RESTRICTED
WORLD TRADE WT/REG/M/3
29August 1996
ORGANIZATION(96-3386)
Committee onRegional Trade Agreements
Third Session
NOTE ONTHE MEETING OF29-31 JULY 1996
Chairman: Mr.JohnWeekes (Canada)
A. Adoption oftheAgenda
1. Thefollowing agenda wasadopted:
A. Adoption oftheAgenda
B. Examination ofRegional Trade Agreements:
EnlargementoftheEuropeanCommunities-AccessionofAustria,FinlandandSweden;
andtheNorth American FreeTrade Agreement1
C. Procedures toFacilitate andImprove theExamination Process
D. Other Business
2. TheChairman indicated thathewould revert tothediscussion heldattheCommittee 'sprevious
session onthebiennial reporting requirements under "Other Business".
3. TheCommittee agreed togrant observer status toEFTA andOAS inconformity withthe
guidelines adopted bytheGeneral Council andinthelightofinformal consultations withdelegations
onthismatter.
C. Procedures toFacilitate andImprove theExamination Process
4. TheChairman saidthatconsideration ofthisagenda itemimmediately following theexamination
oftheECEnlargement andNAFTA demonstrated theinteractive nature oftheCommittee 'sagenda.
Henoted therelevant documents forthediscussion under thisagenda item: therevised Standard Format,
thejointproposal byAustralia, Hong Kong andKorea inWT/REG/W/5 andthenon-paper introduced
byJapan atthelastmeeting. Hehoped thatagreement onthenon-binding andflexible nature ofthe
Standard Format would enable theCommittee tosuccessfully conclude itsdiscussion ontheformat
atthissession. Therevised Standard Format setoutinmore detail theinformation required, and
specified clearly itsnon-binding nature. Duplication offunctions would notbeaproblem, asthe
information required wasinrelation tointra-trade, nottotrade onanm.f.n. basis. Thedistinction
between agricultural products andindustrial products hadnotbeenincluded intherevised Standard
Format. Theexplanations under eachsection ofPartIIhadbeenelaborated toindicate, interalia,
thatinformation wasneeded onlyincaseswhere provisions oftheagreement differed fromthoseapplied
1Reports onthese examinations willsubsequently becirculated asseparate documents.WT/REG/M/3
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onanm.f.n. basis. Withtheexception offurther clarifications onwhatsortofinformation wasrequired,
PartIIIwasunchanged. PartIVnolonger specified whatcould beincluded intrade-related provisions,
giving delegations theoption tosubmit information theyconsidered relevant. TheStandard Format
didnotcover information onagreements ontrade inservices, asthiswasanewfacetofthework of
WTO, which made itdifficult atthisstage toidentify elements ofrelevance. However, heexpected
thatafterreview ofaspects related totrade inservices intheexamination ofNAFTA andtheEU
Enlargement, theCommittee would beinabetter position toidentify elements thatcould beincluded
intheStandard Format. Hefurthermore suggested thatthere wasmerit inexploring possibilities for
anincreased roleoftheSecretariat tocollaborate withparties toregional trading agreements (RTAs)
inresponding tothequestions posed intheStandard Format.
5. Therepresentative ofKorea saidthattherevised Standard Format reflected theviews expressed
bydelegations atprevious sessions, buthewasunclear whysubsidies andstateaidshould beincluded
inPartIIIGeneral Provisions. Itwould belogical iftheywereplaced under paragraph 8ofPartII.
TheStandard Format should apply tonewly notified regional trade agreements (RTAs) andthose
agreements inrespect ofwhich thepreliminary stage ofquestions andanswers hadnotcommenced.
Theinformal nature oftheformat enabled theCommittee toreview itatsome stage andmake the
necessary improvements. Hewelcomed thereadiness oftheWTO Secretariat toassist parties toregional
trading agreements inreplying tothequestionnaire. Hisdelegation supported theadoption ofthe
Standard Format initspresent form.
6. Therepresentative ofSwitzerland fullysupported themainparameters setoutbytheChairman
inhisintroductory statement, inparticular thenon-binding nature oftheformat anditsadaptability
tothespecificitiesofeachagreement.Herecognizedthattherevisedversionhadtakenintoconsideration
much oftheviews ofdelegations. Hesuggested thattheCommittee request theSecretariat toprepare
atanearly stage adraftcontaining elements applicable totrade inservices, taking intoaccount the
questions ontrade inservices puttotheparties ofNAFTA andEUEnlargement. Aformat which
applied tobothtrade ingoods andservices would increase transparency, andbenefit boththeparties
toRTAs andtheCommittee.
