RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/64 
1 October 2002 
 (02-5250) 
Council for Trade in Goods 
22-23 July 2002  
 
 
 
 
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
22, 23 AND 30 JULY 2002 
 
Chairman:  H.E. Ambassador Supperamaniam  
 
 
 The meeting of the Council for Trade in G oods was convened by airgram WTO/AIR/1867.  
Document G/C/W/399 contained the proposed agenda for the meeting. On 23 July discussion on items 4 
and 9 were suspended and the meeting was reconvened on 30 July.   
I. TRADE FACILITATION WORK PROGRAMME: ARTICLE VIII OF THE 
GATT 1994 ...................................................................................................................... ..........3 
II. TRADE FACILITATION NEEDS AND PRIORITIES OF MEMBERS, 
PARTICULARLY OF DEVELOPING AND LEAST DEVELOPED COUNTRIES...................................................................................................................... .....42 
III. TRADE FACILITATION: TECHNICAL ASSISTANCE AND CAPACITY 
BUILDING ....................................................................................................................... .......44 
IV. DOHA MINISTERIAL DECISION  ON IMPLEMENTATION-RELATED 
ISSUES AND CONCERNS:  REQUEST FOR THE CTG TO EXAMINE PROPOSALS CONTAINED IN PARAGRAPHS 4.4 AND 4.5 RELATING TO THE AGREEMENT ON TEXTILES AND CLOTHING (WT/MIN(01)/17) ...................53 
V. REQUEST BY COSTA RICA;  INDIA;  INDONESIA;  PAKISTAN;  PERU 
AND HONG KONG, CHINA:  CTG'S OVERSIGHT FUNCTION PURSUANT 
TO ARTICLE IV OF THE AGR EEMENT ESTABLISHING THE WTO – 
TRANSPARENCY REGARDING NEW RESTRICTIONS ON TEXTILE AND CLOTHING PRODUCTS COMMENTED ON BY THE TEXTILES MONITORING BODY (G/C/W/260/REV.1).......................................................................64 
VI. MAJOR REVIEW OF THE IMPLEMENTATION OF THE AGREEMENT ON 
TEXTILES AND CLOTHING DURING THE SECOND STAGE OF THE 
INTEGRATION PROCESS, PURSUANT TO ARTICLE 8.11 OF THE ATC (G/C/W/396) .................................................................................................................... ........64 
VII. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER 
ARTICLE 9 (G/C/W/307 AND ADD.1) ................................................................................68 
VIII. DISCUSSION OF IMPLEMENTATION ISSUES BY THE TRIMS 
COMMITTEE – REPORT TO THE COU NCIL FOR TRADE IN GOODS...................69 G/C/M/64 
Page 2  
 
 IX. PREPARATIONS IN CONNECTION WITH PARAGRAPH 18 OF THE 
PROTOCOL ON THE ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA .......................................................................................................................... ...........70 
X. OTHER BUSINESS.............................................................................................................. ..70 
 
 
    
 
    
 
     
 
    
 
     
 
    
 
     
 
    
  G/C/M/64 
 Page 3 
 
 
 I. TRADE FACILITATION WORK PROGRAMME: ARTICLE VIII OF THE GATT 
1994  
 
1.1 The Chairman  stated that, as set out in the work programme adopted by Members in the CTG 
meeting of 22 March 2002, the Council for Trade in Goods would carry out its work on trade facilitation 
in the course of four formal sessions until the e nd of 2002. Following the meeting in May, the Council 
was now meeting for a second session, which, like the previous one, had three core agenda items: (1) 
Article VIII of the GATT 1994; (2) Trade facilitation needs and prioriti es of Members, particularly of 
developing and least developed c ountries; and (3) Technical assist ance and capacity building. 
Concerning the first item, the Chairman recalled Me mbers' agreement that, while this session would 
focus on GATT Article VIII, delegations would be free to also address questions related to Articles V 
and X.  Any delegation wishing to speak on those Arti cles would therefore have the opportunity to do so 
under agenda item 1 as well.  This might be particular ly the case with regard to Article X, where many 
delegations had noted at the last session that they ha d not had time to study some of the papers that had 
been submitted only shortly before the meeting. Fo r this reason, the airgram also listed all the 
communications that had been previously submitted on Article X. It further included a paper the WCO 
had presented at the last meeting,  and which had recently been circ ulated as a CTG document, following 
consultations held with one delegation. Several ad ditional papers had also been prepared for this 
meeting.  With respect to agenda item 1, the Secretaria t had drafted another background note, this time 
addressing GATT Article VIII, in response to Members' request for such a document at an informal meeting on trade facilitation of 25 February 2002. Communications addressing GATT Article VIII had 
also been received from the European Communities, listed in the airgram as document (G/C/W/394), as 
well as from Canada in document G/C/W/397, Ho ng Kong, China (G/C/W/398), the United States 
(G/C/W/400) and Ja pan (G/C/W/401). 
 1.2 The representative of the Secretariat
 noted that the Secretariat paper had been prepared in 
response to Members' request for background documentation on the three GATT Articles of special 
importance for their deliberations on trade facilitati on. The current paper resembled with first one on 
Article X that had been prepared for the previous  meeting in May. As a second part of the overall 
exercise of providing background information on all three relevant Articles, it followed the structure 
laid down in the first document, and outlined the Article's main provisions including their negotiating 
history, analysed their coverage and outlined the basic obligations established thereby. A final part 
looked at how Article VIII had been applied in GAT T and WTO jurisprudence so far. In doing so, the 
paper limited its focus to a factual outline of the Article from a legal perspective, and refrained from 
entering into an analysis of whet her, and to what extend there was room for possible clarification and 
improvement, which remained Members' prerogative.  
1.3 The representative of the European Communities
 stated that they had prepared a 
comprehensive set of ideas on how Article VIII coul d be made more operati onal, taking into account 
the discussions held in the CTG over the past four  years, ideas expressed by a number of Members, 
consultations with the business community and nationa l experiences, in order to see how Article VIII 
might be clarified and improved. This article expr essed a desirable but not mandatory commitment to 
simplify fees, charges, customs and other procedures. Like Article X, it could be updated and 
modernised, as in the more than 50 years sinc e it was drafted, trade volumes had increased 
exponentially, while customs and government resources had not. Secondly, there were new forms of 
business being conducted, supply chain management, just-in-time techniques, which required a 
commensurate kind of behaviour on the part of impo rt and export administration. Since the Article 
had been written, there had been a large growth in the volume of air transport cargo, which had 
particular needs. Many Members had progressively introduced more regulatory requirements at the 
border, which had created pressures to simplify th e passage of goods. Furthermore, there was now a 
large range of international standards and instrume nts in the customs area and elsewhere, which had G/C/M/64 
Page 4  
 
 not been available many years ago. There was ther efore a lot of scope to make Article VIII more 
operational rather than simply aspirational as it currently was.   1.4 With that in mind, the Communities had made a number of proposals, taking account of Members’ discussions, the views of the business community, based on a number of examples and 
precedents in existing WTO agreements like th e ones on Import Licensing, TBT and Customs 
Valuation. The Communities had also drawn a lot of ideas from measures which existed in a number 
of bilateral or regional agreemen ts concerned with trade facilitati on such as the APEC and the ASEM 
trade facilitation work, the EU Euromed Trade I nvestment Facilitation Action Plan, the recently 
concluded EU Mercosur Trade Facilitation Action Plan and even the ASEAN transit agreement, 
where the EC had found a large number of interesti ng ideas with direct applicability to Article VIII.  
 1.5 As for specific proposals, the Communities sugg ested that if Members wished to clarify and 
improve Article VIII, one might begin by maki ng the import and export procedures subject to a 
number of basic GATT/WTO principles such as non-discrimination in the design and application of 
import and export procedures, transparency and due process in the application of those procedures, a 
commitment to reduce and simplify trade procedur es to the extent possible and to make them 
proportional to the objectives being sought and regul arly reviewed. Furthermore, the Communities 
also considered it useful to develop a commitment to use in Members' respective domestic procedures 
international standards and instruments where they ex isted, as that reduced errors, delays and costs for 
trade and made administration simpler. The Communities also believed that anything Members 
developed to clarify and improve Article VIII should not only apply to Members as federal entities, 
but also to any sub-federal requirements as well as to customs unions. Assumingly, no delegation 
would have difficulties in principle with the c oncept of import and export procedures and customs 
administrations being subject to non-discriminati on, transparency, proportionality, due process and 
alike.  However, the EC consider ed it necessary to go beyond that very  general level and make Article 
VIII more operational, in tune with business need s through a number of more specific measures set 
out in the Community paper.   1.6 Turning to the specific me asures suggested by the Communi ties, the EC representative 
remarked that in the area of fees and charges, as po inted out by the very useful Secretariat paper, 
Article VIII only expressed the desirability, and th e importance of reducing fees and charges to a 
minimum, without containing an actual commitment to do so. There was no obligation, and no 
guidance as to how to do that. The Communities made  three proposals in this respect, taking account 
of recent GATT and WTO panel findings. First of a ll, the EC proposed a commitment to simplify and 
consolidate fees and charges and to publish them toge ther with a justification for their existence.  
Secondly, the EC proposed to tie fees and charges to specific services rendered,  so that they were 
proportionate to their objective. One might even wi sh to go as far as identifying what could be 
legitimate services rendered for which fees could be  levied. Thirdly, the Communities proposed a 
clarification of Article VIII to prohibit fees and charges being levied on an ad valorem basis, as - 
almost by definition - an ad valorem fee could not reflect accurately the cost of the service rendered. These proposals, if adopted, would have the effect of  reducing the variety and the incidence of fees 
and charges and give much more flexibility to traders.  
 
1.7 The second broad area the Communities suggested  Members to explore further was the field 
of data and documentation requirements for impor t and export administration. Here, as clearly 
indicated by the business community, it was very im portant to see these requirements reduced to the 
very minimum and to standardise whatever re quirements remained. Such measures could reduce 
errors, costs and delays, while also allowing govern ments to process documents and data much more 
quickly. This would in turn allow goods to be releas ed from border controls more rapidly. With those 
aims in mind, the EC had listed a number of measu res Members might wish to consider, including a 
general requirement to reduce documentation to the very minimum, a suggestion that in doing so, to 
base data and documentary requirements for trade procedures on existing international standards as  G/C/M/64 
 Page 5 
 
 
 such as the UN layout key and relevant WCO simpli fied data sets. The Co mmunities suggested that 
administrations accept information that was normally  commercially available, instead of designing 
unique requirements solely for administrations. The EC also saw merit in measures for regular review 
of data requirements in consultation with the aff ected business community, in order to move into a 
process of continued simplification – a principle compar able to that already found in TBT Article 2.3. 
Furthermore, the Communities did see value in introducing the principle of a single one time 
presentation of trade documents and trade data to a single agency (normally customs). This would 
have a major impact on speed and efficiency of customs release and would improve the performance 
of administrations. Recognising however that this was a difficult measure to implement rapidly, the 
Communities were aware that the concept of the si ngle window, of a one time transmission would 
need to be implemented in a progressive manner as it had resource implications in the short to 
medium term, although its longer term effect wa s to save resources through efficiency gains. 
 
1.8 Another important area where the Communities saw room for simplification was on customs and other agency import and export procedures them selves. Based on the previous proposals by the 
EC and other Members over the last few years, the Communities made some specific suggestions for 
improving Article VIII in the field of customs and related import and export procedures. There was 
ample evidence that burdensome excessive proce dures reduced trade, inhibited investment and 
penalised small and medium sized enterprises. Members had a good opportunity to simplify customs 
and other formalities and requirements to help trad e and investment and to improve and raise duty 
collection and border controls. On pages 6 and 7 of its communication, the EC had made a number of 
proposals to simplify procedures, drawing on intern ational standards of the WCO and even possibly 
the ICC standards in this area. The Communities fu rther suggested that Memb ers consider publishing 
their domestic standard processing times for different forms of customs treatment, and subsequently progressively reduced those standard times. Memb ers should also look at measures in the WTO to 
introduce simplified release and clearance procedures. Some Members had already started to 
implement domestically simplified procedures. In a situation where it was not possible or desirable 
for customs to screen 100% of the consignments, there was a real need to introduce simplified 
procedures, including for compliant traders, linke d to risk analysis and risk assessment. One of 
 the 
proposals the Communities made was for Members to  consider introducing domestically in their 
procedures the concept of authorised traders, wh ereby traders with a good record of compliance and 
management of their consignments would be rewarded with fast-track customs release procedures, a 
benefit both for the traders and for custom s, and again a way of saving resources.  
 1.9 Another area the EC considered important to  look at with the view to seeing whether one 
could create WTO measures, was more coordination and control between different agencies. In the 
previous discussions, a number of Members, including several developing countries, had drawn 
attention to the fact of multiple inspections at  the border for different control purposes. The 
Communities saw merit in trying to coordinate those controls and minimize the amount of 
intervention on goods crossing borders. Customs au tomation was another important area for possible 
measures. Prior to automation one needed to si mplify and reduce documentation and data. While the 
other measures the Communities propo sed such as with risk assessment, authorised traders, simplified 
procedures could be implemented without automation,  they were clearly more successful with it. 
Many members at all levels of development had started using automation and EDI in customs and 
trade administration, which was why there was a good case for considering measures or commitments 
in that area too.   1.10 The last subject the Communities proposed for further study was the development dimension 
of trade facilitation. The Communities had give n careful thought on how to best integrate 
development issues and best capture the need for sp ecial and differential treatment if Members were 
to go down the road of developing future WTO commitments on trade facilitation. In doing this, the 
EC started from the presumption that all of the proposals the Communities as well as many other 
Members had made, were in themselves beneficial for development. It was generally agreed that trade G/C/M/64 
Page 6  
 
 facilitation measures were supporting development.  The proposed measures would in no way in 
themselves reduce the development space or the fl exibility needed by developing countries. The 
Communities had also tried in its proposals to make  a distinction between measures that could be 
implemented fairly rapidly, such as non-discrim ination, and proposals which implied resource 
commitments, or institution building or infrastructure building, and therefore might not be possible 
for some developing countries to implement rapidly, such as automation or the introduction of a 
single customs code or body of legislation were all the procedures were in one place. While good in 
themselves, some of these ideas might take time to implement. Nevertheless, Members should be 
aware that even those trade facilitation measures wh ich implied resources, were at the same time an 
important investment that in the medium term te nded to recoup any initial outlay and created rapid 
efficiency gains, thus actually saving resources. However, the Communities would like to explore 
with Members the different options and possib ilities for taking account of different Members’ 
different capacities and levels of development. One option the Communities had mentioned in its 
paper was that LDCs and possibly other countries c ould be exempted from those future commitments, 
which were potentially resource intensive, until th ey had the capacity to assume them. The EC itself 
was not convinced that that was a good developm ent policy. The Communities were concerned that 
that could create a risk of a two tier membership of continued disengagement and not convinced that 
that kind of approach was necessarily the best for the integration of poorer developing countries into 
the system, but the Communities would like to hear had Members’ views on this. The other approach 
the Communities had explored in its paper was a more calibrated form of differentiation of 
commitments according to the individual situation, needs, capacity of individual developing countries. 
The proposal the Communities had set out for consideration was to develop an individual 
implementation plan with each member having par ticular difficulties, in conjunction with a well 
coordinated plan for technical assistance and capacity  building. This seemed to better create the right 
kind of incentives for progressive modernisation and simplification of trade procedures, while 
preserving a degree of flexibility. Although the focus had naturally been on the least developed 
countries, there was no reason why this kind of calibra ted approach could not be explored with other 
developing countries if there was an interest. The Communities thought of this approach as a kind of 
"ladder" of trade facilitation measures wher e different Members would position themselves on 
different rungs of the ladder and progressively move up over time in line with their improved 
capacities.   
1.11 There was obviously a need to better organi se and improve the quality and quantity of trade 
related technical assistance in this field. Any fu ture work needed to see the commitment to improve 
quality, quantity and coordination of  aid and a better response to the specific demands and needs of 
Members. The Communities proposed a specific mech anism for coordination between the different 
donors, recipients and agencies having an interest in trade facilitation, a kind of integrated framework 
approach. The EC also saw an important role for pr ivate sector participation in capacity building. In 
the consultations the Communities ha d had both with the European and the international private sector 
in the goods as well as the services field, the EC had noticed a lot of interest from a number of 
federations associated with future technical assistance programmes. Many of them had resources, expertise and experience; they were part of the solution and needed to have regular interface with 
customs and other agencies. There was a wealth of  untapped potential in the private sector and a 
potentially easy crossover between FDI in this area and technical assistance. 
 1.12 In conclusion, the EC representative underlin ed his delegation's conviction that the time was 
right to consider measures to make GATT Article  VIII more operational. If Members could develop 
progressive commitments on trade facilitation, one w ould ensure that everybody moved in the same 
direction, drawing on the same international standa rds and benchmarks, and th at no country got left 
behind. Proposals along the lines of the ones tabl ed by the Communities as well as other Members 
would allow the WTO Membership to move towards the compatible harmonised approaches that were 
very important for trade. They would remove the risk of various unilateral, bilateral or regional 
initiatives going in divergent directions. The EC re presentative noted that the EC's proposals would  G/C/M/64 
 Page 7 
 
 
 require modifications of the Communities' custom s and trade procedures. The Communities were not 
saying “This is what we do in the EC and you should do the same." The measures the Communities proposed implied a considerable change domestically and as the world's largest importer, the benefits 
for the EC’s trading partners of the EC moving along this road of continuous simplification and 
modernisation should be very evident. The EC was willing to do that in the context of a WTO 
exercise of negotiations. 
 1.13 The representative of Canada
 stated that their paper represen ted Canada's se cond contribution 
to the 2002 work programme on trade facilitation.  It provided a number of Canadian ideas on how 
GATT Article VIII could be clarifie d and improved.  At past meetings  and in past pa pers, Canada had 
spoken of the benefits of trade facilitation to both traders and governments that might be realised by 
pursuing various trade facilitation measures. Today th ey focused in particular on the potential to 
address improvements in Article VIII:1(c) and those of a broader nature to Article VIII. Canada 
believed that the addition of business and user-friendl y improvements to the core international trade 
procedures reflected in GATT Article VIII were vital keys to enhancing a country's capacity to trade 
and to integrate fully into the international trad ing system. Canada saw considerable potential in 
Article VIII to further explore opportunities to bette r promote cost efficient efficiencies by minimising 
the incidence and complexity of unnecessary or redu ndant border formalities and procedures without 
compromising the need for consumer protection, he alth and safety and public security. As with its 
earlier suggestions regarding Artic le X, Canada's suggestions on Article VIII were designed to 
separate the movement of goods from the movement of information and from the movement of the 
money, thereby facilitating trade while maintain ing control over the importation or exportation 
process. Canada also believed that any proposal s needed to take account of the existing and 
significant technology gap that currently existed in th e trading environment. To this extent it believed 
that proposals for simplification for effective proce dures should be applicable and useable in either a 
non-automated or a technology based environment.  Canada saw many opportunities in both cases to 
promote efficiencies, enhance transparency and minimise procedural delays with the primary 
difference being the degree of change that was achieved.   1.14 In its present paper, Canada suggested sev eral clarifications and improvements to GATT 
Article VIII. In many cases, these  ideas drew from a number of current WTO Agreements, such as the 
Agreement on Rules of Origin and the Agreement on Implementation of Article VII of the GATT. 
These suggestions, which reflected various trade facilitation principles including: consistency, 
efficiency and simplification, harmonisation, consul tation and cooperation, transparency and effective 
compliance, had been categorised under six major cat egories. Under the section “Simplifying border-
related documents, and increasing compatibility/sta ndardising data required for the release of 
merchandise” Canada had focused on the use of agr eed international standards, as it saw that these 
would best ensure a common basis for the measures  applied by different WTO Members. Increased 
compatibility and standardisation of data sets woul d facilitate the increased use of information and 
communications technologies (for example electronic da ta interchange).  This in turn would improve 
transparency and predictability, and lower costs for tr aders, in particular in the preparation of trade 
documents and data. Simplifying and improving cu stoms and border-related documentation based on 
international standards and instrument represented one  of the most important ways of achieving early 
gains in facilitating trade. Cumbersome and repetitive border crossing procedures, related 
documentation and procedural delays in border controls, and haphazard doc umentation requirements 
not only had the effect of impeding the movement of traded goods, but could also ensure that such goods, which might be urgently required, stagnate in  clearance depots or warehouses instead of being 
used productively and in a timely way. The de velopment of common data sets of information 
requirements for the process of goods clearance would in turn facilitate  the increased use of 
information and communication technologies (i.e., EDI or electronic data interchange). This 
development would lead to crucial gains, by reduc ing costs for importers-exporters, particularly for 
those in smaller countries and small and medium -sized enterprises (SMEs) and, as well, would 
produce cost savings for customs and other border-related administrations.  G/C/M/64 
Page 8  
 
  
1.15 Turning to border agency coordination, the Canadian representative noted that in many 
Member countries, the customs function already coin cided with, or involved interaction with, other 
domestic agencies or departments that regulate, c ontrol or prohibit the cross-border movement of 
goods. By way of example, he noted that goods might  be subject to other government department 
requirements and might require special permits, cer tificates and/or examination. In other instances, 
customs authorities might administer the import and export interests of a number of relevant departments and agencies involved in border-process es and procedures. The focus here would be to 
streamline the import process for goods subject to review by agencies outside of customs by better exchanging and sharing information amongst those agencies, and by streamlining and reducing 
duplicative requirements thereby reducing the workload involved in the clearance of shipments.  This 
would enable goods to be released more efficien tly and quickly by reducing unnecessary duplication 
and strengthening inter-agency cooperation (for exam ple through information sharing arrangements) 
with respect to the commercial reporting and release requirements for imported goods. Where 
applicable, this might include the use of technology to allow the use of rele vant release information 
amongst interested parties involved. One very per tinent means to do this, as suggested in both 
Canada's paper and that of the European Comm unities, was through the use of a "single-window" 
approach whereby customs would collect all im port documentation or info rmation on behalf of 
government entities controlling or regulating the import ation or exportation of goods.  As part of these 
responsibilities, customs would also have the res ponsibility to refer, in a timely manner, any 
documentation (or goods) to other government entiti es regulating or controlling the importation or 
exportation of goods.  In this manner, inter-age ncy arrangements might serve as an efficient 
instrument to promote efficient cooperation to st reamline and expedite the release of goods.  
 1.16 Moving on to the issue of streamlined or special procedures, he remarked that such procedures would be founded on the principle of providing the incentive of better services and choices 
to those traders that comply voluntarily with cu stoms and other border-rela ted laws and regulations. 
Canada suggested that streamlined procedures be de veloped for authorised persons using such criteria 
as a history of past compliance or based upon the trad ers’ internal systems for managing their internal 
records. Canada also suggested "special" or "fast -track" procedures for those traders who regularly 
import goods. This might include:  1) the provision of minimal documentation at time of release of goods;  2) the ability to submit a goods declarati on covering multiple transactions over a certain 
specified period;  3) self-assessment and payment of  duties and taxes owed; or 4) clearance at the 
importers premises or other inland locations.  Su ch action would promote a modern concept of 
partnership between customs, traders and third pa rties within international trade. This would 
acknowledge those traders who maintained a good re cord of compliance with border requirements. 
 
1.17 Turning to the provision of collateral or m onetary security and enhanced clearance provisions, 
the Canadian representative noted that the use of  security provisions (e.g. surety bonds) would 
provide added flexibility to traders in the import pr ocess and give certainty to the government that 
trader obligations would be met and the revenue owed to the government would be secured. Surety 
bonds might be used to cover imports on either a si ngle transaction or on a continuous basis or be 
employed for an expanded range of uses to meet a variety of import circumstances. The use of surety 
bonds presented an added option for traders in additi on to the more usual cash equivalent required to 
pay duties, taxes and other import-related charges connected to the importation process. Surety bonds 
would provide a guarantee that the importer would fa ithfully, and in a timely manner, abide by all 
laws and regulations governing the importation of g oods into the country. Ultimately, all risk would 
continue to be borne by the trader who must cont inue to meet his obligations. Surety bonds would 
provide direct benefits to both traders and gove rnment. Traders would benefit from improved cash 
flow management and have the ability to reduce unnecessary pape r and cash management burdens. 
The government would benefit from the security that bonds represent by securing revenue owed and 
by having a means to ensure that tr ader obligations would be satisfied.   
  G/C/M/64 
 Page 9 
 
 
 1.18 Moving on the to use of risk assessment prin ciples, he remarked that in a marketplace that 
demands multi-sourcing and just-in-time inventori es, traders would need smooth, uninterrupted 
processes for getting goods to their domestic customer s. The use of risk assessment principles would 
be based on the simple premise that businesses or individuals with good track records would benefit 
from their history of compliance by having access to options that made border-related processes and 
procedures easier and more convenient for all conc erned, including the government. By using a risk 
management system focused on identifying higher-risk areas among clients, industry sectors, and trade chains, using tools such as links with intern ational enforcement agencies, data from carrier 
reservations systems, client profiles, and customs audits, customs officials would be able to focus 
resources on identifying and effectively attending to areas of higher and unknown risk. This would 
free up time and resources for other purposes. This woul d allow the customs authority to offer a better 
service and choices that would minimise interven tion and inconvenience for low-risk clients. In 
addition to the use of risk management techniqu es, the use of post-entry audits for compliance 
verification would be useful, unde r which customs can initiate a systems audit or periodic verification 
of importers' and carriers' books and records. Th is could range from a si ngle program review, for 
example on valuation, origin or tariff classificatio n, to a comprehensive review of all customs 
programs. The overall objective in using risk manage ment techniques and post-entry audits would be 
to allow customs to be able to  identify and effectively attend to  areas of higher and unknown risk 
while allowing the optimal use of res ources to facilitate legitimate trade.  
 1.19 Turning to express clearance or immediate relea se of consignments, he noted that in an era of 
continually increasing numbers of small consignm ents moving across borders, expedited and 
simplified procedures for speedy clearance of small cons ignments would be of c onsiderable interest to 
those who are dependent on such goods. This would be of particular use for those traders that are involved with goods requiring immediate release in  support of global integrated supply, production 
and distribution networks. Clear, coherent and useful guidelines in  the movement and handling of 
such consignments could better help deliver such  goods in a timely manner. The idea would be to 
facilitate trade while addressing the need of increased information, enabling gove rnments to deal with 
higher levels of risk that could be associated with  such shipments in the current environment. Such 
procedures/guidelines would provide for immediate re lease to all such consignments, provided that 
conditions stipulated were met and the necessary in formation was communicated at a specified time 
before the consignments arrived at destination. Procedures would take into account the different 
categories of goods involved and varying trad e patterns and compliance requirements.  
 1.20 Turning to technical assistance, the Canadian representative informed that similar to Canada's 
earlier paper on GATT Article X on the publication and administration of trade regulations previously 
submitted in May 2002, Canada's pr esent paper again flagged, in various areas, possible areas for 
technical assistance in support of its proposals. These areas, as identified, represented concrete 
subjects where Canada has been active, either sole ly or in concert with other providers, including 
regional bodies and multilateral in stitutions. Canada would be pleased to discuss with WTO Members 
where technical assistance might be provided in  developing appropriate, similar and relevant 
processes. Canada continued to support fully the integrated approach of developing WTO 
commitments and ensuring technical assistance a nd capacity building where required to assist in 
implementing such commitments. Canada believed that this is best pursued through Member 
discussion on how best to identify, coordinate an d deliver technical assistance in the context of 
implementing future commitments in trade facilitation.  In conclusion, he noted that Canada believed 
that simplification measures by customs and other ag encies could make an important contribution to 
realising development objectives and in establis hing a framework for technical assistance and 
capacity building by allowing for significant reductions in administrative costs. The introduction of 
simplified and relevant electronic customs clearance  systems, risk assessme nt techniques (as opposed 
to physical inspections of individual shipments and consignments), pre-arrival processing and post-
release audit would minimise the time spent and woul d make better use of resources and reduce levels 
of error. Canada believed that trade facilitation measures of this type could make an important G/C/M/64 
Page 10  
 
 contribution to the international trading system. Canada looked forward to the opportunity of 
discussing these proposals further and especially welcomed the opportunity to review other suggestions in this area – such as those presente d in the various excellent papers that had been 
prepared for this session.  
1.21 The representative of Hong Kong, China
 expressed his appreciation to the Secretariat for its 
very useful paper, as well as to other Members for the wealth of ideas they had put forward. Hong Kong China's paper was prepared as a contribution to take forward the Doha mandate to review, and, 
as appropriate, clarify and improve relevant aspect s of GATT Articles V, VIII and X pertaining to 
trade facilitation. The paper focused on GATT Article V III. In gist, it proposed to inject certain basic 
GATT/WTO principles commonly found in the WTO agreements, into specific provisions of GATT 
Article VIII, to enhance their operations, in par ticular as regards Article VIII:1(c) on import and 
export formalities, and Article VIII:1 (b) on fees and charges. These principles were not new, but principles all Members were familiar with and to which all Members subscribed. Hong Kong, China's 
proposal aimed at tackling certain, but not all areas under GATT Article VIII, for which it believed 
clarifications and improvements might help advan ce and modernise its operation. Cutting red tape and 
reducing transaction costs have become the catch phrases of all responsible governments nowadays. 
Hong Kong, China's prime objective was to provide a more facilitating and friendly environment for 
the business community in the current highly comp etitive and globalized trading environment. 
 1.22 Turning to the Articles in question, he not ed that, regarding formalities and documentation 
requirements, GATT Article VIII:1(c) only recogn ised the need to minimise import and export 
formalities and simplify documentation requirement s, without spelling out how this could be 
achieved. Hong Kong, China believed that one possi ble way to do so would be to incorporate the 
basic principles commonly found in other WTO agreements to guide the direction of the article's operation. Specifically, his delegation proposed to  consider a number of common principles for 
incorporation into the Article VIII, such as the pr inciple of least trade restrictiveness or necessity, 
according to which import and export procedures were  not allowed to be more trade restrictive and 
administratively burdensome than necessary to fulfil  a legitimate objective. Another such principle 
was the use of international standards or harmoni zation, requiring Members to adopt formalities and 
documentation requirements with reference to inte rnational standards, or to follow guidelines and 
recommendations in their import and export formaliti es and requirements where they existed and as 
appropriate. A further principle was the principle of  review, in order to reduce unnecessary formalities 
and documentation requirements and to  remove them in the light of changed circumstances. Another 
principle was the principle of simplicity and mode rnisation, calling for formalities and documentation 
requirements to be as simple as possible, and to e nhance efficiency. The use of modern information 
technology would have to take full account of the technical capacity of individual Members. Other 
principles such as neutrality, consistency and predicta bility could also be considered for incorporation 
into the article.   1.23 Turning to fees and charges, he noted th at Members might consider the desirability of 
introducing basic GATT/WTO principles like necessity and review to add meaning to the provision of 
Article VIII:1 (b). As regards technical assistance  and capacity building, Hong Kong, China believed 
that full consideration should be given to the t echnical assistance needs of Members, particularly 
those of developing countries and LDCs. The WT O should fully explore with other relevant 
international organisations like the WCO and UN CTAD the areas where coope ration and coordination 
could be further enhanced. In conclusion, the representative of, Hong Kong, China expressed his 
delegation's hope that its proposals of injecting some basic GATT/WTO principles into the relevant 
provisions of GATT Article VIII could help provid ing better guidance on the derivation, application 
and administration of import and export formalities a nd fees by Members in order to facilitate trade. 
Hong Kong, China stressed that its suggestions were  not novel obligations, but principles to which all 
Members had been aspiring in their conduct of trad e. They aimed at providing more concrete and 
clearer guidance on how to put the "recognised needs" under Articles VIII:1 (b) and VIII:1 (c) into  G/C/M/64 
 Page 11 
 
 
 practice. Hong Kong, China had an open mind on the format and language of the 
clarifications/improvements to the Articles. These were matters for future deliberation if Members 
agreed that some clarifications/improvements to  these Articles were required. Hong Kong, China 
welcomed Members' input and comments in this regard.  
 
