RESTRICTEDWORLD TRADE
ORGANIZATIONG/MA/M/32
11 September 2002
(02-4764)
Committee on Market Access
MINUTES OF THE MEETING
Held in the Centre William Rappard on 12 June 2002
Chairman: Joshua Phoho Setipa (Lesotho)
Agenda of the meeting Page
1. Election of the Chairperson .................................................................................................. ...2
2. Introduction of Harmonized System  2002 Changes into WTO Schedules of
Tariff Concessions – Request for a Waiver from Romania – Schedule LXIX
(G/L/553,  G/C/W/383) .......................................................................................................... ...2
3. Submission of HS96 documentation........................................................................................2
4. Submission of HS2002 Documentation ...................................................................................3
5. Modalities and operation of the Integrated Data Base..........................................................4
(a) Status of submission of the requir ed documentation (G/M A/IDB/2/Rev.14).............................4
(b) Progress Report on the Work done by the Se cretariat including t echnical assistance................5
6. Consolidated Tariff Schedules Database Project - Report by the Secretariat ....................7
7. Draft Decision on the Dissemination Policy of the IDB and CTS Data Base.......................8
8. Implementation-Related Issues and Co ncerns:  Meaning to be given to the
phrase "substantial interest" in paragraph 2 (D) of Article XIII of GATT 1994
(paragraph 1.2 of WT/MIN(01)17)..........................................................................................8
9. Outstanding Implementation Issues  raised by Members: Tiret 99 of
Job(01)/152/Rev.1 – Measures designed to secure a Redistribution of Negotiating
Rights in Favour of Small and Medium-sized Exporting Members in Trade
Negotiations ................................................................................................................... ..........11
10. Japan - Information on China's tariff policy on Certain Photographic and
Cinematographic Goods.........................................................................................................1 4
11. United States - China's TRQ Administration As Well As Application of the VAT
to Fertiliz er Imports .......................................................................................................... .....15
12. United States – Preparations in connection with paragraph 18 of the Protocol of
Accession of the People's  Republic of China ........................................................................16
13. Other Business.............................................................................................................. ...........18
(a) Canada – China's variab le tariff on ne wsprint ..........................................................................18
(b) Date of the next meeting.................................................................................................... .......18G/MA/M/32
Page 2
The above agenda as reproduced in document WTO/AIR/1820 dated 31 May 2002 was
adopted with the addition of items under 13.  An annotated agenda was circulated in an informal
document (Job No.(02)/55) dated 7 June 2002.
1. Election of the Chairperson
1.1 The Chairperson stated that the Rules of Procedure for meetings of the Committee on Market
Access provided that the Committee elect a Chairperson at the end of the first meeting of the new
year.  The Chairman of the Council for Trade in Goods had completed consultations on a slate of
names for appointment as Chairpersons of standing bodies in accordance with the established
guidelines for appointment for officers.  On the basis of the understanding reached, she proposed that
the Committee elect Mr. Joshua Phoho Setipa (Lesotho) as Chairperson of this Committee.
1.2 The Committee elected Mr. Phoho Setipa (Lesot ho) as Chairman and Mr Trevor Matheson
(New Zealand) as Vice-Chairman.
2. Introduction of Harmonized System 2002  Changes into WTO Schedules of Tariff
Concessions – Request for a Waiver from Romani a – Schedule LXIX  (G/L/553,  G/C/W/383)
2.1 The Chairman drew the Committee's attention to  the waiver request circulated in document
G/L/553 and accompanying draft waiver decision ci rculated in document G/C/W/383 from Romania.
This request was made in connection with the introduction of HS2002 changes in Romania on 1 January
2002.  The relevant HS2002 documentation was submitted and circulated on 4 June 2002 asG/SECRET/HS02/ROM/1.
2.2 The Committee agreed to forward the waiver request (G/L/553) and the draft waiver decision
(G/C/W/383) to the Council for Trade in Goods for approval.
2.3 The representative of Romania thanked the Committee for having considered the request
positively.
2.4 The Committee took note of the statement.
3. Submission of HS96 documentation
3.1 The Chairman drew the Committee's attention to document G/MA/TAR/2/Rev.28 and Corr.1
which reflected the present situation concerning the submission of required documentation.  From the
document, it could be noted that the submissions of fifteen Members, whether they had requested an
extension of waivers or not, remained pending due to ongoing consultations and/or negotiations.
3.2 He reported on the informal consultations that had been taking place on the subject of the
HS96 transposition exercise.   Since the last formal meeting on 15 March 2002, an informal meeting
of the Committee was held on 26 April 2002 to review the status of HS96 submissions.   An informal
list entitled Revision 12 detailing the situation of HS96 submissions was faxed to all Members when
this informal meeting was convened.   He stated that this process was useful in achieving progress and
proposed that another meeting of this kind be held in the near future. A Revision 13 of the informallist detailing the situation of HS96 submissions co uld be issued along with the fax convening this
meeting.
 3.3 The Committee agreed to the Chairman's proposal.G/MA/M/32
Page 3
4. Submission of HS2002 Documentation
4.1 The Chairman referred to document G/MA/TAR/4/Rev.1 which reflected the situation with
respect to the circulation of HS2002 documentation.  In accordance with the procedures for the
incorporation of HS2002 changes into schedules of concessions, adopted by the General Council on
18 July 2001 and contained in document WT/L/407 the Committee had met in a dedicated  informalsession to undertake a multilateral review of the proposed HS2002 changes of some Members on
26 April 2002.  The submissions by Australia, Canada, Norway and the US were reviewed with the
assistance of the electronic verification sheets prepared by the Secretariat.  It was evident that in all
four cases the issues identified in the Secretariat verification sheets were more complicated than had
been anticipated and would necessitate more discussions between the Member concerned and the
Secretariat.   An exchange of views then took place as to the need to amend the Decision contained in
document WT/L/407 in light of this unexpected situation, and the need to reconcile it with
paragraph 4 of Attachment B of the same Decisi on which envisaged the submission of specific
queries from other Members "to the greatest extent possible by the first multilateral review session."
The view was expressed that it would be more useful if specific queries from Members were received
once discussions between the Secretariat and the Member concerned had been finalized on a schedule.
Because, as had been witnessed by the specific queries submitted under this exercise, there was anoverlap with the points raised in them and in the Secretariat's verification sheet.  As a result, Members
agreed that in future multilateral reviews of this nature, the Member concerned i.e. the Member whose
schedule was the subject of verification should give an indication of the status of its discussions with
the Secretariat and give a signal to Members when the process between the Secretariat and itself had
concluded so that Members could begin submitting specific queries, if they had any at that stage.With such a system, it was also the view of the Members present at that meeting that there would be
no need to amend the decision contained in document WT/L/407.
4.2 The representative of the United States stated that the first multilateral review of the US
HS2002 submission had revealed a substantial number of problems with the US submission. He
informed the Committee that his government w ould submit shortly a revised HS2002 submission
which he hoped would address those problems.
