RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/55
19 November 2001
(01-5850)
Council for Trade in Goods
MINUTES OF THE MEETING
Held in the Centre William Rappard on 2 November 2001
Chairperson:  Ambassador István Major (Hungary)
The meeting of the Council for Trade in Goods was convened by WTO/AIR/1659.  The
proposed agenda contained in do cument G/C/W/330 was adopted.
Table of contents
I. ITEM I:  REQUEST BY HAITI FOR A WTO WAIVER – CUSTOMS
VALUATIO N ...................................................................................................................... ......1
II. ITEM 2:  REQUEST FOR A WTO WAIVER – NEW EC SPECIAL TARIFF
ARRANGEMENTS TO COMBAT DRUG PRODUCTION ANDTRAFFICK ING.................................................................................................................... ....1
III. REQUEST FOR A WTO WAIVER – NEW ACP-EC PARTNERSHIP
AGREEMENT WORKING PARTY TO EXAMINE THE REQUESTS FOR A
WTO WAIVER..................................................................................................................... ....4
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I. ITEM I:  REQUEST BY HAITI FOR A WTO WAIVER – CUSTOMS VALUATION
1.1 The Chairman drew attention to document G/C/W/256, Revision 1, which set out the request
by Haiti for a waiver from certain obligations under a Customs Valuation Agreement and documentG/C/W/326 which contained the relevant draft decision to assist Members in their consideration of
this request.   In the absence of comment, the Chairman proposed that the Council approve the request
and recommend that the draft decision contained in document G/C/W/326 be forwarded to theGeneral Council for adoption.  It was so agreed.
II. ITEM 2:  REQUEST FOR A WTO WAIVER – NEW EC SPECIAL TARIFF
ARRANGEMENTS TO COMBAT DRUG PRODUCTION AND TRAFFICKING
2.1 The Chairman drew attention to a request for a GATT article one waiver by the European
Communities concerning the new European Communities Special Tariff Arrangement to Combat
Drug Production and Trafficking.  The request and relevant annexes, including a draft decision forconsideration by the Council, were contained in document G/C/W/328.
2.2 The representative of the European Communities said for reasons of legal certainty the EC
had decided to ask for an Article 1 waiver.  The EC was making this request before the regime enteredG/C/M/55
Page 2
into force on 1st January 2002.  It wanted Members to consider this request expeditiously so that the
EC would be fully covered under the WTO rules before implementing that regime.
2.3 The representative of Canada said he needed more time to go through the documents to make
sure all the pieces fitted together.  Since there was time between now and January 1st 2002, he
suggested referring it to the next meeting for a decision.  This approach was supported by Gabon.
2.4 The representative of the United States welcomed the proposal of the request of the EC
concerning this waiver.  It was a very important programme and the US supported it fully and urgedexpeditious adoption of the request.
2.5 The representative of Sri Lanka said her delegation was concerned about the effects and
implications that this new arrangement would bring on other GSP beneficiary countries like her.  Her
delegation requested the EC to clarify why this arrangement was notified under Article 1 of GATT.
His delegation presumed that changes to GSP should be notified under the Enabling Clause.
Furthermore, the information provided on the scheme in this document was insufficient to go into a
detailed discussion because, for example, it did not say anything about rules of origin particularly fortextile items.
2.6 The representative of Bolivia, making a statement on behalf of the countries making up the
Andean Community of nations –Colombia, Ecuador, Peru, Venezuela and Bolivia – welcomed the
request made by the EC.  The purpose of this measure was to give greater legal certainty to thepreferences granted by the EU to those Members who had committed to the aim of combatting and
eradicating production and trafficking of drugs.  This fight against the universal scourge of drugs was
based on cooperation and shared responsibility amongst nations which had made it possible to
promote programmes and actions in various areas including trade.  He welcomed the political
recognition that the EC had given to the fight against drug trafficking despite the high cost in humanlives and in the breakdown of the social fabric and institutions.  This was a long-term effort and must
continue to be shared internationally.  He was convinced that initiatives such as this one being
promoted by the EU, constituted an effective contribution to be made by the developed world
providing for a substitution for illicit crops, promoting defence of the environment and the
implementation of alternatives for the poorest segments of the populations affected by the drug-based
economy.
