RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG/M/32
2 July 2002
(02-3692)
Committee on Regional Trade Agreements
Thirty-Second Session
NOTE ON THE MEETING OF 3 JUNE 2002
Chairman:  Mr. B.G. Chidyausiku
A. ADOPTION OF THE AGENDA
1. The Thirty-Second Session of the Committee on Regional Trade Agreements (CRTA) was
convened in Airgram WTO/AIR/1805, dated 24 May 2002.
2. The Chairman proposed to give the floor to the Secretariat under "Other Business", to inform
the Committee on technical assistance activities related to regional trade agreements (RTAs) and to
report on the Seminar on Regionalism and the WTO,  which was organized at the end of April 2002.
3. The following Agenda was adopted:
A. Adoption of the Agenda
B. Systemic Implications of Regional Trad e Agreements for the Multilateral Trading
System and Relationship between them
C. Procedures to Improve and Facilitate the Examination Process
D. Examination of Regional Trade Agreements
I. Free Trade Agreement between Canada and Chile, Services
II. Euro-Mediterranean Agreement between the European Communities 
and Israel
III. Euro-Mediterranean between the EC and Morocco
IV. Free Trade Agreement between the Kyrgyz Republic and Moldova
V. Free Trade Agreement between the Kyrgyz Republic and Armenia
VI. Free Trade Agreement between Georgia and the Russian Federation
VII. Free Trade Agreement between Georgia and Armenia
VIII. Free Trade Agreement between Georgia and Azerbaijan
IX. Free Trade Agreement between Georgia and UkraineX. Free Trade Agreement between Georgia and Turkmenistan
XI. Free Trade Agreement between Georgia and Kazakhstan
E. Other Business
4. The Chairman recalled that the Latin American Integration Association (LAIA) had been
granted observer status to the CRTA on an ad hoc  basis and sought confirmation to extend an
invitation to LAIA to attend the Committee's next meeting.  It was so agreed.
B. SYSTEMIC IMPLICATIONS OF REGIONAL TRADE AGREEMENTS FOR THE MULTILATERAL
TRADING SYSTEM AND RELATIONSHIP BETWEEN THEM
5. The Chairman recalled that in February an exhaustive discussion had been held on the two
surveys prepared by the Secretariat at the request of the Committee, respectively on Rules of Origin
Regimes in RTAs,  and Coverage, Liberalization Process and Transitional Provisions in RTAs .  The
discussion was structured to address the factual aspects of the surveys; the context in which they
should be inserted; and their objectives and possibl e follow-up.  As agreed in the course of thatWT/REG/M/32
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discussion, the Secretariat carefully revised the surveys in light of the factual comments made, and
circulated them as formal documents, und er the symbols WT/REG/W/45 and WT/REG/W/46.
6. The representative of the United States expressed his delegation's wish of being informed on
how the comments made during discussions at previous meetings had been reflected in the formal
documents.
7. Noting that his delegation's comments were aimed at improving any Secretariat's further work
on matters covered in the surveys, the representative of Japan said that, with respect to Annex 1 of
document WT/REG/W/46, it would be useful to also include import shares for each RTA as a whole,
instead of only data for individual countries parties to an RTA.
8. The representative of Turkey thanked the efforts undertaken in carrying out the surveys,
which her delegation viewed as a contribution to current discussions.  With respect to document
WT/REG/W/45, her delegation believed that the harm onization of various preferential rules of origin
used in different RTAs constituted an important potential for world trade.  She welcomed the
proposals for the improvement of the harmonization models made in the document, although, in the
long term, Turkey was in favour of adopting a uniform type of rules of origin.  She noted that parallel
harmonization of non-preferential and preferential ru les of origin should be aimed at.  However, given
the difficulties of this time-consuming process, her delegation suggested in the first instance the
adoption of a single set of rules of origin among the members of every RTA, followed by a
convergence among the rules of origin of different regional integration schemes.  In this context, she
said that the Pan-European System of Cumulati on of Origin (PANEURO) involved an encouraging
feature for the participation of non-member countries into production made within countries parties to
System.  Recalling other arrangements aimed at enhancing trade by facilitating the value-addedproduction system, such as the new proposal of including beneficiaries of the Generalized System of
Preferences in the System existing between the EU, Norway, Switzerland and Turkey, she noted that
these arrangements could also be considered in a nother version of document WT/REG/W/45.  Finally,
she requested that more details be provided on the evaluation of the effects of the cumulation system
to be established among the Euro-Mediterranean FTA parties, and of its integration into thePANEURO.  In that context, she noted that Turkey had proposed that Mediterranean partners be
included individually into the PANEURO as soon as a country had completed its set of RTAs.