4.3 The representative of Australia stated that like the US, his delegation had been working
closely with the Secretariat to rectify some of the problems that had been identified through the
electronic verification of Australia's HS2002 changes.  His delegation hoped to be able to submit the
revised documentation that would address the issues. His delegation also needed to submit a completeloose-leaf schedule under the Article XXVIII procedures. He enquired as to when the next multilateral
review would take place as his delegation wished to provide its documentation in advance of that
review.
4.4 The Chairman indicated that the next multilateral review would be scheduled for the latter
half of July 2002.4.5 The representative of Brazil referred to the Chairman's summary of the discussions of the first
multilateral review of the HS2002 process. His delegation agreed fully with the general thrust of that
summary particularly regarding the lack of a real need to amend the decision on the procedures.However, there was one point on which his understanding differed slightly. The sense he had got from
the discussion was that Members would not be precluded from submitting their comments
immediately following the submission of HS2002 documentation on the understanding that the
notifying Member was also free to wait until it had concluded the process with the Secretariat before
replying to the other Members' comments.  In other words, he wished to register Brazil'sunderstanding that Members were free to submit comments and reservations on a HS2002
documentation immediately after its submission.G/MA/M/32
Page 4
4.6 The Committee took note of the statements.
5. Modalities and operation of the Integrated Data Base
(a) Status of submission of the requir ed documentation (G/MA/IDB/2/Rev.14)
5.1 The Chairman stated that document G/MA/I DB/2/Rev.14 presented the situation of PC IDB
submissions as of 24 May 2002.  Since the document had been finalized the Secretariat had advised
him that the following new submissions had been received: Barbados' 2001 imports and tariffs;
Chile's 2001 imports; Cuba's 2001 and 2002 tariffs; Hong Kong, China's 2001 and 2002 tariffs
(including current bound rates and correlation tables);  Iceland's 2001 imports; New Zealand's 2001
imports; El Salvador's 2002 tariffs;  Slovenia's 2002 tariffs (including current bound rates).  He
reminded Members that the deadline for furnishing the 2002 tariff information was 31 March 2002,
and 2001 trade information 31 October 2002.
5.2 The representative of the United States stated that at the recent Market Access seminar where
IDB issues and other trade databases were discusse d,  it was clear that without sufficient submissions
to the IDB of tariff and trade information it woul d be impossible for the WTO Secretariat to provide
the kind of technical assistance that developing country Members were going to find necessary, ifthey were going to participate in the non-agricultural market access negotiations.  So, his delegation
appealed to those Members to make up to date submissions to the IDB.
5.3 The representative of Australia shared the views expressed by the United States.  Australia
attached importance to all WTO Members making regular submissions to the IDB. This was very
important data that would be used for the negotiations and would be particularly important for
developing country Members.
5.4 The representative of Colombia stated that her authorities had submitted to the Secretariat the
relevant data for exports and imports 2001.  She supported the comments by the US and Australia to
the effect that all Members should make every effort possible to submit up to date information to the
IDB.  It was a very important instrument particularly in view of the up-coming negotiations.
5.5 The representative of the European Communities shared the views of delegations who had
spoken of the importance of the IDB. The IDB was a very valuable instrument and in this regard it
was necessary that it be as complete as possible and he encouraged Members to make the required
submission.  He pointed out that the national correlations for 2002 had been submitted and that thiswould need to be accordingly reflected in document G/MA/IDB/2/Rev.14.
5.6 The representative of Chile agreed with what  had been said by other delegations concerning
the IDB and its value for on-going negotiations, particularly for developing countries.  However, this
tool was not only important for market access negotiations on non-agricultural products but also fornegotiations on agriculture because the coverage of the database included both areas.
5.7 The representative of New Zealand endorsed the earlier comments by the US, Australia, EC
and Chile regarding the importance of the IDB and the significance of having updated and timely
submissions to the IDB.  He thanked the Secretariat for confirming that it had received New Zealand's2001 import data.  He also pointed out that on page 8 in regard to New Zealand, there was  a list of
"no's" under the bound column. It was his assump tion that New Zealand's recent CTS submission
provided all that data and he would be willing to discuss with the Secretariat as to how that could be
reflected in this IDB document.
5.8 The representative of Ecuador informed the Committee that his delegation had submitted to
the Secretariat on 12 May 2002 a communication which contained information relating to boundG/MA/M/32
Page 5
tariffs from 1996 until 2002.  So he asked the Secretariat for clarification as to why this was not
reflected in document G/MA/IDB/2/Rev.14.
5.9 The Secretariat responded that it would need to look into the question.
5.10 The Committee took  note of the statements.
(b) Progress Report on the Work done by the Secretariat including technical assistance
5.11 On IDB dissemination the Secretariat reported that it had continued to load information onto
the IDB Internet site on a monthly basis.  As of  12 June 2002, there were 334 country periods on the
site, of which 322 were in the approved area.  Eighty-two Members and four acceding countries or
territories were represented.  As a reminder, the passwords for accessing the IDB Internet sites (FileTransfer Facility and Internet Analysis Facility) would be changed on 17 June 2002.  The new
passwords were communicated to Heads of Delegations by letter on 17 May 2002.
5.12 Release 8 of the CD-ROM would be distributed to delegations during the week of
24 June 2002.  It contained information for 269 country periods.  As usual, two copies of the CD-ROM would be provided to each delegation.  Any delegation requiring extra copies was requested to
contact the Secretariat.
5.13 On the use of IDB information since March 2002,  following a request from the EFTA
Secretariat, simple tariff averages of applied duties from the IDB for a range of countries and forselected HS chapters were prepared by the Secretariat. For the UK government, the Secretariat
prepared tariff averages of current bound and applied duties for all available countries for HS
chapter 30, i.e. pharmaceutical products. In addition, several ad hoc requests by delegations were
answered.
5.14 On, trade policy review information, since March 2002 four Members had approved the use
of their Trade Policy Review (TPR) files for the IDB.  A reminder letter had recently been sent under
the signature of the Chairperson of this Committee to12 Members whose authorization to use Trade
Policy Review (TPR) files was still outstanding.
5.15 On follow-up actions stemming from the 2000/01 Multilateral Appraisal of the IDB and
related technical assistance activities, to improve the IDB submission rate it was intended to contactparticipants in IDB national and regional workshops and IDB focal points in cases where IDB
submissions had not been forthcoming or had been sporadic.  It should be mentioned that delegations
were notified via the Central Registry of Notifications every 6 months if IDB submissions had not
been forthcoming.  A copy of the CRN letter could also be forwarded to national focal points.
5.16 On IDB technical assistance, since March 2002 IDB statisticians had conducted a national
seminar in Pakistan, and a regional seminar in Oman for Arab Members and Acceding countries.  The
Oman regional seminar was followed by two days of consultations with national officials in Oman.
Eleven out of the 16 Member countries and Acce ding countries who were invited to the seminar
attended.  The result of this activity was positive.  A number of countries submitted data to the IDBand all participants were instructed on notification procedures and the use of IDB and CTS
information.
