REPORT OFTHE GENERAL COUNCIL
TOTHE 1996 MINISTERIAL CONFERENCE
VOLUME I
96-4996WORLD TRADE WT/MIN(96)/2
26November 1996
ORGANIZATION(96-4996)
MINISTERIAL CONFERENCE
Singapore, 9-13December 1996
REPORT OFTHE GENERAL COUNCIL TO
THE 1996 MINISTERIAL CONFERENCE
VOLUME I
Theannual reports for1996 oftheGeneral Council, Dispute Settlement Body, Trade Policy
Review Body, Sectoral Councils, Committees onTrade andEnvironment, Trade andDevelopment,
RegionalTradeAgreements,Balance-of-PaymentsRestrictions,andBudget,FinanceandAdministration,
andtheCommittees andCouncils under thePlurilateral Trade Agreements, arereproduced hereunder.
Each report isreproduced asaseparate section withitsownpagenumbering.
Reports Document Symbol
Section I: General Council1WT/GC/7
Section II: Dispute Settlement Body WT/DSB/8 andAdd.1
andCorr.1
Section III: Trade Policy Review Body WT/TPR/27
Section IV: Council forTrade inGoods2G/L/134 andAdd.1 and
Add.1/Corr.1
Section V: Council forTrade inServices S/C/3
Section VI: Council forTrade-Related Aspects of
Intellectual Property Rights (TRIPS) IP/C/8
Section VII: Committee onTrade andEnvironment WT/CTE/1
Section VIII: Committee onTrade andDevelopment WT/COMTD/9
Section IX: Committee onRegional Trade Agreements WT/REG/2
1Thereport oftheGeneral Council alsocovers thepreparatory work forthe1996 Ministerial Conference
undertakenintheHeads-of-DelegationsprocessundertheChairmanshipofMr.RenatoRuggiero,Director-General.
2Thereports ofthesubsidiary bodies oftheCouncil forTrade inGoods arecontained inVolume IIofthis
document.WT/MIN(96)/2
Page2
Section X: Committee onBalance-of-Payments Restrictions WT/BOP/R/19
Section XI: Committee onBudget, Finance andAdministration WT/BFA/29
Section XII: Committees andCouncils under thePlurilateral Trade Agreements
- Committee onGovernment Procurement WT/L/190
- Committee onTrade inCivil Aircraft WT/L/193
- International Dairy Council WT/L/178
- International Meat Council WT/L/179SECTION I
GENERAL COUNCILWORLD TRADE WT/GC/7
20November 1996
ORGANIZATION(96-4946)
GENERAL COUNCIL
GENERAL COUNCIL
Annual Report (1996)
Thepresent report hasbeenprepared inpursuance oftheProcedures foranAnnual Overview
ofWTO Activities andforReporting under theWTO (WT/L/105), andsetsouttheactions taken by
theGeneral Council since theprevious overview ofWTO activities heldinDecember 1995.1
Incarrying outitstasks, theGeneral Council hasheldseven meetings since December 1995.
Theminutes ofthese meetings, which remain therecord oftheGeneral Council 'swork, arecontained
indocuments WT/GC/M/10-WT/GC/M/16.
Thefollowing subjects areincluded inthereport:
Page
1. 1996 Ministerial Conference 4
(a) Preparations fortheMinisterial Conference 4
(i) Reports bytheDirector-General 4
(ii) Schedule ofmeetings ofWTO bodies 6
(iii) Progress ofpreparatory work insubsidiary bodies oftheGeneral
Council 6
(iv) Reports of: 7
(a) Dispute Settlement Body andTrade Policy Review Body 7
(b) Councils forTrade inGoods, Trade inServices, and
TRIPS 7
(c) Committee onTrade andEnvironment 7
(d) Committees onTrade andDevelopment, Regional Trade
Agreements, Balance-of-Payments Restrictions, andBudget,
Finance andAdministration 8
(e) Committees andCouncils under thePlurilateral Trade
Agreements 8
(v) Election ofofficers oftheMinisterial Conference 8
(vi) Organizational matters 9
(b) Attendance ofobservers attheMinisterial Conference 10
(i) Governments 10
(ii) International intergovernmental organizations 10
(iii) Non-governmental organizations 11
1Theannual report oftheGeneral Council for1995 iscontained inWT/GC/5 andCorr.1.WT/GC/7
Page2
2. Finalization ofnegotiations onschedules ongoods andservices 12
- Decision ontheaccession of,andapproval ofprotocol ofaccession for,the
United Arab Emirates 12
3. Composition oftheTextiles Monitoring Body 12
4. Committee onBalance-of-Payments Restrictions 13
(a) Consultations 13
(b) Disinvocation ofthebalance-of-payments provisions oftheGATT 1994 by
Turkey andPoland 13
(c) Notifications bythePhilippines andIndia 13
(d) Notes onmeetings 13
(e) Adhocobserver status forinternational intergovernmental organizations 13
5. Committee onBudget, Finance andAdministration 13
- Reports 13
6. Committee onRegional Trade Agreements 14
(a) Establishment oftheCommittee andadoption ofitsterms ofreference 14
(b) Presiding officers oftheCommittee 14
7. Approval ofrules ofprocedure forsubsidiary bodies 14
- Committee onRegional Trade Agreements 14
8. Agreement onPreshipment Inspection -Review under Article 6oftheAgreement 15
- Establishment ofaworking party 15
9. Waivers under Article IXoftheWTO Agreement 15
(a) Harmonized System 15
- Bangladesh, Bolivia, Guatemala, Jamaica, Morocco, Nicaragua and
SriLanka 15
(b) Renegotiations ofSchedules 15
(i) Malawi -Renegotiation ofSchedule LVIII 15
(ii) Senegal -Renegotiation ofSchedule XLIX 15
(iii) Zambia -Renegotiation ofSchedule LXXVIII 16
(c) Decision ontheintroduction ofHarmonized System changes intoWTO
schedules oftariff concessions on1January 1996 16
- Extension oftime-limit 16
(d) Extension ofwaivers pursuant toparagraph 2oftheUnderstanding inrespect
ofwaivers ofobligations under GATT 1994 16
(i) - Canada -CARIBCAN 16
- Cuba -Article XV:6 ofGATT 1994 16
- European Communities -Fourth ACP-EC Convention of
Lomé 16
- France -Trading Arrangements withMorocco 16
- South Africa -Basedates under Article I:4 16
- United States -ANDEAN Trade Preference Act 16
- United States -Former Trust Territory ofthePacific
Islands 16
- Zimbabwe -Basedates under Article I:4
(ii) United States -Imports ofautomotive products 17WT/GC/7
Page3
10. Status ofwaivers ineffect onthedateofentry intoforce oftheWTO Agreement 17
11. Accessions 17
(a) Bulgaria 17
(b) Georgia 18
(c) Kazakstan 18
(d) Kyrgyz Republic 18
(e) Mongolia 19
(f) Oman 19
(g) Panama 19
(h) Papua NewGuinea 20
(i) Saudi Arabia 20
(j) Seychelles 20
(k) Tonga 20
(l) Vanuatu 21
12. Brazil -Provisional safeguard measures concerning imports oftoys 21
13. Hungary -Invocation ofArticle 48oftheVienna Convention ontheLawofthe
Treaties 21
14. United States -Cuban Liberty andDemocratic Solidarity Actof1996 21
15. Compliance with theobligations ofArticles 70.8 and70.9 oftheTRIPS
Agreement 21
16. Notification requirements 22
17. World Bank study onMERCOSUR 22
18. WTO Press Release onTrade andForeign Direct Investment 22
19. Procedures forthecirculation andderestriction ofWTO documents 22
20. Status ofratification oftheWTO Agreement bycertain governments 23
21. Arrangements foreffective cooperation withother intergovernmental organizations 23
- RelationsbetweentheWTOandtheInternationalMonetaryFundandtheWorld
Bank 23
22. Guidelines forarrangements onrelations withnon-governmental organizations pursuant
toArticle V:2oftheWTO Agreement 23
23. Administrative matters 24
(i) Offices oftheDeputy Directors-General 24
(ii) Staff-related matters 24
(iii) Pensions andsalaries ofWTO staff 24
24. Observer status 24
(i) Governments 24
(ii) International intergovernmental organizations 24WT/GC/7
Page4
(iii) Guidelines onobserver status forinternational intergovernmental
organizations 25
25. Election ofChairperson 26
1. 1996 Ministerial Conference
(a) Preparations fortheMinisterial Conference
(i) Reports bytheDirector-General (WT/GC/M/11, 12,13,14,15,16)
AttheGeneral Council meeting on16April 1996, theChairman recalled thatataninformal
meeting oftheGeneral Council on5March, ithadbeenagreed thatpreparations fortheSingapore
Ministerial Conference would beundertaken inthefollowing manner:
1. TheGeneralCouncil,meetinginformallyonthatday,wouldinvitetheDirector-General,
Mr.Renato Ruggiero, inhispersonal capacity, tochair informal meetings open to
participation ofallMembers, inprinciple attheHead ofDelegation level. Thepurpose
ofthese meetings would betoenable Members toexchange views onthepreparation
oftheSingapore Ministerial Conference, with regard toboth substantive and
organizational matters.
2. Insodoing, theDirector-General would actinclosecooperation andcoordination with
theChairman oftheGeneral Council.
3. Inallmatters relating totheorganization oftheMinisterial Conference, theDirector-
General would work closely withtheHead oftheDelegation ofthehostcountry of
theMinisterial Conference.
4. TheDirector-General would submit progress reports onthiswork atthemeetings of
theGeneral Council.
5. TheGeneral Council would actuponthesereports oftheDirector-General asnecessary.
Inparticular, itwould consider anyproposals addressed toitandtakeanydecisions
itdeemed appropriate forthefurther preparation oftheSingapore Ministerial
Conference.
Itwasunderstood thatthedifferent WTO bodies would carry outthetasks assigned tothem
under thetextsagreed intheUruguay Round forthepurposes ofthefirstMinisterial Conference.
Inaccordance withparagraph 4oftheabove procedures, theDirector-General thenreported
ontheprocess thathadbeenundertaken thusfar.
TheChairman proposed thattheGeneral Council takenoteoftheDirector-General 'sstatement
andagree thattheSingapore Ministerial Conference takeplace from 9-13December 1996, thatthe
agenda fortheConference bedivided between general discussion andspecific business items, andthat
adecision onthespecific agenda items andtheexact timetobeallocated tothegeneral discussion
andthespecific items betaken atalaterdate.
TheGeneral Council soagreed.WT/GC/7
Page5
AttheGeneral Council meetings on26June, 18July, 2October, and14October 1996, the
Director-General reported ontheprocess thathadbeenundertaken untilthen.
AttheGeneral Council meeting on7,8and13November 1996theDirector-General recalled
thattheHeads-of-Delegations process hadbeenformally putintoplace attheGeneral Council meeting
on16April. Atthatmeeting, theChairman hadoutlined thearrangements agreed ataninformal meeting
oftheGeneral Council on5March. Under thesearrangements, hehadalready reported totheGeneral
Council on16April, 26June, 18July, 2October and14October. Eight informal HOD meetings
hadbeenheldin1996: on18March, 15April, 15May, 17June, 16September, 7and22October,
and2November. Inaddition, aseries ofsixinformal consultations onspecific issues, open toall
interested delegations andfocusing mainly onwhatmight constitute thework programme oftheWTO,
hadbeenheldinthelatter partofJune. Intensive informal bilateral andplurilateral consultations had
alsobeen heldintheperiod from Julythrough early November ontheelements ofaministerial
declaration andonspecific issues. Ateachofthese meetings, bothimplementation questions andthe
future work programme oftheWTO hadbeendiscussed. Withregard toimplementation, delegations
hadbeen given thepossibility toaddress problems ornewideas concerning theimplementation
programme which could emerge incertain areas andwhich were notprovided forintheWTO
Agreements themselves ortheprogramme theyenvisaged. InApril, delegations hadagreed onthe
structureoftheSingaporeConference.Thestructuredivided,inanillustrativemanneronly,theavailable
timebetween general statements andspecific agenda items. Theexact division would bemade ata
laterdatedepending onthelikely number ofgeneral statements andthespecific agenda items, forwhich
several delegations hadalready made useful suggestions. Thatstructure hadbeenformally approved
bytheGeneral Council on16April.
Throughout theprocess, delegations hadintroduced non-papers onvarious subjects. Theissues
concerned were thefollowing: built-in agenda; competition policy; government procurement;
implementation ofUruguay Round Agreements; industrial tariff negotiations; investment; labour
standards; regionalism; rulesoforigin; services; state-trading; technical barriers totrade; textiles
andclothing; trade liberalization initiatives; TRIPS; trade facilitation; WTO rulesinaglobalizing
economy; andWorld Trade Summit in1998. TheSecretariat hadalsocirculated non-papers inthe
course ofOctober andearly November. These were: Outline oftheDraft Ministerial Declaration,
Draft Ministerial Declaration -PartI,andthefulltextoftheDraft Ministerial Declaration. Ofthe
non-papers submitted bydelegations, only thenon-papers concerning competition, investment,
government procurement, WTO rules, andlabour standards hadbeenretained forconsideration in
theHOD process. Atanearly stage hehadsubmitted alistofquestions withrespect totheaction
thatmightberequiredatSingaporeineachcase,suggestingthatMembersconsiderwhethertheproposals
called forspecific decisions tobeagreed bytheMinisters orrequired apolitical statement, suchas
inaministerial declaration. Theotherissues raised inthenon-papers hadallbeenreferred totherelevant
WTO bodies forconsideration therein. Theissue oftheWorld Trade Summit hadbeen leftfor
consideration atanappropriate laterstage, andthere hadbeennosubsequent discussion ofthisissue
intheHOD process.
Consultations heldinJulyandSeptember hadledtothecirculation ofanoutline ofadraft
ministerial declaration, based onthese consultations, which hadbeendiscussed ataninformal HOD
meeting on7October. Following thisdiscussion, allWTO Members hadbeenprovided withthedraft
ofapolitical statement which would constitute theintroductory partoftheministerial declaration.
Thisdrafttexthadbeendiscussed attheinformal HOD meeting heldon22October. Intensive bilateral
andplurilateral consultations hadbeenheldthroughout thelatter partofOctober ontheremaining parts
ofthedraftdeclaration, aswellasonother specific outstanding issues intheHOD process. Asaresult
oftheseconsultations, hehadcirculated adraftofthefulltextofthedraftdeclaration, which attempted
toreflect thepoints made bydelegations inthecourse oftheconsultations. ThistexthadbeendiscussedWT/GC/7
Page6
attheinformal HOD meeting heldon2November. Headded thatwork ontheDeclaration andon
theoutstanding HOD issues wasstillcontinuing.
(ii) Schedule ofmeetings ofWTO bodies (WT/GC/M/11)
AttheGeneral Council meeting on16April 1996, theChairman drewattention totheschedule
ofend-of-year meeting forvarious WTO bodies forthepurpose ofadoption oftheirrespective reports
totheMinisterial Conference (WT/GC/W/32/Rev.1), andtotherevised Programme ofMeetings of
WTO bodies for1996 (WT/GC/4/Rev.1).
With regard toreporting procedures fortheMinisterial Conference, hesaidthathisinformal
consultations hadresulted inagreement onthefollowing textofastatement tobereadbyhim:
"1. Subsidiary bodies oftheGeneral Council areinvited toprepare theirreports onthe
basisoftheProcedures foranannual overview oftheWTO activities andforreporting
under theWTO laiddown bytheGeneral Council on15November 1995(WT/L/105).
Thesereportsshouldbesubmittedinaccordancewiththescheduleofmeetingscirculated
indocument WT/GC/W/32/Rev.1 inorder toenable theGeneral Council toadopt its
ownreport totheMinisterial Conference on7November 1996.
2. Given thedifferent mandates ofStanding Bodies oftheWTO itisdifficult toestablish
acommon format forreports ofthese bodies. Insome instances, forexample, efforts
toinclude inreports anassessment oranidentification ofproblems andissues could
leadtoundue difficulties. EachBody musttherefore ultimately decide ontheformat
ofreport which itdeems mostappropriate forconsideration ofrelevant issues bythe
superior Body.
3. While taking theabove intoaccount, Isuggest thatthese reports include atleastthe
following elements:
(a) asection onimplementation oftherelevant Agreements;
(b) progress concerning work under theBuilt-in Agenda;
(c) anindication asappropriate ofissues andproblems which havebeenidentified
andrecommendations ifany."
TheGeneral Council tooknoteoftheChairman 'sstatement onreporting procedures forthe
Ministerial Conference (WT/L/145), alsotooknotethattheChairman would consult withPakistan
onitsconcerns regarding thesecond sentence ofparagraph 2ofthestatement, andfurther tooknote
thatPakistan would havethepossibility torevert tothismatter atthenextmeeting.
TheChairman theninvited thechairpersons ofsubsidiary bodies toundertake thenecessary
arrangements forthepreparation oftheirrespective reports along thelinesofhisstatement.
(iii) Progress ofpreparatory work insubsidiary bodies oftheGeneral Council
(WT/GC/M/13, 14,15)
Atitsmeeting on18July1996, theGeneral Council heard reports ontheprogress ofpreparatory
workintheirrespective bodies, made under theirownresponsibility, bytheChairpersons oftheDispute
Settlement Body, theTrade Policy Review Body, theCouncil forTrade inServices, theCouncil forWT/GC/7
Page7
Trade inGoods, theCommittee onTrade andDevelopment, theCommittee onTrade andEnvironment
andtheCommittee onRegional Trade Agreements, andbytheChairman onbehalf oftheChairman
oftheCouncil forTRIPS. TheGeneral Council alsoheard thattheChairmen oftheBudget andBalance-
of-Payments Committees hadnothing toreport atthisstage withregard topreparatory work forthe
Ministerial Conference intheirrespective Committees.
Atitsmeeting on2October 1996, theGeneral Council heard briefreports onthepreparatory
workintheirrespective bodies, made under theirownresponsibility, bytheChairpersons oftheCouncil
forTrade inGoods, theCouncil forTrade inServices andtheCouncil forTRIPS. TheGeneral Council
alsoheard thattheChairman oftheCommittee onTrade andDevelopment hadnothing toreport at
thisstage.
Atitsmeeting on14October 1996, theGeneral Council heard reports onthepreparatory work
intheirrespective bodies, made under theirownresponsibility, bytheChairpersons oftheTrade Policy
ReviewBody,theCouncilforTradeinGoods,theCouncilforTradeinServices,theCouncilforTRIPS,
theDispute Settlement Body, theCommittee onTrade andDevelopment, theCommittee onRegional
Trade Agreements andtheCommittee onTrade andEnvironment. TheGeneral Council alsoheard
thattheChairmen oftheBudget andBalance-of-Payments Committees hadnothing toreport atthis
stage withregard topreparatory work fortheMinisterial Conference intheirrespective Committees.
(iv) Reports of:
(a) Dispute Settlement Body and Trade Policy Review Body
(WT/GC/M/16)
Atitsmeeting on7,8and13November 1996, theGeneral Council considered theannual reports
oftheDispute Settlement Body (WT/DSB/8) andtheTrade Policy Review Body (WT/TPR/27). The
General Council tooknoteofthetworeports.
(b) Councils forTrade inGoods, Trade inServices, andTRIPS
(WT/GC/M/16)
Atitsmeeting on7,8and13November 1996, theGeneral Council considered theannual
reports oftheCouncils forTrade inGoods (G/L/134), Trade inServices (S/C/3), andTRIPS (IP/C/8).
TheGeneral Council tooknoteofthethreereports andapproved therecommendations contained therein.
Itagreed torevert atafuture meeting totherecommendations oftheCouncil forTrade inGoods
regarding notification obligations andprocedures, andtookseparate action atthemeeting onthe
recommendation regarding Preshipment Inspection.2
(c) Committee onTrade andEnvironment (WT/GC/M/16)
Atitsmeeting on7,8and13November 1996, theGeneral Council considered thereport of
theCommittee onTrade andEnvironment (WT/CTE/W/403).TheGeneral Council tooknoteofthe
report, approved therecommendations contained therein, andagreed toforward ittotheMinisterial
Conference forconsideration.
2Seepoint 8-"Agreement onPreshipment Inspection...".
3Thereport wassubsequently reissued asWT/CTE/1.WT/GC/7
Page8
(d) Committees onTrade andDevelopment, Regional Trade Agreements,
Balance-of-Payments Restrictions, and Budget, Finance and
Administration (WT/GC/M/16)
Atitsmeeting on7,8and13November 1996, theGeneral Council considered theannual
reports oftheCommittees onTrade andDevelopment (WT/COMTD/9), Regional Trade Agreements
(WT/REG/2), Balance-of-Payments Restrictions (WT/BOP/R/19), andBudget, Finance and
Administration (WT/BFA/29).
TheGeneral Council adopted thereport oftheCommittee onTrade andDevelopment, approved
thedraftplanofAction fortheLeast-Developed Countries inWT/COMTD/W/20,4andagreed tosubmit
ittotheMinisterial Conference foradoption.
TheGeneral Council thentooknoteofthereports oftheCommittees onRegional Trade
Agreements, Balance-of-Payments Restrictions, andBudget, Finance andAdministration.
(e) Committees andCouncils under thePlurilateral Trade Agreements
(WT/GC/M/16)
Atitsmeeting on7,8and13November 1996, theGeneral Council considered andtooknote
oftheannual reports ofthefourCommittees andCouncils under thePlurilateral Trade Agreements
(Committee onGovernment Procurement (WT/L/190); Committee onTrade inCivil Aircraft
(WT/L/193); International Dairy Council (WT/L/178); International Meat Council (WT/L/179)).
(v) Election ofofficers oftheMinisterial Conference (WT/GC/M/14, 16)
AttheGeneral Council meeting on2October 1996, theChairman recalled thattheRules of
Procedure forSessions oftheMinisterial Conference (WT/L/161) provided fortheelection ofa
Chairperson andthree Vice-Chairpersons whowould holdoffice from theendofonesession until
theendofthenextregular session. Since theSingapore Ministerial Conference wasthefirstMinisterial
Conference, andtherewasnoelected Chairperson, heproposed thattheGeneral Council actonbehalf
oftheMinisterial Conference andelectaChairperson andthree Vice-Chairpersons atitsmeeting on
7November 1996. Ifthisproposal wereacceptable, hewould consult withMembers sothattheelection
oftheChairperson andthethree Vice-Chairpersons could takeplace attheGeneral Council meeting
on7November.
TheGeneral Council soagreed.
Atitsmeeting on7,8and13November 1996, theGeneral Council, acting onbehalf ofthe
Ministerial Conference, elected thefollowing asofficers ofthe1996 Ministerial Conference by
acclamation:
Chairperson: H.E. Mr.YeoCheo Tong
Minister forTrade andIndustry ofSingapore
Vice-Chairpersons: H.E. Mr.Enda Kenny
Minister forTourism andTrade ofIreland
4Subsequently reissued asWT/MIN(96)/W/2.WT/GC/7
Page9
H.E. Mr.Alvaro Ramos
Minister ofForeign Affairs ofUruguay
H.E. Mr.Mondher Zenaïdi
Minister ofTrade ofTunisia
(vi) Organizational matters (WT/GC/M/14, 16)
AttheGeneral Council meeting on2October 1996, theChairman addressed thefollowing
organizational matters pertaining totheMinisterial Conference:
1. Opening Session oftheConference
(a) Inaccordance withtheusual practice atMinisterial meetings, abriefinaugural
ceremony would beheldattheopening session towelcome thePrime Minister
ofSingapore.
(b) Theelected Chairperson oftheMinisterial Conference would invite thePrime
Minister ofSingapore toaddress theConference.
(c) Attheendofhisaddress totheConference, thePrime Minister ofSingapore
would declare thefirstMinisterial Conference oftheWTO formally opened.
(d) After thedeparture ofthePrime Minister ofSingapore, theChairperson would
takeupthefollowing business onthemorning ofMonday, 9December as
follows:
(i) Adoption oftheAgenda.
(ii) Agreement ontheOrder ofBusiness.
(iii) Introduction oftheReport oftheGeneral Council bytheChairman
oftheGeneral Council.
(iv) Introduction oftheReport onanoverview ofdevelopments in
international trade andthetrading system bytheDirector-General.
(v) Statements byMinisters.
2. ListofSpeakers
Members wishing tospeak attheMinisterial Conference should contact theSecretariat
andmake reservations notlaterthan1November 1996. Statements should belimited
toamaximum offiveminutes. Ifadelegation sowished, alonger textwould be
circulated indocument form totheConference.
Requestsforreservationsmadeafter1Novemberwouldbeaccommodatedinaccordance
withtheavailability oftime. Thepurpose ofthisprocedure wastoenable theSecretariat
toorganize inadvance thesequence ofplenary sessions oftheMinisterial Conference.
AttheGeneral Council meeting on7,8and13November 1996, theChairman informed
delegations, following consultations withtheSecretariat andwiththeauthorities ofthehostgovernment,
thatthebusiness oftheMinisterial Conference wasbeing planned onthefollowing basis: (a)Opening
Ceremony: Theopening ceremony would beheldonMonday, 9December aspreviously indicated
byhimon2October; (b)Plenary sessions: Plenary sessions would beheldonMonday morning
andafternoon, andthereafter onTuesday, Wednesday, Thursday andFriday mornings; (c)Special
meetings among Ministers: Theafternoons ofTuesday andWednesday, 10and11December, would
beleftopenforspecial meetings among Ministers todiscuss specific issues ofinterest tothem. Thursday
afternoon, 12December, would bereserved foranymeetings thatmight benecessary inaccordance
withtheadvancement oftheConference; and(d)Closure oftheMinisterial Conference: TheclosingWT/GC/7
Page10
ceremony would takeplace onFriday, 13December. Immediately before theclosing ceremony at
theplenary oftheConference, Ministers would adopt theMinisterial Declaration andtakeanyother
actions thattheydeemed relevant under item2oftheProvisional Agenda oftheConference. Onthat
occasion, theywould alsotakenoteoftheGeneral Council report andendorse allrecommendations
therein. With regard tothespecial meetings among Ministers planned totakeplace onTuesday and
Wednesday afternoons, itwasproposed thattheybeorganized inthefollowing manner: (a)These
meetings would beopentoparticipation byallMinisters andtheiradvisers; (b)Although themeetings
would beinformal innature andwould takenodecisions oractions, records ofthediscussions could
bekeptbytheSecretariat ifsodesired; and(c)Inorder toensure anorderly discussion, Ministers
would beinvited toaddress thefollowing general topics: (i)implementation (onTuesday afternoon);
(ii)future work oftheWTO; and(iii) anyother matters which Ministers might wish toraise
(Wednesday, afternoon). Thepurpose ofthespecial meetings among Ministers would betoprovide
theopportunity foranexchange ofviews among Ministers onmatters relating totheWTO andthe
multilateral trading system, inanopenandinformal atmosphere.
(b) Attendance ofobservers attheMinisterial Conference
(i) Governments (WT/GC/M/14, 16)
AttheGeneral Council meeting on2October 1996, theChairman recalled theprocedures for
theattendance ofgovernments asobservers atmeetings oftheMinisterial Conference assetoutin
Annex 2oftheRules ofProcedure forSessions oftheMinisterial Conference (WT/L/161). Under
these procedures, governments thatwere presently accorded observer status intheGeneral Council
anditssubsidiary bodies would beinvited toattend sessions oftheMinisterial Conference asobservers.
Other governments thatwished tohaveobserver status attheMinisterial Conference, anddidnotat
present havesuchstatus intheGeneral Council anditssubsidiary bodies, would havetomake aformal
request inaccordance withtheprovisions ofparagraph 1oftheabove procedures. Anysuchrequests
would beexamined inaccordance withtheprocedures setout.Furthermore, observer governments
thatwished tospeak attheMinisterial Conference would beinvited todosoafterMembers hadspoken,
asprovided forintheprocedures.
Atitsmeeting on7,8and13November 1996, theGeneral Council considered requests for
observer status byIran(WT/L/191) andLaos (WT/L/192).5TheGeneral Council agreed togrant
therequest byLaos, andfurther agreed thattheChairman should inform Iranthattherewasnoconsensus
regarding thelatter'srequest.
(ii) International intergovernmental organizations (WT/GC/M/13, 14,15,16)
AttheGeneral Council meeting on18July1996, theChairman saidthat,ashehadindicated
todelegations ataninformal meeting on12July,heintended tostartconsultations ontheinternational
intergovernmental organizations tobeinvited asobservers totheMinisterial Conference onthebasis
ofthefollowing guidelines:
(a) organizationsthatwereobserverstotheGeneralCouncilwouldbeautomaticallyinvited;
(b) organizations thatwereobservers tosubsidiary bodies oftheWTO would beinvited
iftheyrequested toattend theConference;
5Carried inGeneral Council Minutes under "Iran -Request forobserver status atthe1996 Ministerial
Conference", and"Laos -Request forobserver status atthe1996 Ministerial Conference".WT/GC/7
Page11
(c) consultations would becarried outtodetermine which other international
intergovernmental organizations thatwerenotobservers totheWTO andthatrequested
attendance attheConference should alsobeinvited.
Hehoped thatatitsmeeting scheduled forOctober, theGeneral Council would beinaposition
totakeadecision ontheinternational intergovernmental organizations tobeinvited asobservers to
theMinisterial Conference.
TheGeneral Council agreed withtheChairman 'sproposed approach.
Atitsmeeting on2October 1996, theChairman informed theGeneral Council thatthefollowing
organizations which werenotobservers totheWTO hadrequested attendance atthe1996 Ministerial
Conference: theCommon Market forEastern andSouthern Africa (COMESA), theCentral American
Bank forEconomic Integration, theCommon Fund forCommodities andtheIslamic Development
Bank. Heproposed thattheGeneral Council accept these requests andinvite these organizations as
observers totheMinisterial Conference.
TheGeneral Council soagreed.
Atitsmeeting on14October 1996, theChairman informed theGeneral Council thattheUnited
Nations Economic andSocial Commission forWestern Asia(ESCWA), which wasnotanobserver
totheWTO hadrequested attendance atthe1996Ministerial Conference. Heproposed thattheGeneral
Council accept thisrequest andinvite thisorganization asanobserver totheMinisterial Conference.
TheGeneral Council soagreed.
Atitsmeeting on7,8and13November 1996, theChairman informed theGeneral Council
thatthefollowing organizations which were notobservers totheWTO hadrequested attendance at
the1996Ministerial Conference: ASEAN, Asian Development Bank, Organization forAfrican Unity
(OAU), Organization oftheIslamic Conference, andtheSouthern African Development Community
(SADC). Heproposed thatallorganizations ofaregional orsub-regional nature thathadexpressed
awishtoattend theMinisterial Conference asobservers beinvited thereto.
TheGeneral Council soagreed.
(iii) Non-governmental organizations (WT/GC/M/13, 14,15)
AttheGeneral Council meeting on18July1996, theChairman saidhebelieved itwasnecessary
todetermine urgently howtoproceed withrequests from non-governmental organizations toattend
theMinisterial Conference inanobserver capacity and,onthebasis ofconsultations hehadheld,
proposed thefollowing method forproceeding:
(i) NGOs would beallowed toattend thePlenary Sessions oftheConference;
(ii) applications fromNGOs toberegistered would beaccepted onthebasis ofArticle V
oftheWTO Agreement, i.e.those NGOs "concerned withmatters related tothose
oftheWTO"; and
(iii) adeadline would beestablished fortheregistration ofNGOs thatwished toattend the
Conference. AlistoftheNGOs thathadapplied forattendance would becirculated
subsequently fortheinformation oftheGeneral Council. Attendance atplenary sessions
byNGOs would alsodepend upon theavailability ofspace.WT/GC/7
Page12
TheGeneral Council agreed totheChairman 'sproposed procedure.
AttheGeneral Council meeting on2October 1996, theChairman drewattention toaninformal
document recently circulated bytheSecretariat which listed those NGOs which hadcomplied with
therequirements forattendance attheSingapore Ministerial Conference thathadbeenagreed inJuly.
TheGeneral Council agreed thattheSecretariat would prepare apaper outlining theagreed
modalities fortheattendance ofNGOs attheMinisterial Conference andthatthedeadline forregistration
ofNGOs beextended to15October.
AttheGeneral Council meeting on14October 1996, theChairman saidthatsince theGeneral
Council would notmeetagain before 7November, andinorder nottodelay unnecessarily theprocess
ofregistration forNGOs, agreement hadbeenreached ininformal consultations onawaytomove
theprocess forward, asfollows: (a)theSecretariat would establish for16October, asanaddendum
tothelistdistributed on2October, alistofthose additional NGOs which hadpresented requests for
registrationandwhichhadreceivedregistrationformssince2October,andwouldcirculateon22October
afinallistofthose NGOs towhom confirmation would besent; and(b)thefacilities provided for
NGOs attheSingapore Ministerial Conference might bereviewed bytheGeneral Council inthelight
oftheexperience gained from thisfirstMinisterial Conference.
TheGeneral Council agreed totheChairman 'sproposed procedure.
2. Finalization ofnegotiations onschedules ongoods andservices
- Decision ontheaccession of,andapproval ofprotocol ofaccession for,theUnited
Arab Emirates (WT/GC/M/10)
InDecember 1995, theGeneral Council hadapproved thegoods andservices schedules of
theUnited Arab Emirates.
Atitsmeeting on6February 1996, theGeneral Council approved thetextoftheProtocol of
Accession fortheUnited Arab Emirates (WT/L/129) and,inaccordance withtheDecision-Making
Procedures Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995(WT/L/93),
adopted theDecision ontheAccession oftheUAE (WT/L/128).
3. Composition oftheTextiles Monitoring Body (WT/GC/M/10)
InJanuary 1995, theGeneral Council hadadopted aDecision onthecomposition oftheTextiles
Monitoring Body untiltheendof1997(WT/L/26). With regard totheChina/Pakistan constituency,
afootnote totheDecision stipulated thatintheevent thatChina didnotbecome aWTO Member by
31December 1995, "aWTO Member, tobeproposed bytheWTO Members thataremembers of
theInternational Textiles andClothing Bureau, shallbeincluded inthisconstituency untilsuchdate
asChina becomes aWTO Member".
Atitsmeeting on6February 1996, theGeneral Council considered acommunication from
theITCB (WT/GC/W/28) proposing thatMacau beincluded intheChina/Pakistan constituency until
suchtimeasChina became aMember oftheWTO, oruntil31December 1997, whichever came first.
TheGeneral Council tooknoteoftheproposed nomination totheTMB (WT/L/26/Add.1).WT/GC/7
Page13
4. Committee onBalance-of-Payments Restrictions
(a) Consultations (WT/GC/M/10, 13,16)
Atitsmeetingon6February1996,theGeneralCouncilconsideredandadoptedtheCommittee's
report onitsconsultation withIndia (WT/BOP/R/11 -BOP/R/234).
Atitsmeeting on18July1996, theGeneral Council considered andadopted theCommittee 's
reports onitsconsultations withNigeria (WT/BOP/R/13), Tunisia (WT/BOP/R/14) andSlovakia
(WT/BOP/R/15).
Atitsmeeting on7,8and13November 1996, theGeneral Council considered andadopted
theCommittee'sreportsonitsconsultationswithHungary(WT/BOP/R/17)andNigeria(WT/BOP/R/18).
(b) Disinvocation ofthebalance-of-payments provisions oftheGATT 1994 byTurkey
andPoland (WT/GC/M/13)
Atitsmeeting on18July1996, theChairman oftheCommittee informed theGeneral Council
thatTurkey andPoland hadrecently communicated totheCommittee theirintention todisinvoke the
balance-of-payments provisions ofGATT 1994asof1January 1997(WT/BOP/N/7 andWT/BOP/N/8).
(c) Notifications bythePhilippines andIndia (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council tooknotethattheCommittee hadreceived
anotification from thePhilippines concerning thelifting ofrestrictions onagricultural products
(WT/BOP/N/9), andarecent submission from India containing alistofallquantitative restrictions
including those maintained forBOPpurposes (WT/BOP/N/11).
(d) Notes onmeetings (WT/GC/M/10, 13)
Atitsmeeting on6February 1996, theGeneral Council tooknoteoftheCommittee 'sdiscussion
ofitsongoing business reported inWT/BOP/R/12 -BOP/R/235.
Atitsmeeting on18July1996, theGeneral Council tooknoteoftheCommittee 'sdiscussion
ofitsongoing business reported inWT/BOP/R/16.
(e) Adhocobserverstatusforinternationalintergovernmentalorganizations(WT/GC/M/16)
Atitsmeeting on7,8and13November 1996, theGeneral Council tooknotethatatitsmeeting
on23,24and25September 1996, theCommittee hadrecognized theadhocobserver status ofthe
following international intergovernmental organizations: theACPSecretariat, EBRD, EFTA, OECD,
World Bank andUNCTAD.
5. Committee onBudget, Finance andAdministration
- Reports (WT/GC/M/10, 11,12,13)
Atitsmeeting on6February 1996, theGeneral Council considered theCommittee 'sreports
inWT/BFA/16 -L/7660 andWT/BFA/18 -L/7662, andadopted thetworeports.
Atitsmeeting on16April 1996, theGeneral Council considered theCommittee 'sreports in
WT/BFA/20, WT/BFA/21 andWT/BFA/22. TheGeneral Council approved theCommittee 'sspecificWT/GC/7
Page14
recommendations inparagraphs 12and14ofitsreport inWT/BFA/20, andadopted thereport. The
General Council thenapproved theCommittee 'sspecific recommendations inparagraph 8ofitsreport
inWT/BFA/21, andadopted thereport. TheGeneral Council thenapproved theCommittee 'sspecific
recommendations inparagraphs 5to11ofitsreport inWT/BFA/22, andadopted thereport.
Atitsmeeting on26June1996, theGeneral Council considered theCommittee 'sreport in
WT/BFA/24.TheGeneralCouncilapprovedtheCommittee'sspecificrecommendationinparagraph11
ofitsreport inWT/BFA/24, andadopted thereport.
Atitsmeeting on18July1996, theGeneral Council considered theCommittee 'sreport in
WT/BFA/26.TheGeneralCouncilapprovedtheCommittee'sspecificrecommendationsinparagraphs6
and8ofitsreport inWT/BFA/26, andadopted thereport.
6. Committee onRegional Trade Agreements
(a) Establishment oftheCommittee andadoption ofitsterms ofreference (WT/GC/M/10)
InDecember 1995, theGeneral Council hadagreed inprinciple toestablish acommittee on
regional trade agreements andthattheChairman would holdconsultations ontheterms ofreference
andother related matters concerning thecommittee.
AttheGeneral Council meeting on6February 1996, Mr.Weekes (Canada) reported onthe
consultations hehadheldonbehalf andattherequest oftheChairman, andproposed thatadraftdecision
thathadbeencirculated todelegations onthismatter beadopted withanamendment.
TheGeneral Council adopted theDecision establishing theCommittee onRegional Trade
Agreements withtheterms ofreference setouttherein (WT/L/127).
(b) Presiding officers oftheCommittee (WT/GC/M/11)
Atitsmeeting on16April 1996, theChairman informed theGeneral Council thatMr.Weekes
(Canada) hadagreed toserve asChairman oftheCommittee, andMr.Berthet (Uruguay) Mr.Harbinson
(Hong Kong), Mr.Ravaloson (Madagascar) andMr.Willems (Belgium) hadagreed toserve asVice-
Chairmen.
7. Approval ofrules ofprocedure forsubsidiary bodies
- Committee onRegional Trade Agreements (WT/GC/M/14)
Atitsmeeting on2October 1996, theGeneral Council approved therules ofprocedure for
meetings oftheCommittee onRegional Trade Agreements inWT/REG/1, which hadbeenadopted
bythatCommittee on2July.WT/GC/7
Page15
8. Agreement onPreshipment Inspection -Review under Article 6oftheAgreement
- Establishment ofaworking party (WT/GC/M/16)
Atitsmeeting on7,8and13November 1996, theGeneral Council, onthebasis ofa
recommendation bytheCouncil forTrade inGoods,6agreed toestablish aworking party under the
Council forTrade inGoods withthefollowing terms ofreference: "Toconduct thereview provided
forunder Article 6oftheAgreement onPreshipment Inspection andtoreport totheGeneral Council
through theCouncil forTrade inGoods inDecember 1997" (WT/L/196).
9. Waivers under Article IXoftheWTO Agreement
(a) Harmonized System
- Bangladesh, Bolivia, Guatemala, Jamaica, Morocco, Nicaragua andSriLanka
(WT/GC/M/13)
Atitsmeetingon18July1996,theGeneralCouncilconsideredrequestsbyBangladesh(G/L/77),
Bolivia (G/L/78), Guatemala (G/L/86), Jamaica (G/L/79), Morocco (G/L/80), Nicaragua (G/L/81)
andSriLanka (G/L/83) forextensions ofwaivers previously granted inconnection with their
implementation oftheHarmonized System, andtherelated draftdecisions.
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
these requests.
TheGeneral Council adopted theDecisions ontheextensions ofthewaivers (WT/L/164 -
Bangladesh; WT/L/165 -Bolivia; WT/L/172 -Guatemala; WT/L/166 -Jamaica; WT/L/167 -Morocco;
WT/L/168-Nicaragua;andWT/L/170-SriLanka)inaccordancewiththeDecision-MakingProcedures
Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995 (WT/L/93).
(b) Renegotiations ofSchedules
(i) Malawi -Renegotiation ofSchedule LVIII (WT/GC/M/10)
Atitsmeetingon6February1996,theGeneralCouncilconsideredarequestbyMalawi(G/L/51)
foranextension ofawaiver previously granted inconnection withitsrenegotiation ofitsschedule,
andadraftdecision tothiseffect (G/C/W/31).
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
thisrequest.
TheGeneral Council adopted theDecision ontheextension ofthewaiver (WT/L/131) in
accordance withtheDecision-Making Procedures Under Articles IXandXIIoftheWTO Agreement
agreed inNovember 1995 (WT/L/93).
(ii) Senegal -Renegotiation ofSchedule XLIX (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council considered arequest bySenegal (G/L/82)
foranextension ofawaiver previously granted inconnection withitsrenegotiation ofitsschedule,
andtherelated draftdecision (G/C/W/45).
6SeeWT/GC/W/41.WT/GC/7
Page16
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
thisrequest.
TheGeneral Council adopted theDecision ontheextension ofthewaiver (WT/L/169) in
accordance withtheDecision-Making Procedures Under Articles IXandXIIoftheWTO Agreement
agreed inNovember 1995 (WT/L/93).
(iii) Zambia -Renegotiation ofSchedule LXXVIII (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council considered arequest byZambia (G/L/84)
foranextension ofawaiver previously granted inconnection withitsrenegotiation ofitsschedule,
andtherelated draftdecision (G/C/W/47).
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
thisrequest.
TheGeneral Council adopted theDecision ontheextension ofthewaiver (WT/L/171) in
accordance withtheDecision-Making Procedures Under Articles IXandXIIoftheWTO Agreement
agreed inNovember 1995 (WT/L/93).
(c) Decision ontheintroduction ofHarmonized System changes intoWTO schedules of
tariff concessions on1January 1996
- Extension oftime-limit (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council considered adraftdecision extending
thetime-limit oftheDecision ontheintroduction ofHarmonized System changes intoWTO schedules
oftariff concessions on1January 1996 (G/MA/W/6).
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
thisextension ofthetime-limit.
TheGeneral Council adopted theDecision extending thetime-limit (WT/L/173) inaccordance
withtheDecision-Making Procedures Under Articles IXandXIIoftheWTO Agreement agreed in
November 1995 (WT/L/93).
(d) Extension ofwaivers pursuant toparagraph 2oftheUnderstanding inrespect ofwaivers
ofobligations under GATT 1994
(i) - Canada -CARIBCAN
- Cuba -Article XV:6 ofGATT 1994
- European Communities -Fourth ACP-EC Convention ofLomé
- France -Trading Arrangements withMorocco
- South Africa -Basedates under Article I:4
- United States -ANDEAN Trade Preference Act
- United States -Former Trust Territory ofthePacific Islands
- Zimbabwe -Basedates under Article I:4
(WT/GC/M/14, 15)
Atitsmeetingon2October1996,theGeneralCouncilconsideredrequestsbyCanada(G/L/100),
Cuba (G/L/89), theEuropean Communities (G/L/108, G/L/109), South Africa (G/L/104), theUnited
States (G/L/101, G/L/102) andZimbabwe (G/L/106) forextensions ofwaivers pursuant toparagraph 2WT/GC/7
Page17
oftheUnderstanding inrespect ofwaivers ofobligations under GATT 1994, andtherelated draft
decisions.
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
these requests.
TheGeneral Council agreed torevert tothismatter atitsnextmeeting.
Atitsmeeting on14October 1996, theGeneral Council again considered these requests and
adopted theDecisions ontheextensions ofthewaivers (WT/L/185 -Canada; WT/L/182 -Cuba;
WT/L/186 andWT/L/187 -European Communities; WT/L/188 -South Africa; WT/L/183 and
WT/L/184 -United States; andWT/L/189 -Zimbabwe) inaccordance withtheDecision-Making
Procedures Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995(WT/L/93).
(ii) United States -Imports ofautomotive products (WT/GC/M/16)
Atitsmeeting on7,8and13November 1996, theGeneral Council considered arequest by
theUnited States (G/L/103 andCorr. 1)foranextension ofitswaiver pursuant toparagraph 2ofthe
Understanding inrespect ofwaivers ofobligations under GATT 1994, andtherelated draftdecision
(GC/W/55).
TheChairman oftheCouncil forTrade inGoods reported ontheCouncil 'sconsideration of
thisrequest.
TheGeneral Council adopted theDecision ontheextension ofthewaiver (WT/L/198) in
accordance withtheDecision-making procedures under Articles IXandXIIoftheWTO Agreement
agreed inNovember 1995 (WT/L/93).
10. Status ofwaivers ineffect onthedateofentryintoforceoftheWTO Agreement (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council tooknotethatinconsultations heldrecently
bytheChairman onthestatus ofwaivers ineffect onthedateofentry intoforceoftheWTO Agreement,
there appeared tobebroad agreement thateachMember thatsought anextension ofsuchawaiver,
alistofwhich wasprovided inWT/L/153/Rev.1, should submit arequest foritsextension which should
bedealtwithunder theprovisions ofArticle IX:3oftheWTO Agreement andthat,pursuant tothose
provisions, suchrequests should firstbeconsidered bytheCouncil forTrade inGoods.
11. Accessions
(a) Bulgaria (WT/GC/M/14)
InNovember 1986 andFebruary 1990, theGATT 1947 Council hadestablished aworking
party toexamine Bulgaria 'srequest foraccession totheGeneral Agreement onTariffs andTrade.
Subsequently,inpursuanceoftheDecisionregardingrequestsforWTOaccessionadoptedbytheGeneral
Council on31January 19957,theGATT 1947 Accession Working Party hadbeentransformed into
aWTO Accession Working Party.
7SeeWT/GC/M/1, Item 4(g).WT/GC/7
Page18
Atitsmeeting on2October 1996, theGeneral Council considered theWorking Party'sreport
(WT/ACC/BGR/5 andCorr.1, Add.1 andAdd.2).
TheGeneral Council approved thetextoftheProtocol ofAccession (WT/ACC/BGR/7) and
thetextofthedraftdecision ontheAccession ofBulgaria and,inaccordance withtheDecision-Making
Procedures Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995(WT/L/93),
adopted theDecision ontheAccession ofBulgaria (WT/ACC/BGR/6). TheGeneral Council then
adopted thereport oftheWorking Party (WT/ACC/BGR/5 andCorr.1, Add.1 andAdd.2).
(b) Georgia (WT/GC/M/13)
Atitsmeeting on18July1996, theGeneral Council considered acommunication fromGeorgia
(WT/ACC/GEO/1) concerning itsinterest inacceding totheWTO Agreement pursuant toArticle XII
thereof.
TheGeneral Council agreed toestablish aworking party toexamine Georgia 'srequest, and
authorized itsChairman todesignate theChairperson oftheWorking Party inconsultation with
representatives ofMembers andwiththerepresentative ofGeorgia.
(c) Kazakstan (WT/GC/M/10, 11)
Atitsmeeting on6February 1996, theGeneral Council considered acommunication from
Kazakstan (WT/ACC/KAZ/1) concerning itsinterest inacceding totheWTO Agreement pursuant to
Article XIIthereof.
TheGeneral Council agreed toestablish aworking party toexamine Kazakstan 'srequest, and
authorized itsChairman todesignate theChairperson oftheWorking Party inconsultation with
representatives ofMembers andwiththerepresentative ofKazakstan.
TheChairman invited Kazakstan, onbehalf oftheGeneral Council, toattend meetings ofthe
General Council and,asappropriate, meetings ofother WTO bodies asanobserver during theperiod
when theWorking Party wascarrying outitswork.
Atitsmeeting on16April 1996, theChairman informed theGeneral Council thatMr.Ekblom
(Finland) hadagreed tochair theWorking Party.
(d) Kyrgyz Republic (WT/GC/M/11, 13)
Atitsmeeting on16April 1996, theGeneral Council considered acommunication from the
KyrgyzRepublic(WT/ACC/KGZ/1)concerningitsinterestinaccedingtotheWTOAgreementpursuant
toArticle XIIthereof.
TheGeneral Council agreed toestablish aworking party toexamine therequest oftheKyrgyz
Republic, andauthorized itsChairman todesignate theChairperson oftheWorking Party inconsultation
withrepresentatives ofMembers andwiththerepresentative oftheKyrgyz Republic.
TheChairman invited theKyrgyz Republic, onbehalf oftheGeneral Council, toattend meetings
oftheGeneral Council and,asappropriate, meetings ofother WTO bodies asanobserver during the
period when theWorking Party wascarrying outitswork.
Atitsmeeting on18July1996, theChairman informed theGeneral Council thatMr.Metzger
(France) hadagreed tochair theWorking Party.WT/GC/7
Page19
(e) Mongolia (WT/GC/M/13)
InOctober1991,theGATT1947CouncilhadestablishedaworkingpartytoexamineMongolia's
request foraccession totheGeneral Agreement onTariffs andTrade. Subsequently, inpursuance
oftheDecision regarding requests forWTO accession adopted bytheGeneral Council on31January
19958,theGATT 1947Accession Working Party hadbeentransformed intoaWTO Accession Working
Party.
Atitsmeeting on18July1996, theGeneral Council considered theWorking Party'sreport
(WT/ACC/MNG/9 andCorr.1, Add.1, Add.1/Corr.1, andAdd.2).
TheGeneral Council approved thetextoftheProtocol ofAccession (WT/ACC/MNG/11) and
thetextofthedraftdecision ontheAccession ofMongolia and,inaccordance withtheDecision-Making
Procedures Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995(WT/L/93),
adopted theDecision ontheAccession ofMongolia (WT/ACC/MNG/10). TheGeneral Council then
adopted thereport oftheWorking Party (WT/ACC/MNG/9 andCorr.1, Add.1 andAdd.1/Corr.1,
andAdd.2).
(f) Oman (WT/GC/M/12, 14)
Atitsmeeting on26June1996, theGeneral Council considered acommunication fromOman
(WT/ACC/OMN/1) concerning itsinterest inacceding totheWTO Agreement pursuant toArticle
XIIthereof.
TheGeneral Council agreed toestablish aworking party toexamine Oman 'srequest, and
authorized itsChairman todesignate theChairperson oftheWorking Party inconsultation with
representatives ofMembers andwiththerepresentative ofOman.
TheChairmaninvitedOman,onbehalfoftheGeneralCouncil,toattendmeetingsoftheGeneral
Council and,asappropriate, meetings ofother WTO bodies asanobserver during theperiod when
theWorking Party wascarrying outitswork.
Atitsmeeting on2October 1996, theChairman informed theGeneral Council thatMr.Akram
(Pakistan) hadagreed tochair theWorking Party.
(g) Panama (WT/GC/M/14)
InOctober 1991, theGATT 1947Council hadestablished aworking partytoexamine Panama 's
request foraccession totheGeneral Agreement onTariffs andTrade. Subsequently, inpursuance
oftheDecision regarding requests forWTO accession adopted bytheGeneral Council on31January
19959,theGATT 1947Accession Working Party hadbeentransformed intoaWTO Accession Working
Party.
Atitsmeeting on2October 1996, theGeneral Council considered theWorking Party'sreport
(WT/ACC/PAN/19 andCorr.1, Add.1 andAdd.2).
TheGeneral Council approved thetextoftheProtocol ofAccession (WT/ACC/PAN/21) and
thetextofthedraftdecision ontheAccession ofPanama and,inaccordance withtheDecision-Making
8SeeWT/GC/M/1, Item 4(g).
9SeeWT/GC/M/1, Item 4(g).WT/GC/7
Page20
Procedures Under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995(WT/L/93),
adopted theDecision ontheAccession ofPanama (WT/ACC/PAN/20). TheGeneral Council then
adopted thereport oftheWorking Party (WT/ACC/PAN/19 andCorr.1, Add.1 andAdd.2).
(h) Papua NewGuinea (WT/GC/M/10, 11)
InNovember 1995, theGeneral Council hadadopted aDecision (WT/L/98) authorizing Papua
New Guinea toaccede totheWTO Agreement under terms setoutinitsProtocol ofAccession
(WT/L/99).
Atitsmeeting on6February 1996, theGeneral Council considered acommunication from
Papua New Guinea requesting thatthetime-limit foracceptance inparagraph 6ofitsProtocol of
Accession bechanged to13May1996(WT/GC/W/30), andadraftdecision tothiseffect intheAnnex
tothatdocument.
Therepresentative ofJapan reiterated hisGovernment 'sconcern withregard toPapua New
Guinea 'sapplied tariff oncanned mackerel thatwasinexcess ofthebound tariff.
TheGeneral Council adopted theDecision extending thetime-limit (WT/L/130).
Atitsmeeting on16April 1996, theGeneral Council considered acommunication fromPapua
NewGuinea requesting thatthetime-limit inparagraph 6ofitsProtocol ofAccession befurther extended
to13August 1996 (WT/GC/W/33), andadraftdecision tothiseffect intheAnnex tothatdocument.
TheGeneral Council adopted theDecision further extending thetime-limit (WT/L/148).
(i) Saudi Arabia (WT/GC/M/10)
InJuly1993,theGATT1947CouncilhadestablishedaworkingpartytoexamineSaudiArabia's
request foraccession totheGATT. Following therequest bySaudi Arabia foraccession totheWTO
Agreement(WT/ACC/SAU/1),thatworkingpartyhadbeentransformedintoaWTOAccessionWorking
Party.
Atitsmeetingon6February1996,theChairmaninformedtheGeneralCouncilthatMr.Weekes
(Canada) hadagreed tochair theWorking Party.
(j) Seychelles (WT/GC/M/13)
InJuly1995,theGeneralCouncilhadestablishedaworkingpartytoexamineSeychelles'request
foraccession totheWTO Agreement, andhadauthorized itsChairman todesignate theChairperson
oftheWorking Party inconsultation withrepresentatives ofMembers andwiththerepresentative of
Seychelles.
Atitsmeeting on18July1996, theChairman informed theGeneral Council thatMr.Ravaloson
(Madagascar) hadagreed tochair theWorking Party.
(k) Tonga (WT/GC/M/10)
InNovember 1995, theGeneral Council hadestablished aworking party toexamine Tonga 's
request foraccession totheWTO Agreement, andhadauthorized itsChairman todesignate the
Chairperson oftheWorking Party inconsultation withrepresentatives ofMembers andwiththe
representative ofTonga.WT/GC/7
Page21
Atitsmeeting on6February 1996, theChairman informed theGeneral Council that
Mr.Harbinson (Hong Kong) hadagreed tochair theWorking Party.
(l) Vanuatu (WT/GC/M/11)
InJuly1995, theGeneral Council hadestablished aworking partytoexamine Vanuatu 'srequest
foraccession totheWTO Agreement, andhadauthorized itsChairman todesignate theChairperson
oftheWorking Party inconsultation withrepresentatives ofMembers andwiththerepresentative of
Vanuatu.
Atitsmeeting on16April 1996, theChairman informed theGeneral Council that
Mrs. Syahruddin (Indonesia) hadagreed tochair theWorking Party.
12. Brazil -Provisional safeguard measures concerning imports oftoys(WT/GC/M/13)
AttheGeneralCouncilmeetingon18July1996,therepresentativeoftheEuropeanCommunities
expressed concern atBrazil 'srecent initiation ofasafeguard investigation andtheimposition ofa
provisional safeguard measure onimports oftoysoriginating inallthirdcountries.
13. Hungary -Invocation ofArticle 48oftheVienna Convention ontheLawoftheTreaties
(WT/GC/M/11)
Atitsmeeting on16April 1996, therepresentative ofHungary informed theGeneral Council
ofHungary 'sinvocation, on9April 1996, ofArticle 48oftheVienna Convention ontheLawofTreaties
withrespect toSection IIofPartIVofSchedule LXXI, andexpressed hisGovernment 'sreadiness
toholdconsultations withanyMembers onthismatter.
14. United States -Cuban Liberty andDemocratic Solidarity Actof1996 (WT/GC/M/11)10
AttheGeneral Council meeting on16April 1996, therepresentative ofCuba expressed concern
thattheUSHelms-Burton Actof1996 wasaviolation ofinternational trade rules andinternational
law,aswellasofundertakings entered intobytheUnited States when signing theFinal ActEmbodying
theResults oftheUruguay Round, andnoted thathisGovernment hadrecently circulated a
communication onthismatter (WT/L/142).
15. Compliance withtheobligations ofArticles 70.8and70.9oftheTRIPS Agreement
(WT/GC/W/10)
AttheGeneral Council meeting on6February 1996, therepresentative oftheUnited States
expressed concern thatanumber ofcountries hadnotcomplied withtheobligations ofArticles 70.8
and70.9oftheTRIPS Agreement andreserved hisdelegation 'srights forfuture action inthisregard.
10Carried inGeneral Council Minutes as"Statement byCuba ontheUnited States 'Helms-Burton Actof
1996."WT/GC/7
Page22
16. Notification requirements (WT/GC/M/11)
AttheGeneral Council meeting on16April 1996, theDirector-General noted thatMembers
hadrecently beenreminded oftheirunfulfilled notification requirements for1995andtheirnotification
requirements for1996, andunderlined theimportance offulfilling these obligations.
17. World Bank study onMERCOSUR (WT/GC/M/16)
AttheGeneral Council meeting on7,8and13November 1996, therepresentative ofBrazil
expressed concern ataWorld Bank study onMERCOSUR, which hesaidraised aproblem ofWorld
Bank action onamatter under WTO competence andnotforeseen under thecooperation established
byArticle III:5oftheWTO Agreement.
18. WTO Press Release onTrade andForeign Direct Investment (WT/GC/M/15)
AttheGeneral Council meeting on14October 1996, therepresentative ofIndia expressed
concern attherecent issuance bytheSecretariat ofaPress Release entitled "Trade andForeign Direct
Investment -New Report bytheWTO", which raised thefundamental andimportant issueoftherole
oftheSecretariat anditsrelationship withMembers.
19. Procedures forthecirculation andderestriction ofWTO documents (WT/GC/M/10, 12,13)
Atitsmeeting on6February 1996, theChairman informed theGeneral Council thatnofurther
progress onthismatter hadbeenachieved since themeeting oftheGeneral Council inDecember 1995
andthatheintended torefer tothismatter inastatement hewould make under aseparate Agenda
item.11
Atitsmeeting on26June1996, theChairman informed theGeneral Council thathewasstill
notinaposition tosubmit adraftdecision onthismatter forconsideration byMembers.
AttheGeneral Council meeting on18July1996, theChairman saidthatfollowing extensive
consultations heldsince thebeginning oftheyear, agreement hadnowbeenreached onacompromise
textthatappeared tobeagreeable toamajority ofdelegations. Heproposed thatthetextofthedraft
decision onthismatter, withparagraph (h)oftheAppendix redrafted toreflect thecompromise regarding
panel reports, beadopted atthepresent meeting.
TheGeneral Council adopted theprocedures forthecirculation andderestriction ofWTO
documents (WT/L/160/Rev.1).
TheChairman thenmade thefollowing statement: "Inadopting these procedures onthe
circulationandderestrictionofdocuments,theGeneralCounciltakesnotethatMembersattachparticular
importance totherestricted nature ofdocuments sodesignated, andthatindividual governments should
proceed accordingly intheirhandling ofsuchdocuments."
11Seeunder point 25-"Election ofChairperson".WT/GC/7
Page23
20. Status ofratification oftheWTO Agreement bycertain governments (WT/GC/M/16)
Under theprovisions ofArticle XIV:1 oftheWTO Agreement, contracting parties totheGATT
1947 thathadotherwise completed therequirements tobeoriginal Members were allowed untilthe
endof1996 tocomplete theirratification oftheAgreement.
Atitsmeeting on7,8and13November 1996, theChairman informed theGeneral Council
thathewould consult onthequestion ofthreegovernments covered bytheprovisions ofArticle XIV:1
oftheWTO Agreement thathadstillnotratified theAgreement andwould havetonegotiate accession
iftheyfailed toratify bytheendof1996.
21. Arrangements foreffective cooperation withother intergovernmental organizations
- Relations between theWTO andtheInternational Monetary Fund andtheWorld Bank
(WT/GC/M/13, 16)
AttheGeneral Council meeting on18July1996, theChairman saidthatinformal consultations
ondraftarrangements forrelations between theWTO andtheIMFandtheWorld Bank werecurrently
under way, andproposed thattheGeneral Council revert tothisitematitsnextmeeting.
TheGeneral Council soagreed.
Atitsmeeting on7,8and13November 1996, theGeneral Council considered draftAgreements
oncooperation withtheIMFandtheWorld Bank contained inWT/GC/W/43, andadraftdecision
regardingtheapprovaloftheseAgreements(WT/GC/W/42andAddenda).TheGeneralCounciladopted
thedraftDecision (WT/L/194 andAddenda) approving theAgreements withtheIMFandtheWorld
Bank (WT/L/195).
22. Guidelines forarrangements onrelations withnon-governmental organizations pursuant to
Article V:2oftheWTO Agreement (WT/GC/M/10, 12,13)
Atitsmeeting on6February 1996, theChairman informed theGeneral Council thatnofurther
progress onthismatter hadbeenachieved since themeeting oftheGeneral Council inDecember 1995
andthatheintended torefer tothismatter inastatement hewould make under aseparate Agenda
item.12
AttheGeneral Council meeting on26June1996, theChairman recalled thatapproval ofthe
proposed guidelines onthismatter hadbeenlinked toagreement onderestriction procedures, onwhich
hewasstillnotinaposition tosubmit adraftdecision forconsideration.
AttheGeneral Council meeting on18July1996, theChairman drew attention tothedraft
guidelines forarrangements onrelations withnon-governmental organizations which hadbeenagreed
ininformal consultations heldin1995 andheldinabeyance pending adecision onprocedures forthe
circulation andderestriction ofWTO documents. Since thelatter hadbeenadopted earlier atthat
meeting13,heproposed thattheguidelines onrelations withnon-governmental organizations alsobe
adopted.
12Seeunder point 25-"Election ofChairperson".
13Seeunder point 19-"Procedures forthecirculation andderestriction ofWTO documents".WT/GC/7
Page24
TheGeneral Council soagreed (WT/L/162).
23. Administrative matters
(i) Offices oftheDeputy Directors-General (WT/GC/M/11)
AttheGeneral Council meeting on16April 1996, theDirector-General proposed thatsince
preparations fortheMinisterial Conference inDecember 1996 would require alltheattention of
Members, thecontracts ofthethree Deputy Directors-General, Messrs. Hoda, Lavorel andSeade,
which wereduetoexpire on31July1996, beextended foraperiod ofoneyear, andthatheinitiate
consultations onfurther renewals ornewappointments early in1997, wellinadvance ofthedateof
expiration oftheirterms ofoffice.
TheGeneral Council agreed toproceed assuggested bytheDirector-General ifthismatter
were notraised again atitsnextmeeting.
(ii) Staff-related matters (WT/GC/M/10)
Atitsmeeting on6February 1996, theDirector-General recalled theDecision oftheGeneral
Council atitsmeeting on30October 1995withregard tothereview ofthequestion ofsalaries, pensions
andother conditions ofservice ofWTO staff(WT/L/91), andoutlined reasons forwhich itwasurgent
fortheGeneral Council toresume consideration ofthese questions inorder toreach decisions assoon
aspossible. Heproposed thatinformal consultations bytheChairman would beappropriate forthis
purpose.
TheGeneral Council agreed thatitsChairman holdinformal consultations onthese matters.
(iii) Pensions andsalaries ofWTO staff(WT/GC/M/15)
AttheGeneral Council meeting on14October 1996, theChairman saidthatininformal
consultations heldrecently, noconsensus hadbeenpossible onthetextofadraftproposal onconditions
ofservice forWTO staffthathehadcirculated, andthathewould continue hisconsultations onthis
matter.
Atitsmeeting on7,8and13November 1996, theGeneral Council adopted aDecision
(WT/L/197) tocontinue itsconsideration ofthismatter withaviewtoreaching aconclusion thereto
by30June1997atthelatest. TheChairman saidthathewould consult shortly toestablish atime-table
toensure thataconclusion tothismatter wasindeed reached bythatdate.
24. Observer status
(i) Governments
- Georgia (WT/GC/M/12)
Atitsmeeting on26June1996, theGeneral Council granted observer status toGeorgia.
(ii) International intergovernmental organizations (WT/GC/M/10, 11,12,13,14,15,16)
AttheGeneral Council meeting on6February 1996, theChairman saiditwashisunderstanding
thatpending agreement onguidelines forobserver status forinternational organizations, theUnitedWT/GC/7
Page25
Nations, UNCTAD, IMF, World Bank, FAO, WIPO andOECD would beinvited tothenextmeeting
oftheGeneral Council, inaccordance withtheadhocarrangements approved on16March 1995.14
AttheGeneralCouncilmeetingon16April1996,theChairmanrecalledhisearlierunderstanding
onthismatter.
AttheGeneralCouncilmeetingon26June1996,theChairmanrecalledhisearlierunderstanding
onthismatter.
AttheGeneral Council meeting on18July1996, theChairman saiditwashisunderstanding
that,pending agreement ontheorganizations tobeaccorded observer status intheGeneral Council
inaccordance withtheguidelines forsuchstatus agreed on18July15,theUnited Nations, UNCTAD,
IMF, World Bank, FAO, WIPO andOECD would beinvited tothenextmeeting oftheGeneral Council.
AttheGeneral Council meeting on2October 1996, theChairman recalled hisprevious
understanding onthismatter.
AttheGeneral Council meeting on14October 1996, theChairman recalled hisprevious
understanding onthismatter.
AttheGeneral Council meeting on7,8and13November 1996, theChairman recalled his
previous understanding onthismatter.
(iii) Guidelines onobserver status forinternational intergovernmental organizations
(WT/GC/M/12, 13)
AttheGeneral Council meeting on26June1996, theChairman recalled thatagreement on
guidelines onobserver status forinternational intergovernmental organizations hadbeen awaiting
agreement ontheparticipation oforganizations asobservers intheDispute Settlement Body andthat
anessential aspect ofthiswould bethearrangements forcooperation between theWTO andtheIMF
andtheWorld Bank thatwerepresently under consideration. Theguidelines therefore could notyet
befinalized.
AttheGeneral Council meeting on18July1996, theChairman recalled thatMembers had
thusfarconsidered thatguidelines onobserver status forinternational organizations could notbeadopted
untilagreement hadbeenreached onarrangements forcooperation between theWTO andtheIMF
andWorld Bank. Pending theapproval ofthose arrangements, heproposed thatMembers agree on
thetextascontained inPC/IPL/W/14, withanamendment toparagraph 3thereof, which would not
prejudge theoutcome oftheconsultations ontheabove arrangements, butwhich would atthesame
timeenable theGeneral Council toadopt guidelines atthepresent time. Thiswould allow theWTO
tosettle thequestion oftheattendance ofinternational intergovernmental organizations inWTO bodies
intimefordecisions tobetaken regarding theparticipation ofobserver organizations attheMinisterial
Conference inSingapore.
The General Council adopted theguidelines onobserver status forinternational
intergovernmental organizations proposed bytheChairman (WT/L/161, Annex 3).
14SeeWT/GC/M/3, Item 3.
15Seeunder sub-point 24(iii) below -"Guidelines onobserver status forinternational intergovernmental
organizations".WT/GC/7
Page26
25. Election ofChairperson (WT/GC/M/10)
AttheGeneral Council meeting on6February 1996, astheoutgoing presiding officer ofthe
General Council, theChairman made astatement onthework oftheGeneral Council in1995
(WT/GC(96)/ST/1).
TheGeneral Council thenunanimously elected Mr.Rossier (Switzerland) totheChair.SECTION II
DISPUTE SETTLEMENT BODYWORLD TRADE WT/DSB/8
28October 1996
ORGANIZATION(96-4542)
DISPUTE SETTLEMENT BODY
DISPUTE SETTLEMENT BODY
Annual Report (1996)
Thepresent report hasbeen prepared inpursuance oftheProcedures foranAnnual Overview
ofWTO Activities andforReporting under theWTO (WT/L/105), andsetsouttheactions taken by
theDispute Settlement Body (DSB) since theprevious overview ofWTO activities held inDecember
1995.1
Incarrying outitstask, theDSB hasheld 15meetings since December 1995. Theminutes
ofthese meetings, which remain therecord oftheDSB'swork, arecontained indocuments
WT/DSB/M/10-WT/DSB/M/24.