Commenting document WT/REG/W/46, she said that though the document was very comprehensive,
more and various types of information could enhance the discussion, in particular by including more
data on RTAs other than those concluded among Central and Eastern European countries.  Regarding
the concept of "Trade Coverage", detailed sectoral assessments on agriculture and services would
make the document more tangible.  Turkey did not agree with Members which suggested the use ofevery source of information for updating, as this might reduce the accuracy of the document.  She
suggested an amendment to the document, so as  to include a heading on the "Assessment on the
Implication of Non-Tariff Barriers and the Use of Safeguard Measures on the Trade Flow of the
RTAs".
9. Responding to the comments made by Turkey, the representative of the United States noted
that his delegation would have difficulties in seeing the PANEURO being presented as a model to
which it would be useful to harmonize rules of origin régimes, given its highly discriminatory aspects.
He was surprised to see that Annex 3 of WT/REG/W/45 did not detail these discriminatory aspects,
given the numerous discussions held in the Committee.
10. The representative of Hong Kong, China praise d the two surveys, and reiterated that they
should serve the purpose of background and reference documentation and not prejudice the
negotiations.  Thus, the outcome of the surveys should not be over tempered by other concerns.  The
survey on coverage, which was very useful, provided some indications of areas that might be
researched further by the Secretariat.  One would be the coverage of RTAs concluded between
developed and developing economies or among de veloping economies only, so that patterns ofWT/REG/M/32
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coverage for these groups could be determined.  A nother area to analyse related to the magnitude of
difference in coverage between traded goods and tradable goods, and the conditions under which such
disparity magnified.  The Secretariat could also star t looking into other areas identified in document
WT/REG/W/38, which listed themes for surveys of RTA provisions, starting by trade regulatory and
trade remedies provisions under RTAs.  In the future, coverage and liberalization in servicesagreements should also be analyzed.
11. The representative of Hungary indicated that  the surveys would serve as background material
for the negotiations.  While his delegation objected the holding of substantive discussions in that
Committee, comments made might be useful in further developing the surveys.  He agreed with the
proposal made by the representative of Hong Kong, China, that the scope of the surveys should be
widened to include other agreements, and in particular those involving developing countries, to be in
line with the universal nature of the negotiations.  Recalling that the Secretariat had explainedpreviously that the scope of the coverage survey had been limited by the unavailability of data, he
noted that additional data might have become available meanwhile.  In the coverage survey, data for
CEFTA countries - together with NAFTA and MERCOSUR - was included in almost all Annexes;
that was not surprising given CEFTA's commitment to transparency.  His delegation would like to
reflect further on the appropriateness, at that stage and within that context, that the Secretariat preparea survey on trade regulatory provisions, given that he thought that the Secretariat should first conclude
the two existing surveys.  The decision to ask for additional surveys should be taken after, and in light
of the ongoing negotiations being carried out in another fora.  Reacting to the comments made by the
representative of United States on the survey on rules of origin, he stated that it would be
unacceptable for his delegation that a background note by the Secretariat included value judgments,given that it was for delegations to pass value judgements.
12. Noting that the surveys were very useful as they stand, the representative of Australia agreed
that there was scope for further Secretariat work building on them.  The surveys could be extended to
cover issues that have been touched upon but not dealt with in detail, such as agreements concluded
between developed and developing countries or among developing countries and traded/tradablegoods, as indicated by Hong Kong, China.