7. Therepresentative oftheEuropean Communities (EC) welcomed theeffort which hadgone
intotherevision oftheStandard Format, andnoted theChairman 'sintroductory statement. Itwould
benecessarytoidentifythoseregionaltradeagreementswhichweresufficientlyadvancedinthequestions
andanswers process, withaviewtoexempting themfromtheuseoftheStandard Format. Hesuggested
thattheChairman revert tothisissue inhisconcluding remarks, bearing inmind theCommittee 's
previous discussions onthismatter. Heconsidered theStandard Format aninstrument toimprove
theexamination process. Turning totherevised draft, hesuggested thatthefirstparagraph beredrafted
tomake clearthatthescope andcoverage ofinformation requested didnotinanywaypre-judge the
scope andcoverage oftheexamination regarding theconsistency oftheagreement withtherelevant
multilateral rules. Inhisview, thefootnote meant thatinformation ontradeinservices could atafuture
stage beintegrated asapartoftheStandard Format. Hereferred toPartII.1oftheformat, which
touched onthequestion ofwhether therequirements ofArticle XXIV: 5(b)wereapplicable toexisting
preferential agreements. Since thisquestion hadsystemic implications hecautioned thattheStandard
Format should notinanyway pre-judge thisoranyother related issue. AnyStandard Format should
beflexible, inlinewiththeevolutionary nature ofthework oftheCommittee. Hehoped tobeusing
therevised non-binding Standard Format forhisdelegation 'sfuture notifications. Adrafting exercise
atthisstage wasnotuseful. Theguidelines would notbeofmuch useunless theyallowed forabrief
overview oftheimport andexport regimes atthetimeofnotification.WT/REG/M/3
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8. Therepresentative oftheUnited States saidthataStandard Format would benefit boththe
parties toaRTA andtheCommittee andcould beofassistance inthebiennial reporting process. She
emphasized theimportance oftheinitial collection ofinformation, bothforreasons oftransparency
andtheevaluation oftheconsistency ofanRTA withthemultilateral rules. TheCommittee needed
toidentify atanearlystagetheinformation requirements related totradeinservices. Thenon-binding
nature oftheformat certainly precluded complex negotiations, anditlefttheflexibility fordelegations
toputspecific questions. While sheagreed withthedelegation oftheECthatinformation onpreferential
agreements predating theRTAmight notberelevant inanexamination oftheconsistency ofanRTA,
suchinformation wasneeded fortransparency reasons andshould beavailable totheCommittee. Her
delegation supported theadoption oftheStandard Format.
9. Therepresentative ofBrazil saidthat,while heacknowledged thevoluntary andnon-binding
status oftheStandard Format, henevertheless suggested thatitsapplicability totheinitial collection
ofinformation onlyandtoagreements where thisprocess hadnotstarted, could bestated more clearly
either inthebodyofthedocument orasafootnote. Itshould bequiteclearthattheinformation required
under PartIVwasonlyforpurposes oftransparency.
10. TheChairman, speaking inhispersonal capacity, saidthatthesubmission ofinformation which
wasnotrequired specifically under Article XXIV: 5wasuseful notonlyforreasons oftransparency
butalsoforunderstanding thedynamics oftheagreement anddelegations should feelencouraged to
doso.Theexamination ofNAFTA hadshown thatitwould bedifficult tounderstand thefullscope
oftheagreement without anyknowledge ofitsinvestment chapter. Moreover, mostoftheobligations
related totrade inservices were encompassed intheinvestment chapter.
11. Therepresentative ofIsrael saidthattheStandard Format wasasaresponse tothewishes
expressed bymany delegations. Formal adoption ofanon-binding document would besuperfluous;
instead, astatement bytheChairman should suffice. Therepresentative ofJapan saidhewasprepared
togoalong withaconsensus. Itwasimportant thatelements related totrade inservices should be
included intheStandard Format inthenearfuture. What mattered inanexamination ofaRTA was
knowledge ofwhich trade regulations were affected bytheagreement, sothattheCommittee could
determine whether theyhadbecome more restrictive. Hesuggested thatanewversion oftheStandard
Format require theprovision ofthisinformation.
12. Therepresentative ofAustralia accepted theStandard Format asawayoffacilitating and
streamlining theexamination ofRTAs. Anappreciation ofthemechanics oftheagreements tobe
examined bytheCommittee wasimportant. Shewelcomed thepossibility toinclude other elements
suchasthose related totradeinservices, which would simplify andimprove theexamination process.
Therepresentative ofCanada supported adoption oftheStandard Format, asitwould helpthe
Committee 'swork significantly. Heagreed thatwork should beundertaken todevelop asimilar format
applicable totrade inservices, though thisshould notholduptheuseofthecurrent document. The
representative ofNewZealand saidthattheadditional details included intherevised version improved
theStandard Format. Hesupported further elaboration ofPartIV,evenifitwere onlyforreasons
oftransparency. Pastexperience hadshown thatsuchelaboration benefitted examinations inthe
Committee.
13. Therepresentative ofMexico welcomed aformat which would alsobeapplicable totrade in
services. While herecognized thatthedocument would taketheform ofChairman 'snon-binding
guidelines, hesuggested toreplace theterm"applied" asitrelated totariffs, by"applicable" inSections
IandIIsince itwasnotclear towhich tariffs itreferred; whether those applied tothirdparties, to
those applied within theRTAorthoseinforceduring thetransitional period. Herecalled thataWorking
Group haddealtwiththisissue inthepast. Another alternative wastosay"tariff quotas andchargesWT/REG/M/3
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having anequivalent effect ascustoms duties andfiscal duties ontrade ofproducts covered bythe
agreement"; iftheomission ofthedescriptive termwasaccepted thesame could bedoneinSections I
andII.TheChairman commented thatthere wasnouniform useofequivalent adjectives in
Article XXIV, andthattheCommittee should takenoteoftheviews ofMexico.
14. Therepresentative ofArgentina saidthathisdelegation would accept theStandard Format,
subject toafewcomments. Hewasuncomfortable withthetermguidelines: rulings ordecisions by
Chairmen hadacquired under GATT tradition theforce oflaw. Heshared theEC'spoint ofview
thatitshould beclearwhich information theStandard Format would cover. Itshould bestated clearly
thatduplication ofworkundertaken byother Committees oftheWTO should beavoided. Astheformat
applied toallAnnex 1Aagreements oftheWTO Agreement, itwould benecessary toclarify
unambiguously whatwere theother trade-related provisions referred toinPartIV.Asrestrictions
were prima facie illegal, hesought explanation ofthescope ofother restrictions referred toinPart
II.Aregional agreement entailed theamendment oftrade regulations, asenvisioned inArticle XXIV
ofGATT 1994 andtheUnderstanding onitsinterpretation. Itwasunclear what therepresentative
ofJapan meant by"regulations" initsstatement. Theevolutionary quality ofthedocument made the
guidelinessubjecttochangeandneededtobeclearlyunderstood.Aformatapplicabletotradeinservices
should bedeveloped. Hecalled foraclarification oftheterm"applied" asitrelated totariffs.
