RESTRICTEDWORLD TRADE
ORGANIZATIONG/IT/M/26
5 July 2001
(01-3368)
Committee of Participants on the Expansion of
Trade in Information Technology Products
MINUTES OF THE MEETING OF 27 APRIL 2001
Chairperson: Mr. Hiromi Yano (Japan)
Agenda of the Meeting  Page
1. Review of the Status of Implementation of the Ministerial Declaration on Trade in
Information Technology Products (G/IT/1/Rev.18)...........................................................1
2. Non-tariff Measures Work Programme (G/IT/19, G/IT/SPEC/Q2/1, G/IT/SPEC/Q2/2,
G/IT/SPEC/Q2/3, G/IT/SPEC/Q2/4, G/IT/SPEC/Q2/5, G/IT/SPEC/Q2/6,
G/IT/SPEC/Q2/7)................................................................................................................ ..1
3. Divergences in Classifying Information Technology Products
 (G/IT/14/Rev.1, G/IT/W/6)..................................................................................................5
4. New Participants............................................................................................................. ......9
5. Other Business............................................................................................................... ........9
Introduction
The Chairperson stated that the proposed agenda for this meeting was circulated in
WTO/AIR/1532 on 12 April 2001.  He asked if there were any other matters to be raised under "Other
Business".  Hearing no requests, he stated he would take up the "review of product coverage" and the
date of the next meeting of the Committee under this agenda item.  The agenda was adopted with
these additions.
1. Review of the Status of Implementation of the Ministerial Declaration on Trade in
Information Technology Products (G/IT/1/Rev.18)
1.1 The Chairman pointed out that an overview of the implementation of the Ministerial Declaration
on Trade in Information Technology Products was contained in G/IT/1/Rev.18. This document showed
the participants and the implementation issues pertaining to the WTO procedures for implementation.
1.2 The Committee took note of the Chairman's statement.
2. Non-tariff Measures Work Programme (G/IT/19, G/IT/SPEC/Q2/1, G/IT/SPEC/Q2/2,
G/IT/SPEC/Q2/3, G/IT/SPEC/Q2/4, G/IT/SPEC/Q2/5, G/IT/SPEC/Q2/6,
G/IT/SPEC/Q2/7)
2.1 The Chairman stated the Committee had moved ahead with the Non-Tariff Measures' Work
Programme, as contained in G/IT/19. He noted that there had been seven submissions to the inventory,
which have been circulated to the Committee in documents G/IT/SPEC/Q2/1 through 7.  Thus, this was
significant progress since the last formal meeting when the Committee previously discussed this item.  In
addition, he believed there had been a useful exchange of information at the informal meeting that was
held prior to the formal meeting.  It seemed that at the outcome of the informal consultations participantsG/IT/M/26
Page 2
wanted to encourage further submissions to the work programme, but still move ahead with the
examination of the submissions already received.
2.2 The delegate of Australia stated that his delegation attached great importance to the non-tariff
measures work programme.  He was encouraged by the seven submissions that had been made and
encouraged further submissions from all participants, especially from developing countries.  He
believed that what was already submitted was sufficient to move to Phase II of the work programme
and begin analysis of the non-tariff measures that had been listed.  However he wanted to be as
flexible as possible, and wanted to have Phase I remain open so that others intending to make a
submission could do so at some later point in time.  He looked forward to having the new
submissions included in the analysis.  In terms of the modalities, he suggested at the informal meeting
that the Committee could encourage all participants to comment on the submissions, and to forwardthose comments to the Secretariat for a compilation.  He was encouraged by the suggestion that the
Secretariat could also compile references to other relevant studies done on non-tariff measures.