13. The representative of Chile noted that his country was also very committed to transparency,
as MERCOSUR and NAFTA countries.  Reacting to the suggestion made by Japan, he though that it
would be good if the Secretariat developed further the coverage survey to provide information on
trade carried out under preferences and under MFN, provided that information would refer to the end
of the implementation periods often foreseen in the RTAs.  Regarding the suggestion made by Hong
Kong, China, he agreed that providing a follow-up to these surveys, and in particular the coveragesurvey, was very important, especially for the ongoing negotiations.  He recalled that it had been
noted at the last meeting that the surveys would be of a dynamic nature, given that RTAs were being
concluded all the time.  Besides that, he agreed that the survey missed information on RTAs between
developing and developed countries and among developing countries, which were increasing in
number and working well.  Regarding the latter type of RTAs, he noted that while they had not beendealt with in the CRTA, information on them had been made available to other WTO bodies, in
particular the Trade Policies Review Body and the Committee on Trade and Development (CTD).
For example, information on all RTAs concluded within the framework of the Latin American
Integration Association had been submitted to the CTD.  He urged the Secretariat to collect this
information and to update the survey accordingly.  While his delegation could also support surveysbeing made on trade regulatory provisions, he cautioned that account should be taken of the dividing
line between the work of this Committee and of the Negotiating Group on Rules.
14. The representative of the European Communities expressed his delegation's appreciation for
the surveys, which contained a lot of material that merited consideration.  While he agreed that there
was scope for carrying forward the work on both surveys, it was for the Negotiating Group on Rulesto determine priorities for examination and deepening of analysis by the Secretariat.  Concerning theWT/REG/M/32
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PANEURO, he noted that it was well known to all that his delegation and that of the United States
had a different appreciation on it; his delegation considered that the existence of a harmonized set of
rules of origin within the PANEURO participants  was to the benefit of both its parties and non-
parties.
15. The representative of the United States requested clarification on whether or not additional
surveys would be made by the Secretariat.  If these were to be made, he noted that with respect to
trade remedies, the RTA impact occurred even in the absence of specific provisions.  Thus, in the
event of a survey on trade remedies, the Secretariat should not only look at the provisions themselves
but also how the measures themselves were applied, particularly in areas of exclusion or maintenance
of margins of preference.  Regarding the suggestion that a possible survey on trade liberalization
carried under preferential and MFN basis take into account only the end of the transition period was
problematic for his delegation.  Given that these were particularly long - specially in cases of RTAsinvolving developed-developing countries - data wo uld be distorted.  Even more troubling was the
fact that many existing European RTAs contained provisions for the liberalization in the agricultural
sector pending further negotiations, without any sche dule of commitment.  It would thus be difficult
to incorporate this theoretical full liberalization outline and to reflect it as having agricultural items
covered.  An objective factor would rather have to be used, and may be an intermediate period wouldgive a better indication of the relationship between preferential and MFN trade.
16. Reacting to the comments made, a representative of the Secretariat indicated that
WT/REG/W/45 and WT/REG/W/46 represented work  in progress.  They would remain under
constant review and periodical updates would be i ssued.  These would incorporate comments made at
this Session, in particular regarding the scope of the coverage survey.  Other issues, such as traderemedies and trade carried under preferences/MFN deserved to be treated and would be dealt with in
the future.  He called the Committee's attention to the paper prepared by the Secretariat for the
Seminar on Regionalism and the WTO , entitled Regional Trade Integration under Transformation ,
which was a comprehensive and "transparency" document and in which many of the issues referred to
at that Committee's meeting were also dealt with.  That paper would also be kept under constantreview and be periodically revised, so that the Committee had at its disposal an updated full landscape
of RTAs.
