be add to this column, so that, for example, the section currently listing 7 measures
to achieve the principle of simplification could be extended, as other Members might like to propose
other measures as well. Where was one going from there? Was one going to agree to all these
measures or would the procedure be to go through each measure one-by-one and discuss it in terms of
whether it was doable or not, and if it was doable, to discuss what were the costs involved? The point
raised by Singapore on a cost-benefit analysis was important, because it was necessary to look at boththe cost and the benefit. The Canadian paper listed the benefits, but it was up to each Member
nationally to look at the costs involved if it was to undertake these measures. That was really an open
question with respect to that particular column. It could actually be very expensive to implement some
of these measures. With respect to the column on trade-related technical assistance possibilities, heG/C/M/69
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asked for some indication of how much it had cost Canada to implement those measures, so that
Members could also get an idea of the cost implications. Another point of the Canadian paper which
had also been raised previously was that the issue of harmonisation. That was a very difficult matter.
Harmonisation might require many measures, and it had to carefully considered whether that was
something that could actually be done. The last po int he wanted to make related to the issue of
infrastructure. All the measures listed in the Canadian matrix related to systems in terms of
administration, and perhaps also in terms of the electronic delivery of the system. But hard
infrastructure was not taken into account. One could have all the systems in place, but if one could not
have that kind of facilities, such as port facilities or computerisation systems, it would make no
difference to the whole system, since one had to look  at it as a package, and the hardware part would
be the most expensive element. He was wondering whether, if Members were to agree on some kind
of rules, that would also be taken up in terms of technical assistance. Malaysia would like to havesome answers on that point as well.
1.41 Turning to the Japanese non-paper, he noted that Japan had referred to APEC and ASEM
when talking about the three pillars. Since Malaysia was a party to both of those regional groupings,
he would like to address a question to the Japanese delegation, and perhaps also to others who wereequally Members of these two regional groupings. Both APEC and ASEM were carrying out a
number of trade facilitation measures. If APEC was a binding regional group, wouldn't there be only
few countries really engaging in trade facilitation? The reason certain developing countries were able
to agree to those kind of trade facilitation measures in APEC and ASEM was that they operated on a
voluntary basis. That was why everybody agreed to th e high principles set in those regional initiatives.
They subscribed to them, but at the same time, they remained their policy-space, their freedom. If
those countries could not achieve the kind of measures they had agreed to, they did not have to be
concerned about being brought to dispute settlement, because there was no such thing in APEC and
ASEM. One had to look at it in terms of that particular creativeness. Maybe there was something
Members could develop further in the WTO context. If the suggested measures were not mademandatory, developing countries, who really had prob lems with it, would feel a bit more comfortable.
They would not have to match up to those high expectations mentioned earlier.
1.42 Moving to the US paper, he noted that, if Members were to negotiate rules, transition periods
would not always be the best approach. Malaysia felt that it was more important to look at the nature
of the rules themselves, since some of them might be difficult for certain developing countries to
implement. One had to look at the particular situation of each country, and one may need some otherform of rules to address that particular case. Some rules would be very difficult to implement, and he
did not think that by simply granting a developing country a transition period to do so, that could
actually be achieved. That had been seen in the case of the Uruguay Round agreements, where some
of them, such as the TRIPS Agreement, had been very difficult for many developing countries to
implement. Here, even if one was to grant them 30 years, some of them would still not be able toimplement, since there were other things that were deficient. It was also necessary to engage in some
sort creative thinking about S & D treatment. When l ooking at the word "comprehensive", he had first
thought that the US would be looking at developi ng countries as one group and the LDCs as another,
and that S & D treatment would be granted to each group accordingly. But then Malaysia had noticed
that the US was actually thinking of some sort of a "one-size-fits-all" solution. This was a veryworrying trend from the US over the last two years after Doha  when discussing how to approach the
question of S&D and the development dimension of the Doha Round. There were some developing
countries that were more advanced than others. The question of giving developing countries a certain
comfort level was something that needed to be looked at seriously by one's trading partners. If they
would not provide that comfort level to developing  countries and the LDCs, they would not feel very
appreciative of the fact that trade facilitation was good for them, and then they might wish to join at a
later stage. If the only offer was a longer transition period, it would be very difficult to convince a
developing country to agree to undertaking a certain measure on binding basis.G/C/M/69
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1.43 Turning to the paper by the EC, he noted that it gave an indication of the amount of technical
assistance that was needed, and that even in a situation where there were no binding rules, technical
assistance was enormous. He could not imagine the amount of assistance that would be required if
there where binding rules and all the measures listed in the Canadian paper became part of these rules.
He could also not imagine that it would be possible to  actually deliver that assistance. He would liketo know from the Communities whether, based on the technical assistance they provided, an
assessment could be made in terms of the effectiveness of that technical assistance, and whether those
programmes could actually help the beneficiary countries reach a level of compliance. As a last point,
he noted that on the key issue of binding rules and whether one really needed them, Malaysia believed
that Members could still achieve substantive results with non-binding rules. Binding rules would scare
away a lot of developing countries. It was necessary to look at creative ways on how to address that
issue.
1.44 The representative of Peru  noted that she would like to briefly comment on the papers
presented by Canada, the Unites States and Japan in a preliminary fashion. With respect to Canada's
submission, Peru had noted with much interest the presented chart. The principle of transparency was
very important, as well as availability and access to information. There had to be propercommunication of the standards. Peru was interested in transparency and predictability, but with
respect to the suggested measures contained in the table, one had to be careful not to create major
obligations, such as, example, when it comes to the publication of  future planning,  as had been
proposed in one the EC's previous submissions, or the proposal made by Japan to identify the means
of publishing legislation.  Simplification was a fundamental principle for Peru. Standards should not
be any more restrictive than necessary. Yet, it was Peru's view that some of the measures indicated in
the paper could go beyond some developing countries' implementation realities. With respect to
consultation and communication, Peru was still in the process of analysing the proposals made so far,
but also here, developing countries had some shortcomings in terms of infrastructure, human
resources or technological resources. There was greater need for technical assistance and capacitybuilding. The proposed measures could lead to binding commitments. Peru was concerned to see that
much was proposed on a standard level, applying a "one-size-fits-all" approach. Peru failed to
understand how one could propose general binding commitments. Regarding standardisation and
harmonisation of procedures, Peru was concerned about the type and level of standards that could be
created, and whether they were supposed to be binding or not, especially with regard to the release of
goods. Here, it was necessary to be very careful when looking at the current capacities to meet the
requirements.
1.45 Having briefly looked at the US document,  Peru was heartened by its specific focus on
technical assistance in relation to the needs of every country, and taking into account their different
levels of development. In this context, Peru appreciated the questions raised under section 2 of the
document. As for its section 3, referring to the bi nding nature of commitments, Peru was of the view
that it was still premature to attempt to actually engage in this. Peru had also looked at the other
proposals, and thought that there still had to be done more work on the identification of Members'
needs and priorities. This would have to be ensured in a parallel fashion, in parallel to S&D treatment.
Technical assistance and capacity building measures had to address the specific needs of each
country. Peru had a number of questions with respect to the presented papers. The first one, whichwas a question to all Members, related to the fact that, when speaking about implementation, repeated
reference had been made to technical assistance and capacity building. Peru was wondering how such
assistance would actually be funnelled and what type of assistance would be given, bilaterally or
through other international organisations? Could this be done through the WTO? How would this be
channelled and how could requests be filed for technical assistance? Also, the delegation of Peruwould like to hear Members' views on preparing a study on the particular situation of various
countries with respect to trade facilitation measures in the area of customs, which the WTO
Committee of Customs Valuation could be mandated to  carry out. This would have to be done before
developing  specific commitments in the area of trade facilitation.G/C/M/69
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1.46 The representative of Sri Lanka noted that the papers by Canada, Japan and the United States
were positive contributions to move forward the work on trade facilitation. The Canadian paper had
put forward broad trade facilitation principles, which could be promoted by an appropriate set of
WTO commitments on trade facilitation. The paper highlighted potential benefits yielded by theimplementation of these principles and measures and illustrated examples of trade-related technical
assistance and capacity building possibilities with clarity. Sri Lanka broadly agreed with Canada on
the trade facilitation principles outlined in the document, as well as on the potential benefits. As
Canada and many others had stated, trade facilit ation was a win-win situation where all Members
could benefit. A small country like Sri Lanka, whose economy depended on external trade, was
convinced of the important role played by trade fa cilitation measures, as effective trade facilitation
measures reduced transaction costs and made the goods sector more competitive. In addition, studieshad shown that effective trade facilitation measures were more important in attracting foreign
investments than granting investment incentives. On the non-paper by Japan, the representative noted
that Japan had raised an important question in its three pillar approach, particularly in the area of
capacity building, when referring to the need for such assistance to also include infrastructure, and in
noting that this should be done in parallel to an action programme and rule making. This was animportant aspect that should be addressed in the implementation of a potential agreement on trade
facilitation. Turning to the paper submitted by the US on an integrated and comprehensive approach
to special and differential treatment, he noted that this was an important contribution to the discussion
as it not only addressed the fundamental issue of how S & D should be treated in a potential
agreement, but also raised the issue of implementation challenges of such an agreement. It wasnecessary at this early stage for Members to reflect on those implementation challenges, so that
technical assistance and capacity building, including capacity building in the area of infrastructure,
could be approached in an integrated manner.
1.47 Sri Lanka's experience with the implementation of the Customs Valuation Agreement
demonstrated that in spite of the 5 years transition period, many developing countries needed more
time to draft legislation, carry out reforms and modernise their customs administrations in order to
implement such an agreement. Therefore, any poten tial agreement on trade facilitation, which should
be a broader concept than focussing merely on customs clearance and procedures, would require more
technical assistance, and therefore a comprehensiv e approach. In that context, the three point
approach to S & D treatment in the US proposal had merit.  Creative thinking was required regarding
the application of S & D treatment. Outmoded approaches had proven ineffective. Certainly eachMember represented a unique situation with equally unique needs. The situation of a small country
like Sri Lanka with only one port, with different levels of infrastructure, was different than that of
other countries which had different implementation capacities. Therefore, even with the application of
transition periods, a "one-size-fits-all" approach would not deliver the desired results. A differentiated
approach to implementation in terms of specific obligations might be required. The proposal to ensuretransition periods operated in an integrated manner with technical assistance targeted to specific
implementation needs, had merits.  With such an approach, each country's implementation needs could
be identified in order to facilitate implementatio n. However, Sri Lanka believed that infrastructural
needs to implement a potential agreement should be taken into account in such an exercise, and built
in as an integrated part.
1.48 Regarding the technical assistance review and coordination mechanism, the steering
committee type approach by Members to ensure that  such assistance related to the implementation
needs regarding the results of negotiations, had merit. Members should reflect more on it. On the
enforcement of commitments, Sri Lanka had some questions regarding the establishment of anagreement-specific process of consultation or mediation. The US had stated in their paper had they
place great importance on bringing the results of the negotiations on trade facilitation into the sphere
of WTO rights and obligations. More clarity would be required on the role of the
consultative/mediation process. Singapore had raised the question whether this consultation processG/C/M/69
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would be a first step, and whether in the case of non-compliance, one would still be subject to the
DSU. More clarification on this issue was required as this was an extremely important element to
many developing countries, who might be in favour of a potential trade facilitation Agreement, since
they were convinced of the potential benefits of trade facilitation, but not yet convinced of the need
for trade facilitation measures being subject to the DSU.
1.49 The representative of Indonesia noted that since the papers by Canada, the United States and
Japan had only very recently been received, his comments would be preliminary in nature. With
regard to the Canadian paper, Indonesia would like to stress that it did not disagree on the benefits
listed in the paper. However, in order to improve the paper, Canada should also include the possible
costs in implementing their suggested trade facil itation principles. For instance, to implement the
principle of standardization, which utilised inform ation and communication technologies, training and
technical assistance, would not be sufficient to help  developing countries comply with that principle
as such. In order to bear the costs of implementing that principle, broader assistance would be needed
in order to cope with problems related to infrastructure constraints. Indonesia would like to know
whether the principles suggested in Canadian paper were to be understood as an exhaustive list, or if
there were still other principles not yet listed. He would also like to know whether the order in whichthe principles had been listed was to be understood as an indication of the importance or urgency of
each issue.
1.50 With respect to the paper by the United States, he noted that the US suggested three points
related to special and differential treatment. On the question of a comprehensive approach totransitional periods, Indonesia believed that this should be discussed in the CTD, as the appropriate
body to discuss appropriate approaches to special and differential treatment. Indonesia noted that the
United States suggested to grant developing countries an individual transition mechanism. However,
the question arose whether, after the expiry of the transitional periods, developing countries still faced
problems in implementing trade facilitation commitments. In this regard, his delegation wished toemphasize that developing countries needed different levels of commitment and greater flexibilities,
and not merely transitional periods. On the issue of enforcement of commitments, non-compliance on
the part of developing countries was mainly due to capacity constraints to implement the
commitments. Indonesia believed that that type of non-compliance should not be penalized. He was
wondering whether the United States was of the view  that the results of the consultation or mediation
process it wished to establish should be binding on the parties concerned.
1.51 On the Japanese paper, he noted that the three pillar approach of an action programme,
capacity building and rule setting was interesting. Indonesia shared Japan’s view on the importance of
trade facilitation to expand trade and investment, improve government efficiency in collecting
revenue and the control of cargoes. However, Indonesia disagreed with Japan that in the case of an
action programme, members might withdraw their commitments at any time. Given the recognizedbenefits of trade facilitation, Members would continuously improve their trade facilitation
commitments. Finally, Indonesia was of the view that many of the issues discussed in the CTG could
be addressed in the WCO as a competent body in this area. The WTO could at the same time do its
work in trade-related issues of trade facilitation contained in various WTO agreements.