5.17 During Geneva Week, several hands-on sessions on the IDB were offered to non-resident
delegates.  At the recent Market Access Seminar, participants were offered two hands-on IDB trainingsessions.  Both sessions were fully booked.  IDB statisticians were also present throughout the three
day seminar to respond to questions and give advice.G/MA/M/32
Page 6
5.18 One member of the IDB team was currently in Mongolia conducting a national IDB seminar.
A video-conferencing session with Chile would be held this Friday 14 June 2002.  As for the
remainder of 2002, the Statistics Division had the following activities in the pipeline: Regional
seminars for French speaking African Members; Caribbean Member countries for which the
Secretariat was seeking cooperation with the Inter-American Development Bank; participation in aUnited Nations Statistical Division seminar on improving African trade statistics. National IDB
activities in Bangladesh, Burundi, the Dominican Republic, India, Lithuania.  To accelerate the
selection process for regional seminars, the Division would be following the suggestion put forward
by the Technical Cooperation Division which was to address invitations to Heads of Delegations and
copies thereof to national focal points.  IDB training for the Trade Policy Courses continued as well as
IDB workshops and presentations for delegations in Geneva on request.  Looking forward, technical
assistance was on the agenda of the recent annual meeting of the Inter-agency Task Force oninternational merchandise trade.  It was decided that  as a first step towards ascertaining the feasibility
of conducting joint activities that each agency's planned activities would be posted to the Task Force
EDG. As for 2003, the Technical Cooperation Division had called for submissions for next year's
Technical Assistance plan by  the end of July 2002.  It was emphasized again by senior management
that ad hoc requests would be accepted only on an exceptional basis.  Therefore it was important thatdelegations informed the Statistics Division or the Technical Cooperation Division before the end of
July 2002 deadline of any requests for technical assistance that were foreseen for the year 2003.  It
was also intended to plan a range of regional seminars and workshops covering the main regions.
They would focus on the supply of IDB data and the use of IDB and CTS information.
5.19 On resources, the Statistics Division had been allocated a post for a statistician for one year
under the recent fast-track recruitment process.  A statistician with good experience in the statistical
support of tariff negotiations had been recruited.  His duties would consist of assisting the division in
technical assistance delivery, development of the Internet Analysis Facility (IAF) functionalities and
addressing users' needs regarding IDB and CTS.
5.20 On software development, the IDB IAF prot otype software (http://iaf.wto.org/) was made
available to Members on 19 April 2002.  It allowed users to browse IDB information on-line.  It
contained facilities for selecting products and applying tariff and trade criteria, similar to those
available with the IDB CD-ROM.  At present, two reports could be compiled - a detailed tariff line
report and a report showing tariff averages, imports and other statistical indicators.  A third report -
tariff and trade profiles, was almost complete and would be transferred to the Internet site shortly.
5.21 As mentioned at the last formal meeting of this Committee, the IAF was potentially a very
powerful analytical tool that would assist all Members to fully exploit the information in the IDB.
The Secretariat had obtained extra budgetary funding, partly from the UK government and partly from
the Global Trust Fund to assist with the IAF software  development.   The IAF would be progressively
enhanced to operate from linked IDB and CTS information, to provide additional reports and to
provide downloading facilities.  A consultant programmer was also evaluating the possibilities for
permitting the IAF to operate from a "snapshot" of the database to be distributed on DVDs, in order to
address the needs of users that had unreliable telecommunication facilities.  If feasible, this "portable
IAF" could eventually replace the IDB CD-ROM.
5.22 In order to ensure that the IAF fully met user requirements, feedback from Members was very
important.  Feedback and information on any problems that might arise in using the Internet facility
could be sent to the Secretariat via the IDB e-mail account (idb@wto.org).  Suggestions for additional
features would also be welcome.  Within the Secretariat, focal points had been identified in variousDivisions.  They were being used to identify anal ytical requirements for incorporation in the IAF and
improvements that could be introduced in the software.  In this context, on 19 June 2002 from 14.00
hrs to 16.00 hrs a demonstration of the IAF would be held.  It would consist of an introduction to the
Facility and a presentation of future development pl ans.  It should also provide an opportunity forG/MA/M/32
Page 7
delegations here in Geneva to provide feedback on the IAF current facilities and to offer suggestions
as to future requirements.  The workshop would be in English.  Questions and answers, however,
could be in all three WTO languages.
5.23 The representative of Chile  thanked the Statistics and Technical Assistance Divisions for the
video conference that would take place on between Santiago and Geneva on 14 June 2002. The
conference was to cover the tools that could be used for the future negotiations on market access on
agriculture and non-agricultural products.  This was an alternative form of technical assistance
through which financial costs were reduced.
5.24 The representative of Oman expressed her go vernment's appreciation to the WTO Secretariat
for sponsoring the IDB regional seminar that was held in Oman.
5.25 The representative of Switzerland asked if additional workshops could be organized after the
one scheduled for 19 June 2002.5.26 The Secretariat responded that additional workshops could be organized.
5.27 The Committee took note of the report and the statements.
6. Consolidated Tariff Schedules Database Project - Report by the Secretariat
6.1 The Secretariat reported that it had completed the processing of all developing country
Members' CTS tariff and agricultural commitments fi les, including the two latest Members, China and
Chinese Taipei.  Since the March 2002 formal meeting of this Committee, the Secretariat had
incorporated the comments received from Bulgaria, India, Lithuania and Singapore into their database
files.  The revised files have been sent to the Members concerned for approval.  Comments forwarded
by Czech Republic and Japan were being included in their database files.   With respect to the 11Members who had committed to prepare their CTS database files themselves, the CTS tariff and
agricultural commitments files of eight Members were completely finalised.  They were Australia,
Canada, the EU, Hungary, New Zealand, Norway, Sw itzerland and the US.  Still outstanding were: 1)
the draft agricultural file of Venezuela.  She had been informed that the review of their draft
agricultural commitments was continuing with the intention of completing the approval process as
soon as possible;  2) the tariff submission of Icela nd.  Iceland had forwarded its final tariff submission
to the Secretariat, including the ITA tariff concessions.  There were still some correlation issues thatneeded to be addressed.  However, these problems should be resolved in the near future through
cooperation between the Secretariat and the delegation of Iceland;  3) a data base file incorporating
the tariff and agricultural commitments of Poland had not yet been submitted to the Secretariat.   All
finalised CTS database files had been posted to the Internet File Transfer Facility web site.
6.2 The representative of the United States stated that at the informal meeting preceding this
meeting, there had been no objections to switching on the CTS database. He did not think that a
formal decision by the Committee was necessary but a statement from the Chair to the effect that the
Statistics Division should be instructed to provide access based on the dissemination policy that the
Committee was going adopt under the next agenda item would be an appropriate measure. The CTSdatabase was going to be a work in progress because it would be constantly updated for changes.  This
database was to be as accurate a reflection of the current situation of Members' obligations in this area
as possible, so continuing scrutiny was necessary but that was a long-term effort.