2.3 The delegate of the European Communities was encouraged by the seven contributions made
from six ITA participants.  Nevertheless, he felt that in order to benefit from the exercise, he desired a
wide spectrum of contributions from as many ITA participants as possible.  He noted the contribution
of his delegation and stated he could make a short presentation and perhaps even answer some
questions that other delegations might have.  With regard to the process, he felt the Committee should
go ahead with Phase II of the work programme, but not restrict any further contributions to the
inventory being carried out in Phase I.  He saw a merging of the two phases in the work ahead.  Healso saw Phase II as a process whereby further information could be gathered, further contributions
made, and comments made on the existing contributions.  He encouraged participants and the
Secretariat to look at further studies, for example those by other international organisations such as
the OECD or UNECE.  It might be useful to invite those organisations to contribute directly to the
exercise.  While noting that other organizations had contributed through the national contributions, hethought it might still be worthwhile to have an open invitation to these organisations or other
interested parties to make a contribution to try to have as much information as possible.  However,
with the contributions received thus far, there was sufficient material to carry out an analysis in terms
of Phase II, by looking at the economic and developmental impact of the NTMs identified, looking at
the possible benefits of their removal, and reflect on the regulations that were in place in terms of their
necessity and fitness for purpose.  He suggested looking at the instruments that could be used to
address non-tariff measures, either at the national or international level, and then look at how ITAparticipants could address the non-tariff measures.  He reminded delegations of the deadline of
November 2001, and noted that there should be a compilation of the contributions made and the
analysis by ITA participants.
2.4 The delegate of the United States expressed his appreciation to the seven participants who had
made their submissions.  His government had not yet made a submission, but intended to, and
therefore appreciated the willingness to accommodate submissions after the deadline.  He believed
that it made sense to move on to the analysis phase of the work programme because it would not be
fair to those participants who respected the deadline, and also because there was nothing taken away
from delegations that had not yet made a submission.  By proceeding to the analysis stage, he hopedto elicit further contributions from countries that had not already made submissions, so flexibility in
proceeding was important.  With respect to the ideas put forward by the European Communities, he
did not see any objection to information coming from  any other sources willing to contribute, as this
could only enhance the process to have more information available.  He noted that the November
deadline seemed like a reasonable period to complete the analysis.
2.5 The delegate of Malaysia stated his appreciation to the seven participants who had made a
submission, noting that Malaysia had yet to make a submission but hoped to soon.  Nevertheless, he
stated that the Committee should go ahead with Ph ase II, noting flexibility in that the door should
remain open for those who still wanted to make submissions.  He supported the suggestion ofG/IT/M/26
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Australia that comments should be submitted to the Secretariat for compilation.  He stated that with
respect to the suggestion by the European Communities for direct inputs from industry, he was unsure
whether this meant direct inputs from industry or having a seminar or some kind of workshop.  He
noted that the work programme allowed for this, but felt that it was premature as Phase II was just
beginning.  He noted that the European Communities stated that a large part of these contributionsshould have already come through national contributions, and that national industries should submit
through national submissions.  In Malaysia's case, they had consulted a large number of industries and
most of them were multinational corporations or transnational corporations and there was no problems
because of a lot of intra-industry trade, and whatever problems there were, they resolved it among
themselves.  There are very few bona fide Malaysian companies who were involved in the IT sector
and trading internationally.  He pointed out the importance of consulting with the national industries
and submitting their inputs through the national submissions; there was no need to have workshops.He referred to the remarks made concerning the deadline for the end of Phase II, and thought it was
premature given that the work programme stated that the Committee would meet to consider the
outcomes of Phase I and Phase II no later than November 2001.
2.6 The delegate of India stated that with respect moving forward with the work programme, she
preferred to make advances at a substantive level.  She did not want to embark on a technical or
procedural debate on whether the Committee was in Phase I or Phase II.  She supported Australia's
suggestion that Members should be invited to make comments on the seven submissions and that the
Secretariat should make a compilation of those comments which would then constitute one element of
the analysis.  The second element would be further submissions, such as stated by the United Statesand perhaps Malaysia.  She confirmed her own delegation hoped to make a submission in the next
couple of weeks.  They had made some progress at the draft stage and hoped to submit soon.  She
recalled that the work programme provided that modalities for the analysis in Phase II would be
worked out by the Committee.  Her delegation was open and flexible as concerned the modalities, but
would like to hear how this process would proceed into the analytical step.  She preferred to have anidea as to what the modalities for the analysis would be, and this could take into account the European
Communities' suggestions on contributions from other bodies or having direct inputs from industries,
as well as the deadline.  She thanked those delegations who had made contributions.