1.52 The representative of the European Communities noted that his delegations had been quite
encouraged by the current debate. He would agree that there was not yet convergence amongst
Members on what needed to be done with this issue at Cancun or after. That was very clear from the
interventions. But what the discussions had also shown was a growing understanding of the substance
of what Members were talking about, as well as a growing appreciation of the importance of this issuein the overall scheme of things. For a long time, trade facilitation had been in some ways the
"Cinderella" of the Doha agenda, but now more and more people from the business community in
many countries were recognizing, at the political level, that this was actually a very important area,
and very important for economic growth. Some recent independent studies suggested that a quarter toG/C/M/69
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a third of the overall gains of the Doha Round could be delivered by trade facilitation, which clearly
underlined the importance of the matter. This had also started to come through in the current
discussions.
1.53 Turning to the submissions prepared by delegations for the present meeting he noted that he
had a few remarks to make from the viewpoint of  the European Communities. With respect to the
Canadian document, the EC welcomed what it sai d. It was a useful tool, a kind of at-a-glance
description of the potential scope of Members' work. There were a couple of areas where perhaps
Canada might like to improve it further. It would be useful to have more specificity on the question of
the last column on technical assistance, in the sense of information regarding which organisations had
expertise in providing which kind of technical assistance, or what other kind of assistance
programmes existed that could be used to implement particular areas of trade facilitation. It also mightbe useful to add a fifth column on the kind of existing international standards that could support the
implementation of some of these more general measures that were being proposed. Having said that,
he wanted to emphasize that the Canadian paper was very helpful and a good summary of a lot of
work that reflected a lot of thinking.
1.54 Turning to Japan's (non-)paper, which was a very interesting document, he noted that it had
started to answer two basic questions that had been posed by Members over the past few months. One
was the question of the role of the WTO vis-à-vis other international organisations, which was a basic
question that had been repeatedly raised in the past, and also in the current meeting. The Japanese
submission demonstrated that there was a complementary relationship that could be built between theWTO as the guardian of the rules-based trading system, and other organisations, such as the WCO or
the UN bodies, which had a role either in developing standards or in the delivery of aid and technical
assistance. The sketching out of what Japan called the "international architecture" was absolutely
accurate. The second question Japan had answered to some extent in its paper related to the level of
harmonisation or the level of detail in any future rule making exercise. Members had heard a lot aboutharmonisation and standardisation and there was a lot of mis-information on matter. One of the ideas
in the Japanese paper which the Communities liked very much was the notion that the WTO would
develop or set commitments at a more generalised level, and that, in many cases, it would be the role
of other international organisations to develop more detailed standards that could be a preferred
means to meet that generalised commitment. Japan cited a number of examples that already existed in
the WTO, such as in the areas of TBT and SPS, where one had fairly general, broad commitments and
some kind of preference was given to international standards developed elsewhere as a best practiceor a means to implement them. Japan's concept of  the architecture helped answering the question
about the risk of excessively prescriptive rules and standards that Members would have to accept
whatever their level of development.
1.55 Moving on to the US submission, he noted that there was a famous French opera by Bizet
called L’Arlésienne, the lady of Arles, in which one heard about this lady all the way through without
ever actually seeing her. She never appeared until the very last act. For a long time, the US proposal
had been a little bit like that lady from Arles. One heard about her, dreamt of her for a long time, but
never got to see the girl. He was very happy that at last she had walked on the stage and was singing a
very good aria. The Communities welcomed the paper. It contained some extremely useful ideas.There were some comments the EC would like to make  in this context. With respect to transitional
periods, the Communities agreed with the idea th at it would be sensible to think of more
individualised or customised implementation road maps or transitional periods, reflecting the
individual situation of each Member. That was better than the so called one-size-fits-all approach.
Pursuing individualised road maps or implem entation plans would not risk a bigger debate on
graduation. It was a very pragmatic and sensible idea.
1.56 The European Communities also agreed with the point raised by the US on the question of
technical assistance, that such assistance must be an integral part of any negotiating process and notG/C/M/69
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an after-thought that would be tacked on after WTO commitments were entered into. The EC shared
the US view that one would need some kind of mechanism to ensure a better degree of cooperation
between different international organisations, bilateral donors and recipients. It would be useful to
have some kind of a platform in order to cooperate on the provision of aid and assistance in a coherent
manner. Perhaps one could draw some lessons, both good and bad, from the operation of theIntegrated Framework which was trying to achieve th at with the least developed countries, involving
all the different donors and international organisations. This experience provided some useful lessons,
including lessons on what had not worked in the past, and what one wanted to avoid in the future. The
US had rightly noted that there should be a role for the private sector in any technical assistance
activity. This was also a point the EC had made in its submission on GATT Article VIII. His
delegation had received a lot of signals of interest from the European and International private sector
investing in many countries. There was often a th in line between FDI and technical cooperation in
ports or airports or at the border. The EC was w illing to continue that. Even more could be done if
there were the guarantees of predictability that a set of WTO commitments could provided. The way
private sector investors saw it that if they were given a greater degree of predictability through a WTO
framework of some kind, they would be more inclined to invest more and provide more training,
cooperation, aid, hardware and software. The Communities were working with its federations to try toget more precision on what they could do in the future and what was already been done. The third
area in the US paper the EC very much liked related to the ideas on how to address the question of
binding commitments and enforcement. The EC believed that as in the case of democracy, there was
no alternative. There was no alternative to having WTO commitments. That was the value added of
the WTO. However, the Communities would also agree that it would be completely inappropriate tohave recourse to the DSU in situations where a country did not have the capacity to implement
commitments. That was absolutely clear. It had to be ensured that no country could ever be brought
before the DSU system because it was too poor to implement its commitments. That concept could
surely be translated into WTO terms. The EC was at tracted to the US idea that in certain cases, where
problems of implementation were related to inadequate capacity, there should be some alternative orpreliminary alternative to dispute settlement. There should be some kind of mediation process. This
was worth developing further. Work after Cancun may include commitments not implying resources
such as commitments on non-discrimination, as well as commitments which were resource intensive.
It would not be acceptable to anybody to have the issue as a threat in cases where a country simply
did not have the resources to implement, even if they wished to. The US idea was a very positive one.
There were additional ways in order to reflect special and differential treatment and the concern about
WTO commitments. The EC had already mentioned a number of them in previous submissions, suchas flexibility in the actual commitments made as well as the more standard tracks of realistic and
generous implementation periods coupled with assistance.
1.57 Furthermore, it was necessary to have a degree of flexibility in any future rules in themselves.
The EC did not think that any commitments in this  area should be unduly prescriptive, so that they
would be difficult to meet. Release times, for example, would not have to be around one hour. That
would be a degree of prescription and harmonisa tion which would be unsuitable for many Members.
What could be done and was feasible was that each WTO Member would set its own individual
release time and notify it. The commitment would be to progressively try to reduce those average
release times. The rule would only set the direction and not necessarily the end result. The roadMembers were taking was as important as the dest ination. If one could look at the concept of WTO
rulemaking in that manner, it might provide better comfort to those Members who were yet to be
convinced. This was not a new approach – it already existed in the GATS and in agreements like the
TBT one. He would offer that as an additional idea in addition to the very helpful US proposals on
S&D.
1.58 The representative of Chinese Taipei noted that Canada's submission was very useful in that it
presented Members a clear and complete picture of their discussions on this issue since last year.
Although the benefits of trade facilitation were already well identified, some Members were veryG/C/M/69
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concerned about the cost of undertaking such measures. While it was of course up to each individual
Member to allocate its limited resources to undertake trade facilitation measures, Chinese Taipei
would like to point out that, over the past two or three decades, it had recognised trade facilitation as
one of the most important factors contributing to its economic development. Turning to Japan's non-
paper, he noted that, while reflecting on the three pillars in a rather preliminary manner,  ChineseTaipei tended to agree that the WTO had an unique role in setting internationally accepted rules in the
area of trade facilitation. Furthermore, taking into account Members' different levels of economic
development, the delegation of Chinese Taipei fully ag reed that the objectives of rules setting in the
area of trade facilitation should be limited to achievable ones. Therefore, Chinese Taipei looked
forward to participating in this kind of discu ssion in the days ahead. With respect to the US
submission, he noted that the questions posed therein provided excellent food for thought. His
delegation would consider them positively. Finally, he wanted to touch upon the issue of therelationship between trade facilitation and the Harmonisation Work Programme on Rules of Origin.
Chinese Taipei especially agreed with the idea contained in the Japanese non-paper that the scope of
trade facilitation should not be narrowly limited to customs procedures alone. Both trade facilitation
and the Harmonization Work Program were important. Members should work together to complete
work in both areas under the framework of the WTO, rather than negatively influence each other.
1.59 The representative of Hungary noted that the papers submitted by Canada, the United States
and Japan coincided with her delegations's thinking to a great extent. Hungary shared many of the
views and ideas expressed in these papers, especially in the submission by Canada, which provided an
overview of how trade facilitation principles could be advanced through the development of
appropriate WTO commitments. Trade facilitation was equally important to all Members, developed,
developing alike. It was not only fostering trade, but also helped increasing the efficiency of revenue
collection. The WTO had an important role to play in the field of trade facilitation. Achieving an
agreement on trade facilitation could be an important development-related achievement emerging
from the Doha Development Agenda. Trade facilitation was an area where assistance to developingcountries to build capacity was crucial. The question of trade-related assistance was an integral part of
the work on trade facilitation under the Doha Development Agenda. Consequently, any future WTO
provisions on trade facilitation should include a range of special and differential treatment and
technical assistance provisions, to help developing countries implement the results of the negotiations.
The recent US and Canadian submissions and the information on trade-related technical assistance
submitted by the EC contained very important elements in this area. Hungary was convinced that the
papers submitted for the present meeting could substantially stimulate Members further discussions.Her delegation was looking forward to working with  all Members to advance work in this important
area.
1.60 The representative of Lithuania expressed general support in respect of the ideas expressed in
the papers presented by Canada, the United States and Japan. During previous meetings on this issue,
the Lithuanian delegation had supported the ideas regarding the necessity to strengthen rules related to
trade facilitation and provided examples of existing practices by some countries which used cross
border procedures in a trade distortive manner. Some of these measures were used against Lithuania
as well. Therefore. Lithuania believed that streng thening the rules in this area would eliminate such
practices. It would strengthen productivity in this area and reduce costs of importers and exporterscomplying with cross border procedures. Lithuania was of the view that such a strengthening of the
rules in this area would bring significant benefits for all Members, both developed and developing.
Regarding Canada's document, Lithuania supported the views expressed therein. The paper was
especially useful in presenting the views in system ic manner, incorporating also technical assistance
issues regarding the implementation of rules by developing countries through appropriatecommitments, and the description of the benefits accruing from such rules. Lithuania had one remark
regarding the paper's description of the non-discrimination principle. The paper referred to this
principle as an obligation of trade-related rules and procedures not to discriminate between goods and
or modes of transport. In Lithuania's understanding, the description of the scope of that principle wasG/C/M/69
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not exhaustive. GATT Article V talked not only about non-discrimination between goods and modes
of transport, but also with respect to the origin of goods, ownership of transport and others aspects. In
Lithuania's view, one should also apply the principle of non-discrimination regarding countries of
separate customs territories.  That was of key importance to Li thuania. Non-discrimination between
countries should also be addressed in the area of origin of goods and ownership of means of transport,and it should be addressed by appropriate rules. Practice showed that country specific restrictive
measures could be even more distorted than discriminatory aspects between products or modes of
transport.  The non-discrimination principle should not only be applied in respect of transit, as
provided in Canada's paper, but also in respect of customs procedures, which were now subject of
Article VIII. That was perhaps a detail, but it wa s really important for Lithuania. Generally, the
Lithuanian delegation really supported Canada's paper.
1.61 With respect to the US document, Lithuania welcomed the paper and its significant step of
proposing a solution for the implementation of trade facilitation rules by developing countries. The
suggestion to pursue an individual approach tailored to  the specific situation of a country, rather than
a "one-size-fits-all" approach, was really useful and provided a good basis for further discussion.
Regarding the issue of dispute settlement, Lithuania understood the sensitivity of that matter. Furtherdiscussions were necessary in due course. Regarding Japan's non-paper, the Lithuanian delegation
found the idea of the suggested three pillar approach  very  interesting. Addressing the relationship
between future WTO rules and the present commitments was also really important. Lithuania would
need more time to study the document in more detail. Generally, Lithuania really supported these
ideas and was very much in favour of  negotiations on this subject.
1.62 The representative of Poland noted that the written contributions prepared for the meeting had
been most useful and constructive. The Polish delegation would react to them more substantively after
it had analysed them in more detail. At this stage of the debate, his comments would relate  to a point
rightly made by the delegation of India about the need to secure a closer linkage between the work ontrade facilitation and other WTO disciplines. More specifically, he referred to provisions on customs
valuation and rules of origin, and he would do so for a practical reason: Poland’s customs authorities
were reporting a disquieting number of cases where legitimate suspicions might be raised about
accuracy, integrity and fairness of commercial documents attached to shipments of goods, particularly
from non-European countries. Such cases, including suspicions of  fraud, often regarded unit value
and origin of goods declared in the documents. Requests of the Polish authorities for co-operation
from authorities of exporting countries in conducting proper verification were often not met with asufficient response. He raised this point since improved disciplines and increased confidence in
implementing WTO provisions on customs valuation and rules of origin were essential if governments
were to have greater incentives to expedite and simplify border procedures in trade, and work towards
developing a multilateral framework for such facilitation.
1.63 The representative of Mexico noted that his delegation could only make some preliminary
comments on the submitted documents at this stage, and that time constraints won't allow him to
express his views on the Japanese non-paper. Mexico was in sympathy with the objectives of the
WTO discussions on trade facilitation and was convinced of the benefits this matter would bring to
the world economy. Mexico had worked hard to im plement measures aimed at improving its customs
administration system, without allowing primary obje ctives of customs control (such as the protection
of the safety of the inhabitants, control of foreign trade operations and proper application of tax
provisions) to be undermined in any way.