Thefollowing subjects areincluded inthereport:
Page
1. DSB schedule ofmeetings 2
2. Election ofChairperson 3
3. Working procedures oftheAppellate Body 3
4. Indicative listofgovernmental andnon-governmental panelists 3
5. Curricula vitae ofrepresentatives totheWTO 4
6. Mutually agreed solutions 4
7. Requests tobejoined inconsultations under theDSU 5
8. Recourse todispute settlement procedures 5
(a) Brazil 5
(i) Export financing programme foraircraft 5
(ii) Measures affecting desiccated coconut 5
(b) Canada 6
- Certain measures concerning periodicals 6
(c) European Communities 6
(i) Implementation oftheUruguay Round commitments concerning
rice 6
(ii) Measures affecting livestock andmeat (hormones) 6
(iii) Measures concerning meat andmeat products (hormones) 7
1The1995 Annual Report oftheDSB iscontained inWT/DSB/3.WT/DSB/8
Page 2
(iv) Regime fortheimportation, saleanddistribution ofbananas 7
(v) Trade description ofscallops 8
(d) Japan 8
- Measures affecting consumer photographic film andpaper 8
(e) Korea 9
- Measures concerning bottled water 9
(f) Pakistan 9
- Patent protection forpharmaceutical and agricultural chemical
products 9
(g) Poland 9
- Import regime forautomobiles 9
(h) Portugal 10
- Patent protection under theIndustrial Property Act 10
(i) Turkey 10
- Action onimports oftextiles andclothing 10
(j) United States 11
(i) Anti-dumping investigation regarding imports offresh orchilled
tomatoes from Mexico 11
(ii) Import prohibition ofcertain shrimp andshrimp products 11
(iii) Increase intherates ofduty oncertain products oftheEuropean
Communities (Presidential Proclamation No5759 of24December
1987) 11
(iv) Measures affecting imports ofwomen 'sandgirls'wool coats 11
(v) Measures affecting imports ofwoven wool shirts andblouses 12
(vi) Restrictions onimports ofcotton andman-made fibre underwear 12
(vii) Standards forreformulated andconventional gasoline 13
(viii) Tariff increases onproducts from theEuropean Communities 14
(ix) TheCuban Liberty andDemocratic Solidarity Act 14
9. USdraft billconcerning thedefinition of"domestic industry" inthearea of
safeguards 15
10. Report onprogress ofpreparatory work fortheSingapore Ministerial Conference 15
11. DSB report totheGeneral Council fortheSingapore Ministerial Conference 15
12. Summary conclusions 16
1. DSB schedule ofmeetings (WT/DSB/M/10)
AttheDSB meeting on31January 1996, theChairman announced thattheschedule ofDSB
meetings for1996 hadbeen circulated inWTO/AIR/237 on12December 1995.
TheDSB took note ofthisinformation.WT/DSB/8
Page 3
2. Election ofChairperson (WT/DSB/M/10)
Atitsmeeting on31January 1996, theDSB elected Mr.Celso Lafer (Brazil) asChairman
byacclamation.
3. Working procedures oftheAppellate Body (WT/DSB/M/10, 11)
AttheDSB meeting on31January 1996, theChairman saidthatthework ontheprocedures
fortheappellate review hadbeen carried outbytheAppellate Body members inJanuary 1996. The
views expressed byMembers onthismatter hadbeen conveyed totheAppellate Body inaccordance
with paragraph 14inWT/DSB/1. Any other views byMembers onkeyissues were required tobe
conveyed totheChairman thefollowing day, astheAppellate Body wasfinalizing itsprocedures.
TheDSB took note ofthisinformation.
AttheDSB meeting on21February 1996, theChairman drew attention totheworking
procedures oftheAppellate Body contained inWT/AB/WP/1, which hadbeen circulated on15February
1996 asanunrestricted document. Healsodrew attention toacovering letter from theChairman of
theAppellate Body which hadaddressed theissues ofinterest toMembers, andhadexplained thereasons
oftheAppellate Body foritsconclusions oncertain keyelements oftheworking procedures.
Therepresentatives ofMexico, Egypt, India, theUnited States, Chile, Canada andtheEuropean
Communities spoke.
TheDSB took note ofthestatements.
4. Indicative listofgovernmental andnon-governmental panelists (WT/DSB/M/10,14,20,21,22,24)
AttheDSB meeting on31January 1996, theChairman drew attention todocument
WT/DSB/W/17 containing names ofcandidates forinclusion ontheindicative list,andproposed that
theDSB approve thenames contained therein.
TheDSB soagreed.
AttheDSBmeetingon17April1996,theChairmandrewattentiontodocumentsWT/DSB/W/21
andWT/DSB/W/24, containing names ofcandidates forinclusion ontheindicative list,andproposed
thattheDSB approve thenames contained therein.
Therepresentative oftheUnited States spoke.
The DSB took note ofthestatement and approved thenames inWT/DSB/W/21 and
WT/DSB/W/24.
AttheDSB meeting on5July1996, theChairman drew attention todocument WT/DSB/W/30
containing names ofcandidates forinclusion ontheindicative list,andproposed thattheDSB approve
thenames contained therein.
TheDSB soagreed.WT/DSB/8
Page 4
AttheDSB meeting on15and16July 1996, theChairman drew attention todocument
WT/DSB/W/33 containing names ofcandidates forinclusion ontheindicative list,andproposed that
theDSB approve thenames contained therein.
TheDSB soagreed.
AttheDSB meeting on27September 1996, theChairman drew attention todocument
WT/DSB/W/36 containing names ofcandidates forinclusion ontheindicative list,andproposed that
theDSB approve thenames contained therein.
TheDSB soagreed.
AttheDSB meeting on16October 1996, theChairman drew attention todocument
WT/DSB/W/40 containing names ofcandidates forinclusion ontheindicative list,andproposed that
theDSB approve thenames contained therein.
TheDSB soagreed.
5. Curricula vitae ofrepresentatives totheWTO (WT/DSB/M/20)
AttheDSB meeting on5July1996, theChairman proposed thatinorder tofacilitate thework
oftheSecretariat withregard tothecomposition ofpanels, Members were invited tosubmit thecurricula
vitae oftheir Geneva-based representatives which might beconsidered toserve onpanels.
TheDSB took note ofthestatement.
6. Mutually agreed solutions (WT/DSB/M/15, 24)
AttheDSB meeting on24April 1996, theChairman drew attention totheobligation under
Article 3.6oftheDSU tonotify mutually agreed solutions tomatters formally raised under thedispute
settlement provisions.
Therepresentative ofIndia spoke.
TheDSB took note ofthestatement.
AttheDSB meeting on16October 1996, therepresentative ofIndia drew attention todocument
WT/DSB/W/35 prepared bytheSecretariat inresponse toIndia 'srequest made attheDSB meeting
on24April 1996, with regard totheobligation under Article 3.6oftheDSU tonotify mutually agreed
solutions. Hesaidthathewould make adetailed statement explaning hisviews onthisdocument at
alater date.
TheDSB took note ofthestatement.WT/DSB/8
Page 5
7. Requests tobejoined inconsultations under theDSU (WT/DSB/M/13)
AttheDSB meeting on27March 1996, theChairman presented aproposal concerning
communications containing requests tobejoined inconsultations pursuant toArticle 4.11 oftheDSU.
Thetextofthisproposal wassubsequently circulated inWT/DSB/W/23.
TheDSB agreed torevert tothismatter atitsnext meeting.
8. Recourse todispute settlement procedures
(a) Brazil
(i) Export financing programme foraircraft (WT/DSB/M/22)
Atitsmeeting on27September 1996, theDSB considered arequest byCanada forthe
establishment ofapanel toexamine itscomplaint regarding Brazil 'sexport financing programme for
aircraft (WT/DS46/2).
Therepresentatives ofCanada, Brazil andJamaica spoke.
TheDSB took note ofthestatements andagreed with Canada 'sdecision thatitsrequest for
apanel inWT/DS46/2 bewithdrawn andthatanew request forapanel onthismatter becirculated
andconsidered bytheDSB atitsnext regular meeting.
(ii) Measures affecting desiccated coconut (WT/DSB/M/10, 11,12)
AttheDSB meeting on31January 1996, therepresentative ofthePhilippines informed Members
thatconsideration oftherequest fortheestablishment ofapanel toexamine thePhilippines 'complaint
regarding Brazil 'scountervailing duties onimports ofdesiccated coconut would bepostponed
(WT/DS22/5).
Therepresentative ofBrazil spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext meeting.
Atitsmeeting on21February 1996, theDSB considered arequest bythePhilippines forthe
establishment ofapanel toexamine itscomplaint regarding Brazil 'scountervailing duties onimports
ofdesiccated coconut (WT/DS22/5).
Therepresentatives ofthePhilippines, Brazil, Indonesia onbehalf ofASEAN countries, and
SriLanka spoke.
TheDSB took note ofthestatements andagreed, attherequest ofthePhilippines, toconvene
itsnext meeting on5March inorder toreconsider thismatter.
Atitsmeeting on5March 1996, theDSB again considered thismatter.
Therepresentatives ofthePhilippines andBrazil spoke.WT/DSB/8
Page 6
TheDSB took note ofthestatements, agreed toestablish apanel toexamine thePhilippines '
request, andauthorized theChairman oftheDSB todraw uptheterms ofreference ofthepanel in
consultation with theparties tothedispute inaccordance with Article 7.3oftheDSU.
Therepresentatives ofCanada, theEuropean Communities, Indonesia, Malaysia andtheUnited
States reserved their third-party rights toparticipate inthepanel proceedings.2
(b) Canada
- Certain measures concerning periodicals (WT/DSB/M/18 andCorr.1, 19)
Atitsmeeting on6June 1996, theDSB considered arequest bytheUnited States forthe
establishment ofapanel toexamine itscomplaint regarding Canada 'smeasures concerning periodicals
(WT/DS31/2).
Therepresentatives oftheUnited States andCanada spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext meeting.
Atitsmeeting on19June 1996, theDSB again considered thismatter.
Therepresentatives oftheUnited States andCanada spoke.
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
(c) European Communities
(i) Implementation oftheUruguay Round commitments concerning rice
(WT/DSB/M/10)
AttheDSB meeting on31January 1996, therepresentative ofUruguay informed Members
thathiscountry hadrequested consultations under Article XXII:1 ofGATT 1994 with theEuropean
Communities with respect totheimplementation ofthecommitments onriceundertaken bythelatter
intheUruguay Round (WT/DS25/1 andCorr.1).
TheDSB took note ofthestatement.
(ii) Measures affecting livestock andmeat (hormones) (WT/DSB/M/22, 24)
Atitsmeeting on27September 1996, theDSB considered arequest byCanada forthe
establishment ofapanel toexamine itscomplaint regarding European Communities 'measures affecting
livestock andmeat (WT/DS48/5).
Therepresentatives ofCanada andtheEuropean Communities spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext regular
meeting.
Atitsmeeting on16October 1996, theDSB again considered thismatter.
2After themeeting SriLanka alsoreserved itsthird-party rights.WT/DSB/8
Page 7
Therepresentatives ofCanada, theEuropean Communities andArgentina spoke.
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
Therepresentatives ofAustralia, New Zealand, Norway andtheUnited States reserved their
third-party rights toparticipate inthepanel proceedings.
(iii) Measures concerning meat andmeat products (hormones) (WT/DSB/M/16,17)
Atitsmeeting on8May 1996, theDSB considered arequest bytheUnited States forthe
establishment ofapanel toexamine itscomplaint regarding theEuropean Communities 'measures
concerning meat andmeat products (WT/DS26/6).
Therepresentatives oftheUnited States, theEuropean Communities andArgentina spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext meeting.
Atitsmeeting on20May 1996, theDSB again considered thismatter.
Therepresentatives oftheUnited States andtheEuropean Communities spoke.
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
Therepresentatives ofAustralia, Canada, New Zealand andNorway reserved their third-party
rights toparticipate inthepanel proceedings.
(iv) Regimefortheimportation,saleanddistributionofbananas(WT/DSB/M/15,16,
19)
Atitsmeetingon24April1996,theDSBconsideredarequestbyEcuador,Guatemala,Honduras,
Mexico andtheUnited States fortheestablishment ofapanel toexamine their complaint regarding
theEuropean Communities 'regime fortheimportation, saleanddistribution ofbananas (WT/DS27/6).
Therepresentatives ofGuatemala, onbehalf ofEcuador, Honduras, Mexico andtheUnited
States, theEuropean Communities andMexico, onbehalf ofEcuador, Guatemala, Honduras andthe
United States spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext meeting.
Atitsmeeting on8May 1996, theDSB again considered thismatter.
Therepresentative ofGuatemala, onbehalf ofEcuador, Honduras, Mexico andtheUnited States,
therepresentative ofSt.Lucia, onbehalf ofBelize, Dominica, Dominican Republic, Grenada andSt.
Vincent andtheGrenadines, andtherepresentatives ofIndia, Côted'Ivoire, Cameroon, Ghana, Jamaica,
Dominican Republic, Costa Rica, Colombia, Nicaragua, Venezuela, Canada, theEuropean Communities
andtheUnited States spoke.WT/DSB/8
Page 8
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
Therepresentatives ofBelize, Cameroon, Colombia, Costa Rica, Côted'Ivoire, Dominica,
Dominican Republic, Ghana, Grenada, India, Jamaica, Japan, Nicaragua, thePhilippines, St.Lucia,
St.Vincent andtheGrenadines, Senegal, Thailand andVenezuela reserved their third-party rights to
participate inthepanel proceedings.3
AttheDSB meeting on19June 1996, therepresentative ofJamaica expressed hercountry 's
concerns with regard tothedecision taken bythepanel ontheCommunities régime fortheimportation,
saleanddistribution ofbananas, togrant ACP countries observer status during thefirst substantive
meeting ofthepanel. Sherequested theChairman toinitiate consultations onthismatter.
Therepresentatives ofCameroon, Côted'Ivoire, theEuropean Communities, theUnited States
andtheChairman spoke.
TheDSB took note ofthestatements.
(v) Trade description ofscallops (WT/DSB/M/20)
AttheDSB meeting on5July1996, therepresentative ofCanada, speaking onbehalf ofthe
European Communities, Chile andPeru, announced thatmutually agreed solutions hadbeen reached
inboth disputes regarding theFrench labelling regulation onscallops (WT/DS7, WT/DS12 and
WT/DS14).
TheChairman spoke.
TheDSB took note ofthestatements.
(d) Japan
- Measures affecting consumer photographic filmandpaper (WT/DSB/M/23,24)
Atitsmeeting on3October 1996, theDSB considered arequest bytheUnited States forthe
establishment ofapanel toexamine itscomplaint regarding Japan 'smeasures affecting consumer
photographic film andpaper (WT/DS44/2).
Therepresentatives oftheUnited States, Japan andtheEuropean Communities spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext regular
meeting.
Atitsmeeting on16October 1996, theDSB again considered thismatter.
Therepresentatives oftheUnited States, Japan andtheEuropean Communities spoke.
3After themeeting Thailand informed theSecretariat thatitwould notparticipate asathird party inthis
dispute; Canada andSuriname reserved their third-party rights.WT/DSB/8
Page 9
TheDSB took noteofthestatements andagreed toestablish apanel with theterms ofreference
tobedrawn upbytheparties tothedispute within 20days inaccordance with Article 7.1ofthe
DSU.
Therepresentatives oftheEuropean Communities andMexico reserved their third-party rights
toparticipate inthepanel proceedings.
(e) Korea
- Measures concerning bottled water (WT/DSB/M/15)
AttheDSB meeting on24April 1996, therepresentative ofCanada announced thatKorea and
Canada hadreached amutually agreed solution with regard toKorea 'smeasures concerning bottled
water (WT/DS20/6).
Therepresentative ofKorea spoke.
TheDSB took note ofthestatement.
(f) Pakistan
- Patent protection forpharmaceutical and agricultural chemical products
(WT/DSB/M/21)
Atitsmeeting on15and16July1996, theDSB considered arequest bytheUnited States for
theestablishment ofapanel toexamine itscomplaint regarding Pakistan 'spatent protection for
pharmaceutical andagricultural chemical products (WT/DS36/3).
Therepresentatives oftheUnited States andPakistan spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atafuture meeting.
(g) Poland
- Import regime forautomobiles (WT/DSB/M/21,22)
AttheDSB meeting on15and16July 1996, therepresentative ofIndia announced thatthe
authorities ofIndia andPoland hadreached amutually agreed solution with regard toPoland 'simport
régime forautomobiles (WT/DS19/1).
Therepresentative ofPoland spoke.
TheDSB took note ofthisinformation.
AttheDSB meeting on27September 1996, therepresentative oftheUnited States sought further
clarification with regard tothesettlement reached between Poland andIndia onpassenger cars
(WT/DS19/2).
Therepresentatives oftheUnited States andPoland spoke.
TheDSB took note ofthestatements.WT/DSB/8
Page 10
(h) Portugal
- Patent protection under theIndustrial Property Act(WT/DSB/M/24)
AttheDSB meeting on16October 1996, therepresentative oftheUnited States drew attention
ofMembers thatPortugal andtheUnited States hadreached amutually satisfactory solution tothematter
raised bytheUnited States concerning theterm ofpatent protection required bytheAgreement onTrade-
Related Aspects ofIntellectual Property Rights (WT/DS37/2 andCorr.1).
TheDSB took note ofthestatement.
(i) Turkey
- Action onimports oftextiles andclothing (WT/DSB/M/11, 13,14,15)
AttheDSB meeting on21February 1996, therepresentative ofHong Kong informed Members
thathisGovernment hadrequested consultations with Turkey with regard totheimplementation ofthe
Customs Union between Turkey andtheEuropean Community (WT/DS29/1).
Therepresentatives ofthePhilippines, onbehalf ofMalaysia andThailand, India, Korea, Peru,
Argentina, Colombia, Brazil, Pakistan, Turkey andtheEuropean Communities spoke.
TheDSB took note ofthestatements.
AttheDSB meeting on27March 1996, therepresentative ofIndia informed Members that
hisGovernment hadrequested consultations withTurkey onquantitative restrictions imposed unilaterally
onimports ofabroad range oftextile andclothing products from India (WT/DS34/1).
Therepresentatives ofTurkey, Hong Kong, theEuropean Communities andJapan spoke.
TheDSB took note ofthestatements.
AttheDSB meeting on27March 1996, therepresentative ofHong Kong saidthatsince the
thirty-day period toenter intoconsultations pursuant toArticle 4.3oftheDSU hadexpired, herequested
Turkey toconfirm itsreadiness toenter intoconsultations with Hong Kong (WT/DS29/1).
Therepresentatives ofThailand, onbehalf ofMalaysia andthePhilippines, andTurkey spoke.
TheDSB took note ofthestatements.
AttheDSBmeetingon17April1996,therepresentativeofHongKongexpressedhisdelegation's
position regarding theparticipation oftheEuropean Communities inconsultations which Hong Kong
hadrequested with Turkey (WT/DS29/1).
Therepresentatives ofThailand, onbehalf ofMalaysia andthePhilippines, India, Peru, Turkey,
Brazil, theEuropean Communities andCanada spoke.
TheDSB took note ofthestatements.
AttheDSB meeting on24April 1996, therepresentative ofIndia expressed hisdelegation 's
position regarding theparticipation oftheEuropean Communities inconsultations which India had
requested with Turkey (WT/DS34/1).WT/DSB/8
Page 11
Therepresentatives ofTurkey, theEuropean Communities andHong Kong spoke.
TheDSB took note ofthestatements.
(j) United States
(i) Anti-dumping investigation regarding imports offresh orchilled tomatoes from
Mexico (WT/DSB/M/20)
AttheDSB meeting on5July1996, therepresentative ofMexico informed Members thathis
country hadrequested consultations withtheUnited States withregard totheanti-dumping investigation
onimports offresh orchilled tomatoes from Mexico (WT/DS49/1)
TheDSB took note ofthestatement.
(ii) Import prohibition ofcertain shrimp andshrimp products (WT/DSB/M/24)
AttheDSB meeting on16October 1996, therepresentative ofThailand, onbehalf ofIndia,
Malaysia andPakistan, informed Members thattheyhadrequested consultations with theUnited States
concerning itsbanimposed onimportation ofshrimp andshrimp products from theabove-mentioned
countries (WT/DS58/1).
TheDSB took note ofthestatement.
(iii) Increase intherates ofduty oncertain products oftheEuropean Communities
(Presidential Proclamation No5759 of24December 1987) (WT/DSB/M/13)
AttheDSB meeting on27March 1996, therepresentative oftheEuropean Communities drew
attention totheunilateral measures taken bytheUnited States under Presidential Proclamation No5759
of24December 1987, inretaliation fortheCommunities 'directive prohibiting theuseofhormones
anditsbanonimports ofbeef from cattle raised with theuseofhormones.
Therepresentatives ofJapan andCanada spoke.
TheDSB took note ofthestatements.
(iv) Measures affecting imports ofwomen 'sand girls'wool coats
(WT/DSB/M/13,14)
Atitsmeeting on27March 1996, theDSB considered arequest byIndia fortheestablishment
ofapanel toexamine itscomplaint regarding theUnited States 'measures affecting imports ofwomen 's
andgirls'wool coats from India (WT/DS32/1).
Therepresentatives ofIndia andtheUnited States spoke.
TheDSB took note ofthestatements andagreed toconvene ameeting on17April inorder
torevert tothismatter.
Atitsmeeting on17April 1996, theDSB again considered thismatter.
Therepresentatives ofIndia andtheUnited States spoke.WT/DSB/8
Page 12
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
Therepresentatives ofCanada, Costa Rica, theEuropean Communities, Norway, Pakistan and
Turkey reserved their third-party rights toparticipate inthepanel proceedings.4
(v) Measures affecting imports ofwoven wool shirts and blouses
(WT/DSB/M/13,14)
Atitsmeeting on27March 1996, theDSB considered arequest byIndia fortheestablishment
ofapanel toexamine itscomplaint regarding theUnited States 'measures affecting imports ofwoven
wool shirts andblouses from India (WT/DS33/1).
Therepresentatives ofIndia andtheUnited States spoke.
TheDSB took note ofthestatements andagreed toconvene ameeting on17April inorder
torevert tothismatter.
Atitsmeeting on17April 1996, theDSB again considered thismatter.
Therepresentatives ofIndia, theUnited States, Norway, theEuropean Communities, Canada
andPakistan spoke.
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.
TherepresentativesofCanada,theEuropeanCommunities,Norway,PakistanandTurkeyreserved
their third-party rights toparticipate inthepanel proceedings.
(vi) Restrictions onimports ofcotton and man-made fibre underwear
(WT/DSB/M/10, 11,12)
AttheDSB meeting on31January 1996, therepresentative ofCosta Rica informed Members
thathisauthorities hadrequested consultations with theUnited States under Article 4oftheDSU,
Article XXIII oftheGATT 1994, andthecorresponding provisions oftheAgreement onTextiles and
Clothing with regard totheintroduction andimplementation ofquantitative restrictions onimports of
cotton andman-made fibre underwear (WT/DS24/1 andCorr.1).
Therepresentatives ofIndia andHong Kong spoke.
TheDSB took note ofthestatements.
AttheDSB meeting on21February 1996, therepresentative ofCosta Rica requested thata
meeting oftheDSB beconvened within thenext 15days inorder toconsider Costa Rica'srequest
fortheestablishment ofapanel onthismatter.
TheDSB took note ofthestatement.
4Initscommunication dated 25April 1996 andcirculated inWT/DS32/2, India informed theDSB thatits
Government haddecided toterminate thepanel proceedings withregard tothisdispute.WT/DSB/8
Page 13
Atitsmeeting on5March 1996, theDSB considered arequest byCosta Rica forthe
establishment ofapanel onthismatter (WT/DS24/2).
Therepresentatives ofCosta Rica andtheUnited States spoke.
TheDSB took note ofthestatements andagreed toestablish apanel with standard terms of
reference inaccordance with Article 6oftheDSU.5
(vii) Standardsforreformulatedandconventionalgasoline(WT/DSB/M/11,17,19,20)
On10April 1995, theDSB hadestablished apanel toexamine thismatter attherequest of
Venezuela. On31May 1995, theDSB hadestablished apanel toexamine thismatter attherequest
ofBrazil. Atthatmeeting, pursuant toArticle 9oftheDSU inrespect ofmultiple complainants the
DSB haddecided, with theagreement ofallparties, thatthismatter beexamined bythepanel already
established attherequest ofVenezuela.
Atitsmeeting on21February 1996, theDSB considered thepanel report onthecomplaints
byVenezuela andBrazil contained inWT/DS2/R. Mr.Harbinson (Hong Kong), onbehalf ofMr.Wong,
Chairman ofthePanel, introduced thepanel report.
Therepresentatives ofVenezuela, theUnited States andBrazil spoke.
TheDSB took note ofthestatements andoftheUnited States 'decision toappeal thepanel
report inDS2/R.
Atitsmeeting on20May1996, theDSB considered theAppellate Body report inWT/DS2/AB/R
andthePanel report inWT/DS2/R pertaining tothecomplaints byVenezuela andBrazil.
Therepresentatives ofVenezuela, Brazil, theUnited States, theEuropean Communities and
Japan spoke.
TheDSB took note ofthestatements, adopted theAppellate Body report inWT/DS2/AB/R
andthePanel report inWT/DS2/R asmodified bytheAppellate Body report, andagreed thatin
accordance with theprocedures adopted bytheGATT 1947 Council inMay 1988 (BISD 35S/331),
both reports bederestricted.
AttheDSB meeting on19June 1996, theUnited States informed theDSB ofitsintentions
inrespect ofimplementation oftherecommendations oftheDSB atitsmeeting of20May (WT/DS2/9).
Therepresentatives ofVenezuela, Brazil andNorway spoke.
TheDSB took note ofthestatements andoftheinformation provided bytheUnited States
regarding itsintentions toimplement therecommendations oftheDSB.
AttheDSB meeting on5July1996, therepresentative ofVenezuela informed Members that
parties tothedispute haddecided toextend the45-day period stipulated inArticle 21.3 oftheDSU
with aview ofreaching amutually agreed time-period fortheimplementation oftheDSB
recommendations.
5After themeeting India reserved itsthird-party rights.WT/DSB/8
Page 14
Therepresentative ofBrazil spoke.
TheDSB took note ofthestatements.
(viii) Tariff increases onproducts from theEuropean Communities (WT/DSB/M/19,
20,21)
AttheDSB meeting on19June 1996, therepresentative oftheEuropean Communities requested
aspecial meeting oftheDSB inorder toconsider theCommunities 'request fortheestablishment of
apanel regarding tariff increases bytheUnited States oncertain export products from theEuropean
Communities (WT/DS39/2).
TheDSB took note oftherequest.
Atitsmeeting on5July 1996, theDSB considered arequest bytheEuropean Communities
fortheestablishment ofapanel toexamine their complaint regarding tariff increases bytheUnited
States oncertain export products from theEuropean Communities.
Therepresentatives oftheEuropean Communities andtheUnited States spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext meeting.
AttheDSB meeting on15and16July 1996, theDSB again considered thismatter.
Therepresentatives oftheEuropean Communities andUnited States spoke.
TheDSB took note ofthestatements.
(ix) TheCuban Liberty andDemocratic Solidarity Act(WT/DSB/M/24)
Atitsmeeting on16October 1996, theDSB considered arequest bytheEuropean Communities
andtheir Member States fortheestablishment ofapanel toexamine their complaint regarding theUnited
States 'legislation: i.e.,theCuban Liberty andDemocratic Solidarity Act(WT/DS38/2 andCorr.1).
Therepresentatives ofAustralia, Bolivia, onbehalf ofmembers ofthe"Rio Group"6,Canada,
Cuba, Mexico, India andSwitzerland spoke.
TheDSB took note ofthestatements andagreed torevert tothismatter atitsnext regular
meeting.
6Argentina,Bolivia,Brazil,Chile,Colombia,CostaRica,Ecuador,Mexico,Panama, Paraguay,Peru,Trinidad
andTobago, Uruguay andVenezuela.WT/DSB/8
Page 15
9. USdraft billconcerning thedefinition of"domestic industry" inthearea ofsafeguards
(WT/DSB/M/16)
AttheDSB meeting on8May 1996, therepresentative ofMexico expressed hisdelegation 's
concerns regarding thedraft billtobesubmitted forapproval bytheUSSenate under which thedefinition
of"domestic industry" contained intheUSlegislation onsafeguards would beredefined.
Therepresentatives ofCanada, Argentina, Australia, Brazil, Chile, Costa Rica, Dominican
Republic, Egypt, ElSalvador, Guatemala, Honduras, New Zealand, Nicaragua, Norway, Peru, the
Philippines onbehalf ofASEAN countries, andUruguay spoke.
TheDSB took note ofthestatements.
10. ReportonprogressofpreparatoryworkfortheSingaporeMinisterialConference(WT/DSB/M/21)
AttheDSB meeting on15and16July1996, theChairman announced thatatthemeeting of
theGeneral Council scheduled for18Julyhewould present anoralreport ontheactivities oftheDSB
inimplementing theprovisions oftheDSU.
TheDSB took note oftheinformation.
11. DSB report tothe General Council for the Singapore Ministerial Conference
(WT/DSB/M/20,22,24)
AttheDSB meeting on5July 1996, theChairman proposed thattheDSB submit itsannual
report forconsideration bytheGeneral Council atitsmeeting on7November 1996.
TheDSB took note ofthestatement.
AttheDSB meeting on27September 1996, theChairman drew totheattention ofMembers
thatcertain aspects concerning theDSB'sactivities referred toinhisstatement made attheGeneral
Council meeting on18July1996, would beincluded intheannual report oftheDSB tobesubmitted
forapproval bytheDSB atitsmeeting on16October 1996.
Therepresentatives ofJamaica, Mexico andNorway spoke.
TheDSB took note ofthestatements.
AttheDSB meeting on16October 1996, theChairman sumbitted foradoption adraft text
ofthe1996 Annual Report oftheDSB contained inWT/DSB/W/37. Heproposed thatfollowing its
adoption, theSecretariat beauthorized toupdate theAnnual Report under itsown responsitility. He
alsoproposed thatanannex beattached totheAnnual Report containing anoverview ofthestate of
play ofWTO disputes prepared bytheSecretariat.
Therepresentatives ofCanada, theUnited States, theEuropean Communities, India, Korea,
Norway, Hong Kong andtheChairman spoke.WT/DSB/8
Page 16
TheDSBtooknoteofthestatementsandadoptedtheAnnualReportcontainedinWT/DSB/W/37
ontheunderstanding thatdrafting amendments proposed byMembers with regard tothe"Summary
conclusions" beincluded inthetextandcirculated together with anannex asproposed bytheChairman.
Ifnecessary, informal consultations would beheld onthismatter. TheDSB authorized theSecretariat
toupdate theAnnual Report under itsown responsibility asproposed bytheChairman.
12. Summary conclusions
TheDispute Settlement Body (DSB) hasbeen inoperation forjustunder twoyears. Thepurpose
ofthissection istohighlight certain aspects ofthedispute settlement process during thisperiod.
Since January 1995, 42distinct matters have been raised intheDSB under theprovisions of
theDSU.7Dispute settlement panels have been established inrespect of12different matters, three
ofwhich were ultimately settled without panel decisions being issued. Ofthenine remaining matters,
three panel reports have been circulated,8twoofwhich were appealed totheAppellate Body (asat
18October 1996). TheAppellate Body hasissued reports intwocases. Although ineach case the
Appellate Body upheld thepanel 'srecommendations, itmodified thepanel 'slegal reasoning. The
remaining sixpanels areexpected toissue their reports induecourse.
Anumber ofobservations could bemade after theDSB'sexperience in1995 and1996. First,
thenumber ofmatters referred totheDSB isconsiderably greater than wasthenumber under GATT
duringsimilarperiods.Themajortradingnationshavebeenthemainparticipantsinthedisputesettlement
system, both ascomplaining andresponding Members. There hasbeen anevident tendency touse
theDSU insettling trade disputes inaccordance withtheaimofArticle 23oftheDSU on"Strengthening
oftheMultilateral System". Afurther noteworthy development istheincreased useofthesystem by
developing country Members.
Second, there have been asignificant number ofsettlements reached under theDSU. Inseven
ofthe42matters referred toit,theDSB hasbeen formally notified ofsettlements. Inaddition, inseven
other matters theDSB hasnotreceived arequest fortheestablishment ofapanel, even though more
than sixmonths haselapsed since theinitial request forconsultations. This record suggests thatthe
DSU isfulfilling itsfunction ofpermitting, wherever possible, Members toresolve disputes quickly,
without resort totheformal panel procedures.
Third, theexperience oftheDSB todateshows thatthere isincreased transparency intheWTO
dispute settlement system. Asaresult oftheimplementation oftheGeneral Council 'sDecision of18
July1996 onderestriction ofdocuments, alldocuments circulated under theauspices oftheDSB are
now available asunrestricted documents oraresubject toexpeditious consideration forderestriction.
Furthermore, theDSU provides that"mutually agreed solutions tomatters formally raised under the
consultation anddispute settlement provisions ofthecovered agreements shall benotified totheDSB
andtherelevant Councils andCommittees." TheChairman oftheDSB hasdrawn theattention of
Members tothese provisions.
7There haveactually been58formal requests forconsultations under theDSU andtwomatters brought before
theDSB pursuant totheAgreement onTextiles andClothing (ATC), which doesnotrequire consultations in
theDSU, butrather allows parties torequest theestablishment ofapanel following completion ofconsultation
andother procedures under theATC.
8Twoadditional short panel reports were circulated informing Members thatmutually agreed solutions have
been reached between theparties tothedisputes.WT/DSB/8
Page 17
Asthebody dealing with disputes intheWTO, theDSB, inaccordance with theprovisions
laiddown intheDSU, hasheldmeetings asoften asnecessary inorder tocarry outitsfunctions. Since
January 1995, theDSB hasheld 22meetings. There were twonon-scheduled meetings held in1995
andsince January 1996, fivesuch meetings have been held.
AmongitsfunctionstheDSBadministerstheindicativelistofgovernmentalandnon-governmental
panelists having expertise indifferent fields. This listwhich, asof18October 1996 contained 189
names, hasassisted Members toobtain high-level expertise indifferent panels.
Following thetradition ofGATT, theDSB hasworked inaspirit ofpragmatism andfacilitated
theobtention ofmutually acceptable solutions totrade disputes. Thedispute settlement system ofthe
WTO hashowever moved beyond theGATT dispute settlement procedures through theprogressive
development ofpastpractices inGATT which arenow enshrined intheDSU. TheDSU therefore
provides Members with both thepossibility ofreaching mutually satisfactory solutions totheir disputes
consistently with theWTO Agreement andwith thecertainty ofalegal solution ofsuch disputes, when
necessary.
Itmay therefore beconcluded thattheroleoftheDSB inmanaging thesettlement ofdisputes
within thenew multilateral trading system under theWTO hasbeen positive. TheDSU, under the
managementoftheDSB,iscontributingtogreatersecurityandpredictabilityinrelationsamongstpartners
intheopenmultilateraltradingsystem.Certainproblemsintheoveralloperationofthedisputesettlement
system have been identified andinmost cases, working practices have been developed tosolve these
problems inapragmatic manner. Further experience intheoperation ofthesystem isnevertheless
required before itcanbefully evaluated. Inthisrespect, theDecision byMinisters toreview theoperation
ofthesystem within four years after itsentry intoforce willprovide anopportunity for such an
evaluation andfortheintroduction ofimprovements inthesystem ifnecessary.
Itcanfinally bestated thattheeffective operation ofthedispute settlement system during the
firsttwoyearsofitsexistencehasfosteredgreatercooperationamongstMembers,reflectingtheirgrowing
trust inthemultilateral system, andthuscontributing towards thestrengthening andtheconsolidation
oftheWTO andtheopen multilateral trading system.WT/DSB/8
Page 18
ANNEX
OVERVIEW OFTHE STATE OFPLAY OFWTO DISPUTES
AttheDSBmeeting on16October 1996, theSecretariat wasrequested toprovide anoverview
ofthestateofplayofdisputes under thedispute settlement system intheWTO. Theattached overview,
which reflects thestateofplayofWTO disputes from1January 1995 to18October 1996, hasbeen
prepared bytheSecretariat under itsownresponsibility. Section Ioftheoverview indicates thestate
ofplayofdisputes untilthestage oftheestablishment ofpanels. Section IIindicates thestateofplay
ofdisputes from theestablishment ofpanels untilthestage ofadoption ofAppellate Body reports.WT/DSB/8
Page19SECTION I
Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
1. Malaysia -Prohibition ofImports
ofPolyethylene andPolypropylene13.01.95
Singapore
WT/DS1/110.01.95 11.03.95 17.03.95
Singapore
WT/DS1/2
withdrawal of
request on
19.07.95
WT/DSB/M/6
2. United States -Standards for
Reformulated andConventional
Gasoline02.02.95
Venezuela
WT/DS2/124.01.95 25.03.95 27.03.95
Venezuela
WT/DS2/210.04.95
WT/DSB/M/3
3. Korea -Measures Concerning the
Testing andInspection of
Agricultural Products06.04.95
United States
WT/DS3/104.04.95 03.06.95 09.06.95
Japan
WT/DS3/2
4. United States -Standards for
Reformulated andConventional
Gasoline12.04.95
Brazil
WT/DS4/110.04.95 09.06.95 22.05.95
Brazil
WT/DS4/231.05.95
WT/DSB/M/5WT/DSB/8
Page20Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
5. Korea -Measures Concerning the
Shelf-Life ofProducts05.05.95
United States
WT/DS5/103.05.95 02.07.95 24.05.95
Canada
WT/DS5/2
09.06.95
Japan
WT/DS5/431.07.95
WT/DS5/5 &
Corr.1
24.11.95
Add.1
22.04.96
Add.1/Rev.1
22.04.96
Add.2
22.04.96
Add.3
19.07.96
Add.4
20.09.96
Add.5
6. United States -Imposition of
Import Duties onAutomobiles
from Japan under Sections 301and
304oftheTrade Actof197422.05.95
Japan
WT/DS6/117.05.95 16.07.95 02.06.95
EC
WT/DS6/2
12.06.95
Australia
WT/DS6/319.07.95
WT/DSB/M/6
7. EC-Trade Description ofScallops 24.05.95
Canada
WT/DS7/119.05.95 18.07.95 09.06.95
Chile
WT/DS7/2
09.06.95
Iceland
WT/DS7/3
09.06.96
Japan
WT/DS7/4
12.06.95
Peru
WT/DS7/519.07.96
WT/DS7/1210.07.95
Canada
WT/DS7/7 &
Corr.119.07.95
WT/DSB/M/6WT/DSB/8
Page21Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
8. Japan -Taxes onAlcoholic
Beverages29.06.95
EC
WT/DS8/121.06.95 20.08.95 17.07.95
United States
WT/DS8/2
17.07.95
Canada
WT/DS8/315.09.95
EC
WT/DS8/527.09.95
WT/DSB/M/7
9. EC-Duties onImports ofCereals 10.07.95
Canada
WT/DS9/130.06.95 29.08.95 15.09.95
Canada
WT/DS/9/211.10.95
WT/DSB/M/8
10. Japan -Taxes onAlcoholic
Beverages17.07.95
Canada
WT/DS10/107.07.95 05.09.95 21.07.95
United States
WT/DS10/2
27.07.95
EC
WT/DS10/315.09.95
Canada
WT/DS10/527.09.95
WT/DSB/M/7
11. Japan -Taxes onAlcoholic
Beverages17.07.95
United States
WT/DS11/107.07.95 05.09.95 15.09.95
USA
WT/DS11/2 &
Corr.127.09.95
WT/DSB/M/7
12. EC-Trade Description ofScallops 25.07.95
Peru
WT/DS12/118.07.95 15.09.95 09.08.95
Canada
WT/DS12/3
11.08.95
Chile
WT/DS12/2 &
Rev.1
17.08.95
Japan
WT/DS12/519.07.96
WT/DS12/1215.09.95
Peru
WT/DS12/6
22.09.95
Peru
WT/DS12/711.10.95
WT/DSB/M/8
13. EC-Duties onImports ofGrains 26.07.95
United States
WT/DS13/119.07.95 17.09.95 29.09.95
United States
WT/DS13/2WT/DSB/8
Page22Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
14. EC-Trade Description ofScallops 31.07.95
Chile
WT/DS14/124.07.95 22.09.95 07.08.95
Canada
WT/DS14/2
11.08.95
Peru
WT/DS14/3
17.08.95
Japan
WT/DS14/419.07.96
WT/DS14/1115.09.95
Chile
WT/DS14/5
27.09.95
Chile
WT/DS14/611.10.95
WT/DSB/M/8
15. Japan -Measures Affecting the
Purchase ofTelecommunications
Equipment24.08.95
EC
WT/DS15/118.08.95 17.10.95 31.08.95
United States
WT/DS15/2
16. EC-Régime fortheImportation,
SaleandDistribution ofBananas04.10.95
Guatemala
Honduras
Mexico
United States
WT/DS16/128.09.95 26.11.95 13.10.95
St.Lucia
WT/DS16/2
20.10.95
Colombia
WT/DS16/3
24.10.95
Dominican Rep
WT/DS16/4
25.10.95
Venezuela
WT/DS16/5
20.10.95
Nicaragua
WT/DS16/6
30.10.95
Costa Rica
WT/DS16/7
17. EC-Duties onImports ofRice 11.10.95
Thailand
WT/DS17/105.10.95 04.12.95WT/DSB/8
Page23Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
18. Australia -Measures Affecting
Importation ofSalmon11.10.95
Canada
WT/DS18/105.10.95 04.12.95
19. Poland -Import Régime for
Automobiles18.10.95
India
WT/DS19/128.09.95 27.11.95 11.09.96
WT/DS19/2
20. Korea -Measures Concerning
Bottled Water22.11.95
Canada
WT/DS20/108.11.95 08.01.96 30.11.95
United States
WT/DS20/2
14.12.95
EC
WT/DS20/46.05.96
WT/DS20/6
21. Australia -Measures Affecting the
Importation ofSalmonids23.11.95
United States
WT/DS21/120.11.95 19.01.96 13.12.95
Canada
WT/DS21/2
22. Brazil -Measures Affecting
Desiccated Coconut20.12.95
Philippines
WT/DS22/1
10.01.96
Rev.130.11.96 29.01.96 08.02.96
Philippines
WT/DS22/505.03.96
WT/DSB/M/12
23. Venezuela -Anti-Dumping
Investigation inRespect ofImports
ofCertain OilCountry Tubular
Goods (OCTG )4.01.96
Mexico
WT/DS23/15.12.95 3.02.96
24. United States -Restriction on
Imports ofCotton andMan-Made
Fibre Underwear15.01.96
Costa Rica
WT/DS24/1
23.01.96
Corr.122.12.95 20.02.96 27.02.96
Costa Rica
WT/DS24/205.03.96
WT/DSB/M/12WT/DSB/8
Page24Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
25. EC-Implementation ofthe
Uruguay Round Commitments
Concerning Rice19.01.96
Uruguay
WT/DS25/1
19.10.96
Corr.114.12.95 12.2.96
26. EC-Measures Concerning Meat
andMeat Products (Hormones)31.01.96
United States
WT/DS26/126.1.96 26.3.96 8.02.96
New Zealand
WT/DS26/2
9.02.96
Australia
WT/DS26/3
13.02.96
Canada
WT/DS26/425.04.96
United States
WT/DS26/620.05.96
WT/DSB/M/17
27. EC-Régime fortheImportation,
SaleandDistribution ofBananas13.02.96
Ecuador
Guatemala
Honduras
Mexico
United States
WT/DS27/105.02.96 05.04.96 28.02.96
Dominican
Republic
WT/DS27/2
28.02.96
St.Lucia
WT/DS27/3
28.02.96
Nicaragua
WT/DS27/4
01.03.96
Jamaica
WT/DS/27/512.04.06
Ecuador,
Guatemala,
Honduras,
Mexico,
United States
WT/DS27/608.05.96
WT/DSB/M/16
28. Japan -Measures Concerning
Sound Recordings14.02.96
United States
WT/DS28/109.02.96 09.04.96 28.02.96
EC
WT/DS28/2WT/DSB/8
Page25Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
29. Turkey -Restrictions onImports
ofTextile andClothing Products15.02.96
Hong Kong
WT/DS29/112.02.96 12.04.96 01.03.96
EC
WT/DS29/2
28.02.06
Malaysia
Philippines
Thailand
WT/DS29/3
28.02.96
Peru
WT/DS29/4
29.02.96
India
WT/DS29/5
01.03.96
Brazil
WT/DS29/7
01.03.96
Canada
WT/DS29/8
30. Brazil -Countervailing Duties on
Imports ofDesiccated Coconut and
Coconut Milk Powder from Sri
Lanka05.03.96
SriLanka
WT/DS30/123.02.96 23.04.96
31. Canada -Certain Measures
Concerning Periodicals14.03.96
United States
WT/DS31/111.03.96 10.05.96 24.05.96
United States
WT/DS31/219.06.96
WT/DSB/M/19
32. United States -Measures Affecting
Imports ofWomen 'sandGirls'
Wool Coats30.04.96
WT/DS32/215.03.96
India
WT/DS32/117.04.96
WT/DSB/M/14WT/DSB/8
Page26Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
33. United States -Measures Affecting
Imports ofWoven Wool Shirts and
Blouses15.03.96
India
WT/DS33/117.04.96
WT/DSB/M/14
34. Turkey -Restrictions onImports
ofTextile andClothing Products25.3.96
India
WT/DS34/121.03.96 20.05.96
35. Hungary -Export Subsidies in
Respect ofAgricultural Products02.04.96
Argentina
Australia
Canada
New Zealand
Thailand
United States
WT/DS35/127.3.96 26.5.96 12.04.96
Japan
WT/DS35/2
36. Pakistan -Patent Protection for
Pharmaceutical andAgricultural
Chemical Products06.05.96
United States
WT/DS36/130.04.96 29.06.96 28.05.96
EC
WT/DS36/24.07.96
US
WT/DS36/3
37. Portugal -Patent Protection under
theIndustrial Property Act06.05.96
United States
WT/DS37/130.04.96 29.06.96 8.10.96
WT/DS37/2
15.10.96
Corr.1
38. United States -TheCuban Liberty
andDemocratic Solidarity Act13.05.96
EC
WT/DS38/13.05.96 2.07.96 8.10.96
WT/DS38/2
14.10.96
andCorr.1
39. United States -Tariff Increases on
Products from theEuropean
Communities29.05.96
EC
WT/DS39/118.04.96 17.06.96 24.6.96
EC
WT/DS39/2WT/DSB/8
Page27Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
40. Korea -Laws, Regulations and
Practices inthe
Telecommunications Procurement
Sector20.05.96
EC
WT/DS40/19.05.96 8.07.96
41. Korea -Measures Concerning
Inspection ofAgricultural Products31.05.96
US
WT/DS41/124.05.96 23.07.96
42. Japan -Measures Concerning
Sound Recordings04.06.96
EC
WT/DS42/128.05.96 27.07.96 11.06.96
US
WT/DS42/2
43. Turkey -Taxation ofForeign Film
Revenues17.06.96
US
WT/DS43/112.06.96 11.08.96
44. Japan -Measures Affecting
Consumer Photographic Film and
Paper21.06.96
US
WT/DS44/113.06.96 12.08.96 20.09.96
US
WT/DS44/216.10.96
WT/DSB/M/24
45. Japan -Measures Affecting
Distribution Services20.06.96
US
WT/DS45/1
24.09.94
US
WT/DS45/1/
Add.113.06.96
20.09.9412.08.96
46. Brazil -Export Financing
Programme forAircraft21.06.96
Canada
WT/DS46/119.06.96 18.08.96 17.09.96
Canada
WT/DS46/2
4.10.96
WT/DS46/4WT/DSB/8
Page28Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
47. Turkey -Restrictions onImports
ofTextile andClothing Products26.06.96
Thailand
WT/DS47/120.06.96 19.08.96
48. European Communities -Measures
Affecting Livestock andMeat
(Hormones)08.07.96
Canada
WT/DS48/128.06.96 27.08.96 22.07.96
Australia
WT/DS48/2
23.07.96
US
WT/DS48/3
23.07.96
New Zealand
WT/DS48/417.09.96
Canada
WT/DS48/516.10.06
WT/DSB/M/24
49. United States -Anti-Dumping
Investigation Regarding Imports of
Fresh orChilled Tomatoes from
Mexico08.07.96
Mexico
WT/DS49/101.07.96 30.08.96
50. India -Patent Protection for
Pharmaceutical andAgricultural
Chemical Products09.07.96
US
WT/DS50/102.07.96 31.08.96 22.07.96
EC
WT/DS50/2
51. Brazil -Certain Automotive
Investment Measures06.08.96
Japan
WT/DS51/130.07.96 28.09.96 13.08.96
Korea
WT/DS51/2
15.08.96
EC
WT/DS51/3
15.08.96
United States
WT/DS51/4
19.08.96
Canada
WT/DS51/6WT/DSB/8
Page29Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
52. Brazil -Certain Measures
Affecting Trade andInvestment in
theAutomotive Sector14.08.96
US
WT/DS52/109.08.96 08.10.96 19.08.96
Canada
WT/DS52/2
19.08.96
Japan
WT/DS52/3
28.08.96
Korea
WT/DS52/4
02.09.96
EC
WT/DS52/5
53. Mexico -Customs Valuation of
Imports9.09.96
EC
WT/DS53/127.08.96 26.10.96 18.09.96
Norway
WT/DS53/2
30.09.96
Switzerland
WT/DS53/3
54. Indonesia- Certain Measures
Affecting theAutomobile Industry14.10.96
EC
WT/DS54/13.10.96 2.12.96 18.10.96
United States
WT/DS54/2
..
Japan
WT/DS54/3
..
Korea
WT/DS54/4
55. Indonesia -Certain Measures
Affecting theAutomobile Industry10.10.96
Japan
WT/DS55/14.10.96 3.12.96 18.10.96
United States
WT/DS55/2
..
EC
WT/DS55/3WT/DSB/8
Page30Dispute Request for
Consultations
(date of
circulation)Date ofReceipt
oftheRequest
forConsultationExpiration of
Consultation
PeriodRequest to
Join
ConsultationsMutually
Agreed
SolutionRequest for
Establishment
ofaPanelPanel
Established
56. Argentina -Measures Affecting
Imports ofFootwear, Textiles,
Apparel andOther Items15.10.96
United States
WT/DS56/14.10.96 3.12.96 ..
Hungary
WT/DS56/2
57. Australia -Textile, Clothing and
Footwear Import Credit Scheme09.10.96
United States
WT/DS57/17.10.96 6.11.96
58. United States -Import Prohibition
ofCertain Shrimp andShrimp
Products14.10.96
India, Malaysia,
Pakistan and
Thailand
WT/DS58/18.10.96 7.12.96
59. Indonesia -Certain Measures
Affecting theAutomobile Industry15.10.96
United States
WT/DS59/18.10.96 7.12.96 ..
Japan
WT/DS59/2
60. Guatemala -Anti-Dumping
Investigation Regarding Imports of
Portland Cement from Mexico24.10.96
Mexico
WT/DS60/115.10.96 14.12.96WT/DSB/8
Page31SECTION II
Title Panel
EstablishedPanel Report
CirculatedExpiration
of20-Day
PeriodExpiration
of60-Day
PeriodNotice of
AppealPanel Report
AdoptedAppellate Report
CirculatedExpiration of
30-Day PeriodAppellate
Report
Adopted
1.United States -
Standards for
Reformulated and
Conventional
Gasoline10.04.95
Venezuela
WT/DS2
31.05.95
Brazil
WT/DS429.01.96
WT/DS2/R18.02.96 29.03.96 21.02.96
United
States
WT/DS2/620.05.96
WT/DS2/929.04.96
WT/DS2/AB/R29.05.96 20.05.96
WT/DS2/9
2.Japan -Taxes on
Alcoholic
Beverages27.09.95
EC
WT/DS8
Canada
WT/DS10
US
WT/DS1111.07.96
WT/DS8/R
WT/DS10/R
WT/DS11/R31.07.96 09.09.96 08.08.96
Japan
WT/DS8/9
WT/DS10/9
WT/DS11/64.10.96
WT/DS8/AB/R
WT/DS10/AB/R
WT/DS11/AB/R3.11.96
3.EC-Trade
Description of
Scallops19.07.95
Canada
WT/DS705.08.96
WT/DS7/R
4.EC-Trade
Description of
Scallops11.10.95
Peru
WT/DS12
Chile
WT/DS1405.08.95
WT/DS12/R
WT/DS14/R
5.Brazil -Measures
Affecting
Desiccated Coconut05.03.96
Philippines
WT/DS2217.10.96
WT/DS22/R06.11.96 16.12.96WORLD TRADE WT/DSB/8/Corr.1
20November 1996
ORGANIZATION(96-4928)
DISPUTE SETTLEMENT BODY
DISPUTE SETTLEMENT BODY
Annual Report (1996)
Corrigendum
Sub-item 8(j)(ix), page14:
Thesecond paragraph should read asfollows: "The representatives oftheEuropean
Communities, theUnited States, Australia, Bolivia, onbehalf ofmembers oftheRioGroup6,Canada,
Cuba, Mexico, India andSwitzerland spoke."
6Argentina,Bolivia,Brazil,Chile,Colombia,CostaRica,Ecuador,Mexico,Panama, Paraguay,Peru,Trinidad
andTobago, Uruguay andVenezuela.WORLD TRADE WT/DSB/8/Add.1
15November 1996
ORGANIZATION(96-4795)
DISPUTE SETTLEMENT BODY
DISPUTE SETTLEMENT BODY
Annual Report (1996)
Addendum
Thisaddendum updates theDSBAnnual Report (1996) circulated on28October 1996 with
theaction taken bytheDSBatitsmeeting on29October and1November 1996. Theinformation
ontheaction taken bytheDSBatthatmeeting alsosupplements theinformation onDSBactivities
inSection 12"Summary Conclusions" oftheAnnual Report andinSection IIofitsAnnex containing
the"Overview oftheState ofPlayofWTO Disputes".
_______________
1. Recourse todispute settlement procedures
- Japan
- Taxes onalcoholic beverages (WT/DSB/M/25)
AttheDSBmeeting on29October and1November 1996, theDSBconsidered theAppellate
Body report inWT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R andthePanel report inWT/DS8/R,
WT/DS10/R andWT/DS11/R pertaining tothecomplaints bytheEuropean Communities, Canada
andtheUnited States respectively.
Therepresentatives oftheEuropean Communities, Canada, theUnited States andJapan spoke.
TheDSBtooknoteofthestatements, adopted theAppellate Body report inWT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R andthePanel report inWT/DS8/R, WT/DS10/R andWT/DS10/R
asmodified bytheAppellate Body report.
2. Ruleofquorum (WT/DSB/M/25)
AttheDSBmeeting on29October and1November 1996, Japan raised thequestion ofthe
ruleofquorum intherulesofprocedure oftheDSBwhich provided foraquorum ofasimple majority
ofMembers,i.e.63delegationsunderthepresentWTOMembership.SinceattendanceatWTOmeetings
wasusually lessthat63delegations hesuggested thattheruleofquorum beamended. TheChairman
saidthatatanappropriate timeinformal consultations would beheldonthismatter which wasalso
relevant forother WTO bodies, andurged delegations thatuntilaproper solution wasfound such
problems beapproached inaspirit ofpragmatism.
Therepresentative ofNorway spoke.
TheDSBtooknoteofthestatements.SECTION III
TRADE POLICY REVIEW BODYWORLD TRADE WT/TPR/27
28October 1996
ORGANIZATION(96-4484)
Trade Policy Review Body
TRADE POLICY REVIEW MECHANISM
REPORT TOTHE SINGAPORE MINISTERIAL CONFERENCE
1. TheTrade Policy Review Mechanism wasestablished in1989, onaprovisional basis, asan
early harvest oftheUruguay Round. Ithasthusbeeninexistence forseven years. TheMarrakesh
Agreement, which confirmed thestatus oftheMechanism, envisages anappraisal ofitsoperation at
thelatest in1999 ("not more thanfiveyears aftertheentry intoforce oftheAgreement Establishing
theWTO"). Members, however, havekepttheMechanism under constant review since itsinception
andanumber ofprocedural improvements havebeenintroduced inthepastfewyears.
2. Thisreport bytheTrade Policy Review Body provides aninterim assessment oftheextent
towhich theTPRM isfulfilling itsstated objectives, itsvalue toMembers, itscost-effectiveness and
thescope forfurther procedural improvements. AtableofTrade Policy Reviews todateisannexed.
Fulfilling itsObjectives
3. Inframing theirexpectations oftheTPRM, Members areguided bytheobjectives stated in
Annex 3totheMarrakesh Agreement:
"tocontribute toimproved adherence byallMembers torules, disciplines andcommitments
made under theMultilateral Trade Agreements and,where applicable, thePlurilateral Trade
Agreements, andhence tothesmoother functioning ofthemultilateral trading system, by
achieving greater transparency in,andunderstanding of,thetrade policies andpractices of
Members. Accordingly, thereview mechanism enables theregular collective appreciation and
evaluation ofthefullrange ofindividual Members 'tradepolicies andpractices andtheirimpact
onthefunctioning ofthemultilateral trading system. Itisnot,however, intended toserve
asabasis fortheenforcement ofspecific obligations under theAgreements orfordispute
settlement procedures, ortoimpose newpolicy commitments onMembers."
4. Measurement oftheTPRM 'scoverage todatedepends ontheyardstick used. The57members
reviewed sofar(anumber onseveral occasions) account for98percentofallMembers 'tradeingoods
andservices. TheTPRM spotlight hastherefore effectively focused onallthemajor players inthe
WTO trading system andhasilluminated themostsignificant trends. Byanother yardstick, however,
theoutcome islessreassuring: withWTO membership of108(counting theEuropean Communities
asoneentity) onlyjustoverhalfofMembers havebeenreviewed during theseven-year existence of
theMechanism. Thequestion ofcompleting thecoverage ofdeveloping countries istaken upin
paragraphs 12-14 below.
5. Thecontent andstyleofthereviews isobviously critical totheireffectiveness. There isgeneral
acceptance thatreviews should becomprehensive, rigorous andanalytical, andconducted atan
appropriately senior level. Byandlarge, experience todatesuggests thatthese criteria arebeing met.WT/TPR/27
Page2
While thescope forprocedural improvements isconstantly being assessed, theessential character of
thereviews hasnotbeenchallenged. Oneindicator ofthegeneral health oftheprocess isthelevel
andcomposition ofdelegations from Members under review: thishasimproved markedly since the
establishment oftheWTO, withamajority ofMembers reviewed during thepasttwoyears being led
atMinisterial ordeputy Ministerial level, andwithdelegations including substantial expertise from
capitals.
6. Attempting toensure thatthereviews arecomprehensive isnotwithout risk. Acriticism has
beenmade thattheprocess canfocus toomuch ondetail, atthecostofgiving insufficient attention
topolicy direction. However, theTPRM isenvisaged asareview ofpolicies andpractices: ofthe
implementation ofpolicy aswellasitsoverall direction. Itwillcontinue tobeamatter fortheSecretariat
initspreparationofdocumentation,andforMembersinthemanneroftheirparticipationinthemeetings,
toseektoachieve anappropriate balance between discussion ofpolicy direction andofdetails of
implementation.
Value toMembers
7. There isaclear value forWTO Members inhaving aforum where theycanopenly discuss
eachother'strade andtrade-related policies, elicit information andregister concerns. Thebenefits
forthecountry under review arealsosignificant: theTPRM canprovide avaluable input intonational
policymaking,servingasanindependent,objectiveassessmentoftradeandeconomicpolicies;Members
havealsocommented ontheextent towhich theexperience ofreview hashelped tostrengthen inter-
agency discussion andco-operation intheirowncountries. Thetrading system asawhole benefits
inthattheprocess cansometimes assist governments inpursuing desirable trade policy reforms; it
alsofrequently illuminates areas ofWTO obligations which mayhavereceived insufficient attention
todateandthushelps toensure thatthese areaddressed.
8. Thedualaspects ofself-analysis andexternal audit underpin theeffectiveness oftheTPRM
exercise forallMembers. Inpractice, specific features ofareview canassume aparticular importance
depending onthetradeandeconomic situation oftheMember under review. Thelarger trading entities
aregenerally notshort ofopportunities forpresentation oftheirtradepolicies; intheircase, themost
significant aspect ofthereview istheopportunity fortrading partners tocomment onthebasis ofan
independent WTO Secretariat analysis. Inmany cases, however, review meetings canprovide auseful
forum forgovernments toexplain thedevelopment ofpolicies; additionally, inthecaseofdeveloping
countries, theprocess canhelptoidentify particular technical assistance needs.
Costeffectiveness
9. TheTPRDivision intheSecretariat hasanannual staffbudget ofsome Sfr.4million (just
under 6percentofthetotal). Withastaffcomplement of27(17professionals) itaccounts foraround
10percentoftheprofessional staffoftheorganization, excluding translators, interpreters and
administration. Members alsodevote considerable timetothepreparation andservicing ofmeetings.
Therelationship between tasks andcapacity obviously requires careful balancing: issues ofTPRM
coverage, depth ofthepreparatory process, anddesirable follow-up work, havetobeapproached in
thelightoftheresources available. Thiswillneedevenmore careful attention asWTO membership
expands.
10. Thecontinuing challenge istoensure maximum effectiveness oftheresources used. Inthis
connection, anumber ofareas offer scope forfurther examination:WT/TPR/27
Page3
- Inreviewing across-section ofcountries eachyear, theTPRM inevitably shows up
wider patterns which areinfluencing policy approaches inindividual Members. Over
thepastfewyears, forexample, theoverriding common theme thathasemerged is
therapid pace ofchange, with asustained shift tomore market-oriented and
outward-looking trade andinvestment régimes, deriving inpartfrom autonomous
liberalization policies andinpartfromthestimulus provided bytheUruguay Round.
Interms ofenhancing theprocess, theAnnual Overview ofDevelopments inthe
InternationalTradingSystem,providedforinSectionGoftheAgreementontheTPRM,
maybeusedtodevelop amore structured approach thanhasexisted inthepastof
looking atthecomposite picture emerging fromindividual reviews andtoidentify wider
themes forconsideration byWTO members andcommittees.
- TheTPRM occupies aunique place within theWTO inpromoting non-confrontational
discussion ofkeytrade policy issues. Itsspecific delinkage from dispute settlement
procedures isanessential feature which must besafeguarded; however, further
opportunities might besought forencouraging greater cross-fertilization between TPRB
discussions andthose undertaken inother WTO bodies.
- Oneareawhich isreceiving particular attention isenhancing awareness oftheTPRM
outside theGeneva circle. While WTO member Governments ofcourse havethe
primary stake intheTPRM, thematerial produced isalsoofinterest inthebusiness
andacademic communities. Thelong-term health oftheprocess canonlybenefit from
widedissemination ofinformation about reviews. Aconsiderable amount ofmedia
briefing isalready done bytheSecretariat andtheChair, andboththeSummary
ObservationsbytheSecretariatandtheClosingRemarksbytheChairaremadeavailable
ontheWTO Internet home page. Further improvements suchasspeedier publication
ofreports (within onemonth tosixweeks ofTPRB meetings) andimproved useof
theInternet fordissemination andsaleoffullreports arecurrently under active
consideration bytheSecretariat forearly introduction.
Coverage ofDeveloping Countries
11. ThecoverageofdevelopingcountriesintheTPRMtodateincludesmostofthemajordeveloping
country Members oftheWTO, aswellasanumber ofsmaller countries thathavevolunteered tocome
under review. There arestill,however, over50developing country Members thatremain tobe
reviewed, including asignificant number ofAfrican andleastdeveloped countries.
12. Theinvolvement ofdeveloping countries intheTPRM isexamined insome detail inaNote
of12July1996, circulated toallWTO Members, from theChair oftheTPRM totheChair ofthe
Committee onTrade inDevelopment. Thesummary conclusion inthatNote was:
"Involvement intheTPRM isanimportant wayfordeveloping countries, particularly least
developed countries, todevelop confidence andexperience withtheWTO. Thisneeds tobe
borne inmind in(a)planning theTPRM timetable and(b)ensuring thattechnical assistance
isavailable tothoseLDCs whowould otherwise havedifficulty inpreparing forandundergoing
review.WithincreasedparticipationofdevelopingcountriesintheTPRM,itwillbeparticularly
important toensure thatlessons learned from these reviews arechannelled intotheWTO
machinery".
13. Inanefforttocompletethecoverageofdevelopingcountries,includingleastdevelopedcountries,
while taking account ofresource constraints, theSecretariat iscurrently exploring ways ofgroupingWT/TPR/27
Page4
reviews -forexample inthecaseofsome Southern African orCaribbean countries -while respecting
theindividual nature oftheTPRprocess. Thequestion ofcompleting thecoverage ofTPRs, particularly
tothesmaller developing andleast-developed countries, isonewhich willrequire particular attention
inthepreparation oftheTPRB timetable.
Procedural Improvements
14. Asnoted, therehasbeenafairly continuous process ofself-examination within theTPRB over
theyears, leading toanumber ofimprovements inprocedures. Afirstsetofmodifications was
introduced in1994(L/7458). More recent discussions havebeenreflected intwoNotes fromtheChair,
thefirstinDecember 1995(WT/TPR/13) andthesecond inJuly1996(WT/TPR/20). Theprocedural
issues addressed include preparatory documentation, choice ofdiscussants, levelofrepresentation at
meetings, Chairperson 'ssumming up,follow-up tomeetings. Insofarasthere hasbeenagreement
onprocedural adaptations, these havebeenorarebeing putintoeffect.
15. Oneconcern ofMembers istoensure that,asanexercise intransparency, theTPRB clearly
reflects theprogress made byMembers inimplementing theWTO Agreements. TheSecretariat is
therefore encouraged tocontinue providing, initsreports, systematic information onmeasures taken
byMembers under review inthecontext oftheAgreements, themechanisms bywhich these are
implemented, andnotifications made.
16. Asindicated inparagraph 5,sincetheentryintoforceoftheWTO, themajority oftheMembers
coming forreview havebeenrepresented atMinisterial orDeputy Ministerial level; inmost other
cases, theyhave been represented bysenior officials from thecapital. However, thislevel of
representation hasnotalways beenmatched bytheparticipation -either innumbers orlevel-byother
Members oftheTPRB. IftherôleoftheTPRM istobepreserved andstrengthened, itisimportant
boththatthere beasubstantial number ofdelegations present inTrade Policy Reviews andthatthese
delegations berepresented atappropriate level.
17. Ithasalsobeenstressed thatMembers oweittothehealth ofthesystem toobserve strictly
thedeadlines laiddown foranswering questionnaires anddelivering documentation; delays inthe
completion ofreviews bothaffect thereview process fortheMember concerned andslowdown the
programme ingeneral.
18. Oneofthemoresubstantiveissuesaddressedhasbeenthecycleofreviews.Whileonedelegation
hasproposed amodification toprovide forathree yearcycle formembers currently onatwo-year
review pattern, there hasbeennosupport from other members forsuchachange. However, ithas
been agreed that,inthecaseoftwo-year reviews, every second review might have an"interim"
character, although thisshould notdetract fromthecomprehensive nature ofreviews ofsuchmembers.
Conclusion
19. TheTPRM isaunique element intherange ofWTO activities. Itistheonlyfocus forpeer
review ofthefullrange oftrade policies andcanoften beofconsiderable assistance toMembers in
their domestic review andrevision ofpolicy. Inaddition, itisofsignificant value inproviding
authoritative, wellfounded analyses ofdevelopments intradepolicies andpractices. Given thebenefits
oftheprocess, Members whohavenotyetpresented themselves forreview arestrongly encouraged
todoso;those whowould feeltheneedoftechnical assistance inundergoing theprocess arereminded
ofthepossibilities inthisregard.WT/TPR/27
Page5
20. While Members aresatisfied withtheconsiderable progress made inimproving thefunctioning
oftheTPRM, theyarealsoconscious ofthehighlevelofSecretariat andnational resources involved
intheprocess, andanxious toensure thatthese resources continue tobeusedeffectively. Members
willtherefore continue toassess thecontent, coverage andresources usedinreviews totrytoensure
theneeds ofallWTO members aremet. They willalsoseektoenhance theimpact oftheMechanism
intheways outlined inthisreport, while ensuring thatitsdistinctive character ispreserved.
Trade policy reviews conducted under GATT 1947 andWTO provisions, 1989-1996
Europe/Middle East Asia/Pacific Africa America
Austria1aAustralia (2)aCameroonaArgentinaa
Czech RepublicbBangladeshaCôted'IvoirebBrazil (2)c
European
Communities (4)cHong Kong (2)aEgyptaBoliviaa
Finland1aIndiaaGhanaaCanada (4)c
HungaryaIndonesia (2)aKenyaaChilea
IcelandaJapan (3)aMauritiusbColombia (2)c
IsraelaKorea (2)cMorocco (2)cCosta Ricab
Norway (2)cMacauaNigeriaaDominican Republicb
PolandaMalaysiaaSenegalaElSalvadorb
RomaniaaNewZealand (2)cSouth AfricaaMexicoa
SlovakiabPakistanaTunisiaaPerua
Sweden1(2)aPhilippinesaUgandabUnited States (4)c
Switzerland (2)cSingapore (2)cZambiabUruguaya
TurkeyaSriLankabZimbabweaVenezuelab
Thailand (2)c
14 15 14 14
a Reviewed under theGATT.
b Reviewed under theWTO.
c Reviewed under theGATT andtheWTO.
1 Included inEUfrom 1995.SECTION IV
COUN CILFOR TRADE INGOODSWORLD TRADE G/L/134
5November 1996
ORGANIZATION(96-4676)
Council forTrade inGoods
1November 1996
REPORT OFTHE COUNCIL FOR TRADE INGOODS
TOTHE GENERAL COUNCIL
Introduction
1. ThisreporthasbeenestablishedinaccordancewiththestatementbytheChairmanoftheGeneral
Council, atthemeeting on16April 1996, withregard to"Reporting Procedures fortheSingapore
Ministerial Conference". Itcovers theperiod from 1January to4November 1996;1itcomprises
aSection I:factual part,andaSection II:conclusions and/or recommendations. Thereport also
covers theactivities ofthesubsidiary bodies oftheCouncil forTrade inGoods (hereinafter referred
toas"theCouncil"), asoutlined under item19(a).