15. Therepresentative ofPeruwelcomed theStandard Format andsuggested thattheCommittee
justtakenoteofitsince suchanapproach would stress itsvoluntary character. Therepresentative
ofHong Kong saidthatthere seemed tobeanemerging consensus toadopt apragmatic approach to
theissue ofreconciling theobjective ofincreasing transparency withthewishtoavoid creating any
legalobligations. Hehoped thatparagraphs 1and2tookcareofthisconcern. Hewasready toaccept
theformat, ashedidnotinterpret itascreating anyadditional legalobligations. Because ofitsvoluntary
status, wider usewould result iftherewasactive encouragement. Noting general support foraformat
applicable totrade ingoods ofavoluntary nature, hesuggested todevelop onewithasimilar nature
applicable totrade inservices. Dataforintraandextra trade asrequested under Section I.4should
cover more thanoneyear, ifthere wastobeanymeaningful assessment oftheimpact ofRTAs.
16. Therepresentative ofHungary accepted theStandard Format asaninformal non-binding tool
meant toexpedite theexamination process byreplacing thetraditional questions andanswers process.
Itwasherunderstanding thattheformat would apply onlytonewexaminations. Therepresentative
oftheUnited States requested thatprovision should bemade fordocument reference anddateof
notification; therequested information could beupdated asandwhen required. Thiswould increase
theusefulness oftheinformation asanhistorical record.
17. TheChairman suggested thattheCommittee takenoteofthefollowing. Thefirstparagraph
would specify thattheformat concerned theprovision ofinitial information; paragraph 2would be
reformulatedtogiveitaddedprecisioninthefollowingmanner:theinformationrequestedintheStandard
Format doesnotprejudge theconsistency orotherwise ofanagreement withtherelevant multilateral
rules. Section I.4would relate tothemost recent period. However, given thevoluntary nature of
thedocument, thiscould notbemade mandatory. Section II.1dealtwithintra-trade restrictions currently
inplace, aswellaswiththose thatwould remain aftertheagreement wasfullyimplemented. The
term"applied" initsrelation totariffs should bedeleted. Thesections onsubsidies andstateaidshould
betransferred fromSection IItoSection II,Trade Provisions. Section IVshould beentitled "Other"
withthefollowing additional language: fortransparency purposes, anyotherrelevant information related
totheprovisions oftheagreement being examined.WT/REG/M/3
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18. Hecontinued bysaying thatheintended tocirculate arevised draftshortly. Hehaddetected
thewishofMembers tostartusing theformat. Outlining thevarious stages oftheexamination process,
hesaidthatitwasclearthattheformat would beapplicable incases where questions hadnotyetbeen
submitted. Itsuseincases where theprocess ofexamination hadonlyjuststarted would besubject
toaprocess ofconsultations withtheparties totheRTA concerned, anddecided onapragmatic basis
bearing inmind thequestion which hadalready beensubmitted. Henoted thatwhile theformat would
clearly replace theinitial stage ofquestions andanswers, itwould notpreclude putting additional or
subsequent questions. Hewasoptimistic thattheuseoftheStandard Format would expedite the
examination process. Hesuggested thataStandard Format applicable totrade inservices should be
developed assoonaspracticable. Information astohowanRTA affected trade regulations would
become clearer, astheStandard Format came intouse.
19. TheCommittee tooknoteofthedraftguidelines inthelightofthestatements made.
20. Therepresentative ofKorea, inintroducing thejointproposal byhisdelegation, thedelegation
ofHong Kong andthedelegation ofAustralia, saidthatitaimed atimproving theexamination process,
bywayofintroducing general guidelines ensuring adegree ofpredictability. Procedural rulesshould
beanintegral partoftheprocess tostrengthen thelegalrequirement ofnotification. Target time-frames
should beintroduced forthefirstexamination oftheRTA, aswellasfortheentire process. Such
time-frames would serve asbenchmarks fortheCommittee 'swork programme. Adoption ofaset
ofprocedures would serve tointroduce ahighdegree ofclarity andpredictability totheexamination
process. TheStandard Format would beanintegral partoftheprocedures andwould besubmitted
asapartofthenotification process. Information onareas other thanthose relating totrade ingoods
could besubmitted within areasonable timeafteradecision tostarttheexamination. Theco-sponsors
were committed toavoiding rigidity andwelcomed anysuggestions from delegations.
21. Therepresentative oftheUnited States welcomed thesuggestion contained inthejointproposal
tostartthereview process assoonaspracticable inasystemic manner. Thesubmission oftheStandard
Format atthetimeofnotification orveryshortly thereafter would facilitate andquicken theexamination
process. Shesuggested thatMembers begiven theopportunity toaskfurther questions based onthe
responses oftheparties tothequestions contained intheStandard Format. TheSecretariat should
havetheresponsibility tostructure thequestions relating tobothtrade ingoods andtrade inservices
inoneconsolidated document. Thepresentation ofquestions andtheirtransmission toparties could
perhaps bedoneelectronically. Circulation ofthequestions bytheSecretariat toallMembers would
havethemerit ofavoiding theriskthatnotallparties toanRTAwould receive suchquestions. While
sheaccepted theimportance ofstructure anddiscipline, shenevertheless cautioned against thesetting
oftime-frames, asthiscould becounter-productive. While theRTA wasstillunder consideration in
thenational legislative body, itwasimportant todistinguish between theconcept ofadvance notification
andtheactual stating point oftheexamination process. Advance notification i.e.anearly warning
system hadseveral advantages, especially where bindings would bebroken. Compensation negotiations
could getunder wayassoonasnotification wasreceived.