1.64 Mexico was aware that the majority of Members relied on infrastructure and technical
assistance that allowed them to feel comfortable before entering into specific trade facilitation
commitments. However, this should not prevent Me mbers from drawing up a plan to establish the
general outlines of the main concepts discussed in the CTG, as this would, at a later stage, help to
identify specific lines on which the discussions could focus. Mexico therefore considered Canada'sG/C/M/69
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contribution to be very valuable, as it moved towards identifying the main concepts that had been
discussed, such as transparency, simplification, non-discrimination and predictability, whilst leaving
the Articles aside for the moment. As the Malaysian representative had mentioned, there would be
specific elements that could be incorporated as a result of this discussion.  This exercise always had to
take infrastructure levels, technical assistance requirements and the safeguarding of the role of thecustoms into account.
1.65 The document submitted by the United States was, in a way, a recognition of the differences
in infrastructure and the difficulties that had been expressed by some Members with regard to
embarking upon further commitments. The three elements identified by the United States were very
interesting as regards special and differential treatment. His delegation hoped to work on providing
answers to the questions formulated in the document, so as to help resolve some of Members'concerns. Mexico agreed with some Members that progress made in other areas of the Doha mandate,
which also contributed to trade facilitation, was a very important element, and one that would
encourage them to enter into commitments on that issue.
1.66 The representative of Cuba noted that the Cuban delegation would not provide structured
comments on the submissions since they had been received only very recently, but just give some
general commentary on the ideas being discussed in the Council. At the outset, he would like to say
that Cuba appreciated that the questions of technical assistance and capacity building were being
looked at in the papers presented in the current session. Notwithstanding that, it was Cuba's feeling
that other elements were looked at as well, such as the establishment of standards and bindingcommitments, or a consultation mechanism, which, at present, went beyond the envisaged
expectations and could also in some ways pre-judge the success level of Members' work at this stage.
As other delegations had also mentioned, Cuba felt that there was a need to better identify the needs
of developing countries and least developed countries. Members should not turn a blind eye to
financial requirements and infrastructure requirements by a number of countries of a lower level ofdevelopment. This would have an impact on the mechanisms when it came to trade facilitation.
Therefore, looking at these aspects, Members could be more realistic. Cuba wanted to move ahead in
a realistic way so that there was truly a win-win situation. His delegation shared the views of those
delegations who had expressed the need to approach some of these criteria in a flexible way, so that
convergence could be achieved on the part of all of the Members. This could allow developing
countries to get a feeling of trust that there were to be true benefits for them.
1.67 The representative of Chile noted that the late submission of the presented documents had not
allowed his delegation to study these interesting contributions in the in-depth manner they deserved,
which was why Chile's comments would be rather brief without going into matters of substance.
Notwithstanding that, he would like to thank Canada for the effort they had made. Canada had
provided Members with principles and guidelines regarding future negotiations on trade facilitation ina very clear and illustrative fashion and shown how this could give rise to concrete proposals and
measures. Both the United States and Canada ha d demonstrated concern about the true problems
developing countries were facing when it comes to taking on more demanding commitments in the
area of trade facilitation. It was of fundamental importance that the proponents of negotiations
demonstrated a lot of comprehension and flexibility regarding the legitimate concerns of thedeveloping countries in this area. Otherwise it would not be possible to reach the critical mass of
understanding required before going to Cancun. The comments by the EC representative had been
very positive and encouraging.
1.68 For the time being, Chile had more questions  than it had answers when it came to how to
approach S & D treatment and technical assistance, but posing certain questions could already be a
good start on which basis one had to continue working in constructive spirit. Finally, he would like to
establish a link with the discussions that were on-going in another forum of the WTO. Everybody
knew that in Doha, Ministers had mandated Members to address the problems of non-tariff barriers.G/C/M/69
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There was almost complete concensus amongst Members, developed and developing alike, on the
importance of this matter if one was to solve the problem of effective market access in integrated
effective way. Members had been notifying various non tariff barriers their own exporters were
encountering in different markets, and in looking at these notifications, one had seen that quite a large
proportion of those barriers laid in the area of trade facilitation.  Clearly, negotiations on trade
facilitation would allow Members to address a lot of these different barriers. Those Members not
wishing to engage in negotiations on trade facilitation were loosing a very good opportunity to help
their own export sectors to achieve effective access in other markets. Therefore, he would like to call
upon all Members to think about these issues and to make their decision in a broader viewpoint,
looking not only at matters of cost, but also at the benefits that could arise from such negotiations in
the area of trade facilitation
1.69 The representative of the WCO congratulated Members on the progress made during the past
four meetings. He had been encouraged by the general agreement among WTO Members on
importance of trade facilitation, that included, but was not limited to Customs procedures. He was
also pleased to see the emergence of a clear understanding on the complementary nature between the
WTO and other intergovernmental organisations including the WCO. The World CustomsOrganisation saw that the WTO set out high principles for trade facilitation, while the WCO
instruments provided standards to help Custom s implement those high principles. The WCO also
assisted its Members in properly applying WTO rules and WCO standards through technical
assistance and capacity building. He hoped that enhanced coordination among intergovernmental
organizations, based on complementarity, would result in a more coherent approach to tradefacilitation, including technical assistance and capacity building. In relation to trade facilitation, some
Members in the current meeting had expressed their concerns regarding implementing the WTO
Customs Valuation Agreement. In this context, he would like to inform Members that upon the
request of the WTO Committee of Customs Valuation, the WCO Technical Committee was now
considering the implementation issue of valuation, including information exchange, from a technical
point of view. The WCO would report back the outcome of its study on practical means to address the
valuation concerns in mid May. This was another example of the complementary nature between the
two organizations. He assured Members that the WC O would  remain available for providing further
clarification on the Customs-related technical aspect of trade facilitation.
1.70 The representative of the OECD noted that  the OECD had prepared a paper on how the
proposals made by WTO Members relating to GATT Article V had been implemented at the national
and international level in different countries. It was the third paper of a series of three. The other two
relating to Article X and Article V, had already been presented and distributed in the CTG. The
reflections made by the OECD Trade Committee on national and international implementation of
GATT Article V-related proposals showed a number of interesting points. The one which was very
obvious and which had already been made was to wh at extent provisions relating to the other two
Articles with respect to transparency, simplification, harmonization, predictability, were also
important in the area of transit. It also highlighted the importance of taking the principle of
non-discrimination into account in this area. The single most important point made in the paper was
how important it was with respect to transit to ensure appropriate and effective international
cooperation. International cooperation was of course important with respect to customs procedures ingeneral, but it was absolutely indispensable, a sine qua non  condition in the area of transit. The OECD
paper showed that although a number of regional and international initiatives had taken place over the
years with respect to transit, they did not seem to have matched the expectations. They had fallen
short of what their initial negotiators had hoped they would bring. Although the paper did not go as
far as to establish firm reasons why that was the case, it delved into a number of hypotheses aboutthese failures. The delegates in the OECD Trade Committee had pointed out that it was important to
identify the reasons for this failure while the discussions in the WTO on transit were advancing in
order to try to remedy and overcome them in the discussions on trade facilitation in Geneva. In this
same line of OECD work relating to regulatory issu es and to linkages of regulatory issues with tradeG/C/M/69
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facilitation, there would be a seminar taking place in Geneva on 25 March. It was not a seminar on
trade facilitation, but more generally on regulatory issues, which were linked to the Doha agenda. All
delegations in Geneva had received an invitation. The points made during that seminar on the linkage
between domestic regulation and matters within the Doha agenda would provide a more specific and
more particular illustration in the policy areas of trade facilitation and of services.
1.71 The representative of Canada expressed his appreciation of the comments received on the
Canadian paper. Canada had taken measures, proposals and ideas expressed in the compendium, in
other submissions and in interventions and tried to develop a tool. His delegation would be very
pleased if Members would see it as a tool to which they could contribute in the future. In response to
the question raised by Malaysia as to the possibility of adding things, he noted that it was not an
expression of a Canadian position and that many things could be added and the paper could be furtherimproved. Canada was grateful for the specific comments and questions raised which would help
clarify the scope of the issues Members would need to keep in mind when further discussing these
matters. His delegation had taken note of the points made by the Czech Republic and Peru and also
noted that Romania had mentioned that there wa s a need to ensure better cooperation between
customs administrations. This was very important. The point made by Lithuania on non-discrimination was a useful reminder of the fact that when transposing the elements Canada had found
in the proposals relating to Article V, this may have been done too literally. He would like to
apologise for that.
1.72 As for the principle of standardisation, he noted that some concerns raised in that regard
reminded Members of the fact that there was an enormous diversity of standards and trade facilitation
measures among WTO Members. This was not only due to differences in levels of development, but
also to due differences in terms of characteristics of the legal system. Canada fully agreed with that.
When referring to standardisation, it had been more to a principle. If there were, for example,
international standards in one area, then the use of that international standard could be encouraged. Itwas not necessarily prescriptive. Canada recognised that in many areas there were no international
standards. Therefore, standardisation was an objective in terms of ensuring that Members were
moving in the same direction. But at the same time one had to recognise the legitimacy of having
rules that sometimes differed. Difference was not necessarily a negative thing. Canada also noted the
suggestion made by the EC on the benefits of having more specificity on technical assistance. His
delegation could only agree with that. However, Canada was probably not the best partner to add
specificity in that regard. Canada had a certain experience in terms of providing technical assistance,but, as highlighted by Cuba, it was important to keep in mind the identification of Members’ needs
and priorities. Canada was looking forward to further elaboration of those elements, especially by
developing countries.
1.73 Turning to the issue of the development aspect and special and differential treatment, he noted
that Canada shared the view expressed by other delegations on the need for flexibility and creativity
in that regard. There were certain approaches used in other agreements that may be worth considering.
It was necessary to be innovative and to think ”out of the box” to find other more effective ways of
addressing these very important concerns. Moving to the US paper he noted that he shared the views
expressed by the Communities in this regard. By wa y of a preliminary comment he remarked that the
paper contained some very good ideas and lots of food for thought. Members’ discussions had made
clear that there were wide differences in Members’ administrations, both developed and developing
ones. One had seen large differences in administrative practices and degree of implementation. The
US proposal was trying to find a way to respond to that. Canada found the idea of trying to find a
tailor made approach extremely attractive and thought that it should examined. It may be a way toaddress the reality of differences of levels of implementation capacities of potential trade facilitation
commitments. With respect to the second point addressed by the US paper on trade-related technical
assistance and a possible consultative mechanism, his delegation thought that there were already some
initial steps, including in the WTO, but also at a much broader level . In this context, Canada noted theG/C/M/69
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work on the new WTO-OECD database, that may have a position in that regard . There had also been
recent efforts in the WCO and in APEC that were encouraging. It was an idea worth pursuing. The
last point raised in the US paper on the enforcem ent of commitments, was something Canada attached
great importance to, given the rule-based mandate of the WTO. There was room for creativity to take
into account the different levels of development, trying to be pragmatic in order to find a solution interms of legal operationality of specific commitments. In Canada's perspective, what really mattered
was to have commitments that could effectively be implemented by all Members. His delegation had
listened very carefully to the elaboration of the questions and concerns expressed by several
delegations in this context and thought that one could work to enhance the dialogue in order to find
concrete ways of addressing these legitimate concerns.
1.74 As for Japan's non-paper, he noted that it contained interesting elements. Canada saw it as
something that provided further reflection as to how the WTO fitted in the international context of
trade facilitation. What Members were discussing here was only one part, one aspect of the broader
concept of trade facilitation. Brazil had reminded delegations that there were other ways to promote
trade facilitation that Canada saw as complementary. Given the level of commitments in the
multinational system, it was important that all Member s worked in a very constructive way in all these
different fora to find ways to further facilitate trade. Canada had taken note of Brazil's comments and
was looking forward to further engaging on the more specific aspects of concerns or questions of
interest to all Members in the coming months, and most likely years. His delegation had also noted the
reminder by the WCO that there was also work going on in other WTO fora on customs valuation
such as the Technical Committee on Customs Valuation established under the WTO CustomsValuation Agreement.
1.75 With respect to what had been mentioned by several delegations in terms of technical
assistance, he noted that the issue of coordination of technical assistance was very important.
Malaysia had indicated its interest in sharing information on the cost of trade-related technicalassistance.  Canada was willing to engage in that discussion in that regard. As for Peru's suggestion
regarding studies to get a better sense of the different trade facilitation measures implemented by
Members, Canada noted that it was indeed important to get a sense of what Members did and of what
kind of commitments might help. There was already extensive literature in that regard, such as the
study by OECD, covering some 40 countries in term s of best practices. Despite that being just one
example, it provided a certain sense of the range of different measures existing with respect to
Articles V, VIII and X. There was also a paper by  the World Bank and APEC, which provided a
certain indication the type of existing measures.
1.76 The representative of the United States thanked Members for their responses to the US
submission and noted that, when preparing the paper, it had been the intention to stir up responses. He
hoped that this was just the start. With respect to the comments by Chile, he remarked that, as regardsMembers' opportunities to secure market access gains, one had heard a lot about costs. The Canadian
paper was certainly very welcome in making a contribution to the cost-benefit analysis Members had
made reference to over the course of the last year. It was important to remember that there were not
only costs with regard to implementation, but that in today's economy there were also costs related to
non-implementation. There were costs related to a country's neighbour not implementing certainmeasures. With regards to the point made by Malaysia, he would like to underscore what the EC had
replied. It was certainly not the intention of the US to trigger a debate on graduation. The purpose of
the US paper was to stimulate the discussion to move towards achieving implementation of the results
of prospective negotiations, and ultimately indeed towards achieving full integration by all Members
into the multilateral trading system.
1.76 Turning to the papers prepared by other delegations, he noted that the US joined others in
welcoming Japan's ambition with regard to the three pillars. The discussion about the relationship
between organisations was certainly a contribution to the discussions. He also welcomed Colombia'sG/C/M/69
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comments, which would hopefully trigger a working together by all Members on these issues, in order
to achieve implementation, and to perhaps learn lessons from other agreements and programmes.