2. Incarrying outitstask,theCouncil hasheldeight regular meetings. Theminutes ofthese
meetings, which remain therecord oftheCouncil 'swork, arecontained indocuments G/C/M/8 to
3. Thefollowing subject matters which wereraised and/or acted uponintheCouncil areincluded
inthereport:
Page
SECTION I:FACTUAL PART
1. Observer status forInternational Intergovernmental Organizations 5
2. Election ofChairperson oftheCouncil forTrade inGoods 5
3. Appointment ofOfficers fortheCommittee onAgriculture, Committee on
Sanitary andPhytosanitary Measures, Working Party onState-Trading Enterprises,
Working Group onNotification Obligations andProcedures 5
4. Approval ofRules ofProcedure oftheCommittees onAgriculture,
Anti-dumping Practices, Safeguards, Subsidies andCountervailing Measures 6
5. Letter from theChairman oftheCommittee onTrade andDevelopment 6
6. Circulation andDerestriction ofCouncil Documents 6
7. Availability ofdocuments inSpanish 6
1Thereport oftheCouncil forTrade inGoods for1995 iscontained inSection IVofdocument WT/GC/W/25.G/L/134
Page 2
8. Committee onMarket Access 6
- Semi-annual report oftheCommittee
9. Agreement onSubsidies andCountervailing Measures 7
- State ofplayconcerning subsidy notifications -lackofcompliance
withsubsidy notification requirements under Article 25.2ofthe
Agreement onSubsidies andCountervailing Measures
10. Working Party onState Trading Enterprises 7
11. Customs Unions andFree-Trade Areas: regional agreements 7
(a) Customs Union between Turkey andtheEuropean Community 7
(b) Agreement between theGovernment ofDenmark andthe
Home Government oftheFaroe Islands, oftheonepart,
andtheGovernment ofIceland, oftheother part,
onfreetrade between theFaroe Islands andIceland 7
(c) Agreement between theSwiss Government, oftheonepart,
andtheGovernment ofDenmark andtheHome Government
oftheFaroe Islands, oftheother part,onfreetrade
between theFaroe Islands andSwitzerland 8
(d) Agreement between theGovernment ofNorway, ofthe
onepart,andtheGovernment ofDenmark andthe
Home Government oftheFaroe Islands, oftheother part,
onfreetrade between theFaroe Islands andNorway 8
(e) Agreements between theCzech Republic andBulgaria, and
theSlovak Republic andBulgaria 8
(f) Preferential tariff treatment forthecountries offormer Yugoslavia 8
(g) EFTA-Estonia, EFTA-Latvia, EFTA-Lithuania FreeTrade Agreements 8
(h) Enlargement oftheCentral European FreeTrade Agreement (CEFTA) 8
(i) Europe Agreements between theEuropean Communities andthe
Czech Republic, andtheEuropean Communities andtheSlovak Republic 9
(j) Free-Trade Agreement between theCzech Republic andRomania 9
(k) Free-Trade Agreement between theSlovak Republic andRomania 9
(l) FreeTrade Agreement between theEFTA States andEstonia 9
(m) FreeTrade Agreement between theEFTA States andLatvia 9
(n) FreeTrade Agreement between theEFTA States andLithuania 10
12. Waivers under Article IXoftheWTO Agreement 10
(a) Harmonized System -Requests forextensions ofwaivers
Bangladesh, Bolivia, Guatemala, Jamaica, Morocco,
Nicaragua, SriLanka 10
(b) Malawi -Renegotiation ofSchedule LVIII 10
(c) Senegal -Renegotiation ofSchedule XLIX 10
(d) Zambia -Renegotiation ofSchedule LXXVIII 10
(e) Decision ontheintroduction ofHarmonized System changes
intoWTO schedules oftariff concessions on1January 1996 11
(f) Waivers falling under paragraph 2oftheUnderstanding inRespect
ofWaivers ofObligations under GATT 1994 11
(i) Cuba -Paragraph 6ofArticle XVofGATT 1994 11
(ii) United States -Former Trust Territory ofthePacific Islands 11
(iii) United States -Imports ofAutomotive Products 11
(iv) United States -Andean Trade Preference Act 11G/L/134
Page 3
(v) Canada -CARIBCAN 12
(vi) European Communities 12
-European Communities -Fourth ACP-EEC Convention
ofLomé
-France -Trading Arrangements withMorocco
(vii) South Africa -BaseDates under Article I:4 12
(viii) Zimbabwe -BaseDates under Article I:4 12
13. Issues raised concerning Members 'trade practices 12
(a) Brazilian Measure concerning theautomotive sector 12
(b) USdraftbillconcerning thedefinition of"domestic industry" inthearea
ofsafeguards 13
(c) US-"Cuban Liberty andDemocratic Solidarity Actof1996" 13
(d) Banonexports ofwild-harvested shrimps totheUS 13
(e) USNarcotics Control Trade Act 13
(f) Impairment bytheEuropean Community ofTariff Treatment
ofHigh Technology Products 13
(g) Argentine footwear 13
(h) USrequest forConsultations concerning Restrictive Business Practices
intheJapanese Photographic FilmandPaper Market 14
(i) ECproposal on"Trade Facilitation" 14
14. Agreement onPreshipment Inspection 14
(a) Commencement ofOperations oftheIndependent Review Entity 14
(b) Review under Article 6ofthePreshipment Inspection Agreement 14
(c) Notifications 14
15. Working Group onNotification Obligations andProcedures 15
(a) Status ofwork intheWorking Group 15
(b) Report oftheWorking Group onNotification Obligations
andProcedures 15
16. Implementation oftheAgreement onTextiles andClothing (ATC) andrelated matters 16
- Issues andproblems 16
(i) Integration programmes 16
(ii) Useoftransitional safeguards 17
(iii) Bilaterally agreed arrangements 18
(iv) Functioning oftheTextiles Monitoring Body 18
(v) Treatment ofsmall suppliers andleastdeveloped countries 19
(vi) Particular interests ofcotton-producing countries 20
(vii) Rules oforigin 20
(viii) Other ATC issues (outward processing trade, special regimes, etc.) 20
(ix) Relationship between restrictions andregionalism 21
(x) Useoftrade measures fornon-trade purposes 21
(xi) Market access 21
(xii) Rules anddisciplines 22
(xiii) Circumvention 22
17. Textiles Monitoring Body (TMB) 23
- Report oftheTMB 23
A. Summary ofcomments made byWTO Members 23
B. Action taken bytheCouncil 26G/L/134
Page 4
18. Proposals andinitiatives forfurther trade liberalization 26
19. Singapore Ministerial Conference 27
(a) Report ofsubsidiary bodies oftheCouncil forTrade inGoods 27
(b) Report bytheCouncil forTrade inGoods totheMinisterial Conference 28
SECTION II:CONCLUSIONS AND/OR RECOMMENDATIONS
1. Agreement onPreshipment Inspection 29
2. Notification Obligations andProcedures 29G/L/134
Page 5
SECTION I:FACTUAL PART
1. Observer status forInternational Intergovernmental Organizations (G/C/M/8 to14)
1.1 Atitsmeeting of29January 1996, theCouncil agreed thatpending theadoption ofcriteria
andconditions forobserver status forinternational intergovernmental organizations intheWTO and
unless adelegation raised anobjection, those organizations invited tothecurrent meeting oftheCouncil
beinvited toitsnextmeeting onanad-hoc basis. Theorganizations concerned were: FAO, IMF, ITCB,
OECD, UN,UNCTAD, World Bank andtheWCO.
1.2 Atitsmeetings of14February 1996, 19March 1996, 22May1996and5July1996theCouncil
agreed toinvite thesame organizations onanad-hoc basis toitsnextrespective meeting.
1.3 Atthemeeting of25July1996, theChairman pointed outthatatitsmeeting of18July1996,
theGeneralCouncilhadapprovedthe"GuidelinesonObserverStatusforInternationalIntergovernmental
Organizations".InlightofthisdecisionheproposedtoholdinformalconsultationsonwhichInternational
Intergovernmental Organizations would begranted observer status intheGoods Council.
1.4 Atitsmeeting of19September 1996, theCouncil agreed thatpending theoutcome offurther
consultations, theorganizations which hadbeenfollowing theCouncil 'smeeting uptonowonanad-hoc
basis, could attend future meetings oftheCouncil onanad-hoc basis.
2. Election ofChairperson oftheCouncil (G/C/M/8)
2.1 Atitsmeeting of14February 1996, theCouncil unanimously elected Ambassador Narayanan,
asChairman oftheCouncil for1996.
3. Appointment ofOfficers fortheCommittee onAgriculture, Committee onSanitary and
Phytosanitary Measures, Working Party onState-Trading Enterprises, Working Group
onNotification Obligations andProcedures (G/C/M/8)
3.1 Atitsmeeting of14February 1996, theCouncil approved theappointments ofthefollowing
Chairpersons: Committee onAgriculture: Mr.D.Tulalamba (Thailand); Committee onSanitary
andPhytosantiary Measures: MrK.Bergholm (Finland); Working Group onNotification Obligations
andProcedures: Mr.AShoyer (United States); Working Party onStateTrading Enterprises: Mr.
P.May(Australia).
3.2 Atitsmeeting of14February 1996, theCouncil tooknoteoftheresults oftheconsultations
heldbytheChairman onChairpersons for1996fortheother subsidiary bodies asfollows: Committee
onTechnical Barriers toTrade: Ms. C.Guarda (Chile); Committee onMarket Access:
Mr.J.Saint-Jacques (Canada); Committee onCustoms Valuation: Mr.P.Palecka (Czech Republic);
Committee onImport Licensing: Mr.C.Mbegabolawe (Zimbabwe); Committee onRules ofOrigin:
Mr.Osakwe (Nigeria); Committee onAnti-Dumping Practices: Mr.O.Lundby (Norway); Committee
onSubsidies andCountervailing Measures: Mr.V.DoPrado (Brazil); Committee onSafeguards:
Mr.A.Buencamino (Philippines); Committee onTrade-Related Investment Measures: Mr.V.Notis
(Greece).
3.3 TheCouncil alsoagreed thatthequestion ofVice-Chairpersons should behandled atthelevel
oftheCommittees themselves through aprocess ofconsultations.G/L/134
Page 6
3.4 Anumber ofdelegations stated thatfuture consultations onChairpersons should beinitiated
asearly aspossible, theyshould bemore transparent, andtheprinciple ofrotation should betherule
wherever possible. Thepoint wasalsomade thatinthefuture thequestion oftheVice-Chiarmanship
should besettled inthecontext ofsuchconsultations.
4. ApprovalofRulesofProcedureoftheCommitteesonAgriculture,Anti-dumpingPractices,
Safeguards, Subsidies andCountervailing Measures (G/C/M/10)
4.1 Atitsmeeting of22May1996, theCouncil approved therulesofprocedure oftheCommittees
onAgriculture (G/AG/W/22), Anti-Dumping Practices (G/ADP/W/135/Rev.1), Safeguards
(G/SG/W/59/Rev.1) andSubsidies andCountervailing Measures (G/SCM/W/143/Rev.1).
5. Letter from theChairman oftheCommittee onTrade andDevelopment
(G/C/M/10 and13andCorr.1)
5.1 Atthemeeting of22May1996, theChairman informed theCouncil thattheChairman ofthe
Committee onTrade andDevelopment (CTD) hadsentaletter tohimrequesting information onthe
implementation ofdevelopment-related provisions inthose Uruguay Round Agreements dealtwithby
theCouncil. Thisinformation wasnecessary forthereview tobeconducted bytheCTD. Hehadsent
aletter tothechairpersons ofthevarious subsidiary bodies ofthisCouncil requesting them togive
himinformation onthework doneinthisarea. After receipt ofthisinformation, hewould takefurther
action onthebasis oftheinformation provided.
5.2 Atthemeeting of19September 1996, theChairman informed theCouncil thattheresponses
totheletter hehadsenttotheChairpersons ofthesubsidiary bodies oftheCouncil hadbeenreceived
andforwarded totheChairman oftheCTD. TheSecretariat hadmade acompilation ofthose responses
indocument WT/COMTD/W/16 andAddendum. Thematter wasnowunder consideration intheCTD.
6. Circulation andDerestriction ofCouncil Documents (G/C/M/13 andCorr.1)
6.1 Atthemeeting of19September 1996, theChairman drewtheCouncil 'sattention tothedecision
taken bytheGeneral Council atitsmeeting of18July1996 on"Procedures fortheCirculation and
Derestriction ofWTO documents" (WT/L/160/Rev.1). TheCouncil tooknoteofthedecision.
7. Availability ofdocuments inSpanish (G/C/M/13 andCorr.1)
7.1 Atthemeeting of19September 1996, therepresentative ofElSalvador, alsoonbehalf of
GRULAC, expressed concern atthefactthatdocuments werenotmade available intheSpanish language
intimeformeetings. Another representative stated thatthesame problem hadarisen regarding
documents inFrench.
8. Committee onMarket Access
Semi-annual report oftheCommittee (G/C/M/11)
8.1 Atitsmeeting of5July1996, theCouncil tooknoteofthereport made bytheChairman of
theMarket Access Committee (G/MA/4) concerning (1)implementation ofHS96 changes; (2)other
waivers; (3)establishment ofconsolidated loose-leaf schedules; (4)non-tariff matters; (5)Integrated
DataBase; and(6)Report oftheCommittee totheCouncil inconnection withtheSingapore Ministerial
Meeting.G/L/134
Page 7
9. Agreement onSubsidies andCountervailing Measures
State ofplayconcerning subsidy notifications -lackofcompliance withsubsidy notification
requirements under Article 25.2oftheAgreement onSubsidies andCountervailing Measures
(G/C/M/10)
9.1 Atthemeeting of22May1996, therepresentative oftheECconveyed concern about thelack
ofcompliance byMembers withtheir notification obligation under Article 25.2oftheSubsidies
Agreement.
10. Working Party onState Trading Enterprises (G/C/M/14)
10.1 Atitsmeeting of15October 1996, theCouncil tooknoteofthecommunication from the
EuropeanCommunitiescirculatedinG/STR/W/33.TheECrequestedtheCounciltoreferitssubmission
totheWorking Party onStateTrading Enterprises foritsconsideration. TheCouncil agreed torevert
tothismatter atanappropriate time.
11. Customs Unions andFree-Trade Areas: regional agreements
(G/C/M/8, 9,10,11 and13andCorr.1)
11.1 Atitsmeeting of29January 1996, theCouncil tooknoteoftheinformation provided bythe
Chairman thatatthelastmeeting oftheGeneral Council, adecision wastaken inprinciple, toestablish
aCommittee dealing withregional trading matters. Consultations werebeing heldbytheChairman
oftheGeneral Council concerning thenature andterms ofreference ofthenewbody. TheCouncil
agreed thatthequestion ofestablishment ofseparate Working Parties would havetobereviewed in
lightofthefinaldecision onthisissue.
11.2 Atitsmeeting of19March 1996, theCouncil tooknoteofadecision taken bytheGeneral
Council toestablish aCommittee onRegional Trade Agreements (WT/L/127) which would carry out
theexamination ofsuchagreements inaccordance withtheprocedures andterms ofreference adopted
bytheCouncil andwhich would thereafter present itsreport totheCouncil forappropriate action.
(a) Customs Union between Turkey andtheEuropean Community (EC) (G/C/M/8)
11.3 Atitsmeetingof29January1996,theCounciltooknoteofthecommunication(WT/REG22/N/1)
fromtheparties, indicating theentryintoforceon1January 1996oftheCustoms Union between Turkey
andtheEC. TheCouncil established aWorking Party toexamine theAgreement.
(b) Agreement between theGovernment ofDenmark andtheHome Government oftheFaroe
Islands, oftheonepart,andtheGovernment ofIceland, oftheother part,onfreetradebetween
theFaroe Islands andIceland (G/C/M/8)
11.4 Atitsmeeting of19March 1996, theCouncil tooknoteofthenotification from theparties
totheAgreement (WT/REG23/N/1), indicating theentry intoforce on1July1993 oftheAgreement
(WT/REG23/1). TheCouncil established aWorking Party toexamine theAgreement.G/L/134
Page 8
(c) Agreement between theSwiss Government, oftheonepart,andtheGovernment ofDenmark
andtheHome Government oftheFaroe Islands, oftheother part,onfreetrade between the
Faroe Islands andSwitzerland (G/C/M/9)
11.5 Atitsmeeting of19March 1996, theCouncil tooknoteofthenotification from theparties
totheAgreement (WT/REG24/N/1), indicating theentry intoforceon1March 1995oftheAgreement
(WT/REG24/1). TheCouncil adopted theterms ofreference under which theCommittee onRegional
Trade Agreements should examine thisAgreement.
(d) AgreementbetweentheGovernmentofNorway,oftheonepart,andtheGovernmentofDenmark
andtheHome Government oftheFaroe Islands, oftheother part,onfreetrade between the
Faroe Islands andNorway (G/C/M/9)
11.6 Atitsmeeting of19March 1996, theCouncil tooknoteofthenotification from theparties
totheAgreement (WT/REG25/N/1), indicating theentry intoforce on1July1993oftheAgreement
(WT/REG25/1). TheCouncil adopted theterms ofreference under which theCommittee onRegional
Trade Agreements should examine thisAgreement.
(e) Agreements between theCzech Republic andBulgaria, andtheSlovak Republic andBulgaria
(G/C/M/9)
11.7 Atthemeeting of19March 1996, therepresentative oftheCzech Republic, speaking also
onbehalf oftheSlovak Republic andtheRepublic ofBulgaria, informed theCouncil ofthesigning
inDecember 1995ofthefreetradeagreements between theCzech Republic andBulgaria andbetween
theSlovak Republic andBulgaria. These agreements hadbeenapplied onaprovisional basis since
1January 1996andwould benotified totheWTO when theratification processes ineachofthesignatory
states hadbeencompleted.
(f) Preferential tariff treatment forthecountries offormer Yugoslavia (G/C/M/9)
11.8 Atthemeeting of19March 1996, therepresentative oftheECinformed theCouncil thathis
delegation intended toaskforawaiver fromobligations under Article IoftheGATT inorder togrant
thecountries offormer Yugoslavia preferential access totheCommunity market foralimited period
oftime.
(g) EFTA-Estonia, EFTA-Latvia, EFTA-Lithuania FreeTrade Agreements (G/C/M/10)
11.9 Atthemeeting of22May1996, therepresentative ofIceland onbehalf oftheEFTA countries
andEstonia, Latvia andLithuania informed theCouncil thattheEFTA states andEstonia, Latvia and
Lithuania respectively hadconcluded FreeTrade Agreements inDecember 1995. TheAgreements
wereexpected toenterintoforce ortobeapplied onaprovisional basisasof1June1996. Thecontent
andstructure oftheAgreements weresimilar tothefreetrade agreements which hadbeenconcluded
between theEFTA states andtheCentral andEastern European countries withcertain adjustments
reflecting recent developments. TheAgreements would benotified under Article XXIV: 7(a)ofGATT
1994.
(h) Enlargement oftheCentral European FreeTrade Agreement (CEFTA) (G/C/M/10)
11.10 Atthemeeting of22May1996, theSlovak Republic onbehalf oftheparties totheCentral
EuropeanFreeTradeAgreement(CEFTA)andSloveniainformedtheCouncilthatthetextoftheCEFTA
hadbeencomplemented byprovisions ofArticle 39(a)which allowed foraccession totheCEFTA
byother countries. Onthisbasis, theRepublic ofSlovenia hadsigned theAgreement onAccessionG/L/134
Page 9
withthefourparties on25November 1995. TheAgreement wasbeing applied onaprovisional basis
andwould enter intoforce onceratification procedures inthecountries, parties tothisAgreement,
hadbeencompleted.
(i) Europe Agreements between theEuropean Communities andtheCzech Republic, andthe
European Communities andtheSlovak Republic (G/C/M/10)
11.11 Atthemeeting of22May1996, theChairman informed theCouncil thattheEurope Agreement
between theECandtheCzech andSlovak Federal Republic, hadbeenreplaced byseparate Agreements
witheachofthesuccessor states. Theexamination ofthese Agreements (WT/REG18/6 and7)would
takeplace intheCommittee onRegional Trade Agreements.
(j) Free-Trade Agreement between theCzech Republic andRomania (G/C/M/11)
11.12 Atitsmeeting of5July1996, theCouncil tooknoteofthenotification from theparties to
theAgreement (WT/REG26/N/1), which alsoindicated thatsincetheentry intoforceoftheAgreement
(WT/REG26/1), theparties hadagreed toaccelerate theelimination ofcustoms duties onmostindustrial
products (WT/REG26/2). In1995, theCouncil hadbeeninformed thatthisFreeTrade Agreement,
signed on24October 1994, wasbeing applied provisionally since 1January 1995, andwastobe
established overatransitional period ending notlaterthan1January 1998. TheCouncil adopted the
terms ofreference under which theCommittee onRegional Trade Agreements should examine this
Agreement.
(k) Free-Trade Agreement between theSlovak Republic andRomania (G/C/M/11)
11.13 Atitsmeeting of5July1996, theCouncil tooknoteofthenotification from theparties to
theAgreement (WT/REG27/N/1), which alsoindicated thatsincetheentry intoforceoftheAgreement
(WT/REG27/1), theparties hadagreed toaccelerate theelimination ofcustoms duties onmostindustrial
products (WT/REG27/2). TheCouncil hadbeeninformed in1995, thatthisFreeTrade Agreement,
signed on24October 1994, wasbeing applied provisionally since 1January 1995, andwastobe
established overatransitional period ending notlaterthan1January 1998. TheCouncil adopted the
terms ofreference under which theCommittee onRegional Trade Agreements should examine this
Agreement.
(l) FreeTrade Agreement between theEFTA States andEstonia (G/C/M/13 andCorr.1)
11.14 Atitsmeeting of19September 1996, theCouncil tooknoteofthenotification fromtheparties
totheAgreement (WT/REG28/N/1), indicating thattheFreeTrade Agreement (WT/REG28/1) was
signed on7December 1995 andhadbeenapplied onaprovisional basis asof1June1996, pending
ratification bytheparties totheAgreement. TheCouncil adopted theterms ofreference under which
theCommittee onRegional Trade Agreements should examine thisAgreement.
(m) FreeTrade Agreement between theEFTA States andLatvia (G/C/M/13 andCorr.1)
11.15 Atitsmeeting of19September 1996, theCouncil tooknoteofthenotification fromtheparties
totheAgreement (WT/REG29/N/1), indicating thattheFreeTrade Agreement (WT/REG29/1) was
signed on7December 1995 andhadbeenapplied onaprovisional basis asof1June1996, pending
ratification bytheparties totheAgreement. TheCouncil adopted theterms ofreference under which
theCommittee onRegional Trade Agreements should examine thisAgreement.G/L/134
Page 10
(n) FreeTrade Agreement between theEFTA States andLithuania (G/C/M/13 andCorr.1)
11.16 Atitsmeeting of19September 1996, theCouncil tooknoteofthenotification fromtheparties
totheAgreement (WT/REG30/N/1), indicating thattheFreeTrade Agreement (WT/REG30/1) had
beenapplied onaprovisional basis asof1August 1996, pending ratification bytheparties tothe
Agreement. TheCouncil adopted theterms ofreference under which theCommittee onRegional Trade
Agreements should examine thisAgreement.
12. Waivers under Article IXoftheWTO Agreement
(a) Harmonized System -Requests forextensions ofwaivers
Bangladesh, Bolivia, Guatemala, Jamaica, Morocco, Nicaragua, SriLanka (G/C/M/11)
12.1 Atitsmeeting of5July1996, theCouncil considered requests byBangladesh (G/L/77), Bolivia
(G/L/78), Guatemala (G/L/86), Jamaica (G/L/79), Morocco (G/L/80), Nicaragua (G/L/81) andSri
Lanka (G/L/83) foranextension until30April 1997 ofwaivers already granted inconnection with
theirimplementation oftheHarmonized System.
12.2 TheCouncil approved thetextsofthedraftdecisions onthewaiver extensions inG/C/W/40
(Bangladesh), G/C/W/412(Bolivia), G/C/W/483(Guatemala), G/C/W/42 (Jamaica), G/C/W/43
(Morocco), G/C/W/44 (Nicaragua) andG/C/W/46 (SriLanka), andrecommended theiradoption by
theGeneral Council.
(b) Malawi -Renegotiation ofSchedule LVIII (G/C/M/8)
12.3 Atitsmeeting of29January 1996, theCouncil considered arequest byMalawi (G/L/51) for
anextension, until30June1996, ofthewaiver granted toitinconnection withtherenegotiation of
itsSchedule. TheCouncil approved thetextofthedraftdecision (G/C/W/31) onthewaiver extension,
andrecommended itsadoption bytheGeneral Council.
(c) Senegal -Renegotiation ofSchedule XLIX (G/C/M/11)
12.4 Atitsmeeting of5July1996, theCouncil considered arequest bySenegal (G/L/82) foran
extension, until30April 1997, ofthewaiver granted toitinconnection withtherenegotiation ofits
Schedule. TheCouncil approved thetextofthedraftdecision (G/C/W/45) onthewaiver extension,
andrecommended itsadoption bytheGeneral Council.
(d) Zambia -Renegotiation ofSchedule LXXVIII (G/C/M/11)
12.5 Atitsmeeting of5July1996, theCouncil considered arequest byZambia (G/L/84) foran
extension, until30April 1997, ofthewaiver granted toitinconnection withtherenegotiation ofits
Schedule. TheCouncil approved thetextofthedraftdecision (G/C/W/47) onthewaiver extension,
andrecommended itsadoption bytheGeneral Council.
2G/C/W/41/Corr.1 inSpanish.
3G/C/W/48/Corr.1 inSpanish.G/L/134
Page 11
(e) Decision ontheintroduction ofHarmonized Commodity Description andCoding System (HS)
changes intoWTO schedules oftariff concessions on1January 1996 (G/C/M/11)
12.6 Atitsmeeting of5July1996, theCouncil considered thedraftofadecision (G/MA/W/6)
concerning awaiver, which related totheHS96 changes tobeintroduced inMember 'stariffschedules
on1January 1996. Awaiver hadappeared necessary forthose Members finding itnecessary toconsult
ornegotiate under Article XXVIII ofGATT 1994 asaresult oftheHS96 changes. TheCouncil
approved theextension ofthetime-limits setoutinthedraftdecision andagreed thatitbetransmitted
totheGeneral Council foradoption.
(f) Waivers falling under paragraph 2oftheUnderstanding inRespect ofWaivers ofObligations
under GATT 1994 (G/C/M/11, 13andCorr.1 and14)
12.7 Atitsmeeting of19September 1996, theCouncil tooknoteoftheconcerns voiced byone
delegation regarding theimportant number ofrequests forextensions ofwaivers fromtheobligations
under paragraph 1ofArticle IofGATT 1994. Intheviewofthisdelegation, stricter conditions applied
under theWTO thanunder GATT 1947 forthegranting ofwaivers ortheirpossible extensions.
(i) Cuba -Paragraph 6ofArticle XVofGATT 1994 (G/C/M/11 and13andCorr.1)
12.8 Atitsmeeting of5July1996, theCouncil considered therequest foranextension ofawaiver
byCuba (G/L/89) withrespect toparagraph 6ofArticle XVoftheGATT 1994. TheCouncil agreed
torevert tothisissue, asappropriate, inthelightoftheoutcome offurther consultations thatwere
inprogress.
12.9 Atitsmeeting of19September 1996, theCouncil tooknoteofthestatement bytheChairman
thattheconsultations hadledtoanunderstanding thatwaivers falling under paragraph 2ofthe
Understanding inRespect ofWaivers ofObligations under GATT 1994 should follow theprocedure
setoutinparagraph 3ofArticle IXoftheWTO Agreement. TheCouncil approved thedraftdecision
(G/C/W/51/Rev.1) onthewaiver extension, andrecommended itsadoption bytheGeneral Council.
(ii) United States -Former Trust Territory ofthePacific Islands (G/C/M/13 andCorr.1)
12.10 Atitsmeeting of19September 1996, theCouncil considered arequest bytheUnited States
(G/L/101) foranextension ofthewaiver fromitsobligations under paragraph 1ofArticle IofGATT
1994. TheCouncil approved thedraftdecision (G/C/W/53) onthewaiver extension andrecommended
itsadoption bytheGeneral Council.
(iii) United States -Imports ofAutomotive Products (G/C/M/13 andCorr.1 and14)
12.11 Atitsmeeting of19September 1996, theCouncil considered arequest bytheUnited States
(G/L/103 andCorr.1) foranextension ofthewaiver granted inconnection withimports ofautomotive
products. Inlightofonedelegation 'srequest forfurther information onthiswaiver request, theCouncil
agreed torevert tothismatter atitsnextmeeting.
12.12 Atitsmeeting of15October 1996, theCouncil approved thedraftdecision (G/C/W/55) on
thewaiver extension andrecommended itsadoption bytheGeneral Council.
(iv) United States -Andean Trade Preference Act(G/C/M/13 andCorr.1)
12.13 Atitsmeeting of19September 1996, theCouncil considered arequest bytheUnited States
(G/L/102) foranextension ofthewaiver granted inconnection withtheAndean Trade Preference Act.G/L/134
Page 12
TheCouncil approved thedraftdecision (G/C/W/54) onthewaiver extension andrecommended its
adoption bytheGeneral Council.
(v) Canada -CARIBCAN (G/C/M/13 andCorr.1)
12.14 Atitsmeeting of19September 1996, theCouncil considered arequest byCanada (G/L/100)
foranextension ofthewaiver granted inconnection withCARIBCAN. TheCouncil approved the
draft decision (G/C/W/52) onthewaiver extension andrecommended itsadoption bytheGeneral
Council.
(vi) European Communities (G/C/M/13 andCorr.1)
- European Communities -Fourth ACP-EEC Convention ofLomé
12.15 Atitsmeeting of19September 1996, theCouncil considered arequest bytheECandthe
Governments oftheACPStates which werealsoWTO Members (G/L/107 and108)foranextension
ofthewaiver granted inconnection withtheFourth ACP-EEC Convention ofLomé. TheCouncil
approved thedraftdecision (G/C/W/58/Rev.1) onthewaiver extension andrecommended itsadoption
bytheGeneral Council.
- France -Trading Arrangements withMorocco
12.16 Atitsmeeting of19September 1996, theCouncil considered arequest bytheEC(G/L/107
and109)foranextension ofthewaiver granted inconnection withFrance -Trading Arrangements
withMorocco. TheCouncil approved thedraftdecision (G/C/W/59/Rev.1) onthewaiver extension
andrecommended itsadoption bytheGeneral Council.
(vii) South Africa -BaseDates under Article I:4(G/C/M/13 andCorr.1)
12.17 Atitsmeetingof19September1996,theCouncilconsideredarequestbySouthAfrica(G/L/104)
foranextension ofthewaiver granted inconnection withbasedates under Article I:4oftheGATT.
TheCouncil approved thedraftdecision (G/C/W/56/Rev.1) onthewaiver extension andrecommended
itsadoption bytheGeneral Council.
(viii) Zimbabwe -BaseDates under Article I:4(G/C/M/13 andCorr.1)
12.18 Atitsmeeting of19September 1996, theCouncil considered arequest byZimbabwe (G/L/106)
foranextension ofthewaiver granted inconnection withbasedates under Article I:4oftheGATT.
TheCouncil approved thedraftdecision (G/C/W/57/Rev.1) onthewaiver extension andrecommended
itsadoption bytheGeneral Council.
13. Issues raised concerning Members 'trade practices
(a) Brazilian Measure concerning theautomotive sector (G/C/M/8, 9and10)
13.1 Atitsmeeting of29January 1996, theCouncil tooknoteoftheinformation provided byBrazil,
thatafternegotiations withMercosur, theBrazilian Government hadsenttoCongress aProvisional
Measure 1235 thatdealtwiththeautomotive sector.
13.2 Atthemeeting of19March 1996, therepresentative ofBrazil informed theCouncil thatit
hadsubmitted totheSecretariat on15March 1996, arequest forawaiver (G/L/68) fromcertain WTOG/L/134
Page 13
obligations asaconsequence oftheadoption ofaspecial regime concerning investment measures in
theautomotive sector.
13.3 Atthemeeting of22May 1996, Brazil informed theCouncil that, following informal
consultations withinterested WTO Members, ithadwithdrawn itsrequest forawaiver (G/L/75),
presented on15March 1996, regarding theBrazilian automotive regime.
(b) USdraftbillconcerningthedefinitionof"domesticindustry"intheareaofsafeguards(G/C/M/8)
13.4 Atthemeeting of29January 1996, therepresentative ofMexico expressed concern regarding
adraftbillthatwaspassed intheUSSenate concerning thedefinition of"domestic industry" inthe
United States legislation intheareaofsafeguards when dealing withperishable agricultural products.
(c) US-"Cuban Liberty andDemocratic Solidarity Actof1996" (G/C/M/9)
13.5 Atthemeeting of19March 1996, therepresentative ofCuba voiced concern atthesigning
intolawbytheUSPresident ofthe"Cuban Liberty andDemocratic Solidarity Actof1996", which
intheviewofCuba harmed theinterests ofthird-country WTO Members duetoitsextraterritorial
effects".
(d) Banonexports ofwild-harvested shrimps totheUS(G/C/M/9 and10)
13.6 Atthemeeting of19March 1996, therepresentative ofthePhilippines, alsoonbehalf ofthe
ASEAN countries, informed theCouncil thatfollowing thedecision oftheUSCourt ofInternational
Trade on29December 1995, exports ofwild-harvested shrimps totheUSafter1May1996 would
beembargoed iftheexporting country didnotadopt seaturtle conservation programs comparable to
theUSprogram.
13.7 Atthemeeting of22May1996, therepresentative ofHong Kong expressed concern onthis
matter, andrequested further information from theUnited States.
(e) USNarcotics Control Trade Act(G/C/M/9)
13.8 Atthemeeting of19March 1996, therepresentative ofMexico informed theCouncil ofa
USdraftBillwhich ifitbecame lawcould cause problems toUStrading partners. TheBillwould
oblige theUSgovernment toimpose trade sanctions onthose countries which itfeltwerenotdoing
enough toactagainst theproduction ortraffic inillegal narcotics.
(f) Impairment bytheEuropean Community ofTariff Treatment ofHigh Technology Products
(G/C/M/10)
13.9 Atthemeeting on22May1996, theUnited States informed theCouncil thaton2May1996,
ithadrequested consultations withtheECconcerning tarifftreatment being applied tohightechnology
products, i.e.Local AreaNetwork (LAN) equipment andpersonal computers withtelevision capability
(G/L/73).
(g) Argentine footwear (G/C/M/11)
13.10 Atthemeeting of5July1996, theUnited States representative stated thatinSeptember 1995,
Argentina hadenacted decrees which established specific duties forimports offootwear, textiles and
apparel. Intheview oftheUS,these specific duties violated Argentina 'stariff bindings, andits
obligations under theCustoms Valuation Agreement.G/L/134
Page 14
(h) USrequest forConsultations concerning Restrictive Business Practices intheJapanese
Photographic FilmandPaper Market (G/C/M/13 andCorr.1)
13.11 Atthemeeting of19September 1996, theUSrepresentative stated thathisgovernment had
requested consultations onthismatter withJapan pursuant totheCONTRACTING PARTIES 'Decision
of1960on"Restrictive Business Practices: Arrangements forConsultations" under theGATT (BISD
9S/170).
(i) ECproposal on"Trade Facilitation" (G/C/M/15)
13.12 Atthemeeting of1November 1996, under "Other Business", therepresentative oftheEuropean
Communities drewattention toaproposal submitted byhisdelegation ontradefacilitation (G/C/W/67).
Thisproposal covered thequestion ofsimplification andharmonization oftrade procedures inorder
toarrive atlower trade barriers andimproved market access.
14. Agreement onPreshipment Inspection
(a) Commencement ofOperations oftheIndependent Review Entity (G/C/M/10 and15)
14.1 Atthemeetingof22May1996,theChairmaninformedtheCouncilthattheIndependentReview
Entity under theAgreement onPreshipment Inspection, established byDecision oftheGeneral Council
(WT/L/125/Rev.1) atitsmeeting of13December 1995, hadbecome operational asof1May1996
(G/PSI/IE/2).
14.2 Atthemeeting of1November 1996, theChairman informed theCouncil thatsince the
Independent Review Entity (IE)hadbecome operational, theIEhadreceived noapplications requesting
independent review.
(b) Review under Article 6ofthePreshipment Inspection (PSI) Agreement
(G/C/M/13 andCorr.1 and14)
14.3 Atthemeeting of19September 1996, theChairman informed theCouncil thatArticle 6of
thePSIAgreement provided forareview oftheprovisions, implementation andoperation ofthis
Agreement bytheMinisterial Conference attheendofthesecond yearfrom thedateofentry into
forceoftheWTO Agreement. However therewasnospecific bodydesignated toconduct suchareview.
TheCouncil agreed totheChairman 'sproposal toconsult informally onthequestion ofthebody to
bedesignated toconduct thereview aswellasthetiming oftheexercise.
14.4 Atitsmeeting of15October 1996, theCouncil recommended thattheGeneral Council acting
onbehalf oftheMinisterial Conference inaccordance withArticle IV:2oftheAgreement establishing
theWorld Trade Organization, setupaWorking Party under theCouncil withthefollowing terms
ofreference: "toconduct thereview provided forunder Article 6oftheAgreement onPreshipment
Inspection andtoreport totheGeneral Council through theCouncil, inDecember 1997."4
(c) Notifications (G/C/M/15)
14.5 Atitsmeetingof1November1996,theCouncilhadbeforeitdocumentsconcerninginformation
onthenotificationssubmittedbyMembersundertheAgreement.PursuanttoArticle5oftheAgreement,
35Members hadnotified theirlawsandregulations bywhich theyhadputtheAgreement intoforce
4See1of"Section II:Conclusions and/or Recommendations".G/L/134
Page 15
aswellasother lawsandregulations relating topreshipment inspection (G/PSI/N/1, Add.1, Add.2,
Add.3, andAdd.4). Ofthese, 3Members hadnotified lawsandregulations putting theAgreement
onPreshipment Inspection intoforce; 13Members hadnotified other lawsandregulations relating
topreshipment inspection; and19Members hadnotified thattheyhadnolawsorregulations relating
topreshipment inspection.
15. Working Group onNotification Obligations andProcedures
(a) Status ofwork intheWorking Group (G/C/M/9)
15.1 Atitsmeeting of19March 1996, theCouncil tooknoteofthereport provided bytheChairman
ofthatGroup onthestatus ofwork intheGroup. TheGroup hadidentified fourgeneral subjects
forexamination namely: (1)duplication ofnotification obligations; (ii)simplification ofdata
requirementsandthestandardizationofformats;(iii)improvementinthetimingofthereportingprocess;
and(iv)possible assistance tosome developing countries inmeeting theirnotification obligation. The
Council tooknoteofthereport.
(b) Report oftheWorking Group onNotification Obligations andProcedures (G/C/M/14)
15.2 Atitsmeeting of15October 1996, theCouncil considered thereport oftheWorking Group
(G/L/112) andtookthefollowing action ontherecommendations contained inthereport:
(1) itagreed torequest theCommittee onAgriculture toconsider themodified notification formats
contained inthedraftrevision todocument G/AG/2, assetoutindocument G/NOP/W/15 andtorequest
theCommittee onSubsidies andCountervailing Measures toconsider themodified notification formats
contained indraft revision todocument G/SCM/6, assetoutindocument G/NOP/W/15. Both
Committees should consider themodified notification formats withaviewtoachieving greater coherence
andefficiency inthenotification system;
(2) itagreed torequest theGeneral Council totakethenecessary stepstoeliminate thenotification
obligations intheDecisions oftheGATT 1947CONTRACTING PARTIES relating toimport licensing
procedures (L/3756 andSR/28/6)5.TheCouncil alsoagreed torefertheDecisions oftheGATT 1947
CONTRACTINGPARTIESrelatingtoquantitativerestrictionsandnon-tariffmeasures(BISD32S/92-93
andBISD 31S/227-228), andtoMarks ofOrigin (BISD 7S/30-33) totheMarket Access Committee,
andtoretain theDecision onLiquidation ofStrategic Stocks (BISD 3S/51) intheCouncil, forfurther
consideration;
(3) itagreed thatacomprehensive listing ofnotification obligations andthecompliance therewith
byallWTOMembersbemaintainedonanongoingbasisandbecirculatedsemi-annuallytoallMembers.
TheCouncil alsoagreed toanupdating ofthelisting ofnotifications received, assetoutinAnnex III
tothereport oftheWorking Party, prior totheSingapore Ministerial Meeting;
(4) itagreed toconsider thepreparation ofgeneral guidelines forthebodies under itspurview,
providing fortheregular review ofquestionnaires andformats andofthesituation asregards compliance
withnotification obligations;
(5) itagreed toforward thetotheCommittee onTrade andDevelopment therecommendation
that"active consideration begiven ...tothedevelopment ofaspecial programme ofassistance to
developing country Members andparticularly totheleast-developed country Members providing more
5See2(a)of"Section II:Conclusions and/or Recommendations".G/L/134
Page 16
intensive technical assistance, possibly withtheparticipation ofother organizations, focusing onthe
development ofsystems andstructures required torespond tonotification obligations";
(6) itagreed torequest theMinisterial Conference ortheGeneral Council toconsider the
establishment, atanappropriate time, ofabodywithamandate toreview thenotification obligations
andprocedures throughout theWTO Agreement. Alternatively, consideration might begiven tothe
establishment ofabody, ortheextension/modification ofthemandate ofthecurrent Working Group,
toconduct, atanappropriate time, afurther comprehensive review ofthenotification obligations and
procedures intheagreements inAnnex 1AoftheWTO Agreement. Itwassuggested thatfuture work
alsoencompass matters relating totheCentral Registry ofNotifications, electronic transmission of
notifications andfurther work onthenotifications handbook6.
15.3 Inconnection withthelastrecommendation, onedelegate stated thathisdelegation preferred
theestablishment ofabody toconduct attheendof1998 acomprehensive review ofnotification
obligations andprocedures inalltheagreements covered bytheWTO andnotjustthose inAnnex 1A.
16. Implementation oftheAgreement onTextiles andClothing (ATC) andrelated matters
(G/C/M/11, 12,13andCorr.1, 14and15)
16.1 TheCouncil, attherequest ofsome Members, discussed theimplementation oftheAgreement
onTextiles andClothing andrelated matters pursuant toArticle IV:5oftheWTO Agreement andin
preparation fortheSingapore Ministerial Conference. Thediscussion tookplace on5July, 25July,
19September and15October 1996.
16.2 TheCouncil'sdiscussionwasbasedonwrittencontributionsbyPakistanonbehalfoftheASEAN
MembersoftheWTO,i.e.BruneiDarussalam,Indonesia,Malaysia,Philippines,SingaporeandThailand;
andHong Kong, India, Korea andPakistan (G/L/92); theUnited States (G/L/95 andAdd.1); and
theEuropean Communities (G/L/97). TheCouncil alsohadbefore itthereport oftheTextiles
Monitoring Body (G/L/113).
Issues andProblems
16.3 Thefullaccount ofthediscussions intheCouncil wasprovided intheminutes ofitsmeetings
(G/C/M/11-14). Thekeyissues andproblems identified were thefollowing:
(i) Integration Programmes
16.4 Recalling thatacentral feature oftheATC wastheprogressive character oftheintegration
process, concerns wereexpressed thatthefirststage ofintegration programmes implemented byfour
importing Members on1January 1995hadnotbeencommercially meaningful asnoneoftheproducts
integrated (except oneproduct (work gloves) byoneMember) hadbeen subject toquantitative
restrictions. Moreover, these products hadbeenconcentrated inrelatively lessvalue-added areas.
Thefirststage integration hadtherefore notmeaningfully improved access tothese markets. There
werenoindications thatthesecond stage integration on1January 1998would bemore commercially
meaningful. Theintegration programmes should contain amixture ofrestrained andunrestrained
products, andabalanced proportion ofsensitive andnon-sensitive products withgreater emphasis on
clothing. Only integration programmes onthese lines would ensure asmooth transition tothe
GATT/WTO disciplines, intheinterest ofbothrestraining andexporting Members.
16.5 Inresponse, itwasstated thatthechoice ofproducts tobeintegrated ateachintermediate stage
wasamatter foreachindividual Member todecide. Thiscould, withperfect legitimacy, result in
6See2(b)of"Section II:Conclusions and/or Recommendations".G/L/134
Page 17
products being integrated which were notsubject torestrictions. Specific proposals hadbeenmade
inthenegotiations, providing formandatory integration ofrestrained products, butthese proposals
hadnotbeenretained. Therequirements stipulated intheATC hadbeenfullymet. Anumber of
products tobeintegrated orbeing proposed forintegration atStage Twoweresubject toquantitative
restrictions. Thegrowth factors which werealsorequired intheATC werehaving averysignificant
impact onquota levels, bothinterms ofliberalization andtheircontribution tocontinuous adjustments
andincreased competition inthemarkets ofrestraining Members. Furthermore, theATC contained
aprovision forearly elimination ofrestrictions, which oneMember hadmade useof.Inaddition,
itwasstated thatpursuant toArticle 7,Members should takesuchactions asmaybenecessary toabide
byGATT 1994rulesanddisciplines soas,interalia,toachieve improved access toexporting Members '
markets fortextiles andclothing products aspartoftheintegration process.
16.6 Itwasalsoargued thatintegration hadaseparate purpose andhadnotbeendesigned asthe
primary means ofliberalization. Inresponse, itwasargued thattheATC contemplated integration
toproceed inparallel withincreased growth rates; inaddition, boththeseprocesses werealsodesigned
toachieve progressive liberalization oftrade.
(ii) UseofTransitional Safeguards
16.7 Concerns wereexpressed thattheintroduction oftransitional safeguard measures would have
arestrictive aswellasadisruptive effect ontrade, eveniftheyweresubsequently rescinded. They
could alsofrustrate theintegration process. TheATC'stransitional safeguard wasadeviation from
GATT 1994, because itwasselective anddiscriminatory innature. TheATCrecognized theexceptional
natureofthetransitionalsafeguardandprovidedforittobeapplied"assparinglyaspossible,consistently
with theprovisions ofthisArticle andtheeffective implementation oftheintegration process"
(Article 6.1). However, inthefirstyearoftheATC, oneWTO Member hadnotified theinvocation
ofthisclause inrespect of24cases within thespace ofafewmonths against nolessthan14WTO
Members, which werealldeveloping countries. Inthecaseofseven ofthese actions which came in
theformofdispute casesbefore theTMB, threehadbeenrescinded aftertheTMB found nojustification
forthem. Three actions hadbeenbrought before theDispute Settlement Body, ofwhich twowere
currently being examined bypanels. Thefragile grounds onwhich Article 6hadbeeninvoked inthese
cases wasalsoborne outbythefactthatinanother seven cases, therequests forconsultations orthe
measures adopted hadbeenwithdrawn evenbefore theycould bereviewed bytheTMB; thisincluded
anaction where imports ofaproduct hadalready beenrestrained from theMember concerned. An
unduly large number ofrestraints werestillinplace. Thetransitional safeguard hadthusbeenused
inviolation ofthisimportant provision, andalsocontrary tothe"objective offurther liberalization
oftrade" referred tointhepreamble totheATC.
16.8 Inresponse, itwasstated thatanyMember hadtherighttoinvoke safeguard measures. All
theinvocations referred tohadbeenconsistent withATC procedures andwere justified. Anumber
ofmeasures hadbeenrescinded andatpresent 11restraints wereinplace. Requests forconsultations
were made togivetimefortrade toadjust andtoprevent damage inthemarket andoncethiswas
achieved themeasures wererescinded. TheTMB recommendations hadbeenheeded. Theconcept
of"sparingly" wasarelative oneandshould alsobeseeninthelightofthefactthattheMember in
question wasahugeimporter. Theexistence ofthisprovision helped toproceed withgreater confidence
ingoing ahead withtheintegration process. Theoverall effect ofwhat hadhappened seems notto
bediscouraging forthefuture oftheintegration process. Over thelastninemonths theparticular
Member hadmade onlyonerequest forconsultations under thisArticle. Asaresult, thetotalnumber
ofrequests forconsultations hadbeenconsiderably lower thanin1995. Itwasalsoargued thatthe
useofArticle 6wasnotexceptional innature. Inthenegotiations specific proposals hadbeenmade
thatwould haveavoided theuseofdiscriminatory measures, buttheseproposals hadnotbeenretained.G/L/134
Page 18
(iii) Bilaterally Agreed Arrangements
16.9 Itwasstated thatafundamental concept oftheATCwastostrengthen themultilateral disciplines
inthefieldoftextile andclothing trade withaviewtoensuring finalintegration ofthesector intothe
GATT/WTO rules. Itwasrecalled that,inthecontext ofsafeguard measures, anumber ofbilateral
arrangements hadbeennotified. Concern wasexpressed thatthough under theATC theTMB was
required todetermine whether these bilateral arrangements hadbeenjustified inaccordance withthe
provisions ofArticle 6,some ofthese hadnotbeensubsequently confirmed bytheTMB asbeing in
conformity withtheprovisions oftheATC. Theabsence ofendorsement byTMB ofasafeguard action
didnotmake thesafeguard action legal. Thus, theintegrity ofthemultilateral rules anddisciplines
wasweakened.
16.10 Inresponse, itwasstated thatArticle 6made explicit provisions forbilaterally agreed restraint
measures, andsome otherArticles alsoprovided thatMembers consult withaviewtoreaching mutually
agreed solutions. Intheabsence ofconfirmation bytheTMB, asafeguard action didnotbecome illegal.
During thenegotiations aproposal hadbeenmade formandatory endorsement ofsafeguard actions
bytheTMB. Thisproposal hadnotbeenretained.
16.11 Inresponse, itwaspointed outthatArticle 6.9oftheATC provided foraTMB determination
astowhether bilaterally agreed restraint measures wereinaccordance withtheprovisions ofArticle 6.
(iv) Functioning oftheTextiles Monitoring Body
16.12 Itwasrecalled thattheTMB wasrequired tosupervise theimplementation oftheATC, to
examine allmeasures taken under itandtheirconformity therewith, andtotaketheactions specifically
required ofitbytheATC(Article 8.1). Before raising atextile matter intheDispute Settlement Body,
ithadfirsttoberaised attheTMB. Concerns wereexpressed that,inorder toretain theconfidence
ofallMembers, there wasaparticular needtoenhance transparency oftheTMB'sfunctioning, and
toensure adpersonam participation byitsmembers soastoensure impartiality. TheTMB had
recognized thatinafewcases itcould notarrive ataconsensus decision onmatters brought toit,and,
therefore, could notfulfilitsmandate. This, apartfromhaving anadverse impact ontrade, hadseriously
modified thebalance ofrights andobligations oftheATC. TheTMB should ensure thatsuchsituations
didnotariseinfuture. TheTMB should giveadequate reasons foritsrecommendations or,where
recommendations should havebeenmade butwerenotmade, themainreasons underlying theTMB's
failure todischarge itsfunctions should have been made known. Thiswould have enhanced the
effectiveness andaccountability oftheBody asawhole andwould have further strengthened the
confidence ofWTO Members thatthewayTMB functions wasfair.Those Members which maintained
apermanent seatintheBody hadtheadvantage ofmaintaining an"institutional memory" onpoints
which could berevisited inthefuture, unlike other Members whose representatives served intheTMB
onarotating basis. Greater transparency would provide rotating members withabetter understanding.
Inreviewing safeguard measures, theTMB had,onoccasions, failed topoint outsubstantive aswell
asprocedural inconsistencies inmeasures taken. Itsreview process hadnotalways taken place within
ATCdisciplines. TheTMB should alsomake available notifications received byittoallWTO Members
without delay. Under Article IV:5oftheWTO Agreement, theCouncil "shall oversee thefunctioning
oftheMultilateral Trade Agreements inAnnex 1A."
16.13 Inresponse, itwasstated thattheTMB haddoneitsjobunder difficult circumstances; one
hadfullconfidence initscompetence andintegrity. TheTMB hadsucceeded, byasystematic approach,
insetting certain standards forassessing thejustification oftheexistence ofserious damage. TheTMB's
roleandresponsibilities asestablished bytheATC should berecognized. Theview thattheTMB
haderred inprocedures andsubstance onsome occasions could notbeshared. Some oftheTMB's
problems wereduetoambiguities intheATC itself. TheTMB wasaquasi-judicial body, therefore,
there werereasonable limits tohowtransparent itcould be.TheTMB hadacknowledged problemsG/L/134
Page 19
withdecision-making andhadmentioned aspossible factors thecircumstances ofitsestablishment,
thelarge number ofdisputes ithadfaced andtighttime-constraints under which itoften operated.
Itsreports hadtobecarefully crafted andifmore transparency wasrequested thenthereports would
havetobemore detailed, which would inturnalsoincrease theTMB'sworkload anddifficulties with
respect todecision-making. Despite bestefforts andcertainly good faithefforts, theTMB hadfaced
cases thenature ofwhich required time-itwasunfair tocriticise this. Onecould onlyurgethatit
make greater efforts andhopethatitsmembers could overcome divergencies ofviews andenhance
TMB'sability toreach consensus. TheTMB'sreport totheCouncil hadfacilitated increased
transparency, which should beencouraged.
16.14 Itwasalsostated thatthedegree ofacceptance orcompliance withTMB recommendations
would beoneimportant element inanyassessment ofitsfunctioning. Itwasargued thatthefactthat
oneMember declined tofollow aTMB recommendation affirming aMember 'ssafeguard action
undermined theATC'sassumption thatMembers would follow theTMB'srecommendations.
16.15 Inresponse, itwaspointed outthattheATCdidnotrequire governments tocomply withTMB
recommendations buttoendeavour toaccept them infullandthatitwould bewrong toimply that
affected exporting Members should notexercise thedispute settlement rights under Article 8.10.
(v) Treatment ofSmall Suppliers andLeast Developed Countries
16.16 With respect tosmall suppliers, itwasrecalled that,according toArticle 1.2,meaningful
increasesinaccesspossibilitiesmustbeprovidedforsmallsuppliers,usingtheprovisionsofArticles2.18
and6.6(b). Concern wasexpressed thattheonlywaytodetermine iftheprovisions werebeing complied
withwastoreceive notifications from Members imposing ormaintaining restrictions, indicating the
wayinwhich "meaningful increases" inaccess possibilities were being implemented.
16.17 Inresponse itwasstated thattheMembers wereabiding nowandwould continue toabide by
theirobligations tosmall suppliers.
16.18 Itwasrecalled thattheATCprovided that,totheextent possible, exports fromaleast-developed
country Member might alsobenefit fromtheprovisions ofArticle 2.18(concerning improved growth
inquotalevels)soastopermitmeaningfulincreasesinaccesspossibilitiesforsuchMembers.Provisions
onspecial treatment ofLLDCs hadalsobeenprovided inthepreamble, inthefootnote toArticle 1.2
andinArticle 6.6(a). These provisions didnotspecify theprecise modalities foraccording such
treatment, butonewaymight betoreview thequotas inplace, including more favourable growth rates.
IntheMarrakesh Declaration, Ministers hadrecognized theimportance oftheimplementation ofspecial
provisionsfortheLLDCsandhaddeclaredtheirintentiontocontinuetoassistandfacilitatetheexpansion
oftheirtrade andinvestment opportunities. They hadagreed tokeepunder regular review bythe
Ministerial Conference andtheappropriate organs oftheWTO theimpact oftheresults oftheUruguay
Round ontheLLDCs withaview tofostering positive measures toenable them toachieve their
development objectives. Positive measures wererequired tostopthefurther marginalization ofLLDCs,
whose integration intotheglobal trading system would beintheinterest ofallWTO Members.
16.19 Inresponse, itwasstated thatMembers were abiding nowandwould continue toabide by
thebestendeavour provisions infavour ofLLDCs. OneMember added thatalthough itmaintained
restraints oncertain textile exports ofanLLDC Member, thatMember, although being averylarge
supplier, hadunusually freeaccess andbenefitted frominitial quota growth ratesinexcess of8percent.
Another Member added thatithadnorestraints onLLDCs andthatitapplied zerotariffs.G/L/134
Page 20
(vi) Particular Interests ofCotton-Producing Countries
16.20 Recalling thataccording toArticle 1.4"theparticular interests ofthecotton producing exporting
Members should, inconsultation withthem, bereflected intheimplementation oftheprovisions of
thisAgreement", itwaspointed outthat,aswasclearfromthequoted wording, theonusofconsultations
wasontheimporting Member integrating products intoGATT 1994. Concern wasexpressed thatno
suchconsultations hadbeennotified, norheld. TheTMB hadreceived nonotifications relating to
theimplementation ofthisprovision. Itshould havesought information fromtheMembers concerned.
Therefore therequirements ofthisprovision hadnotbeen fulfilled andtheparticular interests of
cotton-producing exporting Members hadnotbeenreflected intheimplementation oftheprovisions
oftheATC.
16.21 Inresponse itwasstated thatthisprovision hadbeenfaithfully implemented. Nospecific
consultations hadbeenrequested from anyMember withrespect tothisprovision. Some Members
hadheldconsultations withanumber ofcountries which theyconsidered toberelevant toArticle 1.4.
There wasnoobligation tonotify theTMB andnoMember hadtaken thisissue totheTMB.
(vii) Rules ofOrigin
16.22 Itwasrecalled thataccording totheATC theintroduction ofchanges, suchaschanges in
practices, rules andprocedures, should notupset thebalance ofrights andobligations between the
Members concerned; adversely affect theaccess available toaMember; impede fullutilization of
suchaccess; ordisrupt tradeunder theATC(Article 4.1). TheAgreement onRules ofOrigin (ARO)
further provided thatpending thecompletion oftheworkprogramme forharmonization oforigin rules,
Members should ensure, interalia,thattheirrules oforigin were notusedasinstruments topursue
trade objectives directly orindirectly. Concerns wereexpressed thatoneMember hadimplemented
changes initsorigin rulesfortextile andclothing products asaninstrument oftrade policy. Thiswas
contrary totheprovisions oftheARO aswellasArticle 4oftheATC, andhadintroduced great
uncertainty andunpredictability withadverse effects ontheexports ofalarge number ofMembers.
Corrections tothissituation werenecessary. Theharmonization oftherulesoforigin hadbeenmandated
bytheARO tobeundertaken atthemultilateral level; thefactthattheMember concerned had
harmonized itsrules oforigin relating toimports oftextiles andclothing products unilaterally
demonstrated thatithadproceeded contrary totherelevant provisions oftheARO andtheATC. This
development wasverydisturbing considering thattheobjective oftheATC wastobring about further
liberalization, notrestrictions, oftrade intextiles andclothing.
16.23 Inresponse, itwasstated thatMembers requesting consultations under Article 4wererequired
toshow thatthere hadbeenachange intheimplementation andadministration ofrestrictions andif
thatwasthecase,thattheyhadbeenadversely affected ortradedisrupted. Inconsultations withvarious
Members, ithadinanumber ofcases beenagreed thattheimplementation ofrevised origin ruleshad
hadnoadverse impact. Incases where adverse impact could bedemonstrated, theparticular Member
wasworking towards amutually satisfactory solution. Thenewruleshadbeendesigned toconform
withrulesofotherMembers andalsotoprovide greater protection against circumvention. OneMember
hadexpressed concern about thenewrulesandwasconsulting withtheMember inquestion, buthad
sofarnotrequested theintervention ofanyWTO body. TheMembers whofeltthattheywereaffected
bythechanges intherules were freetoraisethematter intheappropriate forum.
(viii) Other ATC Issues (Outward Processing Trade, Special Regimes, etc.)
16.24 Itwasstated thatafundamental principle oftheGATT/WTO wastheelimination of
discriminatory treatment ininternational commerce. Concerns wereexpressed, however, thatspecial
regimes werecontinually being extended toprovide better access tocertain Members. Special regimes
werealsobeing usedtopromote theinterests ofspecial interest groups inimporting countries, suchG/L/134
Page 21
asmanufacturers offabrics attheexpense oftheexport oftextile andclothing products fromdeveloping
country manufacturers. Itshould beensured thataccess rights ofother restrained Members werenot
adversely affected.
16.25 Inresponse itwasstated thattheATC required more favourable treatment toqualifying re-
imports asdefined bythelawsandpractices oftheimporting country. TheATC gaveimporting
Members discretion onwhat typeofmore favourable treatment wastobegiven tothistrade. A
particular Member wascurrently providing more favourable treatment tore-imports under itsoutward
processing programme, fullyconsistent withtheATC.
(ix) Relationship Between Restrictions andRegionalism
16.26 Concerns wereexpressed thatexpanding restrictions inthecontext ofregionalism hadadverse
implications, especially fortheexport prospects ofdeveloping country Members. Unilateral restrictions
under thepretext ofregional obligations could notbejustified under GATT 1994ortheATCandcould
undermine theimplementation oftheATC objective offurther liberalization oftrade.
16.27 Inresponse, itwasstated thatregionalism could beneficially influence trade inoverall terms
through itsimpact onbothquantitative restrictions andtariff rates. General conclusions could notbe
drawn fromveryspecific individual cases. Thegeneral question ofregionalism should appropriately
bediscussed intheCommittee onRegional Trading Arrangements.
(x) UseofTrade Measures forNon-Trade Purposes
16.28 Concerns were expressed thatpressures hadbeengrowing fortrade measures inpursuit of
non-trade objectives, particularly affecting textile products. Often, suchmeasures carried aprotectionist
bias,were based oncriteria outside theframework ofWTO rules anddisciplines, produced serious
disruptive effects forthetradeinterest andprospects ofdeveloping country Members, andmayimpinge
ontheeffective implementation oftheATC. Measures being adopted orcontemplated under thepretext
ofsocial andenvironmental concerns were examples ofsuchnon-tariff barriers.
16.29 Inresponse itwasstated thatitwasinappropriate toconcentrate onjustonesector when dealing
withthisissue which hadamuch broader scope thantextiles trade. Thesubject should bedealtwith
inawider context.
(xi) Market Access
16.30 Itwasstated thatanimportant element oftheATCwasincreased opening ofthetextiles markets
ofallWTO Members. Article 7.1(a) provides that"aspartoftheintegration process andwithreference
tothespecific commitments undertaken bytheMembers asaresult oftheUruguay Round, allMembers
shalltakesuchactions asmaybenecessary toabide byGATT 1994 rules anddisciplines soasto:
(a)achieve improved access tomarkets fortextile andclothing products through suchmeasures as
tariffreductions andbindings, reduction orelimination ofnon-tariff barriers, andfacilitation ofcustoms,
administrative andlicensing formalities". Concerns were expressed thatsome exporting Members
hadnotcomplied withtheir obligations under Article 7.Inexamining theextent towhich the
commitment toachieve improved access tomarkets hadbeencomplied with, attention should alsobe
paidtoanyinstances where defacto market access hadbeenreduced through theraising ofapplied
tariffrates, inaddition tothereduction orelimination ofnon-tariff barriers. OneMember hadinvited
exporting Members tomake itclear inwhat waytheywould beprepared togiveeffect tothis
commitment. Atrade-off fortheprogressive liberalization ofrestraints byimporting Members was
theremoval ofvarious impediments totextile imports byexporting Members.G/L/134
Page 22
16.31 Inresponse, itwasstated thattheUruguay Round results constituted atotalpackage witha
general equilibrium between rights andobligations forallMembers. Benefits given tocertain Members
intheATCthrough progressive integration ofthetextile andclothing tradeintotheATCweretrade-offs
fortheobligations these Members hadundertaken inother Agreements. Besides, Article 7explicitly
referred to"specific commitments undertaken byMembers asaresult oftheUruguay Round" and
therefore therewasnoobligation onthepartofanyMember toprovide additional market access over
andabove thecommitments already included initsSchedule ofCommitments. International tradecould
notbeconducted onabasisofsectoral reciprocity. There hadbeennotifications expressing appreciation
tocertain exporting Members forhaving provided effective access intheirmarkets fortextiles and
clothing products. Noprovisions intheATCrequired thattheintegration beconditional ontheremoval
ofimpediments totextile imports byexporting Members. Theapproach undertaken byimporting
Members atoffering more meaningful integration inexchange forgreater market access inexporting
Members wasnotjustified. Thesuggestion thatattention should alsobepaidtoincreased applied tariff
rateswasrejected because themultilateral trading system had,asitscornerstone, theconcept ofbindings
oftariffs. ItwastherightofanyMember toapply anyratessolongasthese werewithin thebound
levels initsschedule. Applied ratescould fluctuate depending ontherevenue anddevelopment needs
ofMembers.
16.32 Inresponse, itwasstated thatthere wasnoattempt toestablish anewkindofconditionality;
whatwasbeing looked forwasthewidest possible contribution totheworldwide liberalization oftrade
intextiles andclothing. AMember, ofcourse, might adjust anapplied tariffrateupwards tothebound
level. However, onewould seriously question thelogic ofthose whowould argue thatthere wasno
deterioration oftherealconditions ofmarket access tocountries thatmake suchadjustments.
16.33 Thepoints were alsomade thatneither intheMarket Access Committee, theTMB northe
DSB hadthere been complaints astocompliance withmarket access obligations. Thescheduled
commitments onlyprovided secure andpredictable trading opportunities anddidnotnecessarily translate
intohigher trade volumes ineachcase. Moreover, alarge group ofMembers hadadopted unilateral
liberalization measures. What wasneeded wasamechanism which would enable those Members to
becompensated forthese measures which hadbenefitted thewhole multilateral trading system.
(xii) Rules andDisciplines
16.34 Itwasstated thattheCouncil should examine Members 'compliance withGATT 1994 rules
anddisciplines having animpact ontradeinthetextiles sector. Ifnecessary, itshould request relevant
information fromother relevant bodies suchasthose dealing withanti-dumping, balance-of-payments,
subsidies and/or theprotection ofintellectual property.
16.35 Inresponse itwasstated thataneffective evaluation oftheimplementation oftheATC should
notbeextended tocompliance withother WTO disciplines. There wereconcerns about thegrowing
misuse ofanti-dumping proceedings ontextile products which resulted inthedisruption anddislocation
oftradeamounting totradeharassment. Anyperceived non-fulfilment ofobligations should bebrought
totheattention oftherelevant Committees.
(xiii) Circumvention
16.36 Concerns were expressed thateffective implementation oftheATC depended onexporting
Members adopting effective measures toprevent circumvention oftheAgreement. Transshipment,
inparticular, wasalargeandgrowing problem. Theoverall problem oftransshipment wasmuch bigger
thantheamount ofimports which hadbeensubject tocharge-back.Members hadcommitted themselves
intheATC toestablish thenecessary mechanisms todealwiththisproblem. They should abide by
thisandcommit themselves tocloser cooperation inthisarea.G/L/134
Page 23
16.37 Inresponse itwasstated thattheconcerned Members continued tofully implement anti-
circumvention measures. They hadfully cooperated withtheirtrading partners atcombating and
redressing situations which might suggest theexistence ofcircumvention. They reaffirmed their
commitments toclose cooperation butstated thatrecourse totheremedies provided forintheATC
wastheproper course tofollow. Oneofthemain problems wasthesubjective manner inwhich the
circumvention provisions werebeing interpreted andapplied. Themagnitude oftheproblem should
notbeexaggerated. Itwasalsopointed outthatimplementation oftheATC could notbemade
conditional oneffective anti-circumvention measures.
*****
16.38 Divergent views wereexpressed withrespect topossible conclusions and/or recommendations,
withreference totheissues andproblems referred toinparagraphs 16.4-16.37 above.
16.39 AttheCouncil 'smeeting of1November 1996Hong Kong, onbehalf alsooftheASEAN WTO
Members, i.e.Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore andThailand; and
Colombia, Costa Rica, India, Pakistan andPeruandwiththesupport ofsome otherMembers, presented
under"OtherBusiness"aproposalforconclusionsandrecommendationsinrespectoftheimplementation
oftheAgreement onTextiles andClothing. Theproposal wassubsequently circulated asG/C/W/65.
16.40 Atthesamemeeting, alsounder "Other Business" Pakistan, onbehalf ofanumber ofMembers,
presented adraftofaMinisterial Decision, subsequently circulated asG/C/W/66.
16.41 Divergent views were expressed onhowthese proposals should betreated.
17. Textiles Monitoring Body (TMB)
Report oftheTMB (G/C/M/14)
17.1 TheTextiles Monitoring Body isastanding body oftheWTO setuppursuant toArticle 8:1
oftheAgreementonTextilesandClothingtosupervisetheimplementationoftheAgreement,toexamine
allmeasures taken under it,andtheirconformity withit,andtotaketheactions specifically required
ofitbytheAgreement. TheTMB consists ofaChairman and10members. Themembers areappointed
byMembers designated bytheCouncil toserve ontheTMB, discharging their function onan
adpersonam basis. TheTMB'sreport istherefore notareport byabodyconsisting ofWTO Members.
17.2 Atitsmeetingof15October1996,theCouncilconsideredtheReportoftheTextilesMonitoring
Body (G/L/113) inthecontext ofthepreparations fortheSingapore Ministerial Conference. Thefull
account ofthediscussions intheCouncil wasprovided intheminutes ofthemeeting (G/C/M/14).
Thefollowing is(a)asummary ofthecomments made byMembers atthatmeeting; and(b)action
taken bytheCouncil.