1.24 The representative of the United States  thanked the Secretariat for its work. As in the case 
with the Secretariat paper on Article X, the US ve ry much welcomed its paper on Article VIII, which 
it believed to be an important contribution to Me mbers’ efforts. The US also thanked the other 
Members who had submitted papers. He noted th at the Unites States' paper wanted to be 
complementary to the other communications. As the US had stated before, it saw the core elements of 
Members’ work on trade facilitation being related to  transparency and effici ency. Traders wanted to 
know what the rules were for moving goods, and wanted  to ensure that the regulatory efforts at the 
border did not impede the logistical chain they had established to bring the product to the market place as quickly as possible. As stated by the Co mmunities, what once deemed desirable when GATT 
Article VIII was authored, was now an imperative. In  the view of the United States, the task was to 
bring shape to the requirements, to do what was needed to ensure that traders, investors and 
manufacturers were facing a rules-based environm ent that contributed to increased opportunities 
through transparency and efficiency.    1.25 Turning to the US submission, he remarked th at it set forth a series of questions in order to 
identify certain issues. It was done in an attempt to suggest what Members should be thinking of, as 
they moved forward. The US saw this as complementary to other submissions.  
 1.26 With regard to fees, the Communities’ paper ha d noted that there seemed to be a real need for 
clarification through more specification. Fees had b een the subject of litigation, and there remained 
the need to improve and clarify the situation on fees overall. Moving to Article VIII (1) c, he noted 
that the whole question of formalities and requireme nts would come down to a main issue which was 
how quickly goods could be released. This was wh ere Members’ focus ought to be. There were a 
number of ways how this could be addressed, but the US  wanted to make sure that this was central to 
Members efforts relating to formalities and requireme nts, and that Members did not lose sight of the 
issue of rapid release of imported goods from the cust ody of customs. A subset of that question and a 
matter that underscored the need to improve and clarify GATT Article VIII was the treatment of 
express shipments and the growing impact on Memb ers economies as well as the need for special 
requirements for treatment related to efficiency  and transparency. The US was interested in 
addressing the question of simplification of documen tation requirements, and also noted one element 
of specification that could be needed as regards the use of certificates of origin. The task was simple 
in terms of seeking clarification, and greater specification. 
 
1.27 Turning to Article VIII (3) and (4), he cl arified that the citation in the US submission under 
penalties should only refer to Article VIII (3) and th at the (b) should disappear. Similarly with regard 
to scope of coverage, the US inte nded to refer to Article VIII (4) in its entirety, not merely Article 
VIII.4.b. With regard to the question of penalties,  the U.A.S. stated that  Members needed to ask 
themselves what could be done to bring improveme nt that would ensure procedural fairness and 
address situations such as minor breaches, early rectification of clerical errors, whether further 
specification and clarification could not contribu te substantially to a more efficient trading 
environment. Members' task was best reflected in  looking at the content of GATT Article VIII as 
something desirable that the trade environment ha d made imperative. The US  continued to hold the 
view that this was a true win-win situation for all Members. Everybody understood and shared the 
importance of this area. The United States had the in tention, subject to further consultations with 
some of their developing country partners, to make a future submission with regard to the 
development dimension, and in par ticular with regard to the challenges of implementation. There was 
the overwhelmingly positive view that this area pr esented an opportunity to come up with creative G/C/M/64 
Page 12  
 
 ways to meet those challenges of implementation,  while preserving the nature of the commitments 
that could be improved upon in Members’ work.  
 1.28 The representative of Japan
 thanked the Secretariat and other Members for furnishing many 
inputs to the very important discussion on trad e facilitation and GATT Article VIII. Japan had 
submitted a paper as well which had been circul ated to Members as document G/C/W/401. Japan 
would like to recall the benefits from trade facilitation as well as those gained from taking trade facilitation under the WTO norms for all stakeholde rs both from the private and the public sector. 
Although the current meeting was designed to discu ss the whole of Article VIII, the Japanese paper 
focussed on Article VIII (1) c. This silence did not mean that Japan had no opinion on the rest of the 
elements of the Article. Article VIII (1) c of the GATT stated that Members recognized the need for 
minimizing the incidents and complexity of impor t and export formalities a nd for simplifying import 
and export documentation requirements. Such a simp lification of trade procedures required the cost 
burden to be borne by trade operators.  Some international organizations estimated that enterprises in 
developing countries and small and medium sized en terprises would receive more benefits than the 
larger enterprises in developed countries. It should be emphasized that WTO work on the 
simplification of trade procedures should not be designed or implemented in a way that precluded 
governments from pursuing its legitimate trade polic y objectives. Members would need to discuss the 
scope of those legitimate trade policy objectives. Yet, at the same time, the Japanese delegation would 
like to emphasize that trade procedures should not be more trade restrictive than necessary in order to 
fulfil such trade policy objectives. The basic idea co uld be looked at in the SPS and TBT Agreements.  
Some Members might be concerned with this  seemingly conflicting relationship between the 
simplification of trade procedures and the level of co ntrols. Yet, this might not be the case. Anecdotal 
evidence had shown that an increase in public sector  efficiency through the simplification of trade 
procedures might enable governments to shift re dundant resources from resource-sufficient activities 
such as document format verification to more labou r-intensive activities such as physical inspection. 
The fruit of such efforts might resu lt in an increase of the collected duties or in more efficient goods' 
controls.   1.29 Like the previous speakers, Japan was of the opinion that saw that  since the current GATT 
Article VIII (1) c simply recognized the need for such simplification,  while not providing for any 
mandatory requirements in this sphere, the fruits of simplifying the present procedures had not yet 
been fully realized. The provisions needed to be  made operational. Such WTO work on this issue 
would create an essential guide and benchmark for Members to improve their laws as well as the implementation process related to trade procedures. This would help countries to integrate themselves 
into the world trading system and contribute to the further development of world trade. Turning to some specific examples of improvements in trade procedures, the Japanese representative referred to 
the adoption of internationally accepted standard s and instruments as a basis for setting up and 
implementing trade procedures, a reasonable selection of goods to be examined based on appropriate 
risk assessment methods or the cooperation and coor dination among different authorities in charge of 
border controls at exist and entry points, e.g the introduction of a single window through which a trader could submit all the required data to a single agency at once for various official purposes.  Other 
examples included  the opportunity for the users of trade pro cedures, including the private sector to 
communicate their views and comments to the agency in question, the adoption of advanced control 
techniques such as deferred payment, post-clear ance audit, the release of goods before import 
permission with adequate security if required, automation of border procedures and the use of 
internationally accepted standards. Japan also saw th at some countries lacked adequate capacities. In 
this context, the Japanese represen tative noted that appropriate tec hnical cooperation was an effective 
tool for introducing and implementing trade fa cilitation measures smoothly. When considering 
efficient resource allocation, the work and the expert ise of specialized international organizations such 
as the WCO and UNCTAD should be taken into acc ount. In order to make technical cooperation 
programmes more effective, it was important to create targeting goals for technical cooperation.   G/C/M/64 
 Page 13 
 
 
 Japan believed that the best process for achieving such goals would be th rough constructive WTO 
negotiations.   1.30 The representative of Korea
 thanked the Secretariat for its background note and the EC, 
Canada, Hong Kong China, Japan and US for their valuable contributions on GATT Article VIII.  
Korea supported most of the ideas contained in th ose contributions. Korea had also expressed its 
views on this important issue to facilitate th e discussion. GATT Article VIII covered fees and 
formalities directly related to impor tation and exportation. It set out the basic principles of limiting the 
amount, incidence and diversity of fees and form alities to the reasonable minimum. The trade 
environment, including customs administration, ha d undergone dramatic changes. Despite this, the 
principles laid out in Article VIII were still equally  valid. Korea was of the view that WTO Members 
should now refine the time-honoured principles into more concrete disciplines which reflected the 
changes in the trading environment. Some countri es were introducing voluntary measures, but only 
concerted efforts by all Members could deliver s ubstantial improvement. Now that Members had the 
fora to discuss ways of working on Article VIII, this  issue needed to be addr essed more seriously in a 
forward looking manner.  
 1.31 In line with Korea's first communication for the last CTG meeting in May (G/C/W/377), 
Korea believed that two basic criteria, namely th e degree of contribution and feasibility, should be 
used to evaluate the merits of potential discip lines. Many specific measures had been identified as 
being instrumental in facilitating trade. Some of them  were expected to make significant contributions 
while imposing a relatively light burden of implem entation, such the accep tance of commercially 
available information, except for some justifiabl e cases, which could be introduced without delay 
since it did not involve a significant financial or administrative burden. Such a deregulatory measure 
would not only lower the costs for the traders, but  also relieve customs authorities of an unnecessary 
administrative burden. Furthermore, pre-arrival processing, post-auditing and core risk-management 
measures were the key measures for the rapid rele ase of goods. This set of measures would bring 
benefits both to the traders and the governments.   1.32 With proper technical assistance and support for capacity building, which would represent a 
small financial burden, de veloping countries would be able to en joy the benefits from such measures. 
The focus of capacity building and technical assist ance should be on institutional reform and human 
training, taking into account that IT infrastructure c ould make the process more efficient. In whatever 
form the above disciplines were to be introduced in to the WTO system, it would be useful to reiterate 
some of the widely accepted principles with a view to providing a clear reference for legal 
interpretations as well as a guideline for the matt ers not specifically covered by the operative 
provisions. Those principles were non-discrimination,  transparency, predictability, simplicity and 
reasonableness. Such principles could be inferred from GATT Article VIII together with other articles 
of the GATT and WTO instruments. It should be noted  that such principles were not new to the WTO, 
and thus should be easy to agree upon. Korea l ooked forward to cooperating with the other Members 
on identifying the agreeable details of such discip lines and principles. Korea was of the view that, 
while the following measures would contribute to tr ade facilitation, they needed to be further 
discussed in terms of their feasibility. Some of the modern customs techniques were not easy to 
implement without a sound IT infrastructure. For example, single windows access would function 
efficiently only if a proper IT infrastructure and an efficient mechanism for information flow among 
the various authorities were established. Also, for ED I, an IT infrastructure would be a prerequisite. 
Some measures might need more common understanding . The obligatory application of international 
standards would, for instance, require a consensu s among Members on which standard to use. And a 
general commitment to simplification and modern isation by itself would not be amenable to 
enforcement, even though simplification and mode rnisation would be acceptable as basic principles. 
Finally, the Korean representative noted that hi s delegation welcomed comments and better ideas on 
this subject and wished to comment more specifically  on other suggestions tabled at the meeting at a 
later stage. G/C/M/64 
Page 14  
 
  
1.33 The Chairman
 stated that a request had been received from the World Customs Organisation to 
make a statement in their capacity as an observer or ganization. In this contex t, he drew delegations' 
attention to the fact that the WCO had prepared a communication dealing with Article VIII, copies of which had been made available by the WCO for this meeting. 
 
1.34 The representative of the WCO
 introduced his organization’s paper on GATT Article VIII.  As 
already stated at the May meeting, the WCO saw its role as being complementary to the WTO in 
developing instruments to support the WTO rules. All the legal provisions and principles in the WCO instruments were compatible with and complimentar y to the three GATT Articles V, VIII and X. The 
GATT Articles set out the high principles for trade facilitation, while instruments of the WCO, 
including the Revised Kyoto Convention, provided basis, practical guidance and information for the implementation of those principles. The WCO saw the WTO work programme on trade facilitation as beneficial both for the trade and the customs commun ity. Especially with regard to customs, this 
could provide for the political will and commitme nt which was indispensable in pursuing customs 
reform and the simplification of procedures. The WCO knew from past experience that the success of 
customs reform depended on the political will at the highest level and the support from the trade community. These efforts could form a basis fo r good governance. With regard to the trade 
community, the WTO efforts would encourage its support and compliance for efficient and effective customs operations, thus ensuring predictability of the trade system. The modern customs approach 
was based on the partnership with the trade comm unity and other relevant sectors. Moreover, the 
WTO could address trade facilitation issues that we re beyond customs competence. Albeit important, 
customs was only one part of the global trade ch ain, and co-operation with other border agencies, 
especially through joint intervention, was also highly important to secure the smooth flow of goods.  Finally, the WCO expected that the work progr amme would result in appropriate resources being 
realigned for capacity building that could promot e customs reform and modernization, which both 
trade and customs desired. In this connection, the WCO representative reported that a recent WCO 
Council in June had decided that the WCO woul d make a contribution to the WTO strategy for 
capacity building by identifying Members’ needs, while endorsing the complementary nature of the 
WCO work to the WTO activities. 
1.35 Turning to GATT Article VIII, the WCO re presentative remarked th at the Revised Kyoto 
Convention enhanced and supplemen ted the high principles contained in this article on requirements 
for fees and formalities, as far as the customs was concerned. He highlighted some of the guiding 
principles of the simplification of customs proce dures contained in the Revised Kyoto Convention, 
making special reference to the use of risk assessment as a key concept. It was a useful tool to identify 
high-risk consignments and thus enabled customs to deploy an appropriate level of resources to 
greater areas of risk, while allowing little interv ention for the legitimate flow of goods. Another 
important concept based on risk management was the introduction of authorized persons, by which 
customs gave “fast track” procedures to compliant traders. The Revised Kyoto Convention also stipulated numerous standards including those for goods declarations with minimum data 
requirements, simplified release, post- clearance audit and application of information technology. 
1.36 For more detailed practice, other WC O instruments and initiatives supplemented the 
provisions set out in the Revised Kyoto Convention. The Immediate Release Guidelines developed a 
minimum set of data for each cat egory of goods to be submitted to  customs for requiring immediate 
release.  The WCO initiative on a Customs Data M odel would establish a standardized and simplified 
data set for electronic transmission of custom s declarations and supporting documents. The WCO 
Time Release Guideline was a useful performance measurement tool to identify problems and assess 
improvement in customs procedures.  Article VIII was particularly relevant with respect to the 
growing need to safeguard security of national bord ers. In this context, the WCO Council had recently 
adopted a resolution on security and facilitation in the international trade supply chain, mindful of the 
need to reconcile the necessary facilitation of le gitimate trade with the need to increase the  G/C/M/64 
 Page 15 
 
 
 effectiveness of border control. He encouraged dele gations to examine carefully the contents of the 
WCO paper as it not only gave technical details, but  also outlined the linkages and the complimentary 
nature of the various WCO instruments and initia tives with GATT Article VIII. He concluded by 
offering additional information if requested.    
 
1.37 The Chairman  remarked that the WCO paper seemed to touch upon a number of issues of 
relevance for Members' deliberations on GATT Articl e VIII, and suggested that  it be distributed as a 
CTG document.  1.38 It was so agreed
. 
 
1.39 The Chairman  suggested that, in order to have a mo re focussed discussion, delegations would 
first focus in their interventions on GATT Article VIII. After that, he would open the floor for interventions on Article  V and Article X. 
 
1.40 The representative of Colombia
 thanked the Secretariat for the document submitted on Article 
VIII and as well as all parties who had subm itted proposals, including the World Customs 
Organisation. The note prepared by the Secretar iat enabled the Colombian delegation to see the 
relevant aspects of the Article currently being discussed, which should be clarified and improved in 
order to facilitate trade exchange between our countries, and more pa rticularly, to guarantee that what 
had been established in paragraphs  b and c did not remain a dead letter. The various contributions 
submitted for the meeting set out general principl es, common areas with other WTO agreements and 
specific provisions on which Members should work in order to give better guidance to customs 
administrations regarding procedures and formaliti es, with an aim of facilitating trade. Trade 
facilitation measures called for simplifying, harmonisi ng and standardising customs procedures. From 
that point of view, Colombia considered it ad visable to analyse the possibility of adopting 
international standards, such as those provided fo r in the Kyoto Convention, which should guarantee 
simplification and predictability as well as transp arency and support customs administrations and 
commercial operators of developing countries and the least-developed countries.   1.41 Colombia also wished to suggest that an  inventory of non-tariff measures should be made, 
starting from information given by capitals on the obstacles encountered by exporters and importers 
affecting the productivity and co mpetitivity of goods and services. Such an inventory could be 
accompanied by a glossary of terms which could help  Members to reach an interpretation of Article 
VIII terms such as services, severe sanctions, approxi mate cost of services, or sanction to prevent 
errors or omissions. Colombia wished to take th is opportunity to re-emphasise the importance that 
should be given to technical assistance in this  process. Any measure proposed with the view to 
simplify, harmonize, or standardize customs procedures as well as measures to systematise transfers, 
electronic transmissions and data transmissions between users would require physical and human 
resources which should be obtained from donor coun tries, amongst them governments of developed 
countries and international organizations which sp ecialized in this subject. For Colombia, GATT 
Article VIII was of great relevance. It was the ar ticle of greatest importance within paragraph 27 of 
the Doha Declaration due to the harmonization a nd standardization of customs procedures, which 
currently gave rise to delays and surcharges in  trade transactions. The Colombian authorities had 
launched an inter-institutional coordi nation process in order to prepare a contribution which Colombia 
hoped to submit very soon.  1.42 The representative of Pakistan
 thanked the Secretariat for coming up with a comprehensive 
compilation which was very helpful for all Members.  He also thanked Members for their submissions. 
Pakistan had not yet had the time to study those papers which had only been submitted at the 
beginning of the present meeting, but it would come back to them at a later stage. Turning to the 
submission by the EC, he noted that it was comprehe nsive and that it had been send to the capital for G/C/M/64 
Page 16  
 
 further study. In his preliminary comments, the re presentative of Pakistan agreed with the EU that 
Article VIII needed to be more operational than aspirational. It was important not to make it 
aspirational for the developing countries.   1.43 While Members agreed that there was a n eed for simplifying border-related documentation 
and increasing compatibility and standardization of data requirements, it was also agreement on the 
need for more border agency coordination. Ideally, a single window approach would also be helpful, 
streamlining special procedures for authorized persons. This was an area which needed to be looked at 
very carefully, as Pakistan was currently doing. Th ere were certain concepts like the provisions for 
collateral and monetary security, developing countries were not re asonably aware of, which was why 
they required further studying in more detail. All of these issues would require a considerable amount 
of institutional and technical capacity, which the developing countries, especially Pakistan, would 
lack. Pakistan would like to hear more from Member s, especially developing countries, about their 
national experiences and about how their natio nal governments had identified their domestic 
compulsions in terms of providing trade facilitation measures. Pakistan thanked the Korean delegation 
for presenting its paper and also for giving the o pportunity of studying their national experiences on 
trade facilitation. Pakistan was in the process of iden tifying its specific areas of interest and would get 
back on that to Members as soon as possible. 
 
1.44 The representative of Thailand
 thanked all Members who had submitted proposals on Article 
VIII of the GATT 1994 regarding fees and formaliti es connected with importation and exportation, 
which contributed to Members' discussion of this Arti cle. It was clear in Thailand's interpretation that 
Article VIII aimed at facilitating international tr ade between and among Members and that it was an 
important tool to eliminate trade distortions. As  suggested in the EC paper regarding specific 
provisions on fees and charges, Thailand agreed that fees and charges should be limited to the 
approximate cost of services rendered and should not  be calculated on an ad valorem basis. Thailand 
was also of the view that Members should officially  notify the fees and charges currently collected by 
them for the purpose of transparency. Thailand appr eciated a summary and comparison of those fees 
and charges item by item, which would be of great interest and benefit to all Members for their 
analytical in-depth study, if they so wished.  Regarding provisions on data and document requirements and procedures, Thailand could suppor t the concept of a single window as long as its 
application and implementation did not impose t oo many burdens and commitments on developing 
countries. Developed countries should provide necess ary technical assistance and capacity building to 
the developing countries and LDCs according to thei r needs and priorities. In that light, Thailand was 
ready to consider the idea on technical assistance and capacity building measures described on page 9 of the EC paper. Yet, one needed to make sure th at an international mechanism as such, if set up in 
the future, would keep the financial implications  to the WTO to the minimum. However, Thailand 
would like to seek clarification from the EC on its suggestion to adopt a uniform domestic customs 
code or similar legislation. It would like to know what modalities or components were to be 
incorporated in such an uniform customs code or legislation the EC had in mind.   1.45 As regards customs and re lated import and expor t procedures, it was clear that customs 
formalities and procedures should facilitate the clearance and release of goods, both for importation 
and exportation. The procedures and formalities s hould be efficient, simplified, rapid, non-
discriminated and standardised. Thailand warmly welcomed the proposal under item D on page 6, 
with the understanding that such procedures were  governed by the principle of reciprocity as 
recognised by the Marrakesh Agreement Establishi ng the WTO, failing which the implementation of 
Article VIII would come to no avail at all.  Thaila nd also faced problems with and difficulties in every 
export shipment of chicken and fishery products to the EC. It was evident that every consignment was 
stopped and thoroughly checked by hi-tech examination equipment. Unfortunately, the EC had only limited equipment available and used it only at certain ports. Not only export shipments from Thailand, but also from Vietnam and China were delayed for customs clearance for periods ranging 
from one and a half to two months due to the unr easonably strict and non-standardised EC import  G/C/M/64 
 Page 17 
 
 
 procedures and formalities, not to mention due to discrimination. This important example 
demonstrated a serious problem that every Member of the WTO, not only developing countries and LDCs, but also developed countries like EC, should be aware of in order to ensure that related import 
and export procedures would facilitate legitimate inte rnational trade. Such delayed customs clearance 
would impose financial burdens on exporters, which was not in line with the spirit of Article VIII. 
Customs procedures should be applied across the board on a non-discriminatory manner. Thailand 
would like to know when the EC would alleviate th is problem when such a conduct was expected in 
the EC's paper.  1.46 Thailand was of the view that new obligations  should not place many burdens on developing 
Members. As regards special and differential treatme nt, Thailand would like to thank the EU for this 
initiative. Special and differential treatment was ve ry important, not only for LDCs but also for 
developing countries, to ensure that they c ould effectively, but comfortably implement any 
international commitment and obligation. Techni cal assistance and capacity building measures 
should, in this respect, cover programmes relati ng to the improvement of port and communication 
infrastructure, cargo logistics or services to exporters. 
 1.47 The representative of Singapore
 welcomed the contributions fro m the EC, Hong Kong China, 
Japan, Korea, US, Canada, the WCO as well as from th e Secretariat. No-one denied the benefits of 
trade facilitation, which was why Singapore would not  go into the arguments for the win-win situation 
of trade facilitation or the benefits of the various  proposals. Singapore agreed with the submissions 
that GATT Article VIII was the core article of trad e facilitation, but this was not to diminish the 
importance of the other GATT Articles related to tr ade facilitation. Singapore agreed that governing 
principles such as certainty, predicta bility, the necessity test of not being more trade restrictive than 
necessary, expeditiousness, and the use of international standards c ould and actually would apply to 
the three GATT Articles of special concern for Members' work on tr ade facilitation. Singapore shared 
the view that the scope of GA TT Article VIII encompasses all bodies involved in consultation and 
exportation, and not just customs. This was implic it within GATT Article VIII itself. There were also 
other WTO Agreements which covered aspects of tr ade facilitation, such as the agreements on Import 
Licencing, Pre-shipment Inspection, TBT and SPS,  which Singapore saw as complementary to the 
CTG's work programme on trade facilitation.   
1.48 Looking at all the papers, Singapore had not ed that there was a c onvergence of approaches 
and suggestions. Hong Kong China's proposal to in ject certain basic GATT/WTO principles into 
Article VIII's provisions was of particular interest  to Singapore. She noted that this was also the 
general approach advocated in the EC paper. Her delegati on considered the injection of certain basic 
principles into Article VIII to be a good building block approach to carry out the Doha mandate of 
clarifying and improving relevant aspects of GATT Article VIII. Specifically, Singapore agreed that 
GATT Article VIII:1 c would be improved by re quiring customs formalities and documentation 
requirements to be not more trade restrictive and administratively burdensome  than necessary to fulfil 
a legitimate objective. Such an  necessity test would check against protectionism and non-trade 
barriers. Singapore agreed that there probably was a need to discuss and elaborate on what constituted 
a legitimate objective.  
 
1.49 Turning to the proposal to use international standards, forms and data sets, the representative 
of Singapore noted that this would greatly facilita te the smooth and efficient flow of trade across 
borders. In this respect, she noted that Singapor e felt that Members could draw upon work done in 
other fora, where standardised data sets of form ats had been developed, which met government and 
trade requirements to release and move goods across borders. She noted that, as pointed out in the 
Canadian submission, the increased  compatibility and standardisation of data sets would lead towards 
modernisation. The increased use of technology su ch as electronic data interchange would process 
documentation more efficiently. The use of modern technology as well as simplification and standardisation would also reduce the incidence of  errors, while at the same time lowering business G/C/M/64 
Page 18  
 
 and administrative costs. As regards standardisati on and minimisation of data sets, Singapore agreed 
with the EC's point made on page 6 of their paper,  that this should not be a prescriptive approach. Her 
delegation did not think that there was any disag reement that cumbersome, laborious and repetitive 
paperwork for various controlling agencies increase d administrative and business costs to nobody's 
benefit. Having a streamlined, single window, one time submission approach for import and export 
formalities and requirements would therefore complement the foregoing principle of having 
standardised and simplified data set s. Like others, Singapore recogni sed that some countries might not 
be able to implement a single window approach immediately and that those countries would need 
progressive steps to achieve this standard.   
1.50 As regards documentation, Singapore found the query raised by the US in relation to Article 
VIII:2 worthy of further discussion. It would be us eful to further debate whether Article VIII:1 c 
could be improved by specifying what certificates of origin could be said to be strictly indispensable. 
Singapore also supported Hong Kong China's proposal to  inject the general principle of neutrality into 
GATT Article VIII:1 c. In Singapore's view, the administration of customs formalities and 
documentation requirements should be done in a fa ir and equitable manne r and not be applied 
discriminatorily by distinguishing between like products. This principle was not alien, but, as highlighted by Hong Kong China and the EC, al ready reflected in the WTO Agreements on Import 
Licencing and Preshipment Inspection as well as in the language of GATT Article X: 3 a itself. It was also a concept embodied in the APEC principles on  trade facilitation. Finally, the representative of 
Singapore remarked that Singapore also agreed with  Hong Kong China that injecting the concept of 
review would go hand in hand with the least trade re strictiveness principle. Everybody knew that the 
trading environment did not remain static and that  reviews were commonsensical means to update and 
discharge antiquated or no longer necessary measures. This was also a principle highlighted in the EC paper with respect to their specific proposals on data  requirements, calling for their simplification and 
update.  
 
1.51 The representative of Australia
 thanked the Secretariat for its  background paper and the EC, 
Canada, Japan, US, Hong Kong China and Korea as we ll as the WCO for their submissions. They all 
raised many important issues, which warranted much more detailed reflection, not just in the current 
meeting, but also in the weeks and months ah ead. In studying these documents, his delegation had 
noted that Article VIII 1 c had attracted considerab le attention. It was the article dealing with 
minimising the complexity of import and expor t formalities and documentation requirements. 
Australia agreed that this was a very important  area which provided productive avenues for improving 
trade facilitation in general and GATT Article VIII in pa rticular. By taking just some of the examples 
of such avenues mentioned in Members' submissions , he referred to the adop tion of internationally 
accepted standards and instruments, the introd uction of a necessity test for formality and 
documentation requirements, greater use of risk  assessment, cooperation amongst border agencies 
including moves to a single window, the opportunity for consultation with the trading community and the adoption of advanced control techniques prom oting automation of official border procedures, 
noting that these measures involved many national agencies and not just customs.   1.52 The Australian representative also mentione d the submission of the WCO and its description 
of the relevant parts of the Kyoto Convention and the work of the WCO on common data sets as very 
important issues. All these things were tools whic h closely related to the earlier mentioned avenues 
for improvement. In the further consideration of Artic le VIII 1 c, Australia found it useful to further 
explore possible ways to use the principles of these instruments to further work in the WTO. Australia 
particularly looked at the chapters outlined in th e WCO's submission, such as chapter 3 concerning 
clearance and customs formalities, and chapter 5 on financial security, chapter 6 on risk management 
and chapter 7 on information technology. Finally, he observed that all the submissions addressed the 
issue of technical assistance and capacity buildin g. Australia recognised the challenges for many 
countries to make the required changes and strongl y supported the need to develop capacity building 
programmes. This would need to be done in an integrated way, taking account of the range of  G/C/M/64 
 Page 19 
 
 
 international organisations involve d in capacity building assistance. Such assistance would need to be 
targeted very tightly on the implementation of the specific trade facilitation measures concerned. The 
issue of technical assistance deserved much fu rther discussion. Australia was looking forward to 
exchanging views on this issue under agenda items 2 and 3.  
1.53 The representative of Brazil
 expressed his gratitude for the Secretariat background paper, 
which, as in the case of Members’ discussions on Article X, had shown to be a very valuable instrument for their work. He also thanked the WC O for the statement and for their submission, as 
well as all delegations which had circulated specifi c submissions for the current meeting. On the 
whole, Brazil saw these submissions as containing so me constructive suggestions, although at times 
overly ambitious. They did constitute however a usef ul basis on which to undertake further work in 
Members’ discussions during the present phase of their work. Unfortunately, the timing of these 
submissions did not allow Brazil to make any detailed comments, as they required detailed 
examination by the Brazilian authorities. What he could say on a preliminary basis was that Brazil considered the approach taken by the US to be par ticularly constructive. Trying to frame the issue by 
raising the questions that needed to be asked in an  attempt to identify specific gaps in Article VIII and 
exploring possible solutions, were very positive ways to move forward.   1.54 He noted that there was a specific questi on referring to paragraph 2 of Article VIII on the 
question of rules of origin. As already noted in th e previous May meeting, the exercise of concluding 
the harmonization work programme on non-preferentia l rules of origin was long over due and an 
indispensable step towards moving forward in trad e facilitation, particularly as the Agreement on 
Rules of Origin itself recognised it had this character. Brazil was of the view that it might be difficult 
to define when rules of origin were strictly in dispensable, if Members could not even conclude an 
agreement on how rules of origin for non-preferential trade should be.  
1.55 Turning to the EC paper, which had been av ailable a bit earlier, he noted that he had some 
very basic preliminary reactions, even though he had not yet heard from the Federal Revenue 
Secretariat under whose jurisdiction customs fell, and whose input was of great importance. This 
paper was more a proposal-driven type of submi ssion compared to the US one. It began with a 
diagnosis of perceived shortcomings in the Artic le in question and outlined some very specific 
suggestions the Communities felt might help overc oming them. In examining these proposals, Brazil 
classified them into three broad categories. The first set of proposals went in the direction of 
reaffirming some core principles already embodied in GATT. Substantively, Brazil did not see any a priori difficulties with them, although his delegati on was giving detailed c onsideration to both the 
implications of each proposal and the value-added of  a simple reiteration of principles. Others sought 
to give more precise guidelines to the terms of Artic le VIII, particularly regarding fees and charges. 
Finally, there was a set of proposals which, on firs t reading, seemed to have an unfavourable cost-
benefit ratio. Brazil’s initial reaction was that an excessive amount of disciplines was being proposed 
for an issue which might not provide correspondingly concrete benefits to tr ade flows. Brazil hoped to 
come back to this issue in more detail at a la ter stage, following the careful examination of the 
proposals. As a last point, he raised one question relating to Colombia’s intervention. If it was a 
proposal to have an inventory on non-tariff measure s in general, it seemed to go beyond the mandate 
of the CTG and might fall under the mandate of  the Negotiating Group on Market Access for non-
agricultural products. He would appreciate clarification on the exact scope of the proposal.  
 