C. P
ROCEDURES TO IMPROVE AND FACILITATE THE EXAMINATION PROCESS
17. The Chairman provided the Committee with an update of the examination of RTAs within the
Committee.  Without taking into account the work that would be carried out at that Session, the
Committee had 120 RTAs under examination, with the following breakdown:  29 RTAs for which the
factual examination had not yet started; 16 RTAs under factual examination; 63 RTAs for which thefactual examination had been concluded; 12 RTAs whose draft reports were under consultations.
Noting the various problems confronting the Committee, he said that the Seminar on Regionalism and
the WTO  had brought to his attention the existence of a certain gap between the agreements notified to
the WTO and those actually in force.  He was aware that the issue of RTA notification obligations had
been discussed in the past and he did not wish to re-open a lengthy debate on the matter.  It was hisduty, however, to recall the increasing emphasis given to the question of transparency in terms of the
future work and role of the Committee, and theref ore to invite all Members to place considerable
effort in ensuring compliance with notification obligations.
18. The Chairman then called delegations’ attention to an issue which had a bearing on the
organization of meetings of the Committee.  By mid-March 2002, he had sent a fax to all delegations
proposing a schedule of examinations for the 32nd and 33rd Sessions, and indicating the documentation
needed for each individual examination.  The examination of 17 RTAs had been planned for the 32nd
Session.  Since the Secretariat had only received one request for postponement, the annotated agendaissued by mid-May still indicated an examination programme for 16 RTAs, though recalling the
documentation still missing.  Stressing that the examination of only eleven RTAs had been includedWT/REG/M/32
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in the Agenda for the 32nd Session as the necessary documentation had not been provided in time, he
observed that this had two consequences.  First, planning the duration of Sessions became a difficult
task, which in a period of relative scarcity of meeting rooms and of interpretation resources was a less
than welcomed situation.  Second and more substantively, there has been not only a lengthening of the
period of examination of RTAs, but the appearance of a considerable time-lag for the first round ofexamination of an increasing number of RTAs.  Noting that he relied on the cooperation of all
delegations in trying to keep with schedules, he suggested that the Secretariat draw, before the
Summer break, an annotated agenda for the November meetings, and that required documentation be
made available well in advance.  In that context, the Chairman also reminded delegations that all
documents submitted to the Committee would be circulated as unrestricted, unless requested
otherwise, in accordance with the General Counc il's Decision of 14 May 2002, and invited them to
clearly instruct the Secretariat with respect to their own submissions.
D. E
XAMINATION OF REGIONAL TRADE AGREEMENTS
19. (The minutes of the examination of the Agreements listed under agenda items D.I-XI are
being distributed as separate documents.)
E. O THER BUSINESS
20. The Chairman noted that the Secretariat would give an account of the RTA-related technical
assistance activities undertaken by the Secretariat in the last months, including a presentation of the
Seminar held in late-April in Geneva, and those planned for the near future.  He recalled that
paragraph 41 of the Doha Ministerial Declaration instructed the Director-General to report to the Fifth
Ministerial Conference on the adequacy and implementation of technical assistance/capacity building
commitments contained therein, with an interim re port to be provided to the General Council in
December 2002.  Since the Secretariat was compiling data to fulfil that mandate, it was important that
the Committee be given the opportunity to be informed of the activities related to its area of work, and
that delegations could express any views.
21. A representative of the Secretariat indicated that the Secretariat had organized on 26 April
2002 a one-day Seminar on Regionalism and the WTO , specifically in the context of the Doha
Development Agenda and in response to requests received from delegations in 2001.  Non-resident
Members and regional organizations from developing countries participating at the Geneva Week,
which took place on 21-25 April, had also been also invited to the Seminar.  The Seminar had been
extremely well attended by around 250 delegates.  At its morning session, legal and economic experts
had focused on the main technical issues underlying the broad questions of market access and
regulatory provisions in RTAs and presented concrete proposals on how some of these issues could be
approached during the ongoing negotiations on RTA rules.  The afternoon session dealt with thepresent and future RTA-WTO relationship;  it consisted of a roundtable of speakers, chaired by Mr.