22. TheChairman, speaking inapersonal capacity andrecalling hisexperience withNAFTA,
saidthatNAFTA parties hadnotified theCouncil inFebruary 1991ofthedecision bythethreecountries
toenter intocomprehensive negotiations. While theformal notification wasinFebruary 1993, the
three parties hadissued anagreed description oftheagreement inAugust 1992 attheconclusion of
thenegotiations. Theparties could havenotified theagreement toMembers immediately thereafter.
However, given thelengthy andsometimes difficult process ofratification (especially inthecaseof
NAFTA), itwasnecessary tostrike areasonable balance between transparency andflexibility.
Continuing inhisofficial capacity, heproposed thattheCommittee request theSecretariat todrawWT/REG/M/3
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upachecklist ofpoints made inthediscussion ontheissueofimprovement oftheexamination process,
toguide theCommittee initsfurther work onthismatter.
23. Therepresentative ofIsrael saidthatwhile itwasimportant toimprove discipline and
transparency, itwasnotnecessary toconsider achange intheapplicable rules. Henoted thatabout
two-thirds ofworld trade wasnotonanm.f.n. basis. Changes totheexisting ruleswould make their
observance more difficult forsmaller nations anddeveloping countries entering intoRTAs. His
delegation wasreluctant toaccept theproposal initscurrent form.
24. Therepresentative oftheEuropean Communities saidthathewould liketosethiscomments
onthejointproposal against thebackground ofthepurpose ofthereview ofRTAs; suchreviews had
tohaveanoperational purpose orotherwise riskbeing redundant. TheCommittee needed firstofall
todefine theproblem itwassetting outtoresolve, aswellasdetermine whathadgonewrong sofar.
Itwasimportant tobearinmind thepolitical dimension ofRTA's.Hesawmerit intheChairman 's
proposal forachecklist ofpoints, asithadthepotential ofassisting theCommittee tocome upwith
ideas which would improve theexamination process. Hisdelegation could, however, notaccept the
assumption underlying thejointproposal ofanautomatic caseforformalization. Itshould beborne
inmind thatthescope andcontent ofRTAs varied widely. Itwasreasonable toexpect some flexibility
withregard toprocedures. Thesignificance ofthelinkinparagraph 3ofthepaper between the
examination process andthenotification process wassomewhat unclear. Hesawaclearcaseforprompt
notification consistent withdomestic political andnegotiating realities. Thefundamental purpose of
theexamination process needed tobeespoused. Undue emphasis ontheformal procedure ofnotification
hadthepotential ofobscuring thepurpose oftheexamination.
25. Therepresentative ofArgentina associated himself withthecomments made bytheEC.He
considered thejointproposal byAustralia, Hong Kong andKorea asrelating toprocedures. Whereas
thenon-paper presented bythedelegation ofJapan concerned systemic issues. Point 4inthesecond
paragraph oftheJapanese proposal which referred togovernment procurement ignored thatthe
Agreement onGovernment Procurement wasonlyvoluntary andwasplurilateral. There seemed to
benolegalbasisforJapan'ssuggestion. Thereference toanarbitrary application ofpreferential rules
oforigin wasapre-judgment, andthelegality ofanysuchrulesshould beamatter fortheCommittee
onRules ofOrigin. ThisCommittee wasconcerned withthese matters forreasons oftransparency
andnotforreasons oflegality.
26. Therepresentative ofJapan saidthathisdelegation 'snon-paper didnotdealexclusively with
procedural questions related tonotification. Thefirstround ofexaminations ofNAFTA andEC
Enlargement which hadjusttaken place intheCommittee showed thedifficulties which could arise
from thedifferent interpretations oftherequirements ofArticle XXIV. Thelackofclear criteria
weakened theexamination process. Theproposals nowbefore theCommittee hadsignificant merit
buttheywould notresult inaneffective examination, ifthere werenoclearcriteria fordetermining
compatibility withWTO provisions. Thiswasthecontext ofJapan'ssuggestion toestablish guidelines
forexamination inorder torationalize theprocess. Hisdelegation 'spaper wasconcerned mainly with
tariff andnon-tariff measures raising thelevelofprotection faced bythirdparties inamanner which
wasnotcompatible withWTO provisions. These included forexample theautomatic extension of
territorial application ofanti-dumping measures andpreferential rules oforigin intheapplication of
safeguard measures. While these could beconsidered systemic issues, hisdelegation wasseeking to
establish guidelines onthebasis oftheexisting provisions inArticle XXIV. TheCommittee could
perhaps establish aWorking Group tothatend.Hisdelegation waslooking totheSingapore Ministerial
Conference toreaffirm thesuperiority ofthem.f.n. principle andtheneedtoensure thatRTAs were
compatible withmultilateral principles. ThisCommittee should, foritspart,beabletomake concreteWT/REG/M/3
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proposals toMinisters toimprove andfacilitate theexamination process andseekcleardirections on
awork programme which would mandate ittoreview theprovisions ofArticle XXIV.
27. Therepresentative ofCanada saidthatthejointproposal focused onanumber ofimportant
issues. Referring tothesuggestion foradvance notification, hesaidthatarequirement tonotify before
ratification would haveposed problems forNAFTA parties. Ontheother hand, arequirement, on
abestendeavour basis, foradvance notification withamoreefficient review process oncetheagreement
wasnotified merited serious consideration bytheCommittee. Anytime-frames would havetorecognize
theneedforcoordination between parties. Even though thevoluntary nature oftheStandard Format
hadbeenagreed upon, itsAnnex seemed toimply thatparties toRTAs wereunder anobligation to
useit.Heagreed withtherepresentative ofArgentina thatJapan'snon-paper wasseeking an
interpretation andamendment oftheprovisions ofArticle XXIV.
