WORLD TRADE
ORGANIZATIONG/L/665
4 December 2003
(03-6438)
REPORT (2003) OF THE COUNCIL FOR TRADE IN GOODS
In accordance with the "Procedures for an Annual Overview of WTO Activities and for
Reporting under the WTO" (WT/L/105), the Council for Trade in Goods is to report each year to the
General Council on the activities in the Council as well as in the subsidiary bodies. The reports are to
be "factual in nature, containing an indication of actions and decisions taken, with cross references to
reports of subordinate bodies and could follow the model of the GATT 1947 Council reports to theCONTRACTING PARTIES".
Since the CTG 2002 annual report (G/L/595) was issued, the Council for Trade in Goods has
met five times in formal session on the following dates:  6 December 2002 (minutes contained in
document G/C/M/67);  23 January and 26 February 2003 (G/C/M/68);  12 and 13 March 2003(G/C/M/69);  12 and 13 June 2003 (G/C/M /70);  and 26 November 2003 (G/C/M/71).
The following subject matters which were raised and/or acted upon in the Council are as
follows:
1. Election of Chairperson
2. Appointment of officers
3. Periodic reports of the Market Access Committee
4. Waivers under Article IX of the WTO Agreement
5. TRIMs
6. Regional Trade Agreements
7. Work programme on electronic commerce8. Trade facilitation
9. China Transitional Review
10. Notifications
11. Consideration of annual reports of subsidiary bodies
1. Election of Chairperson for the Council for Trade in Goods  (G/C/M/69)
At its meeting of 12-13 March 2003, the Counc il elected H.E. Ambassador Hovorka (Czech
Republic) as its Chairman for 2003.
2. Appointment of Officers for the subsidiary bodies of the Council (G/C/M/69)
At its meeting of 12-13 March, the Council took note of the consensus on the following
persons nominated for election as Chairpersons of its subsidiary bodies1:
Committee on Agriculture Dr. Magdi Farahat (Egypt)
Committee on Anti-Dumping Mr. David Evans (New Zealand)
Committee on Customs Valuation Mr. Ivan Lee (Hong Kong)
                                                     
1 Committee of Participants on the Expansion of Trade in Information Technology Products (ITA):
Mr. Hisashi Yoshikawa (Japan).G/L/665
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Committee on Import Licensing Ms. Philippa Davies (Jamaica)
Committee on Market Access Ms. Jo Lomas (United Kingdom)
Committee on Rules of Origin Mr. Syed Habib Ahmed (Pakistan)
Committee on Safeguards Mr. Pornchai Danvivathana (Thailand)
Committee on Sanitary and Phytosanitary
MeasuresMr. Paul Martin (Canada)
Committee on Subsidies and Countervailing
MeasuresMs. Olga Lucia Lozano (Colombia)
Committee on Technical Barriers to Trade Mr. Juan Antonio Dorantes Sanchez (Mexico)
Committee on Trade-Related Investment
MeasuresMr. Sivaramen Palayathan (Mauritius)
Working Party on State Trading Enterprises Ms. Judith Vankova (Slovak Republic)
At the same meeting, the Council agreed to proceed on the understanding that as concerns Vice-
Chairpersons, it would be for the subsidiary bodies to  decide if they needed a Vice-Chairperson in cases
where the option existed under the respective Agreem ent and/or rules of procedure, and for the
respective Chairperson to hold the necessary consultations.
3. Periodic reports of the Market Access Committee (G/C/M/70, G/C/M/71)
At its meeting on 12 and 13 June 2003, the C ouncil took note of the periodic report (in
document G/MA/149) of the Market Access Committee on inter alia  the requests for waiver extensions
and/or waivers made in connection with the transposition or renegotiation of schedules of tariffconcessions and/or in connection with the introducti on of harmonized system changes into schedules of
tariff concessions on 1 January 1996.  At its mee ting on 26 November 2003, the Council took note of the
periodic report in document G/MA/151.