A. Summary ofComments Made byWTO Members
17.3 Some Members stated thatthereport wasacomplete, well-documented analysis oftheactivities
oftheTMB based onthemandate given toitintheATC. Itwasthemostimportant reference document
foranalysis oftheimplementations oftheATC, giving afactual account onthewayinwhich the
Members hadcomplied withtheirobligations andthewayinwhich thedifferent problems which had
arisen hadbeen analyzed andassessed. Itwasanimportant contribution totheCouncil towards
understanding themajor complexity ofthematters being handled bytheBody andthedifficulties therein.
TheTMB wasahard-working body, andanumber ofdelegations appreciated theamount oftimeand
effort given bytheTMB members anditsChairman tocompleting thereport. Itwasalsostated that
itwasapparent thattheTMB hadrelied extensively onnotifications byMembers toperform itstasks.G/L/134
Page 24
17.4 Some Members stated that,according toArticle 8.3,theTMB wassupposed alsotorelyon
additional andsupplementary information thatcould orshould beavailable toit.Incertain cases, it
hadnotsoughtsuchinformation,e.g.fromtheimportingaswellasthemajorcotton-producingMembers
astowhether consultations required under Article 1.4hadbeen conducted. TheTMB hadalso
overlooked changes intherules oforigin ofoneimporting Member andshould havebeenabletoat
leaststatethatthetransitional safeguard hadnotbeensparingly used. TheTMB hadreceived butnot
yetdisclosed anumber ofnotifications involving administrative arrangements. Itwould seemimportant
fortheTMB toreview these toensure thattheywereconsistent withtheprovisions oftheATC. It
wasalsostated thatthereport confirmed almost allconcerns voiced withregard totheoperation of
theTMB, aswellasontheimplementation oftheATC.
17.5 Inresponse itwasstated thatnocomplaints hadbeenbrought totheTMB concerning changes
intherules oforigin norabout non-sparing useoftransitional safeguards.
17.6 Itwasstated thatwhile theTMB hadbrought outtheabsence ofcommercially meaningful
integration inthefirststage, ithaderred innotpointing outthattheintegration programmes ofMembers
which didnotmaintain quantitative restrictions carried overfromtheMFA wasanotional integration,
andthattheproducts theyselected forintegration hadnoimplication fortheaccess; unlike inthecase
ofthefourother Members.
17.7 Inresponse itwasstated thattheTMB hadhandled theintegration notifications inafactual
andseparate manner which recognized thattheobligations concerning integration arose fromdiffering
legalprovisions (paragraphs 7(a)and7(b)ofArticle 2).
17.8 Itwasalsostated thatthereport should haveincluded information astowhether theMember
taking safeguard action hadclaimed serious damage oractual threat thereof orboth, andwhether the
TMB hadfound serious damage oractual threat orboth.
17.9 Inresponse itwasstated thatsuchinformation wasnotanimportant andcertainly notanecessary
element thatshould havebeenincluded inthereport.
17.10 Some Members stated thatthemanner inwhich Article 6notifications hadbeenreviewed by
theTMB didnotalways seem tohavetaken place within thedisciplines oftheATC. Forexample
specific limits lower thantherollback level, inconsistent withtheATC, should havebeenpointed out
bytheTMB. TheTMB hadaccepted, inseveral cases, bilateral solutions which werenotconsistent
withtheletter andthespirit oftheATC; inthisconnection, theso-called Guaranteed Access Levels
(GALs) were mentioned. TheTMB hadconcluded thatanotified restraint wasjustified "inoverall
terms", atermnotusedinArticle 6.When further bilateral consultations hadbeenrecommended,
rights andobligations hadbeenmodified. Doubts were expressed withregard toastatement inthe
report thatMembers invoking thesafeguard provisions had,inallcases, strictly observed theprocedural
requirements. TheTMB hadgonebeyond theprovisions oftheATC, inthatArticle 8.9didnotenvisage
anyrequirement ofMembers "tocomply" withTMB recommendations, especially when readwith
theprovision ofArticle 8.10which enabled Members topursue unresolved matters intheDSB. It
wasalsorecalled thattheTMB hadstated itsawareness oftheconcerns expressed bysome Members
withrespect tolackofsufficient improvements inaccess tomarkets insome developing country
Members. However, therehadnotbeenanynotification byanyWTO Member totheTMB withregard
totheimplementation ofArticle 7.Norhadthere beenanycommunication fromtheMarket Access
Committee totheTMB onthematter ofcross- andreverse-notifications. Itwassurprising thatthe
TMB should havemade suchanextra-jurisdictional observation.
17.11 Inresponse tosome ofthesepoints itwasstated thattheGALs involved anoutward processing
programme andArticle 6explicitly notonlypermitted suchprogrammes butrequired thataMember
usingArticle6givemorefavourabletreatmenttoMembersinvolvedinoutwardprocessingprogrammes.G/L/134
Page 25
TheGALs offered tocertain Members werenecessary toremain inconformity withArticle 6.The
remark bytheTMB thatinmostcases Members could comply withrecommendations wasapositive
statement offactwhich didnotreflect distorted legalobligations, namely thatMembers hadbeenable,
following theirbestendeavours, tocomply infullwiththerecommendations made. Inmost cases
Members hadbeenabletoabide byTMB recommendations, which boded wellfortheATC. Reference
hadbeenmade todispute caseswhere theBody could notreach agreement, buttheavoidance ofdecisions
onlateorabsent notifications wasofequal concern. TheTMB wasentitled tomention market access
because Article 8:1entrusted itwithsupervision ofallaspects oftheATC, including Article 7.
17.12 Recalling thatthereport didrecognize thatthere hadbeendifficulties which wereveryoften
duetothelimited amount oftimeavailable toreview dispute cases, theview wasexpressed thatit
would beinconsistent withtheprovisions oftheATCtoprovide time-frames otherthanthose prescribed
inArticle 6.Thedanger ofaccepting suchaview, andtransposing ittoother processes under the
Dispute Settlement Body, could notbeoveremphasized.
17.13 Inresponse, theviewwasexpressed thatthiswassimply stating afact.Itwasunfair tocriticize
theTMB inthismatter. Onecould seefrom thelength ofthereport whattasks theTMB faced. In
some cases itmight notbepossible fortheBody toreach consensus, particularly when itwasoperating
under tightdeadlines.
17.14 Recalling thattheTMB hadexpressed awareness oftheneedforgiving reasons foritsdecisions,
someMembers didnotagree thatmoredetailed reports might render consensus moredifficult toachieve
orrequire additional time. Thediscipline ofhaving toprovide reasons orcommon rationale fora
decision orrecommendation would encourage TMB members tostudy thevarious elements seriously
anddischarge theirduties strictly inanadpersonam capacity. TheTMB'sreviews should bedictated
bytheactions themselves rather thanbytheconvenience oftheparticipants. They believed greater
transparency provided forgreater accountability andtherefore greater acceptability. Itwasfurther
recalled thattheTMB wasconcerned thatinafewcases ithadnotbeenabletoarrive ataconsensus
decision andtherefore could notfulfil itsmandate. TheTMB alsohadsaidthatthiscould havean
adverse impact ontheMembers affected. Itwasactually concerned about theimplications ofunresolved
issues forthecontinued operation oftheAgreement. However, while theTMB stated itsdetermination
totakeallnecessary steps toovercome suchdifficulties, itwentontosaythatsimilar circumstances
could notbeexcluded inthefuture. Itwasofconcern thattheTMB recognized thatithadnotfulfilled
itsmandate under theATC andthenalsorecognized thepossibility thatsuchasituation might occur
again. Furthermore, theTMB wasaware oftheimplications fortrade ofrequests forconsultations
made withaviewtointroducing transitional safeguard measures. However, theTMB onlysaidthat
further efforts would bemade toprovide asmany details andexplanations aspossible. There was
thusneither ademonstration ofwilltoaddress theroots oftheproblem noracommitment toprovide
common rationale.
17.15 Inresponse theviewwasexpressed thattheTMB hadbeenabletoestablish standards forthe
review ofnotifications anddisputes which could provide guidance toMembers withrespect tothe
implementation oftheATC. Thereasons forTMB'sdecisions wereimportant notonlyfortheparties
towhom theyweredirected, butforallother Members. TheTMB hadacknowledged these problems
andwasdetermined tomake every effort toovercome theobstacles toreaching decisions byconsensus
andtotrytomake itsdecisions more understandable. Onecould onlyurgetheTMB tomake greater
efforts soastoenhance itsability toreach consensus decisions. Anassessment ofTMB'sfunctioning
could notbemade without taking intoconsideration circumstances ofitsestablishment, theinitial
workload itwasfaced with, aswellastheimportance ofthissector ofinternational trade. Itwasa
factthatmoredetailed reports might render consensus moredifficult toachieve and/or require additional
time. Explanations incaseofnoconsensus alsorequired consensus intheTMB. Because ofthe
quasi-judicial nature andneutrality requirement oftheTMB there should beareasonable limittoits
transparency. Some alsoargued thatTMB'sproblems werepartly duetoshortcomings intheATCG/L/134
Page 26
itself. TheATC established theTMB andunless onewasready toembark onsubstantial legislative
andnegotiating activity which didnotseem feasible, onehadtocontinue tolivewiththeTMB. The
course ofaction therefore wastotrytoenhance itsfunctioning precisely through adiscussion such
asthepresent one.Bytheverynature ofitsconstitution theTMB hadlimits toaperfect performance.
17.16 Itwasstated thatthereport oftheTMB hadcontributed towards greater transparency ofthe
TMB functioning, andthatthistrend should beencouraged.
B. Action Taken bytheCouncil
17.17 TheCouncil tooknoteoftheTMB'sreport anddecided toannex ittoCouncil 'sownreport
totheGeneral Council.
17.18 TheCouncil alsoagreed totakethefollowing action onthethree recommendations made by
theTMB totheCouncil:
(i) ittooknoteoftheobservations andconcerns contained inparagraph 102oftheTMB report
andrecalled toMembers theparticular importance ofstrictly adhering tothenotification
requirements under theAgreement onTextiles andClothing;
(ii) itagreed thattheChairman resume consultations ontheproposal oftheadpersonam status
ofTMB'smembers (G/C/W/20) atanappropriate time;
(iii) ittooknoteoftherecommendation thatdueconsideration should begiven totheschedule of
meetings oftheTMB intheWTO 'soverall schedule ofmeetings.
18. Proposals andInitiatives forFurther Trade Liberalization
(G/C/M/11, 13andCorr.1, 14and15)
18.1 Atthemeeting of5July1996, therepresentative ofAustralia stated thatwhile thebuilt-in
agenda covered many areas, itfailed todealwithindustrial tariffs. Forthatreason Australia proposed
thattheSingapore Ministerial Conference agree tobegin comprehensive industrial tariff negotiations
intheyear2000, atthesame timeasfurther negotiations inagriculture andservices, andmandate
theCouncil ortheCommittee onMarket Access toundertake preparatory work forsuchnegotiations
asfrom 1997 (G/L/96).
18.2 Atthemeetingof19September1996,therepresentativeofAustraliafurtherclarifiedtheproposal
made byhisdelegation inthecontext ofpreparations fortheSingapore Ministerial Conference. The
Council agreed totheChairman 'sproposal toconsult informally onthismatter.
18.3 Atthemeeting of15October 1996, therepresentative ofAustralia proposed thatadraft
recommendation onthismatter beincluded inthereport oftheCouncil.
18.4 Atthemeeting of1November 1996, therepresentative ofAustralia proposed thattheCouncil
consider theinclusion ofarecommendation inSection IIofitsreport totheeffect that"Members agreed
tokeepunder review theprospect ofeffecting further tradeliberalisation including onanautonomous,
plurilateral ormultilateral basis".
18.5 Inthediscussions ofthismatter intheCouncil, Members expressed divergent views withrespect
tothesubstance oftheAustralian proposal aswellastherequest fortheinclusion ofarecommendation
inthereportoftheCouncil.WhilesomeMembersexpressedsupportinvaryingdegreesfortheproposal,
other Members expressed opposition totheproposal aswellastotherequest forarecommendation.G/L/134
Page 27
18.6 Attheresumed meeting of4November 1996, therepresentative ofAustralia stated thathis
delegation would continue towork withother delegations towards theobjective thattheSingapore
Ministerial Conference underlines thecommitment oftheWTO tothefurther progressive liberalization
oftariffs through successive rounds ofmultilateral trade negotiations. Atthisstage, Australia would
notinsist ontheinclusion oftherecommendation proposed inSection IIoftheCouncil 'sreport.
18.7 Atthemeeting of1November 1996, under "Other Business", aproposal wasalsosubmitted
byCanada onFurther Tariff Liberalization (G/MA/W/9) which recommended aWTO workprogramme
toaddress, interaliatheacceleration ofUruguay Round tariff reductions, expansion ofmembership
forexistingsectoralandharmonizationinitiatives,andidentificationofadditionalsectorsforzero-for-zero
andharmonization initiatives.
18.8 Additionally, twocommunications were submitted atthatmeeting under "Other Business":
onebytheUnited States (G/MA/W/8), concerning theInformation Technology Agreement onfurther
liberalization ofinformation technology products; andonebytheEuropean Communities onbehalf
oftheWTO Members concerned (G/MA/W/10), onTrade inPharmaceutical Products outlining the
review ofpharmaceutical product coverage thathadresulted intheaddition of465products forduty-free
treatment.
19. Singapore Ministerial Conference
(a) Reports ofsubsidiary bodies oftheCouncil (G/C/M/13 andCorr.1, 14and15)
19.1 Atitsmeeting of19September 1996, theCouncil agreed totheChairman 'sproposal toconsult
informally ontheCouncil 'streatment ofthereports ofitssubsidiary bodies.
19.2 Atitsmeeting of15October 1996, theCouncil agreed thatthebroad guidelines withregard
tothehandling ofthereports of12ofitssubsidiary bodies (i.e.,theCommittees onAgriculture, Anti-
Dumping Practices, Customs Valuation, Import Licensing, Market Access, Rules ofOrigin, Safeguards,
Sanitary andPhytosanitary Measures, Subsidies andCountervailing Measures, Technical Barriers to
Trade, Trade-Related Investment Measures andtheWorking Party onStateTrading Enterprises) who
wereexpected tosubmit theirreports onaconsensus basistotheCouncil inthecontext oftheSingapore
Ministerial Conference, would betotakenoteofthose reports andannex themtoitsownreport. This
would bewithout prejudice totheability ofMembers toraisepoints withregard tothereports, and
alsotheability oftheCouncil torecord observations, tomake recommendations, andtotakedecisions,
ifconsidered necessary. With regard tothefactual report fromtheIndependent Entity under thePSI
Agreement andthereport from theWorking Group onNotification Obligations andProcedures, the
Council agreed totreattheminthesame wayastheother 12reports. Asconcerned theTMB report,
theCouncil agreed totheChairman 'sproposal toconsult informally onhowtodealwiththisreport.
19.3 Asregards thereports oftheCommittees onAgriculture (relating totheMarrakesh Ministerial
Decision onMeasures concerning thePossible Negative Effects oftheReform Programme onLeast-
DevelopedandNetFood-ImportingDevelopingCountries)7,Anti-DumpingPractices,CustomsValuation,
Import Licensing, Market Access, Rules ofOrigin, Safeguards, Sanitary andPhytosanitary Measures,
Subsidies andCountervailing Measures, Technical Barriers toTrade andTrade-Related Investment
Measures, theIndependent Entity, theWorking Group onNotification Obligations andProcedures
andtheWorking Party onStateTrading Enterprises, theCouncil atitsmeeting of1November 1996,
tooknoteofthem anddecided toannex them toitsownreport. Asregards thereport oftheTMB,
7Atthetimeofadoption oftheCouncil 'sreport, thereport oftheCommittee onAgriculture ontheImplementation
oftheAgreement onAgriculture andthework oftheCommittee hadnotbeen received. TheCouncil agreed toconsider
thatreport separately after itsreceipt andforward ittotheGeneral Council asanaddendum totheCouncil 'sreport.G/L/134
Page 28
theCouncil tooknoteofitanddecided toannex ittoitsownreport; thisaction waspreceded bya
fullconsideration ofthereport (seediscussion inparagraphs 17.1to17.18).
19.4 Atitsmeeting of1November 1996, theCouncil tooknoteoftheconcerns voiced bysome
delegations onthethirdsentence ofparagraph 15ofthereport oftheCommittee onTechnical Barriers
toTrade (TBT) relating totheissue ofeco-labelling anditscoverage intheTBTAgreement.
(b) Report bytheCouncil forTrade inGoods totheMinisterial Conference (G/C/M/10, 11,13
andCorr.1, 14and15)
19.5 Atitsmeeting of22May1996, theChairman referred tothestatement made bytheChairman
oftheGeneral Council atthemeeting of16April 1996, concerning "Reporting Procedures forthe
Singapore Ministerial Conference" (WT/L/145), andsuggested holding informal consultations ata
laterstage ontheCouncil 'sreport totheSingapore Minsterial Conference.
19.6 Atitsmeeting of5July1996, theChairman stated thatinthecontext ofthestatus ofwork
withrespect totheSingapore Ministerial Conference hewished toaddress twoaspects regarding this
process. While thesituation wassatisfactory inrespect ofscheduled commitments, aserious problem
seemed tobeemerging inrespect ofcompliance withnotification obligations inanumber ofAgreements,
asreflected indocument issued bytheWorking Group onNotification Obligations andProcedures.
Thesecond aspect related totheindication given bytheChairman oftheGeneral Council thatitwould
beappropriate fortheChairmen ofthesectoral Councils topresent anoralreport totheGeneral Council
regardingthecurrentstatusofworkconcerningthepreparationsfortheSingaporeMinisterialConference,
particularly inrespect ofimplementation andthebuilt-in agenda. Accordingly, heintended topresent
anoralreport onhisownresponsibility totheGeneral Council atthemeeting scheduled for18July
1996.
19.7 Atitsmeeting of19September 1996, theCouncil agreed totheChairman 'sproposal toconsult
informally ontheformat andcontent oftheCouncil 'sreport totheSingapore Ministerial Conference.
19.8 Atitsmeeting of15October 1996, theCouncil agreed thattheCouncil 'sreport would consist
oftwoparts, onefactual andonecontaining conclusions and/or recommendations.
19.9 Atitsresumed meeting of4November 1996, theCouncil adopted thereport totheGeneral
Council contained inG/C/W/62/Rev.1, asamended inthelightofthediscussion atthatmeeting8.
8Thereport wassubsequently issued initsfinalversion asG/L/134.G/L/134
Page 29
SECTION II:CONCLUSIONS AND/OR RECOMMENDATIONS
Theconclusions and/or recommendations ofthesubsidiary bodies oftheCouncil arecontained
inthereports oftherespective bodies annexed tothisreport.
Thefollowing conclusions and/or recommendations arisedirectly from thedeliberations of
theCouncil:
1. Agreement onPreshipment Inspection
1.1 TheCouncil recommends thattheGeneral Council acting onbehalf oftheMinisterial
ConferenceinaccordancewithArticleIV:2oftheAgreementestablishingtheWorldTradeOrganization,
setupaWorking Party under theCouncil withthefollowing terms ofreference:
"toconduct thereview provided forunder Article 6oftheAgreement onPreshipment Inspection
andtoreport totheGeneral Council through theCouncil, inDecember 1997."
2. Notification Obligations andProcedures
(a) TheCouncil requests theGeneral Council totakethenecessary stepstoeliminate the
notification obligations intheDecisions oftheGATT 1947 CONTRACTING PARTIES relating to
import licensing procedures (L/3756 andSR/28/6).
(b) TheCouncil requests theMinisterial Conference ortheGeneral Council toconsider
theestablishment, atanappropriate time, ofabodywithamandate toreview thenotification obligations
andprocedures throughout theWTO Agreement. Alternatively, consideration might begiven tothe
establishment ofabody, ortheextension/modification ofthemandate ofthecurrent Working Group,
toconduct, atanappropriate time, afurther comprehensive review ofthenotification obligations and
procedures intheagreements inAnnex 1AoftheWTO Agreement. Itwassuggested thatfuture work
alsoencompass matters relating totheCentral Registry ofNotifications, electronic transmission of
notifications andfurther work onthenotifications handbook.WORLD TRADE ORGANIZATION
ORGANISATION MONDIALE DUCOMMERCEG/L/134/Add.1
7November 1996
ORGANIZACI ÓNMUNDIAL DEL COMERCIO(96-4726)
Council forTrade inGoods
1November 1996
REPORT OFTHE COUNCIL FOR TRADE INGOODS
TOTHE GENERAL COUNCIL
Addendum
Atitsresumed meeting of5November 1996, theCouncil tooknoteofthereport ofthe
Committee onAgriculture ontheimplementation oftheAgreement onAgriculture andthework of
theCommittee anddecided toannex ittoitsownreport.
Conseil ducommerce desmarchandises
1ernovembre 1996
RAPPORT DUCONSEIL DUCOMMERCE DESMARCHANDISES
AUCONSEIL GENERAL
Addendum
Alaréunion quiarepris le5novembre 1996, leConseil aprisnotedurapport duComité
del'agriculture surlamiseenoeuvre del'Accord surl'agriculture etlestravaux duComité etadécidé
del'annexer àsonpropre rapport.
Consejo delComercio deMercancías
1ºdenoviembre de1996
INFORME DEL CONSEJO DEL COMERCIO DEMERCANC ÍAS
ALCONSEJO GENERAL
Addendum
Enlareunión reanudada el5denoviembre de1996, elConsejo tomó notadelinforme del
Comité deAgricultura acerca delaaplicación delAcuerdo sobre laAgricultura ylalabor delComité
ydecidió adjuntarlo como anexo asupropio informe.WORLD TRADE ORGANIZATION
ORGANISATION MONDIALE DUCOMMERCEG/L/134/Add.1/Corr.1
7November 1996
ORGANIZACI ÓNMUNDIAL DEL COMERCIO(96-4735)
Council forTrade inGoods
1November 1996
REPORT OFTHE COUNCIL FOR TRADE INGOODS
TOTHE GENERAL COUNCIL
Corrigendum
Inthefirstlinereplace "5November 1996" with"6November 1996".
Conseil ducommerce desmarchandises
1ernovembre 1996
RAPPORT DUCONSEIL DUCOMMERCE DESMARCHANDISES
AUCONSEIL GENERAL
Corrigendum
Alapremière ligne, remplacer "5novembre 1996" par"6novembre 1996".
Consejo delComercio deMercancías
1ºdenoviembre de1996
INFORME DEL CONSEJO DEL COMERCIO DEMERCANC ÍAS
ALCONSEJO GENERAL
Corrigendum
Enlaprimera línea, sustitúyase "5denoviembre de1996" por"6denoviembre de1996".SECTION V
COUNCIL FOR TRADE INSERVICESWORLD TRADE S/C/3
6November 1996
ORGANIZATION(96-4706)
Council forTrade inServices
COUNCIL FOR TRADE INSERVICES
Report totheGeneral Council
PartI:Activities oftheCouncil andSubsidiary Bodies
1. TheCouncilforTradeinServiceshasheldninemeetingsduring1996.Reportsonsuchmeetings
arecontained indocuments S/M/8 -16. TheCouncil addressed thefollowing matters:
Procedures fortheImplementation ofArticle XXI(Modification ofSchedules)
2. Paragraph 5ofArticle XXIoftheGATS (Modification ofSchedules) callsupon theCouncil
forTrade inServices toestablish procedures forrectification ormodification ofschedules. Ininformal
consultations intheUruguay Round, participants hadbeenworking onthebasisofadetailed preliminary
draftofsuchprocedures. During 1995, informal consultations started under theCouncil onthebasis
ofthatdraftandcontinuedin1996resultinginthreeconsecutiverevisionsthelastofwhichwascirculated
inaninformal notebytheSecretariat dated 23May1996. Several delegations expressed theview
thatinthelightofadditional questions which hadbeenraised, informal consultations should continue
withaviewtoproducing afinaldrafttextforconsideration andadoption bytheCouncil. Consultations
arecontinuing.
Taxes andSubsidies attheSub-Central Level
3. InaccordancewiththestatementmadebytheChairmanoftheGroupofNegotiationsonServices
dated 13December 1993(MTN.GNS/50), participants intheUruguay Round weregiven anadditional
period oftimeuntil15June1994 tocomplete thescheduling ofmeasures relating tosubsidies and
taxes atthesub-central level. Thestatement alsostipulated that"itisunderstood thatthisprocess will
notresult inanyalteration inthenegotiated balance ofrights ofobligations. Foraperiod ofthirty
daysstarting on16June1994, ifanyparticipant considers thatsuchbalance hasbeenaltered asaresult
ofscheduling additional measures, itmayconsult withtheparticipant orparticipants concerned with
aviewtoreaching asatisfactory adjustment". Pursuant tothatstatement, theUnited States submitted
acommunication, contained inPC/SCS/W/4 dated 30June1994, through theSub-Committee on
Services. Upon request fromdelegations, thecommunication wassubject tomultilateral consultations
under theauspices oftheSub-Committee onServices during 1994andunder theauspices oftheCouncil
during 1995 and1996. Atitsmeeting of4March 1996, theCouncil considered aninterim report
ontheprogress achieved inconsultations thusfar(S/C/W/13). TheCouncil tooknoteofthereport
andagreed thatmultilateral consultations shallcontinue withaviewtoreaching asatisfactory outcome
fullyconsistent withGATS disciplines. Anumber ofdelegations tooktheviewthatfuture consultations
onthematter should notbedirected towards factfinding, butshould focus onpractical solutions to
theproblems identified inprevious consultations.S/C/3
Page2
Notification oftheEstablishment ofEnquiry andContact Points
4. Paragraph 4ofArticle IIIandparagraph 2ofArticle IVoftheGATS callupon Members to
establish enquiry points and,where appropriate, contact points within twoyears fromthedateofentry
intoforceoftheAgreement. However, thesearticles donotrequire thenotification oftheestablishment
andlocation ofthese agencies. Given theobjective behind theestablishment ofsuchagencies, the
Council considered itdesirable thattheirexistence andlocation bemade known. TheCouncil therefore,
atitsmeetingon28May1996,adoptedthe"DecisionontheNotificationoftheEstablishmentofEnquiry
andContact Points" (S/L/23) which callsuponMembers tonotify theestablishment ofsuchagencies.
Sofartwenty-four Members havesubmitted suchnotifications (S/ENQ/1 -24).
Notifications pursuant toArticle V(Economic Integration)
5. Atitsmeeting on22November 1995, theCouncil forTrade inServices hadreceived a
communication from theEuropean Communities andtheirMember States notifying the"Economic
Integration Agreement" asinstituted bytheTreaty ofRome, subsequently enlarged, andmodified most
recently bytheTreaty ontheEuropean Union. Atitsmeeting on23September 1996, theCouncil
decided torequest theCommittee onRegional Trade Agreements toexamine theAgreement interms
ofitsconsistency withtheprovisions ofArticle VoftheGATS.
6. TheCouncilhasalsoreceivednotificationspursuanttoparagraph7(a)ofArticleVfromAustralia
andNewZealand (S/C/N/7), theEuropean Communities andtheirMember States andtheSlovak
Republic (S/C/N/23), theRepublic ofHungary (S/C/N/24), theRepublic ofPoland (S/C/N/25), the
Czech Republic (S/C/N/26), Romania (S/C/N/27) andtheKingdom ofNorway, theRepublic ofIceland
andthePrincipality ofLiechtenstein (S/C/N/28).
Atitsmeeting on30October 1996theCouncil decided torequest theCommittee onRegional
Trade Agreements toexamine thefollowing agreements:
- ProtocolonTradeinServicestotheAustralia-NewZealandCloserEconomicRelations
Trade Agreements (S/C/N/7)
- Europe Agreement between theEuropean Communities andtheirMember States and
theSlovak Republic (S/C/N/23)
- Europe Agreement between theEuropean Communities andtheirMember States and
Republic ofHungary (S/C/N/24)
- Europe Agreement between theEuropean Communities andtheirMember States and
Republic ofPoland (S/C/N/25)
Committee onSpecific Commitments
7. TheCommittee onSpecific Commitments hasheldtwomeetings in1996. Itsdiscussions have
focused onhowtoorganise itsactivities andwork priorities according toitsthree main areas of
responsibility asspecified intheterms ofreference (seedocument S/L/16).
8. With respect tothefirstresponsibility -overseeing theimplementation ofcommitments -
Members generally consider thattheoversight function should behandled onanad-hoc basisandshould
focus ontechnical aspects ofimplementation.S/C/3
Page3
9. Members consider thatagreat dealofuseful work canbedoneintheCommittee regarding
thesecond function -examining technical aspects ofschedules ofcommitments andMFN exemption
listsinorder toimprove theirtechnical accuracy andcoherence butwithout affecting thecurrent
commitments. Astarthasbeenmade inexamining issues relating tothedefinition ofsectoral coverage
ofcommitments andtotheadequacy oftheexisting GATS classification list.TheCommittee discussed
aSecretariat paper onrelevant developments inservices classification systems incoordination with
otherinternational organizations andtheirimplications fornegotiations andscheduling under theGATS.
TheCommittee hasalsodiscussed thequestion ofhowtofacilitate thehandling oflistsofcommitments
andMFN exemptions. Inthisregard, theSecretariat prepared apaper analysing relevant issues
concerning, first, theintroduction ofaloose-leaf binding system forthelistsand,second, current
developments attheWTO inthecomputerisation ofschedules.
10. WithrespecttothethirdfunctionoftheCommittee-overseeingtheapplicationoftheprocedures
forthemodification ofschedules under GATS Article XXI-Members generally consider thatthe
Committee should address relevant issues when theprocedures themselves havebeenfinalized.
Working Party onProfessional Services
11. Since starting work inJuly1995, theWPPS hasheldseven meetings. Itsdeliberations have
focused onthethree setsofissues intheaccountancy sector laiddown inparagraph 2oftheDecision
onProfessional Services .These issues are:(a)thedevelopment ofmultilateral disciplines toensure
thatdomestic regulatory requirements arebased onobjective andtransparent criteria andarenotmore
burdensome thannecessary; (b)theuseofinternational standards and(c)theestablishment of
guidelines fortherecognition ofqualifications.
(a) Development ofmultilateral disciplines
12. Theactivities oftheWorking Party have focused ontheestablishment ofanextensive
information baseonregulation intheaccountancy sector andonprioritizing andaddressing specific
issues withaviewtothedevelopment ofmultilateral disciplines particularly inthissector.
13. TheWorking Party hasdevoted considerable timeandeffort tothecollection andanalysis of
dataandstudies ofdomestic regulation intheaccountancy sector. Aseminar wasorganized atwhich
theInternational Federation ofAccountants (IFAC) presented theresults ofamajor international survey
ontheregulation andstructure ofaccountancy services, explained itsroleandthatoftheInternational
Accounting Standards Committee (IASC) insetting international standards insuchareas asauditing,
education foraccountants andfinancial reporting, andintroduced astatement onrecognition of
accountancy qualifications. Briefings werealsoreceived fromtheOECD andUNCTAD, bothofwhich
havecarried outextensive workonaccountancy services. TheOECD presented theresults ofitssurvey
onregulations onaccess forprofessional services andthecategorized inventory ofmeasures affecting
trade inprofessional services. UNCTAD, through itsInter-governmental Working Group ofExperts
onInternational Accounting Standards ofAccounting andReporting (ISAR), explained itsmainactivities
inpromoting international harmonization ofcorporate accounting andreporting practices.
14. Inorder tocomplete theinformation thathadbeenmade available bytheabove organizations
ontheregulatory regimes ofMembers affecting theaccountancy sector, asupplementary questionnaire
onspecific aspects ofdomestic regulation wascirculated toWPPS Members. Twenty-three responses
covering thirty-seven Members havebeenreceived todate.S/C/3
Page4
15. With respect toissues, Members drew upanon-exhaustive listofpriority issues, based on
delegation submissions andstatements, which define insome detail thepolicy areas forwhich the
Working Party isdeveloping multilateral disciplines. Theissues proposed forconsideration comprise:
qualificationrequirementsandprocedures;licensingrequirements(otherthanqualificationrequirements)
and procedures; regulations governing the establishment ofacommercial presence;
nationality/citizenship/residency requirements; professional liability andethics; regulations governing
entry andtemporary stayofnatural persons forthepurpose ofsupplying accountancy services. The
tworemaining issues, relating toguidelines forrecognition ofqualifications anduseofinternational
standards, aredealtwithbelow.
16. AmongtheseissuesMembershaveconcentratedinitiallyonlicensingrequirementsandprocedures
intheaccountancy sector. Inthisregard, theWorking Party hasstarted toexamine theapplicability
oftheconcepts andapproaches taken intheTechnical Barriers toTrade (TBT) Agreement astheyapply
tolicensing requirements andtheother measures covered byGATS Article VI.4. Similarly, theWPPS
hasbegun toexamine therelevance ofthedisciplines intheImport Licensing Agreement totheneed
toensure thatlicensing procedures intheaccountancy sector donotinthemselves restrict trade.
(b) Useofinternational standards
17. Themain roleoftheWorking Party inthisareaistokeeptrack ofwork going onelsewhere
andencourage cooperation withrelevant international organizations. Inafurther seminar members
oftheWorking Party received briefings onthedevelopment ofinternational standards bytheIASC
andtheInternational Auditing Practices Committee (IAPC), andontheir co-operation with the
International Organization ofSecurities Commissions (IOSCO).
(c) Establishment ofnon-binding guidelines formutual recognition agreements orarrangements
intheaccountancy sector
18. TheWorking Party hasalsoworked onthedevelopment ofnon-binding guidelines forthe
negotiation ofmutual recognition agreements orarrangements, which arepermitted under theconditions
laiddown inArticle VIIoftheGATS. Thepurpose ofsuchguidelines, which would constitute a
roadmaporchecklist, would betoassist onavoluntary basisthenegotiation andconclusion ofmutual
recognition agreements orarrangements among WTO Members andtoensure theirtransparency. At
itsseventh meeting, theWorking Party tooknotethatadraftpaper entitled Guidelines forMutual
Recognition Agreements orArrangements intheAccountancy Sector hadbeenprepared andisunder
discussion.
Working Party onGATS Rules
19. TheWorking Party onGATS Rules wasestablished inMarch 1995 bytheCouncil onTrade
inServices tocarry outthenegotiating mandates contained intheGATS onemergency safeguard
measures, government procurement inservices andsubsidies. Article Xrequires thatmultilateral
negotiations shallbeheldonthequestion ofemergency safeguard measures, based ontheprinciple
ofnon-discrimination, theresults ofwhich aretoenter intoeffect notlaterthan1January 1998.
Article XIIIofGATS callsformultilateral negotiations ongovernment procurement inservices within
twoyears fromthedateofentry intoforce oftheWTO Agreement. Article XVofGATS stipulates
thatnegotiations willbeheldwithaviewtodeveloping thenecessary disciplines toavoid thetrade-
distortive effects ofsubsidies thatmayariseincertain circumstances andtoaddress theappropriateness
ofcountervailingprocedures.ItalsorequiredMemberstoexchangeinformationconcerningallsubsidies
related totrade inservices andtoestablish afuture work programme todetermine how, andinwhat
timeframe, negotiations onsuchmultilateral disciplines willbeconducted.S/C/3
Page5
20. TheWorking Party hasheldeight meetings. TheWorking Party firsttookuptheissue of
emergency safeguard measures, followed atintervals ofthree months bygovernment procurement in
services andsubsidies. Thus, since itsfifthmeeting, theWorking Party hasconsidered allthree
negotiating mandates atevery meeting. Differing views havebeenexpressed byMembers inregard
tothequestion ofdeveloping anemergency safeguard mechanism under GATS andsubstantive
discussions arecontinuing inregard tothisquestion. Working papers onemergency safeguard measures
were submitted totheWorking Party byAustralia (S/WPGR/W/5), Thailand (S/WPGR/W/6) and
Switzerland (S/WPGR/W/14). TheWorking Party agreed thatthose Members wishing todosowould
provide written contributions inrelation toquestions raised indocument S/WPGR/W/15 onemergency
safeguard measures.
21. Thediscussions intheWorking Party onthesubject ofgovernment procurement inservices
haveaddressed various aspects ofpossible disciplines, particularly inrelation totransparency. In
addition, Members haveconsidered theimplications oftheexistence oftheAgreement onGovernment
Procurement (GPA) foranydisciplines thatmight bedeveloped inGATS, aswellassome ofthereasons
given byMembers astowhytheyarenotsignatories oftheGPA. Members arealsoengaged, on
avoluntary basis, inaninformation-gathering exercise inrelation tonational procurement regimes
affecting trade inservices.
22. TheWorking Party'sdeliberations onthesubject ofsubsidies havesofarbeenofapreliminary
nature. Many delegations havenoted theinherent complexity ofthesubsidy issueinservices, urging
acareful andsystematic approach tothenegotiating mandate. Some discussion hastaken place on
thequestion whether adistinction should bemade between broad-based subsidies ofgeneral applicability
andnarrower, sector specific subsidies. TheWorking Party hasbegun toconsider themodalities of
theinformation exchange exercise called forinthenegotiating mandate. Aworking paper onconceptual
issues relating tosubsidies wassubmitted totheWorking Party byChile (S/WPGR/W/10).
Negotiations onBasic Telecommunications
23. TheNegotiating Group onBasic Telecommunications, established byMinisterial decision at
Marrakesh, completed itsworkon30April 1996. TheNegotiating Group hadheld17meetings between
May1994 andApril 1996. Fifty-three WTO Members werefullparticipants inthenegotiations and
24governments participated asobservers. TheNGBT submitted itsfinalreport totheCouncil for
Trade inServices (S/NGBT/18) on30April; toitwereattached alistoftheresults ofthenegotiations,
intheform of34Schedules ofCommitments representing 48WTO Member governments andone
ListofArticle II(MFN) Exemptions. Also on30April, theCouncil adopted theDecision on
Commitments inBasic Telecommunications (S/L/19) andtheFourth Protocol totheGeneral Agreement
onTrade inServices (S/L/20).
24. Ofthe34Schedules attached totheProtocol, 32offermarket access commitments invoice-
telephony; 28relate tolocaltelephone services, 27todomestic longdistance and25tointernational
services. Other services onwhich commitments were offered included data-transmission services
(31schedules), cellular/mobile telephone markets (28),private-leased circuit services (27)other types
ofmobile services (22)andsatellite services (16). Inanumber ofcases these commitments would
bephased-inovertime.Thirtyofthe34Schedulesincludecommitmentsrelatingtoregulatorydisciplines
onsuchmatters ascompetition safeguards, interconnection, licensing andtheindependence ofregulators
-matters which hadbeenextensively discussed inNGBT meetings devoted toconceptual andtechnical
issues.S/C/3
Page6
25. TheSchedules andExemption Lists attached totheFourth Protocol willenter intoforce on
1January 1998 provided thattheProtocol hasbeenaccepted byallMembers concerned. However,
theDecision bywhich theCouncil adopted theProtocol alsoprovided thatduring theperiod from
15January to15February 1997theSchedules andExemption Listsmaybesupplemented ormodified,
andestablished anewGroup onBasic Telecommunications toconduct consultations onthe
implementation ofthisprovision.
26. TheCouncil Decision alsoincluded astandstill provision calling upontheMembers concerned,
tothefullest extent consistent withtheirexisting legislation andregulations, nottotakemeasures which
would beinconsistent withtheirundertakings resulting fromthese negotiations. TheCouncil, which
willmonitortheacceptanceoftheProtocol,willalsoexamineanyconcernsraisedbyMembersregarding
thestandstill.
27. TheGroup onBasic Telecommunications (GBT) helditsfirstmeeting on19July1996. At
thatmeeting, theGroup decided tobeopentoallMembers oftheWTO. Participants recognized the
importance oftheresults achieved inApril, interms ofcreating abenchmark forfurther liberalization
andestablishing newregulatory disciplines. Participants suggested thattheprincipal issues before the
GBTincluded thedesirability ofimproving thequantity andquality ofSchedules offered, andtheneed
toaddress possible distortions intrade resulting fromthecoexistence ofopenmarkets andmonopoly
markets ininternational telecommunications services andtoclarify commitments ontheprovision of
satellite-based services.
28. TheGBTapproved atimetable ofmeetings andactivities leading uptothe15February 1997
deadline forthemodifications. Thetimetable comprised monthly meetings inSeptember, October
andNovember 1996 andamore intensive programme ofmeetings tobeheldduring the15January
to15February period, theconduct ofbilateral negotiations inassociation withthese meetings, and
indicative datesforthesubmission totheGroup ofproposals forneworimproved draftoffers throughout
theprocess. Itwasalsoproposed thattheGBTshould holdahigh-level meeting inNovember 1996.
Negotiations onMaritime Transport Services
29. TheMinisterial Decision onNegotiations onMaritime Transport Services andtheAnnex on
Negotiations onMaritime Transport Services provided amandate forMembers tonegotiate, bythe
endofJune1996, commitments relating tomaritime transport services leading totheelimination of
restrictions within afixed timescale. TheDecision established theNegotiating Group onMaritime
Transport Services tocarry outthenegotiations. TheNegotiating Group held16meetings andreported
periodically totheCouncil onTrade inServices.
30. InOctober 1994, theNegotiating Group issued aQuestionnaire onMaritime Transport Services
covering market structure andregulatory issues. TheGroup reviewed participants 'responses tothe
questionnaire. Inall,35ofthefullparticipants andtwoobserver governments submitted questionnaire
responses. Another activity oftheGroup wastoexamine outstanding technical andconceptual issues.
Amongissuesdiscussedweretechnicalmattersrelatingtotheschedulingofcommitmentsoninternational
shipping, auxiliary services, access toanduseofportfacilities andmultimodal transport services.
AttheendofJune1995,participantsbegansubmittingdraftoffersofcommitmentsonmaritimetransport
services toserve asthebasis fornegotiations.
31. Atitsmeeting on28June1996, theCouncil forTrade inServices adopted aDecision tosuspend
thenegotiations onmaritime transport services andtoresume them withthecommencement of
comprehensive negotiations onservices, inaccordance withArticle XIXoftheGATS, andtoconclude
them nolaterthanattheendofthisfirstround ofprogressive liberalization (S/L/24).S/C/3
Page7
32. After thesuspension ofthenegotiations, twoMembers, Iceland andNorway, consolidated their
bestoffers, i.e.transformed theiroffers intospecific commitments tobeinscribed intheirschedules.
Two Members, Austria (inthecontext ofitsaccession totheEuropean Union) andthe
DominicanRepublic,withdrewtheircommitments,whiletwoMembers,CanadaandMalaysia,modified
theircommitments slightly. Currently, 35Members havecommitments onmaritime transport services.
This includes: 29Members who made commitments intheUruguay Round, 4Members
(PapuaNewGuinea,SaintChristopherandNevis,SierraLeoneandSlovenia)whoaccededsubsequently,
and2Members (Iceland andNorway) whomade commitments aftertheextended negotiations.
33. Atthetimeofsuspension ofthenegotiations, 56governments (including theEuropean
Communities andtheirMember States) hadelected toparticipate fullyinthenegotiations. Another
16governments wereparticipating intheprocess asobservers. Bythattime24conditional offers had
beensubmitted.
Committee onTrade inFinancial Services
34. Theactivities oftheCommittee onTrade inFinancial Services in1996 focused onfivemain
issues: monitoring oftheacceptance andimplementation oftheresults ofthefinancial services
negotiations concluded inJuly1995; exchange ofinformation onrecent developments infinancial
services trade; consideration ofsome technical issues regarding theschedules ofspecific commitments
andArticle II(MFN) exemptions; availability offinancial services data; andorganization offuture
work. The work oftheCommittee in1996 was conducted under theChairmanship of
Mr.Frank Swedlove ofCanada. TheCommittee heldtwoformal meetings in1996.
35. Onthemonitoring oftheacceptance andimplementation oftheresults ofthefinancial services
negotiations, theCommittee provided transparency onthestatus ofacceptances oftheSecond Protocol
totheGATS toallMembers, andcontributed tothecompletion oftheacceptance process bythe
Members concerned.1Although notallMembers concerned wereabletoaccept theProtocol bythe
initial deadline of30June1996, itentered intoforce on1September 1996byvirtue ofadecision taken
on30July1996 byMembers which hadaccepted it.Thiswasinaccordance withtheprocedures
inscribed intheProtocol adopted bytheCommittee inJuly1995. Adecision bytheCouncil forTrade
inServices wasalsotaken onthesame daytoextend theperiod foracceptance oftheProtocol until
30November 1996, allowing theremaining Members toaccept. TheCommittee continues tomonitor
theacceptance oftheProtocol bytheremaining Members.
36. Concerning theexchange ofinformation onrecent developments infinancial services trade,
several Members reported recent liberalization measures. These developments werewelcomed, and
Members were encouraged toreport anyrelated developments totheCommittee fortransparency
purposes.
37. Regarding theconsideration oftechnical issues, theSecretariat produced anoteindicating issues
fordiscussion ontwotechnical questions; thedistinction between Modes 1and2infinancial services
andsectoral classification offinancial services. Other technical issues, suchashowtoimprove the
verification ofschedules andMFN exemptions afternegotiations, havealsobeenraised. TheCommittee
agrees topursue these discussions.
1TheMembersconcernedare:Australia,Brazil,Canada,Chile,Czech Republic,DominicanRepublic,Egypt,
European Communities andtheir Member States (15), Hong Kong, Hungary, India, Indonesia, Japan, Korea,
Kuwait,Malaysia,Mexico,Morocco,Norway,Pakistan,Philippines,Poland,Singapore,SlovakRepublic,South
Africa, Switzerland, Thailand, Turkey, Venezuela. Members who have notaccepted theProtocol asof
5November 1996 were Belgium, Brazil, Egypt, Greece, Portugal andSpain.S/C/3
Page8
38. Ontheavailability offinancial services data,theCommittee encouraged theSecretariat towork
inclose cooperation withother international organizations intheirefforts toimprove theavailability
ofstatistics, andrequested ittoreport onanyfuture developments withrespect tothissubject.
39. TheCouncil forTrade inServices haddecided inJuly1995 thatallMembers begiven the
opportunity tomodify orwithdraw allorpartoftheirspecific commitments andtolistArticle II(MFN)
exemptions under theGATS infinancial services during aperiod of60days beginning on
1November1997.TheCommitteewilloverseenegotiationsundertakeninaccordancewiththisdecision,
andhasdecided thatsuchnegotiations willresume inearly April 1997.
40. Ontheorganization offuture work, theCommittee recognized theimportance ofproper early
preparation fortheresumption ofnegotiations in1997. Ittherefore agreed todraw upatimetable
forsuchnegotiations leading totheirconclusion inDecember 1997. Suchatimetable willbepresented
tothenextmeeting oftheCommittee tobeheldinearly April 1997.
Movement ofNatural Persons
41. During 1996, theCouncil reviewed thestatus ofacceptance oftheThird Protocol totheGATS.2
TheProtocol hadbeenopen foracceptance until30June1996. Atthatpoint, there remained five
Members which hadnotaccepted theProtocol duetoprocedural delays. Atitsmeeting on30July
1996 theCouncil reviewed thesituation andadopted the"Decision ontheAcceptance oftheSecond
andThird Protocol totheGeneral Agreement onTrade inServices" (S/L/28) which provides an
additional period foracceptance, until30November 1996.
2Members whoattached aschedule totheThird Protocol were: Australia, Canada, European Communities
andtheir Member States (15), India, Norway andSwitzerland. Members who, asof5November 1996, have
notaccepted theThird Protocol: Belgium, Greece, Portugal, Spain andSwitzerland.S/C/3
Page9
PartII:Future work
Negotiations onBasic Telecommunications
42. Itisrecommended thatMinisters stress theircommitment tobring thenegotiations onbasic
telecommunications toasuccessful conclusion by15February 1997, urgeallWTO Members tostrive
forsignificant,balancedandnon-discriminatoryliberalizationcommitmentsonbasictelecommunications
bythatdateandrecognize theimportance ofresolving theprincipal issues before theGBT.
Committee onTrade inFinancial services
43. Itisrecommended thatMinisters stress theircommitment tobring thenegotiations ontrade
infinancial services, toberesumed inearlyApril 1997, toasuccessful conclusion within theprescribed
timeframe.
Working Party onGATS Rules
44. Itisrecommended thatMinisters notethatmore analytical work willberequired onemergency
safeguard measures, government procurement inservices, andsubsidies. They agree thattheWorking
Party onGATS Rules should aim, inaccordance withtheprovisions ofArticle X,tocomplete
negotiations onthequestion ofemergency safeguard measures by31December 1997. Ifnegotiations
havenotbeenconcluded bythatdate, theCouncil forTrade inServices mayextend theprovisions
ofArticle XoftheGATS toanappropriate time. Ministers agree toreview thereport oftheCouncil
onprogress intheGATS Rules negotiations attheirmeeting in1998, bearing inmind theneedtocarry
forward thenegotiations expeditiously.
Working Party onProfessional Services
45. TheWorking Party onProfessional Services should:
- Aimtocomplete itswork ontheaccountancy sector bytheendof1997.
- Pursue workontheArticle VI.4work programme asitrelates toprofessional services,
examining,asappropriate,bothhorizontalaspectsofthisworkandspecificissuesrelated
toparticular services withdueconsideration forthediversity ofprofessional services.
- Pursueworkonvoluntaryguidelinesformutualrecognitionagreementsorarrangements.
- Cooperate withUNCTAD initswork onprofessional services, particularly onthe
accountancy sector.
- Encourage theefforts made byother relevant international organizations asdefined
bytheGATS, including theInternational Accounting Standards Committee andthe
International Organization ofSecurities Commissions, toformulate international
standards intheaccountancy sector which areaimed atachieving greater comparability
infinancialstatementsandfacilitatingtheeffectiveliberalizationofaccountancyservices.S/C/3
Page10
Committee onSpecific Commitments
46. TheCommittee onSpecific Commitments should pursue itsmandate, including work relating
tothescheduling ofcommitments, andshould make recommendations forimproving thetechnical
accuracy andcoherence ofschedules ofspecific commitments andlistsofexemptions fromArticle II
oftheGATS before thecommencement ofthenextround ofnegotiations onservices liberalisation
pursuant toArticle XIXoftheGATS.
Further work bytheCouncil
47. Itisrecommended thatMinisters reaffirm theimportance ofprogressive liberalization oftrade
inservices asmandated inArticle XIXandother relevant provisions oftheGATS. Therequisite work
tofacilitate suchnegotiations, taking intoaccount theneedforappropriate flexibility, shallinclude,
interalia,:
- TheCouncil forTrade inServices willdevelop aninformation exchange programme.
Theaimofthisprogramme istofacilitate theaccess ofallMembers, inparticular
developingcountryMembers,toinformationregardinglaws,regulations,administrative
guidelines andpolicies affecting tradeinservices inorder tocontribute totheassessment
oftrade inservices which would assist future negotiations intheservices sector. The
structure should besimple andabletoprovide acommon standard andconcise
multilateral basis tounderstand thestateandevolution oftheregulations governing
theservices sector avoiding anyunnecessary burden totheMembers ingeneral and
developing country Members inparticular. During 1997, theCouncil should agree
tothemodalities andthetiming forthisprogramme.
- TheCouncilshouldbegintheconsiderationofguidelinesandproceduresfornegotiations
mandated under Article XIXatanappropriate time.
- TheCouncil should examine, asappropriate, under Article VI:4oftheGATS, measures
relating toqualification requirements andprocedures, technical standards andlicensing
requirements withaviewtotaking theworkasfaraspossible before thecommencement
ofthenextround ofliberalization negotiations referred toabove.
Negotiations onMaritime Transport Services
48. Itisrecommended thatMinisters takenoteofthecurrent status ofthesuspended negotiations
onmaritime transport services andconfirm their commitment toproceed according totheagreed
conclusions.SECTION VI
COUNCIL FOR TRADE-RELATED ASPECTS OF
INTELLECTUAL PROPERTY RIGHTS (TRIPS)WORLD TRADE IP/C/8
6November 1996
ORGANIZATION(96-4704)
Council forTrade-Related Aspects
ofIntellectual Property Rights
REPORT (1996) OFTHE COUNCIL FOR TRIPS
I General
1. Since theperiod covered byitslastreport1,theCouncil forTRIPS hasheldsixformal meetings,
on11December 1995andon22February, 9May, 22-25 July,18September and5November 1996.
Theminutes ofthese meetings aretobefound indocuments IP/C/M/5-10.2Thisreport covers this
period, butalsocontains references tothework donebytheCouncil forTRIPS in1995.
2. Thefirsttwoofthemeetings referred toabove were chaired byMr.Stuart Harbinson
(Hong Kong). Theremainder were chaired byAmbassador Wade Armstrong (New Zealand).
3. Meetings oftheCouncil wereopentoallWTO Members. Inaddition, government observers
toWTO bodies wereinvited. WIPO wasinvited toallmeetings, inaccordance withtherecommendation
ofthePreparatory Committee asconfirmed bytheGeneral Council. Pursuant totheinterim procedure
onobserverstatusforintergovernmentalorganizationsevolvedundertheauspicesoftheGeneralCouncil,
theFAO, theIMF, theOECD, UNCTAD, theUnited Nations, UPOV (International Union forthe
Protection ofNewVarieties ofPlants), theWorld Bank andtheWCO were invited tomeetings of
theCouncil.
II Implementation
(i) Notifications andNotification Procedures
(a) Article 63.2
4. Atitsmeeting inNovember 1995, theCouncil adopted thefollowing decisions togiveeffect
totheobligation tonotify implementing legislation under Article 63.2: Procedures forNotification
of,andPossible Establishment ofaCommon Register of,National Laws andRegulations under
Article 63.2(document IP/C/2); Format forListing of"Other Laws andRegulations" tobeNotified
under Article 63.2(document IP/C/4); andChecklist ofIssues onEnforcement (document IP/C/5).
5. These procedures require that,asofthetimethataMember isobliged tostartapplying a
provision oftheTRIPS Agreement, thecorresponding lawsandregulations shallbenotified without
delay. Averysubstantial volume oflegislation hasbeennotified under these procedures. Asofthe
dateofthisreport, 30Members havenotified some oralloftheirimplementing legislation. Most
1Document WT/GC/W/25, Section VI
2Document IP/C/M/10 tobeissuedIP/C/8
Page2
ofthematerial tobenotified byMembers whose legislation, intheareaofcopyright andrelated rights,
wasthesubject ofreview attheCouncil 'sJulymeeting (seeparagraph 14below) hasbeennotified;
threeothercountries havenotified some oftheirlegislation while indicating thatthisiswithout prejudice
totheirtransition period under theprovisions ofArticle 65;and11Members havenotified legislation
relating totheimplementation ofArticle 70.8and,insome cases, Article 70.9oftheTRIPS Agreement.
These notifications arecirculated intheIP/N/1/COUNTRY/- series ofdocuments.
6. AtitsNovember 1995meeting, theCouncil alsoagreed thatMembers would provide responses
toachecklist ofissues onenforcement (IP/C/5). Inrecognition ofthefactthatpreparation ofthe
responses would taketime, theprocedures require them tobesubmitted "assoonaspossible" after
thetimethataMember isobliged tostartapplying theprovisions oftheTRIPS Agreement on
enforcement. Eight Members havenotified responses. These responses havebeencirculated inthe
IP/N/6/COUNTRY/- series ofdocuments. AttheJuly1996 meeting oftheCouncil, theChairman
urged theMembers concerned toprovide theirresponses soonandinanycasebefore theendof1996.
7. Thenational treatment andMFN obligations ofArticles 3,4and5oftheTRIPS Agreement
became applicable toallMembers from1January 1996. Sofar,nonotifications havebeenreceived
under Article 63.2relating specifically totheimplementation ofthese provisions, except insofaras
suchnotifications haveformed partofthecomprehensive notifications bydeveloped country Members
oftheirgeneral implementing legislation. TheCouncil hasconsidered whether theremaybetechnical
difficulties withmeeting thisnotification requirement. AttheCouncil 'sJulymeeting, aproposal was
made forasimplified procedure inthisconnection andtheCouncil agreed thatthematter betaken
upininformalconsultations.Followingtheseinformalconsultations,theCouncilagreedatitsSeptember
meeting thattheMembers concerned hadarange ofoptions astohowtomeet these notification
requirements inawaybestsuited totheirnational circumstances. Three options were identified in
particular:
- notifying thespecific provisions oflawsandregulations thatimplement theobligations
setoutinArticles 3,4and5;
- notifying allintellectual property lawsandregulations; or
- making ageneral statement thatnationals ofother WTO Members enjoy non-
discriminatory treatment, together withalistofanyexceptions tothatprinciple.
TheCouncil invited theSecretariat toprepare apaper which would recognize these three options and
contain adraftformat forthelastoption. Thispaper willbeconsidered bytheCouncil atitsmeeting
scheduled for11-15 November 1996.
(b) Articles 1.3and3.1
8. Articles 1.3and3.1oftheTRIPS Agreement, relating tothedefinition ofbeneficiary persons
under theAgreement andtonational treatment, allow certain exceptions tothenormal rulesonthese
matters, provided thatnotifications aremade totheCouncil forTRIPS. 24Members havesubmitted
notifications under these provisions. These notifications arecontained intheIP/N/2/COUNTRY/-
series ofdocuments.
(c) Article 4(d)
9. Article 4(d)oftheTRIPS Agreement requires aMember seeking tojustify anexception to
theMFN ruleonthebasisofaninternational agreement relating totheprotection ofintellectual property
which hadentered intoforcepriortotheentryintoforceoftheWTO Agreement tonotify thatagreementIP/C/8
Page3
totheCouncil forTRIPS. Atthemeeting oftheCouncil inNovember 1995, theChairman drew the
attention ofMembers totheneedtomake notifications under Article 4(d)by1January 1996ifMembers
wished tohavelegalcover fromthatdateforanyexceptions toMFN treatment thattheyseektojustify
byreference totheprovisions ofArticle 4(d). Todate, 28Members havemade notifications under
thisprovision. These notifications arecontained intheIP/N/4/COUNTRY/- series ofdocuments.
10. Indiscussions attheCouncil 'smeetings ofFebruary, MayandJuly1996, some Members
expressed concern about some ofthenotifications made, inparticular thattheabsence ofsufficient
guidelines forsuchnotifications meant thatthenotifications didnotalways enable theother Members
tounderstand thespecific element ofdiscrimination thatwasbeing sought tobejustified. Asagreed
attheCouncil 'sFebruary meeting, theChairman heldinformal consultations onthismatter. Tofacilitate
these consultations, hecirculated aninformal background notebytheSecretariat. Itwasgenerally
feltintheCouncil thatitwould bevaluable tocontinue work onthedevelopment ofcriteria thatcould
assist individual Members inmaking orreviewing theirnotifications, butthatsuchcriteria could not
addtoordiminish therights andobligations ofWTO Members under theprovisions ofArticle 4(d).
Further consultations onthismatter willbeheld.
(d) Article 69
11. Article 69oftheTRIPS Agreement requires Members toestablish andnotify contact points
forthepurposes ofcooperating witheachother withaviewtoeliminating international tradeingoods
infringing intellectual property rights. Procedures forsuchnotifications wereagreed bytheCouncil
inSeptember 1995. Todate,67Members havenotified contact points. Themostrecent compilation
ofthese iscontained indocument IP/N/3/Rev.2.
(e) Notifications Under Other Provisions oftheAgreement
12. Anumber ofnotification provisions oftheBerne andtheRome Conventions areincorporated
byreference intotheTRIPS Agreement butwithout being explicitly referred toinit.Atitsmeeting
inFebruary 1996, theCouncil invited eachMember wishing tomake suchnotifications tomake them
totheCouncil forTRIPS, eveniftheMember inquestion hadalready made anotification under the
Berne ortheRome Convention inregard tothesame issue, anddrew theattention ofMembers tothe
discussion relating tothetiming ofsuch notifications inparagraphs 16through 21of
document IP/C/W/15, aSecretariat background noteonthesubject. Todate,oneMember hasmade
anotification under thisprocedure. Notifications ofthiskind arebeing circulated inthe
IP/N/5/COUNTRY/- series ofdocuments.
(ii) Monitoring theOperation oftheAgreement
(a) Review ofNational Laws andRegulations
13. Atitsmeeting inNovember 1995, theCouncil adopted a"Schedule fortheConsideration of
National Implementing Legislation in1996/1997" (IP/C/3). Thisprovided forlegislation inthearea
ofcopyright andrelated rights tobereviewed bytheCouncil inJuly1996. Following informal
consultations, theCouncil agreed atitsMay1996meeting onprocedures fortheCouncil 'sreview of
legislation inthisarea. These procedures provided forwritten questions andreplies priortothereview
meeting, withfollow-up questions andreplies during thecourse ofthemeeting.
14. AttheCouncil 'smeeting of22-25 July1996, thelegislation intheareaofcopyright andrelated
rights of29Members wasreviewed. Anumber ofthese Members indicated thattheystillhadsteps
totaketocomply fully withtheirTRIPS obligations inthisarea. Therecord oftheintroductory
statements made bydelegations, thequestions puttothemandtheresponses given isbeing circulatedIP/C/8
Page4
intheIP/Q/COUNTRY/- series ofdocuments. Atsubsequent meetings oftheCouncil, anopportunity
willbegiven tofollow-up points emerging fromthereview session which delegations consider have
notbeen adequately addressed. Inthisconnection, itwasrecognized thatthereview ofnational
implementing legislation implied quiteaheavy workload andthatitwasimportant toallow anadequate
opportunity, consistent withtheprovisions ofArticle 63oftheAgreement, forafollow-up toall
Members, inparticular todeveloping country Members thathadconstraints ontheirresources affecting
theirability toanalyse anddigest some ofthematerial.
15. Theprocedures adopted bytheCouncil forthereview provided thatthereview would apply
tothecopyright andrelated rights legislation ofMembers obliged tocomply withtheTRIPS Agreement
under Article 65.1andofanyother Members notstillavailing themselves inrespect ofthisareaof
legislation ofanylonger transition period towhich theymaybeentitled. During thecourse ofthe
review, questions wereputtoanumber ofMembers which didnotconsider thattheyfellintoeither
ofthese categories andwhich didnotprovide answers intheCouncil 'smeeting.
16. Inaccordance withthe"Schedule forConsideration ofNational Implementing Legislation in
1996/1997" (IP/C/3), theCouncil willreview legislation intheareas oftrademarks, geographical
indications andindustrial designs atitsmeeting scheduled for11-15 November 1996. Legislation in
theareas ofpatents, layout-designs ofintegrated circuits, undisclosed information andthecontrol of
anti-competitive practices incontractual licences isscheduled forreview inthefirsthalfof1997, and
thatintheareaofenforcement inthesecond halfof1997.
(b) Implementation ofArticle 70.8and70.9
17. Atitsmeetings inFebruary, May, JulyandSeptember 1996, theCouncil considered the
implementation ofArticle 70.8andtherelated provisions ofArticle 70.9. Atthesemeetings theCouncil
tooknoteofstatementsbysomeMembersoftheirconcernthatnotallMemberstowhichtheseprovisions
applied weregiving effect tothemor,intheevent thattheyhaddoneso,hadnotnotified therelevant
legislation under Article 63.2. AttheCouncil 'smeetings ofMayandJuly1996, some Members
informed theCouncil thattheywere engaged indispute settlement proceedings onthismatter with
twoother Members (IP/D/2 andIP/D/5).
(c) Implementation ofArticle 70.2
18. AttheCouncil 'sFebruary meeting, statements were made concerning compliance with
Article 70.2inregard tothepatent termandinrespect ofrights insound recordings. Dispute settlement
proceedings initiated inconnection withthese matters havebeennotified totheTRIPS Council in
documentsIP/D/1,3and4.On3October1996,theCouncilwasinformedofamutuallyagreedsolution
reached between theparties onthefirstofthese issues (document IP/D/3/Add.1). Inthisnotification,
which wasmade totheCouncil forTRIPS foritsinformation andwithout prejudice totherights and
obligations ofother Members, theparties involved expressed theirunderstanding thatArticle 70.2in
conjunction withArticle 33requires developed country parties toprovide apatent termofnotless
than20years fromthefiling dateforpatents thatwereinforce on1January 1996, orthatresult from
applications pending onthatdate. Thenotification alsoindicates thattheaffected party hastaken the
necessary stepstoconfirm thatallaffected patents willenjoy atermthatisthelonger of15years from
thedateofgrant or20years from thedateoffiling.
(iii) Revocation ofPatents
19. AttheCouncil 'sJulyandSeptember meetings, anumber ofMembers stated theirviews on
thegrounds thatcould justify therevocation ofapatent. TheCouncil tooknoteofthestatements.IP/C/8
Page5
(iv) Technical Cooperation
20. Inaccordance withadecision taken bytheCouncil inNovember 1995, theChairman made
available fortheFebruary 1996 meeting oftheCouncil aninformal discussion noteoutlining and
structuring theissues which hadbeenraised intheCouncil 'svarious discussions onthesubject of
technical cooperation andidentifying possible options forcarrying forward theCouncil 'swork inthis
area(subsequently distributed asIP/C/W/21). Asaresult oftheensuing discussion, theCouncil agreed
onthefollowing:
- thattheCouncil would seektheannual updating bydeveloped country Members of
information ontheir technical cooperation activities pursuant toArticle 67ofthe
Agreement, andthatin1996 theupdating would besought intimefortheCouncil 's
meeting scheduled forSeptember 1996;
- thattheCouncil 'sSeptember 1996 meeting would haveaspecial, butnotexclusive,
focus ontheissue oftechnical cooperation;
- thattheSecretariat would prepare ananalytical summary oftheinformation ontechnical
cooperation activities already presented and,onthisbasis, consideration would begiven
towhether Members would beinvited touseacommon listofbasic headings in
presenting anoverview oftheirtechnical cooperation activities;
- thattheSecretariat would beinvited topresent asuggestion foraspecific pilotproject
foraworkshop, tobeheldinthemargins oftheCouncil meeting, thatwould permit
amore in-depth, thematic discussion ofaparticular aspect oftechnical cooperation.
21. AtitsMaymeeting, theCouncil considered aproposal forapilotproject foranin-depth
discussion ofaspecific aspect oftechnical cooperation. TheCouncil agreed thattheSecretariat should
goahead, hopefully incooperation withtheInternational Bureau oftheWIPO, toorganize aworkshop
onborder enforcement, tobeheld immediately before orafter theCouncil 'smeeting of
18September 1996. Theworkshop, organized jointly bytheWTO Secretariat andtheInternational
Bureau ofWIPO, washeldontheafternoon of17September 1996.
22. AttheCouncil 'sJulymeeting, itwasagreed thatdeveloped country Members, insubmitting
updated information ontheirtechnical cooperation activities priortotheCouncil 'sSeptember meeting,
would notify acontact pointorcontact points which could beaddressed byadeveloping country Member
seeking technical cooperation. Thecontact pointcould bethesameastheonethatthedeveloped country
Member inquestion hadnotified under Article 69oftheAgreement, oritcould bedifferent, depending
onthestructure oftheMembers 'administrations.
23. TheCouncil 'sSeptember meeting hadaspecial focus ontheissue oftechnical cooperation.
Forthatmeeting, ninedeveloped country Members supplied updated information ontheirtechnical
cooperation activities andinformation wasalso supplied bytheWTO Secretariat andsix
intergovernmental organizations. Thecontact points notified bydeveloped country Members arebeing
compiled inasingle document (IP/N/7). Inaddition toreviewing thisinformation, theCouncil assessed
theexperience withtheworkshop onborder enforcement, organized jointly bytheWTO Secretariat
andtheInternational Bureau ofWIPO on17September. Anumber ofdelegations saidthattheissue
oftechnical cooperation should bebrought totheattention ofMinisters atSingapore. TheCouncil
hasagreed tocontinue itsdiscussion ontechnical cooperation atitsmeeting scheduled for
11-15 November 1996, when itisexpected thatfurther information ontechnical cooperation activities
willbeavailable from other developed country Members.IP/C/8
Page6
(v) Cooperation withWIPO
24. Article 68oftheTRIPS Agreement provides thattheCouncil shall, inconsultation withWIPO,
seektoestablish, within oneyearofitsfirstmeeting appropriate arrangements forcooperation with
thebodies ofthatOrganization. AtitsDecember 1995 meeting, theCouncil forTRIPS approved a
draftagreement drawn upasaresult ofconsultations between theChairman oftheCouncil forTRIPS,
assisted bytheWTO Secretariat, andtheChairman oftheWIPO Coordination Committee, assisted
bytheInternational Bureau ofWIPO. Thedraftagreement wasapproved bytheGeneral Council at
itsmeeting of13and15December 1995. Following approval bythecompetent bodies ofWIPO and
thesignature bytheDirector 's-General ofthetwoOrganizations, theAgreement between theWorld
Intellectual Property Organization andtheWorld Trade Organization (IP/C/6) entered intoforce on
1January 1996. TheAgreement provides forcooperation inthefollowing threeareas: thenotification
of,access toandtranslation ofnational lawsandregulations; theimplementation ofArticle 6terof
theParis Convention (relating tonational emblems) forthepurposes oftheTRIPS Agreement; and
legal-technical assistance andtechnical cooperation.
25. AtitsDecember 1995 meeting, theCouncil adopted adecision ontheimplementation ofthe
obligationsundertheTRIPSAgreementstemmingfromtheincorporationoftheprovisionsofArticle6ter
oftheParis Convention 1967(IP/C/7). Thisdecision hasasitspurpose giving legaleffect under the
TRIPS Agreement totheprocedures relating totheadministration ofTRIPS obligations regarding
Article 6teroftheParis Convention thatareincorporated intheAgreement between WIPO andthe
WTO.
III Built-in Agenda
(i) Article 24.1
26. Under Article 24.1, Members agree toenterintonegotiations aimed atincreasing theprotection
ofindividualgeographicalindicationsunderArticle23.Notime-frameisspecifiedforsuchnegotiations.
AttheJulymeeting oftheCouncil, some Members addressed Article 24.1, butnospecific suggestions
havebeenmade asyetintheCouncil withregard tosuchnegotiations.