28. Therepresentative ofNewZealand recalled hissupport foranimprovement oftheprocedural
rules fortheexamination ofRTAs. There wasaneedforpragmatism when assessing theimpact of
RTAs onother countries. Itwasimperative thatRTAs which hadthepotential tosignificantly affect
thecommercial interests ofthirdcountries beexamined aspromptly aspossible. Hecautioned that
drawing undue attention tothepurpose oftheexamination process carried theriskofraising questions
astothepurpose ofthisCommittee andindeed ofArticle XXIV andtheitsrelated Understanding.
Heshared theintention ofthesponsors ofthejointproposal toimprove theexamination process.
Establishing time-frames could bebeneficial tonon-parties totheRTAs.
29. Therepresentative ofKorea supported theunderlying motive forJapan'snon-paper. The
suggestions made weremeant toimprove thenotification process andtheefficiency oftheexamination
process andtoreinforce existing rules byestablishing criteria fordetermining consistency ofRTAs
withWTO provisions. Thesuggestion thatthere should beanadvance notification ofallRTAs so
astoimprove transparency wasparticularly attractive. Earliest possible notification oftheagreement
andallotherrelevant documentation would assist theCommittee inappreciating themechanics ofRTAs
andtheirimplications.
30. Therepresentative ofMexico reiterated hisdelegation 'ssupport forprocedures tostreamline
andfacilitate theexamination process. Theprocedural aspects oftheexamination process needed to
bedistinguished fromthesubstantive issues suchastheadequacy oftheprovisions ofArticle XXIV.
Changes toArticle XXIV would necessarily involve negotiations between Members. Prior notification
presented practical andpolitical difficulties. Hepreferred aconcept ofprompt notification, possibly
through anannouncement ataCouncil meeting. Heshared theimportance attached tohaving adraft
report forconsideration aftertwoformal examination sessions andtoavoid going overground already
covered. Herecalled theimportance which hisdelegation attached to"back-to-back" consideration
ofprovisions relating totrade ingoods andtrade inservices, andsaidthatthediffering legalregimes
must notbeignored. Hecould notagree withthesuggestion inparagraph 6thataMember could
require theconvening ofathirdformal examination session. Toprevent abuses, thatdecision should
belong exclusively totheCommittee. General time-frames could serve auseful purpose. Turning
toJapan'spaper, hesaidthatitappeared thatitcovered more thanprocedural issues. Theideas
contained inittouched ontheinterpretation oftheprovisions ofArticle XXIV, andassuchcould be
considered abasis fornegotiations.WT/REG/M/3
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31. Therepresentative ofNorway saidthatthejointproposal hadfocused attention ontheneed
toimprove andfacilitate theexamination process. However, theapproach adopted inparagraph 1
seemed tobeoverambitious, andcould undermine thegeneral theme oftheproposal. Thishadbeen
borne outbytheexperience. Tostarttheexamination process onthebasisofanotification doneafter
thesigning, rather thanratification, ofaRTA wasimpractical. Therejection inareferendum ofthe
ECEnlargement Agreement bythecitizens ofNorway demonstrated thatitwasprudent tostart
examination aftertheratification ofanRTA bytherelevant authorities oftheparticipating members
oftheregional trading arrangement orinitiative. Ontheother hand, heagreed thatadvance notification
before ratification could beconsidered, ashadbeensuggested bytherepresentative ofCanada. He
supported theEC'ssuggestion thatsimplified procedures should beusedinexamining some RTAs;
andtheChairman 'ssuggestion thattheSecretariat compile elements relevant totheexamination process.
Heshared theview expressed bytherepresentative ofJapan thattheJapanese non-paper dealt with
abroad range ofissues. Paragraph 2thereof envisaged clarification oftheprovisions ofArticle XXIV
ofGATT 1994.
32. Therepresentative ofArgentina saidthatparagraph 6oftheAnnex tothejointproposal was
unnecessary, asitwaswithin therightofevery Member toaskquestions ordemand information even
after thesecond formal examination session. Japan'sproposal concerned therenegotiation of
Article XXIV -asystemic issue which wasnotappropriately discussed under thisagenda item. The
Committee would require detailed information before itcould carry outsuchanexercise.
33. Therepresentative ofKorea saidthatthesponsors ofthejointproposal hadachieved theirbasic
aim,which wastofocus attention andstimulate discussion ofthisissue. Theconcerns andviews
expressed bydelegations would betaken intoaccount inthenewversion which would beprepared.
TheChairman 'ssuggestion foranincreased rolefortheSecretariat wassomething which needed further
reflection. Hesupported thesuggestion thattheSecretariat prepare acheck-list ofissues.
34. Therepresentative oftheEuropean Communities saidthatitwasevident thatmore thought
andmoretimewasneeded before theCommittee could determine howtoproceed. Thiswasadiscussion
withfarreaching implications andneeded tobecarefully pursued before theCommittee could come
tofirmconclusions relating toguidelines andprocedures. Theprocedures suggested intheAnnex
tothejointproposal hadbeenovertaken bytheChairman 'sguidelines andbythediscussions inthe
Committee. Hisdelegation wasoftheviewthatthere wasaneedtodefine theoverall purpose ofthe
examination process; hewondered whether anyinitiative should betaken bearing inmindtheSingapore
Ministerial Conference.
35. Therepresentative oftheUnited States saidthatherdelegation sawtheissues before the
Committee from asomewhat different perspective thantheonetaken bytheEC.Incremental steps,
however small, would result inconcrete benefits suchasimproving transparency. Shecautioned that
setting one'sgoals toohighcould result inlackofanyprogress. Shealsosupported thesuggestion
thattheSecretariat draw upantheinformal check-list ofissues.