6.3 The Chairman indicated that he had intended to bring up this subject under the next agenda
item.G/MA/M/32
Page 8
6.4 The representative of Venezuela stated that as the Committee was aware, Venezuela had not
yet finalised its data on agricultural products.  Venezuela had explained that this was due to the
changing of posts in the Ministry which had affected the people responsible for the updating of the
data.  A special team had now been set up to do the work.  However, until such a time that
Venezuela's comments were submitted to the Secretariat, Venezuela's agricultural data could not beconsidered approved.  She therefore requested clarification from the Secretariat.  If the CTS database
was to start up what would be the treatment given to Venezuela's data and what would be the policy
for its dissemination?  Her delegation wanted to have a guarantee to the effect that Venezuela's data
would be included on a provisional basis an d that its dissemination would be limited.
6.5 The Secretariat responded that technically speaking the situation of Venezuela would be
covered by paragraph 10 of the dissemination policy of the CTS database.  The files in the CTS would
be disseminated on the internet file transfer facility and on this site there were two areas similar to the
IDB, the provisional and the approved area.  The file of Venezuela would initially be posted to the
provisional area and when it was finalized it would be moved to the final approved area.
6.6 The representative of Poland  stated that his authorities were finalizing the preparation of the
CTS files. He informed Members that Poland was going to submit its CTS file in the HS2002
nomenclature.
6.7 The Committee took note of the statements.
7. Draft Decision on the Dissemination Policy of the IDB and CTS Data Base
7.1 On the basis on the discussions held prior to this formal meeting, the Chairman proposed that
the Committee adopt the decision contained in document G/MA/W/31, with the changes agreed to at
the informal meeting, concerning the dissemination policy of the IDB and CTS database.
7.2 The Committee so agreed1.
7.3 The Chairman also proposed that based on the discussions undertaken in the informal meeting
preceding this formal meeting that the Comm ittee agree to turn on the CTS database on the
understanding that the Secretariat would provide regular updates as to the status of the submissions
that were not completed and those that were outstanding.
7.4 The Committee so agreed.
8. Implementation-Related Issues and Concer ns:  Meaning to be given to the phrase
"substantial interest" in paragraph 2 (D) of Article XIII of GATT 1994 (paragraph 1.2 of
WT/MIN(01)17)
8.1 The Chairman recalled that at the last formal meeting of the Committee on 15 March 2002, in
order to start the process and to assist the Committee in its consideration of this subject, the former
Chair of the Committee had proposed that the Committee request the Secretariat to prepare a paper
using empirical data (nothing complicated) illustrating how "substantial interest" would be taken into
account if the Korean proposal were to be used. She had added that this paper was only meant toassist the Committee in its initial thinking of the subject, and did not prejudge the position of any
delegation. The Committee had agreed to this proposal.
8.2 A discussion of this subject had taken place at the Committee's informal meeting of
26 April 2002 based on a Secretariat document circulated as Job (02)/34.  At that meeting, and in light
                                                     
1 The adopted document was circulated as G/MA/115.G/MA/M/32
Page 9
of the results of the Secretariat study, the point was made by one delegation on the appropriateness of
the Korean proposal to determine Members eligible for new rights.  In order to further advance
discussions, the Chair had proposed that Members forward to the Secretariat concrete proposals
concerning the parameters on which new studies by the Secretariat could be undertaken.  In this
connection, a fax dated 8 May 2002 was sent by the former Chair inviting Members to submit writtenproposals on a possible criterion to define "substantial interest" under paragraph 2(d) of Article XIII
of GATT 1994.  A submission was received from Saint Lucia which was circulated as document
G/MA/W/30 .  He proposed that the Secretariat prepare additional examples basing itself on St Lucia's
proposal, and that the Committee meet informally in order to discuss this matter once the Secretariat
paper had been finalized.
8.3 The representative of Ecuador stated that during the informal consultations conducted by the
Chairperson of this Committee at the request of th e Chairman of the General Council, prior to the
Doha Ministerial Conference, his delegation had expressed its position on the request made by
another Member of the Organization to revise the meaning to be given to the expression "substantial
interest" in Article XIII:2(d) of the GATT 1994.  Ecuador's position on this matter had not changed
since the pre-Doha consultations. In the days be fore Doha, Ecuador did not oppose transmitting the
report made in a personal capacity by the Chairperson of the Market Access Committee to the
Chairman of the General Council with a view to including it in the Ministerial Declaration on
implementation issues.  However, Ecuador agreed to this on the condition that the only decision taken
in this respect should be that the matter should re turn to this Committee for further analysis without
any conclusion being adopted.
8.4 At its latest meeting, the Committee was presented with a paper prepared by the Secretariat
illustrating, through an empirical example on the basis of the proposal made by Korea, the
implications that this proposal would have in the case of a specific product in a specific market.  He
thanked the Secretariat for this study, which in his view confirmed his delegation's initial position.  Itwas not appropriate to state that there were doubts about the contents of Article X III:2(d) of the
GATT 1994.  If anyone had any doubts as to this they  should consult what the Appellate Body had to
say on the banana case in paragraph 161 of its report.  Obviously there were Members who did not
like what the Appellate Body had said, but that wa s not a reason to alter the balance of rights and
obligations under the GATT.  The Appellate Body report clearly stated the correct interpretation of
Article XIII:2(d) of the GATT 1994:  it was clear that at the moment when a quota was allocated there
were Members who had a substantial interest and ot hers who did not.  The Appellate Body made it
clear what the rights of those with a substantial interest at the moment of quota allocation were.  It
also stated that the allocation of quotas among those not having a substantial interest must follow the
principle of non-discrimination. The proposal to revise the meaning of the expression "substantial
interest" was, in Ecuador's view, an attempt to alter the balance of rights and obligations under that
Article and circumvent the principle of non-discrimination among those not having a substantialinterest.
8.5 A practice had been followed for a number of decades whereby, in order to have a substantial
interest at the moment when a quota was allocated, the criterion to be considered was whether a
Member had at least 10 per cent of the import market for a specific product.  On the basis of thispractice many tariff quotas had been distributed and disputes resolved.  And it was on the basis of this
practice that the results of the Uruguay Round were agreed.  To alter this practice had implications
that went beyond those originally raised when the consideration of this item was proposed.
8.6 Lastly, the proposal raised situations that were hard to accept, such as the following:  in the
case of a country the economy of which basically depended on a single crop, that country would
automatically have a substantial interest in all th e markets of the world where quotas existed for that
product.  In other words, it would be in a more fa vourable situation than the main exporters of the
product in question.G/MA/M/32
Page 10
8.7 The representative of the United States stated that his delegation remained interested in
pursuing this idea.  There were some issues of fairness that had been raised which needed to be further
examined.  Although his delegation understood that the proposal concerned the future, this clearly
would have an effect on the agriculture negotiations. For the Market Access Committee to beoperating in isolation from the agriculture negotiators might potentially be a problem. It was clear that
input would have to be solicited from them at some point.