(ii) Article 24.2
27. Article24.2requirestheCouncilforTRIPStokeepunderreviewtheapplicationoftheprovisions
oftheSection oftheAgreement ongeographical indications, andstates thatthefirstsuchreview shall
takeplace within twoyears oftheentry intoforce oftheWTO Agreement. AttheCouncil 'sMay
andJulymeetings, theChairman raised thequestions ofwhen andhowthisreview should beundertaken.
Asmentioned inparagraph 16above, theCouncil willreview legislation intheareas oftrademarks,
geographical indications andindustrial designs atitsmeeting scheduled for11-15 November 1996.
TheCouncil atitsSeptember meeting received some proposals inconnection withthereview under
Article 24.2. Itagreed totakeupwork onthismatter byincluding ontheagenda oftheNovember
meeting anitem"Review oftheApplication oftheProvisions oftheSection onGeographical Indications
under Article 24.2" which willbeaddressed afterandtaking intoaccount thereview oflegislation
intheareas referred toabove, itbeing understood thatthiswould permit theconsideration ofthe
proposals putforward inSeptember together withanyother inputs from delegations.
(iii) Article 23.4
28. Article 23.4 calls ontheCouncil forTRIPS toundertake negotiations concerning the
establishment ofamultilateral system ofnotification andregistration ofgeographical indications forIP/C/8
Page7
wines eligible forprotection bythose Members participating inthesystem, butdoesnotspecify atime-
frame forsuchnegotiations. AttheJulyandSeptember meetings oftheCouncil, some delegations
addressed thequestion ofhowandwhen these negotiations might beinitiated.
(iv) Article 27.3(b)
29. Article 27.3(b) states thattheprovisions ofthissubparagraph shallbereviewed fouryears after
thedateofentry intoforce oftheWTO Agreement. AttheCouncil 'smeeting inJuly,some delegations
addressed thequestion ofwhen thiswork should beinitiated.
(v) Article 64.3
30. Article 64.3requires theCouncil forTRIPS toexamine, during thefiveyears from thedate
ofentry intoforce oftheWTO Agreement, thescope andmodalities forthecomplaints provided for
under subparagraphs 1(b)and1(c)ofArticle XXIII ofGATT 1994 made pursuant totheTRIPS
Agreement, andtosubmit itsrecommendations totheMinisterial Conference forapproval. No
suggestions regarding thisaspect oftheCouncil 'swork were made during thecourse of1996.
(vi) Article 71.1
31. Article 71.1requires theCouncil forTRIPS toreview theimplementation oftheTRIPS
Agreement aftertheexpiration ofthetransitional period referred toinparagraph 2ofArticle 65,namely
after1January 2000.
IV. Issues, Problems andRecommendations tobeBrought totheAttention ofMinisters
32. Members reaffirm theimportance offullimplementation oftheTRIPS Agreement within the
applicable transition periods andthateachMember willtakethesteps which itconsiders appropriate
sothattheprovisions oftheAgreement willbeapplied.
33. Members alsoreaffirm theimportance ofthenecessary provision oftechnical andfinancial
cooperation bydeveloped country Members infavour ofdeveloping country andleast-developed country
Members, inaccordance withArticle 67oftheTRIPS Agreement, inorder tofacilitate implementation
oftheAgreement.
34. Members further reaffirm theircommitment totheTRIPS built-in agenda agreed during the
Uruguay Round, including anytime-frames specified intherelevant provisions, andtocarrying out
asandwhen appropriate analytical work andinformation exchange soastoallow Members abetter
prior understanding oftheissues involved without prejudice tothetiming orscope ofthereviews or
negotiations envisaged inthatbuilt-in agenda. Inregard togeographical indications, theCouncil has
agreed thatareview oftheapplication oftheprovisions ofthesection ongeographical indications as
provided forinArticle 24.2would taketheformoutlined inparagraph 27above, which permits inputs
fromdelegations ontheissueofscope, andtheCouncil willinitiate in1997preliminary work onissues
relevant tothenegotiations specified inArticle 23.4 oftheTRIPS Agreement concerning the
establishment ofamultilateral system ofnotification andregistration ofgeographical indications for
wines. Issues relevant toanotification andregistration system forspirits willbepartofthispreliminary
work. Alloftheabove work would beconducted without prejudice totherights andobligations of
Members under theTRIPS Agreement andinparticular under thespecific provisions oftheTRIPS
built-in agenda.SECTION VII
COMMITTEE ONTRADE AND ENVIRONMENTWORLD TRADE WT/CTE/1
12November 1996
ORGANIZATION(96-4808)
Committee onTrade andEnvironment
REPORT (1996) OFTHE COMMITTEE ONTRADE AND ENVIRONMENT
I.INTRODUCTION
1. TheCommittee onTrade andEnvironment (CTE) wasestablished bytheWTO General
Council inJanuary 1995. TheCTE'smandate andterms ofreference arecontained inthe
Marrakesh Ministerial Decision onTrade andEnvironment of15April 1994 (Annex I).This
Decision mandates theCTE toreport tothefirstbiennial meeting oftheMinisterial Conference
when thework andterms ofreference oftheCommittee willbereviewed, inthelightof
recommendations oftheCTE.
2. TheCTE hasstructured itswork around thetenItems listed intheDecision onTrade and
Environment. Forseveral oftheItems, theCTE wasabletobuild ondiscussions thathadtaken
place in1992-93 intheGATT Group onEnvironmental Measures andInternational Trade (EMIT)
andondiscussions in1994 inaSub-Committee onTrade andEnvironment oftheWTO
Preparatory Committee.1
3. TheCTE metformally sixtimes in1995 andseven times in1996 under thechairmanship
ofAmbassador Sánchez Arnau ofArgentina.2Membership oftheCTE isopentoallWTO
Members; observer governments andobservers from inter-governmental organizations were
invited toparticipate.3Informal meetings were alsoheld, including ajointinformal meeting with
theCommittee onTechnical Barriers toTrade ontheissue ofeco-labelling.
4. TheCTE heldtwostocktaking exercises, on26-27 October 1995 and28-29 May1996.
During theOctober stocktaking exercise, specific issues ontheItems ofthework programme
were identified.4AttheMaystocktaking exercise, theschedule ofmeetings through toSingapore
1Report byAmbassador H.Ukawa (Japan), Chairman oftheGroup onEnvironmental Measures andInternational
Trade, tothe49thSession oftheCONTRACTING PARTIES, L/7402, 2February 1994. Minutes ofthemeetings of
theSub-Committee onTrade andEnvironment oftheWTO Preparatory Committee anditsbackground documents are
contained indocument series PC/SCTE/M/- andPC/SCTE/W/-.
2Minutes ofthemeetings oftheWTO CTE arecontained indocument series WT/CTE/M/-.
3SeeItem10ofthisReport.
4SeetheSummary ofActivities oftheCTE(1995) presented bytheChairman oftheCTE(WT/CTE/W/17), contained
inAnnex IItothisReport, foralistofthespecific issues identified forItems onthework programme.WT/CTE/1
Page2
andtheformat oftheReport were adopted.5TheCTE wasassisted bybackground documents
prepared bytheSecretariat and
documents, proposals andnon-papers submitted byMembers which, along withthemany
statements made intheCTE meetings, provided thebasis fordrawing upthisReport.6
II.BACKGROUND, ANALYSIS, DISCUSSIONS AND PROPOSALS
ITEM 1 Therelationship between theprovisions ofthemultilateral trading system and
trade measures forenvironmental purposes, including those pursuant to
multilateral environmental agreements
5. Under thisItem, theissue oftrade measures applied unilaterally byaWTO Member to
address environmental problems thatlieoutside itsnational jurisdiction hasbeendiscussed.
TheCTE hasexamined whether there isaneedtoclarify thescope thatexists under WTO
provisions tousetrade measures pursuant tomultilateral environmental agreements (MEAs). It
hasalsoexamined whether there isanyneedtoenlarge thatscope, andifsoinwhat
circumstances, withwhatobjectives andthrough whatmeans.
6. Itwasstated during thecourse ofdiscussions under thisItemthatthere isalready scope
under theWTO provisions tousetrade measures forenvironmental purposes. These provisions
aimtoensure thatWTO Members mayadopt orenforce measures inpursuit ofimportant public
policy objectives fortheprotection oftheirenvironmental resources, while safeguarding Members '
WTO rights against arbitrary orunjustifiable discrimination anddisguised restrictions ontrade.
7. Most ofthedelegations which intervened inthedebate onthisissue stated thatthey
consider thattheprovisions ofGATT Article XXdonotpermit aMember toimpose unilateral
trade restrictions thatareotherwise inconsistent withitsWTO obligations forthepurpose of
protecting environmental resources thatlieoutside itsjurisdiction. Forthem, arenewed
commitment needs tobetaken byWTO Members toavoid using trade measures unilaterally for
thatpurpose, andnumerous proposals havebeenmade intheCTE tothateffect. Another viewis
thatthere isnothing inthetextofArticle XXwhich indicates thatitonlyapplies topolicies to
protect animal orplant resources orconserve natural resources within theterritory ofthecountry
invoking theprovision. Anumber ofMembers noted thatthere were differing views astowhat
constituted "unilateralism".
8. MEAs based oninternational consensus areviewed bytheinternational community asthe
bestwayofcoordinating policy action totackle global andtransboundary environmental problems
cooperatively7.TheWTO hasnocompetence intheareaofenvironmental matters perse,butit
isconcerned withtrade measures applied pursuant toMEAs which canaffect WTO Members '
rights andobligations. Ofthemany MEAs currently ineffect, onlyabout 20contain trade
provisions.8There areconsiderable differences between thetrade provisions ofdifferent MEAs,
inparticular thekinds oftrade measures thatMEA Parties areauthorized orrequired toapply and
5SeetheResults oftheStocktaking Exercise (WT/CTE/W/33), contained inAnnex IIIofthisReport.
6Acomplete listofdocuments andnon-papers iscontained inAnnex IVtothisReport.
7SeeAgenda 21.
8PC/SCTE/W/3, 13October 1994.WT/CTE/1
Page3
theconditions pursuant towhich themeasures aretaken. NoGATT orWTO trade dispute has
arisen sofarovertheuseoftrade measures applied pursuant toanMEA. Nevertheless, doubts
havebeenexpressed bysome WTO Members about theWTO consistency ofcertain trade
measures applied pursuant tosome MEAs, inparticular discriminatory trade restrictions applied
byMEA Parties against non-parties thatinvolve extra-jurisdictional action. Forsome, the
uncertainty these doubts create forWTO Members andforthenegotiators ofMEAs makes
clarification oftherelationship between WTO provisions andthese trade measures desirable. For
some others, trade measures applied pursuant toanMEA byWTO Members should beconsistent
withWTO rules anddisciplines.
9. Coordination between trade andenvironment officials innational capitals andduring the
negotiation ofMEAs andnewtrade rules hasbeenrecognized bymany intheCTE tobean
important means ofensuring coherence between MEAs andtheWTO. Some consider itcanbe
enhanced through closer cooperation between theWTO andMEAs. Several suggestions have
beenputforward toimprove theflowofinformation between theWTO andMEAs. One
proposal9isfortheCTE toinvite representatives ofMEAs tobriefitontheuseoftrade measures
applied pursuant totheMEAs, andfortheCTE tohaveanopportunity toexpress itsviewto
MEA authorities ontrade measures which arecontemplated inanMEA. Ithasalsobeen
suggested thatconsultation andcooperation between theSecretariats oftheWTO andMEAs
should beencouraged, especially during initial negotiations andamendments ofMEAs. Another
proposal10istoenhance transparency, dialogue andcooperation between MEAs, relevant
international organizations andtheWTO from theinitial stage ofnegotiation ofanMEA toits
implementation. Thiscooperation mayinclude exchange ofinformation, mutual participation in
meetings, mutual access todocuments anddatabases, andbriefing sessions, asnecessary. Another
proposal11isthatafactual reference guide containing WTO principles should becompiled bythe
WTO Secretariat which, afterbeing agreed bytheCTE, could beusedbyMEA negotiators in
theirconsideration ofproposed trade measures. Aproposal12hasbeenmade toconclude
cooperation agreements between theWTO andcompetent MEA institutions, providing: (i)forthe
WTO Secretariat torespond torequests forfactual information about relevant WTO provisions;
and(ii)forMEAs toinform theWTO ofallenvisaged trade provisions, which would be
examined bytheCTE andthereport ofthemeeting would becommunicated backtotheMEA
authorities. While acknowledging theimportance ofcontacts between theWTO andMEA
Secretariats, some areoftheviewthatpolicy dialogue must takeplace innational capitals, thatthe
WTO andMEAs must respect theirspecific areas ofcompetence, andthattheWTO Secretariat
hasalready theauthority toprovide factual information about themultilateral trading system.
10. When account istaken ofthelimited number ofMEAs thatcontain trade provisions, and
thefactthatnotrade dispute hasarisen overtheuseofthose measures todate, some feelthat
there isnoevidence ofarealconflict between theWTO andMEAs; existing WTO rules already
provide sufficient scope toallow trade measures tobeapplied pursuant toMEAs, anditisneither
necessary nordesirable toexceed thatscope. According tothisview, theproper course ofaction
toresolve anyunderlying conflict which maybefelttoexistinthisareaisforWTO Members to
avoid using trade measures inMEAs which areinconsistent withtheirWTO obligations. Any
9Proposal byJapan, WT/CTE/W/31, 30May 1996.
10Non-paper bytheRepublic ofKorea, 12June 1996.
11Non-paper byHong Kong, 22July1996.
12Non-paper bySwitzerland, 20May 1996.WT/CTE/1
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clarification inthatrespect canbeprovided, asnecessary, expostthrough theWTO dispute
settlement mechanism.
11. Oneproposal13isthustoconfirm thattheexisting provisions ofGATT 1994 areadequate
todealwithtrade measures taken pursuant tolegitimate environmental objectives contained in
existing MEAs, andthattrade measures pursuant tofuture MEAs should beformulated keeping in
mind theprovisions ofthemultilateral trading system. Theproposal stated thattrade measures
which arerestrictive innature inMEAs, eveniftaken forenhancing environmental protection,
must respect therule-based nature ofthemultilateral trading system andtheircosts interms of
trade restriction must befullytaken intoaccount. Inaddition, anytrade measures taken for
achieving environmental objectives should beappropriately dealtwithwithin thescope of
Article XXofGATT 1994; thatistheonlywaytoensure non-discrimination which isthe
foundation ofthemultilateral trading system.
12. Some feelscope fortheuseoftrade measures applied pursuant toMEAs canbeprovided,
ifnecessary, through recourse totheexisting waiver provisions ofArticle IXoftheWTO. These
provide theopportunity forMembers toseek, inexceptional circumstances, awaiver toaWTO
obligation, subject toapproval ataminimum bythree-quarters oftheWTO membership. A
waived obligation istime-limited, andmust berenewed periodically; andatrade measure applied
pursuant toawaiver could stillbechallenged inWTO dispute settlement onthegrounds of
non-violation, nullification andimpairment ofWTO rights. Thestrictness ofthese conditions is
considered bysome tobeappropriate forprotecting therights ofWTO Members incircumstances
inwhich, forexample, MEA Parties apply WTO-inconsistent discriminatory trade measures
against non-parties. Thisapproach, theyfeel,could provide ameasured, case-by-case response to
anyproblems which might ariseinthefuture. Evidence ofamultilateral consensus, avoiding the
needforaseparate definition intheWTO ofanMEA, would beestablished onthemerits ofeach
casesince itcould bepresumed thatanMEA which could genuinely claim broad support from the
international community would findequally broad support among WTO Members.
13. Totheextent thatconcerns existabout thetime-limited nature ofWTO waivers, ithas
beensuggested that,subject tocertain conditions, aspecial "multi-year" waiver could beprovided
fortrade measures applied pursuant toMEAs. Onesuchproposal14suggests thatallmeasures
taken under MEAs would beeligible forawaiver, provided theymeetspecified criteria15,anda
"negative vetting" approach could beadopted whereby thewaiver would beautomatically renewed
ifnonewdevelopments affect theexceptional circumstances which justified itsgranting inthefirst
instance. Another proposal16suggests thatspecific trade measures contained inexisting andfuture
MEAs, whether among Parties oragainst non-parties, maybegranted awaiver onacase-by-case
13Non-paper byIndia, 23July1996.
14Non-paper byHong Kong, 22July1996.
15Thecriteria would be,forinstance: (i)thenegotiation ofandparticipation intheMEA reflect agenuine international
consensus; (ii)theMEA meets thecriteria setoutintheheadnote toGATT Article XX; (iii)thegrant ofthewaiver does
notprejudice WTO Members 'rights andobligations under theDSU, irrespective ofwhether theyareParties totheMEA
inquestion. Additional criteria, suchasnecessity, leasttrade-restrictiveness, effectiveness andproportionality, would apply
fornon-specific trade measures. Furthermore, thecriterion of"least-inconsistent withWTO provisions" should apply to
specific trade measures.
16Proposal from ASEAN, WT/CTE/W/39, 24July1996.WT/CTE/1
Page5
basis subject tonon-binding guidelines.17Thewaiver would beextended annually untilits
termination aslongastherequirements contained inArticle IXaremet,andthe"exceptional
circumstances" referred tointhatprovision would cover specific trade measures included in
MEAs. WTO Members would retain theirrights toresort tonon-violation dispute settlement
procedures intheWTO.
14. Some others donotconsider theWTO waiver provisions offer auseful approach tothe
useoftrade measures inMEAs because waivers aredesigned todealonlywithtemporary
measures involving exceptional circumstances. Recourse toanuncertain testofvoting ona
waiver intheWTO could failtoprovide MEA negotiators withanecessary degree ofsecurity or
predictability intheirnegotiations anditmight involve theWTO passing judgement overother
international legalinstruments. This, theyfeel,could giverisetoanuntenable situation for
WTO Members thathaveaccepted obligations under boththeWTO andanMEA.
15. Some others havesuggested theissue oftheuseoftrade measures inMEAs needs tobe
addressed more from anexantepoint ofviewandnotonlythrough theexpostmeans available
under theWTO dispute settlement orwaiver provisions. Forthem, international co-operation is
themost environmentally effective means oftackling transboundary andglobal problems, because
thejointefforts ofallcountries concerned arerequired: thisisreflected intheincreasing agenda
ofMEA negotiations. Although noconflict hassofararisen asregards trade measures pursuant
toMEAs andWTO rules, these Members feelthatitisimportant toadopt apreventive attitude
andprovide greater certainty. Thiswould bebeneficial bothforenvironment andtrade policy
makers. Forthose Members, thekeypoint isthatMEAs andtheWTO bothrepresent different
bodies ofinternational law. Various proposals havebeenputforward, withaviewtoestablishing
aframework fortherelationship between MEAs andWTO. Although these proposals differ in
nature, scope andlevelofambition, theyareallbased ontheviewthattheWTO should be
supportive ofaction atthemultilateral levelfortheprotection oftheenvironment. They develop
theviewthat,subject tospecific conditions being met,certain trade measures taken pursuant to
MEAs should benefit from special treatment under WTO provisions; thisapproach hasbeen
described ascreating an"environmental window" intheWTO. They haveanumber ofcommon
features.
16. Oneisthatalthough itmaybedesirable toclarify thetreatment under WTO provisions of
trade measures applied pursuant toMEAs, noadditional scope thanthatwhich exists already isto
bemade available under GATT Article XXfortheuseofunilateral measures forenvironmental
purposes. Asecond isthatimportance isattached toenhancing thetransparency oftrade measures
applied pursuant toMEAs. Several proposals make notification ofthemeasures totheWTO a
pre-condition forthem benefitting from anyadditional accommodation thattheproposals suggest
themeasures might begranted under WTO provisions. Athirdcommon feature istherolewhich
WTO dispute settlement would playinthecaseofaconflict arising overtheuseoftrade measures
applied pursuant toMEAs; discussions onthisissue aredescribed inmore detail under Item5of
thework programme.
17. Oneproposal18elaborates twooptions. Thefirstistoinclude measures taken pursuant to
specific provisions ofMEAs inGATT Article XX. Thesecond istointroduce areference not
onlytothese measures but,alsoinmore general terms, tomeasures necessary toprotect the
"environment"; andtoimprove theconsistency oftherules ofthemultilateral trading system
17Thenon-binding guidelines would include criteria such asnecessity, least trade-restrictiveness, effectiveness,
proportionality andthedegree ofscientific evidence.
18Non-paper bytheEuropean Community, 19February 1996.WT/CTE/1
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taking intoaccount boththecommitment expressed inthefirstpreambular paragraph ofthe
Agreement establishing theWTO andthefactthattheenvironment isalready mentioned inseveral
WTO Agreements. Bothoptions suggest thedevelopment ofanUnderstanding under the
provisions ofGATT Article XXthatintheevent atrade measure applied pursuant toanMEA is
challenged intheWTO, subject tocertain procedural criteria being met19thedispute settlement
panel would examine onlywhether themeasure hasbeenapplied inconformity withthe
requirements intheheadnote language ofArticle XXandwould notconsider itsnecessity. The
aimistosendapolitical signal oftheWTO 'ssupport formultilateral measures asameans of
discouraging theuseofmore trade-disruptive andless-environmentally efficient unilateral ones,
andsotostrengthen themultilateral trading system byestablishing aframework todealwith
problems thatarise. TheWTO would notjudge thelegitimacy oftheenvironmental objectives or
thenecessity ofthemeasures taken toachieve these objectives because themultilateral character
ofthetrade measures would bethebestguarantee against abuse. Atthesame time, theWTO
would retain itspower tocounter protectionist implementation ofamultilaterally-agreed measure
through theheadnote language inArticle XX.
18. Asecond proposal20istodevelop anUnderstanding, applicable across all
WTO Annex 1Agreements, ondifferentiated treatment fortrade measures applied pursuant to
MEAs, depending onwhether theyapply between Parties oragainst non-parties andwhether they
arespecifically mandated inanMEA. Specific andjointly notified trade measures applied among
MEA Parties would prevail overtheirWTO obligations totheextent ofthemandated
inconsistency, andWTO dispute settlement would notbeavailable tothem fortrade action within
theterms ofthenotified measures. Non-consensual measures (those applied among Parties but
notspecifically mandated inanMEA, andthose applied against non-parties which arespecifically
mandated inanMEA) could betested through WTO dispute settlement against procedural and
substantive criteria which would besetoutintheUnderstanding. TheUnderstanding would not
apply totrade measures taken against non-parties toanMEA thatwere notspecifically mandated
intheMEA; norwould itapply tounilateral measures. These would continue tobesubject to
existing WTO provisions. Theproposed procedural criteria aimatensuring thatanMEA reflects
agenuine "multilateral" consensus through requiring: (i)negotiation ofandparticipation inan
MEA tobeopenonequitable terms toallinterested countries; (ii)broad participation of
interested countries inbothgeographical terms andrepresenting varying levels ofdevelopment;
and(iii)adequate representation ofconsumer andproducer nations oftheproducts covered bythe
MEA. Theproposed substantive criteria aimatensuring thatthetrade measure isnecessary to
achieve theenvironmental objective oftheMEA, including through consideration of:(i)the
effectiveness ofthetrade measure inachieving theenvironmental objective; (ii)whether the
measure istheleasttrade-restrictive ordistorting; and(iii)theproportionality ofthemeasure to
theneedfortrade restriction toachieve theenvironmental objective.
19. Athirdproposal21istointroduce "acoherence clause". Itwould provide thatincaseofa
WTO dispute overatrade measure mandated under anMEA, thedispute panel would examine
whether themeasure wasapplied inamanner thatconstitutes arbitrary discrimination between
countries where thesame conditions prevail orwithaviewtoachieving trade advantages, butit
would notexamine thelegitimacy oftheenvironmental objective northemeasure 'snecessity. A
19Those terms would bewhether theMEA wasopen toparticipation byallparties concerned withtheenvironmental
objectives oftheMEA, andreflected, through adequate participation, theirinterests, including significant trade andeconomic
interests.
20Submission byNew Zealand, WT/CTE/W/20, 15February 1996.
21Non-paper bySwitzerland, 20May 1996.WT/CTE/1
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listofMEAs benefiting from thecoherence clause would beestablished. Twopossible
approaches were identified toestablish thelist:either theGeneral Council could make adecision
concerning theinclusion ofeachMEA onthelist,oreachMEA could benotified totheWTO
Director-General byitsdepositary inwhich casetheGeneral Council would beasked toreach a
decision onlyifaWTO Member objected toaproposed listing.
20. Another approach22proposes the"possibility ofsetting differentiated WTO disciplines" for
trade measures applied pursuant toMEAs based onwhether thetrade measures arespecifically
mandated byanMEA andwhether theyareapplied among Parties oragainst non-parties. The
skeleton ofthisapproach isillustrated inamatrix inAnnex V.Trade measures taken among
Parties would beeligible forqualified codification onalapse oftimebasis, subject tothem
meeting appropriate conditions which would belessstrict formeasures specifically mandated inan
MEA thanforthose simply authorized bytheMEA. Under thisproposal itwould bepremature
toconsider theaccommodation ofanyother typeoftrade measures taken pursuant toanMEA (for
example, against anon-party) thatgoesbeyond thescope ofexisting WTO disciplines.
21. Adifferent approach suggested bysome Members istodevelop guidelines toprovide
more predictability thanexists atpresent overthetreatment ofcertain trade measures applied
pursuant toMEAs andallow forthedevelopment ofmutually supportive trade andenvironment
policies, asenvisaged inAgenda 21.Oneproposal23made inthisregard istodraw up
non-binding interpretative guidelines, withthepossibility ofmaking them legally-binding with
appropriate modifications asnecessary. Guidelines could beusedbyMEA negotiators toprovide
them withanauthoritative point ofreference ontheapplication ofWTO provisions when theyare
considering theuseoftrade measures pursuant toMEAs, theycould beusedbyWTO dispute
panels when examining thecompatibility withWTO rules oftrade measures applied pursuant to
MEAs, ortheycould serve asabasis onwhich theWTO Secretariat would provide technical
advice onWTO provisions toMEA Secretariats andenvironmental negotiators. Theproposed
guidelines arenotintended tobeuseddirectly inapanel examination, although theycould havea
certain impact onthescrutiny ofpanels. Formal decisions concerning substantive criteria made
bytherelevant MEA authority should betaken intosufficient account onthecondition thatthe
MEA meets procedural criteria thatwould reflect itsconsensual basis.24These substantive criteria
could incorporate characteristics ofMEA trade measures suchastheirnecessity, effectiveness and
proportionality.25
22. Oneproposal26suggested thattheCommittee develop anagreed framework for
endorsement bytheSingapore Ministerial Conference thatwould include, interalia,thefollowing
22Non-paper bytheRepublic ofKorea, 12June 1996.
23Proposal byJapan, WT/CTE/W/31, 30May 1996.
24Examples ofprocedural criteria are:(i)negotiation oftheMEA isopen toallcountries, andtakes place preferably
under theUNaegis; (ii)countries from different geographical regions andatdifferent stages ofeconomic andsocial
development which areParties totheMEA have participated inthenegotiations andmust bereflected inthemembership
oftheagreement; and(iii)theMEA deals withenvironmental protection ofatransboundary orglobal nature.
25Substantive criteria are,forexample: (i)trade measures arechosen onlywhen effective andwhen alternative measures
areineffective inachieving theenvironmental objective, orwhen other measures areinefficient without trade measures as
partoftheMEA; (ii)trade measures arenotmore trade-restrictive thanrequired toachieve theenvironmental objective;
(iii)trade measures donotconstitute arbitrary orunjustifiable discrimination; (iv)trade withnon-parties ispermitted on
thesame basis aswithParties ifnon-parties provide equivalent environmental protection; and(v)trade measures andthe
circumstances under which theycanbetaken areclearly defined.
26Non-paper bytheUnited States, 11September 1996.WT/CTE/1
Page8
points: thestrong appreciation among WTO Members oftheimportance ofMEAs; thatWTO
rules should nothamper theability ofMEAs toachieve theirenvironmental objectives; thattrade
measures havebeenandwillcontinue tobeanimportant toolforachieving important
environmental objectives; thattrade measures willnotalways beneeded, andshould beused
prudently butshould beavailable when needed, andMEA negotiators areinthebestposition to
determine when thisisso;thattheWTO should recognize andrespect thetechnical and
environmental expertise ofMEA negotiators; andthatpanels can,andshould, seek input from
relevant MEA bodies inanydispute involving questions relating toanMEA.
23. There havebeenmany reactions tothese proposals andsuggestions.
24. Onesetofreactions hasbeenexpressed toproposals thatwould increase thescope under
theWTO forapplying pursuant toMEAs trade measures thatareconsidered tobeinconsistent at
present withitsprovisions, orthatwould limittherecourse ofWTO Members todispute
settlement. Some areconcerned thatthiscould undermine theexisting balance ofWTO rights and
obligations andcreate aloophole fortrade protectionism. These Members believe thatitcould
leadalsotothelegitimization ofunilateral measures andtheirextrajurisdictional application, as
wellastheuseoftrade measures based onnon-product-related processes andproduction methods
(PPMs), forwhich intheviewofthese delegations nobasis exists inWTO rules. Singling out
trade measures pursuant toMEAs would require determining whether those trade measures are
necessary oreffective. Thiswould require holistic consideration ofallother measures, including
positive measures, taken within theframework ofanMEA, which isclearly outside theWTO 's
scope. Some feelalsothatthere isariskofintroducing adirect linkbetween "necessity" and
"environment" intheWTO atatimewhen aclear andcomplete definition of"environmental
necessity" isstillevolving inother intergovernmental fora.
25. Concerns bysome havebeenexpressed inparticular overproposals thatwould enlarge the
scope under theWTO fortheuseofdiscriminatory trade measures against non-parties toan
MEA. There isconcern about whoisentitled tojudge themerit ofacountry 'sdecision notto
joinanMEA, andthataccount betaken ofthereasons whyacountry would takethatdecision
(itmayfindthescientific evidence unpersuasive, itmaynotbeabletoafford tojoinorhave
access tonecessary technology onfavourable terms, itmaynotagree withagiven environmental
objective orwiththemeans toachieve theobjective, oritmayconsider there aremore pressing
national policy problems which deserve higher priority). Inthisregard, mention hasbeenmade
ofPrinciple 7oftheRioDeclaration ,which states thatthere isa"common butdifferentiated
responsibility" ofStates inresolving environmental problems ofaglobal nature. Some feelthat
trade measures, andinparticular discriminatory trade measures against non-parties toMEAs, are
notanappropriate waytopursue international environmental objectives. They consider that
discriminatory trade measures should notbeusedtocoerce countries tobecome signatories toan
MEA andthatthisisnottheWTO 'srole,andtrade measures areoneofthealternatives inthe
package ofinstruments thatcanbeusedtoachieve MEA objectives. They alsobelieve that
positive measures andincentives suchasfinancial andtechnology transfers, increased market
access andtechnical assistance aremore efficient andeffective. Therefore, changes inWTO rules
toaccommodate MEA trade measures which areinconsistent withWTO rules areanunbalanced
andisolated approach aslongasthere isnoparallel commitment tofirstuseandenforce positive
measures, asameans inparticular toincrease participation inMEAs.27
26. Concern wasalsoexpressed bysome overanypossible extension oforderogation from
WTO rules formeasures which arenotspecifically prescribed orauthorized inMEAs, since this
could permit justification forunilateral measures disguised asmultilateralism andopenthedoor
forprotectionist measures. Itwasemphasized thattheaccommodation oftrade measures pursuant
27Seeinparticular theNon-paper byIndia, 23July1996 andtheSubmission byASEAN, WT/CTE/W/39, 24July1996.WT/CTE/1
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toMEAs, orenlarging thescope fortheuseofdiscriminatory trade measures, could sendthe
wrong signals tomany countries, particularly developing countries which havecommitted
themselves totrade liberalization. Other concerns include thelackofanoperational definition of
MEAs todifferentiate them from regional andplurilateral environmental agreements, and
uncertainty about theeffectiveness oftrade measures vis-à-vis other measures. Forsome, an
operational definition ofMEAs isapre-condition fordiscussing theuseoftrade measures applied
pursuant toMEAs, andtheimportance offurther work onprocedural criteria, suchasthose
described above inparagraph 18,hasbeenunderlined inthisrespect.
27. Doubts havebeenexpressed bysome about theneedfora"coherence clause" when only
certain trade measures applied pursuant toMEAs areviewed asbeing potentially
WTO-inconsistent, andabout theappropriateness oftheWTO being seentopassjudgement on
individual MEAs. With regard toproposed guidelines forenvironmental negotiators, some feel
these would appear toallow theWTO tosecond guess MEAs inareas outside itscompetence and
would sendasignal ofmistrust tonegotiators representing, indifferent fora, Members ofthe
WTO. Inthissense, some stated withconcern thatthecondition thatmeasures arenottaken with
aviewtoachieving trade advantages would imply shifting theburden ofproof from theMember
invoking the"coherence clause" totheMember thatmaydecide tochallenge themeasure, thereby
reversing GATT/WTO dispute settlement practice.
28. Doubts havebeenexpressed bysome delegations about theappropriateness andeventhe
feasibility offormulating procedural andsubstantive criteria against which toevaluate the
WTO-consistency oftrade measures applied pursuant toMEAs. They havepointed outinthis
regard thatthebestpolicy package ofanMEA islikely tovaryaccording tothespecific
circumstances ofagiven environmental problem, sotrade measures havebeenapplied pursuant to
MEAs foravariety ofreasons andinanumber ofways inthepast,andthere isnoclear
indication ofhowtheywillbeusedinthefuture. Inlightofthis,andconsistent withtheview
thattheWTO doesnothavecompetence inenvironmental matters perse,theyconsider thatthe
WTO should notformulate criteria which would limittheflexibility forenvironmental policy-
makers tojudge thelegitimacy ofenvironmental objectives andtypes oftrade measures needed.
29. Specific concerns havebeenraised bysome about thesubstantive criteria thathavebeen
proposed. With regard to"necessity", aconcern hasbeenvoiced about applying inthiscontext
theinterpretation thathasbeengiven byGATT dispute panels totheterm"necessary" in
Article XX(b) which, ithasbeenstated, isnotuniversally accepted. According tothisviewthe
criterion of"necessity" isnotfound inother provisions ofArticle XX,notably Article XX(g), and
arecent Appellate Body Report hasbeencitedinthatregard.28However, itwasalsostated that
thenotion ofnecessity wasparticularly relevant inother GATT Article XXprovisions thatcould
berelated totrade measures taken forenvironmental purposes. Inaddition, ithasbeenstated that
theconcept of"effectiveness" cannot befound inWTO provisions orjurisprudence, andthat
"least trade-restrictive" and"proportionality" arenotconcepts thatcanbefound inArticle XX.
Theviewofsome istherefore thatsince suchcriteria would gobeyond theexisting conditions
attached totheapplication oftrade measures under GATT Article XX,theywould make itmore
difficult tousetrade measures forenvironmental purposes. Thiswould sendthewrong message
withrespect tothesupport oftheinternational community forresolving global andtransboundary
environmental problems through multilateral action andcould furthermore actasadisincentive to
theuseofmultilateral action.
30. According tosome others, these criteria ofnecessity, effectiveness, leasttrade
restrictiveness andproportionality areimplicitly included inWTO disciplines. Theconsideration
ofthese criteria, inparticular thatof"necessity", isessential toanyeffort tobetter accommodate
28WT/DS2/AB/R, 22April 1996.WT/CTE/1
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trade measures pursuant toMEAs. Thenecessity ofthese measures should notbetaken for
granted, inparticular, when theirusedepends more onpolitical pressure thanenvironmental
necessity. Some stated thattrade measures applied forenvironmental purposes arerelated to
GATT Article XXprovisions other thansub-paragraph (g)where theconcept ofnecessity is
particularly relevant. Some feelthattheconcept ofnecessity needs tobeconsidered andredefined
intheenvironmental context onthebasis ofUNCED principles, suchas"common but
differentiated responsibilities", equity andinternational cooperation. Some consider alsothat
procedural criteria would beessential, especially intheabsence ofanyaccepted definition ofan
MEA.
31. Anumber ofWTO Members remarked ontheusefulness ofthe"differentiated approach"
asamethodology foranalysing issues related tothisItem: theapproach differentiated, ontheone
handtrade, measures applied among MEA Parties from those applied against non-parties toan
MEA, and,ontheother hand, trade measures specifically mandated ordefined inMEAs from
those thatarenot.
ITEM 5 Therelationship between thedispute settlement mechanisms inthemultilateral
trading system andthose found inmultilateral environmental agreements
32. ThisItemhasbeendiscussed inconjunction withItem1.Oneissue examined waswhat
thecompetent forum would betosettle adispute which arose between twoWTO Members over
trade measures applied pursuant toanMEA. Asecond waswhatscope there might befor
enhanced institutional cooperation inthisarea, inparticular theinvolvement ofenvironmental
expertise inWTO dispute settlement proceedings andoftrade expertise inMEA dispute settlement
proceedings when disputes concern trade measures applied pursuant toanMEA. Thepossibility
ofproviding public access toWTO dispute settlement proceedings, asisthecaseforcertain
MEAs, wasalsoraised.
33. LiketheWTO, MEAs emphasize theavoidance ofdisputes. They include provisions to
increase transparency through thecollection andexchange ofinformation, coordination of
technical andscientific research, andcollective monitoring ofimplementing measures aswellas
consultation provisions. Most oftheMEAs thatarethefocus oftheCTE'swork contain
mechanisms forresolving disputes. These range from non-binding, consensus-building
mechanisms tobinding, judicial procedures ofarbitration, andincertain cases resort tothe
International Court ofJustice.
34. Some feelitiseachgovernment 'sresponsibility toavoid entering intoconflicting
obligations intreaties itissignatory to;thatisbestdoneatthenegotiating anddrafting stage.
Some alsohavestated thatdisputes canbeavoided ifWTO Members, which areParties toan
MEA, review trade measures applied byother countries pursuant totheMEA inthecontext ofthe
totality oftheirinternational obligations. Some havesaidthatWTO Members should notresort to
theWTO dispute settlement mechanism tocircumvent orimpair theobligations theyhaveaccepted
bybecoming MEA Parties. Article 3oftheDispute Settlement Understanding (DSU) hasbeen
citedinthatregard, which callsonMembers before bringing acasetoexercise theirjudgement
about whether action through theDSBwould befruitful.
35. OneviewisthatthisItemraises procedural issues which could bestbeaddressed once
conclusions havebeendrawn under Item1ofthework programme. Another viewisthat
procedural issues dowarrant attention; iftrade measures aretaken pursuant tonewMEAs inthe
future, thepossibility ofatrade dispute arising mayincrease. Inthatcase, attempts should be
made toensure thatbothtrade andenvironment interests aretaken intoaccount andthatWT/CTE/1
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implementing onetreaty 'ssetofrules doesnotjeopardise thefulfilment oftheobjectives ofthe
other.
36. Doubts havebeenexpressed about anyapriori WTO determination oftheforum under
which adispute which involved WTO rights andobligations should behandled. Some feela
case-by-case approach would beapragmatic solution. Others stress theimportance ofWTO
Members maintaining theirrighttosubmit anyconflict involving trade measures toWTO dispute
settlement, andrecall thattheDSU explicitly states thatthepurpose oftheWTO dispute
settlement system istopreserve therights andobligations ofWTO Members. Thus, these
Members areoftheviewthattheWTO remains competent todealwithaconflict arising from the
useofanytrade measure independently ofitspolicy objective.
37. Some feelthatadispute between WTO Members, Parties toanMEA, overtrade measures
taken pursuant totheMEA should inthefirstinstance bepursued under theMEA dispute
settlement mechanism. Onesuggestion isthatMEA Parties might stipulate exantethatthey
intend trade disputes among them arising outofimplementation oftheobligations oftheMEA to
besettled under theMEA'sprovisions. Onecontribution29notes thatthe1982 UNConvention on
theLawoftheSea,andinparticular the1994 Agreement Relating totheImplementation of
PartXIoftheConvention (Section 6:Production Policy), attributes competence totheWTO in
settling disputes involving trade-related measures, notably production subsidies andtrade
restricting measures. Thisapproach, itissuggested, canhelpensure theconvergence oftheaims
ofMEAs andtheWTO while safeguarding theirrespective spheres ofcompetence, thus
overcoming problems arising from overlapping jurisdictions. There maybevalue instrengthening
MEA dispute settlement mechanisms, butitisrecognized thatthismatter liesoutside WTO
competence. Another suggested approach istoexamine whether recourse toarbitration, as
provided forinDSU Article 25,canbeanappropriate means ofresolving trade andenvironment
disputes.
38. Intheevent ofadispute between twoWTO Members, oneanon-party toanMEA, over
trade measures applied pursuant totheMEA, some havenoted thattheWTO would provide the
onlyavailable dispute settlement mechanism since thenon-party would havenorights under, nor
access to,theMEA dispute settlement mechanism. Insuchcircumstances, itwould beimportant
fortheDSBtoavoid becoming involved inpureenvironmental conflicts, butaWTO dispute
settlement panel could seekrelevant environmental expertise andtechnical advice.
39. Article 13andAppendix 4oftheDSU allow apanel toseekinformation andtechnical
advice from anyindividual orbody which itdeems appropriate, toseekinformation from any
relevant source andtoconsult experts toobtain theiropinion oncertain aspects ofthematter, and
torequest areport inwriting from anadvisory review group withrespect toafactual issue
concerning ascientific orother technical matter raised byaparty toadispute. Thisfacility is
available topanels examining disputes thatariseovertheuseofanyenvironment-related trade
measures, whether these havebeenapplied pursuant toanMEA ornot.
40. Oneviewisthatthese DSU provisions aresufficient andthere arenogrounds formaking
special provision forenvironmental expertise. Some havestated thatfulluseofthese provisions
should beencouraged. Nevertheless, mechanisms could beexplored toinform panels ofMEA
provisions, including theapplication andinterpretation ofanMEA orjudgements on
environmental matters inMEAs. Onesuggestion hasbeentheestablishment ofcooperation and
consultation arrangements between MEAs andtheWTO toensure thatanMEA'senvironmental
objectives aregiven appropriate consideration.
29Communication from Chile, WT/CTE/W/2, 16February 1995.WT/CTE/1
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41. Some havesuggested strengthening theroleofexpert groups inWTO disputes involving
environmental issues, particularly inanydisputes thatmight ariseovertheuseoftrade measures
applied pursuant toMEAs, forexample byrequiring theuseofsuchgroups where there are
scientific andtechnical points atissue inthedispute. Ithasbeennoted inthatconnection that
under theprovisions oftheGATS Annex onFinancial Services "panels fordisputes onprudential
issues andother financial matters shallhavethenecessary expertise relevant tothespecific
financial service under dispute". Inthisregard, itisfeltthatenvironmental expertise would be
particularly important inanydisputes involving theinterpretation andapplication ofanMEA, for
testing thenecessity ofanenvironment-related trade measure andfortheassessment ofscientific
evidence. However, concerns havebeenraised thattheindependence ofWTO panellists tojudge
adispute should notbecompromised; expert opinion could helpinform apanel, butoutside
experts should notbecome involved injudging whether ornotmeasures areWTO consistent.
Also, doubts havebeenexpressed about thelegalbasis forWTO panels totakeaccount ofan
MEA'sobjectives orprovisions, andabout whether theCTE istheappropriate forum toconsider
changes intheprovisions oftheDSU. Oneproposal30hasbeentoconfirm thatDSU provisions
areadequate todealwithanytrade dispute brought totheWTO which maybelinked to
environmental issues.
42. Thepossibility ofproviding, upon request, trade expertise toMEA dispute settlement
proceedings hasbeendiscussed. Onecircumstance which could warrant thatiswhere anMEA
refers explicitly toWTO provisions.
43. Some MEAs provide opportunities forthepublic tohaveknowledge ofandobserve their
dispute settlement proceedings. OneviewisthattheDSU might suffer incomparison inthis
regard. Ithasbeenrecalled thattheUNCommission forSustainable Development atits
1994 session stressed theimportance oftransparency andactive involvement ofthepublic and
experts inwork ontrade andenvironment, including indispute settlement processes, and
considered there wasconsiderable needforimprovement inthese areas.
ITEM 2 Therelationship between environmental policies relevant totrade and
environmental measures withsignificant trade effects andtheprovisions
ofthemultilateral trading system
44. ThisItemcovers environmental polices andmeasures notalready covered under other
Items ofthework programme.
45. Property rights, market-making measures suchastradeable emission permits, fiscal
instruments, emission taxes, financial subsidies andsoftloans, liability systems, andbond and
deposit-refund systems havebeenmentioned bysome. Some consider thatcompared totraditional
regulatory approaches towards theinternalization ofenvironmental externalities, measures suchas
these canoften beusedmore flexibly inamarket economy andtheycanbemore transparent.
Others consider that,nevertheless, depending onhowtheyaredesigned andimplemented, they
cangenerate significant trade effects andraisenational concerns about relative competitiveness
differentials which canprovoke demands forcompensatory trade measures tobeimposed.
46. Environmental subsidies were discussed. Subsidies canbeusedtocreate incentives for
producers toadopt environmentally-sustainable production practices, andthespecific,
environmentally-related, non-actionable subsidies identified inArticle 8.2(c) oftheAgreement on
30Non-paper byIndia, 23July1996.WT/CTE/1
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Subsidies andCountervailing Measures (SCM) were noted inthatregard.31Some were ofthe
opinion thatenvironmental subsidies maydiffer from more traditional forms ofproduction
subsidies buttheycanstillexert animportant influence onprices andproducers 'incomes, and
hence ontrade. Further analysis hasbeensuggested oftherelationship oftheSCM Agreement to
various forms ofenvironmental incentives, oftheextent towhich WTO provisions encouraged
subsidization thatcould beenvironmentally-harmful, inparticular butnotlimited toenergy use,
andoftheuseofenvironmental subsidies inrelation totheAgreement onAgriculture, particularly
itsAnnex 2.12.
47. Oneproposal andadraftDecision32recommends thatnational governments undertake
environmental reviews oftrade agreements likely tohavesignificant environmental effects, and
thatWTO Members beinvited toprovide copies ofsuchreviews andrelated material and
methodologies totheWTO Secretariat forreference byother Members. Some feelthatthisissue
fallsoutside themandate andcompetence oftheWTO, andthattheWTO should nottherefore be
making recommendations ofthisnature. Some others feelthatenvironmental reviews fitwithin
theprovision oftheterms ofreference calling foridentification oftherelationship between
environmental measures andtrade measures.
48. Oneproposal33istoconsider therelationship andcomparability ofgeneral trade and
environmental principles. Among theprinciples tobeconsidered areinteraliatheprinciple of
sustainable development, Principle 12oftheRioDeclaration34,MFN andnational treatment,
transparency, theconcepts ofleasttrade-restrictiveness, proportionality andequivalence, special
anddifferential treatment fordeveloping countries, common butdifferentiated responsibility,
sovereignty overenvironmental resources, fairandequitable sharing ofbenefits, andthespecial
needs ofdeveloping countries. Some feelthatconsideration ofenvironmental principles lies
outside themandate oftheWTO. Some feelthatsummarizing complex principles could create
misunderstandings. Some feelthatanysuchlistofprinciples should becomprehensive and
include theprinciple oftheobligation tocooperate, thepolluter paysprinciple, andthe
precautionary principle. Arelated suggestion istoanalyse theflexibility oftrade principles to
accommodate current andemerging environmental policies, todetermine whether theyprevent the
internalization ofenvironmental externalities, andwhether thetrade rules contribute tointegrated
sustainable development policies. Another suggestion isthattherelationship between specific
environmental policies andspecific WTO Agreements could onlybeusefully examined ona
case-by-case basis.
31Itwasnoted thatSCM Article 8.2(c) provides forone-time, non-recurring measures tomeetspecified conditions with
thepurpose ofpromoting theadaptation ofexisting facilities tomeet newenvironmental regulations andstandards. Itwas
alsopointed outthatArticle 8.3requires exantenotification ofsubsides claimed under theprovisions ofArticle 8.2(c).
32Submission bytheUnited States, WT/CTE/W/37, 23July1996 andNon-paper bytheUnited States,
11September 1996.
33Non-paper byIndia, Item2,23July1996.
34"States should cooperate topromote asupportive andopeninternational economic system thatwould leadtoeconomic
growth andsustainable development inallcountries, tobetter address theproblems ofenvironmental degradation. Trade
policy measures forenvironmental purposes should notconstitute ameans ofarbitrary orunjustifiable discrimination ora
disguised restriction oninternational trade. Unilateral actions todealwithenvironmental challenges outside thejurisdiction
oftheimporting country should beavoided. Environmental measures addressing transboundary orglobal environmental
problems should, asfaraspossible, bebased onaninternational consensus."WT/CTE/1
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ITEM 3(A) Therelationship between theprovisions ofthemultilateral trading system and
charges andtaxes forenvironmental purposes
49. Oneissue examined istheapplication ofGATT rules onBorder TaxAdjustment (BTA) to
environmental taxes andcharges. Thepotential effects ofenvironmental taxes ontrade and
problems involved inthevaluation fortaxpurposes oftradeable environmental products havealso
beendiscussed.
50. Views havebeenpresented onthepotential trade effects andgeneral economic and
environmental effectiveness oflevying environmental taxes andcharges onimports andrebating
them onexports, depending onwhether theyareassigned tocorrecting consumption orproduction
externalities andarelevied atthenational orinternational levels.
51. With regard tothetreatment ofenvironmental taxes andcharges under theBTA
provisions, the1970 Report oftheGATT Working Party hasbeentaken asapoint ofreference
andseveral ofitsfindings were noted.35These were thattheBTA provisions arebased onthe
concept oftrade neutrality andtheyapply thedestination principle. Furthermore, theWorking
Party concluded thatcertain taxes notlevied directly onproducts areineligible forBTA. There
wasaconvergence ofviews intheWorking Party thattaxes levied directly onproducts are
considered eligible fortaxadjustment, andadivergence ofviews regarding theapplication of
BTA fortaxes occultes (consumption taxes oncapital equipment, auxiliary materials andservices
usedinthetransportation andproduction ofother taxable goods, forexample taxes onadvertising,
energy, machinery andtransport).36
52. Views havebeenpresented intheCTE ontheapplication ofBTA toenvironmental taxes
orcharges applied tonon-product-related PPMs. OneviewisthatBTA applies solely totaxes
levied onproducts orproduct-related PPMs, andthattaxes orcharges levied on
non-product-related PPMs arenoteligible forBTA. Another isthatGATT jurisprudence remains
unclear onthispoint, andthatcertain important environmental taxes andcharges might fallinto
thecategory oftaxes occultes onwhich the1970 Working Party didnotreach afirmconclusion.
Since theBTA provisions could influence aMember 'schoice ofwhatenvironmental taxes and
charges toapply, some feelthatitisimportant toclarify them incertain aspects. Some suggested
thatenvironmental taxes andcharges might needtobeaccorded different treatment under WTO
rules thanother fiscal measures, andcautioned against drawing premature conclusions onBTA
disciplines which would make itmore difficult toapply them. Some feelthattheenvironmental
policy decision toimpose theinternal taxorcharge should betaken asgiven andshould not
influence consideration oftheadequacy ofWTO rules onBTA.
53. Reference hasbeenmade totheAgreement onSubsidies andCountervailing Measures
(SCM), inparticular itsprovisions on"Prohibited Subsidies" (Article 2andAnnex I)andits
"Guidelines onConsumption ofInputs intheProduction Process" (Annex II).Different views
havebeenexpressed onthelikely treatment under theAgreement ofarebate forexported
products ofindirect environmental taxes onanon-product-related PPM inexcess ofthetax
rebated onlikeproducts when soldfordomestic consumption. Oneviewisthatenergy taxes
appear tobecovered byFootnote 61oftheSCM Agreement. Another isthattheprinciple of
physical incorporation remains thebasis upon which BTA isapplied.
35BISD 18S/97.
36TheWorking Party noted thatitappeared adjustment wasnotnormally made fortaxes occultes except incountries
having acascade tax.WT/CTE/1
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54. Views havebeenpresented bysome andquestions were raised byothers onmethodologies
tovalue environmental resources forthepurposes oftaxation, andthepotential impact ofdifferent
types ofenvironmental taxes andcharges onthetrade ofdeveloping countries.
ITEM 3(B) Therelationship between theprovisions ofthemultilateral trading system and
requirements forenvironmental purposes relating toproducts, including standards
andtechnical regulations, packaging, labelling andrecycling
55. Thekeypoint ofreference fordiscussion ofthisItemhasbeentheWTO Agreement on
Technical Barriers toTrade (TBT) anditsrelationship toenvironmental regulations andvoluntary
standards. Discussions focused onenvironmental labelling (eco-labelling) schemes/programmes
andmeasures andtheirrelationship totheprovisions oftheTBTAgreement37.Considerable
empirical andanalytical work wasdonebytheGATT EMIT Group inthisarea, covering notonly
eco-labelling butalsoenvironmental packaging andwaste handling requirements. Thatwork has
beenrecalled, andsome stressed theircontinued interest intaking upagain theanalysis on
environmental packaging, waste handling, andrelated requirements.
56. Discussions oneco-labelling havebeenenriched bypresentations ofseveral existing
eco-labelling schemes/programmes atajointinformal session oftheCTE andthe
TBTCommittee.38Those presentations illustrated thevariety ofapproaches thathavebeen
adopted towards eco-labelling byWTO Members anddescribed theperceived environmental
benefits andcosteffectiveness ofthedifferent approaches.
57. Some consider there arestillfeweco-labelling schemes/programmes inoperation in
WTO Member countries andtheyhaveexpressed doubts about them becoming asignificant new
force inthemarket. Inthisregard, some questioned whytheCTE spent alarge amount oftime
discussing voluntary eco-labelling schemes/programmes, given thatapproximately 20
schemes/programmes were inoperation. Some feelthatadeeper analysis ofeco-labelling
schemes/programmes isrequired todetermine theireffectiveness aspolicy instruments for
environmental protection, particularly inviewoftheirpotential trade-distorting nature.
58. Some noted thatAgenda 21recognized theimportance ofeco-labelling asan
environmental policy tooltoassist consumers inmaking informed choices, along withtheneedto
develop criteria andmethodologies fortheassessment ofenvironmental impacts andresource
requirements throughout thefulllife-cycle ofproducts andprocesses.
59. Some havenoted thateco-labelling schemes/programmes arevariously administered in
different Members bycentral governments, localgovernment bodies, andnon-governmental
bodies. Some ofthose administered atthelocalgovernment levelorbynon-governmental
standardizing bodies havesignificant government involvement atvarious stages oftheprocess
from product selection toproduct certification andtheaward ofalabel.
60. Existing eco-labelling schemes/programmes areoverwhelmingly voluntary innature,
which some consider should relieve concerns thatmayexistabout theirpotential trade restricting
effects. Some others express doubts inthatregard, however, saying thatifthe
schemes/programmes aresuccessful theyinfluence consumer behaviour andthatinthisrespect
theycanaffect significantly market access andconditions ofcompetition.
37OneMember suggested thatthetermvoluntary labels beusedinstead ofeco-labelling schemes/programmes, since
itwasfeltthatvoluntary labels werenotonlylimited toenvironmental issues butcould beusedtohelpachieve other objectives.
38WT/CTE/W/23-G/TBT/W/23, 19March 1996.WT/CTE/1
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61. Onefocus ofdiscussion hasbeentheimplications thattheuseofLife-Cycle Approaches
(LCA) insome eco-labelling schemes/programmes canhaveinrequiring interaliatheuseof
non-product-related PPMs inorder foraproduct tobeeligible toreceive aneco-label. Some have
saidinthiscontext thatLCA canresult instandards thatarebased onamixture ofcriteria relating
toproduct andperformance characteristics, product-related PPMs andnon-product-related PPMs.
They havesuggested thatitwould notbepractical toseparate thecoverage under WTO provisions
ofeco-labelled products according tothenature ofthecriteria used, andthatallcriteria involved
ingranting aneco-label should becovered byWTO disciplines. From anoperational perspective
aneco-labelling scheme programme needs tobetreated asanintegrated whole under WTO
provisions.
62. OneMember noted thatthebusiness community inbothdeveloped anddeveloping
countries acknowledged non-product-related PPMs asoneoftherealities ofthemarketplace. In
many cases, business wasmore concerned about transparency andconsultation issues, rather than
withwhether ornotaparticular standard wasbased upon non-product-related PPMs. However,
developing country exporters appeared torequire additional timetoadapt tonewrequirements. A
number ofindividual casestudies demonstrated thepragmatic attitude ofsome developing country
textile exporters inmeeting non-product-related PPM requirements.39
63. Another Member noted thatanumber ofdeveloping countries hadreported difficulties in
complying withstandards based onnon-product-related PPM.40These problems were particularly
acute forsmall firms, because ofdifficulties inobtaining andadapting required technology, among
other factors. While transparency wasabasic requirement, itwasnotconsidered adequate, as
complying withthestandard would restrict theirmarket access.
64. Some others haveexpressed concern thatmultiple criteria-based schemes/programmes will
inevitably reflect theenvironmental conditions, preferences andpriorities prevailing inthe
domestic market, andthatthiscancreate market access difficulties. Overseas suppliers operating
under different setsofenvironmental conditions could finditdifficult andcostly, especially in
developing countries, toadjust theirproducts tomeetthecriteria required intheirexport markets,
andmayevenbeplaced inasituation ofhaving toadopt practices unsuited totheirlocal
environmental conditions. They haveexpressed concern alsoabout theimplications oftheuseof
LCA based interaliaonnon-product-related PPMs, particularly where these arechosen
selectively byaneco-labelling authority, forthemaintenance ofWTO disciplines based onthe
principle of"like product".
65. Theviewofsome isthatthere isaneedtoextend theexamination todifferent types of
eco-labelling standards anddiscuss thetrade implications ofeach. Inthisregard, itisfelt
important when designing LCA-based eco-labelling standards torecognize adequately different
countries 'particular environmental conditions andtoaccommodate different approaches that
produce anequivalent, environmentally-beneficial result. Also, eco-labelling
schemes/programmes should bedesigned soastoensure thattheyprovide sufficient andaccurate
information toconsumers regarding therelative environmental impacts ofcompeting products, and
inthatrespect theprinciples oftruthfulness, scientific basis andsubstantiability areimportant.
39International Trade Centre, Eco-labelling andother environmental quality requirements intextiles andclothing:
Implications fordeveloping countries, 1996
40UNCTAD casestudies, 1992-1995.WT/CTE/1
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66. TheCTE examined therelationship oftheprovisions oftheTBTAgreement to
eco-labelling inthelightofadocument prepared bytheWTO Secretariat.41TheCTE discussed
(i)theapplication ofthenotification andother transparency provisions oftheTBTAgreement to
voluntary eco-labelling standards, and(ii)theapplicability oftheprovisions oftheTBT
Agreement tovoluntary eco-labelling schemes/programmes based, interalia,oncriteria on
non-product-related PPMs.
67. Divergent views were expressed inthisregard. Some expressed theviewthattheanalysis
ofthetwoissues maynotbeconducted separately, andconsequently should bedealtwith
together.
68. With regard tothefirstissue, given various trade-related concerns about eco-labelling
schemes/programmes, itisawidely heldviewthatfulltransparency plays apivotal rolein
avoiding potential trade difficulties andincreasing thelegitimacy ofsuchschemes/programmes and
participation byinterested parties intheirdevelopment. Itwasrecalled thattheTBTCommittee
hasdecided thatmandatory labelling requirements aresubject tothenotification provisions of
Article 2.9oftheTBTAgreement regardless ofthekindofinformation thatisprovided onthe
label.42
69. Some consider thatallvoluntary eco-labelling standards aresubject tothetransparency
provisions oftheCode ofGood Practice forthePreparation, Adoption andtheApplication of
Standards (Annex 3oftheTBTAgreement). Some others consider thatvoluntary
schemes/programmes based onLCA donotseem tobefullycovered bythetransparency
provisions oftheTBTAgreement totheextent thatcriteria concerning non-product-related PPMs
donotfallwithin thedefinition of"Standard" inAnnex 1.Furthermore, inaccordance withthis
view, apartial coverage isnotinpractical terms sensible, because intheoperation ofthese
schemes/programmes allcriteria established forspecific categories ofproducts havetobejointly
taken intoaccount when awarding thelabel.
70. With regard tothesecond issue, many delegations expressed theviewthatthenegotiating
history oftheTBTAgreement indicates clearly thatthere wasnointention oflegitimizing theuse
ofmeasures based onnon-product-related PPMs under theTBTAgreement, andthatvoluntary
standards based onsuchPPMs areinconsistent withtheprovisions oftheAgreement aswellas
withother provisions oftheGATT. There isobjection43toanyattempt through CTE work on
eco-labelling toextend thescope oftheTBTAgreement topermit theuseofstandards based on
non-product-related PPMs.
71. Another viewisthatthedefinition oftheterm"Standard" intheTBTAgreement is
ambiguous withrespect toitscoverage ofstandards based onnon-product-related PPMs. Some
Members suggested thatthedefinition doesnotseem tocover standards based, interalia,on
non-product-related PPMs. Itcannot bestated, therefore, apriori ,thatsuchstandards are
inconsistent withtheterms oftheAgreement. Ithasbeensuggested that,ifanykindof
41WT/CTE/W/10-G/TBT/W/11, 29August 1995."Note bytheSecretariat ontheNegotiating History oftheAgreement
onTechnical Barriers toTrade withRegard toLabelling Requirements, Voluntary Standards, andProcess andProduction
Methods unrelated toProduct Characteristics."
42"Inconformity withArticle 2.9oftheAgreement, Parties areobliged tonotify allmandatory labelling requirements
thatarenotbased substantially onarelevant international standard andthatmayhave asignificant effect onthetrade of
other Parties. Thatobligation isnotdependent upon thekindofinformation which isprovided onthelabel, whether itis
inthenature ofatechnical specification ornot." (G/TBT/1/Rev.3).
43Non-paper bytheArab Republic ofEgypt, 18June 1996.WT/CTE/1
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inconsistency between theuseofLCA tools inthecontext ofvoluntary eco-labelling andthe
provisions ofthemultilateral trading system were identified, theCTE should, inaccordance with
itsterms ofreference andthefirstpreambular paragraph oftheAgreement establishing theWTO,
devise positive solutions topreserve theintegrity ofLCA. Thiswould notimply thattheuseof
non-product-related PPM requirements would begenerally allowed.
72. Stillothers havestated thattheTBTAgreement doesnotcover measures based on
non-product-related PPMs, andvoluntary eco-labelling schemes/programmes based onLCA are
notcovered bytransparency provisions oftheAgreement, since criteria concerning non-product-
related PPMs donotfallwithin thedefinition of"Standard" inAnnex 1.TheCTE isnotthe
proper forum todiscuss preserving theintegrity ofLCA. Further, environmental impacts of
different stages ofaproduct depend ontheabsorptive capacities ofdifferent countries.
73. Another viewisthatallforms ofeco-labelling, including eco-labels thatinvolve
non-product-related PPMs, arecovered bytheTBTAgreement andthattheinclusion of
non-product-related PPM-based elements inaneco-labelling regime isnotperseaviolation of
WTO rules. According tothisview, theTBTAgreement provides sufficient flexibility topermit
non-product-related PPM-based eco-labelling tobeused, subject toappropriate trade disciplines,
andthevalidity ofanyeco-labelling regime under theWTO must bejudged according tothe
relevant rules ofthemultilateral trading system.
74. Anumber ofspecific proposals havebeenmade. One44istoconfirm thattheprovisions
oftheTBTAgreement anditsCode ofGood Practice forthePreparation, Adoption and
Application ofStandards apply toalleco-labelling schemes/programmes, whether voluntary or
mandatory, andwhether administered bygovernmental ornon-governmental bodies. Inaddition,
theCTE, jointly withtheTBTCommittee should initsfuture work-programme analyse theimpact
ofthedevelopment ofinternational standards based onLCA inawaythatdoesnotprejudice the
views ofMembers regarding non-product-related PPMs. Inthisregard ithasbeensuggested45
thatthescope oftheTBTAgreement should beinterpreted tocover theuseofstandards based
upon non-product-related PPMs ineco-labelling schemes/programmes provided thatthese
standards adhere tomultilaterally-agreed eco-labelling guidelines based onscientific criteria, are
transparent, consensual andnon-discriminatory.
75. Inresponse tothisproposal, some havestated thattheydonotseeanyneedtoconfirm
whatisalready included inexisting provisions oftheTBTAgreement, andtheyhaveopposed
changing theinterpretation orapplication oftheTBTAgreement topermit standards tobebased
onnon-product-related PPMs. Inthisregard, theyhaveobjected toincluding asapoint of
reference intheTBTAgreement international standards based onLCA thatarecurrently being
developed bytheInternational Organization forStandardization (ISO). Intheirview, accepting
LCA under theTBTAgreement would permit onecountry toimpose itsenvironmental priorities
onanother. They havealsoexpressed concern about theISOprocess andthedifficulties forsome
WTO Members, particularly developing countries, toparticipate effectively initbecause ofthe
considerable resource commitments itinvolves. Consequently, theydonotconsider thattheISO
standards currently being developed inthisfieldtaketheirtrade interests adequately intoaccount.
76. Some havesuggested more generally thatwhere environmental standards, notonly
eco-labelling butalsoinsuchareas aspackaging andwaste handling, arebased onnational
environmental attributes which arenotnecessarily shared byother countries, international
standardization willnotprove tobeanacceptable wayforward under WTO provisions asameans
44Draft Decision byCanada, WT/CTE/W/38-G/TBT/W/30, 22July1996.
45Submission byCanada, WT/CTE/W/21-G/TBT/W/21, 21February 1996.WT/CTE/1
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ofavoiding unnecessary trade restriction ordistortion. Rather, theyconsider there isaneedto
examine anddevelop theTBTprovisions relating tothe"equivalence" ofstandards and"mutual
recognition" ofconformity assessment procedures asawayofalleviating trade concerns. They
havereferred tothework ofUNEP andUNCTAD inthisregard.
77. Another proposal46isthatfulltransparency should beencouraged toenable timely public
input ateachstage ofaneco-labelling programme 'sdevelopment. Thiswould reduce theriskthat
environmental criteria ineco-labelling schemes/programmes narrowly reflect national
considerations, takedifferent environmental approaches intoaccount, andhelpensure thatforeign
producers orcountries withsignificant trade interests inalabelled product havebothtimely and
effective input throughout theentire eco-labelling process. Transparency provisions should
emphasize thetimely access toinformation regarding product group definition; theidentification
andelaboration ofenvironmental criteria; procedures usedintheawarding oflabels, andother
factors. Transparency, ithasbeennoted, isofimportance notonlytothetrading system butto
theenvironmental policy objectives aswell.
78. Another proposal47insupport oftheimportance offulltransparency inthedevelopment
andoperation ofvoluntary eco-labelling schemes/programmes based onLCA suggests thattwo
possible options should beconsidered: (i)seeking fullcoverage bytheTBTAgreement; and
(ii)negotiating anadhocinstrument suchasacodeofconduct taking asapoint ofreference the
mechanisms andprocedures established intheTBTAgreement. However, theproposal notes that
itmaybeinappropriate toaddress thetransparency issue without firstclarifying thestatus of
LCA-based voluntary eco-labelling schemes/programmes.
79. Inresponse tothisproposal, some haveexpressed objection todeveloping aseparate code
ofconduct.
80. Oneproposal48emphasizes thepotentially adverse market access impact which
eco-labelling schemes/programmes canhaveondeveloping countries, andseeks clarification ofthe
extent towhich countries, particularly developing countries, areabletoparticipate effectively in
existing transparency provisions. Article 12oftheTBTAgreement hasbeenrecalled, inwhich
special anddifferential treatment ofdeveloping country Members should beaccorded. Inthis
regard, theproposal includes consideration ofthetransfer ofappropriate technologies asone
aspect ofaneffective transparency regime withregard toeco-labelling schemes/programmes.
81. Some consider thatthediscussions onthisItemtodatehavefocused oneco-labelling to
suchanextent thatinsufficient attention hasbeengiven toother environmental product
requirements, notably packaging andwaste handling requirements, including recycling
requirements. Inthatregard, oneviewisthateco-packaging requirements generally arebased on
conditions which reflect thenational priorities inthecountry which imposes them. Applying these
measures toimports might notonlybeenvironmentally inappropriate butalsohaveanegative
impact onmarket access. According tothisview, indepth discussion isnecessary onthebest
wayofensuring thateco-packaging requirements effectively comply withtherelevant provisions
onnon-discrimination andnational treatment, since these requirements might leadtosignificant
defacto trade barriers. Equality ofopportunity tocompete iscentral tothisissue, andthe
effective application oftheconcept ofnecessity isalsoimportant.
46SubmissionbytheUnitedStates,WT/CTE/W /27;G/TBT/W /29,25March1996, andasproposed ina"DraftDecision
onTransparency inEco-labelling Programmes", 11September 1996.
47Non-paper bytheEuropean Community, 24July1996.
48Non-paper byIndia, 22July1996.WT/CTE/1
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ITEM 4 Theprovisions ofthemultilateral trading system withrespect tothetransparency
oftrade measures usedforenvironmental purposes andenvironmental measures
andrequirements which havesignificant trade effects
82. Ensuring thattrade measures usedforenvironmental purposes andenvironmental measures
andrequirements which havesignificant trade effects (hereinafter trade-related environmental
measures) aretransparent helps toavoid unnecessary trade restriction anddistortion from
occurring andprovide important information toproducers andtraders about overseas market
access opportunities. Therolewhich transparency plays indispute avoidance wasalsonoted.