36. Therepresentative ofHong Kong saidthatthejointproposal sought tocontribute tooneof
thetasksmandated totheCommittee, inparticular theimprovement andfacilitation oftheexamination
process. Heagreed withtherepresentative ofKorea thatthishadalready beenpartly achieved; the
Committee should nowdecide howtotakeitswork onestage further. Theexperience ofthelasttwo
daysinexamining theECEnlargement andNAFTA hadconvinced himthattheCommittee would
behandicapped, unless itlooked attheoverall purpose oftheexamination process. Theterms of
reference foresaw theinterlinkages intheCommittee 'swork; anditwasagainst thatbackground that
thethree co-sponsors hadsubmitted theirproposal. Thework programme oftheCommittee inthe
run-up totheSingapore Ministerial Conference made provision fordealing withtheseissues inaparallelWT/REG/M/3
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fashion. Their proposal dealtwithoneaspect, buthewasinterested inpursuing discussion onothers,
suchasthose putforward byJapan.
37. Therepresentative ofArgentina saidthattheongoing discussion didnotdrawclearlinesbetween
renegotiation ofArticle XXIV andthework programme oftheCommittee. Hewondered whether
theJapanese proposal aimed atafullrenegotiation ofArticle XXIV.
38. Therepresentative ofAustralia saidthatthecheck-list should notonlyreflect theprocedural
andsystemic issues thathadcome upinthediscussion oftheirjointproposal, butalsotheissues raised
during theexamination ofECEnlargement andNAFTA. There weresystemic issues thatneeded to
beconsidered bytheCommittee. Sheinvited thedelegation oftheECtosubmit aproposal.
39. Therepresentative ofSwitzerland saidthattheCommittee should operate within itsterms of
reference. During theexaminations oftheECEnlargement andofNAFTA, some delegations had
raised issues outside theCommittee 'sterms ofreference. Thesame thing hadhappened inthecourse
oftoday'sdiscussion. Whereas itwastruethattheCommittee hadbeenmandated toimprove and
facilitate theexamination process, some oftheproposals before theCommittee wentbeyond whatwas
intended byitsterms ofreference. Some issues could beconsidered asrequiring aninterpretation
ofArticle XXIV, andevenoftherelationship between regionalism andmultilateral trading system.
Theterms ofreference didnotcontemplate arenegotiation orafresh interpretation oftheprovisions
ofArticle XXIV. Members needed tobeclearonwhatcould bepursued inthisCommittee andwhat
needed tobepursued inother fora. Agreeing ontheusefulness ofacheck-list ofissues setting out
thevarious views, shesuggested categorization onthebasisofthose directly within themandate such
astheStandard Format, andthose which felloutside theterms ofreference oftheCommittee. The
Committee would havetouseingenuity ininjecting thesecond category intodiscussions within its
terms ofreference.
40. Therepresentative ofJapan saidthathehadnoted theviews expressed andwould betaking
them intoconsideration. Hehadintended todistinguish between theneedtoclarify theprovisions
ofArticle XXIV andanyeventual negotiation ofnewrules. Japan'sproposal placed emphasis onthe
clarification oftheexisting provisions, asafirststep,withaviewtoimproving theexamination process.
41. TheChairmansaidthattheexaminationofNAFTAandECEnlargementhadshownthateffective
procedures wereneeded toexamine RTAs. Ithadalsothrown lightonthesystemic implications of
RTAs. Hepointed outthattheterms ofreference mandated theCommittee toconsider thesystemic
implications ofRTAs andtomake recommendations totheGeneral Council. TheCommittee thus
hadthepossibility torecommend, atalaterstage, achange initsmandate totheGeneral Council.
Moreover, theterms ofreference themselves envisaged thepossibility thatnewtasks beassigned to
theCommittee bytheGeneral Council. Hehadnoted thatdelegations shared hisviewthatitwould
beuseful torequest theSecretariat toprepare acheck-list ofviews expressed ontheissueofimproving
theexamination process. Hehoped thatthedocument would beready before thenextmeeting ofthe
Committee. Itwasnotnecessary tomake adistinction inthecheck-list between items which fellwithin
andthose which felloutside ofthemandate oftheCommittee. ThistaskwasbestlefttoMembers.
42. TheCommittee tooknoteofthestatements made andrequested theSecretariat todraw upa
checklist ofpoints made inthediscussion ontheissue ofimproving theexamination process.WT/REG/M/3
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43. Therepresentative ofArgentina noted thattheChairman hadnotreflected thepoint made by
hisdelegation andthatoftheECthatthepurpose ofthereview process beclarified. Thecheck-list
tobeprepared bytheSecretariat would haveontheonehandissues relating tothejointproposal, and
ontheother handissues relating tothesystemic implications ofRTAs. Hesuggested thefollowing
steps forthedebate onthesystemic implications: first, there should beclarification ofthescope of
theexercise; recommendations could thenbemade andawork programme established; andeventually
arenegotiation oftheterms ofArticle XXIV. There wasaconsensus thatthediscussion should proceed
systematically. Thecheck-list would provide animpetus forfurther work, aswould theAnnex tothe
jointproposal. However, theproposal byJapan wentbeyond themandate oftheCommittee.
44. TheChairman saidthathissumming upprincipally related totheagenda itemonfacilitating
andimproving theexamination process. However thecheck-list would alsocover points ofsystemic
relevance which hadarisen inthecourse oftheexaminations ofthepasttwodaysandintoday's
discussion. Heinvited delegations tomake aninput tothework thatwould becarried outbythe
Secretariat.HenotedthatattheCommittee'sSeptembermeeting,anumberofRTAswouldbeexamined
bytheCommittee; inaddition, onedaywassetasidetotakeupother items oftheCommittee 'sagenda.
Delegations might usethatopportunity toreflect onthekindofdirections theCommittee would wish
toseekfrom theSingapore Ministerial meeting.
D. Other Business
45. TheChairman recalled thestatement hemade atthestartofthemeeting where henoted his
intention todiscuss under thisagenda itemtheissueofbiennial reporting. Hereferred toWT/REG/W/3
andsaidthatitcontained achecklist ofpoints onreporting ontheoperation ofregional agreements.