1.56 The representative of Colombia
 clarified that her delegation had merely wanted to note that 
Article VIII was a matter of drawing up a catalogue of measures concerning barriers faced by 
exporters. At the same time, as re gards the exchange of goods, if it was under Article VIII and not in 
general together with all the other measures whic h might become barriers to trade, one would go 
beyond the competence of the work programme mandated in paragraph 27 of the Doha Declaration. 
In order to shed some light on this issue, it was important to know exactly where the greatest 
difficulties were as regards the import of goods. G/C/M/64 
Page 20  
 
  
1.57 The representative of the Czech Republic
 thanked the Secretariat for preparing a very useful 
and helpful document outlining GATT Article V III. The Czech Republic also welcomed the 
submissions by the EU, Canada, Hong Kong Chin a, US, Japan, Korea and the WCO. The Czech 
Republic belonged to those countries whose economy very much depended on the results of foreign 
trade. This was why his delegation, while providi ng transparent and predictable customs procedures, 
including fees and formalities to its trading partne rs, was strongly interested in achieving modern and 
simplified procedures that would reduce the existin g complexity. The Czech Republic believed that 
the experience of the WCO would be useful  for Members' work. His delegation was in favour of a 
broader coverage which would in clude formalities imposed by other public agencies. Such an 
approach would benefit all Members. The question was not only to simplify, but also a question of 
what should be simplified, what of the request ed information concerning importation/exportation 
might be an unnecessary duplication. A criterion for such a determination might be whether the requested information requested w as processed or put on file without further application. In this 
respect, the Czech Republic supported further work on clarification of or reference to existing 
definitions of a non-discriminatory measure, of how to  interpret transparency and predictability, and 
of what was a legitimate obstacle. As regards fe es and charges, the Czech Republic supported the 
reduction of their number and diversity, as well as the strengthening of transparency and predictability 
in this field. As a first step, the Czech authorities were considering to publish a list of applied fees and 
charges related to foreign trade on the internet , and to update this information periodically. 
 
1.58 The representative of Uruguay
 thanked the Secretariat for a very  useful paper on Article VIII. 
He also thanked the WCO representative and other de legations for their contributions. Uruguay had a 
few preliminary questions. In the light of the fact that one was speaking of trade facilitation in general, it would greatly facilitate work if Members were able to get the proposals sometime prior to 
the meetings so that delegates could send them to their capitals and receive more substantial 
comments before the meeting took place. If dele gations would find these documents only on the day 
of the meeting, all they could do was making pre liminary comments, or raise preliminary questions. 
This facilitation would greatly help  Members' work on facilitation. 
 1.59 Turning to the submission by the EC, the re presentative of Uruguay noted that it underscored 
special and differential treatment as well as t echnical assistance for developing countries. 
Furthermore, it contained a chapter on developmen t, which was a very important message.  When 
getting down to the specifics, one would find that the chapter underlined three basic parts. First, 
reference was made to a differentiation of comm itments, but only in favo ur of least developed 
countries. As regards developing countries, there wa s just a reference to transition periods. A third 
part mentioned technical assistance and capacity bu ilding measures, but only in general terms. He 
therefore wanted to know from the European Comm unities whether, when speaking of the importance 
of special and differential treatment and technical assistance, the EC  made a difference between the 
various types of developing countries, other than  the reference to the least developed ones.  
 1.60 As regards the communication from the US, he  remarked that its questions for discussion on 
the second page were very interesting, as an atte mpt was made to focus the discussion on various 
questions or gaps which might be fo und in Article VIII. This was a very useful way of discussing this 
issue. Under the fourth bullet, formalities and requi rements, reference was ma de to express shipments 
of goods. He wondered whether that meant express delivery, as express delivery was related to goods, 
but also to services. If one went to the existing classification of services, one saw that W120 did not include this category of express delivery services. There was a negotiating proposal to create a 
possible category of express delivery services, but  currently, there was no such category in 
classification. W120 just included postal services and courier services. The question was therefore how it was intended to carry forth the subject of expr ess delivery in view of the fact that it related to 
both goods and services. Uruguay would appreciate info rmation on this matter. Finally, as regards the 
idea presented by Colombia of having an inventory of non-tariff measures, he remarked that Uruguay  G/C/M/64 
 Page 21 
 
 
 shared the view expressed by Brazil that this had already been included in paragraph 16 of the Doha 
Declaration in its section on Market Access. Greater clarification on this subject would be important and greatly appreciated.   1.61 The representative of Mexico
 joined delegations in thanking  the Secretariat, the WCO and 
Members for their inputs. For reasons already mentioned by Brazil and Uruguay, his comments would 
also be only preliminary ones. Mexico agreed th at Article VIII was the heart of the discussion on 
trade facilitation and it also shared the view that everything which had already been carried out in this context at the international leve l should be taken into account, such as, for instance, the Kyoto 
Convention. This did not mean that WTO Members should join those mechanisms. Principles such as 
transparency, simplification and non-discrimination were now in the spirit of Article VIII. Mexico 
believed that Members' various prop osals were necessary to make this  Article more operational. Such 
proposals were valuable and welcome to  start th e discussion. Mexico had no doubt that this would 
benefit operators. There were some practical ideas in the documents submitted by Members to make 
Article VIII more operational, such as the gran ting of benefits to certain enterprises and the 
establishment of financial guarantees. Nonetheless, one should not lose sight of the fact that any 
discipline Members wished to consider in more de tail should pursue legitimate objectives and should 
not imply that customs lose their functions of protecting basic principles such as safety and public health,  which were very important to the consumer. 
 
1.62 The representative of Hungary
 thanked the Secretariat for its very useful background note 
which comprehensively described the provisions of  GATT Article VIII and their application in GATT 
and WTO jurisprudence. She also thanked the EC , Hong Kong China, Canada, Japan, US and Korea 
for tabling valuable proposals, as well as the WC O for its presentation and submission. Hungary 
considered Article VIII to be the core provision for trade facilitation. The article addressed fees and 
formalities connected with importati on and exportation, including specifi c legal obligations applicable 
to fees and charges. But there was scope to make Article VIII more operational and to improve its 
implementation by clarifying and improving its provis ions and by reducing the complexity of import 
and export procedures and formalities as well as of fees and charges. Hungary was convinced that 
enhanced and improved trade facilitation disciplin es were the guarantee of avoiding unnecessary 
obstacles when applying legitimate measures. Due to the late distribution of some of the proposals, 
Hungary could only study the EU submission in a more detailed manner. Therefore, Hungary's 
preliminary comments mainly related to this paper. The issues raised in the EU submission seemed to 
be relevant and Hungary generally  supported the views and proposals expressed therein. It agreed 
with the view that the scope of any WTO co mmitment applied beyond customs to other agency 
interventions. One could not question the principl e of non-discrimination when applying export and 
import procedures and formalities. The need for tr ansparency, predictability, harmonization, and 
standardisation was an important issue when prep aring the negotiations on the GATT Articles V, VIII 
and X. It was important to avoid the trade distor ting application of measur es taken under the umbrella 
of trade facilitation.  1.63 Concerning the specific provisions on fees a nd charges and data and document requirements 
and procedures, as well as regards customs and re lated import and export pr ocedures, the EC paper 
contained very relevant proposals to simplify the di fferent procedures. Further detailed consideration 
was needed on the elements of the EC proposal, taki ng into account the common elements of the other 
papers. It seemed to Hungary that there were ma ny common ideas in the different proposals. Hungary 
agreed with the EC that, on a longer term basis, developing countries would also be beneficiaries of 
simplified procedures, and that the maintenance of a simple, transparent trading environment was of 
paramount importance for them. The simplification of  measures could make an important contribution 
to realising development objectives. However, H ungary fully understood the concerns of certain 
developing countries as regards possible additional bur dens for their administration, which was why 
the inclusion of a range of special and differential treatment provisions in any future WTO provisions 
was very important. The EC submission contained so me very interesting suggestions in this respect, G/C/M/64 
Page 22  
 
 like a differentiations of commitments, transition periods, technical assistance and capacity building 
measures, which required further discussions. H ungary was ready to further discuss all the 
submissions in a more focussed and constructive manner.  
 
1.64 The representative of India
 thanked the Secretariat for very  informative background papers on 
the scope and application of GATT Article VIII as we ll as on the trade facilitation needs and priorities 
of Members. India would also like to thank the EC  for their paper on GATT Article VIII. While India 
might have certain reservations on the suggestions ma de therein, this did not detract from the paper's 
value by advancing the study process on trade fac ilitation as mandated in paragraph 27 of the Doha 
Ministerial Declaration. The Indian delegation agr eed with the EC that Ar ticle VIII was the core 
GATT article on trade facilitation. However, India ha d some concerns as regards the suggestions to 
convert the recommendatory provisions of GATT Article VIII (1) b and c into mandatory ones. 
Contrary to the view expressed by EC that th e absence of any operational WTO requirements to 
simplify or reduce fees and formalities remained a significant weakness in the WTO rule book, it was 
India's understanding that the recommendatory nature  of the Article had served its purpose equally 
well. The earlier study process on trade facilitation,  which now formed one of the basis of the 
Secretariat paper G/C/W/393, amply revealed that Members had autonomously taken steps to simplify 
and modernise their border clearance procedures. There was no denying of the fact that archaic and cumbersome procedures were obstacles to trade. Li kewise, there was no doubt that faster clearance of 
cargo and fewer procedures would reduce the tran saction cost of exports and imports, remove 
uncertainties in trade and would lead to an increas e in trade and investment. Therefore, this was a 
win-win situation for all countries,  both developed and developing.  
 1.65 Recognising this fact, India had autonomous ly taken a number of steps to simplify and 
modernise customs clearance procedures. The introdu ction of EDI had completely revolutionised the 
functioning of customs in India. The EDI system featured on-line assessment, duty payment and 
examination of goods. Under EDI, all queries raised  by customs officers were processed on-line, 
thereby capturing the complete record of the lif e cycle of an import/export document. EDI had 
considerably reduced human interface with the trad e and the processing time of goods declaration had 
come down drastically. An EDI gateway project was under implementation which would link customs 
with all its  community partners such as banks, licencing authorities, export promotion agencies, 
freight forwarders, customs brokers and the di rectory general of commercial intelligence and 
statistics. For faster clearances, two working shifts  had been introduced in seven air cargo complexes 
and for all working days during 8:00 a.m. to 10:00 p.m. One working shift had been introduced on holidays from 10:00 a.m. to 5:00 p.m. This apart, cu stoms facilities could be availed of at ports, air 
cargo complexes, inland container depots and contai ner freight stations etc. on payment of overtime 
fees when work was performed after office hours. As a measure of trade facilitation and to reduce 
transaction costs, the government had considerably reduced the scale of examination of export goods 
and had also simplified the procedures for examinati on of such cargo. The transshipment procedures 
had been considerably simplified by introducing a single window system for issuing transshipment 
permits. A large number of Inland Container Depot s (ICDs) and Container Freight Stations (CFSs) 
had been set up in the Indian hinterland to enable exporters and impor ters to export or  import goods at 
their doorstep. To encourage Indian ports to devel op as consolidation hub ports and to reduce freight 
charges for exporters and importers, the consolidation of LCL, the less than container load cargo, had 
been permitted at Indian ports. The facility allowed shipping lines to take the containers stuffed with 
LCL export cargo, irrespective of destination from IC D/CFS to a gateway port, where these could be 
opened and reworked with cargoes received from di fferent ICDs and CFSs. After such reworking, 
cargoes could be stuffed in containers destination- wise. A similar facility had also been provided for 
consolidation of LCL imported cargo. The procedur e for movement of goods in coastal vessels had 
been greatly simplified and an authority for advance ruling had been set up to give binding rulings on 
classifications and valuation matters raised by fo reign investors. A project team had also been 
established to work exclusively on customs reen gineering. The important features of customs 
reengineering included the introduction of post a udit, single window submission of information and  G/C/M/64 
 Page 23 
 
 
 risk assessment analysis, apart from reliance on syst ems assessment and reduced intervention by the 
customs. Reengineering would be supported by increased automation including an EC/EDI gateway 
infrastructure.   1.66 The Indian representative noted that she had dealt at some length with some of the trade 
facilitation measures taken by India to highlight two issues: First, the existing Article VIII had itself 
been a guiding force for countries to modernise and simplify their export/import procedures, which 
was a trade necessity in the present competitive environm ent. In view of this, there did not appear to 
be any necessity to make any major changes to this  article so as to create binding obligations. While 
India was moving towards simplified and modernised  customs procedures, India's focus and pace was 
dependent upon its perceived needs a nd available resources.  It was interesting to see the diversity and 
broad brush of the trade facilitation measures th at countries had narrated during the earlier study 
process, and which had been summarised in the S ecretariat paper G/C/W/393. This underlined the 
different meaning and emphasis given to trade fa cilitation by different countries, which were at 
various stages of development.  The second point India wished to make followed from this. Members 
would appreciate that the focus of trade facilita tion would be different for different countries, 
therefore India felt that a general wording of the existing GATT Article VIII would be far more 
appropriate than the proposal made by EC in sec tions (c) and (d) of their paper 394 enumerating 
certain specific elements of commitments to be taken under GATT Article VIII.   
 1.67 India would also like to make some observations on some of the points raised by the EC in 
their paper. On transparency an d predictability issues, the EC had referred to its paper on GATT 
Article X. India had concerns on certain proposed tr ansparency measures, some of which the Indian 
delegate would highlight. India was not very sure how the cause of transparency would be served by 
the EC suggestion to make available to the public information on customs and other government agencies management plans relating to implemen tation of WTO commitments, or on their reforms 
and modernisation programmes, including, for exam ple, targets, deadlines and benchmarks set for 
such programmes. India felt that these were mostly  policy issues and involved parliamentary approval 
as well as financial implications. It was therefore not therefore always possible to share the plans of the government with the public well in advance, as these could undergo changes in the course of their 
passage through parliament. On the issue of advance ru ling, India had in the last meeting stated that 
this would entail consideration of specific transa ctions, whereas Article X covered rules of general 
application and not specific transactions. India had also certain reservations regarding the suggestion 
to make new or revised laws, or major changes in operating procedures, known to the public in 
advance, particularly where these were in legisla tive form.  Some such changes were part of the 
annual budgetary exercise which could not be made  public before the presentation of the budget to 
parliament.  There were nonetheless mechanisms  of consultation with trade bodies and other 
interested parties before budget formulation. Furthe r, with reference to setting standard time for 
resolution of minor appeals at administrative level,  it was felt that there might be certain difficulties 
associated with distinguishing between minor a nd major appeals. She wondered whether such a 
distinction would be based on the quantum of duty in volved, or on some other criterion. In some cases 
of abuse, even if the duty involved was small, it could be a major issue on account of it being taken as 
a precedent for future imported consignments.  Prese ntly, there was no distinction between minor and 
major appeals and disposal of app eals were dependent on the quantum of the intake of appeals which 
in India was quite high. India was also concerned with the suggestion that there should be provisions 
in certain circumstances to keep  the duty payment in abeyance pe nding the outcome of the appeal. 
The current practice of the importer paying duty under protest as per assessment made and to claim refund in case of receipt of a favourable order from the appellate authority strikes a more appropriate 
balance between facilitation and revenue interests.   
 1.68 Turning to Japan's proposal contained in document 376 regarding formulation and publication 
of administrative guidelines for decision-making by customs authorities, the Indian representative 
noted that under the Indian Customs law, decisions on determination of classification, valuation etc. G/C/M/64 
Page 24  
 
 were in the nature of quasi judici al functions. India was not sure how this could be reconciled with the 
proposal for a uniform administrative guideline of a binding nature. It deserved to be mentioned here that on the basis of classification opinions received from the WCO, executive instructions were issued 
by the government for ensuring uniformity in the asses sment practice in the customs field formations.  
India was also not very sure how Members could gi ve effect to a commitment proposed by the EC in 
paragraph 5 of its paper to avoid unnecessary procedur al barriers. The question was how to define the 
term 'unnecessary'. Countries with different levels of  development might have different perspectives 
about a particular procedure being labelled necessar y or unnecessary. It had been recognised in the 
EC paper that there were various international st andards and instruments which could be used as a 
common basis for measures applied by WTO Member s. The revised Kyoto Convention was one such 
instrument. India was at a loss to understand as to wh at objections Members could have to adopt these 
provisions through the WCO route rather than bringing it to an already over burdened WTO. It was well recognised that the WCO was the expert cu stoms body in this respect. The Revised Kyoto 
Convention incorporated an appropriate balance between customs facilitation and customs control. 
Any attempts to selectively import its provisions into WTO would only lead to a dilution of its 
provisions.  As was highlighted in the last meeting, developing countries like India faced a number of 
challenges which including the need to safeguard customs revenue, reduce ille gal imports and address 
the issues of poor infrastructure and lack of resour ces. Further account needed to be taken of the 
present security scenario. Security concerns vari ed from country to country. The multi-dimensional 
challenge that India was facing in this area would cal led for heightened vigilance at the boarder. India 
had made much progress in computer connectivity, but still much ground was to be covered. India 
was also not sure how it could have a uniform syst em of risk assessment methods when countries had 
substantially different leve ls of tariffs which could  create different categories of challenges for border 
enforcement agencies.    1.69 The Indian representative thanked Canada  for its paper on GATT Article VIII, which 
contained several useful suggestions on how this  article could be clarified and improved. The 
introduction of simplified customs and border-relate d documentation, the single window approach to 
border agency coordination, the release of goods on th e basis of security would help facilitate trade. 
Therefore, these suggestions need  to be examined further. 
 1.70 However, other suggestions such as cust oms clearance of goods at declarants premises, 
submission of goods declaration covering multiple tr ansactions over a certain specified period, self-
assessment and accounting of duty and taxes by au thorised persons were good concepts, but perhaps 
difficult to administer in practice. This was not to sound a note of dissonance with these suggestions 
per se , but only to highlight the difficulties that one may encounter in administering them. The Indian 
experience showed that in situations where tari ffs were high and accounting experience and access to 
electronic information was limited, shifting to a risk-based assessment system would encourage 
under-invoicing and other customs frauds. Similarly, in  a country of the continental size of India, 
clearance of goods at declarants premises w ould pose administrative problems. By way of an 
example, the Indian representative remarked that a mis-declaration of  a customs classification such as 
a mis-declaration of high value berry grade of c opper scrap as candy grade, would be difficult to 
detect once the goods had been taken into use in the production process. The submission of a goods 
declaration for multiple transactions was based on the assumption that the duty rates would remain 
static over a certain specified period.  This may not be so.  Issues of refund, short collection of duty 
and interests payments would need to be addres sed satisfactorily. One would encounter the same 
problems in allowing a self-assessment facility to author ised persons. In view of this, while India fully 
endorsed the benefits of trade facilitation, whic h India was vigorously pursuing autonomously, India 
felt that it should be continued in the same au tonomous manner. Targeted technical assistance and 
capacity building for developing and least develope d countries would be most helpful. Making GATT 
Article VIII mandatory in nature would however substantially alter its  character, for which India was 
not prepared at this point in time. 
  G/C/M/64 
 Page 25 
 
 
 1.71 The representative of New Zealand  thanked all delegations who had made submissions for the 
current discussions, as a means to progress the exer cise of reviewing, and, where appropriate, 
clarifying and improving relevant GATT provisions on trade facilitation. New Zealand welcomed the 
indications received from a large number of Members,  that they were willing to seriously analyse the 
proposals presented in this respect. New Zealand also thanked the Secretariat for another very useful 
paper as well as the WCO for their contribution. As  already indicated at the last meeting, New 
Zealand supported the WCO's self-characterisation as having a complimentary role to that of the 
WTO. The WCO had pointed out the value of such  a complimentary relationship, with the WTO 
developing high principles, further formalities a nd procedures and the WCO developing instruments 
in their support. The WCO had also highlighted the interaction that WTO provisions could play with 
the various WCO instruments, which could provide  a means to help implement these principles, 
including through the provision of technical assistance.   1.72 New Zealand had found several common appr oaches in the proposals submitted on Article  
VIII. As regards procedure, there had however been  different approaches, with the EC putting forward 
a number of very detailed proposals, while the US ha d chosen to raise a number of very enlightening 
questions, and Hong Kong China had highlighted some key WTO principles for injection in the context of trade facilitation provisions. New Zealand thought that all of those approaches were very 
complementary. As a package, they would help furthering Members' unders tanding of the relevant 
issues, particularly in terms of identifying current gaps and ways to overcome them.  
 
1.73 Turning to the EC paper, the representa tive of New Zealand noted that her delegation 
supported many of the ideas contained therein. Ne w Zealand was in the position to do so as it had 
been thinking about these issues and conducting cu stoms modernisation and reform for  about 15 
years. New Zealand recognized that not all Members were  in that situation. In this context, she noted 
that the US approach of asking questions had been very useful in trying to consider at a multilateral 
level Members' objectives in terms of reviewing,  clarifying and improving current provisions. There 
were a number of common elements in the presented proposals, similar to Members' discussions on 
Article X. A large number of delegations seemed to focus on core WTO principl es, such as least-trade 
restrictiveness, proportionality, use of internationa l standards and transparency, which were already 
widely accepted in the WTO as very workable and operational principles. New Zealand very much 
supported the further development of these principles in a more specific context of trade facilitation, 
as a means to make the existing GATT Articles rele vant to trade facilitation more effective and 
operational.  1.74 Commenting on Brazil's intervention, she noted  that the Brazilian delegate had made the 
worthwhile point to say that some of the presen ted proposals and ideas might have an unfavourable 
cost-benefit result in that their gains not necessarily  outweighed the pains of the required obligation. 
This was something that had to be kept in mi nd when analysing the ideas for improvement of the 
relevant Articles. The results of such a cost-benefit analysis might vary from country to country according to the different development levels among st the Membership. This should be kept in mind 
when conducting the needs and priorities identificati on under agenda item 2. This would also further 
influence Members' approach to the wider discussi on on possible special and differential treatment in 
the context of trade facilitation and technical assist ance. Members had to think of creative ways to 
increase the ratio of gain over pain by looking at m eans to facilitate the implementation of any rules in 
this area. New Zealand was very conscious of the different starting points among WTO Members and 
acceding countries when thinking about S&D treatment. Those different needs needed to be kept in 
the front of Members' thinking about future im plementation timetables of any improvements or new 
rules.   
 1.75 Turning to the comments made by the Indian  delegation, the representative of New Zealand 
expressed her thanks to India for having shared their national experiences about ongoing developments in their customs modernisation and tr ade facilitation efforts. It seemed to New Zealand G/C/M/64 
Page 26  
 
 that India had acknowledged the benefits in trying  to implement procedures beyond those currently 
contained in Article VIII. New Zealand commended I ndia for having done that , which was consistent 
with New Zealand's national experience in that area.  New Zealand would be extremely interested to 
hear about the experiences of other developi ng countries or LDCs in that context.  
 
1.76 The representative of Poland
 welcomed submissions by the EC, Canada, Japan, Korea, USA, 
Hong Kong China and the WCO. Poland also found the Secretariat background note very useful. All 
submissions were being examined w ith attention in his capital. At this stage, Poland would limit itself 
to expressing a few comments on the EC paper. In general, Poland shared the premises on which this 
paper was based. As experience had demonstrated, the existing WTO instruments were currently not 
sufficient to deal with the speci fic type of administrative obstacles, which were not part of 
governments' trade policies, but which resulted from various, often substantia lly deferring, regulatory 
and administrative practices at the border or fro m deficiencies in infrastructures or technical 
application. In this context, an improvement of  GATT Article VIII was very desirable. Poland found 
many concrete EC proposals to be very interesting. By way of some  preliminary comments, the Polish 
representative noted that it was right to see non-discrimination among the general commitments. At 
the same time, it seemed that the improvement  of Article VIII would in itself facilitate the 
strengthening of the practical application of this principle. Poland also agreed that that principle 
should not interfere with Members' rights to treat co nsignments differently according to objective risk 
assessment. Poland was looking at the improveme nt of Article VIII as a win-win operation. 
Meanwhile, Poland recognised the problems that some Members had with the application of enhanced 
trade facilitation measures. It seemed to Poland th at a rigid and unique S&D approach might not 
necessarily be the best solution. In  the context, Poland found that some of the EC's ideas as regards 
differentiated special and differential treatment were very interesting. 
 
1.77 The representative of the Philippines  thanked the Secretariat for a very useful background 
paper on Article VIII, especially the section on its application in the GATT and WTO jurisprudence. 
The Philippines also thanked all delegations that had ci rculated papers, some in advance, others at the 
meeting itself as well as for the contribution from the WCO. All of the ideas contained in those papers 
would be studied and evaluated in the capital.  The representative noted that in the age of 
globalisation, the Philippines were  already unilaterally implementing trade facilitation measures, not 
because of the WTO, APEC, or ASEAN, but b ecause the Philippines' business community is 
"demanding" it from the Philippine government. 
 1.78 Turning to the EC paper, she remarked th at for a developing country, it was very comforting 
to note that the EC in its presentation admitted that  the proposals contained in  their paper would entail 
considerable changes in EU procedures and might entail considerable costs. The Philippines believed 
that some of the ideas contained in the paper had already been implemented within the Community.  
The Philippine delegation was curious to find out if the EC could share its experience with regards to 
the amount of time and resources spent to implement some of the measures they currently had in place. The Philippines also welcomed the EC recogn ition that measures to deliver technical assistance 
should be an integral part of any WTO exercise a nd that specific mechanisms for future coordination 
of technical assistance needed to be developed.  The Philippines also found the presented concepts on 
special and differential treatment very interesting, a nd were of the view that they merited considerable 
discussion and reflection as part of the agenda.   1.79 Turning to section c on the provisions on da ta and documentary requirements and procedures, 
she noted that the proposal for a uniform, domest ic customs code or similar legislation was very 
ambitious, as WTO Members were at different levels  of economic development.  Equally, on section 
d, on the progressive introduction of simplified a nd standardised import and export procedures based 
on international standards and instruments, the Philippines agreed with India's observation that 
Members should not burden the agenda of the WTO by  bringing in the agenda of other international 
organisations like the WCO. For the Philippines,  the WCO had served it well. The Philippines had  G/C/M/64 
 Page 27 
 
 
 tried to comply with all the measures they had agr eed on in the WCO context to the extent possible. 
On the Canadian paper, she noted that the Philippi nes welcomed the recognition by Canada that the 
ideas for their submission had been drawn fro m a number of WTO agreements, such as the 
Agreements on Rules of Origin and Customs Valua tion. For the Philippines, the completion of the 
harmonization work programme on non-preferential Rul es of Origin was of the utmost importance for 
progress in the trade facilitation agenda. As regard s section b of the Canadian paper, the Philippines 
wanted to find out about Canada's experience wi th regards to the implementation of the single 
window interface as a step towards border agency coordination. Members had heard about this 
suggestion also in their discussions on Article X, wh ich was why it would enlighten delegations to get 
Canada's experience on how they were finally able  to do the single window interface in terms of time 
and resources spent. Concerning item c on streamlined or special procedures, the representative of the 
Philippines remarked that this c oncept had been unilaterally implemented in the Philippines. The 
Philippines had a super green lane procedure in plac e in its Bureau of Customs, where their top 1000 
corporations were treated in a more efficien t manner because they had established a good track 
record. 
 
1.80 Turning to the questions raised in the US pa per, she noted that if one put together all the 
proposals and questions that were being raised, th is would be a way to move forward Members' 
discussion after the discussion of all the articles under the Doha mandate. On the question with regard 
to formalities and requirements, and the last bullet on the use of certificates origin referred to in Hong 
Kong China's paper, she shared Brazil's view th at before one could use these certificates, the 
harmonization work programme for non-preferential ru les of origin should be finished. Turning to 
Korea's paper, the Philippine repr esentative agreed with Korea that  any trade facilitation measures 
should be discussed as to their feasibility. Some of the ideas that had been put forward were very 
ambitious. The big question was how to implement all these ideas in practice. Korea's paper recognised that any modern customs techniques were not easy to implement without a sound IT 
infrastructure. For the Philippines, that  was one of the current deficiencies.  
 1.81 The representative of Lithuania
 thanked Members for their proposals, which he found 
interesting and useful for the work. He also tha nked the WCO for their factual papers which were 
valuable both for the current discussions and furthe r work on the issue. He further thanked the 
previous speakers for expressing their views, clearin g the doubts and raising issues Members' needed 
to think about. During the May meeting, Lit huania had expressed support for discussions on trade 
facilitation as Lithuania was one of the countries dependent on foreign trade and where cross-border 
problems created by some other countries increased every day. Article VIII was probably the core article of trade facilitation, and the principles reflec ted in the proposals were acceptable for Lithuania, 
especially the principles of non-discrimination and predictability in customs procedures. Lithuania 
considered these principles to be essential as regards customs procedures.   
 