Further creativity was required in this context. Wi th respect the question raised by several members
such as Singapore, Norway, Switzerland, Korea and Sri Lanka regarding further clarity on where the
United States would see the operation of dispute settlement, in terms of another mechanism in case ofcapacity-related cases of non-compliance, the US delegation did not have a ready-made answer. What
the US had wanted to do was put forward a question to which he would hope all Members had certain
ideas. The purpose had been to bring in all these ideas. The starting-point of the US delegation was to
ensure that the results of Members' work were within the sphere of WTO rights and obligations. In
conjunction with that, the US saw a fundamental role of dispute settlement, but that was merely a
starting-point. There was no denying of the challeng es Members faced here, but there were ideas one
could put forward to address the concerns that had been raised. The US was optimistic that Members
could achieve something to meet those needs, partic ularly with regards to something that was so much
related to ensuring that the benefits of market access were actually achieved. He would give a similar
response to the question raised by Singapore about establishing some sort of mechanism for ensuring
that technical assistance was monitored, that coordination was undertaken and that progress was
reviewed. The United States agreed that there should be great concern not to establish somethingbureaucratic. It would help if all Members could share their experiences in this respect in order to
advance this work, and establish something appropr iate that would work with efficiency, and help
achieve the overall objective of full implementation of the results of Members’ work. This was
something of benefit for all Members. The US hope d that, as its submission was further reviewed in
the coming weeks, there would be a further constructive exchange of views. His delegation waslooking to further discussions and consultations on this matter.
1.77 The representative of the Slovak Republic noted trade facilitation was an area where
Members could reach an interesting portion of further liberalisation and improved market access.
Commenting on the three submitted papers, he remarked that his observations would only bepreliminary in nature since his delegation had not had enough time to study these contributions more
thoroughly. The Slovak Republic saw Canada's submission as a particularly useful contribution to the
trade facilitation debate, especially as regards the linkages between trade facilitation principles,
measures, potential benefits and trade-related technical assistance as well as capacity building. The
Slovak delegation found the same range of problems regarding trade facilitation principles Canada
had mentioned in its paper. His delegation also agreed with Canada that the appropriate way for
achieving all trade facilitation concerns would be through multilateral provisions. Turning to theJapanese paper, he noted that the three pillar approach was an innovative one. The Slovak Republic
agreed that cooperation with other international organisations was very important in this field. With
respect to the US submission, he noted that his delegation considered it very useful, especially as
regards its three point approach to special and differential treatment. The Slovak Republic was also of
the view that different countries faced different constraints and had different needs. Therefore it wasimportant to take their particular needs and priorities into account. Trade facilitation was a multi-facet
phenomenon and a complex time and resource consuming issue, which was why his delegation
supported the idea of improved provisions relating to trade facilitation. The Slovak delegation would
like to propose a cooperation among all international organisations with a view to achieving greater
coherence in their trade facilitation activities.
1.78 The representative of Japan thanked all delegations for their comments and inputs and noted
that they would be taken back to Tokyo where they would be considered. This would not be the last
time Members would have this kind of communication, and Japan welcomed further comments and
inputs to its non-paper. Japan was considering to shape up this non-paper and to convert it to acontribution paper to the CTG meeting.  He would like to emphasise again the three pillars of the
action programme, rules setting and capacity building. In talking about them, one might have to talk
about multi-functionality as well. Multi-functionality of trade facilitation meant that all the
participants to the meeting had already realised thei r benefits of trade facilitation so that everybody,G/C/M/69
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government, private sector, developing countries, developed countries, exporters and importers, saw it
as a win-win situation. Japan would like to put forward this issue, to bridge the gap and was ready to
work together.
1.79 Turning to the comments received by some delegations such as Mauritius on infrastructure,
he noted that everybody understood that the infrastructure issue went beyond the WTO. Japan had no
intention to undermine the importance of infrastructure, but did not agree with the view that without
sufficient infrastructure nothing could be done. There were actually still a number of things that could
be done. By way of a metaphor, the Japanese representative remarked that maybe Members had
become too much accustomed with the European way of food, which commenced with the starter,
then moved to an amuse bouche before turning to the main course. Japanese food, on the other hand,
consisted of tiny dishes which were consumed at once, so that one could pick and eat right away.
1.80 As for the question of cost, Malaysia had pointed out that there were already non-binding
initiatives, such as the ones undertaken within AP EC. Here, the question had to raised about the cost
of these non-binding initiatives as well. One often forgot to ask about the cost of carrying out  trade
facilitation measures in voluntary initiatives. The cost difference between voluntary and non-voluntary or binding measures were only minor . In APEC, nobody would think about the costs of
pursuing trade facilitation, but simply set a goal and pursue it.
1.81 The Chairman informed delegations that he would not attempt to summarize the discussions
after every agenda item. Rather, he would offer some concluding remarks once the discussions on all
three items were completed.
1.82 The Council took note of the statements made.
II. TRADE FACILITATION NEEDS AND PRIORITIES OF MEMBERS,
PARTICULARLY OF DEVELOPING AND LEAST DEVELOPED COUNTRIES
2.1 The Chairman noted that he would  now like to turn to agenda item 2, trade facilitation needs and
priorities of Members, particularly of developing  and least developed ones. Delegations would recall
that when discussing this item last year, Members had agreed on the importance of receiving inputs from
delegations for a substantial advancement of the di scussions on this matter, especially from developing
and least developed ones. Several delegations had in formed the Council that th eir capitals were working
on identifying their needs, priorities and national experiences, and after the preparation of a
compendium by the Secretariat (G/C/W/393), and co ntributions by delegations in the form of oral
interventions, the Council then also received a wr itten communication on this matter by the delegation
of Chinese Taipei at the last meeting in December.
2.2 In discussing this national experience paper,  Members had underlined the usefulness of such
contributions and encouraged others to equally enri ch the discussions by submitting similar inputs. One
Member, the delegation of New Zealand, had followed that up and prepared a paper on their experience,
especially with respect to the im plementation of several principles contained in proposals regarding a
possible improvement and clarification of GATT Articles VIII and X (G/C/W/449).
2.3 The representative of New Zealand introduce her delegation's submission, noting that it was a
national experience paper. New Zealand appreciated that a number of national experience papers had
been contributed earlier in the WTO's discussions on trade facilitation. However, at the present stage,
and after viewing the Secretariat's excellent compilation paper, New Zealand had thought it might beuseful to go back and share its national experience in the context of some of the proposals that had
been tabled. Hopefully, when reading through the paper, Members would get the impression that a
number of these proposals were very doable, and not as intimidating as they might seem at firstG/C/M/69
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glance. The measures mentioned in the paper had worked very well for New Zealand. However, the
intention was not to suggest that the specific measures carried out in New Zealand would work
equally well for all WTO Members, but to provide an example of specific things that could be done at
the national level in implementing general trade facilitation principles and standards that might be
adopted at the multilateral level. In the paper, New Zealand had tried to identify real life activities itsauthorities were undertaking to facilitate trade that were relevant to the proposals that had been made
in the CTG process. New Zealand wanted to highlight what sort of actions could be taken to
implement some of the proposed principles and rules, and the benefits of doing so. For her delegation,
the benefits had been real, and often at a lower cost than first anticipated. New Zealand also hoped
that its experience might be of interest to a number of countries which had small Customs authorities
as well. It even seemed that some of the measures had benefited New Zealand that much precisel y
because  of that small size issue.
2.4 New Zealand also hoped that in sharing specific examples of what it had done would help
Members to think more clearly about what needs and priorities might exist under new trade
facilitation disciplines, and to identify areas where technical assistance was going to be necessary in
order to align real world implementation ability with the proposals on the table. Her delegation hadtried to look at the benefits of the actions that had been taken from the perspective of both sides of the
equation – government authorities and the traders themselves. And when saying traders, that included
both the own exporters and those from outside New Zealand importing into New Zealand's market. A
few examples of measures New Zealand had carried out included the implementation of better
consultation between the authorities and traders and to allow for feedback mechanisms, establishenquiry points to help direct enquiries to a customs service and to facilitate a quick answer to those
enquiries. The paper also listed measures in the areas such as risk-assessment and advanced control
techniques or automation.
2.5 Nobody reading the paper should think that New Zealand had already implemented each and
every proposal on the table. That was not the case. New Zealand had simply chosen to focus on those
measures where it had an experience to share. Some might say that New Zealand had taken these
measures and received the benefits independent of whether there were any WTO rules on trade
facilitation. That was true. However, it did not discount the further benefits that could be achieved
through the development of new rules on trade facilitation at the WTO. Such rules would enhance
legal predictability, would allow measures to be  more widely adopted, would enhance understanding
of what sort of measures worked best, they would provide a further reference point for investment andtechnical assistance resources and would facilitate to ensure the necessary political would to carry out
these measures. Even though New Zealand had come a long way in improving its approach to trade
facilitation over recent years, it did not see that in itself as doing full justice to the issue of trade
facilitation at a multilateral level.
2.6 The representative of Australia noted that the paper by New Zealand provided a very useful
practical example of what administrations were capable of doing on their own. Australia very much
mirrored the work New Zealand was doing in terms of the process they had put in place for customs
reform and modernisation, as well as regarding link ages with other authoritie s both within their own
economy and outside the economy within APEC, the Pacific region and also with the WCO. The
issues addressed in the  concluding remarks in paragraph 33 of the New Zealand paper, were very
much standard practice.  One would find these issues also in Australia's administration, as in most
other more modernised customs administrations. Australia would like to see them reflected in a
practical sense, in a trade facilitation process within the WTO. They were issues his delegation had
been working on in the WCO together with New Z ealand and with other administrations. He did not
think there was anything too startling in those measures. The paper encouraged other Members of
reflect on some of the procedures New Zealand had put into place and to see how practical they were
in terms of implementing them in their own administration. Australia would certainly like to echo the
remarks from New Zealand. The measures mentioned in their paper were illustrative of the ones hisG/C/M/69
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delegation was recommending and assisting with in terms of implementation throughout the Asia
Pacific region.
2.7 The representative of Singapore noted that the paper by New Zealand was very
comprehensive and evidenced the good work New Zealand had done in the area of trade facilitation.
As in the case of Australia, the documents also mirrored very much of Singapore's experience.
Singapore also had a small customs infrastructure. For a small island such as Singapore, trade was its
life blood. Her delegation therefore had great interest in modernising and streamlining customs
procedures. Singapore shared Australia's remarks as well as the concluding remarks in the New
Zealand paper on the benefits of simplifying procedures.
2.8 The representative of Paraguay first referred to the submissions by Canada, the US and Japan
under agenda item one, since his delegation had not taken part in first part of the discussion. Paraguay
would be studying these papers in depth and comment on them in the near future. Paraguay
appreciated the interventions by the WCO and OECD and the paper prepared by New Zealand. His
delegation was happy to see that work had come along very well in the area of trade facilitation and
regarding the customs system. One issue of capital importance to his delegation, which was notaddressed in the New Zealand paper, was GATT Article V. The Secretariat had prepared two
compilations which dealt with this issue, G/C/W/393 and G/C/W/343, for which he would like to
express his gratitude. Although these documents had already been debated in earlier CTG sessions,
his delegation would like to continue dealing with this topic. Trade facilitation was very important for
Paraguay,  especially the Doha mandate to clarify and improve GATT Articles V, VIII and X. Thatwas very important for a number of developing countries due to their geographic location. As a land-
locked country, is was crucial to see improvements in trade facilitation, in to integrate rapidly in the
multilateral trade system to enjoy better development.  A number of references had been made to
infrastructure. In this context, he would like to reiterate that developing countries without any outlet to
the sea run into a number of problems regarding coast to coast shipment, and when one had to shipgoods going across a number of borders. Here it would be good to look for simplifications of customs
formalities. This had already been raised in the fr amework of this discussion. Furthermore, he would
like to use this session to inform Members that Paraguay was currently hosting a sub-regional meeting
of Latin American countries which were land-locked. This was a preparatory meeting for an
international ministerial conference on land-locked developing countries to be held in Almaty in
Kazakhstan from 25-29 August 2003 with the support from a donor organisation, which would be
looking at matters of cooperation in transport. This conference would be held on the basis of theMillennium Declaration and the Resolution 52 of the General Assembly of the United Nations. In this
context, he would like to call upon the Council to  have the possibility, within the framework of aid
and cooperation that has been made available by international organisations, as Members had just
heard from the representatives of the WCO and th e OECD, of having some factual information on
what the WTO was doing in order to facilitate the tr ade, especially in the area of transit, in the
framework of that international ministerial conference.
2.9 The representative of Brazil noted that the interesting paper on New Zealand's national
experience in trade facilitation went a long way in collaborating the view Brazil had long held that
there was enormous scope for Members' to do a great deal of trade facilitation work on an
autonomous basis. The last symposium on trade facilitation had made clear that the provision of
resources and technical cooperation had allowed a number of developing countries to greatly enhance
their own internal procedures. Trade facilitation ha d been considered a "win-win" situation by the
proponents. Brazil agreed with that assessment. What his delegation did not understand was why awin-win situation required binding rules. It was almost like situation where one would get a letter
from the tax department saying that one was entitled to a rebate, but that if one did not come and pick
up the cheque, one would be put in jail. If something was good for everybody, why was it necessary
to be coerced into doing something? The issue befo re Members under this item was the identificationG/C/M/69
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of needs and priorities. This was a very daunting task for any delegation. The conclusion Brazil had
arrived at, was that from its national experience, Brazil was not yet at the stage where the kind of
proposals being discussed on Articles V, VIII and X were really the top priorities in terms of trade
facilitation. There were other issues which could be much more productive for the facilitation of trade,
such as combating high tariff protection for some products,  massive levels of domestic support andexport subsidies displacing Brazil's exports from third markets or the abusive recourse to trade
remedies. These were the issues affecting Brazil most closely. Perhaps when one had solved these
issues Members would be able to dedicate a greater  amount of attention to these procedural aspects of
trade facilitation . Fortunately, Members were in a context of a single undertaking and one would be
able to address everybody's interests and priorities in a balanced fashion. As a last point, he would
like to make brief comment on the latest intervention by his Canadian colleague in which he had made
reference to a number of issues Members had already identified as also deserving some kind ofattention when discussing trade facilitation. He was a bit concerned about the Canadian
representative's remarks that one could address them "over the coming years". When thinking that the
harmonization of rules of origin was already five and a half years behind schedule, and one thought of
a few more years, that would give cause for concern.