2.7 The delegate of the European Communities clarified their position on how they envisaged the
development of the work programme.  He agreed with India, that a procedural debate should be
avoided.  He noted that everyone seemed to agree that the Committee should encourage furthersubmissions, as this would only enhance the amount of information already received.  Secondly,
everyone seemed to be in agreement that starting work on those contributions already received, by
inviting comments, was a way to proceed.  The other idea raised was to take into account studies or
analyses carried out in other international organizations which could be directly relevant to the work
envisaged here.  To the extent that these economic analyses on the development impact alreadyexisted, he did not know why they should not be used as reference papers and made available to
participants.  He agreed with the delegate of India that is was important to determine modalities, but it
seemed that the points already made could constitute guidelines for continuing the work.  With
respect to the deadline, he referred to the te rms in the work programme whereby the Committee
would consider the outcomes of Phase I and II by November 2001, so there was no change in deadlineimplied.
2.8 The delegate of Canada joined others in welcoming the submissions that had already been
tabled.  He welcomed the statements by Malaysia, India and the United States that they were working
on papers and hoped to make submissions.  He enco uraged other Members to also make submissions,
especially developing countries. As regarded the process for moving forward, he was flexible.  He
agreed to move into the analytical stage, but did not want to get bogged down in whether it was called
Phase I or Phase II, and also wanted the door open for further submissions. He noted the statement of
the United States whereby participants may want to react to others' submissions in their own
submissions, and this would create an interactive analytical process.  He agreed with the EuropeanG/IT/M/26
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Communities that it was worthwhile to ask the Secretariat to compile a list of studies done by other
international organizations on the costs, benefits, and economics of non-tariff measures in the area of
information technology.  He was open to the question of contributions from the private sector but did
not want to argue over this, and perhaps the door could be left open for possibilities in the future.  He
agreed that comments should come in from participants on the submissions and these should becompiled by the Secretariat.  With respect to the deadline, he noted the November target, and the
Committee should work towards that.
2.9 The delegate of Malaysia referred to the statement of Canada concerning a compilation of
papers by the Secretariat of the outcomes of economic analyses on non-tariff measures done by
various bodies.  That was ok, but he did not want  to see a discussion in the Committee focusing on
those papers.  If such a list was compiled, it should just be for reference in the event that some backup
material or cross-referencing was necessary.  It should not become the focus of the discussions, as he
did not want to see a theoretical discussion in the Committee on those papers.  He desired practical-
oriented work based on the submissions by Members, not theoretical analyses or surveys.
2.10 The delegate of India responded briefly to the European Communities and stated she was not
sure what the difference was between a guideline and modality, as work proceeded into the analytical
phase.  She noted that there were seven submissions, and it was important to see if the comments of
participants could be compiled, which would help in the analytical phase.  However, if there were
other elements to be added to the guidelines or modalities for the analytical phase, she suggested they
be incorporated in the discussions or consultations that the Chairman may hold on the modalities sothere was a clear idea of what was being done in the analytical phase.  She noted that national
authorities were in no way precluded from taking into account all available literature to facilitate their
submissions, and her own capital had already taken this into account.
2.11 The Chairman stated that it was a very constructive discussion and there was no significant
difference of opinion.  He noted that there was no merit in making a theoretical distinction between
Phase I or Phase II, and it was important to stick to the substance.  It was important to keep the door
open for new submissions and to encourage further submissions from both developed and developing
countries in order to have inputs for the process.  Since there were already a good number of
submissions, he recommended starting the analysis of the submissions.  This would entail delegations
submitting comments orally or in writing, and the Secretariat would then compile these comments.
As far as the modalities or guidelines were concerned, he did not want to go into a theological
debate.  The discussions today described how work should proceed in at least the next few meetings
of the Committee.  It was important to work through the issues to see where things stood.  As
concerned the issue of inputs from industry or other outside bodies, there were two sides to this issue.
For example, if certain delegations felt that a paper that existed was of use to the Committee, theycould submit this paper in their input, referring that this paper was of use in the analysis and
discussions in the Committee.  However, if delegations wanted direct contact or submissions from
outside, this probably warranted further discussion.  Finally, on the issue of the November date, he
recalled that the work programme already mentioned November 2001 in the text.
2.12 The delegate of the European Communities stated that his delegation could make a short
presentation of their contribution if this would be useful.
2.13 The Chairman noted that it was probably more appropriate to wait until the next meeting
when Members could comment on the papers submitted and make further interventions on the
substance in the papers.  He believed that the next meeting could be organized in this way if
participants agreed.