1.82 During the May meeting Lithuania had given the example of limitations as regards the 
number of check points using a country's specific criteria. Lithuania also had problems with a few 
countries using country-specific criteria in some customs procedures which were discriminative by 
definition. Problems also arose in respect of di scrimination as regards modes of transport. These 
examples showed the necessity to address these princi ples and to find ways to clarify and perhaps 
amend GATT Article VIII. Predictability aspects were also important for Lithuania, especially in the 
light of other countries' practices. His delegation be lieved that this principle could be ensured by 
further clarification of Article VIII. He encouraged  Members to apply international standards, and to 
enhance the transparency provisions which were di scussed at the May meeting. Lithuania remarked 
that it was also looking for a further progressi ve introduction of international standards and 
instruments and related predictability aspects, as  well as for some other issues like a general 
simplification of customs procedures and a simplified release and clearance of goods, and expressed its support for measures in these areas. The Lithua nian representative noted although some Members 
had been of the view that cross border issues were already covered by international conventions, like G/C/M/64 
Page 28  
 
 the Kyoto Convention, and other sp ecialised customs conventions, it wa s Lithuania's experience in its 
trade relations with some other countries, that it was not enough to have specialised convention alone. 
The main principles and general rules should be regulated in a wider WTO framework, making certain provisions more strict.   
1.83 Lithuania also supported other aspects of th e proposals made regarding customs procedures, 
simplified release and clearance procedures, risk assess ment, coordination of official controls, or the 
reflection of the principle of neutrality as expressed by Hong Kong China. Regarding fees relating to customs procedures, Lithuania would support the view that it was necessary to amend this paragraph.  
Lithuania was of the view that the presented proposals would create a good basis for further 
discussions. They also showed that trade facilitation in the area of customs procedures was generally a 
win-win situation. There were  different views as to how to address this issue, which was why 
Members needed to talk more about that. Lithua nia understood the concerns of some developing 
countries regarding their capacity to implementation so me of the agreed proposals. Lithuania believed 
that this could be solved by technical assistan ce, including assistance in the automation of customs 
and in infrastructure development. Further suppor t could be provided through S&D treatment and 
special implementation mechanisms, as mentioned in  one proposal. Lithuania considered the current 
discussions were useful and saw the perspective of further fruitful work, which would have to address 
the problems and concerns raised.  
 
1.84 The representative of Egypt
 thanked the Secretariat for its useful and informative background 
paper as well as the countries that had submitted propo sals with regard to Article VIII. She further 
extended his thanks to the WCO for its submission. Egypt had not had the chance to analyze all the papers in detail but would like to make some brie f preliminary comments. Her delegation agreed that 
benefits would be achieved from trade facilitati on. The submitted proposals called for applying 
international standards and simplifying documentatio n, risk assessment and other obligations, which 
required structural changes and reforms in the institu tional working of governmental authorities. This 
was not easy for developing countries and created mo re burdens for them. Therefore, Egypt was of 
the view that what was needed to  fulfil the trade facilitation requirements, was adequate and efficient 
technical and financial cooperation rather than furt her obligations that developing countries might 
find difficult to comply with. 
 
1.85 The representative of Indonesia
 expressed his appreciation to the WTO Secretariat for its 
comprehensive background papers. Indonesia also  wished to thank the EC, Canada, Hong Kong 
China, Korea, Japan and the U.S. for submitting very  useful written contributions. He further thanked 
the WCO Secretariat for its presentation. As Indonesi a had received Members' papers quite recently, it 
could only offer some preliminary general comments on some of the issues contained in Article VIII 
without prejudice to its position in the future. The representative reiterated Indonesia's recognition of 
the importance of trade facilitation to increase intern ational trade flows. Indonesia saw many elements 
in members' papers as a good basis for improving trade facilitation, but would find it difficult to 
implement all of them in the context of bindi ng WTO obligations. Indonesia believed that the 
framework of trade facilitation in WTO should refl ect the different levels of development among 
Members. The Indonesian delegation would like to  highlight the importance of setting a balance 
between the taking legitimate regulatory measures an d simplifying procedures with a view to improve 
trade facilitation.   1.86 The representative of Indonesia noted that Article VIII of the GATT was one of the most 
relevant articles related to trade facilitation. It contained a solid commitment for Members to 
implement various obligations established therein. This article comprised a complex set of rules 
where a balance had been developed between those elements which contain specific obligations and 
those, which did not contain specific commitment. The Secretariat paper had explained in paragraph 
3.2 on page 4 that certain subjects covered in Ar ticle VIII were also regulated by the specific 
agreements in the WTO such as the Agreements on  Pre-shipment Inspection, SPS, TBT, Rules of  G/C/M/64 
 Page 29 
 
 
 Origin or Import Licensing. Therefore, Indonesia noted that certain subjects related to this article had 
been clarified previously. However, as Indonesia understood that some Members still wished to further clarify and improve the article by making it more mandatory and operational, which might 
amend the article itself. In this regard, Indonesia would like to study in greater detail the various 
proposals contained in Members' papers. In Indone sia's view, Members should be cautious in their 
efforts to clarify and improve this article. One should first identify the specific problems faced by 
Members in implementing this article. Indonesia c onsidered the approach pursued by the United 
States to raise a series of important questions to be a very good first step to identify the problem. As a the second step, if Members agreed on that by consensus, one could move forward to find solution to the problems.  
 
1.87 One would find different formulations in Ar ticle VIII, reflecting the complex nature of the 
Article VIII's regulations. Members should therefore be careful to see in more depth why Article VIII 
would not be sufficient. In Indonesia's view, stating a recognition to certain asp ects, such as the one  
contained in Article VIII:1 (b) or (c), should al ready provide a solid ground to be followed up by 
concrete steps by each Member. There were Member s who suggested to extend the scope of Article 
VIII beyond customs. In Indonesia's view, the scope of this article should be defined in relation to 
customs related work. Other trade-related subjects had been covered by other articles or agreements in 
the WTO. At the same time, Indon esia agreed that trade facilitation in general involved the work of 
other agencies. On the standards set up by other international organisations in relation with the 
content of Article VIII, Indonesia considered that if other international organisations had set up a 
standard on a certain issue, the standard could be made applicable to their members without 
transposing it to the WTO. By doing so, it would not pose more burdens to the WTO, especially its developing country Members. If one issue could be  settled by other international organisations, it 
would help the WTO to concentrate its work on other trade-related issues.   
1.88 While Indonesia agreed on the importance of  simplifying procedural aspects, it was of the 
view that measures relating to infrastructure, su ch as automation, would create heavy burdens for 
developing countries, given their weaknesses in infra structure, human and institutional development. 
Turning to the issues of non-discrim ination and transparency, he noted that Indonesia was of the view 
that they were already covered by other articl es in GATT (such as Articles I and III of GATT) and 
that they should be applicable to all WTO work s and agreements including Article VIII. It was not 
clear to Indonesia why one would still need to in ject the non-discrimination principle into Article 
VIII. On special and differential treatment and the suggestion by the EC for a waiver or transition 
periods for LDCs, the representative of Indonesia noted that such arrangements should be made 
available to developing countries as well, until they were in a position to take up their obligations.  
There was already wide recognition that developing countries lacked of not only human and 
institutional development, but also infrastructur e. All developing countries needed flexibility to 
implement their obligations. Therefore, Indonesi a believed that Members had to develop a strong 
special and differential mechanism to addr ess the problems faced by developing countries. 
 
1.89 The representative of Malaysia
 thanked the WTO Secretariat for a very useful background 
note as well as all the delegations who had presente d proposals. He further thanked the representative 
of the WCO for his intervention and the paper. As mo st of the papers had only been made available a 
few days ago, Malaysia had to limit its comments some general preliminary remarks. Based on what 
had been said so far, all delegations agreed that trade facilitation was important. In Malaysia’s view it 
was definitely a very important component for a country who relied on trade for its economy growth. To achieve that, one needed to be competitive and part of that competitiveness would consist of better 
trade facilitation allowing for a faster movement  of goods. Based on the discussion over last few 
years, there was this assumption that if one had the new binding rules some Members wanted to create, these rules and especially their binding nature  would automatically lead to an improvement in 
trade facilitation. That was an  issue Members would had to think more about. For the moment, 
Malaysia did not believe in this automatic improvement. He shared India's view that even if the G/C/M/64 
Page 30  
 
 current rules were more than fifty years old, coun tries that made their own movement towards better 
trade facilitation nationally. Malaysia was no exception to that. In this context, Korea had raised an 
important  point in its paper, as what Members woul d want to decide would depend on the question of 
feasibility. Human and financial resources were cr ucial. To have binding rules without having 
adequate resources would be a contradiction, which would not serve Members’ interests, especially 
the ones of those who were not able to implement the required measures.  
 1.90 The US approach was an interesting one, wh ich might be a basis on which to move on. Some 
other approaches were interesting as well. Perhap s one should start by asking whether the current 
situation really required clarification and if th ere was basis for improvement. The very ambitious 
approach by the EC was at the end of the spectrum,  but Malaysia would look into that as well. Like 
Singapore, Malaysia felt that the approach pursued by Hong Kong China could merit further discussion, as injecting various GATT and WTO princi ples into Article VIII could be a possible way 
out. In Malaysia’s view, legitimate policy objec tives of Members should be preserved. Whenever 
taking actions, national policy objectiv es should never be questioned. Coming back to the EC paper, 
which was very comprehensive, very ambitious, and very technical, Malaysia’s capital was still 
looking into it, which was why he could not yet touch on specific aspects of it. In analysing the paper, Malaysia would undertake a cost-benefit analysis . When deciding whether to take up the proposed 
measures, this was an important question that needed to be answered in order to get an indication of 
the kind of resources needed.  He asked the Commun ities for an indication of how much it would cost 
them to implement their suggested proposals.  
 
1.91 As regards special and differential treatmen t, or what Malaysia would prefer to call the 
development dimension, one should not stray away from the fact that  when talking of special and 
differential treatment, one was talking about deve loping countries as a whole. One should not run 
away from the fact that there were others who might  be at different levels of development like the 
least developed countries. Accepting that they required special treatment did not mean that other 
developing countries and their problem s should not be taken into account  as well. It had been said that 
one way of helping develo ping countries take on oblig ations was the provision of technical assistance. 
But, as had already been mentioned earlier, a lot of technical assistance had already been provided 
both bilaterally and plurilaterally, leading to the question how successful has this technical assistance 
programmes had been. He wondered whether the WC O could provide some figures in terms of the 
success rate and the amount of money needed for th at type of assistance. As for the other papers, 
Malaysia would get back to the CTG in due time.  1.92 The representative of the United States
 expressed his wish to respond to a specific question as 
well as to comment on some of the statements made, which had been extremely important and 
helpful. On Uruguay’s question on express shipments,  that that was an area that was potentially 
subject to services negotiations, he noted that, from a services standpoint, what was being addressed, was the treatment of the operations and of the provi der. What the United States was putting forward in 
its trade facilitation paper were some questions with  regard to the treatment  of the goods themselves, 
that were conveyed in an express manner. He noted  that there was a need to do some definitional 
work, but that there was no contradiction or even  a competition with what was being discussed in the 
services round. 
 1.93 Turning to the comments made by other Members, particularly by Malaysia and Indonesia, the US representative expressed his view that the qu estion raised by Indonesia was very important. It 
underscored what appeared to be a coalescence of interest and of substantive agreement both on the 
importance of trade facilitation and the potential importance of operationalising GATT Articles V, 
VIII and X. As regards the use of a cost-benefit an alysis, he noted that this should be part of 
Members’ efforts in this area. It was exactly what  needed to be done as Members moved forward. He 
had been struck by Pakistan's statement r ecognizing the importance of and commenting on the 
challenges faced in the process of operationalising these provisions, of making them less aspirational.  G/C/M/64 
 Page 31 
 
 
 Currently, there was a situation of growing co alescence of the substance Members dealt with. 
Delegations should recognize the opportunity here , as they proceeded with their analysis and, 
particularly as regards the challenges, work toge ther. All Members recognized the importance of trade 
facilitation, and developed a good understanding of  the tools and the methodology involved. All 
Members analysed costs and benefits and unders tood the challenges faced by developing country 
Members. The US was very uncomfortable with suggestions that would lead to two tiers of 
membership. Rather it was important to take advantage of this growing coalescence on Trade Facilitation to figure out ways to move everyone forw ard. It was clearly in all Members’ interests to 
make sure that Members were doing what they talked about. He hoped the current discussion to 
continue. The US would come back with further comments on some of the questions raised with 
regard to technical assistance at a later stage. 
 1.94 The representative of Canada
 first responded to the question raised by the Philippines with 
regard to Canada's experience w ith establishing a single window. He did not have all the facts 
available at the moment, but he would redirect the Philippines back to the Canadian paper G/C/W/238 
which had been submitted in 2000 during the nati onal experience period. There was no doubt that 
Canada had gone through some pains in getting the single window to work, but it had worked and 
worked to the point where Canada was now expanding it. Canada saw it as an investment both for the 
government and the private sector. It had helped redu ce the cost of the private sector to deal with 
issues like SPS and TBT in terms of getting their pe rmits and other required documentation or just to 
find out if their goods actually met the requirements. Secondly, it had reduced the internal cost of the 
government by making it clear where to send doc umentation to. This was the reason why the 
Canadian departments of Industr y Canada, Natural Resources Cana da and Transport Canada were 
looking to see if it was possible to bring them into a single window on various products.   1.95 On a more general level, he shared a lot of the views expressed by the United States in terms 
of where this dialogue was going and the need to ha ve a continuing dialogue about what was actually 
being discussed. There was agreement at the genera l level that trade facilitation was beneficial. A 
cost-benefit analysis of each particular proposal s hould be undertaken. There already seemed to be an 
answer to that as everyone appear ed to claim to already carry out trade facilitation, which raised a 
rather puzzling question about the concerns rega rding WTO commitments on trade facilitation. Some 
had wondered why the WTO should get engaged when other organizations already did it. The answer 
could be found in the area of binding obligations. This was what the WTO was about. There were 
basically two reasons why one should want binding obligations. These reasons were not new, and had 
been brought up by many Members already. One w as that a binding obligation created the political 
will to get things done. Secondly, it ensured that all Members were heading in the same direction. One 
of Canada’s biggest worries was that everyone w as doing trade facilitation but not necessarily the 
same thing. There was the danger of going in oppos ite directions. The reason one had rules was that 
everybody would strive to have a similar system  so that people would be moving in the same 
direction, allowing a small exporter to go to any country with a good idea of his import obligations. 
What was wanted was a universal pr edictability and transparency in creating real benefits. This was 
one of the reasons why Canada strongly supporte d concepts like single window as something the 
WTO should undertake. Both importers and exporters could benefit from that. It was the consistency 
across all Members that would provide the real power of the benefits.  
 1.96 Having similar binding rules within the WTO would also help the delivery of technical assistance. A lot of effort had been put in t echnical assistance, but the question was whether 
everybody did the same thing, whether donors provide d similar assistance for similar problems. One 
key element of the successful delivery of techni cal assistance was the knowledge what to provide 
technical assistance for, the definition of what n eeded to be done and what kind of assistance was 
required. This was another reason why Canada wanted  to look at developing WTO rules in the area of 
trade facilitation. But it also really was a questi on of what was feasible. Canada took that very 
seriously. The Canadian delegation had put a number of proposals on the table which it considered to G/C/M/64 
Page 32  
 
 be feasible, but it also recognized that wherea s some countries could implement these proposals 
immediately, others were going to need time and technical assistance. This was also why Canada had always been open to the concepts of technical as sistance, transition periods , and of other forms of 
transitional S&D. The Canadian objective was that ev eryone would be able to take on the same rules 
at some point in time. At the same time, Canada  recognized that this would not be feasible for 
everyone at the same time and that one had to  look at innovative ways of implementing whatever 
improvements and clarifications Members decided to adopt in terms of possible negotiations. 
Members had the real power to operationalize the act ual benefits of trade facilitation, as opposed to 
having purely theoretical discussions.   
1.97 Turning to the statement that it was not necess ary to talk about non-discrimination in Article 
VIII as it was covered by Article III, the Canadian representative noted that the fact that it was only 
covered by Article III and not also by Article VIII  was exactly the problem. But Canada agreed with 
Hong Kong, China that injecting WTO principles into  Articles V, VIII and X would be a solid way of 
operationalizing the principles of transparency and efficiency. On the question of how to 
operationalize the principle of efficiency, he noted that  the Canadian proposal for a surety  system to 
apply to things like tariff classification and othe r areas, was designed to provide efficiency in the 
following two senses.  First of all, it would provide  efficiency for the importer/exporter, so that goods got across the border faster. Secondly, it meant e fficiency for the government, which would get the 
expected money. The fact that everybody would do that was where real benefits would occur. The 
benefits would increase with the number of players implementing these measures.  
 
1.98 The representative of  the European Communities
 expressed his wish to briefly comment on 
the other papers as well as respond to questions raised with respect to the Communities' paper. The 
Communities strongly welcomed the submissions rece ived from colleagues and partners. Even though 
they were all very different, they identified a number of common themes and were moving Members 
gradually in a common direction with shared el ements. He expressed his gratitude for Canada's 
highlighting of the importance of securities a nd bonds which was a very important question the 
Communities should have taken up in  its own paper. The Communities were very happy with the 
questions, which were relevant. He  had tried to give preliminary answers to some of them. The 
representative noted that he very much liked the Hong Kong proposal to apply the concept of least 
trade restrictiveness, or necessity in Article VIII. What he wanted to know from Hong Kong was 
whether it would draw a distinction between l east trade restrictiveness and proportionality of 
measures, or whether these were the same things for Hong Kong. He would like to know which of the 
two options, least restrictiveness or proportionalit y of measures Hong Kong considered appropriate 
for further exploration. Least trade rest rictiveness was a very high ambitious test. 
 
1.99 The EC representative welcomed the WCO pa per, which underlined in a very sensible way 
what the future relationship between the WTO a nd the WCO could be if Members moved ahead in 
developing some more clear measures on trade facilitation. The WTO was the over-arching setter of commitments, while the WCO was an organization wh ich supplied some of the detailed standards of 
instruments to implement certain commitments. This  was a model which had been very useful and 
effective in a number of existing WTO agreemen ts such as the Customs Valuation and the TBT 
Agreements. He was very pleased to see that the WC O saw the architecture in that light. A number of 
delegations had expressed concern that certain Member s might want to transfer lock, stock and barrel, 
certain WCO conventions or instruments into the WTO, but no one had actually proposed that. The 
Communities certainly did not want that, but saw merit in referencing, benchmarking, as default 
standards, the key international instruments a nd standards of the WCO and a number of other 
international organizations. This  would allow for greater harmonization and standardization. 
 1.100 Turning to comments and questions made in connection with the European Community paper, 
he noted that he was very happy with the cons tructive intervention by Th ailand. As regards the 
question raised by Thailand and the Philippines on the issue of a single customs code and what was  G/C/M/64 
 Page 33 
 
 
 behind that idea, he clarified that the Communities were not advocating some kind of WTO-endorsed, 
globally harmonized customs code every Member had to adopt. What the EC did want to propose was 
that every individual WTO Member adopted its own i ndividual domestic body of customs legislation, 
which would differ from country to country and from customs union to customs union. There was no suggestion to internationally harmonize Members' respective customs regulations, customs codes or 
documentation, (although this would happen to some extent naturally via the use of WCO and other 
international standards in national rules) but simply  one to have a body of laws in place domestically 
for transparency purposes. Turning to Thailand’s a more specific concern about some SPS restrictions 
being placed on Thai exports into the European Co mmunity, the EC representative noted that he did 
not have the facts available at the moment but that he would communicate Thailand's concerns to 
Brussels and reply bilaterally to Thailand. Moving on to the comments by Brazil, he remarked that the 
Communities considered it reasonable to make a co st-benefit analysis of in dividual measures. Every 
information on that matter would be very useful. The vast majority of measures the Communities were proposing had already been implemented in Braz il. It therefore seemed that Brazil had done its 
own cost-benefit analysis domestically and decide d that it was probably worth the minor pain 
involved in implementing these procedures. He clar ified that the Communities had not proposed to 
notify all regulations and procedures to the WTO in a WTO language. That was something the Communities would not support from a cost-benefit anal ysis point of view. Apart from that, there was 
nothing the Communities had seen in terms of propo sed measures, which would fail the cost-benefit 
test. Nevertheless, this was something the Communiti es would look at again measure by measure. His 
delegation was very open to doing that analysis.  
 
1.101 He then mentioned that a number of dele gations had, while welcoming the Communities’ 
ideas on special and differential treatment, expressed concerns about their offer only being focussed on least-developed countries, while there would be other developing countries which also wished to 
explore various kinds of special and differential tr eatments further. He clarified that the Communities 
were not seeking to limit the flexibility it wished to explore to LDCS. An important debate had to take 
place about differentiation of commitments, exemp tions, transitional periods, progressivity and about 
individual countries' needs. Turning to India’s commen ts, he remarked that it had been very useful to 
listen to India's national experience. The Communitie s were aware of many of the ongoing reforms in 
India, but had not known they had proceeded far so . On the specific points raised by the Indian 
delegation on how would it be possi ble in practice to avoid unnecessary procedural barriers, he noted 
that he would like to put back the question to Indi a. There had been such a proposal in the TBT and 
SPS area, this concept existed in those two agreem ents and it seemed that all Members had found the 
principle of avoiding unnecessary procedural ba rriers useful It created downward pressure on 
Members' regulatory procedures. There was also a degree of flexibility. He would see no reason why 
the same concept which had been found very useful in other areas, could not be applied to the customs 
area. As regards India’s remark on the necessity to safeguard customs revenue, he noted that he would 
share the view on the need to control illegal impor ts and that there had been evidence that the 
objectives of better control and better reve nue collection were not a zero sum game  but mutually 
reinforcing. Better control and be tter revenue collection were impor tant consequences and objectives 
of simplified procedures. There was no trade-off but  a net gain for both control and facilitation.  
 
1.102 On transparency, the EC representative expressed his surprise over India's reluctance to 
consult the trading community on proposed regulations and procedures. In a modern society, Members had an interest in ensuring that regulator y procedures were actually supported by the people, 
companies and organizations directly affected by them. Introducing procedures which had the full 
backing of the affected community would actually in crease a country’s soverei gnty over its territories. 
There could certainly instances where it woul d be impossible for fiscal purposes to announce 
legislation involving customs in advance, but that  was the exception rather than the rule, and many 
WTO provisions could cater for that kind of situation. Turning to comments by Malaysia, by 
Indonesia and Egypt on the necessity of rule-making,  he noted that Canada had already answered 
what he had intended to note. The benefit of est ablishing some basic commitments in the WTO was G/C/M/64 
Page 34  
 
 that it locked in domestic reform, made transparen cy, non-discrimination, proportionality irreversible 
and that was the enormous benefit to the trading community of having a basic degree of predictability. Secondly, it allowed the establishment of shared  approaches. By basing commitments on common 
international standards, one could achieve a greater  degree of harmonization, so that the different 
regional approaches Members were pursuing could be  more harmonized. Furthermore, the business 
community would be willing to invest more in th is field, they would be more willing to provide 
technical assistance and support developing countries if they had some basic guarantee that the improvements they were contributing towards were there to stay.  1.103 The representative of Hong Kong, China
 expressed his gratefulness to Members who had 
indicated their willingness to look at the output and inject principles into developing provisions of 
GATT Article VIII.  As some Members had pointed out, those principles were not new, but had been  widely practised in all parts of the WTO agreements . They were basic to the proper functioning of an 
efficient trading system. On the question of the principles of least-trade restrictiveness and the 
question of proportionality of measures, he noted th at Hong Kong China had not made any distinction 
between these two concepts.  Hong Kong China did not  think that these two concepts were mutually 
exclusive, nor that they conflicted with each other.  When his delegation had put forward its argument 
of least-trade restrictiveness, it also combined it with the related notion of necessity because it wished 
to reduce the complexities and incidences  of formalities, so that these formalities were maintained 
only to the extent necessary to ensure a free flow of trade. Therefore, in many respects the question of 
whether and to what extent a measu re should be included, should have a bearing to the efficiency and 
the intent of the measure. To some extent the concep t of proportionality  was part of the consideration. 
Therefore, Hong Kong China had not made any distin ction between these two concepts at that stage. 
 1.104 The Chairman
 observed that Members seemed to ha ve exhausted their discussions on GATT 
Article VIII. He referred to his introductory remark s, according to which delegations would also have 
the opportunity to comment on Articles V and X, a nd opened the floor for interventions on these  
articles.   1.105 The representative of  the European Communities
 informed Members that the EC was 
preparing a paper on Article V. He would like to ci rculate a short note on the some of the issues the 
paper would address, in order to give some food fo r thought to delegations for the time between now 
and the October meeting. First of all, the Communi ties had noticed that transit was of interest to 
virtually all Members, not simply to land-lock ed countries. Land-locked countries, especially 
developing ones, were however especially negativel y affected by lack of effective transit, which 
amounted to a major constraint to trade and grow th. Secondly, the consultations the Communities had 
had with a number of trading partners and with  the business community, suggested that Article V 
lacked specificity and did not really fully reflect th e current trading realities. Therefore, in reality, 
there was no freedom of transit around the world, a nd problems raised in this  context included issues 
such as non-standardised documentation requirement s for transit purposes, excessive physical checks 
of cargoes, the complete non-application of some useful regional instruments and conventions, or 
derogations from those conventions without good re asons, customs procedures being more stringent 
for transit goods than for finally imported goods, and a proliferation of restrictions on transit which 
actually impeded the theoretical freedom of transit guaranteed under Article V. 
 1.106 In terms of solutions to these problems, the Communities had a number of ideas, such as 
ensuring non-discrimination between modes of tran sport and between individual carriers, who are 
carrying the goods in transit, simplifying docume ntation requirements for transit purposes, more 
reasonable fees, charges and securities levied for tran sit and strengthened obligations or commitments 
by Members to conclude regional transit agreemen ts which were indispensab le for the operation of 
regional transit regimes. As regard s special and differential treatment , he noted that the ideas outlined 
in the present EC paper in this respect would apply mutatis mutandis  to any future commitments on 
transit.    G/C/M/64 
 Page 35 
 
 
  
1.107 The representative of Cuba  thanked the Secretariat for the very interesting note on Article 
VIII, as well as other delegations for their su bmissions. The Cuban representative also thanked the 
WCO for its statement, which Cuba had found extr emely interesting. While reserving its rights for 
later comments, the Cuban delegation would like to  make some comments on transparency at this 
stage. Cuba had two specific concerns it wanted related to Korea's proposal to establish a national 
coordination centre to information on customs proce dures, procedures relating to imports and exports. 
For Cuba, such a center would be quite costly, as it would certainly also be for other developing 
countries. There were still countries who had not ma naged to streamline their customs procedures and 
to adapt them to new obligations of international tr ade, and very often they did not have the necessary 
structure to do so. Therefore, in Cuba's view, se tting up of such an institution would constitute a 
requirement which would go beyond the means of some developing countries, and which they therefore could not implement adequately. Another matter of concern, and a even more sensitive one, 
was the European Communities' proposal to establis h an advance mechanism when new laws were 
being passed etc. It seemed to Cuba that this ki nd of mechanism could give rise to various conflicts 
and differences, especially in the light of the differences in various Members' customs systems. 
Developing countries had enormous infrastructur e problems and lacked human and financial 
resources, which might impair the proper working of such a mechanism. Also, the high administration costs of implementing such a proposal gave rise to concern to the Cuban delegation. Therefore, an 
advance consultation mechanism coul d be way beyond Cuba's ideas of transparency. Cuba would like 
to have information, access to legislation, to coun tries national rules, but the Cuban  delegation would 
not want this to interfere in domestic legislative matters, with national laws and regulations. Cuba was 
open to proceed on this debate on transparency whic h it considered to be an important issue. Cuba 
also shared the view that transparency was one  of the pillars of multilateral trading system. 
Nevertheless, some of the proposals made in th is context gave rise to concern for the Cuban 
delegation. 
 
1.108 The representative of Brazil
 had a number of questions, comments and requests for 
clarification on the proposals relating to Article X.  As regards the EC proposals on this matter set out 
in section A of its submission G/C/W/363, "Publica tion and Availability of Information", paragraph 1 
seemed to contain three specific proposals or con cepts. The first one related to the scope of 
information that should be made public. What Brazil would like know was whether the EC was 
proposing a slight expansion in the current mandate of Article X. Brazil's evaluation was that Article 
X was already broad and generic enough to cover ever ything related to trade regulation or legislation. 
Therefore, the Brazilian delegation would like to know in what way the Communities would like to 
expand it. Brazil's concern was aggravated by the fact  that there was a qualification put into the text 
submitted by the EC adding the word "relevant" to  the issue of laws, regulations, administrative 
guidelines and alike. It seemed to Brazil that this  added a subjective element into Article X, which 
could be a step backward rather than forward. Th e second concept in paragraph 1 dealt with the issue 
of charges for the provision of information and th e fact that these should be commensurate with the 
service provided. This was more or less borrowed from Article II (2) c. Brazil had no fundamental 
difficulty with the concept and was ready to find ways of moving forward on this issue. The third 
concept in this paragraph raised however some  concerns. It spoke of ensuring publicity of 
governmental agency's management plans, which, in  Brazil's view, seemed to be outside the scope of 
Article X. Brazil was not sure how this kind of info rmation, including elements  of agency's internal 
reform and modernization programme s were of any real significance to traders. What his delegation 
saw as useful and necessary for traders was info rmation that pertained exclusively to the legal 
positions in effect that impinged on their operations , and not to the internal workings of government 
agencies.  
 1.109 Paragraph 2 dealt with advance rulings in  the areas of tariff classification and origin. The 
concept was one that had already been incorporated  in the agreement on rules of origin and already 
existed in Articles II (h) and III (f.) of the agreement.  To repeat it in this context could therefore be G/C/M/64 
Page 36  
 
 somewhat redundant. Nevertheless, Brazil was ready to  look at the issue of advance rulings for tariff 
classification. Paragraph 3 outlined a proposal fo r presentation of information in a simple and 
accessible manner. The basic concept was one that  would not be objected by anyone. One possible 
area of difficulty on which Brazil would appreciate any further clarification, was the specification that 
such information should be presented in a mann er "not designed to discriminate or make it 
inaccessible or difficult for non-national operators to access". The doubt Brazil had was that if this 
information was presented in the national language of the Member, whether it would be considered a 
discriminatory provision or an inaccessible mean s of providing the information required for non-
national operators.   
1.110 Paragraph 4 was one that Brazil found cu rious, asking each WTO Member to confirm that 
they would do nothing illegal. An obligation for an  administrative and judicial review mechanism was 
already contained in Article X, which was a sufficien t guarantee that the limits of the legal basis for 
decisions and rulings would be respected. Paragraph 5 related to enquiry points.  Brazil agreed that 
they had been a useful tool in the context of  TBT and SPS Agreements.  However, these were two 
examples of particularly focussed technical issues,  where it seemed more feasible to have a single 
enquiry point. Brazil had some reservations as rega rds the viability of establishing one single enquiry 
point that could provide information on the entire bread th of trade-related issues. In this context, the 
Brazilian delegation also had some doubts as to whet her, the adding of one further bureaucratic layer 
into a government structure would help trade facilita tion, or whether it would not rather hinder it, as 
such an enquiry point would have to rely on specifi c information from a number of other agencies, so 
that what one would get was one more stop on  the way of finding the correct information.  
 1.111 The representative of  the European Communities
 remarked that the points raised by Brazil 
were very pertinent. On the question regarding the ways the Communities envisaged for a slight 
expansion of the current scope of Ar ticle X, he replied that there were  at least two areas where the EC 
proposals would constitute an expansion of current Article X requirements on transparency. One was 
that the Communities suggested going down to the level of administrative procedures, and not simply legislation or regulations that needed to be no tified. A second expansion was the idea that customs 
management plans where related to implementation of WTO commi tments should be published. 
There were many instances where the trading community  had a real interest in knowing, for example,  
the customs medium-term plan for computeriza tion, as whatever computer systems customs 
introduced had a direct daily impact on traders' transactions. Similarly, if the customs administration 
was planning to shift its resources from one border post  to another, it had a very direct consequence 
for the trade. It was legitimate for the directly -affected business community to get some kind of 
advance knowledge of the management plans of cust oms and to be allowed to interact with customs 
and discuss these measures, in order to work so lutions which met the interests of both the 
administration and the traders whose livelihoods were  affected. There was no specific meaning to the 
word "all relevant laws" other than that it would ex clude all "irrelevant" laws. This would of course 
lead to the question of what was relevant, and the Communities would look at that again to see 
whether the term was redundant.  1.112 Turning to Brazil’s question on advanced rulings , he noted that this was as much a Canadian 
“baby” as it was an EC one. The WTO already provide d for advanced rulings on origin decisions of 
general application, but there was currently no WTO commitment for binding advanced rulings on 
tariff classification decisions of general applicati on. The reason for the Comm unities to propose that 
was that it gave a certain amount of predictability to traders on a day-to-day basis. Moving to the next 
point raised by Brazil on information being presente d in a simple and not discriminating manner, and 
of it being inaccessible for non-national operators, he  noted that the Communities fully shared the 
Brazil’s view that Members must continue to have the right to publish in their national language. This 
should in no way constitute a form of discrimination.  As a second point, he recalled the Secretariat's 
very interesting paper on Article X where it was noted  that in a number of cases information had been 
provided by governments and customs only to their national established operato rs, and only given to  G/C/M/64 
 Page 37 
 
 
 international operators or third country companies af ter a long time. That seemed to be a completely 
unwarranted form of discriminati on which was currently under no discipline in the WTO, as it should 
be. Point 4 of the EC submission proposed that any decisions by the customs or other agencies should have some form of legal basis. The reality was that quite often traders were faced with customs 
rulings which had no legal basis, which was a problem that needed to be fixed. Finally, on the 
question of enquiry points, the EC representative noted that Brazil had made a good point. The 
Communities did not want to create an unnecessary ne w level of bureaucracy. What the Communities 
wanted was transparency. If enquiry points exis ted, the Communities would appreciate that, but 
certainly the Communities did not want to add a new layer of bureaucracy and it could be in practice that it was more practical for each agency to have its own enquiry point rather than some kind of 
super enquiry point at the top of the pyramid. Brazil’s point was well taken. 
 1.113 The representative of Korea
 responded to Cuba's remark on the Korean proposal, noting that 
the EC had already commented on that. In further clarifying this point, the Korean representative 
noted that the character of the Single National Focal  Point was one of a liaison office to connect the 
information seeker with the competent authorities.  Korea quoted its proposal, according to which "It 
should function no more than as “a focal point”, “a  contact desk”, which liaisons with the other 
domestic competent authorities in order to respond to the inquiries." He noted that such a focal point 
was quite useful, especially for small-sized traders w ho were not capable of gathering all the required  
information. This type of focal point or contact poi nt already existed in other areas of the WTO. It 
also did not cost much. Korea had no intention of  creating a big organization, or big bureaucracies, 
but only suggested the establishment of a contact desk.  
 1.114 The representative of Brazil
 commented on section B of the EC Article X paper addressing 
predictability issues, noting that the basic concep t in these proposals was the issue of establishing a 
consultation mechanism between the private sector  and the government in the preparation and 
elaboration of legislation and guidelines. It seemed a bit excessive to Brazil to try to legislate on this 
matter. There might be instances in which governments would like to consult with the private sector 
to get their views. But there might also be instan ces in which they would not want to do so, referring 
to their governmental authority and prerogative in th is respect.. Therefore, it seems somewhat of an 
overkill to try and determine that in each and ever y instance of trying to a pprove a regulation or a 
legislation, a government would have  to consult with and give adequa te notice of these measures. He 
noted that in certain cases there was a need for em ergency measures, which would not allow for this 
period of prior consultation or pub lication. In any case, Brazil was somewhat concerned that this type 
of proposal might go a bit beyond the Doha mandate . There was nothing in Article X regarding the 
issue of prior consultation with the private sect or, and introducing it now would seem to go a bit 
beyond the Doha mandate. 
 