83. Trade-related environmental measures should notberequired tomeetmore onerous
transparency requirements thanother measures thataffect trade. However, ithasbeenfelt
important toexamine whether anycategory oftrade-related environmental measures currently
escapes entirely coverage byWTO transparency provisions, whether existing levels of
transparency provided forareadequate inthelightofameasure 'spotential trade effects, andwhat
improvements might bemade tofacilitate WTO Members 'access toinformation about these
measures. Many emphasize thehorizontal nature oftransparency anditslinks todiscussions
under Items 1,3,6,7,8and9.
84. There were initial concerns intheCTE thatcertain categories oftrade-related
environmental measures maynotbecovered atallbyWTO transparency provisions andthat
consequently there maybeabsolute gapswhich would needtobefilled. Alistwasdrawn upof
themeasures mentioned inthisregard.49Onthebasis ofaSecretariat survey, itwasnoted that
notifications ofthese measures arebeing made byatleastoneMember under oneorother WTO
provisions. From thepoint ofviewofsome therefore, thenewUruguay Round Agreements have
filled thegapswhich were previously identified. Ithasbeennoted alsothatsome Trade Policy
Review (TPR) reports contain information onthese measures, andthatTBTandSPSenquiry
points areavailable toprovide supplementary information onmeasures covered bythose
Agreements.
85. Asregards theadequacy ofexisting levels oftransparency forparticular categories of
trade-related environmental measures, ithasbeennoted thatWTO provisions provide incremental
degrees oftransparency. Beyond thegeneral GATT obligation topublish information about all
trade-related measures, higher degrees oftransparency areachieved through expostnotification
requirements, exantenotification requirements, andthrough theestablishment ofenquiry points
under theTBTandSPSAgreements. Oneviewisthatthedegree oftransparency should be
correlated withthepotential significance ofameasure 'strade effects, andasuggestion wasmade
fortheCTE toconduct more work onthepotential significance oftheeffects oftrade-related
environmental measures. Some feelthatinanyevent these measures warrant being made subject
toexantenotification sothatforeign suppliers cancomment upon them atanearly stage inthe
development oflegislation, andthatspecial enquiry points should beestablished ineachMember
toprovide upon request additional information about them. Others feel,however, thatwhile the
introduction ofmore stringent transparency requirements might bewarranted inspecific instances,
notransparency provision iswithout costandthisissue should bepursued onacase-by-case basis
under other Items oftheCTE work programme orinspecialized WTO Committees. Specific
concerns raised about theadequacy ofexisting provisions forensuring thetransparency oftrade
measures taken pursuant toMEAs andofvoluntary eco-labelling schemes/programmes were
pursued further under other Items ofthework programme dealing directly withthose measures.
86. Theissue ofestablishing special enquiry points inMembers toprovide upon request
information about trade-related environmental measures wastaken upinthecontext ofdiscussions
49"Potential Identified Gaps inExisting Transparency Provisions," Annex, WT/CTE/W/28, 19April 1996.WT/CTE/1
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onwhatimprovements might bemade tofacilitate Members 'access toinformation about these
measures. Oneproposal50suggests consideration begiven toestablishing enquiry points.
Another51proposes thatinformation ontrade-related environmental measures which donotfall
within thepurview ofTBTorSPSenquiry points should beprovided through national enquiry
points orrelevant authorities. They could handle requests foradditional information onmeasures
notified under theWTO, ormore generally supply information toMembers, especially developing
country Members, about anynon-notified trade-related environment measures ineffect aswellas
informing exporters about market opportunities created byenvironmental measures, suchas
government incentives fortheconsumption ofcertain products, government procurement
requirements which givepreference toproducts thatfulfilled voluntary environmental standards,
andinformation onNGO programmes forenvironmentally-friendly products.
87. Concern hasalsobeenexpressed about thecreation ofenquiry points. Some have
expressed doubts about theappropriateness ofestablishing amechanism thatisbased ona
measure 'spolicy purpose rather thanitscharacteristics, which isnottraditional WTO practice.
There areconcerns alsoabout theadministrative costs involved inoperating them, which itisfelt
would needtobeweighed against theirpotential benefit interms ofincreased transparency in
order tojustify theuseofresources. Some stress theneednottoduplicate thework ofTBTand
SPSenquiry points orother WTO transparency provisions, andsome express concern about the
essentially bilateral nature ofthetransparency which would begenerated inthisway.
88. Views havebeenexpressed thatlackoftransparency maybeassociated more with
differences ininterpretation among Members ofhowexisting WTO transparency provisions apply
totrade-related environmental measures ordifferences incompliance withthose provisions than
withanysystemic inadequacy. Thiscould make itdifficult forMembers tohavecomprehensive
andconsistent information about trade-related environmental measures. Itisproposed,52
therefore, thatMembers should collectively clarify existing notification obligations covering
trade-related environmental measures. Some others feelthismatter could beaddressed more
properly intheWorking Group onTransparency Obligations andImplementation thanintheCTE,
anditissuggested thattheresults oftheCTE'sdiscussions onthisissue should betransmitted to
thatWorking Party.
89. Some havenoted thattheabsence ofacentralized collection point intheWTO for
notifications oftrade-related environmental measures which makes itdifficult atpresent for
Members toretrieve information about these measures easily andefficiently. Inthisrespect, a
proposal wasmade thattheSecretariat should therefore collect from theCentral Registry allsuch
notifications inasingle database, which would beregularly updated.53Thedatabase could contain
thefollowing information foreachnotified measure: itsnature/title; objective(s); product
coverage; relevant WTO orMEA provisions; adescription ofhowitoperates; andcomments
onitstrade effects. Itcould include alsoinformation provided onanessentially bilateral basis by
national enquiry points, which should becopied totheWTO Secretariat sothatthiscould bemade
available onamultilateral basis, aswellasinformation ontrade-related environmental measures
provided inTPRreports. Attention hasbeendrawn inthiscontext totheexistence ofother
databases ofthisnature, forexample onemaintained byUNCTAD, anditisfeltitwould be
important nottocreate duplication.
50Non-paper byHong-Kong, 28May 1996.
51Non-paper byBrazil, 22July1996.
52Non-paper byHong Kong, 28May 1996.
53Non-paper byHong Kong, 28May 1996.WT/CTE/1
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90. Some suggest thatTPRreports canhelpimprove transparency bycovering trade-related
environmental measures systematically. However, others feelitisnotappropriate fortheTPRM
tobecome involved inenvironment-related issues which theyconsider lieoutside itsmandate.
91. Onepoint raised inrelation toallofthese proposals isthedifficulty ofdefining theterm
"environment" inanoperational wayfortheWTO. Many trade-related measures canbe
associated withavariety ofdifferent policy objectives, andenvironmental orconservation aims
maybeonlyasecondary orrelated policy characteristic. Forsome, thismakes itdifficult to
arrive atanyconclusion onwhether gapsintransparency exist, andtheyfeelthatgreater
definitional clarity would beparticularly important inthecontext ofconsidering proposals for
enquiry points dedicated totrade-related environmental measures.
ITEM 6 Theeffect ofenvironmental measures onmarket access, especially inrelation to
developing countries, inparticular totheleastdeveloped among them, and
environmental benefits ofremoving trade restrictions anddistortions
92. ThisItemisofrelevance tomany aspects oftheCTE'sterms ofreference andtoWTO
Members 'agreement toconduct theirtrade relations inawaywhich allows fortheoptimal useof
theworld 'sresources inaccordance withtheobjective ofsustainable development, while seeking
tobothprotect andpreserve theenvironment andtoenhance themeans fordoing soinamanner
consistent withtheirrespective needs andconcerns atdifferent levels ofeconomic development.54
93. Extensive reference hasbeenmade bysome during discussions under thisItemtothe
importance ofanumber ofthegeneral principles contained intheRioDeclaration.
94. Oneisthatpoverty isabasic cause ofenvironmental degradation inmany Member
countries, andthatthecontribution trade canmake totheeradication ofpoverty byraising income
levels isanindispensable requirement forthepromotion ofsustainable development.
95. Asecond isthatitisnottrade thatisgenerally attherootofenvironmental degradation,
butrather unsustainable production andconsumption processes. Some consider thishasimportant
implications forchoosing andassigning corrective policy measures efficiently. Some havenoted
inthisregard thatthekeytotheachievement ofenvironmental benefits isthedevelopment of
more sustainable patterns ofproduction andconsumption.
96. Athirdistheprinciple of"common butdifferentiated responsibility". Some feelthis
should beapplied toanexamination oftheintroduction ofnewtrade-related environmental
measures which could create highadjustment costs fordeveloping countries exporters. Some
others havenoted thatallcountries havethesovereign righttomake theirownjudgements onthe
standards which theyapply within theirownterritories andthatinthisregard there isaneedto
ensure flexibility andfairness intheimplementation ofsustainable development strategies inall
countries.
97. Afourth principle isthatpolicy measures applied topromote theinternalization of
environmental costs should notdistort international trade andinvestment. Onecomment made in
thisregard isthatmeasures toimprove environmental conditions inonecountry should notshift
thecosts ontoothers. Another isthatthepolluter should, inprinciple, bearthecosts ofpollution.
98. AfifthisthatMembers should cooperate topromote asupportive andopeninternational
economic system thatwould leadtoeconomic growth andsustainable development inall
54Preamble totheMarrakesh Agreement Establishing theWorld Trade Organization.WT/CTE/1
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countries, tobetter combat theproblems ofenvironmental degradation. Some considered that
where trade liberalization doesnotbring environmental benefits, itshould beaccompanied by
complementary environmental andresource management policies ifitsfullpotential contribution to
better protecting theenvironment andpromoting sustainable development through more efficient
allocation anduseofresources istoberealized. Some others stressed thatwhile anopen
multilateral trading system makes possible amore efficient useofnatural resources inboth
economic andenvironmental terms, theachievement ofsustainable development depends crucially
ontheimplementation ofsound environmental policies atthenational andasappropriate atthe
international level. Some consider thattrade liberalisation ingeneral results inenvironmental
benefits although insome cases itmayneedaccompanying environmental policies.
99. Oneproposal55describes theproblems oflow-income, commodity-dependent countries
andother countries which remain marginal participants inworld trade, andnotes thatthemost
urgent environmental problems theyfaceareoften different from those ofother countries. It
suggests thataction bytheirtrading partners toassist theexpansion anddiversification oftheir
export opportunities, including diversification intohigher value-added products, could helpthese
countries intheirefforts tobothreduce poverty andprotect theenvironment. Some others
consider thattrade liberalization should beaccompanied bytechnology andfinancial transfers to
developing countries.
100. Some consider there isaneedformore empirical andanalytical work onthedesign and
sequencing oftrade andenvironmental policies toaddress thefactthattrade liberalization might
exacerbate environmental problems interms oftheincome, scale, composition, technology and
product effects resulting, incertain circumstances, from market andpolicy failures. Some take
theviewthattheelimination oftrade restrictions anddistortions thataffect international
commodity prices isasinequanonforachieving thegoals ofenvironmental protection and
sustainable development, particularly indeveloping countries; theirelimination should notbe
made conditional onchanges inenvironmental policies inexporting countries. Some feelthat
evenifincertain circumstances trade liberalization maymagnify existing environmental problems,
theproper policy response istoputinplace thenecessary environmental anddomestic resource
management policies. Policy choices inthatregard, itisfelt,aretheresponsibility of
governments atthenational level.
101. Oneproposal56suggests that:(i)freertrade cancontribute toanexpansion ofeconomic
growth; (ii)economic growth, accompanied bysound environmental policy, canimprove
environmental quality; (iii)eliminating market distortions leads tomore rational andefficient use
ofmarket resources, thereby supporting sustainable development; (iv)opening agricultural
markets contributes toamore efficient allocation ofresources andmayimprove environmental
quality; and(v)agro-environmental policies thatinternalize environmental externalities contribute
toamore efficient allocation ofresources andimprove environmental quality. Italsonotes that
sound environmental policies directed atthose unique nationally-specific environmental problems
arepreferable totrade restrictions. Itconcludes thatfreetrade andenvironmental policies can
work intandem toachieve social benefit, economic growth andenvironmental quality.
102. Many consider thatenvironmental problems should bedealtwithatthenational levelby
Members attheirsource, andnotindirectly through trade restricting ordistorting measures
applied bytheirtrading partners. Inthisregard, Principle 11oftheRioDeclaration wasrecalled.
ThisPrinciple recognizes that"States shallenact effective environmental legislation.
Environmental standards, management objectives andpriorities should reflect theenvironmental
55Submission byAustralia, WT/CTE/W/36, 23July1996.
56Submission bytheUnited States,WT/CTE/W/35, 23July1996.WT/CTE/1
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anddevelopment context towhich theyapply. Standards applied bysome countries maybe
inappropriate andofunwarranted economic andsocial costtoother countries, inparticular
developing countries." Measures based onnon-product-related PPMs were referred toparticularly
inthisregard. Some expressed concern thatwhile itmight prove necessary tobaseenvironmental
measures onlifecycle analysis andnon-product-related PPMs, these should notbeapplied insuch
awayastodifferentiate "like products" attheborder. Some havenoted thatMembers havea
responsibility toensure thatactivities within theirjurisdiction donotcause physical environmental
damage elsewhere, buttransboundary environmental problems should beresolved cooperatively
through thenegotiation ofMEAs; claims thatunilateral action maybenecessary where itproves
difficult tonegotiate anMEA areunacceptable andsuchaction would damage seriously the
trading system.
103. Inthatcontext, many havenoted thatenvironmental standards differ from onecountry to
another andtrade-related measures should notbeusedtotrytoharmonize them orcompensate for
differences between them. Some feelthiscould amount totheextra-jurisdictional imposition ofa
country 'senvironmental standards onitstrading partners. Inaddition, itcould cause bothadverse
economic andadverse environmental effects where producers arerequired toadapt toPPMs that
arenotsuited tothelocalenvironmental conditions ofcountries inwhich theirproduction is
based. Some havereferred tothe1995 Report onTrade andEnvironment totheOECD Council
atMinisterial Level inwhich governments confirmed theircommitment toAgenda 21and
Principle 12oftheRioDeclaration, andagreed that"these principles alsoextend tounilateral
import restrictions based onPPM-related requirements". Ithasbeensuggested bysome that
enhanced market access could begranted forsome sectors likewood products, fisheries and
agriculture, particularly todeveloping countries having better environmental absorptive capacities,
thereby enhancing theirincome andengendering balanced environmental protection.
104. Theeffect ofenvironmental measures onmarket access, especially inrelation to
developing countries, inparticular totheleastdeveloped among them, iswidely viewed asa
cross-cutting issue which could betaken upinpartinamore detailed wayinrespect ofparticular
trade-related environmental measures addressed under other Items oftheCTE work programme.
105. Atthegeneral level, some haverecalled theconclusions oftheOECD57thathighlevels of
environmental protection canhavepositive effects onthecompetitiveness ofdomestic producers
byencouraging them toeconomize onresource useandotherwise increase theirefficiency, and
canstimulate thedevelopment ofnewproducts, services andtechnologies, thereby creating new
market opportunities.
106. Some others consider these opportunities maynotbeeasytoaccess byproducers ina
large number ofWTO Members, particularly small andmedium scale enterprises (SMEs) in
developing andleastdeveloped countries. Analysis andempirical work byUNCTAD was
recalled inthisregard which, itwasstated, showed thatcompliance costs could beconsiderably
more burdensome fordeveloping countries. Substantial financial andtechnological resources as
wellastechnical andadministrative expertise, andincertain cases evenmaterial resource
endowments, might berequired toadapt tonewregulations andstandards inexport markets, and
these arefrequently notavailable todeveloping country producers. Thiscould takeonan
important dimension andleadtothecreation ofnon-tariff trade barriers. Eco-labelling and
packaging requirements andeco-taxes havebeenmentioned inthisconnection. There is,
therefore, concern thatenvironmental measures could have, anddohaveintheviewofsome,
significant adverse trade effects, particularly fordeveloping countries.
57Report onTrade andEnvironment totheOECD Council atMinisterial Level,Paris, 1995.WT/CTE/1
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107. Oneviewisthattomitigate andeliminate theiradverse trade effects, environmental
measures should bebased onthecriteria ofsound science, transparency, andequity, andthey
must becompatible withtheopen, equitable andnon-discriminatory nature ofthetrading system
andconform toitsbasic provisions anddisciplines. Some consider thatinthedesign of
environmental measures, useofenvironmental principles suchastheprecautionary principle and
theprinciple ofproportionality between environmental benefits andeconomic costs should be
studied from thepoint ofviewoftheeffects oftheirapplication onthetrade ofdeveloping
countries.
108. Some consider thatstrengthened WTO disciplines might bejustified toreduce and
eliminate theadverse trade effects ofcertain environmental measures. Inthisregard, one
contribution58suggests thatwork should focus onsafeguarding existing market access
opportunities, particularly forSMEs which account foralarge share ofmanufactured exports in
developing countries. Various WTO provisions should bereviewed from thispoint ofview, in
particular theprovisions oftheTBTandSPSAgreements, theAgreement onSubsidies and
Countervailing Measures andtheTRIPs Agreement, aswellasallWTO provisions forspecial and
differential treatment fordeveloping countries. Further work should alsoaddress means of
increasing market access forenvironmentally-friendly products from developing countries
including thedevelopment ofenvironmentally-sound technologies forsuchproducts andtheiruse.
Onesuggestion made inthisregard istoexamine howbesttoallow developing countries to
benefit from differential schedules forcompliance withtrade-related environmental measures, such
astimelimited exceptions, orthedevelopment ofanenvironmental deminimis clause. Another is
toexplore themeans ofproviding additional technical assistance todeveloping countries.
109. Indiscussions ontheenvironmental benefits ofremoving trade restrictions anddistortions,
theenvironmental benefits thatareaccruing from implementation ofthecommitments agreed in
theUruguay Round negotiations havebeenwidely noted. Many consider thefocus offurther
work should betrade andtrade-related measures applied byMembers thatwillremain afterthe
Uruguay Round results arefullyimplemented. Measures citedbyoneormore Members inthe
CTE aretariff escalation andtariff peaks, production andexport subsidies, highinternal taxes
particularly ontropical products, export restrictions andexport taxes, theexport practices ofstate
trading enterprises, andvarious non-tariff barriers. Reference59hasbeenmade inparticular tothe
potential environmental benefits which could accrue from thereduction andremoval ofremaining
trade restrictions anddistortions affecting sectors andproducts inwhich developing countries have
aparticular export interest, suchastextiles andclothing, leather andleather products, footwear,
forest products, fishandfishproducts, minerals andmining products, agricultural products, other
natural resource-based products andprimary commodities. Many support theneedforfurther
empirical work andanalysis inthese areas. These effects could bepositive ornegative. Positive
effects, oropportunities, arenotalways easytoexploit andrequire expertise, technology and
resources which maynotalways beavailable todeveloping countries. Italsowasnoted thatthe
globalization oftheeconomy suggests theneedtolookfortrade liberalization across theboard.
110. Environmental benefits areexpected toaccrue inavariety ofways. Some consider they
accrue most directly through theremoval oftrade restrictions onenvironmentally-friendly goods
andenvironmental services; theywillaccrue alsothrough theremoval ofrestrictions onthe
transfer ofenvironmentally-sound technologies (discussion under Item8reflects different views on
thispoint); inaddition, trade restrictions anddistortions canleadtoaninefficient allocation of
resources, holdbackincome growth, particularly indeveloping countries, andartificially shift
resources intoactivities which place additional pressure ondomestic, environmentally sensitive
58Non-paper byIndia, 20June 1996.
59See,inter alia,Non-paper byIndia, 20June 1996.WT/CTE/1
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resources; reducing orremoving them would helptocorrect this. Some others alsoconsider that
toensure direct andsubstantial environmental benefits, trade liberalization should be
complemented bymeasures toimprove market access, access toenvironmentally-sound
technologies, finance andcapacity building.
111. Theenvironmental effects ofsubsidies, inparticular intheagriculture sector, andoftariff
escalation were paidparticular attention intheCTE discussions.
112. Some havefocused ontheadverse environmental effects ofthesubsidization of
agricultural production andexports. These aredescribed asinvolving orarising from intensified
landuse,increased application ofagro-chemicals, theadoption ofintensive animal production
practices andovergrazing, thedegradation ofnatural resources, lossofnatural wildlife habitats
andbiodiversity, reduced agricultural diversity andtheexpansion ofagricultural production into
marginal andecologically sensitive areas. Agricultural assistance through output-related policies
inmany OECD countries wasshown tohaveimposed highenvironmental costs inthose countries
athighfinancial expense. Italsoimposed higheconomic andenvironmental costs onother
countries withacomparative advantage inagricultural production andtrade, particularly
developing countries. Empirical work bytheOECD, UNCTAD, andtheFAO wascitedinthis
regard60,andmany consider itimportant toextend thatfurther. Anumber ofdelegations consider
thatfurther reductions ofagricultural protection andsupport would represent a"win-win" situation
fortrade andenvironment.
113. Some others feelitisinappropriate fortheCTE tofocus narrowly ontheagricultural
sector. They alsoconsider thatitwould notbeappropriate fortheCTE toengage indiscussions
thatwould prejudge theagriculture negotiations. They feelthattheWTO Agreement on
Agriculture remains thebestsuited forum fortheconsideration ofagricultural liberalization, since
italready contains abuilt-in structure fordealing withsuchissues, andtheyexpress caution about
drawing generalized conclusions ontheenvironmental impact ofagricultural support programmes,
which theyfeelisacomplex issue. Further analysis isneeded totakeaccount ofdiffering
geographic andenvironmental conditions between countries, different levels ofsocio-economic
development, andother factors, andthisshould bedoneonacountry basis
case-by-case. Theenvironmental externalities associated withagriculture neednotonlybe
negative; agriculture hasadualenvironmental function anditcanhavepositive environmental
effects through conservation andrelated practices. Abandoning farming might leadto
environmental damage associated withsoilerosion orbiodiversity loss. Well-designed agricultural
support programmes, theyfeel,could havebeneficial effects ontheenvironment, aswellasonthe
linked issues offoodsecurity andsustainable development. Areference hasbeenmade inthis
regard toFAO work onSustainable Agriculture andRural Development. These Members noted
thatsustainable agriculture requires anintegrated approach combining environmental, social and
economic factors intoacomprehensive framework ofpolitical andeconomic decision-making.
They considered thatstrategies resulting from theunderstanding ofthese linkages should
correspond tothemultiplicity offunctions ofagriculture, including theprotection ofnatural
resources andthepreservation ofthelandscape.
114. Many point tothepotential economic andenvironmental benefits theyfeelwould accrue
from thereduction andremoval oftariff escalation byhelping toraisethevalue added by
producers incommodity-dependent countries, increase incomes inthose countries, andreduce
direct pressure onnatural resource exploitation. Some suggest thatonsimilar grounds benefits
could beexpected toaccrue alsofrom thereduction andremoval ofexport restrictions onprimary
products.
60OECD, TheEnvironmental Effects ofTrade ,Paris 1994; UNCTAD/COM/35, 25April 1995: "Internalization of
Environmental Damages inAgriculture"; FAO, 16thRegional Conference forEurope.WT/CTE/1
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115. Oneproposal61focuses ontheneedforenvironmental policy tobuild upon prices that
reflect fullprivate costs ofproduction. Therefore, itsuggests thatthefirststeptothisendshould
betoidentify andeliminate those governmental policies responsible forthese price distortions.
Itproposes thattheCTE address initsfuture work theneedforfundamental, on-going reform in
theagricultural sector andidentify ways andmeans toreduce andeliminate trade restrictions and
distortions there. This, itissuggested, would beacontribution tofuture negotiations under the
Agreement onAgriculture.
116. Another proposal62notes thatthere isconsiderable scope topromote more sustainable
agricultural policies andpractices inthecontext oftheagenda built-in totheUruguay Round
results forthecontinuation ofthereform process inagriculture.
117. Oneproposal63suggests thatthere arevarious inter-related factors, including natural
conditions, andsocio-economic circumstances ineachcountry which cause environmental
problems, andtheCTE should advance empirical andtheoretical analysis. Agricultural trade
liberalization could cause environmental problems insome Members byintensifying pressure on
andthedegradation oftheirnatural resources ifeffective environmental policies were notinplace.
Thisproposal alsosuggested thatinmore general terms trade liberalisation without appropriate
environmental policies mayhavenegative effects ontheenvironment.
118. Another proposal64,which isbased onthepremise thatthere isnosimple orautomatic
linkbetween trade liberalization andenvironmental protection, notes withrespect tothelink
between pricing policies andenvironmental policies, thattheeffect oftrade liberalization onprices
cannot bepredicted withcertainty, andthatadjustment ofprices isnotapriori environmentally
efficient. Such environmental efficiency would depend toacertain extent bothonwider economic
factors inagricultural markets andtheconditions conducive tostructural adjustment inproducer
economies. Furthermore, market mechanisms could onlyleadtobothaneconomically and
ecologically optimal allocation ofproduction resources iffullinternalization ofenvironmental
costs were achieved. Thisisdifficult toachieve, andisafunction notonlyofprice levels but
alsoofpolitical will.
119. Inreaction, thedifficulties involved intheinternalization ofenvironmental externalities
havebeennoted bysome. Intheirview, animportant consideration isthatinternalization needs
totakeaccount ofandcoincide withdevelopment priorities. Other questions alsohavebeen
raised, suchaswhowould decide whatandwhen tointernalize, andwhether thedecision should
betaken based onscientific evidence andrelying oncost-benefit analysis.
120. Another proposal65suggests thatitisnotappropriate todraw thehasty conclusion thatthe
removal oftrade distorting agricultural measures willhaveenvironmental benefits, orthat
distorting measures necessarily havenegative environmental effects when helping tocorrect
market failures. Itistherefore proposed toundertake analytical andempirical studies, ona
case-by-case basis taking intoaccount country-specific conditions, todetermine therelationship
between agricultural trade andtheenvironment. Thisproposal alsosuggests thatparticular respect
61Communication from Argentina, WT/CTE/W/24, 31March 1996.
62Submission byAustralia, WT/CTE/W/36, 23July1996.
63Non-paper byJapan, 24June 1996.
64Non-paper bytheEuropean Community, 23July1996.
65Non-paper bytheRepublic ofKorea, 23July1996.WT/CTE/1
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should begiven totheissues offoodself-sufficiency towards foodsecurity, particularly innet
foodimporting countries.
121. Another proposal66suggests thatinnegotiations onfurther trade liberalization, theWTO
should ensure thatenvironmental consequences areconsidered. Inthisrespect, theWTO should
besupportive ofefforts tointernalize environmental costs. Onewaytoproceed intheCTE may
betoidentify sectors where trade liberalization could beconducted inawaysoastoyield both
economic andenvironmental gains. Theenergy sector waspointed outasoneexample where
trade liberalization (interalia,thereduction ofsubsidies andother measures) mayresult insucha
double dividend. Further, thelinks between trade rules andenvironmental principles, in
particular thepolluter-pays principle (PPP) andtheprecautionary principle, should beexamined.
TheCTE should alsoexamine howtointegrate concerns related touseofthelife-cycle approach.
Itwassuggested thatthemultilateral trading system should offer scope forincentives fortheuse
ofenvironmentally friendly products, andthatthemultilateral trading system should not
encompass incentives forproduction anduseofenvironmentally-damaging products.
122. Some havequestioned andobjected tothisproposal, particularly inreference totheenergy
sector. Onespecific reaction isthatanyproposal regarding analysis ofincentives fortheuseof
environmentally-friendly products should takeaccount ofthecomplexities ofthelinks between
energy generation anduseandenvironmental quality. National decision making onenergy
choices includes suchvariables asefficiency inproduction, availability ofenergy sources,
economic costs forusers andsocial impacts onthelocalpopulation. Offering orwithdrawing
incentives toproducts, forexample energy, cannot beundertaken onaselective basis.
ITEM 7 Theissue ofexports ofdomestically prohibited goods
123. Thisissue covers products whose saleandusearebanned orseverely restricted
domestically onthegrounds thattheypresent adanger tohuman, animal, plant lifeorhealth or
theenvironment, butwhich nevertheless maybeexported. Itisofparticular concern tomany
developing andleast-developed countries. In1991, aGATT Working Group onDomestically
Prohibited Goods andother Hazardous Substances (DPGs) produced a"draft Decision onTrade in
Banned orSeverely Restricted Products andOther Hazardous Substances". Consensus toadopt
thedecision could notbereached.67Taking account oftheneednottoduplicate orimpede work
doneorunderway inother intergovernmental foratoimprove themonitoring andcontrol oftrade
inDPGs, theCTE hasexamined whatadditional contribution theWTO might make inthisarea.
124. Since theexamination ofthisissue bytheGATT Working Group onDPGs, anumber of
newinternational agreements andconventions dealing, interalia,withthemonitoring andcontrol
oftrade incertain DPGs haveentered intoforce andothers areunder negotiation. Particular
mention hasbeenmade inthisregard oftheBasel Convention ontheControl ofTransboundary
Movements ofHazardous Wastes andtheirDisposal, thepreparation under theAmended London
Guidelines ofaninternationally legally-binding instrument fortheapplication ofthePrior
Informed Consent (PIC) procedures forcertain hazardous chemicals ininternational trade, the
decision todevelop adraftProtocol onLiability andCompensation forDamage Resulting from
Transboundary Movements ofHazardous Wastes andtheirDisposal, andthedraftProtocol on
Bio-Safety. Multilateral rules onexports ofDPGs should continue tobedeveloped primarily
through environmental instruments suchasthese.
66Non-paper byNorway, 20June 1996.
67SeeReport bytheChairman oftheWorking Group onDomestically Prohibited Goods andOther Hazardous Substances,
L/6872, 2July1991.WT/CTE/1
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125. AdraftDecision onExports ofDomestically Prohibited Goods hasbeensubmitted tothe
CTE forconsideration.68Itdraws onelements ofthe1991 draftGATT Decision onthissubject,
including, interalia,thedefinition ofproduct coverage, theobligation ofexporting countries to
notify other WTO Members ofDPGs theyexport ifthese arenotalready being notified under
another international instrument, andtheneedtoensure thatmeasures taken forthepurpose ofthe
Decision areinconformity withWTO rules. ThedraftDecision includes provisions fortechnical
assistance tobeprovided toMembers inthisarea, forenquiry points tobeestablished, andit
encourages exporting Members toconsider whether themeasures theyapply toDPGs domestically
should alsobeapplied toexports.
126. Some consider thatwhile theWTO 'sroleshould belimited strictly inthisareato
supplementing theactivities ofother specialized international organizations, itnevertheless has
within itscompetence animportant contribution tomake byhelping tofillanygapswhich maybe
leftbyexisting mechanisms inthemonitoring orcontrol ofexports ofDPGs andbyhelping to
strengthen theregimes ofother international instruments whose provisions arenotlegally-binding
orwhich arevoluntary. Twogeneral areas ofpotential gapshavebeensuggested: DPGs not
covered byother international instruments, andDPGs exported byWTO Members which arenot
Parties tothose other international instruments. With regard tothisfirstarea, some consider that
special emphasis should beplaced onexports ofdomestically prohibited orseverely restricted
consumer goods, cosmetics, foodstuffs andcertain pharmaceutical products. Another viewisthat
hazardous wastes should notbedealtwithunder thisItemsince theyarealready fullycovered by
theBasel Convention.
127. Some consider thatmuch trade inDPGs isalready covered byexisting international
instruments andthatwithfurther improvements intheiroperation theissue ofexports ofDPGs
willprove tobeofdecreasing importance. They feelthattheidentification ofpotential gapsin
coverage ofDPGs, totheextent theyexist, istechnical work which liesoutside theWTO 's
competence andwhich could beundertaken better by,oronlyinconsultation with, other relevant
international organizations suchasUNEP andWHO. They havepointed totheinformation
contained inexisting notifications byMembers under theTBTandSPSAgreements about
technical regulations theyimpose onthesaleoruseofproducts onthedomestic market, andthey
havesuggested thatthismayprovide animportant source ofinformation onDPGs andhelp
resolve theperceived problem. They doubt there isafurther contribution which theWTO could
make inthisareathatwould fallwithin itscompetence ormandate, beyond ensuring thatWTO
rules donotconflict withtherules ofother multilateral instruments applied inthisarea.
128. Ensuring thetransparency oftrade inDPGs hasbeenfeltbysome tobeanareawhere the
WTO could contribute, butwithout duplicating existing transparency andnotification procedures
inother relevant international instruments69towhich priority should always begiven, norin
relevant WTO Agreements suchastheTBTandSPSAgreements. Some havesuggested that
countries exporting DPGs could berequired tonotify theproducts inquestion, andthattheycould
establish enquiry points toprovide, onrequest, information about whythedomestic saleoruseof
theproducts notified hasbeenbanned orseverely restricted. Another suggestion isthatWTO
Members maylimitexchange ofinformation inthisareatoregulatory actions relating toDPGs.
Some emphasize theimportance ofensuring thatoneMember 'snotification ofaDPG intheWTO
would notleadtoitsexports being treated differently byanimporting country from exports ofthe
same product from other countries orfrom domestically produced goods. Some others consider
68Proposal byNigeria, WT/CTE/W/32, 30May1996. SeealsoProposal byNigeria, WT/CTE/W/14, 27November
1995.
69Alistofother relevant international instruments wascompiled bytheSecretariat inWT/CTE/W/29, 14May1996.WT/CTE/1
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thataDPG notification programme, including prohibited butalsoseverely restricted goods,
would create aserious administrative burden andtheimportant amount ofnotifications resulting
from suchaprogramme would eventually impair transparency. Onesuggestion istoconsider to
whatextent anenvironmental database, asexamined under Item4,could address theproblem, or
whether achapter dealing withDPG regulations could beincluded inTPRreports.
129. Oneissue examined waswhere theresponsibility fortaking adecision torestrict trade in
DPGs should lie:withtheexporting country, theimporting country, orjointly between thetwo?
Some feelthatareasonable degree oftheresponsibility forcontrolling trade should liewiththe
exporter, which should consider extending itsdomestic salesbansandrestrictions toexports or
engage inmandatory labelling ofDPGs. However, some express concern thatthiscould imply
endorsement ofaMember applying itsownhealth orenvironmental standards extra-
jurisdictionally. Another viewisthatthedecision torestrict trade inaproduct should lie
exclusively withtheimporting country, butthattheexporting country could beasked tocooperate
inensuring thedecision wasimplemented effectively.
130. Providing technical assistance tohelpMembers improve theircapacity totakeinformed
decisions about whether ornottoimport DPGs andtomonitor theirimports ofDPGs more
effectively hasbeenviewed asapotentially important partofthesolution toproblems inthisarea,
particularly overthelonger term. Ithasbeennoted thatthecustoms authorities ofdeveloping
countries often lackadequate product testing facilities andthattheabsence ofproduct standards
andregulations inthese countries addstotheproblem, forexample byenabling products tobe
marketed beyond theirexpiry dates. Ithasbeenrecalled thatChapter 19ofAgenda 21on
"Environmentally sound management oftoxic chemicals, including prevention ofillegal
international traffic intoxic anddangerous products" recommends, interalia,that
capacity-building fortrade inDPGs beconsolidated byassisting developing countries in
developing andstrengthening riskassessment capabilities inorder tomake informed decisions
about theirimports. OneviewisthattheWTO could cooperate inthisregard withother
organizations, suchastheAmended London Guidelines andtheBasel Convention, which could
provide thenecessary technical expertise. Another isthattechnical assistance ofthiskinddoes
notfallwithin theWTO 'scompetence ormandate.
131. Onesuggestion hasbeenmade thatcompensation andliability should beconsidered,
linked withadispute settlement provision, without being necessarily related tonotification and
transparency provisions. Therationale foracompensation andliability provision within the
framework ofaninstrument which would focus mainly ontransparency andnotification hasbeen
questioned byothers.
ITEM 8 Therelevant provisions oftheAgreement onTrade-Related Aspects ofIntellectual
Property Rights
132. Issues discussed under thisIteminclude therelationship oftheTRIPs Agreement tothe
following: theenvironment generally; thegeneration of,access toandtransfer of
environmentally-sound technology (EST); environmentally-unsound technologies; indigenous and
traditional knowledge; andcertain MEAs inparticular theUNFramework Convention on
Biological Diversity (CBD).
133. Recalling theCTE'sterms ofreference, oneviewisthatthisItemshould beapproached
from theperspective thatWTO rules should promote sustainable development, withspecial
consideration totheneeds ofdeveloping countries. Some feel,inthatregard, thattheTRIPs
Agreement lacks specific mechanisms toachieve theobjectives ofsustainable development andWT/CTE/1
Page31
environmental protection. Some others feelthateffective implementation oftheTRIPs Agreement
enhances theprotection oftheenvironment andencourages thetransfer ofEST.
134. TheroleoftheTRIPs Agreement inthegeneration of,access toandthetransfer ofEST
hasbeendescribed bysome astheneedtostrike abalance between therights andobligations of
IPRholders ontheonehandandIPRusers ontheother, andbetween promoting thegeneration of
ESTontheonehandandensuring access toitanditstransfer ontheother. Some believe that
suchabalance isbuiltintotheTRIPs Agreement, forexample inArticle 7,andthatthe
Agreement alsoauthorizes theuseofappropriate measures toprevent abuse ofIPRs toensure that
unreasonable restraints willnotbeplaced ontrade orontheinternational transfer oftechnology.
135. Some feelthattheutility ofESTcanbequestioned ifitisnotdisseminated andused
widely andthatadditional rules maybenecessary tolimitthediscretionary power ofowners of
technologies torestrict access toEST. Ithasbeensuggested inthatregard toreview those
provisions oftheTRIPs Agreement which dealwithpatents, compulsory licensing and
anti-competitive practices. Some consider, furthermore, thatIPRprotection increases thecostof
technology. Obtaining newtechnology atareasonable costisaconcern indeveloping countries,
particularly forsmall andmedium scale enterprises (SMEs). Insufficient access toESTcan
adversely affect developing countries 'competitiveness inexport markets aswellastheircapacity
toprotect theirenvironments. Reference hasbeenmade toAgenda 21,which regards access to
andtransfer ofESTonconcessional terms asessential forsustainable development. Attention has
alsobeendrawn totheimportance ofcapacity-building toallow recipients toidentify the
technologies most suitable totheirneeds. Some feelthatinthecaseofanti-competitive practices
orifaccess totechnologies isnotbeing provided within areasonable period byIPowners, such
technologies should bemade available through compulsory licensing. Regarding theconsequences
ofIPRprotection foraccess toandthetransfer ofESTnotinthepublic domain, ithasbeen
suggested thatthelackofadequate financial resources tofacilitate access totechnology isan
impediment intheimplementation ofenvironmental measures, including those mandated inMEAs.
136. Some others expressed theviewthatbyensuring, interalia,publication ofnewknowledge
andbyproviding R&D returns, effective IPRsystems promote innovation andtechnology transfer.
They noted thattechnology must existbefore itstransfer canbepromoted orthebenefits
associated withitscommercialization shared. They alsonoted thatconsistent rules regarding IP
actually facilitate technology transfer byproviding aplatform forcooperation among private and
public sector entities. Moreover, theexistence ofanIPregime isonlyoneofthefactors which
supports technology transfer; others areeconomic andpolitical stability inthecountry of
destination, thelevelofinfrastructure andavailability ofskilled labour, access tofinancial
resources, aswellasdomestic policies concerning investment, market access, services and
environmental regulation which playamore direct roleintechnology transfer.
137. Onecontribution,70focuses ontherelationship between IPRs andtheenvironment, in
particular theneedtoencourage theglobal useofESTs andproducts which areproduced with
them (EST&Ps) thatbenefit orprotect theenvironment. Itseeks toreconcile theTRIPs
Agreement withtheencouragement oftheglobal useofproprietary EST&Ps relating tothelimited
cases where these EST&Ps aremandated tobeusedunder anMEA orbynational authorities or
where standards orother environmental measures arelaiddown bymultilateral bodies. It
proposes thattheTRIPs Agreement reconcile thedevelopment orgeneration ofEST&Ps withthe
easyaccess toandwidedissemination ofthem on"fairandmost favourable conditions",
interpreted as"preferential andnon-commercial terms". Itsuggests thatthecompulsory licensing
provisions inArticle 31andthetermofprotection provision inArticle 33should beexamined in
suchawayastoensure thattheyencourage thetransfer ofEST&Ps. Italsosuggests thatan
70Non-paper byIndia, 20June 1996.WT/CTE/1
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obligation beimposed onIPowners ofEST&Ps intheTRIPs Agreement totransfer such
technology andsellsuchproducts on"fairandmost favourable conditions" upon demand toany
interested party which hasanobligation toadopt these under thenational lawofanother country
orunder international law. Such IPowners should becompensated through afinancial mechanism
foranylosses incurred bythem incomplying withsuchanobligation.
138. Some consider there isnoneedtoundertake thekindofreconciliation proposed. The
experience ofcountries withTRIPs-consistent IPsystems doesnotindicate thataproblem exists
withthedissemination ofEST&Ps asaresult ofthese systems, butthat,rather, problems related
totransfer ofproprietary technology ortotrade inproducts based onsuchtechnologies tends to
occur asaresult ofimpediments toforeign investment andtrade insuchproducts. Noactual
problem withthetransfer ofproprietary technology orintrade inproducts based onsuch
technologies hasbeenestablished and,should anactual problem beidentified, thetruesource of
theproblem should beidentified rather thansimply presuming thatthesource liesintheTRIPs
Agreement.
139. Concerns havebeenexpressed bysome Members about thenegative effects ofsome
technologies ontheenvironment, inparticular theeffects ofbio-technologies which involve
genetically modified organisms whose effects areuncertain. Some havevoiced concern overthe
patenting ofmicro-organisms, genes, genetic materials andgenetically-engineered crops and
plants, which theyfeelraises ethical, moral andreligious problems, andoverthepatenting oflife
forms which mayleadtobiodiversity lossandsocreate environmental anddevelopment problems.
140. Theviewexpressed bysome others isthatArticles 27.2and27.3oftheTRIPs Agreement
areadequate toaddress realproblems inthisarea, should anyarise, andthatnational health and
safety standards aswellasMEAs canoffer additional protection. Also, itisnotwithin the
competence oftheWTO toseektoremedy ethical, moral andreligious problems.
141. Noting thatArticle 27.3(b) oftheTRIPs Agreement istobereviewed in1999, oneview
isthatadetailed discussion ofitsimplications intheareaoftrade andenvironment bepartofthe
review. Another viewisthattheCTE doesnothavearoletoplayinthisreview, given thatthe
TRIPs Council istheproper forum andhasthenecessary expertise forconducting areview of
specific TRIPs provisions, including Article 27.3(b) asspecified intheTRIPs Agreement.
142. With regard totraditional andindigenous knowledge, oneviewisthatthisknowledge has
beenthebasis formuch ofthedevelopment ofmodern agriculture andmedicine, yetthese
communities havetopayforpatented products thatarederived from theirknowledge and
innovation. Onesuggestion inthisregard isthattheTRIPs Agreement should exclude the
possibility ofpatenting processes andproducts derived from naturally occurring biological
resources, since itisdoubtful these canbeconsidered "novel" interms ofthecriteria for
patentability, butitshould accord recognition totraditional interests andrights holders. New
legislation andcodes ofconduct, including changes inthenotion oftrade secrets, maybeneeded
toensure thatcommunities which arethesource oftraditional knowledge receive benefits from its
exploitation. Ithasbeensuggested bythose sharing thisviewthatthereview ofArticle 27ofthe
TRIPs Agreement should takeaccount oftheresults ofnegotiations on"farmer rights" under the
FAO Global System forPlant Genetic Resources andother developments regarding protection of
traditional knowledge, bothintherealm oftheCBD andatthedomestic level.
143. Another viewisthatitisinappropriate toconsider amending theTRIPs Agreement
because traditional orindigenous knowledge isnotanIPandinvolves subject matter thatiswidely
known orinthepublic domain. Therefore, itcannot andshould notbedeemed tobeanIPR.
Pursuant tothisview, unrestricted andunpaid access toplant genetic resources forfoodand
agriculture needs tobemaintained foritistotheadvantage ofallcountries, andthatanopenWT/CTE/1
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exchange ofsuchgenetic material leads tobetter research, improved knowledge, more productive
cropcultivars andmore andbetter food. Freemovement ofplant genetic resources forresearch
andbreeding facilitates geneconservation, including theimprovement ofcropgenebanks. Rather
thanseeking asolution inanIPRcontext, itwasproposed thatvoluntary agreements involving
firms, foreign governments andindigenous people could provide forbenefit-sharing and
technological cooperation toinformation providers which would represent aneffective means for
compensating traditional knowledge notsubject toIPprotection; suchprivate contractual
arrangements donotrequire multilateral disciplines andremove theneedforaninternational sui
generis system inthisarea.
144. Inconsidering therelationship oftheTRIPs Agreement toMEAs containing IPR-related
provisions, some suggested taking acautious approach because solittleexperience inthe
implementation ofeither isavailable sofar.They feelitliesoutside theCTE'scompetence to
judge orinterpret provisions ofMEAs, andtheCTE should notprejudge orprejudice future MEA
discussions. Ithasbeensuggested thatinput from theprivate sector, thescientific community, or
NGOs should besought when relevant tofacilitate work inthisarea.
145. With aviewtoensuring theobjectives andprovisions ofMEAs andtheTRIPs Agreement
aremutually supportive, some suggested anexamination ofArticles 7and8oftheTRIPs
Agreement, particularly Article 8.1which grants Members theauthority tolimitR&D activities or
approval oftechnology ongrounds ofenvironmental protection. Inthatrespect attention hasbeen
drawn toChapter 34ofAgenda 21which states thattechnologies inthepublic domain should be
freely transferred tofurther MEA objectives andthemeans explored toencourage thetransfer of
privately-owned technologies protected byIPRs. Another suggestion istointerpret Article 27.2of
theTRIPs Agreement inawaythatisconducive toMEA objectives while notderogating from it.
Onequestion raised iswhether theterm"necessary" inArticle 27.2should beinterpreted inthe
same wayasithasbeeninGATT Article XX,orwhether itshould begiven abroader
interpretation inthecontext ofMEAs. Noting that,ononehand, some MEAs, suchasthe
Montreal Protocol either implicitly orexplicitly prohibit theuseofcertain types oftechnology in
favour ofalternative EST, andthat,ontheother hand, patent holders mayrefuse tolicense EST
onreasonable commercial terms, oneproposal71hasbeentoensure thatArticle 31(b) doesnot
hamper theactual transfer ofESTbyfavouring amonopolistic position forpatent holders of
alternative technology, andbyexamining whether, forthepurpose ofArticle 31(l), itwould be
appropriate tointerpret thealternative ESTtechnology inanMEA asan"important technical
advance ofconsiderable economic significance". Thisproposal explicitly mentions thatitdoesnot
intend tomodify theTRIPs Agreement assuch, buttointroduce suchIPR-related matter involving
anMEA andtheTRIPs Agreement totheCTE withaviewtoclarifying potential ambiguities, if
any. Another viewisthattheelements ofArticle 31oftheTRIPs Agreement adequately address
theissue ofremedying anti-competitive practises.
146. Therelationship between theTRIPs Agreement andtheCBD hasbeendiscussed. Some
consider theyhaveadifferent scope, subject matter andintent butthere isnoconflict or
inconsistency between theirobligations andobjectives. Byensuring adequate protection forthe
innovator, theTRIPs Agreement promotes theCBD'sobjective offurthering technology transfer
related tothecommercialization anduseofgenetic resources. Bysetting asanobjective the
equitable sharing ofthebenefits ofcommercialization orother usesofgenetic resources, theCBD
addresses IPRs indirectly andidentifies technology transfer asoneform ofbenefit sharing its
Parties should promote. TheCBD doesnotaddress specific IPRsystems ortheparticular
characteristics ofIPRs butitdoesprovide thatmechanisms usedtopromote technology transfer
should recognize andbeconsistent withadequate andeffective IPRprotection, which isthe
standard demanded bytheTRIPs Agreement. Bothagreements areviewed ashaving the
71Non-paper bytheRepublic ofKorea, 24July1996.WT/CTE/1
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flexibility toachieve environmental objectives. TheTRIPs Agreement permits Members tocarry
outnational policies infavour ofsustainable development andtotakeadequate measures in
conformity withtheCBD. Accordingly, theydidnotseetheneedforfurther work inthisarea.
147. Some feelthere isaneedtoexamine possible inconsistencies between WTO provisions
andtheCBD inthefollowing areas: which agreement would prevail ifaconflict arose between
them, specifically between Parties andnon-parties; whatistherelation between theterms of
access togenetic resources under theCBD (which isbased ontheideaofmutually-agreed terms)
andtheMFN andnational treatment principles oftheTRIPs Agreement; andwhatarethe
possible consequences ofCBD Article 22which provides that"[t]he provisions ofthisConvention
shallnotaffect therights andobligations ofanyContracting Party deriving from anyexisting
international agreement, except where theexercise ofthose rights andobligations would cause a
serious damage orthreat tobiological diversity"?
148. Anumber ofmore specific questions havebeenraised: forexample, whatisthe
relationship between preferential access togenetic resources under Article 15oftheCBD and
GATT provisions suchasArticles IandXI,andwhatisthelinkbetween rights andobligations
under theSPSandTBTAgreements andacountry 'spolicies regarding bio-safety pursuant tothe
CBD? Noting Article 16.5oftheCBD provides thatIPRs should beimplemented inawaythatis
supportive ofanddoesnotruncounter totheobjectives oftheConvention, ithasbeenasked
whether Parties areentitled tousemeasures which limitorrestrict IPRprotection, orresort to
compulsory licensing, ongrounds thatthisisconsistent withtheCBD'sobjectives, especially asit
relates totechnology transfer. Arelated issue iswhether Article 16.1oftheCBD, which
provides fortransfer oftechnology relevant totheconservation andsustainable useofbiodiversity
ortechnology which usesgenetic resources inanenvironmentally-sound manner, andArticle 33
oftheTRIPs Agreement haveconsistent objectives.
149. Comparing therelevant provisions oftheCBD andthose oftheTRIPs Agreement, one
contribution72proposes various changes tothelatter inorder toaccommodate theformer: (i)in
order tobetter address biotechnological inventions, Article 29oftheTRIPs Agreement on
conditions onpatent applicants including fulldisclosure ofpatentable inventions should be
modified soastorequire aclear mention ofthebiological source material, theknown country of
origin andallknown information pertaining toknowledge andpractices oftheuseofbiological
source material byindigenous communities inthecountry oforigin. Thispartofthepatent would
beopentofullpublic scrutiny immediately afterfiling oftheapplication; (ii)toremedy thelack
ofprior informed consent mechanism intheTRIPs Agreement, aMaterial Transfer Agreement
withthecountry oforigin would benecessary where theinventor wishes tousebiological
material, andanInformation Transfer Agreement (ITA) where theinventor makes useof
indigenous ortraditional knowledge; and(iii)anobligation onpatent owners toexecute ITAs for
anytraditional orindigenous knowledge which isalready inthepublic domain orisapartofthe
recorded orotherwise publicly accessible knowledge systems. Itisalsoproposed thattheCTE
examine theprosandconsofevolving asystem forpatenting ofindigenous knowledge andlocal,
contemporary innovations oftraditional folk.
150. Some consider itcontradictory torecognize theimportance ofESTdevelopment while at
thesame timecalling forchanges intheTRIPs Agreement which would havetheeffect of
diminishing incentives todevelop anddisseminate EST, bothabsolutely andrelative toother
technologies. Onesuggestion isthatsolutions toproblems faced bydeveloping countries in
obtaining ESTshould notbesought intheTRIPs Agreement butthrough therelevant MEAs.
According tothisview, technical issues ofthissortwould require ataminimum fuller study in
72Non-paper byIndia, 19July1996.WT/CTE/1
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more appropriate fora. Those expressing thisviewquestioned thevalue andfeasibility ofthe
proposal relating topatent information.
151. There havebeensuggestions forpossible areas ofcooperation between theTRIPs
Agreement andMEAs which contain IPR-related obligations. Oneisthatthose obligations should
benotified under theTRIPs Agreement soastofacilitate synergies withMEAs. Another isto
consider channelling relevant information ontheimplementation ofIPR-related commitments
contained inthese MEAs through theTRIPs Agreement 'snotification mechanisms. TheCTE
should bekeptinformed ofdevelopments inother forasuchastheCBD andInternational
Convention fortheProtection ofNewVarieties ofPlants, andofthedevelopments ofemerging
IPR-related concepts, suchasfarmer 'srights andplant breeder 'srights inrelevant international
organizations. Some support closer cooperation between theWTO Secretariat andother
international organizations inthisarea. Following arequest from theBiodiversity Convention 's
Secretariat toassist inthepreparation ofareport on"Biological Diversity andTrade-Related
Intellectual Property Rights: Synergies andRelationships", theCTE agreed toderestrict relevant
parts ofitsdocumentation.73
152. Oneproposal suggests74discussion continue onanumber ofissues raised bythe
relationship between theTRIPs Agreement andenvironmental objectives: (i)thegeneration,
access toandtransfer ofESTs; (ii)theprovision ofincentives fortheconservation and
sustainable useofbiological resources andtheequitable sharing ofthebenefits ofthisuse,
including inrelation totheknowledge, innovations andpractices ofindigenous andlocal
communities embodying traditional lifestyles; and(iii)thetreatment oftechnology thatmay
adversely affect theenvironment.
ITEM 9 Thework programme envisaged intheDecision onTrade inServices andthe
Environment
153. Pursuant totheMinisterial Decision onTrade inServices andtheEnvironment, the
Council forTrade inServices, atitsmeeting on1March 1995, adopted aDecision
"[a]cknowledging thatmeasures necessary toprotect theenvironment mayconflict withthe
provisions oftheAgreement; and[n]oting thatsince measures necessary toprotect the
environment typically haveastheirobjective theprotection ofhuman animal orplant lifeor
health, itisnotclear thatthere isaneedtoprovide formore thaniscontained inparagraph (b)of
Article XIV". Itdecided "[i]norder todetermine whether anymodification ofArticle XIVofthe
Agreement isrequired totakeaccount ofsuchmeasures (i.e.measures necessary toprotect the
environment), torequest theCTE toexamine andreport, withrecommendations ifany,onthe
relationship between services trade andtheenvironment including theissue ofsustainable
development. TheCTE shallalsoexamine therelevance ofintergovernmental agreements onthe
environment andtheirrelationship totheAgreement. TheCTE shallreport theresults ofitswork
atthefirstbiennial meeting oftheMinisterial Conference aftertheentry intoforce ofthe
Agreement Establishing theWorld Trade Organization".75
154. Discussions onthisItemhavebeenonlyexploratory. Oneviewisthatsimilar issues with
regard totrade andenvironment ariseintheareaoftrade andservices tothose thatariseinthe
73WT/CTE/W/8 (8June1995), WT/CTE/M/3 (18July1995), WT/CTE/W/22 (21February 1996), WT/CTE/M/8
(11April 1996).
74Non-paper byAustralia, 11September 1996.
75S/L/4, 4April 1995.WT/CTE/1
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areaoftrade ingoods, butthattheymight needtobeapproached differently inviewofthe
differences between theGATT andtheGATS provisions. Careful analysis isneeded to
distinguish environmental measures applied directly totrade inservices from environmental
measures applied toproducts associated withthattrade inorder toidentify whether theissues
raised should beaddressed inthecontext oftheGATS orofother WTO provisions. Inthis
regard, some areoftheviewthatservices, being intangible, arenotpolluting perse;
environmental considerations mayoccur onlywhen thedelivery ofservices isassociated with
trade ingoods. Those considerations arealready covered bytheWTO provisions relevant to
trade inproducts.
155. Given thatGATS Article XIV(b) contains thesame language asGATT Article XX(b), one
viewisthattheneedtomodify itshould beconsidered onlyafterprogress hasbeenmade on
Item1.Ithasbeennoted, however, thattheGATS isstillevolving andincludes concepts thatare
notcontained intheGATT sothatconclusions reached intheareaofgoods trade maynotapply
automatically toservices trade. Ithasbeennoted thatthere isnoanalog toGATT Article XX(g)
intheGATS. Asuggested approach istoidentify restrictive measures applied toservices trade,
consider whether these could bejustified byGATS provisions other thanArticle XIV(b), suchas
Article VI,VIIandXIV(c), andexamine whether Article XIV(b) isanadequate basis onwhich to
address environmental concerns. Onepotential problem raised inthiscontext isthatinvoking
Article XIV(b) afteraservice supplier hasinvested andestablished inadomestic market could
prove particularly disruptive andcostly ifthesupplier isobliged todisinvest. Before theCTE
conducts aseparate analysis ofthisissue, Members havebeenasked tobring toitsattention
evidence theymayhaveofmeasures which theyfeelmayneedtobeapplied forenvironmental
purposes toservices trade butwhich maynotbecovered bytheGATS provisions andinparticular
Article XIV(b).
156. Concerning therelationship ofrelevant MEAs totheGATS, itissuggested thatprogress
might bepossible independently ofprogress under Item1andthatafirststage would beto
identify possible points ofcontact between relevant MEAs andtheGATS. Theimportance of
taking account ofwork inother fora, suchastheNegotiating Group onMaritime Services aswell
astheInternational Civil Aviation Organization andtheInternational Maritime Organization is
emphasized. Analysis could focus ontherelationship oftheGATS provisions, suchasArticle VI,
totrade measures applied pursuant toMEAs dealing withservices trade, suchastheBasel
Convention, theLondon Convention onDumping andtheMontreal Protocol. Consideration
should alsobegiven towhether MEAs indicated thatparticular services sectors needspecial
environmental measures.
157. With regard totherelationship between services trade andtheenvironment, including the
issue ofsustainable development, onesuggestion isthatsectoral casestudies could beconducted,
taking account ofwork inother fora, toidentify theenvironmental impact oftheliberalization of
trade inservices (e.g.transport andtourism) andtheimpact thatcertain environmental legislation
might haveontrade liberalization (e.g.conditions applicable toservices suppliers inthefieldof
waste management). Oneviewisthatimproved market access forenvironmental services and
technology resulting from theGATS holdout"win-win" opportunities fortrade andthe
environment. Another viewisthattheCTE hasneither themandate northecapability toconduct
studies ontheenvironmental impact ofservice trade oritsliberalization.
158. Ithasbeensuggested thatparticular attention should bepaidtoensuring thatGATS
Article XXVIII(c)(ii) measures areapplied onanational treatment basis toallow allservices
suppliers access toanduseofpublic environmental services. Further analysis isalsosuggested on
thetrade effect ofenvironmental subsidies andhowthismight bereflected infuture GATS
disciplines.WT/CTE/1
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ITEM 10 Input totherelevant bodies inrespect ofappropriate arrangements forrelations
withintergovernmental andnon-governmental organizations referred toin
Article VoftheWTO
159. ThisItemwasdiscussed ininformal consultations under boththeSub-Committee onTrade
andEnvironment oftheWTO Preparatory Committee andtheCTE, aswellasonanumber of
occasions ininformal andformal meetings oftheCTE.
160. Pending adecision bytheGeneral Council onconditions andcriteria forobserver status
forintergovernmental organizations (IGOs), theCTE extended observer status onanadhocbasis
tofourteen IGOs.76Theprocedures were confirmed bytheGeneral Council atitsmeeting on
18July1996.77TheWTO Secretariat wasrequested tokeeptheCTE informed about work on
trade andenvironment underway inother intergovernmental organizations, including relevant
MEA bodies.
161. There hasbeensupport forcontinuing toimprove thetransparency ofthework ofthe
WTO intheareaoftrade andenvironment andincreasing public access toinformation through
timely derestriction oftheCTE'sworking documents andtherecords ofitsformal discussions,
while emphasizing theimportance attached toeachMember respecting fullytheconfidential nature
ofWTO documentation thatisrestricted initsdistribution. Itisrecognized thatthere isaneedto
respond topublic interest inthisarea, toprovide aclear ideaofwhatisbeing discussed inthe
WTO andhowthose discussions areprogressing, andtobuild public support forthecontribution
thattheWTO canmake tobetter environmental protection andthepromotion ofsustainable
development. Atitsmeeting on18July1996, theGeneral Council adopted aDecision on
"Procedures fortheCirculation andDerestriction ofWTO documents".78
162. Different views havebeenexpressed about theinvolvement ofnon-governmental
organizations (NGOs) inthework oftheCTE79.
163. OneviewisthatNGOs could playaconstructive rolebyproviding information and
technical expertise onenvironmental matters, andtheirpresence atformal CTE meetings would be
arecognition ofthepublic interest thatexists inthisareaoftheWTO 'swork andwould helpto
make thatwork more broadly available tothepublic. Untransparent proceedings, itisfeltby
some, perpetuated asecretive image oftheWTO anddiminished public confidence inandsupport
forWTO work. Thisleads tomisunderstanding andsuspicion ofthedeliberative processes ofthe
trading system. Asuggestion hasbeenmade toinvite representatives ofspecialized NGOs witha
direct interest intrade andtheenvironment tomake contributions toCTE meetings.
164. Asecond viewisthatitwould notbeappropriate toallow NGOs toparticipate inthe
proceedings oftheCTE. Many feelthatprimary responsibility fortaking account ofthemany
76TheUnited Nations (UN), theUnited Nations Conference onTrade andDevelopment (UNCTAD), theWorld Bank,
theInternational Monetary Fund (IMF), theUnited Nations Environment Program (UNEP), United Nations Development
Program (UNDP), Commission forSustainable Development (CSD), theFood andAgriculture Organization (FAO), the
International Trade Centre (ITC), theOrganization forEconomic Cooperation andDevelopment (OECD), andtheEuropean
FreeTrade Association (EFTA), theUNIndustrial Development Organization (UNIDO), theWorld Customs Organization
(WCO) andtheInternational Organization forStandardization (ISO).
77Decision on"Observer status forinternational intergovernmental organizations intheWTO". WT/L/161/Rev.1.
78WT/L/160, 22July1996.
79TheSecretariatprovidedinformationonarrangement sinplaceinotherinter-gover nment alorganizationsforconsul tations
withnon-governmental organizations (PC/SCTE/W/2).WT/CTE/1
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different elements ofpublic interest which arebrought tobearontrade policy-making, and
consequently forrelations withNGOs, liesatthenational level. Arrangements intheWTO
cannot substitute forthis. Furthermore, some feelthatsucharrangements would unnecessarily
complicate theconsultative process withNGOs atthenational level, andthattheWTO 's
deliberations could becompromised ifpublic interest groups were allowed toparticipate directly
initswork. Also, practical difficulties havebeenforeseen ininvolving NGOs directly inCTE
meetings.
165. Atitsmeeting of18July1996, theGeneral Council adopted aDecision on"Guidelines
forarrangements onrelations withnon-governmental organizations".80
III.CONCLUSIONS AND RECOMMENDATIONS
166. TheWTO Committee onTrade andEnvironment (CTE) hasinitiated work onallItems of
itswork programme setoutintheMarrakesh Ministerial Decision onTrade andEnvironment.
TheCTE'sdiscussions were enriched bythework undertaken previously bytheGATT Group on
Environmental Measures andInternational Trade andintheWTO Preparatory Committee.
Discussions havedemonstrated thecomprehensive andcomplex nature oftheissues covered by
theMinisterial work programme, which reflects theWTO 'sinterest inbuilding aconstructive
relationship between trade andenvironmental concerns.
167. TheCTE'sdiscussions havebeenguided bytheconsideration contained intheMinisterial
Decision thatthere should notbenorneedbeanypolicy contradiction between upholding and
safeguarding anopen, equitable andnon-discriminatory multilateral trading system ontheone
handandacting fortheprotection oftheenvironment ontheother. These twoareas ofpolicy-
making arebothimportant andtheyshould bemutually supportive inorder topromote sustainable
development. Discussions havedemonstrated thatthemultilateral trading system hasthecapacity
tofurther integrate environmental considerations andenhance itscontribution tothepromotion of
sustainable development without undermining itsopen, equitable andnon-discriminatory character;
implementation oftheresults oftheUruguay Round negotiations would represent already a
significant contribution inthatregard.
168. TheCTE'sdiscussions havebeenguided alsobytheconsideration thatthecompetence of
themultilateral trading system islimited totrade policies andthose trade-related aspects of
environmental policies which mayresult insignificant trade effects foritsMembers. Itis
recognized thatachieving theindividual aswellasthejointobjectives ofWTO Member
governments intheareas oftrade, environment andsustainable development requires a
coordinated approach thatdraws oninterdisciplinary expertise. Inthatregard, policy coordination
between trade andenvironment officials atthenational levelhasanimportant roletoplay. Work
intheCTE ishelping tobetter equip trade officials tomake theircontribution inthisarea.
169. WTO Member governments arecommitted nottointroduce WTO-inconsistent or
protectionist trade restrictions orcountervailing measures inanattempt tooffset anyrealor
perceived adverse domestic economic orcompetitiveness effects ofapplying environmental
policies; notonlywould thisundermine theopen, equitable andnon-discriminatory nature ofthe
multilateral trading system, itwould alsoprove counterproductive tomeeting environmental
objectives andpromoting sustainable development. Equally, andbearing inmind thefactthat
governments havetherighttoestablish theirnational environmental standards inaccordance with
theirrespective environmental anddevelopmental conditions, needs andpriorities, WTO Members
notethatitwould beinappropriate forthem torelax theirexisting national environmental
80WT/L/162, 23July1996.WT/CTE/1
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standards ortheirenforcement inorder topromote theirtrade. TheCTE notes thestatement in
the1995 Report onTrade andEnvironment totheOECD Council atMinisterial Level thatthere
hasbeennoevidence ofasystematic relationship between existing environmental policies and
competitiveness impacts, norofcountries deliberately resorting tolowenvironmental standards to
gaincompetitive advantages. TheCTE welcomes similar policy statements made inother
inter-governmental fora.
ITEM 1 Therelationship between theprovisions ofthemultilateral trading system and
trade measures forenvironmental purposes, including those pursuant to
multilateral environmental agreements
ITEM 5 Therelationship between thedispute settlement mechanisms inthemultilateral
trading system andthose found inmultilateral environmental agreements
170. These twoItems haveproved tobeclosely linked. TheCTE hasdiscussed them together
anddrawn conclusions andrecommendations onthem jointly.
171. TheCTE notes thatgovernments haveendorsed intheresults ofthe1992 U.N.
Conference onEnvironment andDevelopment theircommitment toPrinciple 12ofthe
RioDeclaration that"Unilateral actions todealwithenvironmental challenges outside the
jurisdiction oftheimporting country should beavoided. Environmental measures addressing
transboundary orglobal problems should, asfaraspossible, bebased onaninternational
consensus." There isaclear complementarity between thisapproach andthework oftheWTO in
seeking cooperative multilateral solutions totrade concerns. TheCTE endorses andsupports
multilateral solutions based oninternational cooperation andconsensus asthebestandmost
effective wayforgovernments totackle environmental problems ofatransboundary orglobal
nature. WTO Agreements andmultilateral environmental agreements (MEAs) arerepresentative
ofefforts oftheinternational community topursue shared goals, andinthedevelopment ofa
mutually supportive relationship between them duerespect must beafforded toboth.
172. Therelationship between theprovisions ofthemultilateral trading system andtrade
measures forenvironmental purposes taken pursuant tomultilateral environmental agreements is
multifaceted. Finding therightbalance todescribe andaddress thisrelationship intheCTE has
proved tobeaverydemanding task,particularly given thevarying nature oftheissues involved in
eachMEA.
173. Adequate international cooperation provisions, including among them financial and
technological transfers andcapacity building, aspartofapolicy package inMEAs areimportant
andcanbeindispensable elements tofacilitate theability ofgovernments, particularly of
developing countries, tobecome Parties toanMEA andprovide resources andassistance tohelp
them tackle theenvironmental problems which theMEA isseeking toresolve andthusto
implement theprovisions oftheMEA effectively, inkeeping withtheprinciple ofcommon but
differentiated responsibility. Trade measures based onspecifically agreed-upon provisions can
alsobeneeded incertain cases toachieve theenvironmental objectives ofanMEA, particularly
where trade isrelated directly tothesource ofanenvironmental problem. They haveplayed an
important roleinsome MEAs inthepast,andtheymaybeneeded toplayasimilarly important
roleincertain cases inthefuture.
174. TheCTE recognizes thattheevolving relationship between MEAs andthemultilateral
trading system iscomplex andthatdifferent questions mayemerge. Inthisrespect, thefollowing
points havebeennoted inthecourse ofdiscussions intheCTE:WT/CTE/1
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(i) Trade measures havebeenincluded inarelatively small number ofMEAs. There
isnoclear indication forthetimebeing ofwhen orhowtheymaybeneeded or
usedinthefuture. Uptonow, there hasbeennoGATT orWTO dispute
concerning trade measures applied pursuant toanMEA.
(ii) Arange ofprovisions intheWTO canaccommodate theuseoftrade-related
measures needed forenvironmental purposes, including measures taken pursuant
toMEAs. Thatincludes thedefined scope provided bytherelevant criteria ofthe
"General Exceptions" provisions ofGATT Article XX. Thisaccommodation is
valuable anditisimportant thatitbepreserved byall.
(iii) Inthecontext oftheconsideration oftheinclusion ofspecifically agreed-upon
trade provisions inMEAs, mutual respect should bepaidtotechnical andpolicy
expertise inboththetrade andenvironment areas.
(iv) Inpractice, incases where there isaconsensus among Parties toanMEA toapply
among themselves specifically mandated trade measures, disputes between them
overtheuseofsuchmeasures areunlikely tooccur intheWTO.
(v) Inthenegotiation ofafuture MEA, particular careshould betaken overhowtrade
measures maybeconsidered forapplication tonon-parties.
(vi) Policy coordination between trade andenvironment policy officials atthenational
levelplays animportant roleinensuring thatWTO Members areabletorespect
thecommitments theyhavemade intheseparate foraoftheWTO andMEAs and
inreducing thepossibility oflegalinconsistencies arising.