8.8 The representative of Australia stated that his delegation was not adverse to the consideration
of the proposal in this Committee, or to further empirical exercises.  However, like the United States,
his delegation believed that there was need to be mindful of the agricultural negotiations and the
possible requirement of an input from the Committee on Agriculture.  His delegation believed that theissues touched upon in the statement by Ecuador were germane to this debate and the consideration of
the proposals. In fact many of the issues raised by Ecuador were of interest to his delegation.
8.9 The representative of Brazil stated that he supported the Chair's proposal to continue to
address this issue in informal consultations.  His delegation attributed particular importance to a
positive response to implementation related issues and concerns.  It seemed to his delegation that the
current international scenario for the Doha Round wa s rather negative, and that this situation should
not be aggravated by not responding to the legitimate concerns raised in these implementation issues.
He had taken note of the statement by Ecuador and fully appreciated the concerns raised.  It seemed to
his delegation that Members might have to look more closely at the question of upsetting the balanceof rights and obligations.  The problem was precisely that smaller economies under the current
interpretation of Article XIII had no rights and this was the problem.  The focus that had been given to
trying to find a solution to this problem through the Korean proposal had raised more difficulties than
solutions.  Seeking a solution for the specific prob lems of small economies in this issue should be
based essentially on the intrinsic importance of that export to that country and not as a comparison tothe situation of other exporters be they medium or large of the same product.  So the focus had to be
more on the weight of the exports of that particular product to the exporting country, than on this
comparison on market share with other exporters.  He took note of the subm ission of St. Lucia, and
wished to revert to it at the future informal meeting.
8.10 The representative of India stated that at a systemic level, her delegation attached importance
to concluding work on implementation issues within the timeframe allocated by Ministers at Doha.
She took note of the statements made by the US and Australia regarding the linkage with agriculture
negotiations.  However, her delegation was of the view that the linkages had to be cleared up by each
delegation in its own internal assessment.  Her delegation was committed to working on this particular
implementation issue with the proponents of the implementation issue.  In the past, her delegation had
supported the Chairman's consultations and also the three issues which were set out in the report bythe Chairperson to the General Council prior to the Doha Ministerial Conference.  Her delegation
believed that those three elements contained a useful basis for the Committee to continue its work and
to try and reach a conclusion.  She also appreciated the point that was being made by Ecuador,
regarding allocation of existing quotas in order not to disadvantage existing quota orders.  However,
Brazil also had a point when it said that it was im portant to focus on the weight of exports and try to
seek a solution from that perspective.  The two objectives were not necessary conflicting and creative
solutions were certainly possible. One of the ideas that had been floated in the paper by St. Lucia was
for the Secretariat to use some other products as an example to further work on the Korean proposal.
It was a good idea for the simple reason that it would help all Members think through in detail the
various elements of the implementation issue wit hout saying whether the Korean proposal was the
right one.  Empirical exercises had the potential of clarifying underlying issues and perhaps they
could direct Members towards a solution which would not disadvantage existing quota holders and
which at the same time would allocate certain rights to smaller economies which did not currently
enjoy them.G/MA/M/32
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8.11 The representative of St Lucia stated that like Brazil her delegation wanted to move away
from an empirical analysis based on a relative comparison i.e. between Members, to one of the
absolute, i.e. the importance of the product to the exporting Member.  St. Lucia was proposing that the
Secretariat do more empirical work in terms of five more products and on an absolute basis.  In otherwords, assess the importance of the product to e xporting Members and whether or not they would
meet with what was jurisprudentially suggested to be  a 10% criteria in terms of the absolute share of
the importing market. If such an analysis were done , from the figures Members would be able to see
the merits of the proposal which was being advanced. She stressed that she was referring to new quota
allocations thereby taking account of Ecuador's concerns. Her delegation felt that it should be clear to
all Members that if 70% of a Member's exports went into a single market, and quotas were to be
allocated, then that Member should have a right to a quota like anyone else who had a 10% importshare of that market, even if 70% of those exports only constituted 3% the import share.  This was not
an issue of comparing one Member to another, but an  issue of absolute justice.  This was the reason
why St. Lucia was continuing with this subject, because it was not one which would directly benefit
St. Lucia.  For example, if one looked at the Secretariat's empirical study on coffee, Burundi and
Uganda had over 40% of their exports made up of coffee.  However, they would not qualify forimport quotas under the traditional 1947 jurisprudence which had been brought into the new WTO
era.  It was this situation which St Lucia wished to address.  If the Committee would agree to the
Secretariat doing further empirical work it would certainly allow Members to see the clear merits of
what was being advanced and the justice which had to be addressed in this implementation proposal.
8.12 The representative of Korea stated that Ko rea's proposal of a 10% benchmark was provided
for the purpose of the exercise and was not necessarily an actual representation of substantial interest.
It was necessary to have more empirical studies on various products.  He also wished to examine
further the points raised by Ecuador.
8.13 The Chairman proposed that the Secretariat undertake further empirical work based on the
proposal by St Lucia and continue discussions at the next informal meeting.
8.14 The Committee agreed to the Chairman's proposal.
9. Outstanding Implementation Issues raised by  Members: Tiret 99 of Job(01)/152/Rev.1 –
Measures designed to secure a Redistribution of Negotiating Rights in Favour of Small andMedium-sized Exporting Members in Trade Negotiations
9.1 The Chairman stated that the minutes of the Council for Trade in Goods meetings of 22 and
27 March 2002 reflected the following: "… with respect to tiret 99, contained in the Compilation of
Outstanding Implementation Issues Raised by Memb ers (Document Job)(01)/152/Rev.1), he [i.e. the
Chairman] proposed that this tiret fell in the area of competence of the Market Access Committee
which would take up the issue and report to the Trade Negotiations Committee by the end of 2002.
He proposed that this issue be put on the agenda of the next meeting of the Market Access Committee
so that it could be addressed in accordance with paragraph 12(b) of the Ministerial Declaration."