Rodríguez-Mendoza (Deputy Director-General), follow ed by open debate.  He then presented notable
questions which had been debated during the Seminar.  First, RTAs represented a major force in
global trade and the volume of trade under preferential treatment, as opposed to MFN, was set to
increase as more countries joined or negotiated RTAs.  The importance of counteracting possibledetrimental effects of this trend through further MFN trade liberalization has been stressed.  Second,
RTAs' "domino effect", coupled with fears of in creasing discrimination/marginalization, was pushing
more and more Members to conclude RTAs.  This situation was placing considerable strain on the
administrative capacities of small developing economies and it has been suggested that WTO
negotiations on RTA rules should take this factor into account.  Third, the unfettered development oftrade regulations in RTAs could lead to inconsis tencies between multilateral and RTA rules, could
and did create unpredictability in trade relations, and might seriously impede and distort trade flows.
This danger was exacerbated by countries becoming parties to several distinct RTAs encompassing
different trade rules;  the question of preferential rules of origin was particularly highlighted in this
context.  MFN harmonization of some of RTA regula tory provisions was a matter deserving furtherWT/REG/M/32
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consideration.  Fourth, to accurately assess the effects and implications of RTA regulatory provisions
on multilateral trade relations, more studies were required and the WTO had a central role to play in
furnishing such information.  In this sense, the CR TA had a major role in ensuring the transparency of
RTAs.  It has been suggested that a strengthening of  such role was critical for the future of Members'
understanding of RTAs.  According to a number of participants, in particular from developingcountries, the Seminar had met its main objective, namely to raise awareness on the significance of
RTAs in world trade and to explore ways to ensure coherence between trade policy initiatives at the
multilateral and regional level.  There have been calls from the floor to encourage the Secretariat to
organize a similar seminar in a not too far future, perhaps before the mid-term review of the Doha
Development Agenda.  He noted that the papers circulated were available on the WTO Website and
stressed that the costs of the Seminar had been covered by the Global Trust Fund.
22. Reporting on the technical assistance activities carried out by the CRTA Secretariat in 2001-
2002, the representative of the Secretariat called the Committee's attention to the document that had
been distributed indicating the 23 technical assistance activities conducted by the CRTA Secretariatfrom January 2001 to the present day.  Of these, 18 had already taken place and five were scheduled
for the remainder of 2002, some of which would be carried out in conjunction with the Secretariat's
Trade Policies Review (TPR) activities.  In particular, the Seminar scheduled for the end of June inLesotho would be carried out in the context of the upcoming TPR of the Southern Africa Customs
Union (SACU).  At the reque st of SACU member countries, which considered their TPR as part of the
institution-building process and aimed at ensuring that SACU was fully consistent with WTO rules
and regulations, the Seminar would include a detailed explanation of RTA-related issues in the WTO
context.  While most of the activities had been charged to the WTO regular budget, some had beenfinanced from donations by Members or the Global Trust Fund for activities under the Doha
Development Agenda.  Hosting countries or organizations also contributed to some expenses; for
example, in the context of the SA CU Seminar, the organizational costs were borne by Lesotho.  The
objectives of the activities listed varied from raising awareness on regional trade matters to training
and advising government officials on WTO rules and procedures on RTAs; their underlying objectivewas to contribute to the development of RTAs that were beneficial to their members and that
complemented the objectives of the WTO.  He reminded the Committee that the Technical
Cooperation Division was currently putting together the technical assistance programme and budget
for 2003, to be presented to Members before the summer break.  If Members wished to have technical
assistance seminars or activities included in that budget, the requests should be tabled either in the
Trade PoliciesReview Division or in the Technical Cooperation Division as soon as possible.
23. Thanking for the detailed information provid ed, the Chairman suggested that the Committee
might wish to receive that kind of information on a re gular basis, so as to monitor technical assistance
activities and to provide adequate feedback to th e Secretariat in this specialized area.  He thus
proposed that the Secretariat presents to the Committee a brief account of developments in RTA-
related technical assistance at each Session, under "Other Business", so as to get such feedback.