2.10 The representative of Korea noted that his intervention would be preliminary in nature. The
paper by New Zealand contributed to further understanding the feasibility and the benefits of
implementing various elements of trade facilita tion with regard to GATT Articles VIII and X,
especially since it spelled out their detailed mechanism and operation system for standardisation,
simplification and modernisation. His delegation shar ed the view that the development of a robust
trade facilitation framework had the ability to reduce unnecessary transaction costs and to benefit all
Members' economies. The concluding part of the New Zealand paper adequately listed considerable
benefits obtained through the trade facilitation process. Korea was certain that trade facilitation would
contribute to world economic growth, expanding  world trade and investment by enhancing
transparency and predictability. It was necessary for all member countries to share information andshare their national experience for the further development of the discussion on relevant aspects of
trade facilitation.
2.11 The representative of the European Communities expressed his appreciation of the New
Zealand paper which was a useful addition that allowed all Members to understand better and in a
very clear and transparent manner some of the substantive issues they were discussing in the Trade
Facilitation Work Programme. The EC was particularly interested in the argument New Zealand madeon several occasions in the paper that they had managed to adopt an approach of least trade
restrictiveness without compromising important controls, and that they had been able to facilitate
trade without compromising on security. That was a very useful message percolating through the
paper, and obviously the basis for New Zealand's own policies. The European Communities
welcomed that. The second thing the EC found particularly useful in the New Zealand paper was itsdescription of New Zealand's domestic consultative mechanisms with business. This was a really
fundamental element in Members' work. Having some kind of commitment to work with the business
community in the development, application and modification of customs and other procedures was
one of the more important things one could do in  any future commitment. The EC welcomed the
description of New Zealand's own way of doing th is. The EC delegation agreed with New Zealand
that each Member had to find their own recipe, their own solution to this, but that the basic principle
of consultation with the broad cross-section of the affected trading communities was important. It was
interesting to learn that according to New Zealand's experience, that was particularly important for
small and medium size enterprises. That was also of special interest in the light of the fact that there
had been some scepticism at an earlier meeting as to whether trade facilitation measures in the WTOwould actually benefit SME's, or whether they only benefitted multinationals. It seems from New
Zealand's experience that the SME community had obtained particular benefits. In many respects New
Zealand's systems were more advanced than those currently operating in the EC. The Communities
could therefore learn from many of the technique s and procedures put in place by New Zealand,G/C/M/69
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particularly as the EC was to enlarge its membership and had to find greater compatibility between
the customs systems of a 25-strong membership. That was a challenge for the EU as well, which the
Communities were determined to take. If there was the prospect of some WTO commitments, that
would provide greater guarantees that changes put in place were there to stay.
2.12 The representative of Canada thanked New Zealand for sharing its practical experience under
both Articles VIII and X. He had noted the absence of references to Article V, but given that New
Zealand was a "sea-locked" country, one could imagine that the challenges raised by transit were very
different from those encountered by many other c ountries. In reading the New Zealand paper, Canada
had been struck, although not surprised, by the basic common sense approach that New Zealand had
adopted to trade facilitation. It was clearly the viewpoint of a small customs service that had decided
to be very client focussed and to operate in a c onscious environment. This was an interesting element
of reflection for several other WTO members in that regard. There were several practices that had
particularly struck Canada, such as those developed in terms of publication and availability of
information. New Zealand was using a variety of means like electronic ones via the web-site or paper-
based ones, or by word of mouth via the electronic media. Canada was also struck by their extensive
use of consultative mechanisms, especially their proactive practice of going out to meet with tradersin their national communities. This was an interes ting practice. Another reference his delegation had
found interesting, was that to a national enquiry point. That was a very practical, result-focussed
emphasis on trade facilitation service delivery. Another point Canada had particularly noted was the
strong support for the use of existing internationa l standards in terms of data and documentation
requirements and procedures. A further noteworthy aspect was New Zealand's active bilateral linkswith a variety of other customs authorities, including the one of Canada. This was probably one area
where Members should have had more discussions. Much more could had been said on this matter,
since there were a lot of activities taking place which were not always coming to the light of day,
including in the area of technical assistance and capacity building, but also in broader areas such as
consultation and cooperation ventures. Canada would like to thank New Zealand for recognising thataspect. As a final remark on New Zealand's submission, he wanted to note that that this type of paper
was extremely useful, and that his delegation was looking forward to other contributions, especially
from developing countries. Having also the nation al experiences of other countries would enhance
Members discussions and their understanding of the very practical and concrete concerns that had
been expressed in earlier interventions.
2.13 Turning to the comments made by Brazil, the Canadian representative noted that he could
reassure him that his earlier reference to "years" was only been one to the fact he hoped to have as
much pleasure with future Brazilian colleagues as he had had with the current ones, both in the work
on trade facilitation and on other issues. It had simply been an expression of satisfaction about the
degree of cooperation and the quality of the discussions that they had exchanged. With respect to the
issue of binding rules, reference had been made to the fact that binding rules could be seen or used asa threat to impose certain things on one's partners. This reminded him of the discussions he had been
involved in a long time ago when, as a high school student, he had advocated the issue of free trade
negotiations with the USA. At that time, people were questioning whether there was a need for
binding rules in this area. But now, almost 20 years after, both sides of the border saw the benefits of
having binding rules, and it had contributed to stimulate even further the cooperation that had existedfor many decades between the USA and Canada. Developing binding rules had further stimulated one
of the most intense bilateral commercial relations that existed in the world. It would not always go in
a very smooth way, but having binding rules had helped to increase self-control and to manage
differences in a very civilised, practical and effective way. Given that all Members shared the
commitment to the multilateral trading system, all the efforts that were currently being undertaken
autonomously because of individual self-interest in trade facilitation could only be further promoted
by binding commitments on trade facilitation. He hoped that Members could see the notion of having
commitments beyond the binding element more in terms of a way to manage the intensification of
trade relations rather than as a tool of imposing one's will upon other trading partners.G/C/M/69
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2.14 The representative of Pakistan noted that his delegation would wish to mirror the
achievements attained by New Zealand. There were se veral features worth noting, some of which had
already been pointed out. He would just like to refe r to one aspect mentioned in paragraph 30 of the
paper, where New Zealand noted that over a 4-year  period with a new computer system, processing
time had been reduced from 10 days to an average of 12 minutes. That was a great achievement. He
noted that there was a link to technical assistance. In this regard, what needed to be avoided was to
have an overlap Speaking from Pakistan's experience with such assistance he reported that Pakistan
had introduced the single administrative document to replace the many documents used previously.
Then, donors had come and told Pakistan to make certain changes, which had taken another year.
After that, just when Pakistan had thought they were finally there, there had been an ESCAP seminar
saying that there was another way to follow. Then UNCTAD got engaged as well.  Now, about three
years later, Pakistan was still in the process of implementation. It was important to avoid these sort of
scenarios.
2.15 Another thing Pakistan had experienced in the area of technical assistance was that experts
would come, write reports and then leave those re ports, with no way to implement them. Pakistan
would like to see that if there was some technical assistance or capacity building, there should be a
kind of follow-up. It was necessary to have adequate time for actually implementing the suggested
measures. Another aspect was that one sometimes thought that technical assistance was for free, but
when one actually looked into it, it was not quite like that. Pakistan was, for instance, trying to replace
its computer system and bring it to a PC basis, and had been told that even UNCTAD's free systemwas going to cost them at least $2 million. Finally, on the point made by Brazil regarding binding
rules, he noted that Pakistan agreed with Brazil th at Members had to carefully look into that further.
The WCO, for example, had many recommendations and conventions without any panel action, and
they had been very successful. Their Harmonised System, for instance, was now being used by about
98 % of the world, and there were no penalties. People would see the benefits of the system andtherefore apply it. He had taken note of what Canada had just said about the benefits of binding rules,
but on the other hand, one could see that Canada and the United States were currently quite
intensively engaged in DS procedures, and Pakistan did not wish to see any repetition of that with
other Members. Perhaps a way to proceed would be to include trade facilitation in the Trade Policy
Review Mechanism. That could be a way to see whether a country had implemented a trade
facilitation measure.
2.16 The representative of South Africa noted that the paper by New Zealand practically
demonstrated the manner in which trade facilitation principles could actually be applied at the
national level . He would also like to comment on statements made by some of the previous speakers
under agenda item 1, specifically on a statement made by Japan in respect of the need at the
international level to build a coherent framework between international organizations that focused onspecific aspects of trade facilitation. In this context, it would be appropriate to mention an initiative
underway at the WCO in respect of technical assist ance with a view to build capacity. The WCO and
its members had embarked on a fully comprehensive and extensive process to identify the needs of
the respective members. This exercise was undertaken with the aim to build a comprehensive capacity
building strategy for customs administrations. Hopefully, by the time of the next MinisterialConference in September, this exercise would be  completed, and the WCO would be able to make a
contribution to Members' discussions on this aspect of trade facilitation. It was necessary to clearly
demarcate areas of responsibility, and to establish clear linkages at the international level in the
process of working towards the objective of facilitating trade.
2.17 The representative of Colombia noted that the paper presented by New Zealand, which shared
its experience in developing projects and programmes to implement some of the proposals put
forward by various countries and compiled by the Secretariat, was very interesting. In Colombia's
view, the methodology  used by New Zealand to share detailed information with Members fromG/C/M/69
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various initiatives should enable them to gauge the scope and the benefits that could be derived from a
coordinated working relationship between the various economic and commercial operators, both
public and private, involved in international trade.  It would also help Members single out initiatives
which would enable them to make progress in resolving recurrent problems concerning the entry,
movement and clearance of goods. The Colombian delegation would like to know New Zealandwould be in a position to provide more informa tion on the costs and the implementation times for
projects of particular interest for some countries. For instance, Colombia would be interested in
projects regarding consultation mechanisms, publication of documents and information centres and
projects to assist SMEs. That sort of information would be very useful, as it would serve to support
the identification process of needs in technical assistance and capacity building.
2.18 The representative of Costa Rica noted that contributions like the one by New Zealand clearly
demonstrated the feasibility of the measures that had been proposed by Members in the CTG. Costa
Rica had presented its national experiences in the past and shared the presented approach. His
delegation could identify many of the elements mentioned in the New Zealand's national experience
paper such as greater transparency and predictability through publication and availability of
information, accessibility, the promotion of publicat ion methods and contact points, or the internet,
where users could access national legislation in real time, by which Costa Rica could guarantee the
application of certain decisions in a given time, and eliminate to the maximum any uncertainty vis-à-
vis those discretionary methods. This was also the case with respect to the presentation before a single
window, a mechanism which allowed a qualitative and a quantitative enhancement of export and
import operations. Automated services and electronic services, which enhanced export and importoperations in order to promote rapid dispatch operations, illustrated the possibilities of trade
facilitation. It showed how the elements that members had been discussing were of benefit to
economies such as that of New Zealand or Costa Rica through the implementation of such methods.
And this was the case even though these two economies were not necessarily the same level of
development.
2.19 The representative of the WCO noted that, as the delegate of South Africa had pointed out,
the WCO High-Level Working Group had been developing a Customs Capacity Building Strategy. As
a part of this effort, the WCO had conducted a survey among its Members, 161 Customs
administrations, to establish an inventory of key capacity building needs, barriers and challenges.
While the WCO had just collected the survey results  and was  still complementing them with its own
research, he would like to make a brief explanation of some of the preliminary findings for effectivecapacity building in Customs. The findings rev ealed that capacity building was a comprehensive
process addressing all aspects of Customs administration. It could not be addressed effectively on an
issue-by-issue basis. It included, but was not limite d to, training and technical assistance.  Quick fix
approaches or “one-size-fits-all” solutions often did not work. As a prerequisite of sustainable
capacity building, high level political will and stakeholder support were essential. One had to focus onpractical and sustainable outcomes. In this connecti on, it was important to learn lessons from previous
capacity building efforts, especially from those that did not meet initial expectations. The WCO had
learned that donor expectations were often too high or set a too short timeframe. Concerning expected
key players’ roles, the WCO had found that sustained political will and commitment, ownership and
participation of Customs personnel, as well as stakeholder support and participation were vital. Acoherent approach among donors and international organizations was also indispensable in this
respect. Another essential element was adequate resources, both in human and in financial terms.
Regarding infrastructure, they had learned that information technology and automation were helpful,
but did not necessarily play a major role in capacity building. What was required was a step-by-step
introduction of automation that would gradually replace manual systems, but simplification of manualsystems was a precondition and most important. Turning to planning and management, the collection
of data and management information would provide a basis for sound planning and change in
management. These were some of preliminary findings of the survey. As soon as it had been finalized,G/C/M/69
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the WCO would be happy to circulate the outcome as an integral part of the Customs Capacity
Building Strategy among WTO Members as their contribution to the Doha Development Agenda.
2.20 The Council took note of the statements made.
III. TRADE FACILITATION: TECHNICAL ASSISTANCE AND CAPACITY BUILDING
3.1 The Chairman noted that with respect to the third agenda item, technical assistance and capacity
building, Members had had a rather intense exchange in the course of their  previous four sessions, in
which delegations had highlighted the importance they attach to this subject. Several donors had briefed
the Council on their respective activities in this ar ea. One of them, the European Communities, had
again prepared a paper on their technical assistan ce and capacity building initiatives for the present
meeting, which was an update of their previous communication on this subj ect (G/C/W/442./Rev.1).