2.7 The representative of Thailand had reservations to granting the request for a WTO waiver.
The arrangements had not complied with all the elements of principle of the Enabling Clause, namely
that it be generalized, non-discriminatory and non-reciprocal.  As a result, Thailand's trade had been
adversely affected and the problems needed to be addressed satisfactorily.  In this respect, he sought
preliminary clarifications as follows:  Firstly, he sought confirmation whether this arrangement waspart of the EC GSP and whether the scheme had been submitted to the WTO for a waiver.  Secondly,
did the arrangements as stated in the document G/C/W/328 provide criteria on how the countries are
included in the program?  What was the basis for having those countries included?  Thirdly, if the
objective was to help combat drug production and trafficking problems, could the EC provide the list
of developing countries besides those on the list that were combatting drug production andtrafficking?  Fourthly, how did the EC do appr opriate monitoring and evaluation of its effects?
Fifthly, exactly what would be the modality of graduation from the scheme besides the expiry date
requested?  The arrangements were not in conformity with WTO provisions and this was the reason
why the EC had asked for a waiver.  As a developing country, Thailand had tried to get the EC's
attention on the negative effects it had on exports of  certain products.  As a developing country whose
government regarded combating drug production and trafficking as a national priority, Thailand could
not agree to this request for a waiver at this stage.G/C/M/55
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2.8 The representative of Santa Lucia said the scheme of the generalised tariff preferences of the
EC provided special preferences for some countries undertaking effective programmes to combat drug
production and trafficking.  These preferences provided duty-free access with exceptions for industrial
and agricultural products originating in the listed co untries.  The EC's existing legislation stated that
common customs tariff duties would be suspended in their entirety on products listed in the annexes,including industrial products falling within chapte rs 25 to 97 of the common customs tariff.  The
beneficiaries were the Andean Group of countries and Panama.  Initially the scheme only covered the
Andean Group as regards industrial products.  However, the second multi-annual scheme of the basic
ten-year GSP programme extended the special preferences on industrial products to Central American
states.  This was based as the legislation says, on an assessment of the EC Commission that there was
a need to do more for these countries.  The second scheme was introduced on 1 January 1999 for a
period of three years and the legislation said that it would be followed by another scheme.   Thesystemic issue was how do you define a regime?  Is it through knowing the MFN regime or through
describing a preference?  Did the EC have any intention of enlarging, or in any other way modifying
its MFN regime to increase or decrease the level preference to the beneficiaries?   She proposed the
establishment of a Working Party at the appropriate time when the documentation was complete in
order to proceed with this matter.
2.9 The representative of Jamaica said her delegation had no objection in principle to the granting
of waivers but the interests of her country was affected and her delegation needed more time to
consider this matter.  She believed that there must be procedural consistency in addressing waiver
matters in the WTO.  The view was supported by Barbados.
2.10 The representative of Mauritius supported the motion of granting preferences to developing
countries because it was to help them develop economically.  He delegation was prepared to work in a
constructive manner on this waiver request once the different conditions had been met.
2.11 The representative of Canada suggested the following course of action:  to have an informal
meeting where the questions put on the table could be discussed.
2.12 The representative of Honduras said he wished to see the measure in writing as if had not
been described.  Where exactly was it?  Which is the documentation which was considered necessary?2.13 The representative of India stated that it was unfortunate that all were faced by preferences
which were not generalised and  that there was a political aspect to the consideration of waiver.
However the CTG should go down the route that Canada suggested which was that the Chairman
would hold informal consultations and that a future  CTG meeting would be held in order to formalise
the process ahead.
2.14 The representative of the European Communities said several Members had expressed
substantive and systemic questions and it would be a good idea to look into them at an informal
meeting. This delegation was ready to discuss the im plications of this request. On the more general
issue of why the European Communities had not used the Enabling Clause, he had certain doubts as to
the possibility of using it as a legal basis and this is why the European Communities had made arequest for a waiver under Article 1.