Fourmajor areas wereidentified inthedocument: (a)theextent ofcoverage andwhether reporting
wasrequired foragreements notified under theEnabling Clause andforagreements dealing withtrade
inservices; (b)thenature ofthereports andwhether theyshould bebased onsome kindofStandard
Format; (c)thebody/bodies receiving thereports; and(d)appropriate follow-up. Hereminded
delegations thatthere were about 74agreements which hadtobeexamined bytheCommittee. The
Understanding ontheInterpretation ofArticle XXIV obliged parties toRTAs tosubmit these reports.
Heinvited delegations tomake theirviews known onthisagenda item.
46. Therepresentative oftheUnited States saidreporting wasimportant fortransparency, for
surveillance, andforunderstanding theimpact ofRTAs. Work should beconducted effectively and
efficiently. Shesaidallpreferential agreements should besubject toreporting requirements. Shedid
notthink reporting onnon-reciprocal agreements should bedealtwithinthisCommittee; thesame
could probably besaidofagreements implemented pursuant towaivers under Article XXV. Shesaid
thisCommittee wastheproper forum forexamining other RTAs. ShedidnotseetheCouncil for
Trade inGoods examining reports on74agreements. AStandard Format forreporting would beuseful;
Members could usetheformat toprovide updates onoriginal submissions. Shesuggested thattwo
meetings oftheCommittee should bedevoted eachyeartothereview ofthese reports. Shefurther
suggested thatagreements begrouped forreview according toanestablished time-table asdone by
theother bodies oftheWTO suchastheTrade Policy Review Body. Success would restonthe
willingness ofparties toRTAs toparticipate intheprocess.WT/REG/M/3
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47. Therepresentative oftheEuropean Communities wasoftheviewthatWT/REG/W/3 should
belooked atsystematically andsuggested theitembetaken upagain atafuture meeting. Itwould
beimportant tothink carefully howthereporting requirements fitted intotherestoftheCommittee 's
work. Theparticular circumstances oftheECmade itsubject toreviews byboththeTPRB andby
thisCommittee. While theyaccepted thatthereview oftheECEnlargement wasimportant, theythought
there wastheneedtoavoid duplication offunctions andavoid overburdening parties toRTAs. Since
theECwasregularly reviewed bytheTPRB, itwasnotnecessary torequire ittosubmit biennial reports
ontheoperation ofthecustoms union.
48. Therepresentative ofHong Kong thought themostimportant aspect oftheongoing discussion
wasthenature andobjective ofthereport. Heconcurred withtheUnited States thattransparency and
surveillanceweretwoimportantreasonsforthereportingrequirements.Theexaminationsjustconducted
confirmed theneedforbiennial reporting, sothattradeeffects, bothforparties andforthirdcountries,
could bebetter understood. Hestressed theimportance ofgiving anopportunity forMembers toseek
clarifications, whether intheform ofadditional questions, additional information oranyfurther
elaboration asnecessary. Noting theback-log ofagreements thatneeded tobeexamined, hesaidthe
Committee needed toagree onamechanism thatwould bethemost efficient. Itwasclear thatthe
examinationofagreementshadpriorityoverthebiennialreportingprocess.Itwouldbemoreappropriate
tolookataspects suchastheforum andcoverage afterthedefinitive establishment oftheobjectives
oftheexamination process bytheCommittee. Hereserved hisrighttocome backtothisissue, as
hisauthorities were presently analysing thedocument.
49. Therepresentative ofSwitzerland saidtheUnderstanding ontheInterpretation ofArticle XXIV
andtheterms ofreference oftheCommittee called forreports onagreements notforreview of
agreements. Theexamination ofbiennial reports assuggested bytheU.S.would present aformidable
challenge given themagnitude ofthetasks involved. Hewasquite positive thattheexercise wasnot
aimed atdetermining theconsistency ofagreements. Itwasentirely logical thatthesectoral Councils
(theCouncil forTrade inGoods (CTG) andtheCouncil forTrade inServices (CTS), andtheCommittee
onTrade andDevelopment (CTD) receive thereports thatwould bepresented byparties toRTAs.
Reports onsystemic issues could, however, bepresented totheGeneral Council. Itwould beforthese
bodies todecide whether further action onthereports wasnecessary. TheChairman 'sguidelines could
probably beusedbyparties whoareobliged toreport ontheiragreements. Anymechanism which
would bedevised should improve transparency andnotbecomplicated.
50. Therepresentative ofKorea thought WT/REG/W/3 setoutthemajor elements thatinhisview
needed tobeconsidered. Thepurpose ofreporting wastoimprove transparency byobliging parties
toupdate information ontheiragreements atregular intervals. Experience hadshown thatknowledge
oftheoperation ofaRTA wasmore important thanknowledge ofitsprovisions, andthiswasexactly
theobjective tobeachieved bythebiennial reporting process. Hethought biennial reports should
givedetails ontheoperation oftheagreement, andparticularly onthetrade impact onnon-members.
Non-members should begiven theopportunity ofexpressing theirviews. Healsonoted thatbiennial
reports wererequired onlyforRTAs involving goods; arequirement, hethought, should beextended
toRTAs involving services. Itwould beadvisable fortheCommittee todevelop astandard outline
forallreports. Since thedecision toexamine aRTA rested withthesectoral Councils andtheCTD,
itwould seem thatbiennial reports should bepresented tothem. Hisdelegation was,however, of
theviewthatitwould bemore efficient ifthereports werepresented totheCommittee, which would
inturnmake aconsolidated report ofafactual nature andpresent ittotherelevant body. Heplaced
importance ongiving WTO Members theopportunity toreview andcomment onbiennial reports.