4. Waivers under Article IX of the WTO Agreement (G/CM/68, G/C/M/70, G/C/M/71)
(a) Kimberley Process Certification Scheme for Rough Diamonds – Waiver request from
Australia, Brazil, Canada, Israel, Japan, Kore a, Philippines, Sierra Leone, Thailand, United
Arab Emirates and United States2
At its meeting on 23 January and 26 February 2003, the Council considered the request
(documents G/C/W/431 + Corr.1 and 2) and recommended that it, together with the draft decision
contained in G/C/W/432/Rev.1, be forwarded to the General Council for adoption.
(b) Introduction of Harmonized System 1996 change s into WTO Schedules of tariff concessions
– Requests for a waiver (Argentina - G/L/606, G/C/W/452, El Salvador - G/L/608,
G/C/W/454, Israel -  G/L/ 620, G/C/W/462, Malaysia - G/L/615, G/C/W/460, Morocco -
G/L/616, G/C/W/461, Pakistan - G/L/612, G/C/W/458, Panama - G/L/ 607, G/C/W/453,
Thailand - G/L/611+Corr.1, G/C/W/457, Venezuela - G/L/ 609, G/C/W/455)
At its meeting on 12 and 13 June 2003, the Council considered requests from nine Members
for waivers in connection with the introduction of HS96 changes to their Schedules of concessions.
The Council approved the waiver requests and recommended that the draft decisions contained in the
cited G/C/W/- documents be forwarded to the General Council for adoption.
                                                     
2 Subsequently, the following Members made notifications to the CTG.  Under paragraph 3 of the
waiver decision (WT/L/518) they were:  European Communities, Switzerland, Czech Republic, Hungary andthe Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, Mauritius, Romania, Slovenia, Croatiaand Bulgaria;  pursuant to paragraph 4 there have been notifications by Canada, Australia, Brazil and
Venezuela.G/L/665
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At its meeting on 26 November 2003, the Council considered requests from Israel and
Thailand in connection with the introduction of HS96 changes to their schedules of tariff concessions.
The Council approved the waiver requests and recommended that the draft decisions contained in
G/C/W/468 and G/C/W/470 be forwarded to the General Council for adoption.
(c) Extension of waiver for the purpose of establishing a new Schedule for Sri Lanka
At its meeting on 12 and 13 June 2003, the Council considered the request from Sri Lanka for
the extension of a waiver for the purpose of establishing a new Schedule.  The Council approved the
waiver request in G/L/610 and recommended that the draft decision in G/C/W/456 be forwarded to
the General Council for adoption.  At its meeting on 26 November 2003, the Council approved a
further extension of the waiver and recommended that the draft decision contained in document
G/C/W/469 be forwarded to the General Council for adoption.
5. TRIMs
(a)  Review of the operation of the TRIMs Agreement under Article 9 (G/C/M/69, G/C/M70,
G/C/M/71)
At its meetings on 12-13 March, 12-13 June and 26 November 2003, the Council took note of
the statements made regarding, inter alia , the submission by Brazil and India in document
G/C/W/428.  The Chairman undertook informal consultations on how to proceed with the review afterthe June meeting and at the November meeting also proposed to continue an informal process of
consultations.
(b) Request by Canada, the EC and the US – Extension of TRIMs (G/C/M/71)
At its meeting on 26 November 2003, the Council took note of the statements made regarding
the phasing-out of remaining TRIMs.