24. A number of delegations thanked the Secretariat for having organized the Seminar on
Regionalism and the WTO  and for the detailed reports made.
25. The representative of Hong Kong, China noted that the Seminar had been a very timely event,
given the developments that took place on RTAs in the past years.  He also agreed that given the
proliferation of RTAs, it was very important to maintain the momentum for multilateral liberalization
and in that line supported the organization of another seminar of a similar nature at a later stage, so asto keep under review the development of RTAs globally and also assess their relationship with the
multilateral trading system.
26. The representative of India noted that the seminar was very useful in providing an opportunity
to all Members to gain knowledge about RTAs  and to exchange views on how to minimize
detrimental effects of RTAs on third parties.  He supported the organization of another seminar, whichWT/REG/M/32
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would help in keeping the momentum for multilateral efforts towards the reduction of the negative
impact of RTAs on third parties.  He requested that the Secretariat's statements be distributed.  He
supported the Chairman's proposal to have a Secretariat report on technical assistance at each CRTA
session.
27. The representative of Cuba supported the Chairman's proposal of having information on
technical assistance on a regular basis in the CRTA and also requested that the Secretariat's statements
be distributed.
28. The representative of the European Communities noted that the Seminar has been very useful
and enlightening.  However, as for its follow-up, he was of the view that no decisions should be taken
at that Session and that if another seminar was needed, the Committee should ensure that it fitted with
other activities.  Concerning technical assistance, he noted that his delegation had argued numerous
times in the CTD that the counting of activities could be very misleading, because a closer look wouldindicate that in a few instances they not always amounted to real technical assistance and transfer of
knowledge.  A differentiation should made between  what really amounted to transfer of knowledge
and capacity-building, and simple presentations made  in various international fora.  More information
should be presented so that a real dialogue could take place on what were the real needs.  He recalled
the Committee that numerous calls had been made for more training and less seminars, and that wasprobably also true in the area of RTAs.  He also informed the Committee that his delegation was
holding discussions with Africa, Caribbean and Pacific (ACP) countries on what technical assistance
could be provided given the post-Cotonou environment where RTAs would be negotiated.  Within
these discussions, the possibility of having Africa as a focus for technical assistance activities in 2003
was being contemplated.  He appealed delegations to respond quickly to the request made so that agood and demand-driven technical assistance programme could be drawn for 2003.
29. The representative of Hungary noted that the Seminar had been very good and important in
the context of the negotiations on RTA provisions carried out in the Negotiating Group on Rules, as it
had allowed participants to confront the current situation and the direction it might take.  His
delegation was not against having another seminar, provided its timing be decided at a later stage soas to give another impetus to negotiations.  As for technical assistance, he also shared the view that
some of the activities listed were rather of a formal nature.  However, it was important to keep in
mind that there existed a continuous need for technical assistance in the area of RTAs.
30. Reacting to the comments made, the representative of the Secretariat noted that activities of a
formal nature had not been counted in the list of technical assistance activities presented at the CTD.
He noted that all of the activities remaining to be completed in 2002 were of a very substantive nature,
aiming at providing assistance in understanding what the WTO-consistency requirements were and/orto train delegations and Members in the understanding of these requirements.  He also pointed to the
fact that a small number of activities of a less substantive nature scheduled for 2002 had not been
included in the list, such as a seminar to be held in Seoul in September.  Regarding what he perceived
as a genuine request for a further seminar in the future, he ensured the Committee that its timing
would be very carefully looked at, so as to ma ke a genuine contribution to the ongoing learning
process on RTAs and to fit appropriately into the negotiating process in place.  In that line, an
appropriate time might be just before the mid-term review of the Doha Development Agenda, as
indicated earlier.
31. The Committee took note of the comments made, and agreed
 to address the question of RTA-
related technical assistance at each Committee's Session under "Other Business".
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