3.2 The representative of the European Communities introduced the EC paper on technical
assistance and capacity building, noting that it was a revised version of an earlier paper the
Communities had circulated at a previous Council meeting. The new version included a list of ECtechnical assistance programming as well as much more information on programmes provided by
different EC member states. In addition, the do cument also contained more information the
Communities had collected on EC programmes with the ACP countries. The paper therefore now
contained a fairly comprehensive list of all recent and forthcoming EC aid programmes, and would
hopefully demonstrate that his delegation was making a real effort to integrate trade facilitation intothe EC development aid programmes for the next fi ve years, in line with the commitments taken at
Doha to do. It was because of the momentum created by the Doha Declaration, and due to the
prospects of future negotiations, that it had been possible to argue to give trade facilitation a much
more prominent position in EC development aid. One could also see the same phenomena in other
countries and in a number of other international organizations. It seemed to be a direct repercussionof the Doha work programme that the World Cu stoms Organization and the World Bank had both
changed, upgraded and reorganized their own technical assistance divisions and programmes on trade
facilitation in response to the work Members were doing in this area, and the expectation that there
would be new things to do after Cancun. The delegate from the Philippines had flagged the
importance of infrastructure, and rightly noted that technical assistance should not simply be about
training officials, but also about infrastructure. The EC paper did indicate that in many cases,
including one in the Philippines. The EC was providing aid of an infrastructural nature, either throughdevelopment programmes or via concessionary loans by the European Investment Bank. It illustrated
that the scope of development aid in this area was much broader than the scope of any future WTO
provisions and that what the EC provided in its aid programmes was broader than the scope of
Members’ work as negotiators in the WTO. Turning to the question raised by Malaysia on the EC
experience in providing technical assistance in the field of trade facilitation, he noted that the amountof EC assistance had so far been limited and given largely to the countries in the process of accession
to the European Union. The bulk of EC aid programmes in the recent past had been devoted to the
broader Europe. It was a consequence of the WTO work on the Doha Agenda that now, for the first
time, the EC had mainstreamed trade facilitation in to its aid programmes. This had not been the case
five or ten years ago.
3.3 As for the EC’s experience with its programmes, it had been mixed so far. Technical
assistance was a little bit like advertising, in the sense that fifty percent of the budget was often
wasted but one never knew which fifty percent. This had unfortunately often been the case with
technical assistance. There were six lessons the Communities had learnt, which had been very usefulin the provision of technical assistance in this field. One was that longer term management
reengineering and training was much more useful than providing hardware or computers. When
providing hardware, there was a very strong tendency for it to get stolen, and that there was leakage,G/C/M/69
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which was not the case when providing more long-term assistance helping to improve the
management capacities of a customs administration or other government agencies. The EC had also
found that one could do a great deal in terms of supporting the modernization or simplification of
customs and trade procedures with or without auto mation. Automation was the very last stage in any
process of reform and a lot could be done even in the absence of automation. This was important toremember given the emphasis put by many delegations on the cost of automation. One could do an
awful lot and could introduce many improvements without going to the stage of automation.
3.4 The second lesson related to the importance of more cooperation between different donors
and recipients. Many delegations such as the United States, the EC and others had made proposals in
different submissions that would try to reinforce future cooperation between different multilateral and
bilateral donors and recipients. The third lesson was that the cost of aid and of programming was notdirectly related to the developmental level of the recipient country, but to other factors. It was often
much easier and cheaper to provide useful aid to streamline and simplify customs to a small
developing country with a fairly rudimentary trading profile and a limited number of border posts or
ports. That was much more easy to do than carrying out a programme with a large developing country
with much more sophisticated needs and a much broader range of trading profiles and much moreinfrastructure. The amount of aid needed by a country was not directly related to its level of
development. Paradoxically, some poorer developing countries actually needed less in terms of the
amount of the support. The fourth issue the EC had found very useful was to try to focus a greater
degree of assistance at the regional as opposed to the purely national level. That was for reasons of
economies of scale in order to help greater integration within particular sub-regions around the globe.It was very much in that perspective that his delegation had put, and would continue to put, a lot of its
efforts in the next five years into technical assistance for different ACP sub-regions, trying to create
really functioning regional markets within those regions such as customs unions, or regional transit
systems. Regional integration was a main objective of that kind of programming.
3.5 The fifth lesson the EC had learnt was that trade facilitation was not necessarily the top
priority for developing country recipients. All EC programmes were demand-driven. The EC was not
striving to impose particular projects on a partner country. It was very much at the demand of the
recipient country in question. What the Communities typically would do was to go to that country, to
inform about the possible budget and discuss the country’s priorities in the trade area. Although
customs and trade facilitation were in any case a priority, there were some cases, including two of the
countries who had spoken about the importance of technical assistance, were the recipients had toldthe Communities that this was not a top priority for them. Their priority had been support for
improving their SPS and TBT frameworks. This was understandable. He was pointing that out
because there was in some cases the possibility of assistance by the EC, which was not taken up. The
last point he wished to make, which the EC had f ound important, was the risk of policy reversal. One
problem with development aid was that if a government changed half way through a programme, ifMinisters changed or were reorganized, decisions could be reversed and that could threaten the future
of a programme. That was one of the reasons why the Communities believed that technical assistance
was more likely to be useful and used to better effect and actually implemented if it was provided as
part of an approach to help a country implement its international commitments. As a number of
delegations had previously noted, any commitments that Members might develop in the WTO couldconstitute a kind of benchmark or reference point against which technical assistance could be
designed and targeted. That was a very good concept. The EC’s own experience with countries in the
process of accession to the European Community was that it had been at the point where those
countries had taken on legal commitments to carry out customs reform and simplification as part of
their process of accession that the implementation of assistance, that the aid had actually started towork, because there had been a very strong political and legal commitment on the part of recipient
countries to modify their legislation and their procedures and to improve and upgrade their systems.
Aid had been much more valuable and of better use then. This led back to the point previously madeG/C/M/69
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by a number of delegations that there was potentially a beneficial relationship between the
construction of some WTO commitments in this area and the supply of technical assistance.
3.6 The representative of New Zealand commented on the concept of making technical assistance
sustainable. This was something of particular interest and also being discussed in other WTO fora.
There were two particular angles to that. It was in teresting to think about what sort of assistance and
what sort of programmes would have long term and sustainable effects on recipients. The EC had
highlighted that training of staff and assistance with management and structural issues could be
particularly important in ensuring that the impact of the assistance was sustainable and carried
through staff and management changes within organizations. The point on sustainability was also
relevant in looking at the issue of avoiding overlap and duplication in technical assistance and in
thinking about how resources could be better focussed, so that they could be used more efficientlyover a longer period of time without duplicating programmes. Pakistan had provided an excellent
example when talking about his country's experience with receiving a number of different and
sometimes conflicting advice from various organizations with respect to a computer system they were
implementing. Looking at ways of coordinating and focussing technical assistance might also have a
side benefit of making it more sustainable in the long-term. That was an important thing to consider
with regard to technical assistance.
3.7 The representative of Thailand noted that he had not made an intervention the other day on
agenda item no 1 since he would like to put his comments on record under agenda item no.3 dealing
with technical assistance and capacity building. Th ailand noted with satisfaction that the discussion on
trade facilitation had made a lot of progress. Many Members had submitted their proposals and made
contributions to the discussions. While Thailand wanted to join others in thanking Canada, US, Japan
and New Zealand for their efforts, the Thai delegation was of the view that many developing countries
were still reluctant to enter into negotiations on trade facilitation as suggested by the proponents. In
Thailand's view that was due to the fact that developing countries were not in a position to assumeadditional commitments while they were still striving to fulfill their WTO obligations. Trade
facilitation measures required indeed a large amount of resources, time and effort, and were beyond
the capacity of developing countries to implement. For instance, it had taken Thailand almost ten
years, millions of bath  and man-hours of systems analysts to establish electronic data interchange
systems. Measures such as the use of risk management techniques, provision of trade information
through electronic means, and the establishment of single window facilities could not be made
possible without adequate computer and communication infrastructure.  That was very costly todeveloping countries. Many WTO Members had i ndicated their willingness to assist developing
country members to overcome their resource limitations and other constraints in connection with the
implementation of trade facilitation measures. Thailand welcomed these efforts, as they did not only
help improve the mutual understanding among Members at different levels of development, but also
create a supportive framework for future negotiations. However, his delegation would like to reiteratethat technical assistance and capacity building should not be limited to advisory services, assistance of
experts and organization of seminars, training programmes and the like. Instead, developed countries
should consider making available the necessary infrastructure and regional trade facilitation
networking that were essential for the long-term development of trade facilitation.
3.8 The representative of Norway noted that the EC paper underlined the importance of avoiding
duplication of work. Norway also provided technica l cooperation that was tailor-made for the country
needing it.  Such assistance had to be demand-driven. It should not come from a donor country telling
someone else how to do something. This was Norway's experience from many years of providing
technical assistance. Not addressing the actual need could be a great problem. Norway's experiencewas that technical assistance required a lot of time and dialogue between the partners, in order to
make the project successful. She had noted from the previous debate that technical assistance should
not only include assistance on trade facilitation in its narrow interpretation, but should also contribute
to so-called hard infrastructure. Some had noted that very little could be achieved concerning tradeG/C/M/69
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facilitation with all such structures in place. Norway agreed that infrastructure development
contributed to supporting an  improved trade facilitation regime, but did not necessarily see it as a pre-
condition. Improved trade facilitation measures would also contribute to development. These two
processes would go hand in hand. Norway had provided support a number of projects in this field to
other organizations such as UNCTAD, IMO, ILO or the World Bank and would continue to do so in
the future.
3.9 The representative of the United States expressed his appreciation of the EC submission. He
had been particularly struck by the presentation on the six lessons learnt with respect to technical
assistance, bearing in mind some of the questions the US delegation had previously put forward  to
trigger thinking in this area, and to ensure sustai nability of those efforts. The EC outline in terms of
those lessons would fit well with the thinking all Members had to do, both as donors and as recipients,in order to meet the challenge related to implemen tation and advancement in this area. Turning to the
question of infrastructure, he remarked that his delegation had taken note of the statement by
Thailand. The Unites States were indeed looking into this. Like Norway, the United States provided
significant support, ranging from World Bank efforts to projects by the US Department of
Transportation. The US was looking into it, and would likely make some sort of submission on thismatter. He was aware of numerous infrastructure projects relating to Thailand, as well as to many
other countries in this area. Infrastructure clearly was critical and important, but it was also one
element and should not stand as a precondition, given the efforts that were taking place. The United
States would attempt to provide further information with regard to that question.
3.10 The representative of Australia commented on the EC presentation that it was always useful
to get a practical insight into programmes that were  actually in place and not just theoretical. The EC
experience with their projects was very valuable. When presenting its paper to the Council in
December, Australia had highlighted the importance of capacity building as an integral part of trade
facilitation measures. His delegation had been through an experience in the WCO, where there was anincreasing momentum to develop a more strategic approach to capacity building. There had been
some high level meetings engaging a number of de veloping and developed administrations in looking
at the issues involved and developing a strategic plan. He was hopeful that this process would be
endorsed in late June at the Council sessions of  the World Customs Organization where 161 Directors
General would endorse this package. That package was very much awaited by donors. It was a
consolidated package that would hopefully be reflected as appropriate in the deliberations of Cancun.
It provided a framework that could be implemented on a case-by-case basis in a flexible manner. Thispackage certainly looked at the longer term. He agreed with the EC that the failure of capacity
building was all too often related to the lack of a longer term commitment both by donors and
recipients. From Australia's own perspective, Australia, New Zealand and the South Pacific Forum
had had a programme of technical assistance and capacity building among specific customs
administrations for some time which his delegation had tried to turn into a strategic process. Australiahad developed an action plan that had been discussed with other South Pacific administrations. Those
that required specific forms of technical assistance had developed their own individual action plans
based on their broader action plan. They would report progress to a small secretariat that had been
established, which was currently headed by an Australian but also staffed by representatives from
specific customs administrations.
3.11 Australia had also been working within the APEC process, where there had been a number of
trade related technical assistance projects over the years. Australia had played a role as a shepherd or
mentor in projects in Indonesia, Brunei Darusalaam, Vietnam and other developing administrations.
Recently at the senior officials meeting in late February in Thailand there had been a number ofreports on progress by several administrations on technical aspects of trade facilitation. One of the
outcomes from the WCO strategic process that he had alluded to was to look at a regional process for
that. A regional outlook was very often more constructive than looking at things on a national basis.
There was a reasonable prospect within the APEC environment to look at a dedicated capacityG/C/M/69
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building action plan that could reflect the WCO strategic outlook. This would hopefully be considered
by senior officials and perhaps be put on the leaders' agenda in September.
3.12 Turning to the lessons identified by the European Communities he noted that there was a lot
of synergy between them, such as between the need for commitment both within customs
administrations and from the political process. Th ere was also a need for commitment by staff. Very
often, if staff was alienated from the modernization process capacity-building would fail. There
needed to be a degree of constructive engagement with stakeholders both from other government
agencies, the private sector and also internationally. The sort of engagement that the World Bank, the
International Monetary Fund and others had indica ted in terms of the WCO strategic framework was
very reassuring. There had also been constructive work with the International Chamber of Commerce
and other international industry associations who were keen on a broad-based capacity-buildingprocess for customs reform and modernization. One of the other issues that had been identified in that
workshop was the need for mentors. There was a role for developed administrations to work as
sponsors, shepherds and in other ways trying to assist developing and least-developed administrations
to improve their trade-facilitation and other procedures. One of the issues that his delegation had
identified as an important facet of this customs reform and modernization was the ability to deliver
increased revenues within customs administrations which was a considerable focus for a number of
developing economies. Marketing the approach was very important. It sounded like a relatively trivial
exercise but the need for advertising and for marke ting this approach within one's own government in
order to raise the profile of customs was an all too often neglected facet of this process.