2.14 The Committee took note of the statements made.G/IT/M/26
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3. Divergences in Classifying Information Technology Products (G/IT/14/Rev.1, G/IT/W/6)
3.1 The Chairman recalled that the Committee had recently held an informal meeting to further
discuss this item in advance of this meeting.  First, he gave a brief overview of the situation.  At the last
formal meeting of the Committee, it was agreed that the Committee should take up Lists I, II, and III in
document G/IT/W/6 at this meeting of the Committee.  However, at the informal meeting somedelegations had indicated some outstanding issues with respect to the Lists, especially as concerned
List II.  Thus, some delegations proposed changes to the Lists, and on 25 April a fax was sent to
delegations indicating changes proposed by two participants.
In summarizing the informal meeting, he noted that List III should be treated as a priority and
addressed at this formal meeting, as there were some obvious time elements involved with sending the
information to the WCO for their consideration.  This would not prejudice the fact that furtheramendments or changes could still be sent to the WCO.  List I seemed to be generally agreeable to most
delegations, although some required more time to examine it, and it was suggested that delegations couldbe invited to align their practice with the classifications set forth here and the items that were agreeable by
consensus could be set aside for future rectifications.  With respect to List II, some delegations noted
there were some items that perhaps did not belong, and further changes would likely need to be made to
this list.   List IV was one that should be set aside for the time being pending the outcome of court cases
or other domestic decisions.
3.2 The delegate of Canada supported sending List III to the WCO.  He pointed out that there
were three items from List II that should also be included in List III, but he was flexible as to when
these three items might be sent.  His preference would be to include them in the current List III that
would be sent to the WCO.
3.3 The delegate of the United States supported reaching a decision at this meting on sending List
III to the WCO.  He had no objections to the items that Canada had identified be moved from List II
to List III.  He believed there was one item on List  III that sh ould be moved back to List II because
some issues remained open, but he was not insistent.
3.4 The delegate of the European Communities stated that as concerned List III, he had three
comments.  First, he agreed with the United States' proposal to withdraw item 2 from this list and
transfer it to List II.  Secondly, he preferred to take a decision today concerning the  communication
of List III to the WCO while keeping the possibility of adding other products at a later stage.  Finally,he noted that the format of the communication of List III to the WCO was important, and this should
be done in as neutral a manner as possible.  It should be pointed out that the determination of
implementation of the Agreement depended solely on the WTO, and the Committee was asking for a
technical opinion on the classification from the WCO.
3.5 The Chairman agreed that the WTO had sole responsibility to determine the scope of the
agreement and there was no intention to have the WCO decide the scope.  What was sought from the
WCO was a technical opinion.
3.6 The delegate of India stated that as far as List III was concerned, she had a priority for
sending it to the WCO for consideration.  However,  due to unfortunate circumstances, she would need
a couple of days to confirm the items set out in List III with her authorities.  She suggested this could
be done on an ad referendum  basis for India, in order to allow a couple of days for clearance.  As
concerned the format of the communication, she wanted to make it clear that the exercise was being
done strictly in accordance with the mandate for this work on classification issues set out in paragraph5 of the Annex to the Ministerial Declaration and this should be clearly noted in the communication to
the WCO.G/IT/M/26
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3.7 The Chairman stated that there was no objec tions to the amendments  of List III proposed by
Canada and the United States, so this would be incorporated.  As agreed an ad referendum  basis, the
list would be sent to the WCO.  The comments by the European Communities and India would be
incorporated in the cover letter to the WCO.
3.8 The delegate of Singapore, in referring to List I, stated that she had not yet received
confirmation from her capital about this list, and asked the Committee for additional time.  She did
not have any objection to examine what to do with the list once it was finally approved.
3.9 The delegate of Australia noted the sentiments expressed at the informal meeting on the need
for a pragmatic approach.  He was willing to contribute to any consensus on how that could be
achieved in respect of List I.  He could agree with the suggestions made for Members to alignthemselves to the nomenclature in List I, with rect ifications to be undertaken at some later point in
time when it was feasible.  He was encouraged by  the flexible approach to List I that had been
expressed by the European Communities.
3.10 The delegate of the United States stated that he could agree to List I as it was.  If there was a
desire for more time from others, he suggested this could be agreed on an ad referendum  basis
because they would not do anything that required further action and others could be encouraged to
align themselves with the information contained in List I.