1.115 The representative of the European Communities  noted that the Doha mandate did not simply 
mandate Members to clarify Article X, but also i nvited them to, where appropriate, improve it. Also, 
Article X was not only about transparency – it was about administration of trade regulations and it 
was perfectly legitimate within the meaning of  Article X to make proposals for the better 
administration of regulations. One way of doing th is was through ensuring that there was good public 
consultation in the process with the affected par ties. Therefore the EC proposals were not going 
beyond the scope of the Doha mandate. On the more s ubstantive point that it was excessive to make a 
proposed commitment in this area, and that there would be circumstances where one would be unable 
or unwilling for various reasons to consult the affected  trading community, he agreed that  there could 
be emergency measures one would take without prio r consultations for very  good reasons. This was 
why the EC paper noted that the scope of any such provision should be further discussed, as the 
Communities realized one could not have a simple  comprehensive catch-all provision and that there 
had to be some flexibility. Nonetheless, the Comm unities would also note that the concept of 
consultation with the effected trade was some thing that was recommended in the WCO Kyoto 
Convention as a standard. The Communities were tr ying to base its idea on good international G/C/M/64 
Page 38  
 
 standards which had been developed and which had found consensus. The idea to hold consultations, 
barring specific circumstances, was also something that already existed in other WTO agreements 
such as the TBT Agreement. Holding consultations w as one of the most useful provisions in the area 
of trade facilitation because the business communi ty needed to know what was going on and 
governments, using tax payer’s money, needed to discuss their proposals w ith affected traders. 
 
1.116 The representative of the United States
 underscored that the US had heard a lot from its 
private sector as well about the need to have adva nce notice of changes in regulatory approach or 
procedures. The legitimate concer n raised by Brazil was something that should be addressed. At the 
same time, he considered this to be the exception and that, if anything, it might present a challenge to 
Members to see if one could not it explore a little bit more to see whether one could capture those 
situations. There should be notice and comment pro cedures, but one should also explore exceptions.  
He would like to add the United States’ voice to what  the US had heard from the private sector on the 
need for more transparency. It was essential to not being caught unawa re of new regulations and to 
get advance notice. Nevertheless, the points raised by Brazil needed to be addressed. As the months 
proceeded, Members might meet that challenge through further discussion and articulation. 
 1.117 The representative of Australia
 noted the Brazil's concerns were relevant. However, it should 
be stressed that the most important part of the EC submission was the title "Predictability". Australia 
thought that the proposals advanced by the Europ ean Communities served to increase predictability. 
No-one could dispute that, or the fact that predictability was at the heart of GATT Article X.. What 
needed to be discussed was how th is predictability could be achiev ed and how Article X could be 
improved and clarified to ensure better predic tability for traders. A modest contribution from 
Australia in this regard was that the Australian Customs Service had established service level charters 
to provide predictability for traders in their dea lings with customs. By way of an example, he 
informed Members that Australia published a service  standard that aimed at having electronic cargo 
reporting systems available twenty hours a day. This  could be another idea for Members to take up 
and consider when talking about how predictability  could be enhanced alongside the ideas that had 
been put forward by the European Communities. 
 
1.118 The representative of Cuba  thanked Korea for its comments which she would refer to her 
capital. Cuba would revert to this matter at a later stage. 
 
1.119 The representative of Brazil  expressed his thanks for the clarifications. Brazil would reflect 
on them. His delegation had no basic objection to th e principle of predictability. Brazil's concern was 
only that this could not be a blanket obligation for each and every measure, as that could, in certain 
instances, constitute a semi-paralysis of a government  if each measure of whatever level had to go 
through such complex consultation procedures. Movi ng to the question of appeal procedures and due 
process, as dealt with in paragraph 9 of the EC paper,  he noted that Brazil was confused as to what the 
real proposed change was from Article X's current paragraph, which already seemed to ensure the 
availability of  procedures for an appeal process a nd its conditions. The one element that seemed to be 
new was the issue of standard tim e and cost for appeal procedures. Brazil was still looking at the 
feasibility of having such things for each and every appeal procedure.  
 
1.120 On paragraph 10, Brazil would appreciate more  clarification on this proposal. Paragraph 3 of 
Article X refered to appeals relating to customs matt ers. It did not specify that these were related to 
imports only, which was why Brazil sought clarifi cation as to why the proposal mentioned that it 
should be extended to cover trans it and exports. It was Brazil's understanding that these were already 
covered. Brazil was also puzzled by the statement that "transit operators a nd exporters' interests are 
not necessarily guaranteed by national treatment pr ovisions". It seemed to Brazil that either the 
operator was a national of the Member and therefore had his legal rights under na tional legislation, or 
he was a foreign national, in which case the nationa l treatment should also ensure his legal rights.  
Brazil did not see any other situation which would require clarification, which was why Brazil would  G/C/M/64 
 Page 39 
 
 
 appreciate more information on this. Turning to item 11 on the release of goods pending a surety bond 
or similar measures, he noted that Brazil recognized  that there was already a similar provision in the 
Customs Valuation Agreement. His delegation was not exactly sure what situation this proposal 
intended to cover, having been presented under Artic le X. It would seem more logical that this 
proposal should be addressed under Article VIII. 
 
1.121 The representative of the European Communities  responded to Brazil’s question on the new 
element in the EC’s proposal to establish a right of  appeal, that the current Article X did not contain 
such a requirement. The Article only stated that Me mbers should institute appeal procedures "as soon 
as practicable" without making it an obligation. The Co mmunities would argue that fifty years later, it 
should be practicable that every Member had some sort of appeal procedures against adverse customs 
decisions. The EC had added to that the suggestion that the relevant WCO standards, which had been 
negotiated by consensus in the WCO, could be a good benchmark reference for modern, simple 
appeal procedures. On the second question from Brazil, asking for more clarification about the proposal that transit operators or exporters should have the right of appeal, he replied that where 
Members had established a right of appeal, they did not allow all traders access to appeal procedures 
in all cases. On  Brazil's suggestion that releasing go ods, pending appeal, subject to a bond or surety, 
belonged to Article VIII, Brazil was probably right.  1.122 The representative of the United States
 noted that the US submission on Article X contained 
mechanisms the United States really considered releva nt in this context. His delegation would like to 
underscore its interest in improving or clarifying  Article X as regards the word "or" right now.  
Currently, Article X spoke of providing appeals th rough administrative or judicial tribunals. The US 
would raise the question whether there would be an  improvement to GATT Article X if, such as under 
the Customs Valuation Agreement, it provided for tr aders to have the right to appeal and review 
procedures, both in terms of administrative and j udicial tribunals for customs matters. The US 
experience was that if one spoke about efficiency, particularly where time matters were involved, 
administrative appeals would actually improved the s ituation for traders. The other element he would 
like to raise was whether the option of obtaining pr ompt review applicable as regards customs unions 
was an improvement of GATT Article VIII, given th e US experiences of its traders seeking such an 
accomplishment.  
1.123 The representative of Canada
 concurred with the previous point s made with regard to right of 
review and appeal, which was an area  Canada had also cite d in its Article X pape r. Canada considered 
it worthwhile providing a right of review and appeal at two different levels. There would be benefit in 
further clarifying the precise areas that would be covere d. Especially in the area of tariff classification 
one should do this, as well as in certain other areas.  Canada would provide an illustrative list because 
it would not want to close the door. There are some places where improvement could be made by just 
clarifying what customs matters were. He would no t engage in a discussion as to whether the surety 
bonds issue related to goods, or whether the right of  review and appeal should be in Article X or 
Article VIII. This was not really the issue. It was something Canada woul d like to bring in as a 
clarification and improvement to both Articles. The reason for putting it under Article X was that this 
surety bond was being provided in the context of releasing a good that  was currently under some sort 
of review and appeal procedure.  
 1.124 Turning to Brazil's request fo r further clarification with regards to advance rulings, he noted 
that what Canada really had in mind was building on the Rules of Origin Agreement, where there 
were specified periods of time in which one was supposed to provide the advance ruling and where 
one got some clarification as to when those advance rulings were binding. Cana da also considered it 
an improvement in terms of clarification if one could identify the areas elig ible for advance rulings. 
The Canadian paper cited tariff classification,  applicable duties, taxes and import licensing 
requirements. It would be worthwhile if one c ould get an advance ruling on whether a product was 
subject to import licensing, in order to know for th e exporter in advance whether he had to go and get G/C/M/64 
Page 40  
 
 an import license for that product. Canada was also looking at some other areas which were not cited 
in its paper. There might be certain elements under the Customs Valuation Agreement where it might 
be worthwhile having an advance ruling. Canada was currently exploring these areas. His delegation 
would come back to the concept of advance ruli ngs in greater detail in  subsequent meetings. 
 
1.125 The representative of Brazil
 noted that when first reading the document, he had been 
somewhat disappointed to see that special and differe ntial treatment was in some ways being equated 
to the concept of technical assistance. In Brazil's view, this was an entirely different concept. The 
latest submission from the EC seemed to give an enti rely different approach to the issue, which was 
why he would like to reflect a bit further on this issue before commenting on it. A number of other 
submissions had been made regarding Article X. Th ere was a broad degree of overlap with what was 
included in the EC paper, which was why he would just highlight one or two points that were not 
covered by the EC submission. With regard to the submission of Japan contained in G/C/W/376, a 
new issue was the question of identification for transparency purposes of a medium through which 
transparency of internal legislation would be ensu red. Brazil considered this to be a very positive 
suggestion and was willing to give very pos itive consideration to such a proposal.  
 1.126 Moving on to Korea's submission (G/C/W/377), the Brazilian representative remarked that Brazil's major concern was a requirement of notify a ll legislation, acts and regulations to the WTO. 
Brazil saw this as technically unworkable. The volum e of information was so monstrous that even 
translating it for notification would be a major pr oblem, not to mention the problems it would cause in 
the WTO itself having to circulate this amount of information relating to 144 Members. It seemed 
essential to ensure that all the information was availa ble to those who really needed it. It was not the 
delegates in Geneva that needed the information,  but the traders. Therefore, what one had to 
concentrate on was ensuring that the information was available in an easy and practicable way. 
Turning to the submission of the US in G/C/W/384, he noted that this paper was very interesting in 
that it did not contain specific proposals for chang es to Article X. Rather, it was a diagnosis on how 
the US implemented its obligations under Article X,  which was very valuable to know for Members. 
The paper also outlined what technical cooperation the US was providing under different aspects of that Article. It went some way along the lines of Braz il's view that Article X in itself was not plagued 
by any substantial or fundamental flaws. Perhap s there was room for some improvement or fine-
tuning in some points, but the sense Brazil had was th at – especially in the case of Article X – the 
problems experienced were essentially due to a lack of institutional and financ ial capacity, and that 
technical cooperation would go a long way to overc ome some of the perceived difficulties in the 
implementation of Article X.  1.127 The representative of the United States
 shared the assessment given by Brazil that, while 
Article VIII required exploration, analytical work, cost-benefit anal ysis and the pondering on other 
elements, Article X was fairly straightforward. The United States saw some room for improvement, but concurred with the characterization given by Br azil, that technical cooperation could go a very 
long way. At the time of the information age, there was so much that could be done and some 
methods had not yet been embraced simply for reasons  of capacity, such as the use of the internet to 
put a country's regulations on the internet. This c ould be overcome. The US would foresee a further 
outline of that in the next months. He informed  delegations that the United States would submit a 
revision of their GATT Article X paper. The US ha d gathered further and more specific information 
on their technical assistance work, some elements of  which related to elements of GATT Article X. 
The right combination of technical cooperati on and some very basic improvements to GATT 
Article X could significantly advance the trading environment. 
 
1.128 The representative of Japan
 stated in response to India’s question on advance rulings that the 
European Communities and Canada had already responded very well. In its previous contribution on Article X, Japan had outlined measures which might be able to contribute to the improvement of 
predictability. Japan was of the view that the development of an advance ruling system could  G/C/M/64 
 Page 41 
 
 
 contribute to improving transparency and predictability  and indicated that such a system, by using the 
phrase "where appropriate" in its contribution, was used as an example. With respect to customs 
classification, Japan might be able to consider a dvance rulings, but Japan could leave this discussion 
for a further occasion.  
1.129 The representative of Korea
 remarked that Brazil had made a useful point and that he wanted 
to briefly clarify Korea's suggestions. Korea had no intention of creating a WTO notification requirement for all laws and regulations, but only suggested Members to notify selective core 
measures as well as important changes of these measu res to the WTO Secretariat, using the same 
notification requirement as in the TBT and SPS Agreements. Korea's suggestion was to find a 
workable way to this problem and was open to discu ss to scope of the core measure that should be 
notified at a later stage.    
 1.130 The representative of Mexico
 thanked Brazil for their interesting questions to the European 
Union which had clarified many of Mexico's points of  concern. He noted that, while he was not sure 
whether the EC proposals went beyond the Doha mandate, they were certainly ambitious.    
 1.131 The Chairman
 concluded that there had been a very frank and constructive exchange of views 
and observations on agenda item 1. He noted that while it was not his intention to summarize the discussions, it might be appropriate to highlight some major points which had emerged from these 
discussions, without attempting to give a comprehens ive description of all the issues raised. It seemed 
to him that all delegations agreed on the importanc e of furthering the facilitation of trade, which was 
very positive. Many Members had noted that the cl arification and improvement of GATT Article VIII 
would bear a number of benefits and several of them had proposed specific measures to this end. 
Among the proposals which had been made were the si mplification, standardization and strengthening 
of procedures related to im portation and exportation, the modernization of procedures and 
instruments, the reduction of data requirements and the increase of their comp atibility, the enhanced 
use of automation, and the establishment of e nhanced clearance systems, including security 
provisions, the use of risk assessment, express clea rance, pre-arrival processing, post-auditing and 
single window.  Proposals had also been made on the improvement of clarity and specificity of certain 
terms and the enhancement of transparency, pr edictability, non-discrimination and least-trade 
restrictiveness. There had also been a proposal relating to the adoption of  internationally-accepted 
standards and the acceptance of relevant commercia lly available information, as well as the proposal 
to coordinate the work of all agencies present at borders. He noted that there had been a common 
understanding both in the proposals as well as the oral interventions on the importance of technical assistance and capacity-building. Several Members had also made reference to the need for special 
and differential treatment.  
 
1.132 While agreeing on the importance of trad e facilitation, several delegations had expressed 
certain reservations with respect to some of the proposals made. Those Members had expressed the 
view that certain proposed measures were ambitious , and a number of developing countries noted that 
would be difficult for them to implement some of these proposals in the light of their constraints caused by their different levels of development. Pa rticular concern had been expressed with respect to 
the objective of developing binding rules. A number  of delegations pointed at the many challenges 
developing countries face in their efforts to facilita te trade, such as the need to safeguard customs 
revenue, infrastructure deficiencies, lack of human and financial resources and security concerns. There had been some indication of a preference fo r trade facilitation measures to take place at the 
national, rather than at the multilateral level. Delega tions might consider it useful to further reflect on 
the points made in the course of the discussions.       
 1.133 The Council took note
 of the statements made. 
 G/C/M/64 
Page 42  
 
 II. TRADE FACILITATION NEEDS AND PRIORITIES OF MEMBERS, 
PARTICULARLY OF DEVELOPING AND LEAST DEVELOPED COUNTRIES 
 
2.1 The Chairman
 stated that this agenda item was related to the part of paragraph 27 of the Doha 
Ministerial Declaration that called upo n the Council for Trade in Goods to "…identify the trade 
facilitation needs and priorities of members, in particular of develo ping and least-developed countries."  
As already pointed out by many delegations at the previous meeting, such an identification stood in 
close relation to the other elements of the Doha tr ade facilitation mandate:  (i ) the review and possible 
clarification and improvement of GATT Articles V, VIII and X; a nd (ii) the provision of adequate 
technical assistance and capacity building.  Identify ing Members' trade facilitation needs and priorities 
could also facilitate discussion on agenda item 3:  technical assistance and capacity building.  
 2.2 Members had discussed several ways to approach this identification exercise, and reference had 
been made to the importance of receiving inputs from delegations themselves, in  order to substantially 
advance and guide our discussi ons on this subject.   Several delegations had noted that their capitals were 
already working on identifying their needs and priorities , and were encouraged by others to follow their 
example. To support delegations' work on this matter , Members had decided to ask the Secretariat to 
prepare a compendium of the inform ation on this subject (G/C/W/393). 
 2.3 The representative of the Secretariat
 noted that the present document aimed at meeting the 
request made by Members at their previous May meeting for a compendium of the already existing 
material on Members' trade facilitation needs and prio rities that was available at the Secretariat. As 
suggested by delegations, the documen t gave an overview of the releva nt information contained in the 
communications Members had submitted to the Secretariat from the Singapore Ministerial onwards, as well as of relevant material included in the two reports on the 1998 Trade Facilitation Symposium 
and the 2001 Technical Assistance Workshop. It fu rther tried to consider submissions by other 
organisations to the extent relevant. The existing material had been grouped into four categories and 
four corresponding sections: (i) national experience papers, (ii) other relevant submissions by 
Members, (iii) the two reports of the works hops and (iv) relevant submissions by other 
intergovernmental organizations, with each section pr esenting the material in a  table outlining author, 
document number and – most importantly - a short summary of the main points relating to trade facilitation needs and priorities. The challenge in this  exercise had been that  most of the examined 
material did not address trade facilitation needs and pr iorities of Members as such, but rather focused 
on particular experiences with specific trad e facilitation measures and programs, or proposed 
approaches to future WTO work on this subject. This had meant that the issue had to be approached in 
a somewhat indirect manner, by basing the documen t's references to needs and priorities mainly on 
information concerning TF measures that had been proposed or already carried out by Members, and 
on what delegations presented as main obstacles to the facilitation of trade. Such an approach was not 
without difficulties, as the problems and measures described in the communications which were 
sometimes several years old did not necessarily represent an accurate reflection of what Members would see as their current  needs and priorities. Also, some of the material was fairly general, without 
providing specific information on the subject at ha nd. Furthermore, while agenda item 2, in the 
context of which Member's request for this comp ilation had been made, particularly called for the 
identification of the needs and priorities of deve loping and least developed countries, a large number 
of the existing material came from developed ra ther than developing countries, with only one 
submission from a LDC and certain regions (especially Africa) not being represented at all.   2.4 As a final remark, the representative of the S ecretariat noted that while the paper tried to 
cover all relevant information, a document like the present one naturally had to limit itself to an 
overview of the main points raised in the submissions , without being able to enter into an exhaustive 
examination of each and every document. In conclu sion, she remarked that while these constraints 
had not allowed for a comprehensive in-depth iden tification of Members needs and priorities, it was  G/C/M/64 
 Page 43 
 
 
 the hope of the Secretariat that the present documen t would be a starting-point in Members’ exercise 
of identifying their needs and priorities, and that  it would help stimulate the current discussion and 
trigger additional inputs from delegations on what their specific trade facilitation needs and priorities 
really were.  
2.5 The representative of the Philippines
 thanked the Secretariat for the helpful compilation. She 
shared the observation of the Secretariat that the contribution for it had mainly come from developed 
countries. But at the same time, she had seen on page  14 of the document on the results of the trade 
facilitation seminar, that there had been an ove rview of experiences by recipient Members. The 
enumeration contained in the section "Main points re lated to trade facilitation needs and priorities" 
was very general and needed to have more substa nce. The Philippines knew that they had to submit 
something to be able to get the assistance they needed. She encouraged all developing countries to 
focus on what their specific trade facilitation relate d-technical assistance need s were. Only then would 
the donor community be able to respond. In this cont ext, the Philippines’ also appreciated the paper of 
the EC pointing out that technical assistance should be a component part of any future work on trade 
facilitation. 
 2.6 The representative of Pakistan
 thanked the Secretariat for its contribution. He considered the 
paper a very useful document, although of a gene ral nature, because there was not much substantial 
input given by the developing countries. He informed  Members that his capital was in the process of 
identifying Pakistan's needs and priorities and th at his delegation would submit a document on this 
matter before the next meeting. 
 2.7 The representative of Brazil
 thanked the Secretariat for a very comprehensive and useful 
compilation of proposals that had been put on the table before. It was almost like a very compact 
menu of trade facilitation measures that had been co nsidered in the past. Members had debated the 
meaning of the mandate’s reference to identifying needs and priorities. At that time, Brazil had 
indicated that, in its view, this was not an issue th at was limited to the aspect of technical assistance 
and capacity building. The mandate was broader th an that. His delegation understood that it was 
important to provide technical assistance as recognize d in the mandate itself. Brazil had also indicated 
that it was beginning to consider on what it unders tood as possible needs and priorities for Brazil. His 
delegation was still working on that. Some tent ative ideas were being discussed within the 
government. Unfortunately, the representative was not yet in a position to discuss this in the Council. 
But his delegation was moving forward and he hope to present some ideas for consideration in the 
CTG at the next meeting.  2.8 The representative of Paraguay
 thanked the Secretariat for the preparation of its document 
which it considered very important and interes ting. As a landlocked country, Paraguay had many 
problems with trade facilitation, not just as regard s transport. Apart from page 7, Paraguay also 
considered the paper’s list on page 16 very inter esting. His delegation was studying these forms of 
technical cooperation in order to facilitate the transport of goods to and from Paraguay, since 
Paraguay had to go over the territories of third c ountries. Paraguay was looking for more convenient, 
more economic and faster ways to address this transit problem, both for those countries who had 
traffic going through them and for land-locked count ries such as Paraguay. The needs were multiple 
and covered not only technical cooperation, but also  financial cooperation. On many occasions such 
as the Monterrey Conference, Paraguay had asked diffe rent international financial institutions like the 
World Bank or the Inter-American Development Bank for help financing for infrastructure for the 
transport of goods on the basis of low interest loans. Paraguay was now studying these problems, 
which also included the customs aspects. This w as one of the bottlenecks. One had to find a better 
solution. Paraguay’s participation in the Colorado Gr oup had been due to all these problems it had in 
the area of trade facilitation as a land-locked country. Paraguay hoped to submit a corresponding 
request rapidly to find out who could cooperate  with it in order to solve all these problems. 
 G/C/M/64 
Page 44  
 
 2.9 The Chairman 
thanked the delegations for their interv entions. It seemed to him that this 
agenda item was a subject which received serious cons ideration by delegations. Some of them needed 
a bit more time to identify their specific needs a nd priorities and to present a paper on that issue for 
discussion at the next meeting. Several delegations  had indicated their intention to submit proposals 
on this particular item very soon. He was certain that also many other developing countries were 
looking into that exercise very seriously and would be in a position to contribute positively to 
Members' deliberations on this matter at the Oct ober meeting. One point that had come out at the 
present meeting was that the question of identifica tion of trade facilitation needs and priorities went 
beyond just technical assistance and capacity build ing. He stressed the importance of developing 
countries to prepare national experience papers for th e discussions of this item at the next meeting, as 
this would bring out some of their needs and requirements.    
 2.10 The Council took note
 of the statements made. 
 
III. TRADE FACILITATION: TECHNICAL ASSISTANCE AND CAPACITY BUILDING 
 
3.1 The Chairman  recalled that Ministers had co mmitted themselves at Doha "to ensuring 
adequate technical assistance and support for capacity building" in the area of trade facilitation.  
Previous discussions had clearly highlighted the im portance delegations attached to this matter. A 
number of Members had outlined the specific problems th ey faced in their efforts to facilitate trade, and 
the Chairman expressed his hope that  many others would follow that example, in order for the donors to 
be able to adapt their programs to these necessiti es.  Several donor Members had outlined the technical 
assistance and capacity building activ ities they were currently undertaking, and he encouraged others to 
do so as well, in order to give a more comprehens ive picture of what kind of  assistance was actually 
available and to facilitat e the necessary coordination among donors.  The Secretariat was also carrying 
out a number of technical assistance activities and planning a new program for the following year. He 
stated that the Canadian delegation had requested an update on the current state-of-play of this 
programming exercise.  In addition, the Canadian de legation had also made reference to a document on 
technical assistance they would like to see updated . technical assistan ce they would like to see updated.  
As the current version of this do cument had been prepared by the Technical Cooperation Division, the 
Chairman suggested that member of that division wo uld brief delegations on these issues and reply to 
any questions Memb ers might have in this respect. 
   
3.2 The representative of Canada  thanked the Chairman for pur suing Canada’s request. The 
Secretariat's report would provide a basis to conti nue the discussion on what had been identified as a 
key issue in Members' work on trade facilitation. As at the last meeting, Canada would encourage 
other donors to provide information on what they we re doing in the area of trade facilitation-related 
technical assistance. This would help in better coordinating the efforts in this work, which was 
precisely the same reason why one needed to be updated on the progress in the development of the 
WTO technical assistance programme. Secondly, Cana da was very interested in hearing from the 
developing countries how they thought one might go about ensuring that donors had a firm grasp and 
understanding of their technical assistance and capacity  building needs so that Canada could advance 
this issue. Canada saw this as an interactive process.  It was clearly linked with agenda items 1 and 2. 
The importance of technical assistance was underlined by the fact that all Members agreed that this 
needed to be a separate agenda  within the overall package.  
 3.3 The representative of the European Communities
 underlined his delegation’s interest in being 
briefed about the progress of the WTO Technical Assi stance Plan. He wondered whether it might also 
be possible to get some kind of feedback from the recipient Members, from the Members who had 
actually received the technical assistance provided by the WTO in the course of this year. It would be useful to get their point of view as well to see how  useful it had been for them and what lessons one 
could draw. The Communities had made a fairly exte nsive intervention at the last meeting on this  G/C/M/64 
 Page 45 
 
 
 subject, so there was no need to go over that again,  and the only thing he would do at this stage was 
provide a rapid update on the technical assistance pr ogramme the EC had been involved in since the 
last discussion at the CTG. In the EC’s current 5 year cycle of development aid programming, trade-related assistance was one of the five core components of development aid for the next 5 years and 
within that the Communities had included trade facilitation and customs simplification reform as a 
item in every single technical assistance programme they were designing or providing. It was up to 
the recipient to actually demand technical assistan ce in the area of trade facilitation. It was not 
something the EC wanted to impose, it really had to be at the request of the developing country in 
question and it was not always the top priority of some countries to have customs simplification or 
trade facilitation measures in the programming. The other thing the EC had done was to concentrate 
quite a lot of its development aid in this area on a regional basis, as opposed to a national basis, 
particularly in the ACP countries, where the EC was in the process of negotiating a series of bi-
regional free trade agreements with specific ACP re gions. There was an obvious value-added in trying 
to promote and support simplification measures, regional customs infrastructure and so on at the 
regional level. This was increasingly the focus of the EC’s programming, rather than purely at the 
national level.   
 3.4 The third thing he wanted to mention was that  to complement the WTO's short term technical 
assistance programmes in this area, the EC was al so arranging a series of regional workshops on 
tariffs and trade facilitation in various parts of the world: one in Central America, which the EC was 
co-organising with Costa Rica for the central American region, and two workshops the EC hoped to 
arrange together with UNCTAD for the Andean Comm unity and in South Asia towards the end of the 
year. The EC would provide more of those work shops in the course of 2003. The EC was also 
organising a one month university course to be he ld towards the end of the year for developing 
countries trade officials, which incl uded several elements on trade fac ilitation as well as other areas. It 
was a bit similar to the WTO's training course to be offered in an European University in December.  
That was just an update of a few of the initiatives the EC was undertaking. 
 3.5 The representative of New Zealand
 thanked the Secretariat for their compilation of the 
existing material of Members' trade facilitation n eeds and priorities. New Zealand had prepared a 
general statement on technical assistance. New Zealand considered technical assistance to form a very 
important part of the work on trade facilitation an d it continued to attach great importance to the 
provision of technical assistance as evidenced in New Zealand's submission G/C/W/380. Such 
activities provided the opportunity to assist countries  seeking to refine their own customs procedures 
as efficiently as possible. It had been evident dur ing the discussions that Members had not necessarily 
been mandating technology, but mandating efficiency , which in New Zealand’s view formed a very 
important part of technical assistance in terms of the relevance of technical assistance. Canada had 
made a very valid point in saying that a key fact or in giving technical assistance was whether it was 
relevant to ones trade facilitation objectives. Noneth eless, the last two days had clearly shown that 
every Member acknowledged the benefits of trade fac ilitation, but that they were also realistic as to 
what countries could do, especially developing coun tries, and least developed countries. New Zealand 
was well aware of their considerable resource an d capacity restraints. Therefore, well focused 
technical assistance was important, if not crucial. New Zealand continued to concentrate its technical 
assistance regionally.  
 3.6 The representative of New Zealand also suppor ted the EC's "ladder" approach to trade 
facilitation and recognised that each proposal was re levant to a rung in the ladder. If countries could 
place themselves by their rung, that would be a us eful reference point in deciding what technical 
assistance was relevant. New Zealand appreciated an y comments from delegations on that point. It 
would also like to reiterate the WTO's complement ary role in providing technical assistance. There 
was a key push in the WTO to coordinate technical  assistance. It had been good on the part of the 
Director General of WTO to give his voice to th e WCO, who had an important complementary role, 
in providing technical assistance. He concluded by expressing his thanks one more time to the G/C/M/64 
Page 46  
 
 Secretariat for their paper and by noting that his de legation was looking forward to the stock take note 
on technical assistance.  3.7 The representative of Japan
 informed Members that Japan was currently preparing a list of 
technical assistance and capacity building activities.  It hoped to present a respective submission at the 
next meeting. Japan was currently examining the possibility of holding a joint WTO - Japan 
International Cooperation Agency (JICA) semina r on trade facilitation designed for developing 
countries and least developed countries, the details of which had not been decided yet. It hoped to 
hold the seminar next year, and that such a semi nar would be helpful for participants to better 
understand trade facilitation. 
 