175. Inorder toenhance understanding oftherelationship between trade andenvironmental
policies, co-operation between theWTO andrelevant MEAs institutions isvaluable andshould be
encouraged. TheCTE recommends thattheWTO Secretariat continue toplayaconstructive role
through itscooperative efforts withtheSecretariats ofMEAs andprovide information toWTO
Members ontrade-related work inMEAs. Asnoted intheCTE'sconclusions under Item10of
itswork programme, observer status forrelevant MEAs inWTO bodies, asappropriate, canplay
apositive roleincreating clearer appreciation ofthemutually supportive roleoftrade and
environmental policies. Requests from theappropriate bodies ofMEAs forobserver status should
beconsidered inthislight. TheCTE should alsoconsider extending invitations toappropriate
MEA institutions toattend relevant discussions oftheCTE.
176. Asdescribed inSection IIofthisReport, views differed onwhether anymodifications to
theprovisions ofthemultilateral trading system arerequired under thisItemofthework
programme. Thismatter should bekeptunder review andfurther work under thisItemshould be
carried outdrawing onthework undertaken todate.
177. TheCTE notes thatboththeWTO andMEA dispute settlement mechanisms emphasize
theavoidance ofdisputes, including through parties seeking mutually satisfactory solutions.
178. TheCTE recognizes thatWTO Members havenotresorted toWTO dispute settlement
withaviewtoundermining theobligations theyaccepted bybecoming Parties toanMEA, andthe
CTE considers thatthiswillremain thecase. While WTO Members havetherighttobring
disputes totheWTO dispute settlement mechanism, ifadispute arises between WTO Members,
Parties toanMEA, overtheuseoftrade measures theyareapplying between themselves pursuant
totheMEA, theyshould consider trying toresolve itthrough thedispute settlement mechanismsWT/CTE/1
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available under theMEA. Improved compliance mechanisms anddispute settlement mechanisms
available inMEAs would encourage resolution ofanysuchdisputes within theMEA.
179. TheCTE recognizes thebenefit ofhaving allrelevant expertise available toWTO panels
incases involving trade-related environmental measures, including trade measures taken pursuant
toMEAs. Article 13andAppendix 4oftheDSU provide themeans forapanel toseek
information andtechnical advice from anyindividual orbody which itdeems appropriate andto
consult experts, including byestablishing expert review groups.
ITEM 2 Therelationship between environmental policies relevant totrade and
environmental measures withsignificant trade effects andtheprovisions
ofthemultilateral trading system
180. Anumber oftrade-related environmental policies andmeasures notcovered elsewhere in
thework programme havebeendiscussed inapreliminary wayunder thisItem. Further
examination andanalysis ofthese policies andmeasures intheCTE willberequired, including
analysis oftheireffects ontrade.
181. There hasalsobeensome discussion oftheusebygovernments atthenational levelof
environmental reviews oftrade agreements, andoftherelationship andcompatibility ofgeneral
trade andenvironmental policy-making principles. Noconclusions havebeendrawn sofaron
either ofthese issues. Further work willberequired onthisItemintheCTE.
ITEM 3(A) Therelationship between theprovisions ofthemultilateral trading system and
charges andtaxes forenvironmental purposes
182. Scope exists under WTO provisions forMember governments toapply environmental
charges andtaxes. TheCTE hasundertaken sofarapreliminary examination ofsome ofthese
issues under thisItem. Further work onthisItemisneeded.
ITEM 3(B) Therelationship between theprovisions ofthemultilateral trading system and
requirements forenvironmental purposes relating toproducts, including standards
andtechnical regulations, packaging, labelling andrecycling
183. Themajor partoftheCTE'swork sofarunder thisItemhasinvolved examination and
analysis ofvoluntary eco-labelling schemes/programmes, including those based onlifecycle
approaches, andtheirrelationship toWTO provisions andtotheAgreement onTechnical Barriers
toTrade (TBT) inparticular. Well-designed eco-labelling schemes/programmes canbeeffective
instruments ofenvironmental policy toencourage thedevelopment ofanenvironmentally-
conscious consumer public. TheCTE noted thatChapter IVofAgenda 21encouraged the
expansion ofenvironmental labelling andother environmentally-related product information
programmes designed toassist consumers inmaking informed purchasing decisions. TheCTE
alsonoted thateco-labelling schemes/programmes haveraised, incertain cases, significant
concerns about theirpossible trade effects.
184. Increased transparency canhelpdealwithtrade concerns regarding eco-labelling
schemes/programmes while itcanalsohelptomeetenvironmental objectives byproviding
accurate andcomprehensive information toconsumers. TheCTE feltthatanimportant starting
point forWTO Members toaddress some ofthetrade concerns raised overeco-labelling
schemes/programmes isbydiscussing howtoensure adequate transparency intheirpreparation,WT/CTE/1
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adoption andapplication, including affording opportunities forparticipation intheirpreparation by
interested parties from other countries. Thetransparency provisions contained intheTBT
Agreement, including theCode ofGood Practice forstandardizing bodies contained inAnnex 3of
theAgreement provide areference point tothefurther work oftheCTE inenhancing
transparency ofeco-labelling schemes/programmes.
185. Asstated above, theCTE'sdiscussion oneco-labelling hasfocused primarily onvoluntary
eco-labelling schemes/programmes andinparticular onthetransparency ofsuch
schemes/programmes. Without prejudice totheviews ofWTO Members concerning thecoverage
andapplication oftheTBTAgreement tocertain aspects ofsuchvoluntary eco-labelling
schemes/programmes andcriteria, i.e.those aspects concerning non-product-related PPMs, and
therefore totheobligations ofMembers under thisAgreement regarding those aspects, theCTE
stresses theimportance ofWTO Members following theprovisions oftheTBTAgreement andits
Code ofGood Practice, including those ontransparency. Inthiscontext, theCTE underlines the
particular importance ofensuring fairaccess offoreign producers toeco-labelling
schemes/programmes.
186. TheCTE willconduct further work onallissues contained under thisItem, including with
respect todeveloping countries andleastdeveloped countries. Such further work could involve
cooperation withtheCommittee onTBTandtakeintoaccount thework ofother international
fora, forinstance UNEP, UNCTAD, OECD, ITCandISO,asappropriate.
ITEM 4 Theprovisions ofthemultilateral trading system withrespect tothetransparency
oftrade measures usedforenvironmental purposes andenvironmental measures
andrequirements which havesignificant trade effects
187. WTO transparency provisions andmechanisms arenotanendinthemselves. However,
theyfulfil animportant roleinensuring theproper functioning ofthemultilateral trading system,
inhelping toprevent unnecessary trade restriction anddistortion from occurring, inproviding
information about market opportunities andinhelping toavoid trade disputes from arising. They
canalsoprovide avaluable firststepinensuring thattrade andenvironment polices aredeveloped
andimplemented inamutually supportive way. TheCTE considers transparency tobean
important aspect ofallItems ofitswork programme where therelationship ofWTO provisions to
specific trade-related environmental measures isreceiving attention.
188. TheCTE recognizes thattrade-related environmental measures should notberequired to
meetmore onerous transparency requirements thanother measures thataffect trade.
189. TheCTE concludes thatnomodifications toWTO rules arerequired toensure adequate
transparency forexisting trade-related environmental measures. Nevertheless, theCTE should
keepunder review theadequacy ofexisting transparency provisions withrespect totrade-related
environmental measures, including theresults ofthework oftheWorking Group onNotification
Obligations andProcedures andwhether theCommittees andCouncils dedicated toindividual
WTO Agreements consider there isanyneedtoreview thetransparency provisions ofthose
Agreements inparticular instances andwhether compliance withtheprovisions isviewed as
satisfactory.
190. TheCTE notes thatsome WTO Members aredealing withsome notifications differently,
bothinterms oftheirunderstanding ofwhich types ofenvironmental measures require
notification, andunder which WTO provisions. Such asituation needs tobeimproved through
jointefforts byMembers toclarify theunderstanding ofthenotification requirements concerned.WT/CTE/1
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191. TheCTE suggests thatMembers consider requests foradditional information onmeasures
notified under theWTO, ormore generally supply information toMembers, especially developing
country Members, about market opportunities created byenvironmental measures.
192. Inthemeantime, theCTE recommends thattheWTO Secretariat compile from theCentral
Registry ofNotifications allnotifications oftrade-related environmental measures andcollate these
inasingle database which canbeaccessed byWTO Members. Thedatabase could contain
information where available foreachnotified measure: itsnature/title; objective(s); product
coverage; relevant WTO provisions andMEA provisions; andadescription ofhowitoperates.
Thisdatabase should bekeptupdated.
193. TheCTE welcomes theefforts ofother inter-governmental organizations, inparticular the
UNCTAD andITC, tocollect anddisseminate additional information ontheuseoftrade-related
environmental measures, andrecommends theWTO Secretariat cooperate withthose organizations
toensure duplication isavoided.
194. Thepossibility ofinformation ontrade-related environmental measures being made
available voluntarily byMembers intheirTrade Policy Reviews andoftheSecretariat including
suchinformation initsTPRReports wasnoted asapossible issue tobeexplored inconsultation
withtheTPRBody.
ITEM 6 Theeffect ofenvironmental measures onmarket access, especially inrelation to
developing countries, inparticular totheleastdeveloped among them, and
environmental benefits ofremoving trade restrictions anddistortions
195. Itisunder thisItemthattheCTE hasdiscussed howtheWTO cancontribute tomaking
international trade andenvironmental policies mutually supportive through trade liberalization and
appropriate development andenvironmental policies determined atthenational levelforthe
promotion ofsustainable development.
196. TheCTE acknowledges thatanopen, equitable andnon-discriminatory multilateral trading
system andenvironmental protection areessential topromote sustainable development andthat
there isaclose linkage between poverty andenvironmental degradation. Emphasis hasbeen
placed ontheimportance ofcooperation intheessential taskofalleviating anderadicating poverty
inorder toachieve sustainable development andtheimportant rolethatincreased trade andmarket
access opportunities canmake inthisregard. Itwasnoted thatmany countries remain marginal
participants inworld trade. Inthisrespect, theCTE could contribute totheidentification oftrade
policy actions which canenhance theparticipation inworld trade ofdeveloping countries, andin
particular theleastdeveloped among them, andpromote environmental protection intheinterest of
sustainable development.
197. Thepossible effects ofenvironmental measures onmarket access, especially inrelation to
developing countries, inparticular totheleastdeveloped among them, havebeendiscussed.
There isconcern thatenvironmental measures andrequirements mayadversely affect the
competitiveness andmarket access opportunities ofsmall andmedium-sized enterprises especially
indeveloping countries. Theenvironmental benefits oftrade liberalization, including theremoval
oftrade restrictions anddistortions, hasbeenaddressed atbothageneral andsectoral levelandin
relation tospecific trade restrictions. TheCTE emphasizes theimportance ofmarket access
opportunities inassisting developing countries obtain theresources toimplement adequate
developmental andenvironmental policies determined atthenational level, diversify their
economies andprovide income-generating activities forthepoor. Consequently, improving
market access opportunities andpreservation oftheopen, equitable andnon-discriminatory natureWT/CTE/1
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ofthemultilateral trading system isessential forsupporting countries intheirefforts toensure
sustainable management oftheirresources. Ithasbeenrecognized thattrade liberalization
including theelimination oftrade restrictions anddistortions canyield developmental and
environmental benefits byfacilitating amore efficient allocation anduseofresources. Atthe
same time, however, theCTE underlines thatimplementing appropriate environmental policies
determined atthenational levelaspartofsustainable development strategies isneeded inorder to
ensure thatthese benefits arerealized andthattrade-induced growth willbesustainable. From
thisperspective, ithasbeenrecognized thattheprompt andfullimplementation ofthe
commitments made intheUruguay Round willconstitute animportant contribution inthisregard.
198. Discussions havetaken place onwhether andhowtheremoval oftrade restrictions and
distortions, inparticular hightariffs, tariff escalation, export restrictions, subsidies andnon-tariff
measures, hasthepotential toyield benefits forboththemultilateral trading system andthe
environment. Uptonowdiscussions havebeencentred ontheagriculture sector, andaproposal
ontheenergy sector hasbeentabled. Nevertheless, theCommittee agrees thatitshould broaden
anddeepen itsanalysis alsotoother sectors, suchastropical andnatural resource-based products,
textiles andclothing, fisheries, forest products, environmental services andnon-ferrous metals.
Further work onthisItemshould bebased onanalytical work andempirical evidence andshould
takeintoaccount different country-specific natural andsocio-economic conditions andthe
specificity ofthesectors andmeasures involved.
199. Further work should alsofocus ontheenvironmental benefits thatmayarisefrom
enhancing existing market access opportunities fordeveloping countries, andinparticular theleast
developed among them, andthecontribution thatimproved market access opportunities could
make inassisting developing countries inimplementing adequate environmental policies
determined atthenational level. Inthiscontext, particular attention should bedevoted tothe
environmental benefits ofinitiatives thatcould enhance thetrade performance ofcountries which
remain onlymarginal participants inworld trade, including lowincome commodity-dependent
countries. Environmentally-friendly products from developing countries should alsobeconsidered
inthisregard. Thiswork should takeparticular account oftheneeds ofsmall andmedium-sized
enterprises. Further work isneeded toensure thattheimplementation ofenvironmental measures
doesnotresult indisguised restrictions ontrade, particularly those thathaveadverse effects on
existing market access opportunities ofdeveloping countries.
ITEM 7 Theissue oftheexport ofdomestically prohibited goods
200. TheCTE recognizes thatserious concerns havebeenexpressed bysome developing and
least-developed country Members about theexport tothem ofproducts whose domestic saleoruse
isbanned orseverely restricted because theyposeathreat tohuman, animal orplant lifeorhealth
ortheenvironment. These Members consider thattheydonothavesufficient timely information
about thecharacteristics ofthese products northetechnical ortechnological capacity tomake
informed decisions about importing them.
201. Atthesame time, progress continues tobemade inother inter-governmental organizations
inaddressing problems created bytrade inpotentially hazardous orharmful products. TheCTE
recommends thatWTO Members alsoconsider participating intheactivities ofother organizations
which havetherelevant expertise forproviding technical assistance inthisfield.
202. TheCTE needs tocontinue toconcentrate onwhatcontribution could bemade inthisarea
bytheWTO, bearing inmind theneedforthiswork neither toduplicate nortodeflect attention
from thework ofother specialized inter-governmental fora.WT/CTE/1
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203. Inthemeantime, theCTE: (a)recommends thattheWTO Secretariat determine what
information isalready available intheWTO ontrade-related environmental measures which relate
totrade indomestically prohibited goods, including onrestrictions orbansondomestic salesor
useofproducts which areormaybeexported; (b)encourages WTO Members tosubmit tothe
Secretariat anyadditional information theyhavewhich theyfeelcould helpitindrawing upa
comprehensive picture ofthesituation throughout theWTO system.
204. Thisdatabase canassist thefurther work oftheCTE inthisarea, aswellaspotentially
provide valuable information toindividual WTO Members. Theinformation should beinstalled in
thedatabase oftrade-related environmental measures referred tounder Item4.
205. TheCTE recognizes theimportant rolethattechnical assistance andtransfer of
technology, onmutually agreed terms andconditions, related todomestically-prohibited goods
where trade isallowed bytheinternational community canplayinthisfield, bothintackling
environmental problems attheirsource andinhelping toavoid unnecessary additional trade
restrictions ontheproducts involved. WTO Members should beencouraged toprovide technical
assistance toother Members, especially developing country Members, particularly the
least-developed among them, either bilaterally orthrough appropriate inter-governmental
organizations, toassist these countries instrengthening theirtechnical capacity tomonitor and,
where necessary, control imports ofdomestically prohibited goods.
ITEM 8 Therelevant provisions oftheAgreement onTrade-related Aspects ofIntellectual
Property Rights
206. TheCTE hasdiscussed awidevariety ofissues related tothegeneration, access toand
transfer ofenvironmentally sound technology andproducts (EST&Ps), including intherelevant
provisions ofsome MEAs, asrelated totheTRIPs Agreement. TheCTE recalls thereference in
thepreamble totheTRIPs Agreement totheneedtopromote theeffective andadequate protection
ofintellectual property rights andtheobjectives oftheTRIPs Agreement thattheprotection and
enforcement ofintellectual property rights should contribute tothepromotion oftechnological
innovation andtothetransfer anddissemination oftechnology, tothemutual advantage of
producers andusers oftechnological knowledge andinamanner conducive tosocial and
economic welfare andtoabalance ofrights andobligations.
207. TheCTE noted thestatement inParagraph 34.7ofAgenda 21that"...access toand
transfer ofenvironmentally-sound technology areessential requirements forsustainable
development." TheCTE alsonoted thattheTRIPs Agreement hasanessential roleinfacilitating
suchaccess andtransfer. Positive measures, suchasaccess toandtransfer oftechnology both
according totheterms andconditions stipulated inthecovered MEAs andwithout prejudice tothe
requirements oftheTRIPs Agreement canbeeffective instruments toassist developing countries
tomeetmultilaterally-agreed targets insome MEAs andinkeeping withtheprinciple ofcommon
butdifferentiated responsibilities intheRioDeclaration.
208. Further work isrequired tohelpdevelop acommon appreciation oftherelationship ofthe
relevant provisions oftheTRIPs Agreement totheprotection oftheenvironment andthe
promotion ofsustainable development, andwhether andhow, incomparison toother factors, these
provisions relate, inparticular, tothefollowing issues: (a)facilitating thegeneration ofEST&Ps;
(b)facilitating theaccess toandtransfer anddissemination ofEST&Ps; (c)environmentally-
unsound technologies andproducts; and(d)thecreation ofincentives fortheconservation of
biological diversity, thesustainable useofitscomponents, andthefairandequitable sharing of
thebenefits arising outoftheutilization ofgenetic resources including theprotection ofWT/CTE/1
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knowledge, innovations andpractices ofindigenous andlocalcommunities embodying traditional
lifestyles relevant totheconservation andsustainable useofbiodiversity.
209. Some issues areunder consideration bytheParties totheConvention onBiological
Diversity whoarealsolooking atthesynergies andrelationship between itsobjectives andthe
TRIPs Agreement. Information hasbeenshared bytheCTE regarding itswork inresponse to
requests bytheSecretariat oftheConvention onBiodiversity. Theexchange ofinformation
between theCTE andtheConvention onBiodiversity might bepursued further, asappropriate.
ITEM 9 Thework programme envisaged intheDecision onTrade inServices andthe
Environment
210. TheGATS isanewagreement which isstillevolving andincludes concepts which arenot
contained intheGATT. Preliminary discussion intheCTE todateonthisItemhasnotledtothe
identification ofanymeasures thatMembers feelmayneedtobeapplied forenvironmental
purposes toservices trade which would notbecovered adequately byGATS provisions, in
particular Article XIV(b). Aninvitation bytheCTE toMembers tosubmit anyfurther
information inthisregard remains open.
211. Further work intheCTE onthisItemisnecessary before itcould beinaposition todraw
anyconclusions ontherelationship between services trade andtheenvironment, oronthe
relevance ofinter-governmental agreements ontheenvironment andtheirrelationship totheGATS
inthecontext ofsustainable development.
ITEM 10 Input totherelevant bodies inrespect ofappropriate arrangements forrelations
withintergovernmental andnon-governmental organizations referred toin
Article VoftheWTO
212. Itisrecognized intheCTE thatthere isaneedtorespond topublic interest inWTO
activities intheareaoftrade andenvironment andtobuild support forthecontribution thatcanbe
made through theWTO towards mutually supportive trade andenvironment policies andthe
promotion ofsustainable development.
213. TheCTE considers thatcloser consultation andcooperation withNGOs canalsobemet
constructively through appropriate processes atthenational levelwhere primary responsibility lies
fortaking intoaccount thedifferent elements ofpublic interest which arebrought tobearontrade
policy-making.
214. IntheDecisions oftheGeneral Council of18July1996 on"Procedures forthecirculation
andderestriction ofWTO documents" andon"Guidelines forarrangements onrelations with
non-governmental organizations", WTO Members haveagreed toimprove public access toWTO
documentation andtodevelop communication withNGOs.
215. Theadoption ofWTO procedures forthederestriction ofdocumentation willprovide
public access totheCTE'sworking documents andtherecords ofitsmeetings. Inthisregard, it
isnoted thattheDecision onProcedures fortheCirculation andDerestriction ofWTO
Documents, interalia,affords WTO bodies substantial freedom tomake theirdocuments available
tothepublic inorder toincrease transparency. TheCTE hastaken decisions already toderestrict
anumber oftheworking documents prepared foritbytheSecretariat. Itrecommends thatall
remaining working documents prepared during these firsttwoyears ofitsoperations beWT/CTE/1
Page47
derestricted. TheCTE encourages allMembers thathavesubmitted papers andnon-papers that
havenotalready beenderestricted toagree thatthese bederestricted along withthisReport.
216. TheWTO Secretariat haslaidthefoundations forproviding timely public access tothe
proceedings oftheCTE through issuing periodically itsTrade andEnvironment Bulletin andfor
enhancing itscontacts withNGOs concerned withmatters related tothose oftheCTE, interalia
through theorganization ofinformal meetings withNGOs. TheCTE recommends thatthe
Secretariat continue itsinteraction withNGOs which willcontribute totheaccuracy andrichness
ofthepublic debate ontrade andenvironment.
217. Following theDecision oftheGeneral Council of18July1996 on"Guidelines for
observer status forinternational intergovernmental organizations intheWTO", theCTE has
agreed toextend observer status onapermanent basis tothose intergovernmental organizations
which previously participated asobservers onanadhocbasis atCTE meetings. TheCTE has
extended observer status toallthose intergovernmental organizations which havesorequested, and
thepossibility exists onthebasis oftheGeneral Council 'sDecision toconsider future requests
from other relevant intergovernmental organizations, including MEAs. Observer status ofrelevant
MEAs inWTO bodies, asappropriate, canplayapositive roleincreating clearer appreciation of
themutually supportive roleoftrade andenvironmental policies. Requests from theappropriate
bodies ofMEAs forobserver status should beconsidered inthislight.
218. TheCTE willcontinue tokeepthese issues under review.
Future oftheCTE
219. Work intheWTO oncontributing tobuild aconstructive policy relationship between
trade, environment andsustainable development needs tocontinue. Therefore, theCTE
recommends thatitcontinue towork, reporting totheGeneral Council, withthemandate and
terms ofreference contained intheMinisterial Decision onTrade andEnvironment ofApril 1994.
Itsrules ofprocedure shallbeadopted byconsensus.ANNEX I
Trade andEnvironment
Decision of14April 19941
Ministers ,meeting ontheoccasion ofsigning theFinal Actembodying theresults ofthe
Uruguay Round ofMultilateral Trade Negotiations atMarrakesh on15April 1994,
Recalling thepreamble oftheAgreement establishing theWorld Trade Organization (WTO), which
states thatmembers '"relations inthefieldoftrade andeconomic endeavour should beconducted
withaviewtoraising standards ofliving, ensuring fullemployment andalarge andsteadily
growing volume ofrealincome andeffective demand, andexpanding theproduction ofandtrade in
goods andservices, while allowing fortheoptimal useoftheworld 'sresources inaccordance with
theobjective ofsustainable development, seeking bothtoprotect andpreserve theenvironment and
toenhance themeans fordoing soinamanner consistent withtheirrespective needs andconcerns at
different levels ofeconomic development,"
Noting:
— theRioDeclaration onEnvironment andDevelopment, Agenda 21,anditsfollow-up in
GATT, asreflected inthestatement oftheChairman oftheCouncil ofRepresentatives tothe
CONTRACTING PARTIES attheir48thSession inDecember 1992, aswellasthework of
theGroup onEnvironmental Measures andInternational Trade, theCommittee onTrade and
Development, andtheCouncil ofRepresentatives;
— thework programme envisaged intheDecision onTrade inServices andtheEnvironment;
and
— therelevant provisions oftheAgreement onTrade-Related Aspects ofIntellectual Property
Rights,
Considering thatthere should notbe,norneedbe,anypolicy contradiction between upholding and
safeguarding anopen, non-discriminatory andequitable multilateral trading system ontheonehand,
andacting fortheprotection oftheenvironment, andthepromotion ofsustainable development on
theother,
Desiring tocoordinate thepolicies inthefieldoftrade andenvironment, andthiswithout exceeding
thecompetence ofthemultilateral trading system, which islimited totrade policies andthose trade-
related aspects ofenvironmental policies which mayresult insignificant trade effects forits
members,
Decide:
— todirect thefirstmeeting oftheGeneral Council oftheWTO toestablish aCommittee on
Trade andEnvironment opentoallmembers oftheWTO toreport tothefirstbiennial meeting of
theMinisterial Conference aftertheentry intoforce oftheWTO when thework andterms of
reference oftheCommittee willbereviewed, inthelightofrecommendations oftheCommittee,
— thattheTNC Decision of15December 1993 which reads, inpart,asfollows:
1Source: MTN/TNC/45(MIN).-2-
"(a) toidentify therelationship between trade measures andenvironmental measures, in
order topromote sustainable development;
(b) tomake appropriate recommendations onwhether anymodifications ofthe
provisions ofthemultilateral trading system arerequired, compatible withtheopen,
equitable andnon-discriminatory nature ofthesystem, asregards, inparticular:
— theneedforrules toenhance positive interaction between trade and
environmental measures, forthepromotion ofsustainable development, with
special consideration totheneeds ofdeveloping countries, inparticular those
oftheleastdeveloped among them; and
— theavoidance ofprotectionist trade measures, andtheadherence toeffective
multilateral disciplines toensure responsiveness ofthemultilateral trading
system toenvironmental objectives setforth inAgenda 21andtheRio
Declaration, inparticular Principle 12;and
— surveillance oftrade measures usedforenvironmental purposes, oftrade-
related aspects ofenvironmental measures which havesignificant trade
effects, andofeffective implementation ofthemultilateral disciplines
governing those measures;"
constitutes, along withthepreambular language above, theterms ofreference ofthe
Committee onTrade andEnvironment,
— that,within these terms ofreference, andwiththeaimofmaking international trade and
environmental policies mutually supportive, theCommittee willinitially address thefollowing
matters, inrelation towhich anyrelevant issue mayberaised:
— therelationship between theprovisions ofthemultilateral trading system andtrade
measures forenvironmental purposes, including those pursuant tomultilateral
environmental agreements;
— therelationship between environmental policies relevant totrade andenvironmental
measures withsignificant trade effects andtheprovisions ofthemultilateral trading
system;
— therelationship between theprovisions ofthemultilateral trading system and:
(a) charges andtaxes forenvironmental purposes;
(b) requirements forenvironmental purposes relating toproducts, including
standards andtechnical regulations, packaging, labelling andrecycling;
— theprovisions ofthemultilateral trading system withrespect tothetransparency of
trade measures usedforenvironmental purposes andenvironmental measures and
requirements which havesignificant trade effects;
— therelationship between thedispute settlement mechanisms inthemultilateral trading
system andthose found inmultilateral environmental agreements;-3-
— theeffect ofenvironmental measures onmarket access, especially inrelation to
developing countries, inparticular totheleastdeveloped among them, and
environmental benefits ofremoving trade restrictions anddistortions;
— theissue ofexports ofdomestically prohibited goods;
— thattheCommittee onTrade andEnvironment willconsider thework programme envisaged
intheDecision onTrade inServices andtheEnvironment andtherelevant provisions ofthe
Agreement onTrade-Related Aspects ofIntellectual Property Rights asanintegral partofitswork,
within theabove terms ofreference;
— that,pending thefirstmeeting oftheGeneral Council oftheWTO, thework ofthe
Committee onTrade andEnvironment should becarried outbyaSub-Committee ofthePreparatory
Committee oftheWorld Trade Organization (PCWTO), opentoallmembers ofthePCWTO;
— toinvite theSub-Committee ofthePreparatory Committee, andtheCommittee onTrade and
Environment when itisestablished, toprovide input totherelevant bodies inrespect ofappropriate
arrangements forrelations withintergovernmental andnon-governmental organizations referred toin
Article VoftheWTO.ANNEX II
RESTRICTED
WORLD TRADE WT/CTE/W/17
12December 1995
ORGANIZATION(95-4039)
Committee onTrade andEnvironment
SUMMARY OFACTIVITIES OFTHE
COMMITTEE ONTRADE AND ENVIRONMENT(1995)
PRESENTED BYTHE CHAIRMAN OFTHE COMMITTEE1
1. Asdirected bytheMinisterial Decision onTrade andEnvironment, theCommittee onTrade
andEnvironment (hereinafter "Committee") wasestablished bytheGeneral Council atitsfirst
meeting on31January 1995. Atthatmeeting, theGeneral Council alsoagreed tothenomination of
Ambassador J.Sánchez Arnau (Argentina) astheChairman oftheCommittee.
2. Thefirstmeeting oftheCommittee washeldon16February 1995 (WT/CTE/M/1). The
Committee adopted aschedule ofmeetings andprogramme ofwork for1995 (Annex 1).The
Committee agreed thatmeetings would beorganized suchthat,oncediscussion oftheitem(s)
constituting thefocus ofthemeeting hadbeencompleted, delegations could address, iftheywished,
theitem(s) thatwere discussed attheprevious meeting. Delegations could submit papers onanyof
theitems atanytimewhich would bediscussed attheappropriate timeaccording totheagreed
schedule ofwork.
3. Other formal meetings oftheCommittee were heldon6April, 21June, 12September and
26-27 October 1995 (WT/CTE/M/2 to5);theitems discussed atthese meetings were asperthe
work programme decided atthemeeting of16February 1995. With regard toitemtenofthework
programme, i.e.appropriate arrangements forrelations withnon-governmental organizations, the
Committee decided topostpone thediscussions pending results ofdiscussions intheGeneral
Council.
4. AttheOctober meeting, thestocktaking exercise wascompleted. Asaresult ofthis
exercise, theCommittee decided onitswork programme through toMay1996 (Annex 2).2
5. Thework oftheCommittee wasassisted bydocuments prepared bytheSecretariat
(WT/CTE/W/1, 3to10,12)anddocuments submitted bydelegations (WT/CTE/W/2 and11);
Annex 3liststhetopics covered bythese documents.3
6. Thediscussions intheCommittee meetings were wideranging andthere wasaveryhigh
levelofparticipation byWTO Members. Forty governments areobservers totheCommittee. The
Committee extended observer status tothose intergovernmental organizations (IGOs) which hadhad
observer status intheSub-Committee onTrade andEnvironment, pending agreement bytheGeneral
Council ontheconditions andcriteria forIGOobserver status. These IGOs were: theUnited
1Thissummary issubmitted bytheChairman oftheCommittee onTrade andEnvironment onhisownresponsibility.
2Thedates ofthemeetings in1996 aregoing tobereviewed atthemeeting oftheCommittee onTrade andEnvironment
on14-15 December 1995.
3TheCommittee 'swork alsotookintoconsideration several background documents prepared fortheEMIT Group and
theWTO Preparatory Committee 'sSub-Committee onTrade andEnvironment.WT/CTE/W/17
Page2
Nations (UN), theUnited Nations Conference onTrade andDevelopment (UNCTAD), theWorld
Bank, theInternational Monetary Fund (IMF), theUnited Nations Environment Program (UNEP),
United Nations Development Program (UNDP), Commission forSustainable Development (CSD),
theFood andAgriculture Organization (FAO), theInternational Trade Centre (ITC), the
Organization forEconomic Cooperation andDevelopment (OECD), andtheEuropean FreeTrade
Association (EFTA).
7. TheCommittee noted thattheSecretariat hadreceived several requests forinformation and
advice from MEAs. There wasnoWTO procedure which would permit ittoadequately reply to
suchrequests andtheestablishment ofnewprocedures wentbeyond theCommittee 'smandate and
wasofinterest totheWTO ingeneral. Forthisreason, theChairman hadreferred thismatter tothe
Chairman oftheGeneral Council whowould beconsulting ontheissue.
8. Following adecision taken atthemeeting oftheCommittee onTechnical Barriers toTrade
(CTBT) on20October 1995, theCommittee agreed toconvene jointinformal meetings on
eco-labelling withtheCTBT. Itwasagreed thattheChairman would consult informally onthe
possibility ofholding ajointmeeting oftheCommittee andtheCTBT possibly around thetimeof
theDecember orFebruary meeting oftheCommittee.WT/CTE/W/17
Page3
Annex 1
Atitsmeeting on16February 1995, theCommittee onTrade andEnvironment adopted the
following schedule ofmeetings andprogramme ofwork:
6-7April: -Item4:"theprovisions ofthemultilateral trading system withrespect tothe
transparency oftrade measures usedforenvironmental purposes andenvironmental
measures andrequirements which havesignificant trade effects"
-Item5:"therelationship between thedispute settlement mechanisms inthe
multilateral trading system andthose found inmultilateral environmental
agreements"
-Item10:"appropriate arrangements forrelations withnon-governmental
organizations referred toinArticle VoftheWTO andtransparency of
documentation"
21-22 June: -Item8:"TRIPs"
-Item9:"Services"
-Item2:"therelationship between environmental policies relevant totrade and
environmental measures withsignificant trade effects andtheprovisions ofthe
multilateral trading system"
early
September: -Item6:"theeffect ofenvironmental measures onmarket access, especially in
relation todeveloping countries, inparticular totheleastdeveloped among them,
andenvironmental benefits ofremoving trade restrictions anddistortions"
late
October: -Item1:"therelationship between theprovisions ofthemultilateral trading system
andtrade measures forenvironmental purposes, including those pursuant to
multilateral environmental agreements"
-Item3:"therelationship between theprovisions ofthemultilateral trading system
and:
(a)charges andtaxes forenvironmental purposes
(b)requirements forenvironmental purposes relating toproducts, including
standards andtechnical regulations, packaging, labelling andrecycling
-Stocktaking andplanning program ofwork for1995/1996WT/CTE/W/17
Page4
Annex 2
TheCommittee onTrade andEnvironment
Theinformal consultations made evident thefollowing points:
Thatthestocktaking ismore aprocess-related exercise thanasubstance-related analysis and,
therefore, theresult ofthisexercise hastobeadetailed work programme toadvance theCTE
mandate, i.e.toproduce areport:
a) identifying therelationship between trade measures andenvironmental measures in
order topromote sustainable development;
(b) making recommendations onwhether anymodifications toWTO provisions are
required, compatible withtheopen, equitable andnon-discriminatory nature ofthe
system; and
(c) complying withthemandate oftheMinisterial Decision onTrade inServices and
Environment.
Inorder toestablish amore focused butwellbalanced work programme, theChairman
submits thefollowing proposals:
(a) tokeepallitems onouragenda, buttomove, whenever possible, from the
discussion ofagenda items totheanalysis ofthose issues identified during thedebate
asthecoreofeachitemand,tothatend,toorganize ourfuture work programme on
thebasis oftheproposal submitted below;
(b) tocontinue theprocess ofanalysis ofthese issues untilMay1996, when anew
review ofthework programme willtakeplace;
(c) thelistofissues identified nexttoeachitemisnotnecessarily exhaustive. Once the
discussion oftheidentified issues iscarried outbytheCommittee, Members would
befreetoraiseother related issues under eachagenda itematthesame meeting;
(d) Aspartofthework programme:
(i) jointinformal meetings oftheCTE andtheCTBT areenvisaged, subject to
theagreement oftheCTBT, toanalyse theapplicability ofthe
TBTAgreement toeco-labelling andthepossible needforfurther disciplines
foreco-labelling;
(ii) allother issues identified inthetablebelow anditems intheagenda would
bediscussed inthePlenary butinformal open-ended meetings, backtoback
tothePlenary, would beconvened when adetailed analysis ofatopic is
necessary orapaper onaspecific issue issubmitted fordiscussion;
(iii) some fewstudies/reports tobeprepared bytheSecretariat havebeen
suggested inaddition tothose already incourse. TheSecretariat is
encouraged tocontinue tocooperate closely with, andtotakefulladvantage
ofavailable andforthcoming studies in,UNCTAD, UNEP andother
intergovernmental institutions.WT/CTE/W/17
Page5
TheCommittee onTrade andEnvironment
Itemonthe
Work ProgrammeIssues Studies When tobe
discussed
Item one: "The relationship
between theprovisions of
themultilateral trading
system andtrade measures
forenvironmental purposes,
including those pursuant to
multilateral environmental
agreements"-ensuring the
compatibility oftrade
measures taken
pursuant toMEAs and
theWTO
-adequacy ofWTO
transparency
mechanisms
concerning trade
measures included in
relevant MEAs
-seeitem526/27 October 95
early February 96
(7/8February 96)
26/27 October 95
early February 96
(7/8February 96)
Item three: "The
relationship between the
provisions ofthemultilateral
trading system and:
(a) charges andtaxes for
environmental
purposes-environmental taxes
which could be
adjusted attheborder
andtheir WTO-
consistency-gather information on
national environmental
taxes forthestudy26/27 October 95
early February 96
(7/8February 96)
(b) requirements for
environmental
purposes relating to
products, including
standards andtechnical
regulations, packaging,
labelling and
recycling"-applicability ofthe
TBT Agreement to
eco-labelling
-adequacy, from
boththetrade and
environmental
perspectives, ofWTO
rules regarding eco-
labelling andpossible
need forfurther
disciplines and
transparencyJoint Informal
Meetings ofthe
CTE +CTBT*
*Report totheCTE once work iscompleted.WT/CTE/W/17
Page6
Itemonthe
Work ProgrammeIssues Studies When tobe
discussed
Item three (b)cont'd -adequacy, from
boththetrade and
environmental
perspectives, ofWTO
rules regarding
packaging, handling,
andother
environmental
regulations,
requirements and
standards, including
thepossible need for
further disciplines and
transparency26/27 October 95
early February 96
(7/8February 96)
Item four: "The provisions
ofthemultilateral trading
system withrespect tothe
transparency oftrade
measures used for
environmental purposes and
environmental measures and
requirements which have
significant trade effects"-examination ofthe
proposal thatMembers
should establish
environmental enquiry
points
-seeitems 1and314/15 December 95
-itemtobe
revisited in
May 96,inorder
todetermine
whether andwhere
further gaps in
transparency
existed
Item five: "The relationship
between thedispute
settlement mechanisms in
themultilateral trading
system andthose found in
multilateral environmental
agreements"-seeitem 1
-environmental
expertise intrade
dispute settlement
-trade expertise in
environmental dispute
settlementearly February 96
(7/8February 95)
Item six: "The effect of
environmental measures on
market access, especially in
relation todeveloping
countries, inparticular to
theleast developed among
them, andenvironmental
benefits ofremoving trade
restrictions anddistortions"-theeffect of
environmental
measures onmarket
access
-theenvironmental
benefits ofremoving
trade restrictions and
distortions, including
tariff escalation,
subsidies, state
trading, excessively
hightariffs-environmental
measures onmarket
access andsetting up
ofamechanism to
survey environmental
measuresmidMarch 96
(13/14 March 96)
midMarch 96
(13/14 March 96)WT/CTE/W/17
Page7
Itemonthe
Work ProgrammeIssues Studies When tobe
discussed
Item seven: "The issue of
exports ofdomestically
prohibited goods"-DPGs, andwhether
there isaneed fora
DPG Agreement14/15 December 95
Item eight: "Trade-Related
Aspects ofIntellectual
Property Rights andthe
environment"-therelationship of
theTRIPs Agreement
toaccess toand
transfer oftechnology
andthedevelopment
ofenvironmentally-
sound technology
-therelationship
between theTRIPs
Agreement andMEAs
which contain IPR-
related obligations-analytical paper on
factors affecting
transfer of
environmentally-sound
technologyendApril 96
(17/18 April 96)
endApril 96
(17/18 April 96)
Item nine: "Services and
theenvironment"-sufficiency of
Article XIVofGATS
-possible points of
contact between
relevant MEAs and
GATSearly February 96
(7/8February 96)
early February 96
(7/8February 96)
Item two: "The relationship
between environmental
policies relevant totrade and
environmental measures
withsignificant trade effects
andtheprovisions ofthe
multilateral trading system"May 96
(21/22 May 96)
Item ten: "Appropriate
arrangements forrelations
withnon-governmental
organizations referred toin
Article VoftheWTO and
transparency of
documentation"intheCTE**
**Once adecision isadopted bytheGeneral Council.WT/CTE/W/17
Page8
Annex 3
WT/CTE/W/1 Environmental benefits ofremoving trade restrictions and
distortions (background paper prepared bytheSecretariat
foritem 6)
WT/CTE/W/2 Submission byChile onrelationship between dispute
settlement inWTO andinmultilateral environmental
agreements, withspecial reference toConvention onthe
LawoftheSeawhich incertain parts emphasises the
provisions oftheGeneral Agreement onTariffs andTrade
(including dispute settlement)
WT/CTE/W/3 Report submitted bytheSecretariat onitsown
responsibility totheSecretariat oftheCommission on
Sustainable Development forthemeeting oftheThird
Session oftheCommission on11-28 April 1995
WT/CTE/W/4 Approaches totherelationship between theprovisions of
themultilateral trading system andtrade measures pursuant
tomultilateral environmental agreements (background
paper prepared bytheSecretariat foritem 1)
WT/CTE/W/5 Provisions ofthemultilateral trading system withrespect
tothetransparency oftrade measures used for
environmental purposes andenvironmental measures and
requirements which have significant trade effects
(background paper prepared bytheSecretariat foritem 4)
WT/CTE/W/6 Adescription ofinternational agreements andinstruments
dealing withtrade indomestically prohibited goods and
other hazardous substances (background paper prepared by
theSecretariat foritem 7)
WT/CTE/W/7 Secretariat 'snoteontheresults ofthethird session ofthe
Commission onSustainable Development
WT/CTE/W/8 Environment andTRIPs (background paper prepared by
theSecretariat foritem 8)
WT/CTE/W/9 Environment andservices (background paper prepared by
theSecretariat foritem 9)
WT/CTE/W/10 Negotiating history ofthecoverage oftheAgreement on
Technical Barriers toTrade withregard tolabelling
requirements, voluntary standards, andprocesses and
production methods unrelated toproduct characteristics
(background paper prepared bytheSecretariat foritem 3)
WT/CTE/W/11 Communication from thedelegations ofNigeria and
Senegal regarding theissue ofdomestically prohibited
goodsWT/CTE/W/17
Page9
WT/CTE/W/12 Trade measures forenvironmental purposes taken pursuant
tomultilateral environmental agreements: recent
developments (note prepared bytheSecretariat)ANNEX III
RESTRICTED
WORLD TRADE WT/CTE/W/33
4June1996
ORGANIZATION(96-2090)
Committee onTrade andEnvironment
RESULTS OFTHE STOCKTAKING EXERCISE
Adopted atthe28-29 May1996 meeting
I. Theinformal consultations onthestocktaking permitted thefollowing consensus tobe
reached:
1. According totheresults ofthefirststocktaking inOctober 1995, theCTE hascompleted
twofullrounds ofanalysis ofeachindividual Itemoftheagenda (Items 2and4willberevisited
during theMaysession). TheSecretariat hassubmitted anumber ofbackground andanalytical
documents andtheCommittee hasbenefitted from thediscussion ofanumber ofItems onitsagenda
inother intergovernmental fora(UNEP, UNCTAD, CSD). Ontheissue of"eco-labelling" ajoint
informal meeting wasorganized withtheCTBT andtheopportunity wasgiven to
managers/practitioners ofnational/regional eco-labelling schemes/programmes topresent their
experience tobothCommittees.
2. Inpreparing fortheSingapore Ministerial Conference, theCTE hasheldageneral debate on
allItems ofitsagenda. Some agenda Items havebeendisaggregated, some specific issues and
problems havebeenidentified. Thegeneral debate clarified andpromoted understanding ofsome
issues andalsopermitted theidentification ofdivergences ofview. Insome cases more analytical
work isrequired. Asaresult ofthisprocess, theCTE isnowinaposition tocentre itsattention on
specific issues, including issues covered byproposals submitted ortobesubmitted byMembers,
keeping inmind theneedforabalanced andfocused approach tothewhole agenda.
3. Anumber ofproposals havebeensubmitted totheCommittee either orally orasformal or
informal documents andadditional proposals areanticipated.
4. Thus, thenextstage oftheCTE activities inpreparation forSingapore needs tobedevoted
tothepreparation oftheFinal Report tobesubmitted totheMinisterial Conference including the
identification ofpossible agreed conclusions andrecommendations inthelightoftheCTE mandate.
II. Tothatendthefollowing work programme, tobedeveloped inthelightoftheCTE terms of
reference contained intheMinisterial Declaration ofMarrakesh, isadopted bytheCommittee1:
1TheCTE isawaiting theadoption ofadecision bytheGeneral Council onthematter referred toinItem10.WT/CTE/W/33
Page2
Date Meeting Items/Issues Objective
28,29May CTE formal
2and4
6and8
1+5and7Toadopt theoutcome ofthestocktaking.
Tocomplete second review.
Torevisit andtodiscuss proposals
submitted onthese Items.
Presentation ofnewproposals.
30May CTE informal 1+5and7 Clarification andanalysis ofnewproposals.
20June CTE formal 1+5
2/3/4/6/7/8Possible presentation ofnewproposals on
these Items. Clarifications, comments and
reactions.
21June CTE informal same Discussion ofproposals.
30June TheSecretariat starts preparing thefirst
draftoftheFinal Report:
Introduction +Chapters 1and2
3-24July Informal
consultations2same Startoftheprocess ofinformal
consultations tobuild upconsensus on
individual issues.
24July CTE formal 2/9/BTA/
packaging(a)Items/issues revisited inviewof
possible presentation ofproposals onthem.
(b)Chairman 'sreport onresults of
informal consultations onspecific
issues/Items/proposals.
24-25 July CTE informal31+5
2/3/4/6/7/8Discussion ofspecific
issues/Items/proposals.
30July TheSecretariat submits thefirstdraftof
Final Report totheChairman forreview
andclearance.
31July Distribution ofthefirstdraftoftheFinal
Report (introduction +Chapters 1and2).
11Sept CTE formal AllItems Statements onanyissue.
11/12/13
SeptCTE informal same Discussion ofproposals onanyItem/issue.
2Allinterested delegations willhave theopportunity tobeconsulted onallissues under consideration.
3Discussions ofissues under Item3(b)relevant tothework oftheCTBT would takeplace inajointformal/informal meeting
withtheCTBT.WT/CTE/W/33
Page3
Date Meeting Items/Issues Objective
16Septto
23OctInformal
consultations2AllItems (a)Continuation ofconsultations onspecific
Items/issues/proposals. Thework is
oriented towards building aconsensus on
possible conclusions andrecommendations.
(b)Consultations onthedraftFinal Report.
10Oct Secretariat completes draftFinal Report to
thelargest possible extent. Review and
clearance bytheChairman.
15Oct Distribution ofthedraftFinal Report
(introduction +Chapters 1and2+
Chapter 3)
24-25 Oct CTE formal (a)Report bytheChairman oninformal
consultations on:
(i) allItems/issues/proposals
(ii) draftFinal Report
(b)Final discussion on
proposals/conclusions/recommendations
(c)Adoption oftheFinal Report.
III. TheFinal Report tobeproduced bytheCommittee needs toinvolve thefollowing broad
components:
1. Anintroductory section briefly sketching theCTE'sestablishment, describing itsmandate
andpointing toprevious GATT work (particularly intheEMIT Group) andoutlining itswork
programme.
2. Three chapters covering eachindividual agenda Item:
(a) Thefirstone,describing theproblems/issues under eachagenda Itemandtheir
background, andmaking reference todocuments submitted bytheSecretariat, witha
short reference totheircontent.
(b) Thesecond would betheanalytical component, drawing onthediscussions at
Committee meetings, describing theproposals anddocuments submitted by
delegations andthedebate which followed theirsubmission.
(c) Thethirdchapter would include theconclusions andrecommendations ifany.
TheFinal Report hastobecomprehensive, balanced among Items/issues and,atthesame
time, among thedifferent "schools ofthought"/perceptions onspecific issues. Theanalytical
component willbethemost substantial partofthereport andwillneedtobecarefully structured.
Atthesame time, amajor effort hastobemade tokeepthereport rather short.ANNEX IV
Listofdocuments andnon-papers prepared onItems ofthework programme
Item1:Therelationship between theprovisions ofthemultilateral trading system andtrade
measures forenvironmental purposes, including those pursuant tomultilateral environmental
agreements
WT/CTE/W/4 +Corr. Note bytheSecretariat onApproaches totheRelationship between
theProvisions oftheMultilateral Trading System andTrade
Measures Pursuant toMultilateral Environmental Agreements
WT/CTE/W/12 Note bytheSecretariat onTrade Measures forEnvironmental
Purposes taken pursuant toMultilateral Environmental
Agreements: Recent Developments
WT/CTE/W/15 +Corr. Note bytheSecretariat onTrade Measures forEnvironmental
Purposes taken pursuant toMultilateral Environmental
Agreements: Recent Developments -FAO Code ofConduct for
Responsible Fisheries
WT/CTE/W/18 Note bytheSecretariat ontheConvention onBiological Diversity:
Recent Developments
WT/CTE/W/19 Note bytheSecretariat onTrade Measures forEnvironmental
Purposes taken pursuant toMultilateral Environmental
Agreements: Recent Developments -Seventh Meeting ofthe
Parties totheMontreal Protocol
WT/CTE/W/20 Submission byNewZealand onItem1
WT/CTE/W/31 Submission byJapan onItem1
WT/CTE/W/39 Submission byASEAN onItem1
Non-paper (19February 1996) Submission bytheEuropean Community onItem1
Non-paper (20May1996) Submission bySwitzerland onItem1
Non-paper (12June1996) Submission byKorea onItem1
Non-paper (23July1996) Submission byHong Kong onItem1
Non-paper (23July1996) Submission byIndia onItems 1and5
Non-paper (11Sept. 1996) Submission bytheUnited States onMultilateral Environmental
Agreements
Item2:Therelationship between environmental policies relevant totrade andenvironmental
measures withsignificant trade effects andtheprovisions ofthemultilateral trading system
WT/CTE/W/16 Note bytheSecretariat ontheNegotiating History ofFootnote 61
oftheAgreement onSubsidies andCountervailing Measures-2-
WT/CTE/W/37 Submission bytheUnited States onEnvironmental Review of
Trade Agreements attheNational Level
Non-paper (23July1996) Submission byIndia onItem2
Non-paper (11Sept. 1996) Submission bytheUnited States: Draft Decision on
Environmental Reviews ofTrade Agreements attheNational Level
Item3:Therelationship between theprovisions ofthemultilateral trading system and:
(a)charges andtaxes forenvironmental purposes; and(b)requirements forenvironmental
purposes relating toproducts, including standards andtechnical regulations, packaging,
labelling andrecycling
WT/CTE/W/10-G/TBT/W/11 Note bytheSecretariat ontheNegotiating History ofthe
Agreement onTechnical Barriers toTrade withRegard to
Labelling Requirements, Voluntary Standards, andProcess and
Production Methods unrelated toProduct Characteristics
WT/CTE/W/21-G/TBT/W/21 Submission byCanada onElements ofaPossible Understanding to
theTBTAgreement onEco-labelling
WT/CTE/W/23-G/TBT/W/23 Eco-labelling Programmes. Information provided byCanada,
Chile, theCzech Republic, theEuropean Community, Norway and
theUnited States attheinformal jointmeeting oftheCommittees
onTrade andEnvironment andTechnical Barriers toTrade heldon
27February 1996 regarding theirnational andregional
eco-labelling programmes
WT/CTE/W/27; G/TBT/W/29 Proposal bytheUnited States onFurther Work onTransparency of
Eco-labelling
WT/CTE/W/38-G/TBT/W/30 Proposal byCanada onaDraft Decision onEco-labelling
Programmes
Non-paper (18June1996) Submission bytheArab Republic ofEgypt
Non-paper (23July1996) Submission bytheEuropean Community onEco-labelling
Programmes
Non-paper (23July1996) Submission byIndia onItem3
Non-paper (11Sept. 1996) Submission bytheUnited States: Draft Decision onTransparency
inEco-labelling Programmes
Item4:Theprovisions ofthemultilateral trading system withrespect tothetransparency oftrade
measures usedforenvironmental purposes andenvironmental measures andrequirements which
havesignificant trade effects
WT/CTE/W/5 Note bytheSecretariat onItem4-3-
WT/CTE/W/28 Note bytheSecretariat onItem4
WT/CTE/W/34 Note bytheSecretariat ontheWTO Central Registry of
Notifications
Non-paper (28May1996) Submission byHong Kong onTransparency: AProposal onan
Environmental Database
Item5:Therelationship between thedispute settlement mechanisms inthemultilateral trading
system andthose found inmultilateral environmental agreements
WT/CTE/W/2 Communication from Chile onItem5
Item6:Theeffect ofenvironmental measures onmarket access, especially inrelation to
developing countries, inparticular totheleastdeveloped among them, andenvironmental benefits
ofremoving trade restrictions anddistortions
WT/CTE/W/1 Note bytheSecretariat ontheEnvironmental Benefits ofRemoving
Trade Restrictions andDistortions
WT/CTE/W/24 +Corr. Submission byArgentina onTheEnvironmental Benefits of
Removing Trade Restrictions andDistortions, including tariff
escalation, subsidies, statetrading, andexcessively hightariffs
WT/CTE/W/25 Note bytheSecretariat onTariff escalation
WT/CTE/W/26 Note bytheSecretariat onTheeffects ofenvironmental measures
onmarket access, especially inrelation todeveloping countries, in
particular totheleastdeveloped among them
WT/CTE/W/35 Contribution bytheUnited States onTrade Liberalization andthe
Environment
WT/CTE/W/36 Submission byAustralia onTrade Liberalization, theEnvironment
andSustainable Development (replaces thenon-paper submitted on
21May1996)
Non-paper (20June1996) Submission byIndia onItem6
Non-paper (20June1996) Submission byNorway onMarket Access andEnvironmental
Effects ofRemoving Trade Restrictions andDistortions
Non-paper (28June1996) Preliminary views ofJapan onItem6
Non-paper (23July1996) Submission bytheEuropean Community onItem6
Non-paper (24July1996) Submission byKorea onItem6-4-
Item7:Theissue ofexports ofdomestically prohibited goods
WT/CTE/W/6 Note bytheSecretariat onAdescription ofinternational
agreements andinstruments dealing withtrade indomestically
prohibited goods andother hazardous substances
WT/CTE/W/11 Communication from Nigeria andSenegal under Item7
WT/CTE/W/14 Proposal byNigeria onDomestically Prohibited Goods
WT/CTE/W/29 Note bytheSecretariat onDomestically Prohibited Goods: An
assessment oftheproduct coverage inspecific international
instruments
WT/CTE/W/32 Proposal byNigeria onDomestically Prohibited Goods
Item8:Trade-Related Aspects ofIntellectual Property Rights andtheenvironment
WT/CTE/W/8 Note bytheSecretariat onEnvironment andTRIPs
WT/CTE/W/22 Note bytheSecretariat onFactors affecting transfer of
environmentally-sound technology
Non-paper (20June1996) Submission byIndia onTheRelationship oftheTRIPs Agreement
tothedevelopment, access andtransfer ofenvironmentally-sound
technologies andproducts (revises thenon-paper submitted on
2April 1996)
Non-paper (23July1996) Submission byIndia onTheRelationship between theTRIPs
Agreement andtheConvention onBiodiversity
Non-paper (23July1996) Submission byKorea onConsideration ofrelevant provisions of
theAgreement onTRIPs
Non-paper (11Sept. 1996) Submission byAustralia ontheTRIPs Agreement
Item9:Thework programme envisaged intheDecision onTrade andServices andthe
Environment
WT/CTE/W/9 Note bytheSecretariat onServices andtheEnvironment
Non-paper (23July1996) Submission byIndia onServices andtheEnvironment
General
WT/CTE/W/3 Report submitted bytheSecretariat onitsownresponsibility tothe
Secretariat oftheCommission onSustainable Development atits
Third Session, 11-28 April 1995-5-
WT/CTE/W/7 Note bytheSecretariat onUNCED Follow-up: Results ofthe
Third Session oftheCommission onSustainable Development,
11-28 April 1995
WT/CTE/W/13 Draft Rules ofProcedure fortheMeetings oftheCommittee on
Trade andEnvironment
WT/CTE/W/17 Summary ofactivities oftheCommittee onTrade andEnvironment
(1995) presented bytheChairman oftheCommittee
WT/CTE/W/30 +Corr. Note bytheSecretariat onUNCED Follow-up: Results ofthe
Fourth Session oftheCommission onSustainable Development,
18April -3May1996
WT/CTE/W/33 Results oftheStocktaking Exercise adopted atthe28-29 May1996
CTE meeting
Non-paper (11Sept. 1996) Submission byNigeria: Preliminary comments onthedraftof
Sections IandIIoftheCTE Report totheMinisterial ConferenceANNEX V
Matrix fortheKorean Approach
Trade measures Discipline Criteria Notification
Procedural Substantive
Between
PartiesSpecific
MeasuresA
Qualified
CodificationNotification
subject to
reviewLeast
inconsistency AllParties of
anMEA
Non-specific
measuresB Least trade
restrictiveness
,necessity
Parties to
non-PartiesSpecific
measuresC Non-binding
guidelines
forMEA
negotiatorMEAGATT Art.20
or
WTO Art.9Party; Notif,
Non-Party;
Counter-notif.
Non-specific
measuresD
No
accommo-
dation-GATT Art.20
or
WTO Art.9
Unilateralism Unilateral
measuresE Imposer; Notif.
Imposed;
Counter-notif.SECTION VIII
COMMITTEE ONTRADE AND DEVELOPMENTWORLD TRADE WT/COMTD/9
4November 1996
ORGANIZATION(96-4637)
Committee onTrade andDevelopment
REPORT (1996) OFTHE
COMMITTEE ONTRADE AND DEVELOPMENT
TOTHE GENERAL COUNCIL
Introduction
1. TheCommittee onTrade andDevelopment (CTD) heldeightmeetings in1996; on16February
(Fifth Session), 24May(Sixth Session, continued on7June), 18June(Seventh Session), 12July(Eighth
Session), 12and23September (respectively Ninth andTenth Sessions), 4and15October (respectively
Eleventh andTwelfth Sessions). TheTwelfth Session briefly resumed on31October. Another meeting
willtakeplace inNovember. There hasalsobeenaseries ofinformal consultations atthebilateral,
plurilateral andCommittee levels.
2. TheSub-Committee onLeast-Developed Countries heldthreemeetings in1996; on27February
(Second Session), 13and23September (respectively Third andFourth Sessions). TheSecond Session
waschaired byMiss Anne Stoddart, andthesubsequent sessions byMr.Nacer Benjelloun-Touimi,
onaninterim basis inhiscapacity astheChairman oftheCTD.
3. Thehighlevelofactivity oftheCTD in1996 reflected theimportance attached byMembers
toproposing practical recommendations fortheSingapore Ministerial Conference (SMC). Asaresult,
itbecame clearintheearlypartofthisyearthattheCTD work programme for1996would beadjusted
inthelightofMembers 'priorities inrelation totheSMC. Accordingly, Members oftheCommittee
identified fourpriority tasksfortheCommittee 'swork: (a)review oftheimplementation ofprovisions
intheWTO Agreements andlegal instruments infavour ofdeveloping country Members; (b)the
preparation ofguidelines forthetechnical cooperation activities oftheWTO; (c)working towards
increasing theparticipation ofdeveloping countries inthemultilateral trading system, including the
evaluation ofimpact oftheUruguay Round onthese countries; and,(d)within these three tasks,
recommend -onapriority basis -positive measures aimed atensuring thatleast-developed country
Members achieve theirdevelopment objectives.
4. Thisreport isdivided intothreesections. Section Isummarizes thework doneineachofthese
fourpriority areas, including thework oftheSub-Committee onLeast-Developed Countries, aswell
asonother issues falling within themandate oftheCTD; Section IIidentifies priority areas forthe
future work oftheCTD andtheSub-Committee; and,Section IIIincludes elements thatcould be
integrated intotheSingapore Ministerial Declaration.WT/COMTD/9
Page2
Section I-Work oftheCTD during 1996
(a) Review oftheimplementation ofprovisions infavour ofdeveloping country Members
5. TheCommittee agreed toreview theimplementation ofprovisions infavour ofdeveloping
country Members onthebasisofcontributions fromMembers andfromtheWTO Bodies responsible
formonitoring theimplementation oftheUruguay Round commitments. Toassist inthisexercise,
theChairman invited theChairpersons ofother WTO Bodies tosubmit information onhowprovisions
infavour ofdeveloping countries hadbeendealtwithintheirrespective Committees. Onthebasis
ofthese responses, theSecretariat prepared background documentation presenting thereplies received
inananalytical format.
6. Thework oftheCommittee hasthusfocused onahorizontal overview oftheimplementation
ofprovisions infavour ofdeveloping countries. TheCommittee noted that,duetothefactthatthe
WTO wasnewly established, theimplementation process wasstillatanearly stage andfurther work
wasrequired fortheCommittee tobeinaposition tofullyevaluate overall progress. TheCommittee
alsoacknowledged thebroad scope andcomplexity oftheconcepts, principles andrulescontained in
theWTO instruments andthat,insome instances, themeans wereyettobeelaborated toprovide an
operational content tothespecial provisions infavour ofleast-developed andother developing country
Members.
7. TheCommittee recognized thatalthough theimplementation oftheprovisions intheWTO
instruments infavour ofleast-developed andother developing country Members hadbeeningeneral
moving ahead inthefirsttwoyears ofexistence oftheWTO, available information pointed toarelatively
lowuseofthose provisions. Many oftheprovisions required action onthepartofdeveloping country
Members tosetinmotion theirapplication. Inthisrespect, theCommittee emphasized theimportance
toimprove theflowofinformation todeveloping, andinparticular least-developed country Members,
ofprovisions intheirfavour which were dependent upon specific requests ontheirpart.
8. Concerns were alsoexpressed astowhether developing country Members hadbeenableto
draw fullbenefit from provisions intheirfavour byincorporating them intotheirtrade policy and
developmentprogrammes.Thepointwasmadethat,evenwhenprovisionswereadequatelyimplemented,
theirimpact ondeveloping country Members remained tobeseen. Some Members referred tothe
importance oftheTrade Policy Review Mechanism fordeveloping countries inthiscontext, andto
thepositive effects oftheirparticipation inthatexercise.
9. TheCommittee offered recommendations forfuture work onthese areas (seeSection II).It
alsoemphasized theimportance ofmaintaining thehorizontal nature ofitsroleinthisareaanditsclose
relationship withwork developed inother WTO Bodies.
(b) Guidelines forWTO Technical Cooperation
10. Inaccordance withtheterms ofreference oftheCTD andinthelight oftheMarrakesh
Declaration calling forincreased andstrengthened technical cooperation, theCTDattached considerable
priority todrafting theGuidelines forWTO Technical Cooperation. Indoing so,Members tookinto
account thetrading environment within which theWTO istooperate (i.e.when compared tothatof
theGATT), andstressed theneedtoadapt thetechnical cooperation activities oftheWTO toimprove
itseffectiveness inhelping recipient country Members tointegrate intothemultilateral trading system.WT/COMTD/9
Page3
11. Thepreparation ofthese Guidelines wascarried outonthebasis ofthefollowing premises:
(i)technicalcooperationshouldaimatcapacity-building,inparticularofhumanresourcesandinstitutional
andadministrative structures; (ii)theWTO should concentrate itsassistance onitsareasofcompetence;
(iii)aneffective response totheincreasing needs ofdeveloping countries fortechnical cooperation in
trade-related matters required thecoordination oftechnical cooperation activities provided bythevarious
international organizations; (iv)therewasaneedtoremove anyunnecessary overlap withthetechnical
cooperation programmes ofrelevant international organizations andtoensure thatrecipient countries
fullybenefit fromthecomplementary nature oftheirrespective competencies; and,(v)Members should
become more involved intheplanning andmonitoring ofWTO 'stechnical cooperation activities.
12. Inorder toassist theCommittee inassessing thepriority areas forWTO technical cooperation,
theCommittee benefited fromthree major inputs; namely, aChairman 'squestionnaire senttoWTO
Members, which served toidentify theoverall technical cooperation needs ofMembers; thecontribution
oftheHeads ofInstitutions andotherBodies whoaddressed theCommittee onvarious occasions, thereby
helping toclarify howthetechnical cooperation activities could becoordinated among therelevant
institutions; and,acomprehensive non-paper bySwitzerland.
13. Based ontheseaswellasonindividual written andoralcontributions fromvarious delegations,
theCommittee adopted on15October asetofGuidelines fortheWTO 'sTechnical Cooperation (see
Attachment 1).TheGuidelines elaborate thescope oftheWTO 'stechnical cooperation; serve toensure
thattheassistance provided willbeadapted totheevolving needs ofrecipient countries andfocus on
capacity-building; andprovide foranevaluation oftheWTO 'stechnical cooperation.
(c) Participation ofdeveloping country Members inthemultilateral trading system, including
thereview oftheimpact oftheUruguay Round ondeveloping country Members
14. During thefirsthalfof1996, theCommittee elaborated anoutline forastudy tobeprepared
bytheSecretariat, which would address thereasons whysome developing countries hadperformed
better thanothers inintegrating intothemultilateral trading system. Theobjective ofthestudy was
toprovide background material foracomprehensive discussion intheCommittee onthese issues and,
ifpossible, todraw conclusions onhowtofacilitate theintegration ofdeveloping country Members
intothemultilateral trading system. Thestudy, distributed inearly August (WT/COMTD/W/15),
addressed bothdomestic (macroeconomic policies, infrastructure problems, etc.)andexternal factors
(barriers totrade inimporting markets, restrictive business practices, etc.).
15. Given thecomplexity ofthetopics addressed, sometimes divergent comments weremade and
differentconclusionsreachedbyMembers.Inparticular,variousviewswereexpressedontheimportance
ofappropriate domestic policies andofmarket access possibilities fortheeconomic development of
developing countries. Forsome Members, themainconclusion wasthatthedifferent ratesofgrowth
ofdeveloping countries wasprimarily related totheirdomestic policies -thatis,while market access
wasimportanttodeterminetheexportperformanceofcountries,littlecouldbeachievediftheappropriate
domestic policies werenotinplace (e.g.astable economic environment andaliberal trade regime).
Other Members, however, while recognizing theimportance ofdomestic policies, feltthatthese did
notconstitute themain reason forthedivergent performance ofdeveloping countries, andthattrade
barriers hadplayed amore significant rolethandomestic policies. Anumber ofspecific comments
weremade withrespect tothecontent ofthestudy; inparticular, themanner inwhich foreign direct
investment wasdealtwithandtothefactthatinsufficient attention waspaidtotheimportance ofdomestic
savings fortheprocess ofeconomic development andtheproblems faced bythenet-food importing
countries.WT/COMTD/9
Page4
16. Anumber ofMembers drew attention tothepositive relationship between investment and
development. Inthisrespect, theCommittee noted thatbothitsterms ofreference aswellasthose
oftheSub-Committee onLeast-Developed Countries provide thepossibility forthesebodies toconsider
measures andinitiatives toassist developing andleast-developed country Members intheexpansion
oftheirtradeandinvestment opportunities fromadevelopment perspective, andthatthisisofrelevance
fortheCTD'swork.
17. Indiscussing thisitem, some Members reiterated thefactthatanumber ofleast-developed
countries,whilehavingliberalinvestmentandtraderegimes,werenotabletotakeadvantageofinitiatives
intheareaoftrade andinvestment duetosupply-side constraints anddifficulties inadopting adequate
domestic policies. Itwasfeltthatthisproblem could betackled, interalia,through theprovision of
technical cooperation inconjunction withotherinternational organizations aimed atbuilding thecapacity
ofhuman andother resources inthese countries. Thecommitment toimplement measures tointegrate
least-developed countries intothemultilateral trading system (see(d)below) wasalsoreferred toon
numerous occasions.
(d) Least-developed countries
18. Asmentioned above, under eachofthepriority areas, particular attention wasdevoted tothe
difficulties oftheleast-developed countries. Work wasinitiated through areview oftheproblems,
concerns andspecial measures infavour oftheleast-developed countries made bytheSub-Committee
onLeast-Developed Countries. Various background documents wereprovided forthereview ofthe
situation oftheleast-developed countries. These included summaries ofthespecial provisions contained
inUruguay Round Agreements andlegal instruments infavour ofleast-developed countries
(COM.TD/LLDC/W/54), andinparticular, thoseprovisions which required specific action byMembers
(WT/COMTD/W/10). Adocument wasalsoprepared anddiscussed outlining recent international
initiatives launched infavour ofleast-developed countries tofacilitate theexpansion oftheirtrade and
investment opportunities (WT/COMTD/LLDC/W/1). Thestudy referred toin(c)above, while not
exclusively devoted toleast-developed countries, provided insights intofactors which might havehad
abearing ontheireconomic, andinparticular trade, performance. Further, first-hand information
ontheworkinfavour ofleast-developed countries carried orplanned forthefuture byotherinternational
organizations wasmade available toMembers through presentations totheCTDandtheSub-Committee
(see(e)below) byvarious invited speakers.
19. Thereview pointed tothedifficult economic situation ofleast-developed countries andtothe
risksoftheirmarginalization inthemultilateral trading system. While theinternational community
waswellawareoftheseproblems,includingtheneedtodevelopdomesticinitiativesaddressingstructural
problems, andhadundertaken numerous initiatives intheareaoftradeandinvestment (both bilaterally
andthrough multilateral institutions), theseingeneral havenotbeensufficient toarrest thedeterioration
oftheeconomic conditions ofanumber ofleast-developed countries. Consequently, theSub-Committee
identified twomaincontributions thattheWTO could make tobetter integrate least-developed countries
intothemultilateraltradingsystem:first,toensurethattechnicalcooperationprovidedtoleast-developed
country Members would aimatinstitutional andhuman capacity-building: andsecond, preparing a
WTO PlanofAction forLeast-Developed Countries thatwould becomprehensive innature andfully
integrated withtheinitiatives planned orunderway elsewhere.