6. Regional Trade Agreements (G/C/M/68, G/C/M/69, G/C/M/70, G/C/M/71)
At its meetings on 23 January and 26 February, 12-13 March, 12-13 June and
26 November 2003, the Council adopted the terms of reference under which the CRTA should
examine the following Agreements:
(a) Agreement between Japan and Singapore for a new-age economic partnership - notification
from the parties to the Agreement  (WT/REG140/N/1, WT/REG140/1);
(b) European Communities – Jordan Euro-Mediterranean Association Agreement - notification
from the parties to the Agreement  (WT/REG141/N/1, WT/REG141/1);
(c) European Communities – Croatia Interim Agreement - notification from the parties to the
Agreement  (WT/REG142/N/1, WT/REG142/1)
(d) Free Trade Agreement between Canada and Costa Rica –  Notification from the parties to the
Agreement  (WT/REG147/N/1, WT/REG147/1)G/L/665
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(e) Free Trade Agreement between the EFTA states and Singapore –  Notification from the
parties to the Agreement  (WT/REG148/N/1, WT/REG148/1)
(f) Free Trade Agreement between Bulgaria and Estonia – Notification from the parties to the
Agreement  (WT/REG149/N/1, WT/REG149/1)
(g) Free Trade Agreement between Bulgaria and Israel – Notification from the parties to the
Agreement  (WT/REG150/N/1, WT/REG150/1)
(h) Free Trade Agreement between Bulgaria and Latvia – Notification from the parties to the
Agreement  (WT/REG151/N/1, WT/REG151/1)
(i) Free Trade Agreement between Bulgaria and Lithuania – Notification from the parties to the
Agreement  (WT/REG152/N/1, WT/REG152/1)
(j) EC-Lebanon Interim Agreement – Notification from the parties to the Agreement
(WT/REG153/N/ 1, WT/REG153/1)
(k) Free Trade Agreement between Turkey and Croatia – Notification from the parties to the
Agreement  (WT/REG156/N/1 and Corr.1, WT/REG156/1)
(l) Free Trade Agreement between Turkey and Bosnia and Herzegovina – Notification from the
Republic of Turkey  (WT/REG157/N/1, WT/REG157/1)
(m) Singapore-Australia Free Trade Agreement – Notification from the parties to the Agreement
(WT/REG158/N/1, WT/REG158/1)
(n) Free Trade Agreement between Croatia and Bosnia and Herzegovina – Notification from the
Republic of Croatia  (WT/REG159/N/1, WT/REG159/1)
7. Work programme on electronic commerce (G/C/M/70)
At its meeting on 12-13 June 2003, the Council considered its report to Ministers as set out in
paragraph 34 of the Doha Ministerial Declaration (the report was subsequently circulated as
document G/L/635).
8. Trade Facilitation (G/C/M/67, G/C/M/69, G/C/M/70)
Since the CTG's last report to the General Council at 28 November 2002 (G/L/595) the
Council continued its work on trade facilitation  as mandated in paragraph 27 of the Doha Ministerial
Declaration (WT/MIN(01)/DEC/1), in the course of three formal sessions on 6 December 2002,
12-13 March 2003 and 12-13 June 2003.
As set out in the 2002 trade facilitation work programme adopted by Members at the CTG
session of 22 March 2002, the meeting of 6 December 2002 served as a forum for an overall
discussion of all core agenda items:   (i) Articles V, VIII and X of the GATT 1994, (ii) trade
facilitation needs and priorities of Members, particularly of developing and least developed countries,
and (iii) technical assistance and capacity building. It also provided the opportunity to discuss theG/L/665
Page 5
organization of future work.  Three papers3 were submitted by Members in preparation for that
meeting, in addition to a compilation of Members' proposals regarding GATT Articles V, VIII and X
prepared by the WTO Secretariat4.  Written contributions were also received by the WCO and the
OECD.
In their discussions, Members reverted to the previous three sessions (G/C/M/61, 64 and 65),
summarizing the debate and highlighting common elements.  Several Members presented their
conclusions from the exchange of views, and highlighted elements they consider to be of particular
importance for their current and future work on the facilitation of trade.  Members were in agreement
on the importance of trade facilitation, with many delegations highlighting the various benefits of this
process.  A number of delegations reported on efforts undertaken in their respective countries in this
regard.  Members also referred to the previous discussions as a reference point for future work, with
some of them indicating how they would like to pursue work in 2003.
With respect to Members' proposals on how to re view and, if appropriate, clarify and improve
GATT Articles V, VIII and X, several Members expressed support for the suggested measures, which
they regarded as means to ensure a more consistent approach to trade facilitation by all Members and
to enhance the efficiency and transparency of trade transactions.  Others raised concerns and
expressed reservations, both in terms of the need to clarify and improve the three articles and with
respect to questions of feasibility for many developing countries, due to their different levels of
development.  In this context, Members underlined the importance of technical assistance.  They also
felt that the principle of special and differential treatment has to be taken fully into account.  Members
also indicated their readiness to address, in the context of further steps, development-related issues
and concerns.   Repeated reference was made to the question of whether or not to develop binding
rules in this area, with several delegations highlighting the need for and the benefits of such rules.