3.11 The delegate of India stated that her delegation was awaiting confirmation from capital on the
items contained in List I.  She suggested that while the Committee was waiting for certain capitals to
confirm or to forward comments, it could be useful  to think about what would be done with List I.
She favoured a practical approach in which the Committee would take note of the recommendations
of experts, but since Members had legal obligations arising from Attachment B, she thought it was
important to reflect on how to deal with List I.
3.12 The delegate of the European Communities recalled that at the informal meeting he stated his
delegation could accept List I.  He hoped other delegations could come to the same conclusions as the
customs experts and agree with the classifications listed.  However, he wanted to be realistic, and
examine what was at issue.  It was important to avoid "endorse" or "adopt" because that might put
some participants in a difficult situation.  That is why he suggested "taking note" so the Committee
could take note of the conclusions reached by experts and also take note of the fact that there was acertain consensus in the Committee that the classifications were correct, but without creating difficult
legal implications.  He encouraged participants to a lign themselves with the conclusions in List I, and
if necessary bring their practices into line by rectifying their lists.
3.13 The Chairman noted that certain delegations needed more time for endorsement from their
capitals, and secondly, that since this ultimately involved rectification which was a legal process, this
needed to be considered carefully.  He noted there was emerging consensus on this issue, and did not
want to miss the important opportunity to take note of this situation.  He suggested that List I be set
aside for a future meeting in view of the emerging consensus.
3.14 The delegate of Canada, in referring to List II, stated that in his delegations' view, the
acceptance of one or more classifications in the list did not require acceptance of all classifications for
the item.  Indeed, List II covered two very different situations and this gave rise to some inadvertent
confusion on the status of items in the list.  The first situation was where experts agreed that a product
could be covered by a number of different tariff classifications.  In the second situation, experts didnot agree on all tariff classifications that were cited for the items.  For example, for item 193, flat
panel display devices, Canada did not agree that those items could be classified under 8471.49,
8543.89 or 8543.90.  He suggested that the list be separated into two lists; first a list where everyone
agreed on all possible tariff classifications for a product, and a second list where there were still
disagreements.   He suggested that participants co uld indicate which items on List II they could agreeG/IT/M/26
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with all the classifications, thus this would serve as a starting-point.  As concerned List I, he could
agree on List I, and looked forward to engaging in the further discussions of what the Committee
would do with List I.
3.15 The delegate of the European Communities agreed with Canada.  In the first case, there were
products that could legitimately have several classifications according to the different categorization
of the equipment concerned, and all these were equally valid classifications.  If participants accepted
List II, it would have the same legal implications as List I, and there would be no alternative
classifications.   With respect to the second category, it contained products on which there was no
final agreement on the classifications and on which work should continue.
3.16 The delegate of the United States agreed that List II had at least two components and perhaps
even a third component.  There were items on which all the experts agreed that more than one
classification was possible and therefore it would have the same status as List I.  The work had
concluded and it was recommended that participants be encouraged to align their schedules.
Secondly, there were items that he felt still needed further discussion, and these items were indicated
in the informal communication his delegation had sent.  There was also the possibility of a thirdcategory whereby after further review, no agreement was possible.  He was willing to separate List II
into the two categories, as suggested by Canada, based on the 14 items they had indicated in their
submission.
3.17 The delegate of Japan welcomed the items in List II except one item, item 199, the printed
circuit assemblies.  His delegation preferred to have more discussions and consultations.  He noted
that perhaps other classifications were possible and hoped that a further experts' meeting could discuss
this.
3.18 The delegate of Singapore agreed with the statement of Canada, as her delegation was having
difficulties understanding the implications of List II in practical terms.3.19 The Chairman asked for clarification from Canada on item 21 of List II, as to whether it
should be moved to List IV or stay on List II.3.20 The delegate of Canada stated that, in his view, item 21 should be moved to List IV, but he
was flexible.  He preferred to commence with the work, especially as concerned List II, and could go
along with the proposal to keep item 199 on List II .  Furthermore, he agreed with the United States
that item 9 did not belong on List IV.