20. Asaresult aDraft WTO PlanofAction forLeast-Developed Countries wasdistributed toCTD
Members atitsEleventh Session. ThePlanofAction reaffirms commitments thatWTO Members
hadalready undertaken withrespect toleast-developed countries andproposes acoordinated strategy
toassist least-developed countries andidentifies many areaswhere practical measures could beadopted.
AttheCommittee 'sTwelfth Session, theCTD considered thedraftPlanofAction andforwarded itWT/COMTD/9
Page5
forconsiderationtotheGeneralCouncilandsubmissiontoMinistersforadoptioninSingapore(circulated
indocument WT/COMTD/W/20).
21. Inaddition, Members feltthat,while theWTO PlanofAction pointed intherightdirection,
more wasneeded toincrease coordination ininternational actions infavour ofleast-developed countries
andefficiency withrespect totheassistance offered tothem. Thus, theCommittee alsoagreed that
theGeneral Council recommend thatMinisters inSingapore callforahigh-level meeting inGeneva
assoonaspossible in1997, inprinciple tobeorganized jointly byWTO, UNCTAD andITC, with
theparticipation ofnational aidagencies, international financial institutions andother relevant
organizations, tofoster anintegrated approach tothetrade-related aspects ofleast-developed countries '
economic development, which willneedtobeobserved intheimplementation oftheWTO Planof
Action. Special emphasis should begiven toincreasing efficiency intheprovision oftechnical assistance
forhuman andinstitutional capacity building.
22. Given thatonlyalimited number ofleast-developed countries arerepresented inGeneva, the
Government ofNorway accepted tofinance, through itsTrust Fund, theparticipation ofrepresentatives
fromleast-developed countries fromtheEuropean capitals attheFourth Session oftheSub-Committee
on23September 1996 andrelated briefings bytheWTO Secretariat on24September 1996. These
activities werewellattended bybothGeneva andnon-Geneva based least-developed country delegations.
(e) Trade anddevelopment activities ofintergovernmental organizations
23. TheCommittee hasactively engaged inpursuing theobjective ofcloser institutional cooperation
byinviting toitsSeventh Session theSecretary-General ofUnited Nations Conference onTrade and
Development (UNCTAD), theExecutive-Director oftheInternational Trade Centre andtheChairman
ofbothWTO'sGeneralCouncilandUNCTAD'sTradeandDevelopmentBoard.Thisdialoguecontinued
attheCommittee 'sTenth Session, where theChairman oftheJoint International Monetary Fund
(IMF)/WorldBankDevelopmentCommitteeaddressedtheCTD.Thisintensifieddialoguehasprovided
Members oftheCommittee withanumber ofpositive contributions, inparticular, withrespect tobetter
appreciating thework ofeachofthese organizations.
24. Onthese occasions, theDirector-General oftheWTO hasalsoaddressed theCommittee on
theresults oftheUruguay Round; theSingapore Ministerial Conference; hisinvitation toparticipate
intheG7Summit; and,technical cooperation.
25. TheChairman oftheJointIMF/World BankDevelopment Committee andtheDirector-General
oftheWTO alsoaddressed theSub-Committee onLeast-Developed Countries atitsFourth Session.
Onthatoccasion, Members oftheSub-Committee wereinformed bytheChairman oftheDevelopment
Committee ofthejointIMF/World Bank initiative fordebtrelief ofhighly-indebted poorcountries.
Inhisaddress, theDirector-General oftheWTO referred tosome actions thatWTO Members should
taketoenhance thedevelopment oftheleast-developed countries, andthatthese should come together
inaPlanofAction forLeast-Developed Countries.
(f) Other elements addressed bytheCommittee
26. AtitsFifthSession, theCommittee reviewed andtooknoteoftheactivities oftheWTO during
1995intheareaoftechnical cooperation. Members alsocommended Norway foritsspecial contribution
totechnical cooperation activities through theestablishment ofaTrust Fund, andtheEuropean
Communities 'financing ofatechnical cooperation programme infavour ofAfrican, Caribbean and
Pacific countries ontheresults andopportunities created bytheUruguay Round.WT/COMTD/9
Page6
27. AtitsTwelfth Session, theCommittee wasinformed ofaninitiative bytheSecretariat tohold
aMeeting ofMinisters from Least-Developed Countries on13-15 November 1996 tobriefthem on
theSingapore Ministerial Conference. TheMeeting istobefinanced bycontributions from the
Governments oftheCzech Republic, Korea andNorway.
Section II-Future Work Programme
28. Initsfuture work, theCTD willcontinue toaddress allitems included initsterms ofreference.
Itwill,inparticular, continue tofulfilitsmandate ofkeeping under review theimplementation ofthe
Uruguay Round provisions infavour ofdeveloping andleast-developed country Members. Inthis
context,theCommitteewillexplorewaysofensuringgreaterdisclosureoftheapplicationoftheUruguay
Round provisions infavour ofdeveloping andleast-developed countries1;andofincreasing efforts
todisseminate information relating tothose provisions. In1997, theCommittee willalsoneedtodecide
howtoimplement therecently adopted Guidelines forWTO 'sTechnical Cooperation withrespect to,
forexample, themonitoring, managing andevaluating technical cooperation activities oftheWTO.
29. Members stressed that,inaddressing thedifferent items oftheworkprogramme, theCommittee
should attempt tomake fulluseofthemany background documents prepared bytheCTD during its
firsttwoyears ofexistence (seeAttachment 2).
Section III-Elements forIntegration intoSingapore Ministerial Process
30. Ministers takenotewithsatisfaction oftheadoption ofGuidelines forWTO 'sTechnical
Cooperation andreiterate theircommitment tocontinue ensuring theavailability offinancial andhuman
resources fortechnical cooperation activities asoneelement tofacilitate theparticipation ofdeveloping
country Members inthemultilateral trading system and,inparticular, reverse thetrend ofthe
marginalization ofanumber ofleast-developed country Members.
31. Ministersrecognizethattheimplementationofthespecialprovisionsinfavourofleast-developed
andother developing country Members, though stillatanearly stage, hasbeenmoving intheright
direction.MinistersrecognizetheimportanceofincreasingtheawarenessofdevelopingcountryMembers
ofthespecial provisions relating tothem, inparticular those designed toenhance trade opportunities.
They notethatthese provisions facilitate asmoother integration ofdeveloping country Members into
therules-based multilateral trading system while theyproceed withthenecessary domestic adjustments.
32. Ministers adopt theWTO PlanofAction fortheLeast-Developed Countries transmitted by
theGeneral Council.
33. Ministers callforahigh-level meeting inGeneva assoonaspossible in1997, inprinciple to
beorganized jointly byWTO, UNCTAD andITC, withtheparticipation ofrelevant institutions, to
foster anintegrated approach tothetrade-related aspects ofleast-developed countries 'economic
development, which willneedtobeobserved intheimplementation oftheWTO PlanofAction, with
special emphasis onincreasing efficiency intheprovision oftechnical assistance forhuman and
institutional capacity building.
1Forexample, byimproving theflowofinformation, inparticular (a)from Members offering thebenefits
toMembers potentially using them and(b)from allMembers totheCommittee.WT/COMTD/9
Page7
ATTACHMENT 1
GUIDELINES FOR WTO TECHNICAL COOPERATION
Adopted bytheCommittee onTrade andDevelopment on15October 19961
Bearing inmind theMarrakesh Declaration of15April 1994 andtheDecision onMeasures
inFavour ofLeast-Developed Countries, WTO Technical Cooperation istobeprovided inconformity
withtheprinciples setoutbelow:
I. OBJECTIVES AND PRINCIPLES
- Assist inthefullintegration ofbeneficiaries intothemultilateral trading system andcontribute
totheexpansion oftheirtrade;
- Strengthen andenhance institutional andhuman capacities inthepublic sector foranappropriate
participation inthemultilateral trading system; whenever possible andinconsultation withthe
government concerned, capacity building activities could include representatives oftheprivate
sector;
- Bedemand-driven andadapted torecipient needs, inparticular withrespect tothebestsuited
modes ofdelivery;
- Becomplementary toandsupportive ofrecipients 'efforts toidentify theirownrequirements;
- Keep ageographical balance, while giving priority toleast-developed countries, inparticular
African countries, andtolow-income economies;
- Cover subject matters within thecompetence andexpertise oftheWTO, inparticular:
- Toimprove knowledge ofmultilateral trade rulesandWTO working procedures and
negotiations; and
- Toassist intheimplementation ofcommitments inthemultilateral trading system and
fulluseofitsprovisions,includingtheeffectiveuseofthedisputesettlementmechanism;
- Befullyandclosely coordinated withother assistance provided bymultilateral andbilateral
institutions;
- Beadministered bytheSecretariat andreviewed byMembers, inaccordance withoperational
directives andimplementation modalities tobeestablished bytheCommittee onTrade and
Development.
1TheGuidelines forWTO Technical Cooperation were circulated asWT/COMTD/8.WT/COMTD/9
Page8
II. OPERATIONAL DIRECTIVES
1. Modes ofDelivery
- Themodes ofdelivery shallbechosen tofitboththerequirements oftherecipient country
andtechnical cooperation programmes;
- Modes ofdelivery shallbeassessed inthelightofprinciples anddirectives tobeagreed upon
bytheCommittee onTrade andDevelopment andontheprogress indevising newmeans for
anefficient dissemination ofknowledge;
- Modes ofdelivery shallbeelaborated withtheaimof:
- Extending assistance onasbroad andcost-effective abasis aspossible, e.g.:
- Training courses ofaregional orlinguistic format;
- Development ofinformation andtraining material, inparticular withthehelp
oftechnology based aids;
- Emphasizing in-depth andconcrete training onWTO matters suchas:
- Specialized technical seminars andworkshops ofaregional orlinguistic format;
- Practical training programmes.
2. Long-Term Engagement
- Follow-up ofindividual programmes andassessment oftheireffectiveness;
- Development oftraining capabilities withparticular emphasis onthetraining oflocal
trainers, theuseoflocalorregional technical expertise, andtheestablishment oflinks
withacademic andresearch institutions.
3. International Coordination
a) International andRegional Institutions Dealing withTrade-Related Matters
- Close institutional dialogue withother international organizations, inparticular with
ITCandUNCTAD, andwithother regional institutions toensure acoherent approach,
toidentifyareasofcompetenceandcomplementarity,todefineandexecutejointprojects
andavoid duplication;
- Dissemination ofinformation ontheWTO technical cooperation programmes, and
establishment withother relevant organizations ofacentral inventory ofprogrammes.WT/COMTD/9
Page9
b) Bilateral Development Assistance inTrade-Related Matters
- Exchange ofinformation withdonor andrecipient governments, including participation
inbilateral programmes.
4. Management
a) Transparency
- Three yearplanadjusted onanannual basis, including budgetary implications, tobe
approved bytheCommittee onTrade andDevelopment andtobesubmitted tothe
appropriatebodiesofWTO,accordingtoagreedproceduresanddecisionsoftheGeneral
Council;
- Annual Secretariat reporting onprogramme implementation, andfinancial report;
- AdhocSecretariat status reports.
b) Funding
- Regular Budget oftheWTO, within thelimits specifically assigned byMembers;
- WTO Trust Fund fortechnical cooperation: Voluntary contributions byMembers and
international financial institutions;
- International ornational cost-sharing, whenever appropriate.
c) Monitoring andEvaluation
- BytheCommittee onTrade andDevelopment based onannual evaluation oftheresults
oftechnical assistance activities inorder toensure optimum useofresources according
toappropriate evaluation criteria;
- TheWTO Trust Fund shallbemanaged according totherecommendations contained
inthedecision taken bytheGeneral Council of18July1996 (WT/GC/M/13) andto
theFinancial Regulations andFinancial Rules indocuments WT/L/156 andWT/L/157
of5August 1996.WT/COMTD/9
Page10
ATTACHMENT 2
BACKGROUND DOCUMENTS PREPARED FOR
MEETINGS OFTHE CTD AND OFTHE SUB-COMMITTEE DURING 1995-96
WT/COMTD/W/1 - Preliminary Information onNotifications toberequired from
WTO Members (First Session -April 1995)
WT/COMTD/W/1/Add.1 - Addendum
WT/COMTD/W/2/Rev.1 - Draft Programme ofWork for1995 -Revision
WT/COMTD/W/4 - CreditandRecognitionforAutonomousLiberalizationMeasures
WT/COMTD/W/4/Corr.1 - Corrigendum
WT/COMTD/W/5 - URcommitmentsundertakenbyDevelopingCountryMembers
WT/COMTD/W/6 - RegulatoryObligationsandOtherImplicationsURAgreements
WT/COMTD/W/6/Add.1 - Addendum
WT/COMTD/W/7 - Technical Cooperation oftheWTO Relations withother
International Organizations
WT/COMTD/W/10 - WTO Measures relating toDeveloping Country Members
WT/COMTD/W/11 - Notes ontheParticipation ofDeveloping Countries inthe
World Trading System
WT/COMTD/W/11/Add.1 - GSP-Addendum
WT/COMTD/W/11/Add.1/Corr.1 GSP-Addendum -Corrigendum
WT/COMTD/W/12 - Technical Cooperation withDeveloping Countries
WT/COMTD/W/14 - Report onTechnical Cooperation
WT/COMTD/W/14/Add.1 - Addendum
WT/COMTD/W/15 - Participation ofDeveloping Countries inWorld Trade:
Overview ofMajor Trends andUnderlying Factors
WT/COMTD/W/16 - Implementation ofUruguay Round Provisions inFavour of
Developing Country Members
WT/COMTD/W/16/Add.1 - Implementation ofUruguay Round Provisions inFavour of
Developing Country Members
WT/COMTD/W/16/Add.2 - Implementation ofUruguay Round Provisions inFavour of
Developing Country Members
WT/COMTD/W/17 - Textiles Monitoring Body
WT/COMTD/8 - Guidelines forWTO Technical Cooperation
WT/COMTD/LLDC/W/1 - Measures toAssist andFacilitate theExpansion ofTrade and
Investment Opportunities ofLeast-Developed CountriesSECTION IX
COMMITTEE ONREGIONAL TRADE AGREEMENTSWORLD TRADE WT/REG/2
6November 1996
ORGANIZATION(96-4701)
Committee onRegional Trade Agreements
REPORT (1996) OFTHE
COMMITTEE ONREGIONAL TRADE AGREEMENTS
TOTHE GENERAL COUNCIL
Introduction
1. Nearly allMembers oftheWorld Trade Organization (WTO) areParties toatleastoneregional
trade agreement notified totheGATT ortheWTO; some Members participate inother regional
initiatives. Thenumber ofsuchagreements hasincreased inrecent years.
2. InameetingoftheGeneralCouncilheldon15November1995,itwasproposedthatacommittee
onregional trade agreements beestablished intheWTO asameans toimprove theorganization of
thework oftheWTO inthisarea,inparticular, withrespect tothereplacement ofmore than20active
working parties examining regional trade agreements, aswellastoprovide aforum intheWTO to
examine theimplications forthemultilateral trading system ofthegrowing number ofregional trading
agreements andinitiatives. Should suchacommittee becreated, therights andobligations ofMembers
would notbeaffected, andtheterms ofreference oftheexisting working parties would notbechanged.
TheGeneral Council, atitsDecember 1995 meeting, agreed inprinciple toestablish aCommittee on
Regional Trade Agreements, subject toagreement onitsterms ofreference andrelated matters.
3. TheCommittee onRegional Trade Agreements wasestablished bythefollowing Decision of
theGeneral Council on6February 1996 (WT/L/127):
"Having regard toagreements1which arerequired tobenotified, asthecase
may be,under Article XXIV oftheGeneral Agreement onTariffs andTrade
(GATT) 1994, Article VoftheGeneral Agreement onTrade inServices orthe1979
Decision onDifferential andMore Favourable Treatment, Reciprocity andFuller
Participation ofDeveloping Countries;
Having regard tothebiennial reporting envisaged inParagraph 11ofthe
Uruguay Round Understanding ontheInterpretation ofArticle XXIV ofthe
GATT 1994; and
Acting pursuant toparagraphs 1and7ofArticle IVoftheAgreement
Establishing theWorld Trade Organization (WTO),
1Theterm "agreements" inthisDecision refers toallbilateral, regional, andplurilateral trade agreements
ofapreferential nature.WT/REG/2
Page2
TheGeneral Council hereby decides :
1. Toestablish aCommittee onRegional Trade Agreements, opentoallMembers oftheWTO,
withthefollowing terms ofreference:
(a) tocarry outtheexamination ofagreements inaccordance withthe
procedures andterms ofreference adopted bytheCouncil forTrade
inGoods, theCouncil forTrade inServices ortheCommittee onTrade
andDevelopment, asthecasemaybe,andthereafter present itsreport
totherelevant body forappropriate action;2
(b) toconsider howtherequired reporting ontheoperation ofsuch
agreements should becarried out and make appropriate
recommendations totherelevant body;
(c) todevelop, asappropriate, procedures tofacilitate andimprove the
examination process;
(d) toconsider thesystemic implications ofsuchagreements andregional
initiatives forthemultilateral trading system andtherelationship
between them, andmake appropriate recommendations totheGeneral
Council; and
(e) tocarry outanyadditional functions assigned toitbytheGeneral
Council.
2. ThattheCommittee shallreport annually totheGeneral Council onitsactivities."
Officers oftheCommittee were appointed bytheGeneral Council on16April 1996. These are:
Mr.Weekes (Canada) asChairman oftheCommittee, andMr.Berthet (Uruguay), Mr.Harbinson
(Hong Kong), Mr.Ravaloson (Madagascar) andMr.Willems (Belgium) asVice-Chairmen.
4. TheCommitteewillhaveheldsevenmeetingsbytheendof1996;on21-22May(FirstSession),
2-3July (Second Session), 29-31 July (Third Session), 17-20 September (Fourth Session);
7,10-11 October (Fifth Session); 31October (Sixth Session); and5-6,8November (Seventh Session).
There hasalsobeenaseries ofinformal consultations.
Work oftheCommittee during 1996
5. TheCommittee adopted itsRules ofProcedure (WT/REG/1) andprogramme ofwork for1996
atitsSecond Session. Thework programme provided foralltheitems ofitsterms ofreference to
beaddressed inabalanced manner, allowing theCommittee toprogress more effectively inallareas
ofitsmandate asaresult ofthesynergies which developed.
2TheCommittee willalsocarry outtheoutstanding work oftheworking parties already established bythe
Council forTrade inGoods, theCouncil forTrade inServices ortheCommittee onTrade andDevelopment,
within theterms ofreference defined forthose working parties, andreport totheappropriate bodies.WT/REG/2
Page3
(a) Examination ofregional trade agreements
6. Members drew attention totheneedfortheCommittee toassign apriority todealing with
thebacklog ofoutstanding examinations. Bytheendof1996, theCommittee willhavestarted, or
continued, theexamination of21regional tradeagreements outofthe32outstanding asofJune1996,
thusworking towards removing thebacklog (seeAttachment 1).
7. Theexaminationsofregionaltradeagreementsduring1996ledtoquestionsfromsomeMembers
concerning theinterpretation ofsome oftheWTO provisions pertaining toregional tradeagreements,
inparticular, ofArticle XXIV oftheGATT 1994, theUnderstanding ontheInterpretation of
Article XXIV oftheGATT 1994 andArticle VoftheGeneral Agreement onTrade inServices. In
some instances, theobservation wasmade thatexaminations were hampered bythelack, orlate
submission, ofrelevant information.
(b) Reporting ontheoperation ofagreements
8. Preliminary discussions onthisitemwere based onachecklist ofpoints prepared bythe
Secretariat (WT/REG/W/3). Members were oftheview thatthefulfilment ofthelegal obligations
toprovide forbiennial reporting ontheoperation ofagreements could helptoincrease thetransparency
ofregional trade agreements. They considered thattheprocedures togiveeffect tothisobligation
shouldbedesignedtooperateinanefficientmanner,takingintoaccountotherrelevantWTOprocedures.
(c) Procedures tofacilitate andimprove theexamination process
9. TheCommittee requested theSecretariat toprepare astandard format fortheprovision of
informationonregionaltradeagreementstofacilitateandstandardizetheprovisionofinitialinformation.
AtitsThird Session, theCommittee tooknoteofthenon-binding, voluntary Chairman 'sGuidelines
assetoutinthe"Standard Format forInformation onRegional Trade Agreements" (WT/REG/W/6).
Membersconsidereditanimportantcontributiontoimprovingtheproceduresforexaminationofregional
trade agreements, asitisintended toprovide timely andaccurate information asasubstitute forthe
initial question andreplyprocess. TheCommittee isconsidering theappropriate timeforthesubmission
oftheStandard Format. TheStandard Format hasbeendeveloped forgoods agreements; following
arequest bytheCommittee, theSecretariat ispreparing asimilar draftstandard format forinformation
onservices agreements foruseasappropriate.
10. TheCommittee isconsidering ajointsubmission bythedelegations ofAustralia, Hong Kong
andKorea (WT/REG/W/5), which proposed theadoption bytheCommittee ofguidelines forthe
examination ofregional trade agreements. TheCommittee isalsoconsidering asuggestion byJapan
fortheadoption ofguidelines fortheexamination ofregional trade agreements aimed ataddressing
thekindofproblems that,inJapan'sview, result from different interpretations ofArticle XXIV.
11. TheCommittee discussed anumber ofmatters relating tothenotification ofregional trade
agreements. With respect tothetiming ofnotifications, theCommittee isexamining thepossibility
ofestablishing ameans toconvey preliminary information relating toregional trade agreements prior
tothenotification itself. TheCommittee alsodiscussed twoapproaches todealing withnon-compliance
withnotificationobligations;eitherthroughtheCommitteeurgingMemberswhicharepartiestoregional
tradeagreements tocomply withtheirnotification obligations orthrough providing forthepossibility
ofcounter-notification. TheCommittee alsohadapreliminary discussion onthepossibility of
establishing asimplified examination procedure forregional trade agreements having minimal effects
oninternational trade. With respect tothereports ontheexamination ofregional trade agreements,
theChairman proposed anewformofreporting involving separating thereport intwoparts, whereby
theCommittee would takenoteofitsfactual part-reflecting thediscussions oftheCommittee -andWT/REG/2
Page4
adopt theconclusions afterhaving considered adraftversion. Thisremains amatter forconsideration.
TheCommittee alsodiscussed othermatters dealtwithintheSecretariat document "Note onProcedures
toFacilitate andImprove theExamination Process" (WT/REG/W/9).
(d) Systemic implications ofregional trade agreements andinitiatives forthemultilateral
trading system andtherelationship between them
12. TheCommittee hadapreliminary, inconclusive discussion onthisissue. Forthisdiscussion,
ithadbeforeitthe1995Secretariatpublication,RegionalismandtheWorldTradeSystem,whichprovides
anoverview oftherelationship between regional tradeagreements andtheGATT/WTO system during
thepast50years. Korea made asubmission (WT/REG/W/4) dealing withwhatitconsidered tobe
thechallenges, systemic issues, andobjectives fortheMinisterial Conference withrespect toregional
trade agreements andtheWTO system; itincluded awork programme onregionalism fortheWTO
in1997-98. Inthediscussion there weredivergent views. Members emphasized theimportance of
therelationship between regional trade agreements andtheWTO system. Some Members stressed
theneedtoaddress therelationship between regional trade agreements andtheWTO rules. Others
wereequally clearthatconclusions could notbedrawn ahead ofthenecessary examination oftheissues.
Theneed forMembers tocomply withtheir notification obligations withrespect topreferential
agreements wasalsonoted.
13. Inthecourse oftheexamination ofregional trade agreements carried outattheThird Session
oftheCommittee, Members identified anumber ofsystemic andhorizontal issues related totherelevant
WTO rules. Upon therequest oftheCommittee, these havebeenincluded inaninformal checklist
bytheSecretariat which willbeupdated toinclude other horizontal issues ofthesame nature referred
toinother Sessions oftheCommittee.
14. Following theChairman 'sproposal onhowtheavailable information could bepresented to
assist consideration ofsystemic implications, theCommittee requested theSecretariat toprepare material
forhorizontal (pilot) studies ontechnical barriers totrade andsanitary andphytosanitary measures
astheyappear inthetexts oftheregional trade agreements under examination. Inapreliminary
discussion based ontheSecretariat 'smaterial (WT/REG/W/8), various views wereexpressed regarding
theimplications fortheWTO. Further discussions wereneeded onthissubject. Inthatcontext, the
Chairman invited Members tosubmit relevant information withrespect towork being doneontechnical
barriers totradeandsanitary andphytosanitary measures inthecontext ofregional initiatives. Interest
wasexpressed bysome Members inexpanding thisexercise tocover other provisions.
15. Indiscussing theCommittee 'sreport totheMinisterial Conference, Members emphasized the
importance ofthecompatibility ofregional trade agreements withthemultilateral trading system.
16. AttheFourth Session, Korea tabled adraft decision fortheMinisterial Conference. The
United States hasalsotabled adraft recommendation. Discussions willtakeplace shortly onboth
proposals.
(e) Additional functions
17. Noadditional functions wereassigned bytheGeneral Council totheCommittee onRegional
Trade Agreements during 1996.WT/REG/2
Page5
Future Work Programme
18. There exists considerable scope fortheCommittee todevelop itswork within theexisting terms
ofreference. TheCommittee 'sfuture work programme willbuild onwork begun thisyear. Members
consider itimportant forMinisters inSingapore toendorse thefollowing aspects ofitsfuture work.
19. TheCommittee should continue theexamination ofregional trade agreements asoneofits
priority tasks fortheyears ahead. TheCommittee should make every effort towork toremove the
backlog andensure thatsuchabacklog doesnotreoccur.
20. TheCommittee should work towards early agreement onprocedures fortheeffective
implementation ofbiennial reporting ontheoperation ofagreements, inanefficient manner, taking
intoaccount other relevant WTO procedures.
21. Onprocedurestofacilitateandimprovetheexaminationexercise,theCommitteeshouldcontinue
thework already initiated. Thisshould include, interalia,thedevelopment ofavoluntary Standard
Format forInformation onServices Agreements, thedevelopment ofguidelines fortheexamination
ofregional trade agreements, andtheconsideration ofthenature andcontent ofreports.
22. TheCommittee should explore measures thatcould helpinincreasing theeffectiveness of
notifications -withrespect totheirtiming aswellastotheircontents -andexamine theoptions available
forensuring thatallregional trade andeconomic integration agreements involving WTO Members
arenotified totheappropriate WTO bodies.
23. Onsystemic matters, theCommittee should continue itsconsideration building onwritten
submissions andinterventions byMembers; ontheevolving checklist ofsystemic issues identified
inthecontext oftheexamination ofregional tradeagreements; andonhorizontal comparative studies
onselected elements ofregional agreements andinitiatives. Aspartofthiswork, theCommittee should
analyse, inanon-prejudicial manner, whether thesystem ofWTO rights andobligations, asitrelates
toregional trade agreements, needs tobefurther clarified with aview tomaking appropriate
recommendations totheGeneral Council, inaccordance withthemandate oftheCommittee.WT/REG/2
Page6
ATTACHMENT 1
Status ofExamination ofRegional Trade Agreements
Regional trade agreements examined in1996 (21)
Agreement Date ofExamination Round of
Examination
ECEnlargement -Goods 29/7/96 First
NAFTA -Goods 30/7/96 Second
EFTA-Hungary 17/9/96 First
EFTA-Israel 17/9/96 First
EFTA-Poland 17/9/96 First
EC-Czech Rep. 18/9/96 First
EC-Hungary 18/9/96 First
EC-Poland 18/9/96 First
EC-Slovak Rep. 18/9/96 First
MERCOSUR 20/9/96 Second
NAFTA -Services 10-11/10/96 Second
ECEnlargement -
Services11/10/96 First
EC-Bulgaria 5/11/96 First
EC-Romania 5/11/96 First
EC-Estonia 5/11/96 First
EC-Latvia 5/11/96 First
EC-Lithuania 5/11/96 First
EFTA-Bulgaria 6/11/96 First
EFTA-Romania 6/11/96 First
EFTA-Slovenia 6/11/96 First
EC-Turkey 8/11/96 FirstWT/REG/2
Page7
Other regional trade agreements already notified, tostart examination in1997 (14)
(a) Regional trade agreements notified before June1996 (8)1
- Central European FreeTrade Agreement (FTA)2
- Czech Rep.-Slovenia FTA2
- Slovak Rep.-Slovenia FTA2
- Hungary-Slovenia FTA2
- EC-Faroe Islands FTA
- Iceland-Faroe Islands FTA
- Switzerland-Faroe Islands FTA
- Norway-Faroe Islands FTA
(b) Newnotifications (6)
- Czech Republic-Romania FTA. Theterms ofreference fortheexamination ofthe
Agreement were adopted bytheCouncil forTrade inGoods on5July1996.
- Slovak Republic-Romania FTA. Theterms ofreference fortheexamination ofthe
Agreement were adopted bytheCouncil forTrade inGoods on5July1996.
- EFTA States-Estonia FTA.1Theterms ofreference fortheexamination ofthe
Agreement wereadopted bytheCouncil forTrade inGoods on19September 1996.
- EFTAStates-LatviaFTA.1ThetermsofreferencefortheexaminationoftheAgreement
were adopted bytheCouncil forTrade inGoods on19September 1996.
- EFTA States-Lithuania FTA.1Theterms ofreference fortheexamination ofthe
Agreement wereadopted bytheCouncil forTrade inGoods on19September 1996.
- Establishment oftheEuropean Community, Services. Theterms ofreference forthe
examination oftheAgreement wereadopted bytheCouncil forTrade inServices on
23September 1996.
1Three bilateral FreeTrade Agreements between Switzerland andtheBaltic countries, previously notified
totheGATT, were replaced bytherelevant EFTA Agreements, notified totheWTO after June 1996.
2TheCommittee wasinformed orally ofthereplacement ofthethree bilateral FreeTrade Agreements between
Slovenia andCzech Republic, Hungary andSlovak Republic bytheAgreement onAccession ofSlovenia tothe
Central European Free Trade Area.WT/REG/2
Page8
ATTACHMENT 2
Documents fortheCommittee onRegional Trade Agreements
WT/REG/1 - Rules ofProcedure forMeetings oftheCommittee onRegional Trade
Agreements
WT/REG/W/1 - GATT/WTO Documents Issued fortheExamination ofRegional
Agreements
WT/REG/W/2 - Draft Rules ofProcedure forMeetings oftheCommittee onRegional
Trade Agreements
WT/REG/W/3 - Checklist ofPoints onReporting ontheOperation ofRegional
Agreements
WT/REG/W/4 - Communication from Republic ofKorea
WT/REG/W/5 - Communication from theDelegations ofAustralia, Hong Kong and
Korea
WT/REG/W/6 - Standard Format forInformation onRegional Trade Agreements
WT/REG/W/7 - Checklist ofPoints Raised byDelegations onProcedures toFacilitate
andImprove theExamination Process
WT/REG/W/8 - Systemic Implications ofRegional Trade Agreements andRegional
Initiatives fortheMultilateral Trading System
WT/REG/W/9 - NoteonProcedures toFacilitate andImprove theExamination ProcessSECTION X
COMMITTEE ONBALANCE-OF-PAYMENTS RESTRICTIONSWORLD TRADE WT/BOP/R/19
5November 1996
ORGANIZATION(96-4664)
Committee onBalance-of-Payments Restrictions
REPORT (1996) OFTHE COMMITTEE ON
BALANCE-OF-PAYMENTS RESTRICTIONS
1. Thisreport hasbeenprepared inpursuance oftheProcedures foranAnnual Overview ofWTO
Activities andforReporting under WTO (WT/L/105).1
2. Since 1December 1995 theCommittee hasheld consultations withfiveMembers under the
Chairmanship ofMr.Peter Witt(Germany).2
3. During theDecember 1995consultations withIndia, theCommittee recalled India'sstated aim
tomove, by1996-97, toatrade régime under which quantitative restrictions areretained onlyfor
environmental, social, health andsafety reasons, provided sustained improvement wasshown inits
balance ofpayments. TheCommittee noted theview expressed byIndia that,inthecontext ofa
deteriorating balance-of-payments situation, itwould beneither prudent norfeasible toconsider the
general lifting ofquantitative restrictions onimports atthisstage. Asthere weredivergent views on
India'sbalance-of-payments situation andontheconclusions tobedrawn, theCommittee welcomed
India'sreadiness tonotify totheWTO allremaining restrictions maintained forbalance-of-payments
purposes soonaftertheannouncement ofthe1996/97 Export-Import Policy andtoresume consultations
inOctober 1996.3Following arequest bytheIMFtoreschedule theconsultation, theCommittee agreed
thatthisconsultation would beheldon20-21 January 1997. InJuly1996, India submitted alistof
allitsquantitative restrictions maintained forbalance-of-payments purposes.4
4. During theconsultations withNigeria inFebruary 1996, theCommittee welcomed Nigeria 's
commitment toconvert allmeasures taken forbalance-of-payments purposes toprice-based measures,
toeliminate these andthereby todisinvoke Article XVIII: B.5Theconsultations resumed in
September 1996. TheCommittee tooknoteofthestatement byNigeria thattechnical andlegislative
processes hadbeeninitiated withaviewtoeliminating theimport prohibitions based onbalance-of-
payments grounds asof1January 1997, andthatpositive recommendations hadbeenmade tothis
end,subject tofinalGovernment approval. Itrequested Nigeria tonotify therelevant decisions to
theCommittee assoonastheyaretaken. Ifallmeasures were removed bythe1997 Budget, there
1TheAnnual Report fortheCommittee for1995 iscontained inWT/BOP/R/10.
2Since theentry intoforce oftheWTO, theCommittee hasheldconsultations with13Members
(Table 1).
3WT/BOP/R/11, 23January 1996.
4WT/BOP/N/11, 23July1996.
5WT/BOP/R/13, 1March 1996.WT/BOP/R/19
Page2
would benoneedforfurther consultation; ifnot,theCommittee would resume itsconsultation with
Nigeria inFebruary 1997.6
5. During theJune1996 consultations withSlovakia, theCommittee welcomed thedecision of
theGovernment ofSlovakia, dated 25June1996, committing itself toeliminate thesurcharge with
effect from1January 1997, andtodisinvoke theprovisions ofArticle XIIofGATT 1994atthesame
time.7Slovakia reduced itsimport surcharge from 10to7.5percent, effective 1July1996.
6. Consultations wereheldwithTunisia inJune1996. TheCommittee recognized thatTunisia 's
balance-of-payments situation wasfragile. Itnoted Tunisia 'sclarification oftheonlyremaining
restrictionsforwhichitclaimedbalance-of-paymentsjustificationandtheagreementofTunisiatoprovide
anotification ofthese restrictions totheWTO within onemonth. Thislistsupplied byTunisia is
contained inWT/BOP/N/10.8TheCommittee discussed whether these restrictions could bejustified
forbalance-of-payments purposes. Opinions differed astowhether thisbalance-of-payments situation
constituted athreat ofaserious decline inTunisia 'smonetary reserves. Some Members, considering
thatthese residual measures represented thefinalstage inphasing outquantitative restrictions, stated
thatTunisia needed thefiveyears envisaged initsPlantocomplete thisprocess. Others recalled that,
under theUnderstanding onBalance-of-Payments Provisions oftheGATT 1994, the1979Declaration
onTrade Measures Taken forBalance-of-Payments Purposes andGATT Article XVIII:9, preference
should begiven toprice-based measures, andthatmeasures should beapplied tocontrol thegeneral
level ofimports, without sector-specificity; onthese grounds, theyrequested Tunisia toliftthe
quantitative restrictions promptly. Bearing inmind allthese factors, theCommittee agreed toresume
theconsultations withTunisia inJune1997onthebasisofanewmacroeconomic analysis bytheIMF.9
7. During consultations inSeptember 1996, Hungary confirmed itsfirmintention toeliminate
thesurcharge anddisinvoke balance-of-payments provisions by1July1997, atthelatest.10Hungary
notified theWTO thatitwasreducing the8percentimport surcharge, introduced inMarch 1995,
to7percenton1July1996 andto6percenton1October 1996.11
8. Theconsultations scheduled withTurkey andPoland inJuneandJuly, respectively, were
cancelledfollowingcommitmentsonthepartoftheseGovernmentstodisinvokethebalance-of-payments
provisions by1January 1997.12
9. InaccordancewiththeconclusionsoftheCommitteeinNovember1995,thePhilippinesnotified
theWTO thatithadliberalized itsrestrictions onagricultural products.13
6WT/BOP/R/18, 16October 1996.
7WT/BOP/R/15, 7July1996.
8WT/BOP/N/10, 10July1996.
9WT/BOP/R/14, 8July1996.
10WT/BOP/R/17, 16October 1996.
11WT/BOP/N/12, 6August 1996.
12WT/BOP/R/16, July1996; WT/BOP/N/7, 19June1996; WT/BOP/N/8, 27June1996.
13WT/BOP/N/9, 3July1996 (cf.BOP/312/Add.1/Rev.1, 1November 1994).WT/BOP/R/19
Page3
10. Inaccordance withtheconclusion oftheCommittee inNovember 1995, SriLanka notified
theWTO thatithadremoved import restrictions onfourtarifflines(potatoes, redonions, "B"onions
andpeppers).14
11. AreportonotherbusinessconductedbytheCommitteeiscontainedindocumentWT/BOP/R/16.
12. Inaccordance withtheannual notification requirement, contained inparagraph 9ofthe
Understanding, theCommittee adopted anotification format (WT/BOP/14) on21October 1996.
13. Pending afinaldecision bytheGeneral Council, theCommittee hasgranted adhocobserver
status tothefollowing intergovernmental international organizations: ACP, EFTA, EBRD, OECD,
UNCTAD andWorld Bank.
14. From1997,fourMembersareexpectedtobeconsultingunderArticleXVIII:12(b):Bangladesh,
India, Pakistan andTunisia. Nigeria andSriLanka willalsocontinue consultations ifanymeasures
justified onbalance-of-payments grounds remain inforce.
14WT/BOP/N/13, 30September 1996.WT/BOP/R/19
Page4Table 1
BOP CONSULTATIONS CONDUCTED SINCE THE ENTRY INTO FORCE OFTHE WTO
Member LastConsultation Follow up
Bangladesh March 1995 Thenextconsultations willbeheldinthespring of1997.
Brazil October 1995 Following consultations withtheCommittee, Brazil withdrew theprovisions forimport quota onmotor vehicles introduced in
June, witheffect from 27October 1995.
Egypt June1995 Egypt disinvoked Article XVIII:B witheffect from 30June1995.
Hungary September 1996 The8percentimport surcharge introduced inMarch 1995, hasbeenreduced to7percentasof1July1996 and6percentas
of1October 1996. Hungary confirmed itsfirmintention toeliminate thesurcharge by1July1997, atthelatest.
India December 1995 Theconsultation willresume on20-21 January 1997.
Israel June1994 Israel disinvoked thebalance-of-payments provisions asof15December 1995.
Nigeria February/September 1996 Nigeria committed itself toconvert allbalance-of-payments measures toprice-based measures andtodisinvoke
Article XVIII:B.
Pakistan November 1994 Thenextconsultation willbeheldon18-19 November 1996.
Philippines November 1995 ThePhilippines undertook todisinvoke Article XVIII:B subject totheliberalization ofremaining restrictions by
31December 1997. Restrictions onagricultural products were lifted inMarch 1996.
Poland June1995 Poland informed theCommittee inJune1996 thatitwould eliminate the3percentsurcharge anddisinvoke Article XIIby
1January 1997.
Slovakia June1996 Slovakia informed theCommittee inJune1996 thatitwould eliminate thesurcharge, lowered from 10to7.5percent asof
1July1996, anddisinvoke Article XIIby1January 1997.
South Africa May1995 South Africa disinvoked thebalance-of-payments provisions witheffect from 1October 1995.
SriLanka November 1995 Members questioned thebalance-of-payments justification ofremaining restrictions oneight fooditems andrecommended that
SriLanka nothaverecourse toArticle XVIII:B. InSeptember 1996, SriLanka notified theelimination ofrestrictions onfour
tariff lines.
Tunisia June1996 Opinions differed astothejustification ofbalance-of-payments grounds forquantitative restrictions onmotor vehicles. The
consultations aretoresume inJune1997.
Turkey June1995 Turkey informed theCommittee inJune1996 thatitwould reduce itsremaining duties tobound levels anddisinvoke the
balance-of-payments provisions asof1January 1997.SECTION XI
COMMITTEE ONBUDGET, FINANCE AND ADMINISTRATIONWORLD TRADE WT/BFA/29
4November 1996
ORGANIZATION(96-4640)
Committee onBudget, Finance andAdministration
ANNUAL REPORT (1996)
1. Inaccordance withtheprocedures foranannual overview ofWTO activities andforreporting
under theWTO adopted bytheGeneral Council on15November 1995, areport ontheactivities of
theWTO Committee onBudget, Finance andAdministration in1996 ishereby submitted.
2. Itwillberecalled thattheCommittee metonanumber ofoccasions andhaspresented reports
totheGeneral Council onaregular basis.15Thisreport willthencover themajor areas theCommittee
hasdealtwithinthecourse oftheyeartodate.
I. ON-GOING RESPONSIBILITIES
3. TheCommittee monitored onaregular basis thefinancial andbudgetary situation ofthe
Organization, thereceipt ofcontributions including theimplementation oftherelated schemes and
measures pertaining toreceipt ofcontributions, andexamined theFinal Position ofthe1995 Budget
andtheDirector-General 'sFinancial Report onthe1995Accounts andReport oftheExternal Auditor.
ItalsodealtwiththeDirector-General 'sbudget proposals for1997.
II. MAJOR AREAS OFACTIVITIES
A. External Auditors
4. TheJointWTO/GATT Committee recommended thatacallforcompetitive tenders forthe
external audit oftheaccounts oftheOrganization bemade in1995. After approval oftheterms of
reference forthecompetitive bids, theSecretariat sentoutacallfortenders thesame year. The
Committee formed aworking group in1996 withtheSecretariat toexamine thecandidatures ofnine
national courts ofaudit. Onthebasis ofareport presented bytheworking group, theCommittee
recommended totheGeneral Council toextend theon-going contract withtheAustrian Court ofAudit
foroneyeartoinclude theauditofthe1996accounts andtonominate theNetherlands Court ofAudit
forauditing theWTO accounts effective asfromtheauditofthe1997accounts forathreeyearterm.
B. General management of,andoverhead costs on,Trust Funds
5. TheWTOCommitteehad,onseveraloccasions,examinedthequestionofgeneralmanagement
andoverhead costsofTrust Funds. In1996, indocument WT/BFA/21, itrecommended totheGeneral
Council thatastandard overhead rateof13percentontrustfundexpenditures becharged. The
recommendations onthegeneral management ofTrust Funds werecontained indocument WT/BFA/26.
./.
15Repor ts:WT/BFA/20 coveringthemeetingof29Januar y1996; WT/BFA/21 coveringthemeetingof29February1996;
WT/BFA/22 covering themeeting of26March 1996; WT/BFA/24 covering themeeting of2May 1996; andWT/BFA/26
covering themeeting of27June1996. Inaddition, theCommittee sentaspecific recommendation totheGeneral Council
indocument WT/BFA/19.WT/BFA/29
Page2
C. Relationship between theInternational Trade Centre (ITC) andtheWTO
6. TheCommittee monitored theimplementation ofthedecision taken in1995 toconsult with
United Nations Headquarters onanewarrangement onbudgetary issues related tothefunctioning of
theITC. In1996, theCommittee examined theproposed 1997budget fortheITCwhich forthefirst
timewasexpressed inSwiss francs andfollowed thepresentation oftheWTO budget.
D. NewWTO Members
7. Inthecourse of1996, theCommittee formulated recommendations totheGeneral Council
onassessments tothebudget andadvances totheWorking Capital Fund upontheaccession totheWTO
ofthefollowing newMembers: (i)Angola, (ii)Benin, (iii)Chad, (iv)Ecuador, (v)Fiji,(vi)Gambia,
(vii)Grenada, (viii)Haiti, (ix)Papua NewGuinea, (x)Qatar, (xi)Rwanda, (xii)SaintKittsandNevis,
(xiii) Solomon Islands, and(xiv)theUnited Arab Emirates.
E. Conditions ofservice ofWTO staff
8. While notintheformal framework oftheCommittee, twoworking groups under theGeneral
Council chaired bythepresent andformer Chairmen oftheCommittee tookupthematter ofconditions
ofservice again in1996. Onedealt withsalaries andtheother withpensions. Theresult ofthese
discussions andconsultations provided thebasisforthedraftdecision providing fortheestablishment
ofWTO -specific conditions ofservice tabled bytheChairman oftheGeneral Council in
September 1996.SECTION XII
COMMITTEES AND COUNCILS UNDER THE
PLURILATERAL TRADE AGREEMENTSWORLD TRADE WT/L/190
17October 1996
ORGANIZATION(96-4315)
REPORT (1996) OFTHE COMMITTEE ONGOVERNMENT
PROCUREMENT (1994 AGREEMENT)
I. General
1. Thisreport issubmitted pursuant toArticle XXIV:7(a) oftheAgreement onGovernment
Procurement, which requires theCommittee toreview annually theimplementation andoperation of
theAgreement andtoinform annually theGeneral Council ofdevelopments intheimplementation
andoperation oftheAgreement during theperiods covered bysuchreviews.
2. TheAgreement onGovernment Procurement entered intoforceon1January 1996. Theperiod
covered inthisfirstReport isJanuary-September 1996, butthereport alsoreflects, where necessary,
thepreparatory work oftheInterim Committee onGovernment Procurement priortotheAgreement 's
entry intoforce. TheCommittee onGovernment Procurement heldthree meetings in1996: on
27February, 4June and20September (GPA/M/1-3). TheInterim Committee onGovernment
Procurement heldsixmeetings in1994 and1995 (GPA/IC/M/1-6). Itsreport totheCommittee was
circulated indocument GPA/IC/9.
3. ThefollowingWTOMembersarePartiestotheAgreement:Canada,theEuropeanCommunities
andfifteen Member States, Israel, Japan, Korea, Netherlands withrespect toAruba1,Norway,
Switzerland andtheUnited States. Seven WTO Members haveobserver status: Australia, Colombia,
Iceland, Liechtenstein, Singapore andTurkey. Twonon-WTO members haveobserver status: Chinese
Taipei andLatvia.
II. Implementation oftheAgreement
Modifications ofAppendices totheAgreement
4. Article XXIV:6 oftheAgreement requires Parties tonotify rectifications ofapurely formal
nature orother modifications relating toAppendices Ithrough IV,which setoutthemutually agreed
coverage provided under theAgreement. Consequential rectifications ormodifications become effective
oncetheyareagreed topursuant totheprocedures under thisArticle.
5. PriortotheentryintoforceoftheAgreement, theUnited States andNorway made rectifications
ofapurely formal nature pursuant totherelevant Decision oftheInterim Committee (GPA/IC/M/1,
Annex 2).TheUnited States rectification toitsAppendix IIregarding State Publications witheffect
asof23December 1994wasaccompanied byalistofsuchpublications (GPA/IC/W/10) andNorway 's
rectification witheffect asof15December 1994related tothechange ofnames ofentities inAppendix I,
Annex 1(GPA/IC/W/8).
1Asof25October 1996WT/L/190
Page2
6. Atthetimeofthesignature oftheAgreement inMarrakesh inApril 1994, theEuropean
Communities andtheUnited States negotiated abilateral agreement extending theirmutual benefits
under theAgreement, therelevant details ofwhich, including theintended modifications, werecirculated
totheInterim Committee on15June1994. Atitsmeeting of7December 1995theInterim Committee
accepted thattheEuropean Communities andtheUnited States hadmettheprocedural requirements,
interms oftherelevant Decision oftheInformal Group onNegotiations (GPA/IC/3), necessary for
theincorporation ofmodifications totherespective Annexes toAppendix I,which weresubsequently
submitted on22December 1995 (GPA/IC/10).
7. After theentry intoforce oftheAgreement, Japan andtheUnited States notified modifications
toAppendix Iwhich followed theirbilateral agreement reached ontheenlargement ofthecoverage
oftheAgreement (GPA/W/1 andGPA/W/2). Consequential modifications toAppendix Ientered into
forceon25February 1996. Following thebilateral agreement reached between Norway andtheUnited
States, further modifications toAppendix Ientered intoforce on17August 1996 (GPA/W/22 and
GPA/W/23). Discussions currently being heldbetween some other Parties mayresult infurther
expansion ofthecoverage oftheAgreement.
8. TheCommittee alsodiscussed thefollow-up toCanada 'soffer, contained initsAppendix I,
Annexes 2and3,tocover sub-central government entities andenterprises inalltenProvinces, onthe
basisofcommitments received fromtheProvinces, withafinallisting tobeprovided within 18months
aftertheconclusion oftheAgreement. Atthelasttwomeetings oftheInterim Committee, Canada
linked thetabling ofitsschedule atthesub-central leveltoachieving increased market access insectors
ofpriority interest toCanadian suppliers andimproving security ofaccess through circumscribing the
useofsmall business andother set-aside exceptions under theAgreement (GPA/IC/M/5-6). Canada
maintained thisposition atthefirstthreemeetings oftheCommittee heldin1996(GPA/M/1-3). Some
other Parties expressed theirdisappointment overthesituation, stressed theneedforCanada tohonour
itscommitments andconsidered thattheproblems raised byCanada withrespect toexpanded coverage
oftheAgreement could onlybeaddressed onceCanada hadcome forward withoffers pursuant toits
commitments initsAnnexes 2and3.Canada hasasserted thatitdidnotundertake obligations regarding
Annexes 2and3,andhasreiterated thatitscoverage wastobebased oncommitments received from
theProvinces. Canada hasalsoasserted that,asnocommitments havebeenreceived, itisunder no
obligation toputforward anoffer under these Annexes.
Accession
9. Atitsfirstmeeting on27February 1996, theCommittee concluded theaccession process of
twoadditional WTO Members totheAgreement, which hadbeeninitiated priortotheentry intoforce
oftheAgreement, byadopting theDecisions ontheaccession ofLiechtenstein andtheKingdom of
theNetherlands withrespect toAruba onthebasisofthereports oftheInterim Committee (GPA/IC/6
andGPA/IC/7), andinviting these Members toaccede totheAgreement ontheterms foraccession
attached totherespective Decisions (GPA/2 andGPA/3). TheKingdom oftheNetherlands forAruba
hasdepositeditsinstrumentofaccessionon25September1996(WT/Let/111andGPA/7).Liechtenstein
hasnotyetdeposited itsinstrument ofaccession.
10. Singapore applied foraccession inNovember 1995. Following bilateral consultations held
between Singapore andParties in1996, theCommittee adopted, atitsmeeting on20September 1996,
aDecision inviting Singapore toaccede ontheterms attached tothatDecision (GPA/6). Singapore
hasnotyetdeposited itsinstrument ofaccession.
11. Chinese Taipei applied foraccession totheAgreement inJune1994 (GPA/IC/5). Atits
February andJune1996 meetings, theCommittee wasinformed ofthebilateral consultations held
between thedelegation ofChinese Taipei andParties totheAgreement onChinese Taipei 'srevisedWT/L/190
Page3
offerinviewofitswishtoconclude thisprocess inthelatter partof1996. AtitsSeptember meeting,
theCommittee wasinformed offurther improvements thatChinese Taipei hadmade toitsoffer.
Decisions onProcedural Matters
12. Atitsfirstmeeting on27February 1996, theCommittee onGovernment Procurement adopted
thefollowing Decisions onprocedural matters: Participation ofObservers intheCommittee; Accession
totheAgreement; andInterim Procedures ontheCirculation ofandontheDerestriction ofDocuments,
Pending Definitive Procedures (GPA/1). These Decisions, which concern, interalia,possibilities
forMembers oftheWTO notParties totheAgreement toparticipate asobservers intheCommittee,
toreceiveCommitteedocumentsandtoaccedetotheAgreement,weretransmittedtotheGeneralCouncil
fortheinformation ofallMembers oftheWTO (WT/L/146). AtitsSeptember meeting, theCommittee
agreed toalignitsprocedures oncirculation andderestriction ofdocuments withthose adopted bythe
General Council on18July1996 (WT/L/160/Rev.1).
13. Atitsmeeting on27February 1996, theCommittee adopted aDecision onmodalities for
notifying threshold figures innational currencies (GPA/1). AllParties havenotified thresholds intheir
respective national currencies fortheperiods 1996-97 andthemethods employed fordetermining them
(GPA/W/12 andAddenda 1-6).
14. Atitsmeeting on4June1994, theCommittee adopted aDecision onProcedures forthe
Notification ofNational Implementing Legislation, including responses toachecklist ofissues
(GPA/1/Add.1). Thissetsatime-limit of31December 1996 forsuchnotifications.
Establishment ofaPractical Guide totheNewAgreement
15. Pursuant toitsdiscussion onthedesirability, thestructure andpresentation ofapractical guide
totheAgreement directed towards theprivate sector, theInterim Committee considered itappropriate
topostpone active consideration oftheestablishment ofsuchaguide inviewofitslinkages withvarious
other outstanding issues, suchastheprocedures fornotifying national implementing legislation and
theuseofinformation technology inprocurement procedures.
Loose-leaf System forUpdating Appendices
16. TheCommittee agreed, atitsmeeting on4June1996, toestablish aloose-leaf system, with
legal effect, toensure thattheAppendices totheAgreement arekeptuptodate. TheCommittee
requestedtheSecretariattoproduceanddistributeanupdatedsetofAppendices,withaviewtoproviding
astarting point fortheloose-leaf system. TheCommittee agreed tomake thisloose-leaf system, once
established, available tothepublic atlarge through theInternet.
Statistical Reporting
17. Article XIX:5 requires Parties tocollect andprovide onanannual basis statistics ontheir
procurements covered bytheAgreement. Withaviewtoensuring thatsuchstatistics arecomparable,
Article XIX:5 requires theCommittee toprovide guidance onthemethods tobeused. TheInterim
Committee established aWorking Group onStatistical Reporting topropose guidelines formeeting
thestatistical reporting requirements ofArticle XIX:5, inparticular inrespect oftheadoption ofuniform
classification systems andmethods tobeusedforproviding statistics onthecountry oforigin ofproducts
andservices.
18. Based onthereport ofthisWorking Group (GPA/IC/8), theCommittee agreed, atitsfirst
meeting on27February 1996, thattherulesoforigin ofproducts usedforthepurposes ofstatisticalWT/L/190
Page4
reporting inArticle XIX:5 oftheAgreement should bethesame asthose applied under Article IV,
which were those usedinthenormal course oftrade. Asfortherequirement toreport statistics on
theorigin ofservices, theCommittee postponed application ofthisrequirement untilpracticable rules
fordetermining theorigin ofservices hadbeendefined. Atitsmeeting on4June1996, theCommittee
adopted classification systems forgoods andservices tobeusedinstatistical reporting under the
Agreement (GPA/4). Some Parties asserted thattheobjective ofestablishing statistics, i.e.toprovide
informationandenablereviewasregardsobligationsofParties,mightbemoreappropriatelymetthrough
alternative means.
Other Matters
19. Inaccordance withtheprovisions oftheUnderstanding onRules andProcedures Governing
theSettlement ofDisputes (Annex 2oftheWTO Agreement), theCommittee notified theDispute
SettlementBody(DSB)ofspecialoradditionalrulesorproceduresondisputesettlementintheAgreement
onGovernment Procurement, namely Article XXII, paragraphs 2through 7(GPA/5).
III. Work under theBuilt-In Agenda
Information Technology
20. Article XXIV:8 oftheAgreement callsonParties toconsult regularly intheCommittee on
developments intheuseofinformation technology ingovernment procurement and,ifnecessary, to
negotiate modifications totheAgreement itself. Inpreparation fortheimplementation ofthefuture
responsibilities oftheCommittee inregard tothese provisions, theInterim Committee gathered
information ontheuseofinformation technology ingovernment procurement inthevarious Signatories
inreplytoaquestionnaire (GPA/IC/W/4/Rev.1) aswellasthrough discussion intheInterim Committee
(GPA/IC/M/1-6). Thisinformation raised anumber ofpolicy issues concerning, ontheonehand,
issues bothofaccess toprocurement opportunities onon-line databases andelectronic tendering or
commerce and,ontheother hand, questions bothofcooperation between andcoordination ofnational
systems (GPA/IC/W/18). Thework oninformation technology hasfocused ontheneedtoensure
thataccess toprocurement opportunities through theuseofinformation technology takes place ona
non-discriminatory basisandalsoonconsidering whatmodifications, ifany,maybenecessary tothe
Agreement toenable thebenefits ofinformation technology tobeharnessed. TheUnited States, the
European Communities andNorway submitted communications identifying anumber ofareasthatmight
require examination toaccommodate thedevelopments ininformation technology (GPA/IC/W/36,
GPA/W/13 andGPA/W/14). Inaddition theSecretariat prepared acompilation ofissues relating to
theimplicationsofthedevelopmentsofinformationtechnologywhichalsoidentifiedoptionsforcarrying
forward thework inthisarea(GPA/W/15). TheCommittee 'sdiscussion oftheseoptions atitssecond
meeting on4June1996 hadthefollowing outcome. First, theSecretariat revised thequestionnaire
oninformation technology (GPA/IC/W/4/Rev.1) asproposed indocument GPA/W/15 (GPA/W/24).
Second, theSecretariat prepared afactual noteontheaspects oftheAgreement thatithadbeensuggested
might needtobere-examined inthelightofinformation technology, setting outtherelevant provisions
oftheAgreement anddrawing attention toanypertinent information ontheir negotiating history
(GPA/W/25). Third, thedelegation oftheUnited States provided information onthepilotproject
launched intheAPEC framework onaccess tonational databases (GPA/M/3). Fourth, theEuropean
Community, incoordination withNorway, would prepare apaper identifying, interalia,thetechnical
issues relating toinformation technology thatmight needtobeexamined byexperts. TheCommittee
isdeterminedtopursueitsworkoninformationtechnologyexpeditiously,soastoensurethatthebenefits
ofinformationtechnologyareharnessedwhileatthesametimeprotectingand,wherepossible,enhancing
non-discriminatory access.WT/L/190
Page5
Three-year Review
21. Article XXIV:7(b) and(c)oftheAgreement callsontheParties, notlaterthantheendofthe
third yearfrom thedateofitsentry intoforce, toundertake further negotiations, withaview to
improving theAgreement andachieving thegreatest possible extension ofitscoverage among allParties
andeliminating anyremaining discriminatory measures andpractices. AttheCommittee 'smeeting
on4June1996, suggestions weremade that,withaviewtofacilitating accession bythewidest possible
number ofcountries andtoadjusting theAgreement tonewly-emerging technologies, suchnegotiations
should beinitiated in1997andcould include thefollowing mainelements: (i)expansion ofthecoverage
oftheAgreement, notably extending ittosectors notpresently covered; (ii)increased security ofmarket
access under theAgreement; (iii)elimination ofdiscriminatory measures andpractices; and(iv)
simplification andimprovement oftheAgreement. Some Parties expressed theview thatfurther
experience withtheoperation oftheAgreement should begained before initiating negotiations aimed
atincreased coverage.
IV. Issues tobebrought totheattention oftheMinisterial Conference
22. TheCommittee hasagreed toundertake anearlyreview, starting in1997withanexamination
ofmodalities, withaview totheimplementation ofArticle XXIV:7 (b)and(c)oftheAgreement.
Thereview will,inparticular, cover thefollowing elements:
- expansion ofthecoverage oftheAgreement;
- elimination ofdiscriminatory measures andpractices which distort openprocurement;
and
- simplification andimprovement oftheAgreement, including, where appropriate,
adaptation toadvances intheareaofinformation technology.
23. Thisreview shallseektheexpansion ofmembership oftheAgreement bymaking itmore
accessible tonon-Parties.
24. Members oftheCommittee notethework under wayunder theCouncil forTrade inServices
ongovernment procurement andtheproposals fortheSingapore Ministerial foramultilateral work
programme ongovernment procurement. TheParties totheAgreement onGovernment Procurement
intend tosupport andactively contribute toanymultilateral work ongovernment procurement that
maybedecided uponbytheMinisterial Conference, without prejudice totheirownefforts toimprove
andextend theAgreement onGovernment Procurement andtoencourage more WTO Members to
become Parties toit.WORLD TRADE WT/L/193
11November 1996
ORGANIZATION(96-4775)
Committee onTrade inCivil Aircraft
REPORT (1996) OFTHE COMMITTEE ON
TRADE INCIVIL AIRCRAFT
1. Thisreport issubmitted under Article 8.2oftheAgreement onTrade inCivil Aircraft
(hereinafter the"Agreement") andArticle IV.8oftheMarrakesh Agreement Establishing theWorld
Trade Organization (hereinafter the"WTO Agreement"). Itsetsouttheactivities oftheCommittee
since November 1995.
2. On8November 1996 there were 22Signatories totheAgreement: Canada, theEuropean
Communities, Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Sweden, United Kingdom, Egypt, Japan, Macau, Norway, Romania,
Switzerland andtheUnited States. Greece hassigned theAgreement subject toratification. Bulgaria
accepted theAgreement on1November 1996. TheAgreement shallenter intoforce forthatcountry
on1December 1996. Theother countries withobserver status intheCommittee are: Argentina,
Australia, Bangladesh, Brazil, Cameroon, Czech Republic, Finland, Gabon, Ghana, India, Indonesia,
Israel, Malta, Mauritius, Nigeria, Poland, Singapore, theSlovak Republic, SriLanka, Trinidad and
Tobago, Tunisia andTurkey. Inaddition, China, theRussian Federation andChinese Taipei have
observer status intheCommittee. TheIMFandUNCTAD arealsoobservers.
3. TheCommittee onTrade inCivil Aircraft (hereafter the"Committee") heldthree meetings
intheperiod under review: on7June, 19Julyand8November 1996.
4. Atthemeeting of7June1996 (TCA/M/2), theChairman reported ontheconsultations he
hadcarried outsince theprevious meeting oftheCommittee andsummarized hisviewofthesituation
oftheAgreement. Hecharacterized thissituation ascreating aclimate oflegal uncertainty, in
contradiction totheobject andpurpose oftheWTO Agreement. Heconcluded that,asitproved very
difficult toamend theAgreement, thealternative forSignatories waseither (i)toterminate orsuspend
theapplication oftheAgreement; or(ii)totryingood faithtomake itfunction asitstood. Inthat
context, theChairman tabled aninformal proposal consisting oftwodecisions. Thefirstonerelated
tothemeaning ofcertain institutional provisions oftheAgreement andconfirmed thelegaleffects of
theentry intoforce oftheWTO Agreement. Thesecond oneprovided thattheWTO Understanding
onRules andProcedures Governing theSettlement ofDisputes would apply todispute under the
Agreement. Signatories agreed toexamine theproposal andtomeetagain rapidly totakeadecision
onthese matters. Under "Other Business", theChairman informed theCommittee thatMr.Latrille
could nolonger serve asVice-Chairman oftheCommittee, andthathehimself would soonnolonger
beabletoserve asChairman. Consultations wereunder wayregarding theelection ofanewChairman
andVice-Chairman.
5. Atthemeeting of19July1996 (TCA/M/3), theChairman concluded thathisproposal was
notacceptable toallSignatories andthatthere were noalternatives thatwould bereadily acceptable
toall.Under "Other Business", oneSignatory referred tothenegotiations initiated under Article 8.3
in1992. Initsview, three options were available: (i)terminate thenegotiations; (ii)conclude the
./.WT/L/193
Page2
negotiations byincorporating intheAgreement theresults onwhich consensus hadbeenreached or
(iii)define anewmandate forthose negotiations. Thesame Signatory alsosuggested thatArticle 8.8
oftheAgreement beamended pursuant toArticle 9.5topreserve thecurrent relationship between the
Agreement andtheother agreements annexed totheWTO Agreement while allowing theAgreement
tobeformally revised totakeintoaccount theexistence oftheWTO.
6. Atthemeeting of8November 1996(TCA/M/4), Mr.Hidetaka Saeki waselected asChairman
oftheCommittee onTrade inCivil Aircraft. TheCommittee discussed theinformal proposal tabled
bytheChairman on7June1996aswellasthesuggestion made byoneSignatory toamend Article 8.8
oftheAgreement. While noagreement could bereached oneither oftheproposals, Signatories agreed
tocontinue discussions aimed atreaching asolution promptly. Signatories alsoreviewed theproposal
made under Article 8.3atthemeeting oftheCommittee of19July1996. Various views wereexpressed
bySignatories butnoagreement could bereached.
7. TheSub-Committee oftheCommittee onTrade inCivil Aircraft, established on16July1992
toconduct negotiations under Article 8.3andcomposed of32participants: Australia, Austria, Belgium,
Brazil, Canada, China, Czech Republic, Denmark, Egypt, European Communities, Finland, France,
Germany,Greece,Ireland,Israel,Italy,Japan,Luxembourg,theNetherlands,Norway,Poland,Portugal,
Romania, Russian Federation, Slovak Republic, Spain, Sweden, Switzerland, Chinese Taipei,
United Kingdom andtheUnited States, didnotholdanymeeting during theperiod under review.
8. Signatories reiterated theircommitment tocontinue thework ontechnical revision withaview
toreaching asuccessful conclusion inthenegotiation toadapt theAircraft Agreement totheWTO
structure. They alsoreiterated theirintention towork toresolve outstanding issues under Article 8.3.WORLD TRADE WT/L/178
11October 1996
ORGANIZATION(96-4172)
INTERNATIONAL DAIRY COUNCIL
Report totheSingapore Ministerial Conference
TheInternational Dairy Agreement (IDA) entered intoforce on1January 1995. Thetwomain
functions oftheAgreement are(i)themaintenance ofminimum export prices forspecific dairyproducts
listed intheAgreement, and(ii)toprovide, withtheInternational Dairy Council, aforum forexchange
ofinformation ontheworld market situation andoutlook fordairy products. Asof17September 1996,
thefollowing wereParties totheAgreement: Argentina, Bulgaria, theEuropean Communities, Japan,
NewZealand, Norway, Romania, Switzerland andUruguay. Other governments andintergovernmental
organizations arerepresented atmeetings byobservers.
TheInternational Dairy Council heldmeetings on20-21 March 1995, 17October 1995 and
17September 1996. Inaccordance withArticle IV:1oftheIDA, theCouncil reviewed atitsmeetings
thesituation andoutlook intheworld market fordairy products onthebasis ofnotes prepared bythe
Secretariat (IDA/W/1, IDA/W/7 andIDA/W/12), aswellasthequestionnaires submitted byParties.
In1995, theCouncil also: (i)adopted Rules ofProcedure (IDA/1); (ii)adopted formats for
Questionnaires 1-5(IDA/4); and(iii)issued astanding invitation totheUnited Nations Economic
Commission forEurope (ECE), FAO, OECD andUNCTAD toparticipate initsmeetings inanobserver
capacity.
AtitsOctober 1995meeting, theCouncil noted thatthelimited membership intheAgreement,
andinparticular thenon-participation ofsome major dairy exporting countries, made theoperation
oftheminimum price provisions oftheIDAuntenable. Inlightofthissituation, theCouncil decided
tosuspend theoperation oftheAnnex totheAgreement thussuspending minimum prices foralldairy
products therein until31December 1997. Noting thatthetaskoftheCommittee onCertain Milk
Products wasdirectly related totheimplementation oftheprovisions oftheAnnex, theCommittee
wasalsosuspended.
Inviewofthefactthatcertain Parties expressed doubts about thecontinued usefulness ofthe
current Agreement inlightoftheUruguay Round results, theCouncil, atitsmeeting inSeptember 1996,
invited theChairperson toundertake informal consultations onthefuture oftheAgreement.
Thereports ofthemeetings oftheInternational Dairy Council arecontained inIDA/2, IDA/5
andIDA/7.WORLD TRADE WT/L/179
11October 1996
ORGANIZATION(96-4173)
INTERNATIONAL MEAT COUNCIL
Report totheSingapore Ministerial Conference
TheInternational Bovine Meat Agreement entered intoforce on1January 1995. Asof
11June1996 thefollowing were Parties totheAgreement: Argentina, Australia, Brazil, Bulgaria,
Canada,Colombia,theEuropeanCommunities(15),Japan,NewZealand,Norway,Paraguay,Romania,
South Africa, Switzerland, theUnited States andUruguay. Other governments andintergovernmental
organizations arerepresented atmeetings byobservers.
TheInternational Meat Council heldmeetings on21-22 June1995 and11June1996. Atits
firstmeeting, theCouncil: (i)adopted theRules ofProcedure (IMA/1) andagreed toholdoneregular
meeting inJuneofeachyear; (ii)adopted theformats forthequestionnaires ondomestic policies
(IMA/2) andstatistical information (IMA/3); (iii)agreed thatobserver governments would berequested
toreply tothestatistical andpolicy questionnaires onavoluntary basis; and(iv)issued astanding
invitation totheUnited Nation 'sEconomic Commission forEurope (ECE), FAO, theInternational
Trade Centre (ITC), OECD andUNCTAD toparticipate initsmeetings inanobserver capacity.
Inaccordance withArticle IV:1oftheInternational Bovine Meat Agreement, theCouncil
reviewed atitsmeetings theworld supply anddemand situation andoutlook inthebovine meatsector
onthebasis ofnotes prepared bytheSecretariat (IMA/W/1 andIMA/W/7, refer) aswellasthe
questionnaires submitted byParties. Parties alsohadageneral exchange ofviews onthefunctioning
oftheAgreement inthelightofpastexperience under theArrangement Regarding Bovine Meat and
theUruguayRoundoutcome.AtitsmeetinginJune1996,theCouncilinvitedtheChairmantoundertake
informal consultations onvarious issues, including thefuture oftheAgreement.