Other Members were not convinced that there should be additional binding rules; some of them
proposed that measures be taken autonomously.  Others  called for non-binding approaches, such as in
the form of guidelines or principles.  The meeting also saw Members exchange their nationalexperiences with trade facilitation measures, with delegations agreeing on the usefulness of such an
exercise.  Members were further updated on various technical assistance and capacity building
support  activities carried out by a number of donors.
With respect to the organization of future work until the Cancun Ministerial , Members
decided to hold two additional formal sessions in  March and June 2003 with the option of a third
meeting at the end of July, should Members consider such an additional session necessary.  As for
substance, Members agreed to keep the current structure with the  three core agenda items of (i) GATT
Articles V, VIII and X, (ii) trade facilitation needs and priorities of Members, particularly of
developing and least developed countries, and (iii) technical assistance and capacity-building.  The
Council agreed on the organisation of future work along these lines and took note
 of the statements
that were made.
           At its meeting on 12 and 13 March 2003, the Council again discussed the agreed three core
agenda items of (i) Articles V, VIII and X of the GATT 1994, (ii) trade facilitation needs and
priorities of Members, particularly developing and least developed countries and (iii) technical
assistance and capacity building.  Four Members submitted written contributions5.  A paper was also
prepared by the OECD.
                                                     
3 G/C/W/440 by Chinese Taipei, G/C/W/442 by the European Communities and G/C/W/443 by
Australia.
4 G/C/W/434.
5 G/C/W/448 by Canada, G/C/W/442.Rev.1 by the European Communities, G/C/W/449 by New
Zealand and G/C/W/451 by the Unites States.G/L/665
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In their discussions, a number of delegations pointed at the benefits of trade facilitation, and
new and strengthened  trade facilitation disciplines and commitments , which were presented as an
important part of efforts to facilitate trade.  Those delegations also made clear that they saw technical
assistance and support for capacity building as essential elements of work on trade facilitation.  There
was also repeated reference to the need for flexibility in the pursued approaches.  Some delegations
further stressed the importance of flexible commitments in terms of broad objectives that wouldenable countries at different level of development to move at different speeds, but in the same
direction of trade facilitation.  These  delegations further highlighted the need for comprehensive
special and differential treatment, where it was noted that it should not be limited to mere transition
periods.   Several interventions addressed the WTO's role and function in the area of trade facilitation,
and its relationship with other international organizations, which was considered to be a
complementary one.  There were also several delegations which expressed serious concerns regarding
the idea of negotiating binding commitments.  These delegations stated that the current state ofdevelopment of many developing countries and their resource constraints would not allow them to
engage in new commitments on an equal level as developed Members.  A "one-size-fits-all" approach
would not work.  While agreeing on the benefits of trade facilitation, they did not concur with the
view of the usefulness and necessity of developing binding trade facilitation rules.   Preference was
further expressed by those delegations for continuing efforts to facilitate trade on a national orregional, rather than a multilateral level.  Specif ic concerns were expressed with regard to the
applicability of dispute settlement procedures.  In this context, a proposal was made by one delegation
to find "creative solutions" to that problem.  The delegation introduced the idea of an agreement-
specific mediation/consultation process.  It was stated by many delegations that dispute settlement
procedures should not be pursued  in cases wher e a Member did not implement a commitment simply
due to its level of development and lack of capacity.
Members further shared their national experiences in implementing certain trade facilitation
measures, which was generally considered to be very informative.  While some of the presented
examples were seen by several delegations as an example of what could be done even within arelatively small administration, others viewed it as an example of the many trade facilitation measures
currently undertaken at the national level in the absence of binding rules.  As regards technical
assistance and capacity-building, Members were in agreement on their importance.  Members were
updated on latest activities by donors in this area, and informed about lessons drawn in the course of
their execution.  Some donors also informed about the importance they attach to tradefacilitation-related technical assistance in the context of their overall development programme.