9.2 The Council for Trade in Goods had agreed to the Chair's proposal, and accordingly this
subject has been inscribed in the agenda of today's meeting.   Tiret 99 referred to "Measures designed
to secure a Redistribution of Negotiating Rights  in Favour of Small and Medium-sized Exporting
Members in Trade Negotiations"
9.3 The representative of St Lucia recalled that th is tiret stated that the "General Council shall
adopt measures to secure a redistribution of negotiating rights in favour of small and medium-sized
exporting Members in trade negotiations"; "trade negotiations" was a broad term.  The mandate forG/MA/M/32
Page 12
redistribution of negotiating rights in favour of a subset of the Membership, i.e. small and medium-
sized exporting Members, in the limited circumstance of the renegotiation of tariff bindings derived
from the Uruguay Round Understanding on the interpretation of Article XXVIII of GATT 1994.  The
Understanding represented the recognition of all Members of a basic reality that the evolution of the
multilateral trading system had built in a disparity within the Membership which precluded theexistence of a level playing field.  She was surprised that the Chairman of the Council for Trade in
Goods had referred the matter to the Market Access Committee, and unfortunately she had not been
present at that particular meeting. Essentially, because it was not a discussion of initial negotiating
rights within the particular confines of Article XXVIII. This issue should have actually been referred
to the General Council, if not to the TNC.  The pu rpose of introducing this issue prior to the Doha
Ministerial was that the concept of engaging in any broader negotiations had to recognise that some
Members were at a fundamental disadvantage in any system of request and offer.  Some Members hadno level playing field.  Some could not even be present at the negotiations.  As she had mentioned in
the Services negotiations, if a Member was going to put a request to St Lucia then it would be
necessary to provide per diem  and travel allowance to St Lucia.  There was a fundamental inequality
to the rules. How could one talk about progressive liberalization in a Doha Development Agenda
when her delegation, for example, had no meaningful way to advance St Lucia's rights in the courseof the negotiations.  This was the point of this particular implementation proposal.  Her delegation had
not been pushing for any Doha expanded negotiations, but they had arrived and the point of this
proposal was to examine how negotiations could take place, with respect to those which had limited
negotiating capital.  How could St Lucia advance its interests at the negotiating table? The mandate
was much broader than Article XXVIII and initial negotiating rights, it was conceptual, it wasprocedural, it was fundamental as to how one proceeded. It was extensive and underpinned the way in
which the multilateral system operated and the way in which her delegation continued to be further
marginalized in the process.
9.4 The representative of the United States stated that the proposal appeared like it went well
beyond the mandate of this Committee.  Some thought had to be given to whether it made sense to
re-introduce this issue into the process at a higher level. On the specific element of tiret 99 and the
redistribution of negotiating rights in favour of small and medium-sized exporting Members, his
delegation viewed this as a difficult question.  In order to make progress, this issue needed to be part
of the overall negotiations. His delegation was willing to examine the issue in this Committee,
participate in the discussions but this was a more difficult issue than the one that the Committee had
considered under the previous agenda item. He noted that in the context of the Committee's review ofparagraph 1 of the Understanding on the Interpre tation of Article XXVIII of GATT 1994 that was
completed in 2000, no specific proposals had been forwarded.
9.5 The representative of Switzerland stated that her intervention would be limited to
Article XXVIII of GATT 1994, although the issue was much broader as stated by previous speakers.
The idea of INRs was not new and was of essential importance to small and medium-sized exporting
Members. This concept could be found in Article XXVIII of GATT 1994. Until now the INR concept
was based on bilateral negotiations between two WTO Members. The problem was that these INRs
had not been systematically put in schedules of concessions of Members at the end of the Uruguay
Round. Therefore, the situation was not transparent because a Member was not aware with whichother Member, on which tariff line, and at which level it had  negotiated an INR. The sole exception
was in the case of accession negotiations to the WTO. In addition, her delegation wished to make it
clear that an INR was created through a bilateral agreement between two WTO Members which
negotiated bilaterally in the sense of Article XXVIII of GATT 1994. The inscription into the schedule
of concessions did not create INRs. The purpose of the inscription in the schedule of concession wasto enhance transparency. This had been done since the beginning of the WTO in the framework of
accessions. This should also be possible in the Market Access Negotiations envisaged in the Doha
Ministerial Declaration.  As regarded tiret 99, it would have to be discussed and agreed among all
WTO Members.G/MA/M/32
Page 13
9.6 The representative of St Lucia stated that St. Lucia was the initial proponent of tiret 99 and
the issue had always been a difficult one for her delegation, because the initial discussion had focused
solely on INRs.  She was appreciative of Switzerland's contribution because the key issue had been
that the whole concept of negotiating rights was built up on a bilateral process. This was a multilateraltrading forum,  however once the negotiations became bilateral, St. Lucia would lose any serious
negotiating ability, unless it was negotiating with an equally small Member. This was an essential
issue which had to be addressed in all market access negotiations – goods and services.  This was the
underpinning reason for raising the issue of redistribution of negotiating rights because INRs were
based on a process which pitted unequal Members against one another.
9.7 The representative of Australia stated that one of the fundamental problems that his
delegation had  with this proposal thus far was that Members tended to confine the consideration of
this to Article XXVIII, but now it was a broader issue which perhaps could not be handled in this
Committee. Additionally, the issue addressed the question of redistribution of INRs and the term
"redistribution" implied that a Member holding an  INR could loose it in favour of a small and
medium-sized country. He understood from St. Lucia's explanation that what was being referred towas the securing of INRs and not the redistribution of INRs already held by Members.  If the issue
were to be addressed in those terms it might allay some of the concerns of certain Members.
9.8 The representative of St Lucia  stated that the term "redistribution" came from the text of the
Uruguay Round Understanding on the Interpretation of Article XXVIII of GATT 1994, so it was not
an alien notion.  She agreed with Australia that the idea was not to deprive any Member of what it
had.
9.9 The Chairman proposed that the Committee agree to send back the issue to the Council for
Trade in Goods with the proposal that it be resubmitt ed to the General Council in order that a decision
be taken on how best to address this item.  The General Council could also be encouraged to
reformulate the mandate that it would give to this Committee.
9.10 The representative of St Lucia stated that she could agree with the Chairman's proposal to
send back to the Council for Trade in Goods the i ssue for submission to the General Council in order
for that body to address the broader issues of this proposal which went beyond the mandate of this
Committee. However, she was of the view that this Committee could continue consideration of thoseissues which fell within its purview in an informal meeting, and that it did not need another mandate
from the General Council to continue discussions on questions which were within its mandate.
9.11 The representative of Pakistan agreed with St. Lucia's statement. As a subsidiary body to the
Council for Trade in Goods, the Market Access Committee was well within its rights to examine the
proposal. In  his delegation's view the proposal di d not go beyond the mandate of Article XXVIII, and
Article XXVIII issues had always been dealt with in the Comm ittee on Market Access. However, it
could be a cross-cutting issue and as a subsidiary body, this Committee would be well within its right
to give its input to the Council for Trade in  Goods and subsequently the General Council.
9.12 The representative of Brazil agreed with the points made by the representatives from Pakistan
and St. Lucia.  There appeared to be a procedural  obstacle to the Chairman's proposal.  This was one
of those outstanding implementation issues described under paragraph 12.b of the Doha Ministerial
Declaration and this body was mandated to report to the TNC by the end of the year on that issue.  It
did not seem procedurally appropriate to ask the General Council to undertake an examination of this
issue and report to the TNC which was a subsidiary body to the General Council.  A decision had
been taken in the Council for Trade in Goods to  submit this matter for consideration to this
Committee.  It would seem to be waiving the Committee's responsibility to send the matter back to the
Council for Trade in Goods without having had one substantive discussion on the subject.  Therefore,G/MA/M/32
Page 14
he would support the proposal that the Committee have an informal discussion on the issue.  The
Committee also needed to get some clarity as to what  exactly it was trying to achieve with this issue.