3.13 Another issue Australia had as a priority in the WCO was an integrity programme, addressing
the need to eliminate corruption in customs administrations. Very often capacity building projects had
failed. There had been some academic studies into this process and one of the reasons for failure was
systemic corruption both in a customs administration but also, more widely, in society. There was a
need for constructive partnerships both within governments and with the private sector. There wasalso a need to raise the awareness of the necessity of this sort of process within a government, of
engaging the media in this process. One of the other aspects his delegation had been focussing on
increasingly was to look at the role of academic institutions in this process. It was necessary to put
customs training on an academic footing and to look at tertiary level courses that were available for
management and customs officers. One of the reasons for looking at a coherent programme for
capacity building was to raise the level of partic ipation in the multilateral trade context. The
Australian paper submitted in December had clearly made the link between capacity building andWTO rules.  Australia was looking at providing more harmonized and standardized approaches to a
consistent implementation of trade facilitation. His delegation wanted to encourage support and
compliance from the trade community for efficient an d effective border controls. It was important to
look at providing a necessary political impetus for national efforts to simplify and modernize trade
procedures and to carry out those domestic reforms that otherwise might not take place. The benefits
of strengthened rules and monitoring mechanisms that Members had been discussing the day before
would certainly improve transparency and predicta bility for international traders and help them
compete on a non-discriminatory basis. Australia l ooked forward to mainta ining its involvement in
the Council and to a higher level degree of engagement in the run-up to Cancun. As a last point he
noted that the previous discussion had highlighted the need for a great level of engagement betweenthe WTO and the WCO. There was perhaps a lack of information about the processes that the WCO
had in place. A lot of the issues delegations had raised such as the need for increased customs
cooperation, or for exchange of information in relation to valuation, were being addressed by the
WCO in a very comprehensive way. There was a very good working relationship between the
Director-General of the WTO and the Secretary-General of the WCO. That relationship needed to bereflected more at a working level between the two organizations.
3.14 The representative of Brazil reiterated the central importance his delegation attached to the
technical assistance and capacity building components of trade facilitation. As his delegation hadG/C/M/69
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stressed since the outset, Brazil understood that enhanced technical assistance could go a long way to
solve the majority of perceived bottlenecks in the area of trade flows. In this context he would like to
thank the EC for the very comprehensive document they had presented. He had one question on the
paper, a clarification. He understood that the budgets quoted in the second column refered to the
broad cooperation programme as an integral exercise, and that part of this was devoted to tradefacilitation issues per se . This was particularly striking when seeing that in one particular project there
was a mention of human rights which he thought was not exactly related to trade facilitation. As a
further comment, he noted that technical assistance and advertising had perhaps more similarities than
simply the issue of not knowing what the results were going to be. With respect to the perceived
usefulness for Members acceding to the European Union to undertake binding commitments as a
valuable component of ensuring political commitmen t to the reforms he noted that this would make
sense where Members were acceding to an existing Union which had its common standards andprocedures, and the acceding country had to meet those standards. Brazil was not as sure if it made
that much sense in the broader multilateral context. In this respect he would like to recall a point he
had made earlier that there was a concern that developing countries would undertake developed
country standards with their own modest budgets. There had been a mention to the issue of
sustainability. Technical assistance was useful as a starting-point, but one had to ensure that everyMember was in a position to autonomously maintain in a sustainable fashion the commitments it may
or may not undertake. These were issues Members had to keep very present when moving forward.
Members had to ensure a level of commitment that was compatible with Members maintaining it. The
experience Members had from the Uruguay Round was not exactly brilliant in that respect.
3.15 The representative of the European Communities noted in response to the Brazilian comment
on the need for sustainable programmes that, as he had already mentioned on earlier occasions,
Members would continue to provide technical assistance with or without a WTO Agreement on trade
facilitation. On the specific points that Brazil had raised about the funding and the scope of the EC
programmes, he noted that, as could be seen in a subheading of the table, in many cases tradefacilitation was one component of a much broader programme for trade-related aid. What the
Communities tended to do was to allocate a budget for trade-related technical assistance, and to
indicate, together with the recipient country, four of five areas within that overall envelope, were it
seemed useful to focus on. These areas typically included customs reform, support for SPS and TBT
measures, export promotion, diversification of production, or SMEs etc. Trade facilitation was one of
the elements and therefore part of the menu. It was then very much up to the recipient country to
decide how much of the overall budget it wanted to see devoted to customs issues or trade facilitation,how much to spend on SME work or on other areas. Generally, the listed programmes were trade
programmes. This was for the broader area of trade. The one exception on page 26 Brazil had
mentioned was perhaps a result of sloppy drafting. This programme aimed at supporting the
strengthening of the Andean common market, and therefore had a coverage beyond the trade and
commercial. It was a much broader programme of social and economic integration, which was whythere was that reference to human rights. But there was no hidden agenda, if that was the concern.
However, in a number of cases, and the programmi ng with Egypt and the programmes with the ACP
sub-regions were good examples, there were quite extensive programmes exclusively devoted to
creating regional customs unions or, in the case of Egypt, to a fairly fundamental programme of
support for their whole customs administration. These were programmes which focussed purely ontrade facilitation-related customs reform. He hoped that would answer the questions of Brazil.
3.16 The representative of the WCO noted that he was encouraged to see a lot of interest in
capacity building in the trade facilitation area. There was certainly increasing momentum for
improving technical assistance and capacity building or, in other words, pressure to do that. The WCOhad been analyzing the lessons learnt from previous capacity-building efforts. In his previous report
on the inventory of key capacity building needs he had stressed the need for a sustainable
comprehensive approach rather than an issue-by-issue or one-size-fits-all approach. Based on this
ongoing research and bearing the urgent need to address capacity building issues in mind, the WCOG/C/M/69
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was currently developing a comprehensive and standardized methodology for the diagnosis of needs
and the design and development of capacity-building programmes. This methodology, which was
called Customs Capacity Building Diagnostic Framew ork, was designed to be a practical tool for
practitioners to promote WCO diagnostic approaches  that would help Members to properly implement
customs-related WTO agreements. While WTO agreements and WCO standards existed to promotetrade facilitation, customs may have a problem in applying these rules and standards. The new
framework was designed to help Members analyze this gap in identifying what their difficulties were,
where they found the gap, and why that gap existed. The difficulties might derive from management
culture, resources, staff capabilities or other root causes. Based on this gap analysis, the Framework
would offer situational solutions, avoiding an “one size fit for all” approach. With the development of
this new tool and the WCO's expertise in the Customs arena, the WCO intended to actively participate
in and contribute to a coordinated capacity build ing with key players. In this connection, the WCO
was currently discussing how best to build a new mechanism with the World Bank and other lending
institutions, embracing relevant intergovernmental organizations, donors, recipients and the private
sector. He hoped that the Framework also covered the concern expressed by the United States on a
pooling of technical assistance, because it would assure the quality control of experts engaged in
capacity building activities. The framework was part of a wider customs capacity strategy, which alsocomprised lessons learnt from previous capacity building programmes and an overview of customs
and its importance to stakeholders. Once it was finalised he would like to contribute it to the Council.
3.17 The representative of UNCTAD informed the Council about technical assistance provided by
his organisation. UNCTAD had traditionally executed technical assistance projects along three main
categories: Assistance relating to (i) institution building, including legal and operational reforms, as
well as training and the creation of long-term trade facilitation-related management capacities; (ii)
implementation of information technology solutions such as the ASYCUDA program dealing with
customs automation and UNCTAD's cargo tracking a nd transport management system ACIS; and (iii)
to the development of transit agreements, including the elaboration of draft proposals, the support ofnegotiating and implementing such agreements and th e implementation of monitoring structures. That
was what his organisation had traditionally done and was still doing in that area. In addition,
UNCTAD was also working on the formulation of a new approach to technical assistance, in which
ownership and local participation, particularly from the private sector, would be extensively
promoted. This approach would address the identification of trade facilitation needs and priorities, and
would complement the methodology presented by the WCO. The new approach would be based on
the creation of trade and transport facilitation clusters, making extensive use of trade technologysolutions. As regards the cost of implementing such a new solution, it should be taken into account
that, as had already often been the case when implementing ASYCUDA, the cost could easily be
recovered through increased customs revenue and reduced production costs for all stakeholders and
the international supply chain. He concluded by notin g that the implementation of technical assistance
was not an easy task. The representative of Pakistan had given a good example of a typical problemfaced on a regular basis.
3.18 The Chairman noted that there had been a useful exchange of views on all the three items of
the agenda. He was particularly pleased to note the constructive and active participation by a large
number of delegation, with some of them even intervening for the first time. This was veryencouraging and would greatly facilitate carrying forward work on this subject. Without attempting to
summarize the discussions, he highlighted a few points, which had repeatedly come up in the course
of the debate. A number of delegations had pointed at the benefits of trade facilitation, and trade
facilitation rules, which were presented as an important part (or "pillar") of efforts to facilitate trade.
Those delegations had also made clear that they see technical assistance and support for capacitybuilding as essential elements of work on trade facilitation. There had also been repeated reference to
the need for flexibility and comprehensive special a nd differential treatment, and that this should not
be limited only to transition periods. Several interventions had addressed the WTO's role and function
in the area of trade facilitation, and its relationship with other international organisations, which wasG/C/M/69
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considered to be a complementary one. On the other hand, there had also been several delegations
which had expressed serious concerns regarding the idea of negotiating binding rules. They had noted
that the current state of development of many developing countries, and their resource constraints,
would not allow them to engage in new commitmen ts on an equal level as developed Members. A
"one-size-fits-all"-approach would not work. While agreeing on the benefits of trade facilitation, theydid not concur with the view of the usefulness and necessity of developing binding trade facilitation
rules.  Preference had been expressed by these delegations for continuing efforts to facilitate trade on a
national or regional, rather than a multilateral level. Specific concerns had been expressed with regard
to the possibility of dispute settlement procedures. In this context, a proposal was made by one
delegation to find "creative solutions" to that problem. The delegation had introduced the idea of an
agreement-specific mediation/consultation process. A number of questions were raised in response to
that proposal, with many delegations requesting further information and specification of this idea.
3.19 With respect to Members' discussion on the second agenda item, he was pleased to note the
high level of interaction, which had allowed delegations to have a good and constructive exchange of
views. Members had benefitted from the sharing of a national experience in implementing certain
trade facilitation measures, which had been considered very informative by all delegations. While ithad been seen by several delegations as an example of what could be done even within a relatively
small administration, others had viewed it as an example of the many trade facilitation measures
currently being undertaken at the national level in the absence of binding rules.
3.20 As regards technical assistance and capacity building, Members had been in agreement on
their importance. Members had been updated on latest activities by donors in this area, and informed
about lessons drawn in the course of their execution. Reference had been made by several developing
countries that such assistance would also have to include infrastructure, if it was to really help them
address their specific problems and allow them to fully benefit from trade facilitation. There had also
been reference to the importance of avoiding duplication of work, of ensuring high level commitment,of assistance to be demand-driven and of having follow-up action to ensure effective implementation
of technical assistance projects. Overall, it had been an interesting exchange, which would certainly
provide much food for further reflection and deliberation.
3.21 The Council took note of the statements made.
IV. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER
ARTICLE 9
4.1 The Chairman recalled that Members had as a basis for their discussion on this issue a
background study jointly produced by the WTO and UNCTAD Secretariats on trade-related
investment measures and other performance requ irements, contained in document  G/C/W/307 and
Add.1.  In addition, last October the Council received a written communication from Brazil and India
concerning the review of the TRIMs Agreement, which was circulated in document G/C/W/428.  At
its meeting of last November, the Council had a first round of discussions on the substance of this
proposal.
4.2 The representative of Brazil said, as indicated in the proposal tabled jointly with India, his
country believed that this revision process should be based on two aspects:  the identification of the
adverse trade effects, if any, of investment measures and, second, how development aspects should be
strengthened as the essential and inseparable part of the TRIMs Agreement.  There was hardly any
investment or production measure completely devoid of trade implications and the same applied tovirtually all economic policy measures, which was not to say that they should be regulated, let alone
prohibited, in the WTO.  The criterion for examination of any investment measures should be its
concrete adverse trade effects, not alleged or assumed, but established by credible evidence.  It wasG/C/M/69
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counterproductive to presume a priori  trade distorting effect s to the investment measures adopted by
developing countries for developmental, social and economic reasons. Even if their immediate
objective was to influence the trading pattern of a company or to influence the business behaviour of
the investor during the production process, there were valid reasons for developing countries to adopt
them.  It should be recalled that the preamble of the Marrakesh Agreement recognized, "the need forpositive efforts to ensure that developing countries, and especially the least-developed countries
secure a share in the growth of international tr ade commensurate with the needs of their economic
development".  Rather than decry the trade impl ications of investment measures in developing
countries, one should welcome them.  One should onl y be concerned with those investment measures
whose adverse trade effects in terms of trade restriction or distortions were direct and significant, not
with those that might be indirect, incidental or pe ripheral to an investment measure.  It was well
known that foreign investment could be kept out of  a host country but it could not be forced into it.
Whilst stipulating performance requirements, for inst ance, each country sought to strike a fair and
equitable balance in the light of its own circumst ances, between its own interests and those of  the
investors.  Performance requirements constituted one of the basic mechanisms for harmonizing
foreign direct investment and national development objectives and priorities of developing countries.
In any case, the foreign investor retained the choice of accepting or refusing the conditions imposedby each country.  Given the competitive situation in the international market place, his choice was
fairly wide.
4.3 The experience of developing countries had been that national efforts to improve market
economic stability and liberalize trade and FDI had not, on their own, guaranteed economic growth
and development.  This had reinforced the notion that without appropriate policies to strengthen
productive capacity, macro level policies were inefficient and insufficient.  Greater competitiveness at
the national level allowed developing countries to diversify away from dependence on a few primary
commodity exports and move up the skills and te chnology ladder, thereby raising income and
permitting greater economies of scale and scope in production.  If developing countries were to derivethe full benefits from the multilateral trading sy stem, specific efforts and policies were needed to
strengthen their productive sector.  Here, performance requirements had a significant role to play as
demonstrated by the past experience of developed countries in this regard.  In conclusion, Brazil
regarded this revision of the TRIMs Agreement not as an opportunity to regain the right to impose
trade distorting or restrictive measures but rather to use the full potential of instruments necessary to
improve the contribution of foreign direct investment to the achievement of the country's national
development objectives.
4.4 The representative of Colombia said that Co lombia attached the utmost importance to the
review of the Agreement on Trade-Related Investment Measures.  The notification recently submitted
by Colombia on the phasing out of investment measures confirmed its commitment to the decisions
adopted in this regard and demonstrated that the prevailing transition periods posed no obstacle to thereview process called for under Article 9.  Such circumstances proved that the WTO had recognized
the difficulties encountered by some of the developing countries in phasing out these measures,
especially in some sectors where it had not been possible to apply the same standard as the disciplines
established for industry.  Various elements of the review process called for under the Agreement
warranted consideration.  First, the element of timing implied that it was feasible to conduct thereview from the fifth year onwards, and that the length of the process was not predetermined.