They were willing tolookatways thiscould bedonewithout over-burdening theCommittee.WT/REG/M/3
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51. Therepresentative ofArgentina reflecting onthestatement made bytheEC,pointed outthat
themandatory reporting requirement didnotpermit exceptions. TheTPRB wasconcerned withthe
rationality oftrade measures. There could bediscussion onthenature andcontents ofthereports,
butnotonthebasicrequirement tosubmit areport every twoyears. Apart fromenhancing transparency,
examinations inthisCommittee could leadtothecreation ofrights inMembers. Itwould beefficient
ifthisCommittee received thereports andlatertransmitted them totherelevant WTO body. This
Committee needed tothink through theamount oftimeitwanted todevote tothisexercise bearing
inmind theagreements which have tobeexamined. Every attempt should bemade tohave
straightforward discussions; politicization ofthediscussion should beavoided.
52. Therepresentative ofAustralia thought itwasinevitable thatdiscussion ofprocedures should
bring upsystemic issues. Shenoted thatbiennial reporting wasrequired bytheUnderstanding, and
thatitwould behelpful tohaveastandard guideline forsuchreports. Thiswould ensure consistency
intheinformation thatwould beprovided byparties toRTAs, especially ontrade effects between the
parties, andbetween themandthirdcountries. Itwasnecessary tostrike areasonable balance between
theneednottooverburden theCommittee andtheparties toRTAs andtheneedtogiveanopportunity
tointerested delegations toraiseissues ofconcern tothem.
53. Therepresentative ofEgypt stated theimportance Egypt attached tothisissue towhich they
would come backatalatermeeting when WT/REG/W/3 hadbeenexamined byhisauthorities. The
representative ofCanada thought itwould becrucial todetermine whether theCommittee waslooking
foranextensive report oronejustfocusing onmajor developments. Hedidnotthink anextensive
report suchasthose presented totheTPRB wascontemplated bytheUnderstanding.
54. Therepresentative ofPeru thought thenature andcontent ofthereport wasveryclearly
established inparagraph 11oftheUnderstanding: parties toRTAs wererequired togiveinformation
ontheoperation oftheagreement, onanyamendments andonsignificant developments. Thepurpose
oftheperiodic report wasneither examining tradepolicies oftheparties norconsidering theconsistency
oftheagreement withArticle XXIV. AStandard Format would simplify theprocedure andmake it
more efficient. Hestressed thatagreement intheCommittee astothenature oftheformat would pave
thewayfortheSecretariat todofurther worktaking intoconsideration pastexperience. ThisCommittee
wasbetter placed toreceive andcomment onthereports. Heagreed withtheUnited States thatit
would beuseful toestablish acalendar sodelegations could bewellprepared. Theitemunder discussion
wasanimportant onetowhich theCommittee should revert atalatermeeting.
55. Therepresentative ofJapan agreed thatthiswasanimportant issueonwhich delegations needed
toreflect. Hethought thateventhough theCommittee hadnoagreed procedures forreview, itwas
important toensure thatdelegations whowished tocomment onthereport weregiven theopportunity
todoso.Hewasflexible onhowthiscould bedone. Asthere wasnoagreed mechanism forbiennial
reviews, anagreed format would giveanindication ofthetypeofinformation thatwasrequired. An
agreed format hadseveral advantages including enhancing transparency.
56. Therepresentative ofNewZealand thought abiennial report should reflect keydevelopments
since theimplementation oftheagreement. Changes intrade dataandeffects onthirdcountries were
possible elements which could beincluded inthereport. Reviews ofsuchreports should notdetract
theCommittee from itsmain task. Members should begiven theopportunity toraisequestions or
demand additional information from theparties totheagreement. Thereview clearly needed tobe
doneinthisCommittee, withareport going toanappropriate body oftheWTO.WT/REG/M/3
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57. TheChairman observed thatthefocus ofthediscussion hadbeenonthepurpose ofbiennial
reporting; which wastoenhance transparency andtodetermine whether changes anddevelopments
hadbeenconsistentwiththeprovisionsofArticleXXIV.Healsonotedtheimportanceofhavingupdated
tradedataandofexamining thetrade-creation andtrade-diversion effects ofRTAs; andthepossibility
ofusing aStandard Format thatmade clearwhatinformation wasrequired. There wasaclearneed
toavoidduplicationofworkdonebytheTPRB.Mostdelegations,henoted,thoughtthatthisCommittee
wastheappropriate body toreceive thereports andmake comments onthem.
58. Therepresentative oftheUnited States wanted toknow whether parties toRTAs which would
beexamined afterthesummer break would make available through theSecretariat information which
wouldenabledelegationstoadequatelyprepareforthereviewsonatimelybasis.Shesoughtinformation
from EFTA parties, andnoted thatMERCOSUR parties hadfailed toprovide information ontrade
andtariffdatadespite being asked about ayearago.Sheinformed theCommittee thatparties toNAFTA
wouldbesupplyinganswerstoquestionsonservicesassoonaspossible.TherepresentativeofArgentina
asked delegations which hadanyquestions orqueries fortheparties toMERCOSUR toputthem in
writing. Therepresentative ofSwitzerland saidthatEFTA parties hadnotyetcoordinated theirresponse
totherequest forinformation from theUnited States, buttheyexpected tofinalize itassoon as
practicable.
59. TheChairman stated thathewould becontacting delegations regarding theupdating of
information onagreements scheduled tobereviewed inSeptember. Incaseofreviews tobecarried
outsubsequently hewould beconsidering, inthelightofdiscussions atthismeeting, what partthe
Chairman 'sguidelines could play. Hementioned theagreements thatwould beexamined inSeptember
bytheCommittee, andstated thattheCommittee would resume itsdiscussions onthesystemic
implications ofRTAs, theprocedures tofacilitate theexamination process andthereporting onthe
operation ofagreements atthemeeting scheduled for20September. Themeeting wasthenadjourned.