A background paper by the Secretariat on the contents of previous discussions on this topic, and on
the technical aspect of the whole concept would be useful.
9.13 The representative of Chile stated that what was being proposed needed to be clarified before
the Committee could move forward. St Lucia had stated that this was a broader question than that of
initial negotiating rights in the context of Article XXVIII. However, was it a reference to the
negotiating modality in the market access negotiations because then the discussions should take place
in another forum. If one was referring to redistribution of initial negotiating rights, then one would be
looking at a revision of Article XXVIII which should be  done in yet another forum.  Before asking the
Secretariat for a document, it was important to see clearly what the proposals meant.
9.14 The representative of St Lucia stated that when this proposal was initially discussed, there had
been an interesting debate on the whole concept of INRs. She had always said that the initial proposal
was always broader, but she believed that this Committee could deal with what had been assigned to it
and what fell within its mandate without waiting for a new mandate.  As to the broader concern ofmultilateral versus bilateral which had already been built in to the modalities in the ongoing
negotiations, she was not sure how to deal with that.  Her delegation, however, could agree to sending
back to the Council for Trade in Goods what was not within the mandate of this Committee. A
Secretariat background paper would be useful in terms of pursuing the more limited aspect of the
proposal.
9.15 The Chairman stated that this subject concerned more than just Article XXVIII or any market
access related issue and that the Committee needed to hold further discussions to ensure that it agreed
on what should be or could be addressed within this Committee and what would have to be refered
back to a relevant body.  In this connection, he proposed that informal consultations be held to addressthe procedural issues raised by Brazil and to continue discussions on what should be addressed in this
Committee.  In this connection, he also proposed that the Secretariat prepare a background note to
facilitate discussions; and encouraged delegations, in particular, St Lucia to come up with written
submissions on their understanding of the mandate which would also facilitate discussions. At the end
of the process, the Committee would be in a bett er position to take a decision on how to move
forward.
9.16 The Committee agreed to the Chairman's proposal.
9.17 In response to a query from St Lucia, the Chairman stated that the Secretariat would prepare a
background document which he understood  would be required by St Lucia to make its submission on
the intention of its proposal.  The basis of the informal consultations would be the Secretariat paper.
10. Japan - Information on China's tariff policy on Certain Photographic and
Cinematographic Goods
10.1 The representative of Japan stated that upon accession to the WTO, the People's Republic of
China (PRC) had made a commitment of tariff rates on 35 items in HS chapter 37 relating to
photographic products on an ad valorem  basis (levied on a yuan by yuan basis). However, the PRC
currently levied on these items specific import duties (levied on a yuan per square meter basis). His
delegation was aware of a multitude of cases in the year 2002 where the import duty exceeded the
bound ad valorem  rate as a result. From the perspective of ensuring the transparency and the
predictability of a tariff system, it was desirable for WTO Members to apply the type of dutyinscribed in their schedule of concessions. In this connection, he drew attention to the report of the
Appellate Body for the case of Argentina's minimum specific import duties on textile products in
1998. The report concluded that a WTO Agreement did not automatically prohibit a Member fromG/MA/M/32
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using a type of import duty which differed from the one inscribed in the schedule. However, the
Appellate Body did state that if the application of a type of a duty different from the one provided in
the schedule of concessions resulted in the levyi ng of duties which were in excess of what would
otherwise have been the case, then this situation was inconsistent with Article II.1(b) of the
GATT 1994.  His delegation considered that China's current tariffs on certain photographic productswere levied with duties above and beyond the levels of concession tariff rates and were inconsistent
with Article II.1(b) of the GATT. This situation impaired benefits accruing  to the contracting parties
of the WTO including Japan. He hoped that the  PRC would take the necessary procedural steps in
line with its commitments upon accession and with the aforementioned article of the GATT without
delay.
10.2 The representative of China understood that this issue had been raised for the first time in
March 2002 and since then China and Japan had been engaged in bilateral consultations. So, at this
stage there had been a thorough exchange of views on this issue and China would like to see these
bilateral consultations continue so that a solution acceptable to both sides could be found.  Japan was
entitled to raise this issue in this Committee, however, he hoped that a solution could be found
through bilateral consultations.  He also wished to point out that it took process and time to find asolution on this issue, but his delegation was committed to continuing such efforts.
10.3 The Committee took note of the statements.
11. United States - China's TRQ Administration As Well As Application of the VAT to
Fertilizer Imports
11.1 The representative of the United States stated that there were two issues: one had to do with
VAT and the second had to do with Tariff Rate Quota (TRQ) allocations on fertilisers.  On the
former, as part of its accession, China had committed to permit access under tariff rate quotas for
diammonium phosphate urea and NPK within quota tariff rates of 4%.  China appeared to beundermining the promised market access through tax policies that discriminated between like and
directly competitive fertilizer products. In July 2001, China's Ministry of Finance and State Tax
Administration issued a joint circular exempting all phosphate fertilizers except diammonium
phosphate and all nitrogen fertilizers except urea from the VAT.  In other words, only phosphate
fertilizer and only urea were assessed a 13% VAT. The VAT exemption favoured other phosphate
fertilizers that China produced but did not import such as monammonium phosphate.
Monammonium phosphate and other phosphate fertilizers competed directly and were substitutes fordiammonium phosphate.  Similarly urea was disadvantaged relative to products with which it
competed.  Moreover domestic producers of urea appeared to be able to avoid the tax through refunds
thereby ensuring that the selective VAT primarily  impacted foreign sourced urea.  His delegation
urged China to apply the VAT consistently with GATT Article III and to not impair the market access
commitments China had made on fertilizer. In that regard, his delegation requested the Chinesedelegation to explain the justification for the differential tax treatment and to provide more details
about the refund policy for China's producers. On TRQ allocation, China's allocation of fertilizer
TRQs for 2002 was delayed by several months and still appeared to be incomplete. Reports indicated
that quota applicants had in many cases only received a portion of the quota they had applied for and
which was originally approved. China was obliged to allocate the full TRQ amount agreed upon inChina's accession agreement without restrictions on when during the calendar year it might be
utilised. In addition, his delegation understood that holders of TRQs designated for importations
through non state trading enterprises were being told that they must still arrange importation through
state trading enterprises which would be contrary to China's accession commitments.  The US sought
China's assistance in ensuring that holders of non state trading enterprise TRQs might import throughany enterprise possessing the right to trade in an y product without the need to go through a state
trading enterprise. His delegation also sought China's assurances that in reallocating TRQs later this
year China would adhere to the schedule and other procedures for reallocation set forth in the workingG/MA/M/32
Page 16
party report and fertilizer TRQ headnote.  In particular, he noted that China had to publish specific
conditions for applying for reallocation by 1 August and had to complete the allocations by 1 October.
Finally, his delegation wished to note its concerns regarding the underlying regulations applicable to
TRQ administration. His delegation had delivered detailed comments to China regarding these
regulations and had requested consultations to discuss the comments and details. His delegationlooked forward to China's response to this request.