3.21 The delegate of India noted the suggestions of Canada and the United States to move items
among the various lists.  As she understood it, partic ipants would forward comments to the Secretariat
on each of the lists including the proposed amendments that were suggested.  Furthermore,
participants should forward comments on the division of List II to the Secretariat.  Once all the
comments were in place, and if there were still discrepancies outstanding on the items, it would
probably be appropriate for the Chairman to contact the Members concerned or to have an informal
meeting of the Committee to see how to take up the matter further.  She reiterated that it was veryimportant to look at the classification exercise strictly within the parameters of paragraph 5 of the
Annex to the Declaration and without any legal implications other than those already committed to in
the Ministerial Declaration.  She did not see the exercise to be in parallel with paragraph 3 of the
Annex, which concerned product coverage.
3.22 The Chairman suggested that List II be split into two parts; perhaps IIA where participants
could agree to all the classifications in the list, and IIB where there was disagreement.  Perhaps there
were even issues, as the United States indicated, where no agreement could be reached.G/IT/M/26
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3.23 The delegate of Canada stated that the United States' suggestion of calling it 'issues for further
discussion' was better than saying total disagreement.  He preferred to see how far the Committee
could proceed before it came to such a third list.
3.24 The Chairman stated that all lists would be subject to further discussion.  He suggested that
the Committee ask the Secretariat to split List II into two lists, as indicated in the discussions.
3.25 The delegate of the European Communities stated that he hoped the Committee could send a
clear message to experts in capitals as regarded the work undertaken and the status of each list.  He
agreed with all that had been stated so far, including the divisions suggested by Canada, but suggested
instead of having Lists IIA and IIB, it was more logical to have IA and IB, then II, III, and IV.
List IA would contain products for which there was consensus, or emerging consensus on the listedclassifications.  List IB would be for those products where there were two or more possible
classifications envisaged.  List II would be comp rised of products on which experts could continue to
work with a view of classifying th em in List IA if one appropriate classification, or List IB if there
were two classifications.
3.26 The delegate of India clarified that there were certain suggestions for moving items among
the various lists, and the ad referendum was in case her capital came back and told her certain
amendments did not belong on List III for example.  It was also possible that her capital could suggest
certain items be shifted.  In case there was a divergence of views through the communications sent to
the Secretariat, she preferred that delegations be c ontacted informally in order to resolve the matter in
a reasonable manner.
3.27 The delegate of the United States noted that with respect to the statement of India, this was
appropriate since there was an ad referendum  reservation and there was no definitive decision what
was on any particular list.  He agreed with the suggestion of the European Communities to have ListsIA and IB, as this was where agreement was reached.
3.28 The Chairman suggested that List II be split in to two.  He saw merit in calling them List 1A
and 1B, and then List II, as suggested by the European Communities.  The first list was the one in
which everyone could agree on all the classifications and the second was where further work was
needed.
3.29 The delegate of India clarified that with respect to List I, she did not anticipate that her capital
would come back and say there were items to be added to List I, but rather the reverse was more
likely whereby items from List I could move to another list.  She wanted to give her capital time to
examine it.
3.30 The Chairman noted that List II would be split into two; one in which delegations could agree
on all the classifications and the second one which would need deeper or further discussion by
experts.  In this respect, he encouraged Member s to submit comments to the Secretariat so that the
Secretariat could divide this list.  The new List II could be discussed at the next meeting of the
Committee.
3.31 The delegate of the United States, in referring to List IV, pointed out in their submission to
the Secretariat that they did not think that item 9 should be on the list.  He was not sure if it belonged
on List II or List III at this point, but would revert to it at a future date.
3.32 The delegate of the European Communities agreed with the United States on the point that
item 9 did not  pertain to List IV.
3.33 The Committee took note of the statements made, and agreed , on an ad referendum  basis, to send
List III to the WCO.  List II would be split into two lists, based on input from delegations.G/IT/M/26
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4. New Participants
4.1 The Chairman noted that this item was place on the agenda in case there were any new schedules
that would be forthcoming.  However, at this point in time there were no new schedules, nor any new
participants to consider.  The Committee took note of the statement.
5. Other Business
5.1 The Chairman stated that the issue of the review of product coverage continued to be a matter
under consultation, and he encouraged delegations to continue their efforts.
5.2 Furthermore, he proposed that the Committee's next regular meeting be held on 2 July 2001,
subject to confirmation.  It was so agreed.
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