Reference was made by several developing countries that such assistance would also have to include
infrastructure, if it was to help them address thei r specific problems and allow them to fully benefit
from trade facilitation.  There was also reference to the importance of avoiding duplication of work,
of ensuring high level commitment, of assistance to be demand-driven and of having follow-up action
to ensure effective implementation of technical assistance projects.  The Council took note of the
statements made.
At its meeting on 12 and 13 June 2003, the Council addressed the traditional three core
agenda items:  (i) Articles V, VIII and X of the GATT 1994;  (ii) trade facilitation needs and
priorities, particularly of developing and least developed countries;  and (iii) technical assistance and
capacity building.  Two Members6 submitted written contributions, in addition to one paper by the
Secretariat7.  Written contributions were also made by the WCO and the OECD.
In the discussions, many delegations highlighted the benefits of trade facilitation, which were
broadly recognized by the Membership.  Reference wa s also made to the need of working together in
this area with a view to achieving benefits for all Members, and to better integrate developing and
                                                     
6 G/C/W/465 by Japan and G/C/W/466 by Australia.
7 G/C/W/463.G/L/665
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least developed countries into the multilateral trading system.  It was held that any evolution of trade
facilitation had to reflect the needs and the specific situations of Members, and their ability to
implement whatever may be agreed upon in the future , to allow for the full enjoyment of the benefits
accruing from trade facilitation.  There was also reference to the fact that additional WTO measures,
if any, should not seek unrealistic levels of harmonisation.
Many delegations further highlighted the benefits of a rules-based approach in this area, while
at the same time expressing understanding for concerns that had been raised in this context and
indicating readiness to pursue flexible approaches .  With respect to such flexible solutions, some
clarifications were sought and given on the precise ideas suggested.  Several Members also pointed at
the difficulties they see with respect to developing binding rules, and called for alternative
approaches, such as the development of non-binding guidelines.  One delegation, supported by some
others,  suggested to work on guidelines which could serve as a target for internal reform endeavours
and for the identification of technical assistance needs, and could then be transformed into binding
rules once developing countries had sufficiently developed their internal capacities.  Reference was
further made to the crucial role of technical as sistance and capacity-building and all agreed that
Members should deliver on their promises in the area of trade facilitation as reflected in paragraph 27
of the Doha Ministerial Declaration.  Members also highlighted the importance of and the benefitsfrom close cooperation among all stakeholders.
In line with the agreed Work Programme, Members then addressed the issue of whether to
hold an additional meeting at the end of July, and since no Member requested to continue the
discussions,  decided not to make use of such an option.  With respect to the required reporting on
trade facilitation work to the General Council, Members agreed to follow the past practice when trade
facilitation was one section of the Council's 2002 Annual Report, and on a procedure of ad
referendum  adoption.  It was further agreed that a report should be of a factual nature.  The Council
took note of the statements made and agreed
 to proceed as described above.
9. Transitional Review under paragraph 18 of the Protocol of Accession of the People's
Republic of China (G/C/M/71)
At its meeting on 26 November 2003, the Council took note  of the reports of the CTG
subsidiary bodies which had carried out their reviews and carried out the CTG-specific review with
respect to the information requirements stipulated in Annex 1A of the Protocol of Accession.  The
Council agreed to send the report (G/L/664), together  with the reports of the subsidiary bodies, to the
General Council.
10. Notifications (G/C/M/71)
(a) Status of notifications under the provisions of the Agreements in Annex 1A of the WTO
Agreement
At its meeting on 26 November 2003, the Council took note of the latest revision of the status
of notifications contained in document G/L/223/Rev.10 and Corr.1.
(b) Frequency of notifications of state trading enterprises under Article XVII of GATT 1994 and
the Understanding on the Interpretation of Article XVII of GATT 1994
At its meeting on 26 November 2003, the Council approved the recommendation of the WP
on the frequency of notifications (G/STR/5) and approved the revised questionnaire that had been
circulated as document G/STR/3/Rev.1.G/L/665
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11. Consideration of annual reports of subsidiary bodies of the CTG (G/C/M/71)
At its meeting on 26 November 2003, the Council took note of the annual reports of its
subsidiary bodies.
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