2.15 The Chairman proposed that the CTG take note of the statement made and that he hold
consultations on the waiver request in the near future.  It was so agreed.G/C/M/55
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III. REQUEST FOR A WTO WAIVER – NEW ACP-EC PARTNERSHIP AGREEMENT
WORKING PARTY TO EXAMINE THE REQUESTS FOR A WTO WAIVER
3.1 The Chairman asked Ms. Liang, Chairperson of the Working Party to report on progress made
in the Working Party.  She made the following report:
"I am making this report on my own responsibility in my capacity as Chairperson of the
working party.  This working party was established with the following terms of reference:  to
examine, under the relevant provisions of the WTO, the request for a waiver concerning the
new ACP-EC Partnership Agreement, and to repo rt to the Council for Trade in Goods.  Since
the working party was set up, it is clear that a good deal of work has been done in line with
the voluntary, best-endeavours timetable that was agreed.  In addition to the documentation
which has been on the table for some time (i.e. the documents pertaining to the waiverrequests by the EC and ACP countries, as well as the proposed amendments by Ecuador), this
examination process has produced additional important documentation.  Let me highlight the
most important developments in this regard:  firstly, 11 Members circulated questions and
comments addressed to the EC and ACP states:  these are Australia, Canada, Colombia, CostaRica, Ecuador, Guatemala, Honduras, Nicaragua, Panama, Paraguay and Thailand.  All thequestions have been circulated in documents G/CW/315 through to G/C/W/324, as well as
G/C/W/327.  Second, the EC and ACP states have circulated their replies to the questions and
comments of the 11 Members and these res ponses are contained in document G/C/W/329.
Informally, the EC has also circulated an addendum to this document containing further
clarifications in response to a first round of discussion.  Third,  on 30 October we had an
informal meeting of the working party which gave Members a first opportunity to comment
on the responses of the EC and ACP States cont ained in document G/C/W/329 and to ask for
additional clarifications.  Several points of interest to Members were discussed and a number
of delegations signalled their intention to addr ess further written questions to the EC and ACP
states.  A further informal meeting was held on 1 November, in which the EC and ACP statestook  note of, and partly responded to, further queries and comments on the part of interested
delegations.  I am also aware that intensive consultations have been held between and among
delegations on relevant issues.  Fourth, at our informal meetings, the EC also tabled as a
discussion document a revised draft decision for a GATT Article I waiver.  This has sincebeen circulated today as G/C/W/187/Add.2/Rev.1.  It seems to me that the new elements in
this revised paper, together with the several comments made, have helped focus attention on
some of the key areas of divergence that need to be bridged in order for the working party tocome to a successful conclusion.  Fifth, the working party held today a formal meeting during
which a further useful exchange took place between delegations, both in terms of the questionand answer process that has been initiated and in terms of examining the waiver requests
regarding GATT Articles I and XIII.
Mr. Chairman, it is my view that this work, which has been both intensive and focused,
testifies to the seriousness and diligence which all concerned delegations have applied to the
examination process.  It is my impression that so far we have had useful exchanges in both
informal and formal settings, which have gone a considerable way to clarifying the issues
under examination.  I think that we have started to identify possible elements that could formthe basis of a solution which would be acceptable to all concerned parties.   I do have the
impression that there is a feeling among delegations that more work needs to be done to
further develop those elements that can form the basis of agreement on the waiver requests.
Consequently, I think that the working party requires more time to continue its work and
hence will need to meet again before we can finalize our report."
3.2 The representative of the European Communities had received instructions to say, regarding
first the Article XVIII negotiations, that the EC was ready to give early consideration to thoseG/C/M/55
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negotiations so that Members would be in a position to conclude these negotiations well before the
end of 2005. The other point was that the EC did not have the intention to raise the in-quota duty
which was now 75€/ton before the end of 2005.
3.3 The representative of  Gabon said she would report the conclusions of the meeting to ACP
Ministers in Brussels. The Ministers would decide how to assess the conclusions drawn today.3.4 In conclusion, the Chairman proposed the CTG take note of Ms. Liang's report and the
statements made.  He suggested that in the light of her recommendation, the CTG would revert to the
matter on a date to be determined after the Working Party had completed its work.
It was so agreed.
The meeting was closed.
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