11.2 The representative of Canada shared the US concerns about China's allocation of not just
tariff rate quotas on fertilizers but TRQs in general. In particular Canada was concerned by reports
that import certificates had not been issued to quota holders. This appeared to be blocking utilisation
of allocated quota. Such certificates should be issued automatically under the terms of the agreement
on import licensing. In addition, his delegation continued to have some concerns regarding theregulations implementing the fertilizer TRQ. The regu lations did not, in Canada's view, reflect three
clear commitments by China. First, that its TRQs would be administered to reflect consumer
preference and end-user demand. Second, that end-users, not private trading companies, were to be
allocated non state enterprise quota and third that any entity with trading rights might import products
allocated to private companies.  Canada requested China to address these concerns.
11.3 The representative of Australia stated that his delegation like the US and Canada attached
great significance to proper administration of China's TRQ administration system for state traded and
designated traded products alike. In accordance with China's commitment as outlined in its protocol
of accession, they should be done so that the conditions were transparent and efficient so that quotaaccess could be granted and there could be full utilisation of all quotas in line with China's
commitments.
11.4 The representative of China stated that some of the difficulties in this regard arose from a
different understanding of the commitments and the relevant regulations governing the administration
of China's TRQ. China as a WTO Member adopted a very serious and responsible attitude in
implementing its obligations under its accession protocol. Accordingly, since the beginning of this
year, China had already made a tremendous effort in this regard and this should be recognized by
Members. However, if in the process of implementation some problems occurred due to a difference
in the understanding or interpretation of the rele vant commitments and the regulations concerned, it
was understandable.  It was also understandable that in a process of implementation some issues of a
technical nature could not be avoided. With regard to the issue of fertilizer VAT as raised by USdelegation, as far as he understood, both China and the US had been engaging in consultations in
Beijing on this matter.  He had also taken note of the statements by Canada and Australia and would
forward them to the capital.
11.5 The Committee took note of the statements.
12. United States – Preparations in connection with paragraph 18 of the Protocol of
Accession of the People's Republic of China
12.1 The representative of the United States stated that this was an issue that most WTO
Committees had to deal with. Pursuant to China's protocol of accession, there was a provision that a
transitional review mechanism would operate through the Committees. Each Committee being
responsible for items that were under its purview.  There were issues that needed to be settled on how
this transitional review would operate in this Committee. In particular, his delegation sought an
understanding of when it could expect the required  information that was specified in the Protocol
allowing for time for an exchange of written questions and answers in advance of the meeting. Hisdelegation's main goal was to allow for sufficie nt time to receive information and answers to
questions in order to be adequately prepared for the meeting.  His delegation had proposed a 90-60-30
day formulation in which the notification would be submitted by China 90 days in advance of theG/MA/M/32
Page 17
meeting at which the review would take place, questions would be posed to China 60 days in advance
of that meeting, and China  would respond to these questions 30 days in advance of the meeting, so
that there would be adequate time for final preparation for the meeting itself. His delegation sought to
ensure that WTO standard practice for similar notifications and exchanges would apply to the
procedure in question and that an understanding was reached on the application of such a standardprocedure. His delegation also noted that the development of these guidelines should allow for
sufficient time for translation into all official WTO languages and circulation by the Secretariat of the
notifications made. It would also be worthwhile to  consider how the Committee would deal with those
questions that China was not able to answer at that meeting.  He noted that this Committee's review of
China's implementation had to occur far enough in  advance of the November Council for Trade in
Goods meeting to allow for the circulation of the Committee's report and its subsequent submission to
the Council for Trade in Goods in accordance with standard practice. His delegation welcomed theopportunity to work formally and informally with  China and other Members so that these details
could be resolved in advance of the next meeting, and accordingly requested the Chairman to conduct
informal consultations.
12.2 The representative of China stated that as a new WTO Member, China took its membership
very seriously and China was willing to fulfil its obligations under Paragraph 18 of its Accession
Protocol. It had been making great efforts in preparation for the transitional review. With the
understanding and the support from its trading partners, China was determined to do its utmost in
trying to overcome the practical difficulties in this regard. However as far as the transitional review
was concerned,  China had no more obligation than what had been stipulated in Paragraph 18 and anysuggestion to go beyond that and increase the obligations of China in terms of specific time-frames,
procedures or whatever, would be rejected. Since Paragraph 18 already established important
guidelines on the frequency, procedure, scope and substance of the transitional review it was
inappropriate for any subsidiary body of the WTO to try to renegotiate or redefine the terms of such
reviews as provided for in Paragraph 18. Accordin g to Paragraph 18, the subsidiary bodies of the
WTO which had a mandate covering China's commitments could conduct the transitional review once
a year. China was of the view that such a review might in principle take place at the last regular
meeting of each subsidiary body concerned for that year. Once a specific regular meeting was chosen
and the date was fixed for the transitional review to be included as one of its agenda items, the WTO
Secretariat should inform China of the schedule for that meeting as soon as possible so that China
could make the necessary preparations. To facilitate the process of the transitional review, Members
were welcome to raise relevant questions of concern to China well in advance of the review and Chinawas prepared to do its best to address them under Paragraph 18. On the other hand, under the same
Paragraph 18, China was also entitled to raise issues and questions of concern to other Members who
were maintaining prohibitions, quantitative restrictions and other measures against imports from
China in a manner inconsistent with the WTO rules and their commitments with regard to China's
accession. It was hoped that through such an exchange of views and dialogue better understandingwould be reached among the WTO Members on how to improve  implementation by all Members and
to facilitate the faster and the sounder growth of trade between China and other WTO Members. In
this regard, China was ready to work very closely with this Committee and make every positive
contribution it could towards the procurement of the Committee's objectives.
12.3 The Chairman proposed that the transitional review as provided for under Article 18 of
China's Protocol of Accession take place at the Committee's 23rd September 2002 meeting.  He also
proposed to undertake some informal consultations in the interim.
12.4 The Committee agreed to the Chairman's proposals.G/MA/M/32
Page 18
13. Other Business
(a) Canada – China's variable tariff on newsprint
13.1 The representative of Canada raised his delegation's concerns with regard to China's variable
tariff on newsprint. China's 2002 customs tariff contained a complex formula for calculating a
variable tariff rate for newsprint. During accession negotiations, China had committed to convertingthis variable rate to an ad valorem  tariff at 11%  in 2002, falling to 5% by 2006. As China had broken
out this HS96 tariff item into 3 HS 2002 tariff items, 84.01.0000, 84026110, and 84026910, the
commitment now extended to all 3 tariff items. Canada sought the immediate conversion of the
variable duty rate tariff to the scheduled ad valorem  tariff in accordance with China's goods schedule.
13.2 The Committee took note of the statement.
(b) Date of the next meeting
13.3 The Committee noted that the next meeting of the Committee was scheduled to take place on
23 September 2002, subject to confirmation.
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