3.8 The representative of the Secretariat  provided a brief overview of the technical assistance 
activities carried out by the Secretariat in this area.  She noted that over the course of 2002, training on 
trade facilitation had been conducted in national missions in Cote d'Ivoire, Ghana, Morocco and the 
Kyrgyz Republic. It was also conducted in a regiona l seminar in Jordan for 12 other Arabic speaking 
countries in cooperation with the World Customs Organization. Some of these training activities had 
targeted officials from the ministry level, while others addressed customs officers, although ministry 
level officials have always been invited to atte nd. The training activities had covered an overview of 
GATT Articles V,  VIII and X,  with a particular extensive discussion of the issue of transparency,  
advantages of trade facilitation, barriers to trade, th e Doha mandate and the current status of work on 
trade facilitation. Activities included a number of pr actical exercises such as a taking part in an 
exercise on risk assessment or discussions on how an advanced rulings program could assist in more 
efficient and uniform application of the customs valuation law.  3.9 She noted that the activities were generally ve ry well received. However, she had also been 
told by a number of participants that their count ries were still in the early phases of development and  
lacked the human and monetary resources necessar y to implement these programs. She concluded by 
informing Members that there were 10 more missions planned for this year: five regional ones and five national missions.  
 3.10 The representative of China
 expressed his thanks for the ex cellent paper prepared by the 
Secretariat. China also appreciated very much the papers presented by Canada  and New Zealand. As a 
recipient Member, China appreciated very much the technical assistance given by the donor Members. 
Technical assistance on trade facilitation was impo rtant to raise the capacity of the developing 
Members to take part in the future negotiations . China also very much appreciated the work 
programme mentioned by the Secretariat, which was a very impressive programme for future technical assistance. China was of the view that technical assistance should be more focused on the 
specific needs of developing members. Different Me mbers had different concerns. For Paraguay, for 
instance, as a land-locked country, transportation was more important, while other Members had other 
concerns. If technical assistance could be focused on the specific need of each developing Member, it 
would be more efficient and more helpful in raisi ng the capacity of developing Members to take part 
in future negotiations. China had presented a pape r on June 28 about its needs and priorities to the 
Secretariat and it would provide more specific papers  to explain its specific concerns and priorities.  
 
3.11 The representative of the Secretariat
 noted that he would like to address two issues at this 
point. The first one related to the development of the Doha Development Agenda Trade-Related 
Technical Assistance and Capacity Building Datab ase. He recalled that there had been a high level 
briefing the week before where detailed presentations  and information was given to delegations by the 
Deputy Director General Ravier, by the Director of the Technical Cooperation Division, Mr. Osakwe, 
by the Director of Training Institute Mr. Mercier and by Director of the Technical Co-operation audit 
unit Mr. Rolian. There had been a very fruitful and positive exchange of views at that point.  Furthermore, Members had been briefed on the activiti es the Secretariat had been able to develop this 
year and on what remained to do be for the rest of the year. As regarded the database, he informed  G/C/M/64 
 Page 47 
 
 
 Members that there had been working group meeti ngs of country and agency technical assistance 
providers, where objectives, parameters and calenda r for the database had been agreed upon. The 
database was jointly managed by the WTO and th e OECD. The server home would be at the WTO 
Secretariat. The agreed objectiv es for the database included transparency of trade-related technical 
assistance delivery, exchange and sharing of inform ation, minimization and avoidance of duplication, 
estimation of progress in the implementation of th e Doha technical assistance mandate, coordination 
and coherence, and the meeting the objectives of the report mandated in paragraph 41 of the Doha 
Ministerial Declaration. In essence, the material contained in the database would be the bulk of the report mandated in paragraph 41 of the Doha Minister ial Declaration. The query parameters had been 
agreed upon and there had also been an agreement on trade-related technical assistance and capacity 
building categories. Information could be requested in terms of technical assistance categories, in 
terms of beneficiary country, in terms of donor count ry provider and in terms of agency provider. The 
database was a web-based application and the data  was requested jointly by the WTO Director 
General and the OECD Secretary General on 16 Ma y 2002. The deadline for reporting data was 31 
July 2002 from country and agency providers. The curre nt data in the database, the prototype that had 
been developed, were WTO technical assistance  activities and trade integration activities under the 
Integrated Framework by the Quad and the Worl d Bank. The representative of the Secretariat 
expressed his appreciation to both agencies and Me mber governments who had already reported data 
for the database. He urgently asked ot hers to do so as well before 31 July. 
 3.12 Turning to the preparation of the Technical Assistance plan for 2003, he noted that 2002 had 
been a transitional period.  The Secretariat had had to implem ent the Doha Development Agenda 
mandate very quickly, as it had to plan for the Pl edging Conference in March 2002 with a very tight 
schedule.  Implementation was proceeding and the Secretariat hoped that implementation would be 
satisfactory by the end of this year. However, the Secretariat was trying to plan in a much better way 
and with many more elements for the Technical Assi stance Plan 2003. The Secretariat was trying to 
work towards having the plan approved and endor sed by the Committee on Trade and Development 
by October, and by the Budget, Finance and Ad ministration Committee by November, enabling the 
required Pledging Conference to be scheduled befo re the end of this year. This would put the 
Secretariat in a better position within the paramete rs agreed and approved by the General Council on 
the Doha Development Agenda Global Trust Fund. Fo r this purpose, it was crucial to stick to the 
deadline of 31 July 2002 for the submission of tec hnical assistance and capacity building requests by 
developing countries, least developed countries a nd transition economies. It was therefore essential 
that delegations consulted their capitals and tran smitted their needs and re quests as soon as possible. 
The representative of the Secretariat reported that sadly, there had been very few responses so far. 
Only 30 responses had been received from 30 countr ies, while there were about 120 developing 
countries, transitional economies and least develope d countries whose needs the Secretariat had to 
respond to. 
 3.13 The representative of Canada
 thanked the Secretariat for pr oviding Members with an update 
on the current situation, which was not entirely en couraging. He would like to add his voice to the 
WTO Secretariat in encouraging Members to make submissions as early as possible so that the entire 
plan and the approval of the plan could stay on track. 
 
3.14 The representative of Pakistan  addressed several questions to the Secretariat. In the course of 
the briefing for the high level senior officials on the technical assistance and related questions, there 
had been two issues of particular significance. One had been that the Trade-Related Technical 
Assistance Database had four categories, of which three had not yet been accessible due to lack of 
information provided so far. He wondered whethe r there had been any progress on that yet. The 
second question was that Members had been told that it might not be possible in the future to have 
demand-driven technical assistance for all countries, and that the Secretariat would be looking at a horizontal type of technical assi stance where all countries could participate. Hearing this had 
somewhat dampened Pakistan’s spirit and this might perhaps also be the reason why technical G/C/M/64 
Page 48  
 
 assistance requests were not coming in to the Secretar iat. If that was the case, and if one was looking 
at that kind of scenario in the future, Pakistan w ould like to know whether any plans were being made 
by the Secretariat for horizontal type of techni cal assistance in the area of trade facilitation. 
 3.15 The representative of the European Communities
 thanked the Secretariat for the presentation, 
which he had found very useful and instructive. It  was no secret that the Communities had not been 
very happy with elements of the 2002 WTO Assistan ce Plan for trade facilitation. The EC thought it 
had been rather haphazardly designed and without al ways responding to the needs of many Members. 
The European Communities were very  keen to see that the 2003 progr amme was better as they were 
sure it would be. Like others, the Communities st rongly encouraged developing countries to make 
requests for 2003. They strongly encouraged requests to be made on a regional basis, because there 
were a lot of economies of scale and learning between  countries to be gained if programmes could be 
delivered in a regional or sub-regional rather than a national basis. In an effort to encourage poorer  
developing countries to come forward with requests,  the EC had made a démarche in every single 
sub-Saharan African country, encouraging them to come forward to the WTO with their request, and 
had also contacted the various regional body Secretar iats in Africa for the different regional groupings 
to encourage them to make requests on a regional b asis. He wondered whether the Secretariat itself 
had approached Members encouraging them to subm it requests, either individually or through their 
different regional groupings, or whether that w as something the Secretariat considered doing. 
 3.16 The representative of the Secretariat
 expressed his appreciation for the support from Canada 
and the EU in joining their voices to his plea fo r developing countries to present their technical 
assistance needs. Turning the question raised by Pakistan, he noted that as regards accessibility, the 
database would be hopefully fully operational by Sept ember/October of this year. It was currently 
operating on the basis of fragmentary  information. There were three ma in categories in the database.  
One on trade policy and regulations, including all the s ubjects dealt with at the WTO, such as dispute 
settlements, customs valuation, services, TBT et c. A second category covered trade development, 
included areas such as trade promotion, strategy, design and implementation, market analysis and 
development, business opportunities and institutions,  public-private sector networking, e-commerce 
and trade finance. So, while category one incl uded all the subjects for which the WTO was 
responsible, for category 2, the components were the responsibility of external bodies, external 
organisations, be they regional, inter-government al, governmental, international business, private 
sector, public sector or even civil society. The th ird category was on infrastructure on the basis of 
donor Members, such as Canada, Japan, the EU an d its Member countries, the US, the World Bank 
and the OECD. The Secretariat had not received full  information on the second category. It was still 
incorporating information. At this point, it was i ndeed difficult to link the three categories, mainly 
category 2 with category 3, but the Secretariat hope d that with the development of the database and 
the receipt of more information, it would be fully operational by October or November 2002. 
 3.17 On the question of the concept of demand- driven or horizontal activities, he recalled the 
extensive debate that had taken place in the WTO on the best use of resources and the limitation of 
resources in the WTO Secretariat, especially as regards human resources. As had been pointed out by one delegation, from the Secretariat’s point of view , regional activities were more efficient due to the 
possibility of reaching a large number of countries.  On the other hand, from the point of view of 
Member countries, national activities might be more  important due to the possibility of reaching a 
larger group of people from different ministries, from the private sector, etc. within a single country. One had to reach a balance, a kind of a level of equilibrium on regional and national activities. This 
should not discourage countries from submitting requests at the national level or from presenting what 
their priorities were.  The Secretariat was moving towards a mo re priority-based programming rather 
than a purely demand-driven one. In terms of the demand-driven programming, the Secretariat 
welcomed all sorts of demands from different Memb er countries, but would discuss with them to  
determine what their priorities were, and whether th e needs they had expressed were exactly the needs 
that had to be fulfilled on a priority basis. The S ecretariat would not set the priorities for Members, on  G/C/M/64 
 Page 49 
 
 
 the contrary, but it hoped that Members would set thei r priorities and that one could jointly determine 
on the basis of those priorities what activities would be developed. He did not see why this expression of demand-driven versus horizontal or priority-based programming might have dampened the desire of Member countries to request activities. He recalled that if the Secretariat would not receive Members’ requests by 31 July from a country, not hing would be programmed for it in the 2003 Plan. 
The Secretariat would not be able to programme anything for these countries as it would lack their 
input. Those countries would mostly likely still bene fit from regional activities, but if they did not 
submit any input expressing their priorities, it was impossible for the Secretariat to guess their priorities, and to determine what was required. Gene rally, there were some issues that could be better 
approached on the regional level, while others could be better addressed at the national one. The 
Secretariat's implementation programme for example, had to be done on a national basis. In the area 
of trade facilitation as well as with regard to other Singapore issues, first steps had been made  through regional activities. Turning to the questi on by the EU as to whether the Secretariat had 
approached Members or regional institutions, he info rmed that the Secretariat had indeed written to all 
Members as well as to all international and regional organisations having a relationship with the WTO 
such as UNCTAD, the World Bank, the IMF and othe rs, asking them to inform the Secretariat about 
their plans by 31 July 2002, so that th e Secretariat could programme accordingly. 
 3.18 The representative of the European Communities
 noted that his question to the Secretariat had 
been more about whether contact had been made with  Secretariats of regional or trading entities, such 
as ASEAN, the Andean Pact, Mercosur and those in different African regions, which tend to have 
regional Secretariats that organised their activities.  He had not so much been interested in knowing 
whether contacts had been established with international organisations. 
 3.19 The representative of the United States
 thanked the Secretariat for the report. The United 
States were interested in the answers to the question presented by the Communities as well. The 
United States did not see it so much as a question of  horizontal versus demand driven, but rather as 
one of reaching an equilibrium be tween meeting the resource needs while at the same time providing 
the most practical way to meet the priorities. They did not see it as necessarily a dichotomy, but as a method to go. The US representative registered his c oncern over the fact that so few requests had been 
made. As had been demonstrated the day before, th ere were many areas where one was trying jointly 
to move forward. It was important to remember that the Doha technical assistance mandate was a 
mandate for all Members, and that it could only  be successful if one moved forward together, 
including also the recipients. The United States en couraged the submission of requests before the 
deadline.  3.20 The representative of the Philippines
 thanked the Secretariat for the briefing and assured that 
her delegation was currently working on a submissi on regarding technical assistance. The question 
had been posed as to how many technical assist ance requests the Philippines could realistically 
submit. There were currently competing interests in the Philippines, and advice had been given to 
prioritise the needs. The Philippin es were also aware that not all the technical assistance activities 
would be provided by the WTO Secretariat, whic h was why the Philippines were looking forward to 
the trade database of information as it would them to inform themselves alr eady when submitting their 
technical assistance needs. But th e basic question really was how many requests the Philippines could 
realistically submit on a national basis, as they woul d not like to dampen the spirits of the agencies 
preparing its technical assistance needs only to be to ld at the end of the day that only so much could 
be done. This had unfortunately been one of th e experiences the Philippines had had in submitting 
some of their technical assistance needs in the ar ea of customs valuation. There, the Philippines had 
submitted a request four years ago which had not been responded to until now. The Philippines would 
not want to repeat this kind of experience.  3.21 The representative of the Secretariat
 first replied to the question of contacting regional 
organizations, confirming that the WTO was i ndeed in close contact with several regional G/C/M/64 
Page 50  
 
 organisations, particularly in the Latin American and the African areas. As Members may have seen 
from the meeting the Director General had had with  the heads of the regional development banks, the 
WTO considered it very important to establish thes e strategic alliances with not only the regional 
development banks, but also with the regional secretar iats, in order to make the delivery of technical 
assistance more efficient. Turning to the point raised  by the Philippines, he noted that he appreciated 
their comments and that the Secretariat was looking forward to receiving their requests. It might not 
be appropriate for the Secretariat to comment  on how many national activities a Member could 
expect. He encouraged delegations to think about  the fact there were now about 120 Members who 
potentially received trade-related technical assistance and capacity building. This meant that if, just 
for the sake of a number, one would schedule 2 activities per country, that would lead to about 240-
250 activities at the national level, plus the ones fo r acceding countries. There were about 28 acceding 
countries, which meant another 56 activities and 300 ac tivities a year at the national level. In the 2002 
Technical Assistance Plan, the Secretariat had pr ogrammed 514 activities, both national and regional. 
Of those 514 activities, about 40% were regional ones.  However, since the Secretariat was trying to 
plan much better and more efficiently than in 2002,  it would to like to concentrate more on regional 
activities, given also the fact that 2003 would be a ministerial year. 
 3.22 The representative of Paraguay
 thanked the Secretariat for the information given. Paraguay 
would like to know how the WTO was working with UNCTAD, since at the beginning of the year, 
the Secretary-General of UNCTAD, Mr. Ricupe ro had presented a very ambitious post-Doha 
technical assistance and capacity building program. Paraguay understood that this was closely linked 
to the results of the Doha Ministerial meeting and to  what the developing countries needed in terms of 
capacity building for programme launched in Doha. Paraguay would like to get some information on 
how work was being carried out and on what the relations were between WTO and UNCTAD. 
 3.23 The representative of the Secretariat
 replied that the WTO was working very closely with 
UNCTAD, as mandated by the Doha development ag enda. As mentioned by Paraguay, UNCTAD had  
presented a technical assistance and capacity building plan and was now in the process of fund raising 
for that programme. He would not want to comment on the case of UNCTAD as this was not his role. But the WTO was working with UNCTAD on a case -by-case basis. Working groups such as the ones 
on Trade and Investment and Trade and Competiti on Policy had close programmes of work with 
UNCTAD and were organising activities with UNCT AD. The question of availability of resources 
was being resolved on a case-by-case basis on the merits of each activity to be organised. The WTO 
was in the process of consultations with UNCTAD on a more formal basis to continue the work, but 
for the moment, it was proceeding on a case-by-case basis.  3.24 The representative of Uganda
 thanked the Secretariat for the information provided. Following 
up on the question posed by Paraguay, he remarked  that the issue of cooperation with UNCTAD on a 
case-by-case basis referred to the delivery of the te chnical assistance programme within the WTO.  
However, there was also a need to cooperate in the sense of tryi ng to see that what the WTO was 
doing within its technical assistance programme wa s not done by UNCTAD as well, in order to avoid 
duplication of activities.  
3.25 The representative of the Secretariat
 thanked the delegation of Uganda, and assured him and 
as well as other Members that the Secretariat tried to avoid that duplicati on. The Secretariat was 
constantly exchanging information with UNCTAD on respective activities. 
 3.26 The representative of Colombia
 thanked the Secretariat for its presentation. Such an update 
was very useful. It was similar to what had been presented in another committee a month ago where 
Colombia had had an opportunity to remark that  it was necessary to link each country’s needs and 
their identification with the needs arising in the framework of each Agreement. For Colombia as a 
developing country, this was a bottleneck in the pr ocess of identifying its internal needs, and in 
prioritising these needs, because Colombia had found that it could have many needs, without always  G/C/M/64 
 Page 51 
 
 
 knowing for which one to make a request for. There had always been a conflict in deciding which 
seminars should be held on a na tional level, and which on the regional level, especially when 
Colombia was planning its response to the WTO on it s technical assistance needs. Unfortunately, at 
the internal level, Colombia had no guide book which allowed it to know beforehand as to what 
Colombia was going to do at the national level and what at the regional one. At the regional level, 
Colombia could not always plan either whether it wa s going to work with group X, or Y, or with an 
inter-governmental institution which might be providing support. She wanted to mention this because 
in drawing the technical assistance plans in 2001, 2002 and now for 20 03, Colombia had not 
identified trade facilitation, although it had many n eeds in this area and wanted support, but at the 
national level, authorities had considered that it mo re important to ask for seminars directed towards 
training, so as to prepare Colombia for the fort hcoming negotiations. For Colombia, things were 
therefore not all that clear. It was aware that th e database would be an important element in this 
process, but it would like to have other tools whic h could be of help in this difficult process. 
 3.27 The representative of Pakistan
 shared the concerns expressed by Colombia. As Members 
moved into substantive work in the WTO, they fo und that their needs were  multiplying because it was 
very difficult to really get into substantive discussi ons and consultations due to  technical inadequacy.  
Whereas Pakistan was also in the process of trying to prioritise its needs and would come back to the 
Secretariat on that by 31 July, it felt that the sour ce constraints of the WTO might finally affect the 
capacity building and technical assistance programme  for developing countries and LDCs. This was a 
real concern for Pakistan. Pakistan would also lik e to follow up on a question regarding UNCTAD.  In 
the presentations made for the senior officials,  it was indicated that UNCTAD was also facing 
financial resource problems and might perhaps not be  in a position to go ahead with the ambitious 
plan they had for technical assistance and capacity  building. The question therefore was to what 
extent the WTO depended on assistance from UNCT AD in terms of human and financial resources, 
and whether in case such assistance was not forthcomi ng, there were any contingency plans to meet 
those shortcomings. 
 3.28 The representative of the Secretariat
 shared Pakistan’s and Colombia's concern about 
identifying and prioritising technical assistance ne eds, and the resource constraints of the WTO. As 
regards UNCTAD, he recalled that the Doha Ministerial Declaration specifically mentioned UNCTAD in some areas. The WTO Secretariat w as resorting to UNCTAD to fulfill the Doha 
mandate, not only because of the mandate but al so because it was recognized that UNCTAD had 
extensive expertise in some of these areas, and in some cases even more in-depth technical expertise 
than the WTO. Therefore, to the extent possibl e, the WTO was making efforts to organize joint 
activities with UNCTAD or to have at least UNCTAD’ s participation in those activities. The idea was 
also that UNCTAD had its own resources, whether w ith difficulties or not, but it was an organization 
that had its own resources and initiall y, in principle, some of the joint activities that were to be 
organized with UNCTAD, had to be organized and financed on a 50/50 basis. There had been some 
financial difficulties within UNCTAD, and the WTO ha d tried to solve the situation on a case-by-case 
basis, so that activities could take place. It was for Members to tell the WTO Secretariat where the 
WTO could use the Global Trust Fund to fund the partic ipation of other interna tional organizations in 
its activities. If the WTO Secretariat got a "yes", it would go ahead with that. He recalled the 
agreement regarding technical assistance, accordin g to which the WTO Secretariat would use the 
funds according to Members’ instructions. He expr essed his hope that one would reach a solution for 
the problem of UNCTAD’s participation in technical assistance activities.  3.29 The Chairman
 sought a clarification from the represen tative of the Secretariat. He had noted 
that there were some difficulties between the WTO and UNCTAD in terms of implementation of 
some technical assistance activities, and that that  some of these activities were being financed on a 
50/50 basis. Furthermore, he had noted that it might be necessary to get back to the Members to see if 
the Global Trust Fund could be used, at least in  respect of those areas  where UNCTAD was now 
having difficulties in terms of resources. In this cont ext, the Chairman raised the question whether the G/C/M/64 
Page 52  
 
 Secretariat had been able to identify the specifi c technical assistance activities where problems with 
joint WTO-UNCTAD activities had occurred.    3.30 The representative of the Secretariat
 replied that there had been some problems in the areas of 
Trade and Investment and Trade and Competition Policy.  He did not want to go into details at this 
stage as he did not have the full information, but apparently there had been certain difficulties. He 
further clarified that he had not wanted to suggest that one should come back to Members in a formal 
or official way. Rather, this had been done on a case-by-case basis in consultations with Members and 
green light had been given in the case of some ac tivities. Delegations had received full information on 
this situation in the two respec tive working groups. He further mentioned a High Level Briefing for 
Senior Officials which had been held the week prior to the CTG meeting, where a note had been 
prepared by the Secretariat on the situation of  WTO with other international organizations. 
 3.31 The representative of UNCTAD
 stated that as regards trade facilitation, UNCTAD had had 
the opportunity in the past to present Members what  it was doing in the area of technical assistance 
and capacity-building. There had been a very good meeting a few months a go on this subject, which 
was why he would not outline what UNCTAD would do in this area at this stage. Rather, he would 
like to inform Members what UNCTAD had tried to do  in the post-Doha context. In the area of trade 
facilitation, UNCTAD had been asked, to prepare a chapters of a document on technical assistance in 
the post-Doha context. UNCTAD had prepared a fairly ambitious project proposal of a wide-scope and significant resource implications UNCTAD's t echnical cooperation body presented this document 
to various potential donors. So far, there had been  no answer, which meant that, since it was supposed 
to be a two-year project, it was already too late for Members to have something ready for discussion 
prior to the next WTO conference. The proposal had been prepared in February, and UNCTAD had 
hoped to start the program by July.   
3.32 However, UNCTAD had also prepared a prop osal to run small short-term workshops to 
provoke discussions at the national and regional le vel on trade facilitation. UNCTAD foresaw to run 
this workshop in cooperation with the WTO and had already discussed it with the Secretariat. There 
were possibilities which might emerge. So far, this  workshop had been proposed to hold jointly with 
UNIDO. The government of Austria was considering th e possibility of financing this workshop in two 
places in Africa on a regional basis. UNCTAD had also used the same workshop and linked it with a 
workshop on tariffs, which it might run together with the European Union in Africa and Latin 
America.  UNCTAD planned to hold the workshop in a c ountry which had requested it and which had 
the finance for it. But UNCTAD itself did not ha ve the funding, which was its main problem. His 
organization did not have the funds run the wo rkshop on its own. UNCTAD's approach was a 
demand-driven one, but it required funding. The case s mentioned by him were cases countries have 
offered the resources to cover the costs. But in ot her cases where there was no money, there could be 
no activity. In conclusion, the representative of UNCTAD stated that cooperation with the WTO had 
been very positive in the area of trade facilitation and that they had been working closely with the 
Secretariat since the beginning of the discussion on trade facilitation within the WTO, and he looked 
forward to strengthening those relations.   
3.33 In response to a question he then clarified that there were three regions UNCTAD would most 
likely work on, Africa, Asia and Latin America.  3.34 The representative of Uganda
 commented on the technical assistance plans of UNCTAD and 
the WTO. His delegation would like to see synergi es, and that there was no duplication. He also 
emphasized that the two technical assistance plans were  not the same. His delegation was interested in 
seeing both organisations carrying on with their technical assistance plans. Uganda was aware that most of UNCTAD's activities were undertaken on the basis of extra-budgeta ry resources. In this 
context, Uganda appealed to the donor community to also enable UNCTAD to implement its plan.  
On the question of UNCTAD's participation in tec hnical assistance activities of the WTO, he noted  G/C/M/64 
 Page 53 
 
 
 that the WTO could not implement its plan with out UNCTAD. They could not do so because while 
the WTO was concentrating on explaining the rules, it would not provide negotiating proposals, which was being done by UNCTAD and which was very useful for the beneficiary countries participating in the negotiations. On the other si de, Uganda was aware that there were no resources 
within the budget of UNCTAD to participate in the WTO activities, which was why he was 
wondering whether, while it was for the Budget Co mmittee of the WTO to discuss these questions, 
the WTO Secretariat was considering to formally ask the Budget Committee to look at other possible 
ways of getting UNCTAD to participate, including the possibility of UNCTAD's participation being 
financed from the WTO fund. The 50/50 cost sh aring basis was not working because UNCTAD had 
difficulties in getting the necessary resources.  
 
3.35 The representative of the Secretariat
 noted that it was not for the WTO Secretariat to solve 
UNCTAD's financial resources problems. This was a matter to be solved by the UNCTAD Secretariat 
with UNCTAD Members. One would see how the pr ogramme developed between now and the time 
one had to go to the Budget Committee for the endorse ment of the plan for 2003, and if the problem 
persisted, the WTO Secretariat might flag the problem, but it would have to be a solution provided by 
Members of the WTO.  
 3.36 The Chairman
 concluded that Members now had a fairly good idea of the WTO technical 
assistance activities. The 2002 plan was in the pro cess of implementation, and for 2003, one was still 
in the process of drawing up a programme. Some disappointments had been expressed in this context 
regarding the fact that inputs had not been co ming from developing countries to facilitate the 
Secretariat’s work of drawing up a programme deemed  to be comprehensive and targeted at the needs 
of countries seeking technical assistance. There had b een a brief exchange of ideas as to how much of 
it should be national-based as well as on the need to factor in activities on a regional basis. Reference 
had been made to the need to balance national a nd regional activities.  Members had been informed 
that the WTO Secretariat was currently in touch with a number of other in ternational and regional 
organizations, as well as with other entities with a view to drawing up a useful technical assistance programme. On UNCTAD's capabilities in this area, he suggested to leave this  issue where it was at 
this stage, as this could not be solved at the mo ment in the current forum. Members would have an 
opportunity to raise this in UNCTAD itself and see  how some of the technical assistance activities 
that had been planned there could be carried out  if the resources were made available. He was 
confident that some of the problems in UNCTAD could be resolved.  
 