Secondly, by referring to the Ministerial Conference, Article 9 of the Agreement clearly established
that any decision on the matter must be taken by that body.  In contrast with the provisions of
Article 31 of the Agreement on Subsidies and Countervailing Measures, for example, the language
used in this case left no doubt as to the exclusive competence of the Ministerial Conference in thisregard.  It was clear, therefore, that Members must work towards producing a recommendation for
Ministers in Cancún.  Third, Article 9 of the TRIMs Agreement envisaged that the review process
could result in an amendment of the Agreement.  In this respect, the implementation proposals that
specifically addressed the TRIMs Agreement reforms from different standpoints became relevant.G/C/M/69
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The fourth and last element to consider was the substantive framework which provided for the review.
Within that framework, investment and competition were factors whose interaction with the
Agreement was established as a condition that required evaluation.  Given the current circumstances,
Members were examining the positive and negative aspects of some developments in regard to
investment and competition.  In the current context, the preamble to the TRIMs Agreement took ongreat significance.  Indeed, it affirmed that one of the objectives of the Agreement was to promote the
growth of all trading partners, particularly developing-country Members, while ensuring free
competition.  There were two possible scenarios for Cancún.  First, if it was decided to exclude the
topics of investment and competition from the agenda, in view of the close link with the TRIMs
Agreement it would prove necessary to extend the ongoing transition periods and to examine the
possibility that some trade-related investment measures might be adopted for development purposes.
Second, if the topics of investment and competition were included in negotiations, Colombia wouldconsider it necessary to extend the transition periods until the negotiations were completed, so that
countries would be afforded the opportunity to carefully evaluate the influence of the new disciplines
on the provisions of the TRIMs Agreement.
4.5 The representative of India supported the intervention by Brazil and said it had referred to two
main elements that needed to be addressed:  the identification of the adverse  effects, if any, of
investment measures and how the developmen t dimension in the TRIMs Agreement could be
strengthened.  He recalled the negotiating hist ory of the TRIMs Agreement and how without any
examination of the operation of GATT Articles relating to the trade-restrictive and –distorting effects
and without having any objective criteria to identify and evaluate the trade-restrictive and -distortingeffects of investment measures, the TRIMs Agreement prohibited outright TRIMs inconsistent with
Articles III and XI of GATT.  The Uruguay Round negotiations had failed to build in the
developmental dimension in an effective manner into the TRIMs Agreement.  The development
dimension had been effectively confined to an additional five-year and seven-year transition period
for developing countries and least-developed countries, respectively.  Many low-income countries andLDCs had been denied the use of this policy instrument, even before certain sectors in their
development process had reached the threshold of benefiting from TRIMs.  It was important to keep
this perspective in mind while reviewing the Agreement.  Regarding the impact of TRIMs on
development, the experience of many developing countries would suggest that TRIMs might be trade-
stabilizing and enhance development.  As pointed out by his delegation at the previous CTG meeting,
there needed to be policy flexibility and autonomy to use these measures where it would contribute to
development.  Local content requirements contributed to a number of economic gains for the nationaleconomy such as the generation of value-added in the economy through greater utilisation of domestic
resources, increased employment, upgrading of technology levels and diversification of the economy
as a whole.  It was in this context that his delegation along with Brazil had proposed that Article 4 of
the TRIMs Agreement be amended to provide the necessary flexibility to implement development
policies and to maintain TRIMs under conditions as cited in paragraph 12 of the joint proposal.  Hereiterated the strong development dimension underlying both the Marrakesh Agreement and the Doha
Ministerial Declaration, in that trade had to be an instrument for development in all parts of the world
so that the less privileged regions were also able to maintain and sustain a high rate of growth.  What
the proponents of the proposal were seeking was to have flexibility for developing countries, which
they believed was lacking in the TRIMs Agreement, to enable developing countries to pursue theirdevelopmental objectives.  He took note of the observation made by Colombia regarding a time-line
for completion of work under the Article 9 review, as well as the Cancun Ministerial Conference and
the linkage with the investment and competition poli cy work currently underway in the WTO.  At this
stage one could not prejudge what Ministers would decide at Cancun.  This would have to be given
serious thought in the CTG.
4.6 The representative of the United States said that in his delegation's view Article 9 was clear
that the focus was on whether the TRIMs Agreement should be complemented by additional
provisions on investment and competition.  In Doha both of those issues were addressed andG/C/M/69
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processes were launched.  For the United States th e modifications proposed by India and Brazil had
not been demonstrated to be necessary.
4.7 The representative of Pakistan recalled that the Article 9 Review mandate was quite broad
and allowed the Membership to propose amendments to the TRIMs Agreement.  To say that the work
had already finished or should have been finished by now was an interesting comment.  To his
understanding of this review process, the work had not been started up to now.  After hectic efforts by
developing countries, the CTG had been able to get a joint study done by UNCTAD and the WTO
Secretariats which had provided impetus to the ongoing discussions.  It was after strenuous efforts
that Members were able to converge and come to an agreement on the terms of reference of the study.
It was only after the launch of that joint study that some meaningful discussions had commenced in
the CTG regarding the Article 9 review, and it was the importance of this and of the Article 9 mandatethat in the end Members were able to come out with concrete recommendations for the Council to
consider.  His delegation did not agree with the interpretation given by the United States that the
Article 9 mandate was to only complement the ongoing exercise or the study phase going on in the
Working Groups on Investment and Competition.  Had that been the case, then the CTG should not
have been involved at all in this review.  Overall he thought the flexibility being asked for in terms of
policy-making for developmental or trade-stabilizing reasons was well-founded, and the Council was
on the right track and making progress on this Article 9 mandate.
4.8 The representative of Canada stated that in Canada's view the modification of the TRIMs
Agreement proposed by India and Brazil under the TRIMs Article 9 review was not warranted.  The
proposal failed to demonstrate the need to change the TRIMs Agreement.
4.9 The representative of the European Communities stated that on the substance he endorsed the
statement of Canada.  The EC was not convinced by the proposals put forward so far and it was clear
from the minutes of previous discussions that a number of their questions had not been answered.
4.10 The representative of Japan stated that the explanation given so far by the proponents of the
review had not been done to the extent that Japan was convinced;  Japan was also against any
weakening of the TRIMs Agreement disciplines.
4.11 The representative of Brazil stated that he shared the concerns presented by Colombia in the
sense that it was necessary to come up with some time-frame for this revision.  As far as the US
intervention was concerned, he shared the same concerns presented by Pakistan.  If one looked at the
record of the discussions taken in the Uruguay Round on this issue, it was quite clear that at the very
end delegations compromised in the sense that it would be possible, after some years, to revisit the
disciplines and aspects related within the Agreement, taking into account the implementation period.
It was quite clear also in Article 9 that the re view would encompass not only the possible additional
aspects and provisions related to investment policy or competition policy.  Article 9 said "Not later
than five years after the date of entry into force of the WTO Agreement, the CTG shall review the
operation of this Agreement and, as appropriate, propose to the Ministerial Conference amendments
to its text."  In the course of this review, as an additional aspect, in his understanding, the CTG should
consider whether the Agreement should be complemented with provisions on investment policy andcompetition policy.  Finally as far as the Canadian, Japanese and EC positions, they were not arguing
that one was not allowed to amend a certain Article of the Agreement;  they did not feel they had
enough clarification whether it was necessary to amend certain aspects of the Agreement as it
currently stood.
4.12 The representative of India commented on the vi ew that the proposal put forward by India and
Brazil was not in the mandate contained in Article 9 of the TRIMs Agreement and that the arguments
put forward by India and Brazil in their proposal  were not fully convincing  The TRIMs Agreement
had established in Article 9(a) a comprehensive provision for the review which included theG/C/M/69
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possibility of Members proposing amendments to the text stemming from the understanding of many
Members at the end of the Uruguay Round that the scope of the Agreement had gone beyond the
mandate agreed to in the Punta del Este Declaration.  After extensive discussions, India and Brazil
had come out with the written proposal and he thought that at the last November meeting the CTG
had had a good discussion.  He hoped that Me mbers would actively engage and come up with
counter-arguments to further the debate and to progress in the review.  He was somewhat
disappointed by the discussion today.
4.13 The representative of Colombia stated that she did not share the interpretation which the US
had given, and joined the delegations of Pakistan, Brazil and India in their statements.4.14 The Chairman proposed that the Council take note of the statements made and agree to revert
to this item at the next meeting.  It was so agreed.
V. REGIONAL TRADE AGREEMENTS
A. FREE TRADE AGREEMENT BETWEEN CANADA AND COSTA RICA –
NOTIFICATION FROM THE PARTIES TO THE AGREEMENT  (WT/REG147/N/1,
WT/REG147/1)
B. FREE TRADE  AGREEMENT BETWEEN THE EFTA STATES AND SINGAPORE –
NOTIFICATION FROM THE PARTIES TO THE AGREEMENT  (WT/REG148/N/1,
WT/REG148/1)
5.1 The Chairman drew attention to the two Agreements listed under this item that have been
notified under GATT Article XXIV.  The texts of the Agreements and their notifications had been
circulated in the documents listed.  In the absence of comments, he proposed that the Committee on
Regional Trade Agreements carry out the examination of the above-quoted Agreements in accordance
with the following terms of reference:
"to examine, in light of the relevant provisions of the GATT 1994, the free trade agreements
just referred to and to submit a report to the Council for Trade in Goods.  It was understood
that the understanding read out by the Chairm an of the Council for Trade in Goods under Item
7 of the agenda of the meeting of the Council for Trade in Goods on 20 February 1995, as
contained in document WT/REG3/1, will apply mutatis mutandis  to the examination of the
two agreements.  It was also understood that, during the examination, due account will betaken of the intrinsic differences between customs unions and free trade areas."
5.2 It was so agreed.
VI. APPOINTMENT OF OFFICERS TO CTG SUBSIDIARY BODIES
6.1 The Chairman said that the guidelines fo r the appointment of officers to WTO bodies
contained in document WT/L/510, adopted by the General Council on 10 December 2002, provided
that the Chairperson of the Council for Trade in Goods would conduct consultations on the
appointment of the Chairpersons of the subsid iary bodies of the Council for Trade in Goods.
6.2 He had carried out consultations and was in a position to propose to this Council an agreed
slate of names for the Chairs of the subsidiary bodies.  The names were as follows:G/C/M/69
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Committee on Agriculture Dr. Magdi Farahat (Egypt)
Committee on Anti-Dumping Mr. David Evans (New Zealand)
Committee on Customs Valuation Mr. Ivan Lee (Hong Kong)
Committee on Import Licensing Ms. Philippa Davies (Jamaica)
Committee on Market Access Ms. Jo Lomas (United Kingdom)Committee on Rules of Origin Mr. Syed Habib Ahmed (Pakistan)
Committee on Safeguards Mr. Pornchai Danvivathana (Thailand)
Committee on Sanitary and
Phytosanitary MeasuresMr. Paul Martin (Canada)
Committee on Subsidies and
Countervailing MeasuresMs. Olga Lucia Lozano (Colombia)
Committee on Technical Barriers to
TradeMr. Juan Antonio Dorantes Sanchez (Mexico)
Committee on Trade-Related
Investment MeasuresMr. Sivaramen Palayathan (Mauritius)
Working Party on State Trading
EnterprisesMs. Judith Vankova (Slovak Republic)
and for the ITA Committee Mr. Hisashi Yoshikawa (Japan)
6.3 He proposed that the Council agree with the nominations.  It was so agreed.
6.4 While all the other subsidiary bodies of the Council had provisions in their respective
Agreement or rules of procedure requiring them to elect Chairpersons, Working Parties did not have
any procedural rules on electing Chairpersons.  As a result, in the case of the Working Party on State
Trading Enterprises, he proposed that the Council appoint the nominated Chairperson.  In the case of
all the other subsidiary bodies, he proposed that the Council take note of his proposals.  It was so
agreed.
6.5 On the question of Vice-Chairpersons, it would be for the subsidiary bodies to decide if theyneeded a Vice-Chairperson in cases where the option existed under the Agreement or rules of
procedure and that it was for the respective Chairperson to hold the necessary consultations.  It was so
agreed.
6.6 He warmly thanked the outgoing Chairpersons of the subsidiary bodies of the Council forTrade in Goods for their hard work and dedication during the year 2002.
VII. ELECTION OF CHAIRPERSON OF THE COUNCIL FOR TRADE IN GOODS
7.1 The Chairman said that the Chairman of the General Council had carried out consultations on
a slate of names for Chairpersons to the different WTO standing bodies in accordance with the
established guidelines for appointment of officers.  These proposed nominations were approved by the
General Council at its meeting on 10 February 2003.  In line with the nominations, he proposed that
the Council for Trade in Goods elect H.E. Ambassador Hovorka of the Czech Republic as
Chairperson of this body by acclamation.  It was so agreed.
7.2 Before handing the Chair over to Ambassador Hovorka, he thanked all delegations and theSecretariat for their efforts and dedication to carrying out the work of the CTG in 2002.  A number of
delegations expressed their gratitude to the Chairman for his work during 2002.G/C/M/69
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VIII.  OTHER BUSINESS
8.1 The representative of Canada stated that with regard to the grace period for the dismantling of
TRIMs, he thought that this exercise was an eloquent demonstration of the flexibility provided for in
the TRIMs Agreement but was concerned now that several Members that had benefited from this
procedure still had to respect their obligations included in the decision, in other words to submitreports on the progress of eliminating currently existing TRIMs measures.  He urged delegations that
had not yet done so to submit a report as soon as possible.  He was grateful to Argentina, Colombia,
Mexico and Thailand for having provided the stipulated reports and awaited the reports of the other
Members concerned.  The Council took note of the statement made.
8.2 The Chairman informed delegations that the next meeting of the CTG was scheduled for 2
and 3 June 2003.  The agenda for the meeting would close on Friday, 23 May.
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