3.37 The Council took note
 of the statements made.  
 
IV. DOHA MINISTERIAL DECISION ON IMPLEMENTATION-RELATED ISSUES 
AND CONCERNS:  REQUEST FOR THE CTG TO EXAMINE PROPOSALS 
CONTAINED IN PARAGRAPHS 4.4 AND 4.5 RELATING TO THE AGREEMENT ON TEXTILES AND CLOTHING (WT/MIN(01)/17) 
 
4.1 The Chairman
 recalled that the Doha Ministerial De cision on Implementation-Related Issues 
and Concerns set out in its Section 4, two proposals in relation to the Agreement on Textiles and 
Clothing which it requested the Council to examin e and to make recommendations to the General 
Council by 31 July 2002 for appropriate action.  He said that, pursuant to this Ministerial Decision, the Council had conducted an examination of the pro posals through  formal meetings combined with 
informal consultations.  He was in the process of  preparing a draft report on the outcome of the 
examination;  however, his consultations on this draf t report were not yet complete.  Accordingly, it 
was necessary to provide some additional time to arrive at the text of the draft report. 
4.2 In this regard, the representative of Hong Kong, China
 recalled that at the last Council 
meeting on 13 June, the US had given to the Co uncil detailed comments on the two implementation G/C/M/64 
Page 54  
 
 proposals mandated by Ministers at Doha to examin e and to make recommendations to the General 
Council for appropriate action by 31 July 2002.  He had given his immediate reaction to the US 
comments at that meeting, and wished to add more considered reflections on this occasion.  He said 
that the arguments made by the US, and also to a gr eater or lesser extent by the two other restraining 
Members, rested essentially on three points:  that the two proposals would require a modification of 
ATC provisions;  that the ATC had allowed imports  to grow, hence implementation was on track;  
and that the proposals would result in significant changes in the substantive economic provisions and would disrupt the balance of the ATC. 
4.3 Concerning the first point, on the re-opening of the ATC, he said that the proposal in 
paragraph 4.4 simply asked Canada and the US to  apply the same methodology in calculating growth 
in quota levels for small suppliers as had already been used by the EC in implementing the same 
provision under the ATC.  Unless the EC was wrong, how could this require any change in the ATC?  
Furthermore, Articles 2.13 and 2.14 of the AT C clearly prescribed only the minimum level for 
increases in growth rates;  the specific language w as "not less than" under both paragraphs.  They did 
not prescribe any ceilings, or prohibit any furthe r increases.  On the second point, the purported 
increases in imports, he said that he had pointed out at the last meeting that the share of restrained 
Members in textile and clothing imports into th e US had dropped from 76.6% in 1994 to 65.9% in 
2000, while that in the EC had decreased from 45.6% to 43.1%.  The figures for clothing alone showed the trend even more clearly.  Developing c ountries' import share in the Canadian market had 
stagnated during the same period. 
4.4 He also noted that, as regards the EC, deve loping Members might now be worse off under the 
ATC than they would have been under the MFA.  The EC would not have been able to justify 
continuing all of the restraints under the MFA ov er a period in which unrestrained exporters, 
including non-WTO Members, had greatly expanded thei r trade to well over half the share of imports.  
He suggested that restrained exporters should, perh aps, consider if their legal rights more broadly 
under the WTO gave them the same protection as th e old MFA would have done.  Citing another set 
of figures, he said that, according to the data in WTO document G/C/W/366, US textile and clothing 
global imports had been increasing by 9.5% per year .  But if one looked more closely, one would 
discover that the annual growth from restrain ed Members was only 6.8%, while that from 
unrestrained Members was 16.6%.  For clothing impor ts, the comparable percentages were 6.3% for 
restrained Members and 21.5% for unrestrained Me mbers.  These differences were startling, as they 
had already taken into account the effect of enha nced quota growth factors for restrained Members 
under the ATC.  It appeared that the traditional suppl iers to the US, which had patiently put up with 
GATT-inconsistent restraints for decades, were s till being heavily penalized for their early but now 
historic market successes. 
4.5 The representative of Hong Kong, China cons idered that this phe nomenon had allowed the 
US, of its own volition, to expand greatly its preferen tial trade, which was tied closely to its domestic 
industry through highly restrictive rules of origin.  In these circumstances, it was not acceptable to 
blame all the resultant increases in imports on Hong  Kong, China and other exporters in a similar 
position.  All the figures pointed to one conclusion:   not only had progressive liberalization under the 
ATC not taken place, but also the adjustment now fa ced by the domestic industries in the restraining 
Members was clearly due to factors other than implementation of the ATC. 
4.6 Finally, he referred to the purported disruption to the balance of the ATC and noted that 
developing exporting Members had repeatedly c ited instances under which their market access had 
been seriously impaired by new restrictions in violation of the provisions of the ATC, unjustified 
antidumping actions on products already under quota restrictions, and other Customs/administrative 
formalities including changes in rules of origin.  A 16-page document had been prepared by ITCB 
members in the context of the second major review  (G/C/W/304) which comprehensively made the  G/C/M/64 
 Page 55 
 
 
 case that the balance in the ATC had, indeed, been impaired, to the detriment not of the restraining 
Members but on the contrary, of the developing exporting Members. 
4.7 The representative of India  also noted that a number of issues had been raised by major 
textile-importing Members in their intervention at th e last meeting and he wished to respond to some 
of them.   He agreed with the comments made by Hong Kong, China.  He noted the reference by the 
US to the fact that acceptance of the implemen tation proposals would require amendments to the 
ATC.  In India's view this understanding of the AT C was not correct.  The ATC, in fact, provided for 
minimum thresholds for increases in the growth ra tes but did not prescribe any ceiling or prohibit any 
further increases thereto.  In fact , there were instances wherein the restraining Members had provided 
increased quotas above the growth-on-growth prov isions.  Although these circumstances had been 
few, they nevertheless pointed to the fact that th e growth rates prescribed in the ATC were minimum 
thresholds and not the upper limits.   
4.8 In these circumstances, it was not clearly understood how some of the importing Members 
had argued that acceptance of the implementation proposals would necessarily require amendments to 
the ATC.  On the contrary, if the words "not less than" in Article 2.14 of the ATC were to have any 
meaning it would be an obligation on the restraining Members to apply growth rates higher than those 
indicated subsequently in the provisions of Article  2.14.  In fact, the EC had stated at the CTG 
meeting held on 2 May that advanced implementa tion of the growth-on-growth provisions did not 
imply the amendment of the ATC.  The proposal und er paragraph 4.4 of the Implementation Decision 
called upon the US and Canada to apply the same  methodology as employed by the EC.  The EC 
would not have applied the methodology if it wa s not permitted under the ATC or would have 
involved the re-opening of the Agreement.  He recall ed that an assertion had also been made to the 
fact that increased imports into the restraining Me mbers had been a result of the ATC implementation.  
Such assertions were based on questionable premises  which ignored the startling differences between 
the increases in imports between unrestrained Member s to the disadvantage of restrained Members.  
To illustrate, in the US market during the period 1994-2000, while imports from unrestrained 
Members had increased by 16.6%, those from restrained Members had increased by 6.8%.  In respect 
of clothing alone, imports from unrestrained Me mbers had grown at an annual rate of 21.5% 
compared to 6.3% annual growth for restrained Me mbers.  Looking at the figures for the share of 
restrained Members in the US market, it became  clear that restrained Members were being 
marginalized.  Overall, the share of restrained Members had declin ed by 11 percentage points while 
this decline in clothing was particularly acute, to the extent of 14 percentage points.  In the market of 
another restraining Member a similar trend could be  discerned, although the extent of decline in the 
share of restrained Members was less than  that in the case of the US market.   
4.9 The representative of India said that there had been references to the stratospheric levels of 
specific duties in respect of textiles and clothing pro ducts.  He agreed that specific duties on textiles 
and clothing products did exist, including in the US.  However, this was not the main issue of 
consideration of the implementation proposals.  References had also been made by restraining 
Members concerning continuous autonomous industrial adjustment to the effect  that the restraining 
Members had made such adjustment while the rest rained Members could not make such a statement 
in respect of their own industries.  He argue d that the developing Members and their domestic 
industries had provided the breathing space to the tex tile industries of the developed Members.  While 
the ATC envisaged progressive integration of this sector during various stages, which by itself was 
backloaded, the manner in which restraining Memb ers had gone about the process of integration in 
the three stages would leave the bulk of restriction to be removed only on 1 January 2005.  As mentioned earlier, also in India's case, with some of its major trading partners more than 95% of 
clothing, fabric and yarn trade w ould remain unintegrated even after the third stage.  Acceptance of 
the implementation proposals would have been a small step in exposing the domestic industry to 
increased competition from imports and would have made the process of transition to the post-ATC 
scenario a small step for such industries.   G/C/M/64 
Page 56  
 
 4.10 He recalled that, in the statement made during the CTG meeting on 13 June, restraining 
Members were of the view that adoption of the implementation proposals would subvert the carefully 
negotiated balance of the ATC.  This was surprising as, in the view of the developing countries, it was 
the restraining Members which had created imbala nces in the implementation of the ATC.  The 
progressive liberation envisaged in the ATC had not materialized;  in fact, most of the quota 
restriction continued to remain in place.  Also , unjustified and arbitrary trade defence measures had 
been resorted to by the restra ining Members to further limit the market access for the restrained 
exporters.  In India's intervention at the last mee ting on the CTG, they had given facts and figures on 
the adverse impact of anti-dumping proceedings on co tton fabrics and cotton bedlinen on the share of 
export from targeted countries.  Rules of origin a ffecting textile and clothi ng products have been 
changed by the US in pursuit of trade policy object ives, thereby subverting the integration process.  
Acceptance of the implementation proposals would, in  fact, restore the balance in the ATC.     
4.11 The representative of India recalled the mandate  given by the Ministerial Conference at Doha.  
Through this mandate, the CTG was to make its  recommendations to the General Council on these 
two proposals for appropriate action by 31 July 20 02.  The developing, exporting Members had made 
their case by logic, facts and flexibilities provided by the provisions in the ATC.  Nevertheless, 
successful resolution of this problem continued to elude the Council.  He stressed that the textile 
implementation proposals also needed to be view ed in the context of the Marrakesh Agreement 
Establishing the WTO which recognized the need fo r positive efforts designed to ensure that the 
developing Members and the least-developed Members secured a share in the growth in international 
trade commensurate with the needs of their economic de velopment.  It  could not be denied that the 
share of developing Members in international tr ade in textiles and clothing had not shown any 
appreciable increase over the past years.  This had, in  part, been due to the resort of some Members to 
arbitrary trade defence measures against imports or iginating in developing Members, some of which 
had been commented upon by panels and the Appe llate Body.  He said that the Ministerial 
Declaration had attached the utmost importance to the implementation issues and concerns and had 
expressed their determination to find an appropriate so lution.  However, they were still not able to see 
any successful resolution to these proposals.  
4.12 The representative of China
 concurred with the statements of Hong Kong, China and India. 
At the last CTG meeting on 13 June 2002, the developing Members had urged the restraining Members to show flexibility and adopt a positive attitude towards the two proposals in order to 
maintain their confidence in the multilateral system.  They had also said that the resolution of this 
implementation issue would facilitate the completio n of the Doha agenda.  He commented on the 
points made by some of the restraining Members, es pecially the United States, at the last meeting in 
relation to these issues.  The importing Members ha d argued that the adoption of the proposals would 
require modifying the Agreement and that would be di fficult for them to do so at this stage.  This 
argument, however, was not convincing.  The ATC, as negotiated, did not prohibit increases in quota 
access beyond the strict, prescribed minimum percenta ges in growth rates.  Furthermore, all three 
restraining Members had found it possible during the ATC period to go beyond those minimums in certain cases;  they could not have done so if this  required modification of the ATC.  He considered 
this, in itself, sufficient to prove that the approva l of the two proposals did not require any change to 
the Agreement.  The restraining Members had ar gued that since imports had increased in their 
markets, therefore, the ATC had been implemented full y.  That was not an accurate statement.  While 
imports into the restraining Members' markets might have increased during the ATC period, the 
import share of restrained Members in the US had fallen dramatically from 76.6% in 1994 to 65.9% in 
2000.  In the EC market, it had fallen from 45.6% to 43.1% in the same period.  The declines in their 
shares in clothing imports in both markets were even higher.  These facts proved that the import increases could not be due to ATC implementation.   Also, the developing Members had presented a 
good analysis of why the adoption of the two proposals would serve the purpose of redressing the 
imbalance under the ATC during the past seven y ears while the importing Members had not advanced 
any convincing reason to demonstrate that the pro posals would somehow disrupt the balance of the  G/C/M/64 
 Page 57 
 
 
 ATC. China believed that the two proposals did not require any modification of the Agreement.  Their 
approval would redress the imbalance that had been  experienced in the implementation of the ATC 
and would provide encouragement to the developi ng Members that the multilateral trading system 
could address the problems and concerns raised by them. 
4.13 The representative of Pakistan  recalled the detailed statement by the United States on 
13 June 2002 on the proposals relating to the Ag reement on Textiles and Clothing referred to this 
Council by the Doha Ministerial Conference.  He said  that, in the US statem ent, it was claimed that 
the two proposals would require an explicit change in the ATC and that the Agreement should not be 
re-opened through these proposals in final years of the implementation period.  Also, he recalled the 
claims that the ATC had allowed imports to grow rapidly and, therefore, the implementation of the 
ATC was on track and working well and that the adoption of the two proposals would upset the 
carefully negotiated balance of the Agreement.  He recalled that, in the CTG meeting held on 
13 June 2002, the US representative had stated th at both proposals would require doing something 
that was not mandated by the ATC as now written, and therefore, would require an explicit change in 
the Agreement.  He noted that, although the US repr esentative made this assertion in their statement at 
the meeting of 13 June 2002, it did not appear in th e document circulated subsequently (G/C/W/387).  
Nevertheless, paragra ph 25 of that document did contain the US  view that the ATC should not be re-
opened by the proposals in its final years.  The statement by the US delegation did not provide any reason or justification as to why the two proposals involved re-opening of the ATC.  No specific points had been put forward to support this contention. 
4.14 He said that the ITCB members, through th eir submission contained in document G/C/W/368, 
had repeatedly pointed out that the proposals fell within the existing provisions of the ATC and their 
adoption would not require any modification in the Agreement or in domestic legislation of the 
restraining Members.  It was clear from a plain reading of the proposal under paragraph 4.4 that in the case of small suppliers, the restraining Members were only required to apply the most favourable 
methodology available under the gr owth-on-growth provisions and extend the same treatment to least 
developed Members. 
4.15 What this would mean was that the two r estraining Members, the United States and Canada, 
would apply the same methodology as had been  done by the EC when implementing the ATC 
provisions.  He was sure that the EC would not ha ve applied such a methodology if it had not been 
permitted under the ATC or would ha ve involved a re-opening of the Agreement.  Furthermore, if 
such methodology had been inconsistent with or not allowed by the provisions of the ATC, the TMB 
would definitely have pronounced itself on it. 
4.16 The representative of Pakistan also noted that the ATC provided minimum thresholds for 
increases in quota levels from the beginning of the three integration phases.  It did not prescribe any 
limits or ceilings or prohibit any increases above the minimum thresholds.  If any restraining Member 
had enacted its legislation as though the percentage  increases were the maximum permissible, that 
Member would be in violation of its obliga tion under Article XVI, paragraph 4, of the WTO 
Agreement which provides that "each Member shall en sure the conformity of its laws, regulations and 
administrative procedures, with its obligations as pr ovided in the annexed Agreements".  He said that 
the two proposals under consideration were designe d to provide increases in quota access.  It was a 
matter of record that all three restraining Member s had provided increases in quota levels during the 
course of the ATC without any change in the Agreem ent.  With effect from 1 January 1998, Canada 
had provided quota increases for a restrained category.  Their notification to the TMB was contained 
in document G/TMB/N/316 of 16 January 1998.  The United States also provided quota increases for a restrained Member on two occasions, the US Federal Register Notices of 6 September 1993 and 21 May 1998 contained information on these increases.  Similarly, the EC had also provided increases in 
quota access for certain Members.  It was, therefore,  apparent that no changes were required to be 
made in the ATC, nor did it involve any re-openi ng of the Agreement to enable these Members to G/C/M/64 
Page 58  
 
 implement these increases.  As such, no change would be required to the ATC to adopt these 
proposals.  He also noted that the EC had accepte d that the proposals would not imply amendment of 
the ATC.  In this connection, he recalled th at in the CTG meeting of 2 May 2002, the EC 
representative had stated that "he accepted that the advanced implementation of the growth-on-growth 
provisions did not imply the amendment of the ATC" (paragraph 1.18 of the document G/C/M/60). 
4.17 Concerning the issue of rapid growth of imports in the restraining Members, Pakistan 
considered that the purported increases in imports was neither relevant to assessing the fulfilment of 
obligations under the Agreement, nor could they pr ovide a justification for violating any of those 
obligations.  In the CTG meeting of 26 October 2001, the US representative had stated "it was clear 
that imports had increased in the US market, this would never be a pretext for failing to fulfil legal 
obligations" (paragraph 5 of G/C/M/56). It was also a fact that no commercially meaningful products 
had so far been integrated.  It was, therefore, obvious that increases in imports could have been the 
result of ATC implementation.  In this regard, the growth of imports into the US market from 
restrained Members had been suppressed at 6.8% per year as compared to 16.6% for unrestrained 
suppliers. 
4.18 With reference to the US statement that "adoption of the two proposals would subvert the 
carefully negotiated balance of the Agreement", as explained by the ITCB in document G/C/W/368, 
contrary to this claim, the adoption of the proposals would in fact go some way in rectifying the imbalance created by the restraining Members which,  unfortunately, the statement failed to mention.  
In sum, despite the passage of seven years, very  few quotas had been removed or phased out.  The 
United States had invoked a number of safeguard ac tions for new restrictions which had impacted 
more than $1 billion of exports from affected exporti ng Members.  Virtually, all of these actions were 
subsequently found to be violations of US obliga tions under the ATC, either by the TMB or by the 
dispute settlement panels and the Appellate Body.  Another restrain ing Member had initiated and/or 
imposed anti-dumping measures on products which were  already restrained by quotas.  This action 
was also subsequently found to be unjustified by  a dispute settlement panel and the Appellate Body 
which faulted the EC methodology for dumping de terminations on several grounds.  The EC had 
removed quota restrictions on non-WTO Members while  it had retained them on WTO Members, in 
violation of the MFN principle and, thereby, Article 1.6 of the ATC.  The US had changed its rules of origin relating to textiles and cl othing for trade policy purposes a nd to raise unjustified protection 
against imports.  The ATC objective of facilitati ng the integration process and progressive phase-out 
of quota restrictions had been nullif ied by deferring integration of the restrained products until the end 
of the transition period.  These actions by the rest raining Members had impaired the balance of the 
Agreement and the adoption of the two proposals woul d go some way towards restoring this balance. 
4.19 The representative of Indonesia
 said that the developing Members had placed such a great 
hope in these issues, especially because Ministers at  Doha had expressed the determination to take 
concrete action to address issues and concerns raised by the developing Members regarding the 
implementation of some WTO Agreements, in particul ar the ATC.  It was surprising to see the wide 
gap between the political commitment by Ministers and the reality in Geneva.  It did not make for an environment of confidence among the developing Memb ers.  The reasons advanced by restraining 
Members would fail to convince any ordinary observers .  For example, the argu ment that the market 
access enhancing proposals would change the ATC, c ould not withstand scrutiny.  The ATC provided 
for minimum threshold for increases in growth rates;   it did not establish or prescribe any ceiling and, 
in fact, all restraining Members had provided incr eases in quota growth rates in addition to the normal 
growth-on-growth in a few cases.  The facts were undeniable that while only a few quota restrictions 
had been phased out, there had been several anti-du mping actions, including against imports of some 
products from Indonesia.  Likewise, there had been changes in rules of origin in another major 
importing Member and the EC had removed quota r estrictions on non-WTO members while retaining 
them on WTO Members in non-violation of the principle of equity.  The balance of the Agreement 
had not been kept.  Under those circumstances, it wa s surprising to hear from the restraining Members  G/C/M/64 
 Page 59 
 
 
 that the balance of the Agreement could be disrupt ed if the two proposals were approved.  The fact 
was that, on the contrary, that adoption could go some way towards redressing the imbalance.  
Indonesia placed much importance of this issue and expected the CTG to fully discharge its mandate.  
Resolution of this issue was critical in  helping to advance the WTO programme. 
 
4.20 The representative of Brazil  endorsed the statements of Hong Kong, China and other 
representatives of exporting Members.  He said th at the key was that there was an undeniable 
imbalance in the implementation of the ATC and th is imbalance had to be redressed.  The path of 
implementation had been unsatisfactory to the expor ting Members.  A sign of this was the significant 
proportion of quotas that were left to be integrated only at the end of 2004.  This was not what they 
understood as progressive liberalization of the quot as in the terms of the ATC itself.  The two 
proposals on the table constituted an attempt to correct this situation.  It was very important to note 
that they did not require any amendment to the AT C, contrary to what was being stated by the 
importing Members.  Moreover, their adoption wo uld send a very positive signal as regards the 
commitment of developed Members concerning implementation as a whole. 
 
4.21 The representative of the United States  noted that there had been frequent reference to the 
statement that the US delegation had made at the la st formal meeting of the CTG;  he proposed to 
make a response.  He referred to three areas which ha d been cited by speakers.  The first issue was the 
possible modification of the ATC.  It was clear that  since Norway had been ab le to entirely eliminate 
its restraints in the course of the implementation of the ATC, there was no question that there was no 
upper limit on what could be done.  On the other hand, when the ATC was negotiated and presented 
to the US Congress, a commitment had been made that  the US would do what it was required to do by 
the ATC and in the case of small suppliers and the relevant methodology, the US had implemented 
what they though was the plain meaning of what had b een negotiated in that part of the Agreement.  
One strong indication that the US reading of the small supplier methodology was correct was the fact 
that it had never faced legal challenge in the WTO.   Members had not been reluctant to take the 
United States to dispute settlement on other textile issues, and if this was an area where the United 
States was truly vulnerable, this w ould have come out in the dispute settlement process.  He said that 
it had been noted that the EC had adopted a diffe rent, more generous methodology and he would 
argue that they did not, in fact, choose a methodology that was required by the ATC.  Why the EC had chosen their methodology was something for them.  For the US, they were comfortable with their 
methodology;  this was what was required by the Ag reement.  That was the aspect being referred to 
when they spoke about modification of the Agreemen t, and what they were required to do by the 
Agreement.  A modification would be required in or der to change what that methodology would have 
to be.   
4.22 With respect to the question of growth rat es, the representative of the United States said that 
this referred to the total increase in imports ove r the period of time that the ATC has been in 
operation.  He did not see a disagreement on the numbers that had been  put forward but the 
interpretation was selective and presented a misleading picture.  On the one hand, the point had been 
made that the share of the US market held by r estrained Members had dropped from three quarters to 
two-thirds over the period the ATC had been in oper ation.  On the one hand, two-thirds of the US 
market was still a very substantial percentage.  He did not think it possible to argue that having a two-
thirds share indicated a marginalization in the US ma rket.  The fact that the share of US imports held 
by restraining Members had dropped was something that  could have been predicted at the time that 
the ATC was negotiated.  Apparently, this had not b een the case in the EC and Canadian markets;  
nevertheless, it followed quite naturally from the fact  that if Members were restrained by quotas over 
a ten-year period, their export growth rates were not going to be as high as unrestrained suppliers.  He 
said that it had been stated that the United Stat es had maintained that the changes that would be 
required in the two proposals before the Council represented an unbalancing of the rights and G/C/M/64 
Page 60  
 
 obligations that were negotiated into the ATC a nd this had been linked to the question of the 
legitimate expectations of the exporting Members and the overall lack of satisfactory increases in 
market access over this period.  From the US st andpoint, what they had achieved in the negotiation 
that created the ATC was a ten-year phase out for their industry.  They knew that the quota growth that would occur during that time was going to put  their industry under pressure and that adjustment 
was going to be the inevitable result.  In fact, over this period, 61% of the increase in US imports had 
come from restrained Members.  This was expected and they knew that adjustment would take place.  
They also knew that the import sh are of foreign suppliers was going  to be increasing over this time 
but what came as a surprise was how fast this peri od of adjustment was compressed in the first seven 
years of the ATC.  At the time that the ATC came  into force, there were almost a million clothing 
workers in the United States.  That number had dr opped;  the latest number was a bit more that 
400,000 and was decreasing.  Therefore, when expor ting Members argued that they had not received 
the benefits from the ATC;  that everything was backloaded;  that there really had not been any 
meaningful adjustment;  that the progressivity of  the Agreement had been ignored, these arguments 
completely ignored the facts at our disposal, that the period of adjustment that was supposed to take 
place over ten years had gone faster than expected .  The idea that adjustment should be further 
accelerated, given the rapid declines in employment and the numerous bankruptcies that US firms are 
facing, was not justified based on what was in th e Agreement and what the US experience had been 
with the Agreement. 
4.23 The spokesman for the European Communities
 stated that they had faithfully implemented 
the obligations and requirements of the ATC.  In this  regard, he pointed out that there were no specific 
provisions beyond the dates and the percentages at the different stages which were written into the 
Agreement, as well as the requirement as to how th e different categories must be covered in the 
integration process.  Therefore, the EC had respected  the requirements of the ATC.  They would study 
very carefully the statement made by Hong Kong, Ch ina because when it came to statistics, there 
were some differences of interpretation from the statistics they had presented.  According to EC 
statistics, imports from 1994 to 2000 had gone up by 61% for restrained Members as compared to 
imports from all sources of 54%.  According to th ese figures, there was favourable treatment for 
restrained Members.  Reference had been made to the CTG meeting of 2 May with respect to 
paragraphs 4.4 and 4.5, where the EC had stated that the growth-on-growth proposals contained in 
paragraph 4.4 would, in fact, have to be c onsidered, if accepted, as a new concession and not 
something which was due.  As a new concession it would have to be considered in the overall textile 
negotiations package.  It was also mentioned that  acceptance of the proposals in paragraphs 4.4 and 
4.5 would change the overall balance of  rights and obligations of the ATC. 
4.24 Referring to the specific point raised by developing Members concerning anti-dumping, the 
EC considered that the application of anti-dumping rules had followed the specific provisions of the 
WTO.  In fact, they were taking place in a differe nt forum, under the special rules which deal with 
these problems.  An anti-dumping action was currently in place between India and the EC and it was 
subject to a specific procedure within the institu tions of the WTO and in this matter, the EC 
considered that it was acting in full compliance with  the panel findings.  In fact, its compliance had 
gone beyond the requirements of the panel to which reference had been made.  Concerning statistics, 
the EC had asked for data concerning imports fro m non-restraining Members to be elaborated and 
circulated along with a request concerning the tari ff structure.  The figures were extremely significant 
when it came to imports from certain non-restraining Members. He said that the figures were 
tremendously low and this could be linked to the bala nce referred to in ATC Ar ticle 7 to which the EC 
and others attached so much importance in terms of  the general liberalization of trade in textiles and 
clothing.  He said that reference had been made  to the EC's treatment of non-WTO Members which 
appeared to be a major problem to some Members.  It was the EC's contention, however, that relations 
with non-WTO Members were not covered by the ATC.  In the specific cases, he pointed out that the 
countries in question had granted virtually free access to the Community and that had been 
accompanied by a generous import policy from their side.    G/C/M/64 
 Page 61 
 
 
 4.25 The representative of Canada  said that they had met and exceeded their obligations under the 
Agreement on Textiles and Clothing in its transitional arrangements.  It remained their view that the 
facts did not support the exporters' contentions rega rding the implementation problems or that there 
had been any impairment or any imbalance of th eir rights and obligations.  He pointed to two 
examples;  first, nowhere in the ATC was there an explicit phase-out schedule specifying dates and 
amounts for the elimination of quotas during the tran sition period before 1 January 2005.  What was 
required was that the integration process be ba sed on two conditions:  meeting minimum volume 
thresholds and meeting the produc t coverage requirements.  Sec ond, concerning developments in 
import levels, clothing imports from restrained Me mbers were up over 80%.  In Canada from 1994 to 
2001, the import market share of the restrained Members had stagnated from 69% in 1994 to 70% in 
2001.  The import growth from the restrained Member s had grown more than three and a half times 
faster than the growth of the Canadian market.  A nd the market share held by the restrained Members 
had increased by more than 10%. 
4.26 He said that Canada remained committed to the full integration of the textiles and clothing 
sector into GATT 1994 disciplines by 1 January 2005, as stipulated in the ATC and, hence, the 
elimination of all remaining quotas by that day.  He agreed fully with the United States on this point, 
that the ATC provided a negotiated, ten-year transitio n period to allow the domestic industry to adjust.  
That was the purpose of the ten-year period in the tr ansitional provisions set out under the Agreement.  
This commitment to the ten-year transition pe riod represented a fundamental commitment that 
Canada had made to its industry.  He noted that th ere had been a number of statements to the effect 
that these proposals would not require an amendmen t to the Agreement.  The ITCB Members had 
pointed out with respect to the growth-on-grow th provisions that the ATC established "minimum 
thresholds";  he agreed.  The ATC set the floor but it did not require anybody to do more than this, 
although Members could choose to do so.  That the EC had chosen a methodology which they agreed was not inconsistent with the ATC, was a choice fo r the EC. Canada had chosen to include in its 
implementation of the small exporters ' provision five more Members than they had to.  Likewise, they 
had chosen in 1998 to increase the quota level unilatera lly on outwear by 10%;  that was their choice.  
That was part of their adjustment  strategy.  However, there was one fundamental point that seemed to 
have been overlooked.  What the ITCB member s were asking for was that these proposals be 
mandated, that the restraining Members be required to  do this.  In other words, they would be required 
to do something that was not required by the AT C.  Canada remained fully committed to this 
Agreement but did not agree with proposals that  would fundamentally alter the specific legal 
requirements of the Agreement in te rms of what they needed to do. 
4.27 The representative of Hong Kong, China
 expressed appreciation for the responses of the 
restraining Members which went some way to clarifying, at least partially, some of the points which had been at the heart of the arguments that they ha d been making in recent months over this issue.  He 
said that it was very clear from what the US and Ca nada had said that their position was that they 
would not do anything more than the minimum that they were required to do.  Furthermore, they had 
explicitly, in one case, and implic itly in another, accepted that th e implementation proposals would 
not require amendment or modification to the ATC provisions.  They appeared to be saying that they would require modification to the undertakings to their domestic industries and political institutions 
which was a very helpful clarification which took them a stage further.   
4.28 Concerning one point which the US had said on the statistical issue, they seemed to be giving 
the impression that the restrained  Members' share of the US market had dropped from about three 
quarters to the two-thirds level.  This referred to import shares which was clear from the earlier 
statistical exchanges.  He also noted the argument th at the restrained Members had to expect that their 
import shares would drop as a result and that the presence of quotas meant that export growth rates would be smaller.  But he considered that the w hole emphasis in the ATC was to ensure that growth 
rates did indeed increase remarkably.  He also h eard reference to an equity argument which would 
have been relevant under the MFA and would probab ly still be relevant t oday under a detailed legal G/C/M/64 
Page 62  
 
 analysis.  The ten-year phase-out was going faster th an expected and the adjustment period was being 
compressed.  This was true but the developing Members had it clear in their statement that this was, in fact, due to the increase in preferential trade.  In  the case of textiles and clothing, the increase in 
preferential trade was tied to highly restrictive prefer ential rules of origin and that was having a very 
large effect on the picture.  He referred to the comment by the US that employment in the industry 
had dropped from one million down to 400,000, and he  asked if that was due to the traditionally 
restrained Members.  If so, that would be fully ju stified as many of the traditional exporters enjoyed 
comparative advantage in this area just as expor ters in the US, Canada and the EC enjoyed 
comparative advantages in other areas.  Undoubtedly, part of this change was the result of increased 
imports from the traditionally restrained Members.  But the point was that imports from preferential 
sources had increased far more strongly, Canada among them.  So, why shoul d Hong Kong, China be 
held accountable for these effects which were in f act "self-inflicted" by the parties to these 
preferential trade agreements.  He noted that US  imports from Canada had increased phenomenally in 
this sector;  he questioned, however, if there were  not other Members which were better equipped to 
export textiles and clothing.  Unless those economi es were allowed to export where they had this 
advantage, then clearly world markets were going to be distorted as they had been for 40 or 50 years 
in this particular case. 
4.29 The representative of Hong Kong, China refe rred to the statistics raised by the EC and 
pointed out that the figures that he had been quoting were based on WTO statistics, while those of the 
EC seemed to have a different product coverage a nd were perhaps in terms of a different currency 
than the statistics that he was quoting.  Furthermor e, concerning the EC's point about relations with 
non-WTO Members not being covered by the ATC, he referred to Article 1.6 of the ATC which said 
that "Unless otherwise provided in this Agreement,  its provisions shall not affect the rights and 
obligations of Members under the provisions of the WTO Agreement and the Multilateral Trade 
Agreements".  He also suggested that Members be ar in mind Article 1 of the GATT, where it states 
that "any advantage, favour, privilege or immunity  granted by any contracting party to any product 
originating in or destined for any other count ry" (not GATT Member or WTO Member) "shall be 
accorded immediately and unconditionally to the like product originating or destined for the territories 
of all the other contracting parties".  On this basi s, he considered that it would be regrettable to 
suggest that it was possible to discriminate agai nst WTO Members in favour of non-WTO Members.   
4.30 The representative of Honduras
 recalled that, during the Ministerial Conference in Doha, 
Members had reached a consensus on many of the necessary elements in order to support the Doha 
Development Agenda.  There had been some s ubjects in relation to the implementation of 
commitments in the Uruguay Round which had not been  settled in November, many of which were of 
great importance for the developing Members.  These included their concerns on the implementation of the ATC.  This Committee was required to ex amine the progress made and the consensus to be 
achieved in July in this connection.  He consider ed that the ATC should not be separated from the 
other elements of the Doha Development Agenda.  This very name reflected the role which the 
developing Members were to play;  his country was co mmitted to this.  He said that they would like to 
have success in the clothing industry, in particular, in  view of the fact that si nce the middle of the last 
decade restrictions were being raised and they had witnessed the importance of open markets.  This was reflected in their commitment to negotiate with  other countries in their hemisphere and to search 
for a free-trade area.  Honduras had committed to e liminating all barriers to trade and supported the 
movement towards more open markets in the Western Hemisphere as well as the rest of the world.  In 
the Doha Ministerial Meeting, the CTG had been ask ed to draw up recommendations for the General 
Council in order to carry out appr opriate actions and to improve on some of the provisions of the 
ATC.  The object of this was not to renegotiate the Agreement.  The intention had been to search for a 
mechanism in order to improve access to their mark ets;  however, at this meeting they had heard 
opinions which showed the contrary.  He expressed the hope that all of the concerns which had been 
expressed would be taken into consideration in or der to search for a satisfactory solution.  Honduras 
supported the view that the best way the WTO could contribute to improvements for the developing  G/C/M/64 
 Page 63 
 
 
 Members would be to set up a wide agenda which would help most Members with specific emphasis 
in favour of the developing world.  Their economies needed this momentum towards liberalization, in 
particular in view of the existing environment. 
4.31 The representative of the United States  referred to the comments by Hong Kong, China with 
respect to the statistics that he had mentioned and he clarified that, in fact, the US was referring to the 
relative share of restrained Me mbers versus unrestrained Member s dropping from three quarters to 
two-thirds.  In respect of the import share of all cl othing exports to the United States, there were some 
definitional problems, particularly due to the pr oblems of counting the re-export trade;  however, 
imports were currently taking 85 to 90% of the US market for clothing. 
4.32 The representative of Canada  sought to clarify a comment by Hong Kong, China to the effect 
that all the restraining Members had accepted that the proposals would not require amendments to the 
ATC.  He would not agree with that;  rather, he would say that the proposals would effectively raise the floor established by the ATC and by raising the floor, that would change the Agreement in terms 
of its substantive basis.  Canada had, on a numbe r of occasions, gone beyond the Agreement but that 
was part of their overall plan.  The proposals were  changes that had not been contemplated and now 
were being argued for, but the bottom line was they would raise the floor established by the ATC as it 
had been negotiated during the Uruguay Round. 
4.33 The representative of Hong Kong, China
 understood the comments by Canada to mean that in 
the particular area of the two proposals as in some  other areas having to do with the implementation 
of the ATC, which prescribed a floor or a minimum, Canada could go beyond the minimum if it was part of an overall plan.  He accepted that the propos als were not part of their overall plan since they 
had gone further in the past in some other areas, however, they could go further if the matter was part 
of their overall plan;  he wished Canada could be  persuaded that these proposals should be part of 
their overall plan.  Saying that an actual amendment of the ATC would be required in order to accommodate the proposals would be stretchi ng things beyond the point of credibility. 
4.34 The representative of Canada
 responded that it was difficult to contemplate other ways of 
expressing their position on whether the proposals would involve a change or not, one that would not 
change anything that they were required to do under the Agreement.  The ATC was in the last two and 
a half years of the transition period and Canada pl anned to fulfil their obligations during those two 
and a half years as the ATC stands.  Canada woul d meet their obligations within the Agreement on 1 
January 2005. 
4.35 Having heard these interventions, the Chairman  said that the Council had taken the 
discussions as far as it could.  He then proposed that the Council agree to suspend the discussion of 
this item and to resume discussion at a further meeting which he would convene for this purpose 
before the General Council  meeti ng scheduled for 31 July.  He also asked Members' agreement for 
convening this meeting on a shorter than normal no tice in view of the obvious time constraints. 
4.36 The Council noted  the Members' statements and agreed  to the Chairman's proposals. 
 
4.37 When the CTG resumed on 30 July, the Chairman  recalled that  the process of examining the 
proposals began in  March and April, with three info rmal meetings to discuss the ways of approaching 
the task.  It was decided that the best means of a dvancing the work would be to begin the examination 
at the formal CTG on 2 May, to be followed by a series of informal sessions which would go into the 
details of the proposals and  prepare the draft report and recommendations, along with the formal 
meetings to put matters on record.  Up to the pr esent time this item had been on the agenda of four 
formal sessions, in May, June and July, and had be en discussed at eight informal consultations over 
this period.  A great deal of documentation w as provided during this exercise in support of the 
argumentation made in the meetings, both in the fo rm of statistics on trade developments during the G/C/M/64 
Page 64  
 
 ATC period, as well as detailed submissions setting out the position of the different Members.  It 
became clear from the outset that there were funda mental differences in the views and understandings 
of the restraining Members and those of the devel oping, exporting Members on both the contents of 
the report and on recommendations.  A great deal of effort went into trying to present these views in a factual and balanced manner in a draft report.  Howe ver, discussion of the draft  text led to repeated 
demands for further points to be included which, in turn, resulted in demands for balancing texts.  The 
draft report was rewritten repeatedly to accommodate  these requests, however, the required consensus 
on the report and on recommendations did not take shape.  In view of all of  this, he saw no alternative 
but to conclude the  exercise without results.  Conse quently, he was not in a position to put before the 
CTG a draft report with recommendations to the Genera l Council.  This would be his statement to the 
General Council on the next day and he proposed that delegations reserve  their views on this matter 
for the General Council meeting.  4.38 It was so agreed
. 
 
V. REQUEST BY COSTA RICA;  INDIA;  INDONESIA;  PAKISTAN;  PERU AND 
HONG KONG, CHINA:  CTG'S OVERSIGHT FUNCTION PURSUANT TO ARTICLE IV OF THE AGREEMENT ESTABLISHING THE WTO – TRANSPARENCY REGARDING NEW RESTRICTIONS ON TEXTILE AND CLOTHING PRODUCTS COMMENTED ON BY THE TEXTILES MONITORING BODY (G/C/W/260/REV.1) 
 
5.1 The Chairman
 noted that this item had been brought before the Council some time ago by 
Costa Rica;  India;  Indonesia; Pakistan;  Peru a nd Hong Kong, China in rela tion to a specific matter 
as well as to a wider concern with the CTG's oversight  function for the ATC.  He reported that he had 
conducted consultations on this issue and had discussed it with the inter ested parties.  He believed that 
he was in a position, on this occasion, to say that these discussions had resulted in a greater 
understanding on both sides on some of the issues invol ved.  Consequently, he considered that it was 
not necessary to further pursue these consultations.  
5.2 The Council took note  of the Chairman's report. 
 
VI. MAJOR REVIEW OF THE IMPLEMEN TATION OF THE AGREEMENT ON 
TEXTILES AND CLOTHING DURING THE SECOND STAGE OF THE 
INTEGRATION PROCESS, PURSUANT TO ARTICLE 8.11 OF THE ATC (G/C/W/396) 
 
6.1 The Chairman
 said that he was pleased to place before the Council, a draft report for its 
consideration on the major review of the implemen tation of the ATC during the second stage of the 
implementation process.  This draft report was contained in document G/C/W/396. 
6.2 The Chairman recalled that the Council ha d conducted the major review of the ATC's 
implementation in three formal sessions held in September and October of last year.  At that time, both the developing Members and the restraining Me mbers had set out in considerable detail their 
experiences and concerns with the ATC implementa tion process during Stage 2, that is, the 1998 to 
2002 period.  Full details of those discussions were contained in the Minutes of those meetings in 
documents G/C/M/51, 52 and 56.  Following this, effo rts had turned to the preparation of a report on 
the discussions for consideration and adoption by the Council.  The Council had agreed to conduct 
this exercise based on informal consultations with all the Members that had expressed their wish to 
participate.   Preparing the draft report had proven to be ex tremely difficult, particularly in respect of 
the efforts to reach agreed conclusions on certain  aspects of the implementation process.  The great  G/C/M/64 
 Page 65 
 
 
 importance and sensitivity of textiles and clothing trad e for so many Members;  the differences in the 
perceptions of the goals and objectives of the Agr eement;  and concerns wi th the consistency of 
certain measures had taken during the implementa tion process made consensus very difficult to 
achieve. 
6.3 However, the Chairman informed the Counc il that the goodwill and understanding of both 
developed and developing Members, combined with a tireless determination to arrive at a consensus 
report had made it possible for him to prepare the draft which was before the Council.  He proposed 
that the Council adopt the draft report.  
6.4 The representative of Hong Kong, China  thanked the Chairman for his efforts in preparing the 
draft report on the second major review of ATC implem entation.  He also noted, in this regard, the 
work carried out earlier by the two previous chairmen  of the Council.  He said that, while Hong Kong, 
China endorsed the draft report, they were not fully satisfied with the conclusions.  They would have 
preferred some of the conclusions to be much more  substantive, as the mandate for the review clearly 
required the Council to make an overall statement of the progress in the integration process towards 
meeting the ultimate objective of full integration of  the textiles and clothing sector into the normal 
GATT rules by 2005. The mandate, and in particular  ATC Article 8l.12, also required the Council to 
take appropriate decisions to ensure that the ba lance of rights and obligations embodied in the ATC 
was not being impaired.  He noted that the matter had been pending for over six months.  Since failure 
to conclude the mandated review would have ri sked undermining the oversight function of the 
Council, Hong Kong, China had been prepared to sh ow a considerable degree of flexibility in a spirit 
of compromise.   
6.5 What stood out in the draft report was that , while the Council could arrive at certain 
conclusions, in paragraph 22 of th e report, it could not arrive at any agreed conclusions on a number 
of other very important issues raised by developing Members.  These issues were discussed in paragraphs 23 to 29 of the report.  There were also  points in the consensus conclusions which merited 
some emphasis.  First and foremost was the rea ffirmation by all Members of their commitment to 
achieve the full and faithful implementation of th e ATC and the importance of achieving the full 
integration of this sector into WTO rules and di sciplines by 1 January 2005.  In the light of this 
overarching objective, it was all the more important for the Council regularly to oversee and evaluate 
the functioning of the ATC in accordance with Artic le 4.5 of the WTO Agreement and Article 8 of the 
ATC.  In this regard, he stressed that while the ATC provided for bilaterally agreed arrangements, it 
must always be remembered that what might be agreed bilaterally was constrained by the multilateral 
rules and that it was the responsibility of the Coun cil to ensure multilateral surveillance.  Another 
important feature of ATC implementation was the n eed to allow for continuous autonomous industrial 
adjustment and increased competition in Members'  markets as mandated under Article 1.5 of the 
ATC.  This was all the more important in view  of the fact that the restraining Members had 
implemented the ATC in such a way as to leave the bulk of quotas in place until the very last day of 
the ATC.  In this regard, he recalled the need for Members to provide information to the Textiles 
Monitoring Body from time to time on relevant devel opments in this area.  Less than two and a half 
years were left before the ATC and all restrictions thereunder terminated.   
6.6 The representative of Hong Kong, China concluded by once again stressing that the Council 
and the entire membership must stay vigilant in the remaining 30 months to ensure that they reach the 
final goal of full integration on 1 January 2005.  As he had said on previous occasions, the full 
engagements of a significant number of developi ng Members in the current Doha Development 
Agenda was clearly predicated on the full delivery of the results of the Agreement on Textiles and 
Clothing.  This meant that ATC implementation was a subject of interest not only to those directly concerned with the trade in the sector, but also to the membership as a whole.   G/C/M/64 
Page 66  
 
 6.7 The representative of Bangladesh
 recalled that in the Council meetings he had expressed 
concern that the major review of the ATC implementation, of the single most important sector of trade to the economies of the developing Members, includi ng Bangladesh, had yet to be concluded and that 
the CTG had been prevented from taking decisions pu rsuant to its mandate under Article 8.12 of the 
ATC.  Thanks to the Chairman's concerted efforts,  the major review had been completed and the CTG 
had the report before it.  While Bangladesh coul d go along with the CTG adopting this report, he 
wished to record their disappointment with the very  meagre results.  Firstly, it was obvious that the 
CTG had not been able to make any decisions in accordance with the mandate that it should ensure 
that the balance of rights and obligations embodied  in the Agreement was not being impaired.  He 
regretted there was no mention of this provision in the body of the report.  Indeed, he understood that 
the restraining Members were opposed to mentioning this.  Secondly, it was regrettable that the CTG 
had not been able to arrive at a ny agreed conclusions in respect of  a number of points that were 
relevant to assessing whether the balance of the Agre ement had been kept.  This was obvious from the 
paragraph 23 to 29 of the report.  Thirdly, as for the specific provision of the ATC in favour of small 
suppliers and the least-develope d Members, the report merely "reaffirms the importance of full 
implementation of those provisions" in indent 4 of pa ragraph 22.  It did not, however, show that, so 
far, these special and differentia l provisions had not been implem ented fully and faithfully.   
6.8 As Bangladesh had repeatedly said, the speci al dispensation of the Agreement and related 
Ministerial Decisions in favour of least-developed Me mbers had, in fact, been completely ignored by 
the major restraining Members in applying quota restri ctions on their exports.  From that perspective, 
Bangladesh had hoped and expected that the concer ned restraining Members would inform the CTG 
about how they proposed to give effect to the la test decision in this report, which reaffirmed the 
importance of full implementation of those two provisi ons.  Finally, he believed that the conclusions 
of this report had an important relationship to th e agenda item pertaining to the examination of the 
two proposals referred to the CTG by the Ministers in  Doha.  He urged that these conclusions be fully 
taken into account in considering those proposals and in the consequent recommendations to the 
General Council, as per the mandate given by the Doha Ministerial Decision. 
6.9 The representative of the United States
 expressed his appreciation for the approach to the 
draft report of other speakers.  It had been a diffi cult process and the result was a substantial one that 
Members were able to collectively agree by consensu s.  He agreed that it would have been a major 
failure if they had not been able to reach that agreement.  He note d that there were areas in which the 
exporting Members had continuing concerns and dissatis factions.  The US also was not entirely happy 
with all aspects of the implementation of the ATC,  but in the spirit in which this issue had been 
approached, he thought that the approach  of Members would serve the Council best. 
6.10 The spokesman of the European Communities  expressed his appreciation for the Chairman 
and for his predecessors who had presided over this le ngthy procedure.  This report had completed the 
process of the review to the extent that everybody  was equally dissatisfied with it, Members could 
consider it to be a fair result. 
6.11 The representative of Canada  after extending his appreciation to the Chairman, expressed his 
agreement with Hong Kong, China on the importance of  meeting the mandate for fulfilling the report.  
All Members had to show a great deal of flexibility  in order to achieve the report.  In terms of 
substance, Members would not be fully satisfied with any particular part of the report, but they all had 
recognized that it was a balanced report that  probably accurately reflects the overall view. 
6.12 The representative of India  also noted the efforts of the Chairman in bringing this important 
exercise to a conclusion.  He also appreciated th e positive contribution in the process of the former 
CTG Chairmen.  He noted that the Council was r esponsible for overseeing the implementation of the 
ATC and for this purpose was required by Article 8. 11 to conduct a major review before the end of 
each stage of integration process.  The completion of  this major review had been long overdue.  As  G/C/M/64 
 Page 67 
 
 
 per Article 8.11 of the ATC, the Council was to complete the second major review before 
31 December 2001.  He said that textile and clothing was an extremely important sector for the Indian economy and a major source of export earnings and em ployment generation.  While he endorsed the 
second major review report and the conclusions containe d therein, it did not mean that they were fully 
satisfied with them or that the conclusions met their reasonable expectations.  Developing Members 
had been expressing concern over the manner in  which some developed Members had been 
implementing various provisions of the ATC.  Duri ng the series of formal and informal consultations, 
developing Members had argued objectively, with facts and figures, how the balance of rights and 
obligations under the ATC had been impaired.  Conc rete suggestions for adoption by the Council to 
restore the balance had also been made.   
6.13 Article 8.12 of the ATC required that "in the light of its review the Council shall by consensus 
take such decisions as it deems appropriate to ensure that the balance of rights and obligations 
embodied in this agreement is not being impaired".  The ATC was a transitional arrangement aimed at 
bringing to an end, by 1 January 2005, the discriminatory quota regime.  The main objective of the ATC was to ensure that as of 1 January 2005 this  sector would be completely integrated into 
GATT/WTO disciplines.  The main path of achievi ng this objective was the progressive and gradual 
integration and elimination of quotas.  The fact was that the bulk of quotas remained in place and 
would be removed only on 1 January 2005.  These con cerns were highlighted in paragraph 8 of the 
report.  While India was pleased that the Council c ould arrive at some conclusions, as contained in 
paragraph 22, on a number of other important is sues raised by developing Members, no clear 
conclusions could be reached.  Repeated use of anti-dumping measures on restrained products, 
subsequently found to be unjus tified, had had serious adverse effects on the exports of some 
developing Members.  Paragraph 29 of the report noted the concerns of the developing Members in 
this context.  Paragraph 28 of the report highlight ed the exporting Members' concern with regard to 
changes in rules of origin for trade policy reasons, disrupting the utilization of market access to 
developing Members.  He said that some other m easures by the major textile importing Members that 
had impeded the attainment of the objectives of th e ATC included elimination of quota restriction on 
certain non-WTO members, while maintaining them on WTO Members;  lack of faithful 
implementation of obligations under Article 1.5 of the ATC for allowing continuous industrial 
adjustment;  customs and administ rative requirements, among others.  It was extremely important that 
provisions of the ATC were implemented in letter a nd spirit in the remaining two and a half years of 
the ATC.   
6.14 The representative of India reiterated the im portance of the second major review of the ATC 
implementation as it came at a critical time, the ATC and all restrictions thereunder would stand 
terminated on 1 January 2005.  He was pleased to  note the conclusion in paragraph 22 of the draft 
report underlining the importance of the full integrati on of this sector into WTO rules and disciplines 
by 1 January 2005.  Also, he noted the report's conclusion stressing the importance of the Council 
overseeing and regularly evaluating progress in th e functioning and implementation of the ATC 
because, as the present review had revealed, e xporting Members were facing many problems with 
regard to its implementation.  Equally important was the conclusion underscoring the importance of 
maintaining full transparency in all aspects of th e implementation process, notification requirements, 
and of facilitating the examination by the TMB of  all measures taken under the ATC.  He also 
underlined the importance of the decisions taken by the Ministerial Conference at Doha with 
reference to the ATC which were contained in section 4 of the Decision on Implementation-Related 
Issues and Concerns, which was reflected in paragra ph 30 of the report.  The major review was not 
just a routine exercise, but was envisaged to revi ew the implementation of the ATC.  It provided 
opportunity to Members to highlight their concerns w ith respect to implementation of the ATC so that 
appropriate corrective action could be taken to address these concerns.  He expressed the hope that the 
conclusions reached by the Council on some of the issues would be kept in mind by Members during 
the remaining period of the ATC and that all Memb ers would endeavour to achieve full and faithful 
implementation of the ATC in the remaining two and a half years. G/C/M/64 
Page 68  
 
 6.15 The Chairman
, in concluding the discussions, stressed that it was the goodwill and 
understanding, flexibility and pragmatism, shown by all delegations that permitted him to bring this 
exercise to a successful closure.  He also referred to the work of his predecessors, that had, in fact, 
laid down a very strong foundation. 
6.16 The Council took note  of the statements by Members and adopted  the report. 
 VII. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER ARTICLE 
9 (G/C/W/307 AND ADD.1) 
 
7.1 The Chairman
 recalled that the Goods Council had initia ted the review under Article 9 of the 
TRIMs Agreement in October 1999. Since then, there had been an invitation outstanding to 
delegations to submit written contri butions on this issue. To date, none had been received. At the last 
meeting, the Council had continued its discussion of  a background study produced jointly by the 
WTO and UNCTAD Secretariats on trade-relate d investment measures and other performance 
requirements (G/C/W/307 and Addendum  1), and some delegations had indicated that they might 
wish to make further comments at a later stage. Also, a number of questions had been raised for 
consideration by Members. He suggested that the CTG continue the discussion of the study. 
 7.2 The representative of Colombia
 said that her delegation had great interest in the review of the 
TRIMs Agreement and that it had suggested several el ements to be taken into account in the review 
concerning, for example, its duration and scope. In this regard, her delegation considered the Fifth 
Ministerial Session in Cancun as the deadline to deal with the review and that the objective should be 
to submit a document for the Minist ers' consideration by that time. Her delegation believed the review 
should include a factual aspect and she suggested th at the Secretariat prepare a document, containing 
the TRIMs notifications made by countries and thei r coverage, both from a sect orial point of view and 
in terms of their share in total imports. This do cument would be presented to Ministers and would 
allow Members to identify the sectors in which TRIM s existed and their commercial dimension at the 
world level as well as in terms of the imports of the countries applying the measures. The document 
might also include the countries that had already e liminated TRIMs as of 1995, in order to find out 
whether this commitment was present for these countri es in other regional agreements, not just in the 
WTO. Concerning the need to analyze the re lationship between the TRIMs Agreement and 
Articles III and XI of the GATT, on which other count ries had insisted, her delegation considered that 
it was important to have a background document on the relationship between the TRIMs Agreement 
and other multilateral agreements, such as the Agreement on Import Licensing Procedures. The 
Secretariat could contribute this paper, which Memb ers could then use as an additional input in the 
review.  
7.3 With respect to the joint WTO/UNCTAD study, she noted that this document stated that the 
rationale for some of the TRIMs requiring local c ontent was based on the lack of perfect competition 
conditions, which would negatively affect the creation and consolidation of dom estic supply. In this 
regard, it would be interesting to  ask whether it would be necessary to prohibit developing countries 
from using this type of instrument. This question was all the more relevant if one considered that, as a 
result of the reforms to the economic model and the adjustment processes, the structural deficiencies 
in the markets of developing countries, in part icular those related to internal marketing and 
distribution had become considerably more serious. In answering this question, one should also take 
into account the conclusion of the joint WTO/UNCTAD study that TRIMs had  only negligible or almost non-existent trade distortion effects.  
7.4 The representative of the European Communities
 said that his delegation was looking forward 
to continuing the discussion on the Article 9 review , preferably on the basis of written submissions. 
Reacting to Colombia's suggestion that the Fifth Mi nisterial Conference should be the deadline for the  G/C/M/64 
 Page 69 
 
 
 review and that Ministers should have a report by then , he said that that was not really what Article 9 
of the TRIMs Agreement said. Therefore, he believe d Members needed to discuss further whether that 
was the preferred option as well as what should come  out of the review. He realised that, at some 
stage, Members should have a result from this exercise. He recognized  that another exercise going on 
under the next agenda item, also had a deadline, but that was a different deadline. He said his 
delegation would like to come back to the points rai sed by Colombia at a late r stage in order to fully 
understand how the Colombian delegation saw the process.  7.5 The representative of Brazil
 confirmed that his delega tion would soon be submitting a 
document in the context of the Article 9 review of the TRIMs Agreement. He considered that 
Colombia had made a number of useful suggestions for further Secretariat analysis and studies. In that 
regard, his delegation considered that, apart from th e empirical verification of trade distortive effects 
of TRIMs-like measures, one important issue to look at was also the relationship between preferential 
rules of origin and the disciplines of the TRIMs Agreement. This was one of the issues that his 
delegation's written submission would develop. 
 
7.6 The representative of the United States  said that his delegation believed that written inputs 
would help Members to move the process forward. Reacting to comments by Colombia and Brazil, he said that his delegation did not believe that the in tent of the review was to decide if measures 
disciplined by the TRIMs Agreement did or did not ha ve harmful effects and, therefore, should not be 
disciplined. While his delegation was open as to how this process would proceed, he wanted to make 
it clear that the review should not be seen as an opportunity to lower the standards outlined in the 
TRIMs Agreement.              7.7 The Council took note
 of the statements made and agreed  to revert to this item at its next 
meeting.  
 
VIII.  DISCUSSION OF IMPLEMENTATION I SSUES BY THE TRIMS COMMITTEE – 
REPORT TO THE COUNCIL FOR TRADE IN GOODS 
 
8.1 The Chairman  recalled that at its meeting of 7 May 2002, the CTG had decided to assign to 
the TRIMs Committee the responsibility for conduc ting the work on the outstanding implementation 
issues reflected in tirets 37 to 40 of document  JOB(01)/152/Rev.1. The TRIMs Committee had also 
been requested to report regularly on the progress of its  work to the CTG. Accordingly, he invited the 
Chairman of the TRIMs Committee to give a report.   8.2 The Chairman of the TRIMs Committee
 reported that, at its meeting of 10 July 2002, the 
TRIMs Committee had continued its discussions on th e outstanding implementation issues related to 
the TRIMs Agreement. At that meeting, Member s had offered greater details on the objectives and 
nature of their proposals and a useful exchange of views had followed. Members had reiterated the 
importance of the discussion of implementation issues related to TRIMs and their willingness to 
continue participating constructively in this exercise with the view to concluding a report at the next 
meeting of the Committee on 14 October. The repor t would then be submitted to the Council for 
Trade in Goods. He said that in order to allow for a more focussed discussion of the outstanding 
implementation issues, some Members had announced that they would be presenting written proposals before the next formal meeting of the Committee. It had been agreed that once this 
proposals were tabled, the Chairman of the Committe e would convene an informal meeting to discuss 
them. For more information on the developments of the discussions on this subject in the TRIMs 
Committee, he drew Members' attention to the releva nt section of the minutes of the meeting held on 
10 July, which would be distributed shortly. He  would keep the CTG informed of any further 
developments and discussions on these issues afte r the next formal TRIMs Committee meeting, 
scheduled for 14 October.      G/C/M/64 
Page 70  
 
  
8.3 The Council took note
 of the report of the Chairman of the TRIMs Committee. 
 
IX. PREPARATIONS IN CONNECTION WITH PARAGRAPH 18 OF THE PROTOCOL 
ON THE ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA  
 
9.1 The Chairman  recalled that this item was discussed in the CTG at the meetings on 24 May 
and on 13 June 2002.  It was also agreed that the Chair would conduct informal consultations to best 
determine how the CTG should carry out its obligations  under this review within the time-frame for 
our report to the General Council.  He informed the Council that his consultati ons in this matter were 
continuing and proposed to suspend discussion on th is item and to revert to the matter at the 
appropriate time.  9.2 It was so agreed.  X. OTHER BUSINESS 
 
10.1 The representative of Canada
 informed that, as his delegation had already mentioned in the 
CTD, on 27 June 2002 the Canadian Prime Minister Jean Chrétien had announ ced that effective 1 
January 2003 Canada would provi de duty-free, quota-free access to imports from 46 of the world's 
least-developed countries for all products except da iry, poultry and eggs. Canada was taking this 
action to help least-developed countries develop by increasing their opportunities to trade and 
encouraging investment in these countries. Canada had received direct representations from LDCs to 
provide improved market access. Other international organizations, including the WTO, the IMF, the 
World Bank and the UN, had also noted the benef its of granting greater market access to least-
developed countries. This was part of a coherent policy approach fo r developing countries, including 
a wide range of issues Canada also announced on 27 J une at the G8 meeting in Canada to support the 
efforts of the African countries, such as an add itional 20 million dollars for Africa in trade-related 
technical assistance. He noted that Canada's le ast-developed market access initiative covered the 
major products of interest in exports to Cana da from these 48 least-developed countries, including 
apparel, accounting for more than half of Canada's imports from these countries.  
10.2    The Canadian representative further remarked  that Canada  was also developing new rules of 
origin and procedures for textiles and apparel for thes e preferences that were designed to provide real 
opportunities and benefits that LDCs could realise by taking directly into account the production 
capacity of LDCs. Benefits would further occur by allowing accumulation, so that beneficiary countries would get the benefits for developing countries as well as those for LDCs who produce 
imports such as yarns and fabric, that were used  by least-developed countries to produce apparel and 
other finished textile products.  Thirdly it would en sure that the benefits went to where they were 
intended, while protecting against illegal tr ansshipment and without imposing undue major 
administrative burdens. By way of example, he noted that apparel imported from an LDC would 
qualify for duty-free access if, first, the apparel was assembled in the LDC, and secondly, it was made 
from fabric cut or knit to shape in that LDC, and th irdly, the fabric or yarn  originated in the same 
LDC.  But apparel cut and sewed in an LDC coul d also qualify if it would use imported fabrics or 
yarns as long as first, there was 25% value added in the LDC in producing the apparel, such as by cutting and sewing the apparel, and secondly, the impor ted fabric or yarn originated in another LDC 
or a developing country. For a fabric to be consider ed originating from this country it must be made 
from yarn produced in an LDC or a developing country and the yarn must be spun in the LDC or 
developing country. In short, the rules of origin for apparel would allow accumulation not just from 
other LDCs but also developing countries, hence en couraging greater trade with developing countries 
as well as with Canada. To fully ensure that the be nefits would go where they were intended, LDCs  G/C/M/64 
 Page 71 
 
 
 would be required to sign an undert aking to cooperate on an exchange  of information for verification 
purposes. Canada would also put in place an enha nced and more targeted monitoring verification 
investigation regime on textiles and apparel, with  the purpose of deterring illegal transshipment and 
routing the benefits to LDCs. In addition to ap parel, Canada was extendi ng duty-free, quota-free 
access for LDCs on other key products of inter est to these countries, including textiles, most 
agricultural products, as well as other industrial produc ts. He concluded by noting that more details 
would be provided in autumn as Canada prepared  to implement its new duty-free, quota-free regime 
on 1 January 2003.   
10.3     The Chairman
 informed delegations that the next meeting of the CTG was scheduled for 
Tuesday, 1 October 2002.  The agenda for the meeting would close on Thursday, 19 September.  
__________