RESTRICTEDWORLD TRADE
ORGANIZATIONWT/REG/W/32
25 November 1998
(98-4753)
Committee on Regional Trade Agreements
DRAFT REPORT (1998) OF THE
COMMITTEE ON REGIONAL TRADE AGREEMENTS
TO THE GENERAL COUNCIL
Chairman:  Mr. Jean-Marie Noirfalisse (Belgium)
I. INTRODUCTION1. At its first meeting in 1998, the Committee on Regional Trade Agreements (CRTA) elected
Mr. J.-M. Noirfalisse (Belgium) as Chairman of th e Committee.  Mr. C. Bouah-Kamon (Côte d'Ivoire)
served as Vice-Chairman throughout the year.  Chan ges took place in the other Vice-Chairmen of the
Committee: Mr. Chul-Ki Ju (Korea) succeeded Mr. S. Harbinson (Hong Kong, China) and
Mr. C. Pérez del Castillo (Uruguay) succeeded Mr. E. Loizaga Caballero (Paraguay), who in turn had
replaced Mr. M.-J. Berthet (Uruguay).
2. The Committee continued its work in 1998 in accordance with its Terms of Reference.
1
3. By the year's end, the Committee will have held five sessions, each of which included both
examinations of individual regional trade agreements  (RTAs) and discussions of systemic and general
matters.  The minutes of those meetings are available in separate documents (see Attachment 1).  A
large number of informal consultations has also been held, generally associated with the examination
process.
II. OBSERVER STATUS
4. At the Committee's nineteenth session, consideration was given to the question of inter-
governmental observership, as decision was pending on a number of requests since 19972 and on
additional requests received in the course of 1998. Discussion will continue at the Committee's
twentieth session, on the basis of an updated list of such requests3 and a communication received in
support of the request for observership by the Latin American Integration Association.4
III. EXAMINATION OF REGI ONAL TRADE AGREEMENTS
5. Under item 1(a) of its Terms of Reference, the Committee is mandated to examine RTAs
referred to it by the Council for Trade in Goods (CTG), the Council for Trade in Services (CTS) or
the Committee on Trade and Development (CTD), depending on the type of agreement.
                                                     
1 Document WT/L/127 contains the Decision of the General Council which established the Committee on
Regional Trade Agreements and provided its Terms of Reference.
2 Document WT/REG/W/11.
3 Document WT/REG/W/11/Add.1
4 Document WT/REG/W/30:  Communication received from the delegation of Uruguay, on behalf of
the Group of Latin American and Caribbean Countries (GRULAC).WT/REG/W/32
Page 2
6. In 1998, the Committee endeavoured to accelerate the examination of agreements which had
already commenced, as well as to handle new agreements referred to it.  The Committee has currently
under its purview a total of 62 RTAs.  To date, the examination of 54 RTAs have been referred to the
Committee by the CTG, seven by the CTS and one by the CTD.  Draft reports on the examination of
27 agreements are currently under consideration; for 14 other agreements, reports are being drafted orfactual examinations are well engaged, while the first round of examination for the remaining
21 RTAs is scheduled for either the Committee's twentieth session or early in 1999.  (See
Attachment 2).  Thus far, no report has been adopted.
7. In examining individual agreements , the Committee worked on the basis of examination
reports consisting of four parts: A. Background;  B.  Factual Report of the Examination;  C. Outcome
of the Examination in Accordance with the Terms of Reference;  and D. Conclusions.
8. The Committee encouraged Members that had not done so to notify RTAs under the relevant
WTO rules.
IV. REPORTING ON THE OPERATION OF AGREEMENTS
9. To fulfil item 1(b) of its Terms of Reference, the Committee adopted, on 20 February 1998,
recommendations to the CTG, CTS and CTD with respect to how the required reporting on the
operation of RTAs should be carried out.  The nature of these recommendations is essentially
procedural and their implementation would not enta il any change in Members' legal rights and
obligations.  The recommendations are geared towa rd standardizing, as much as possible, the
presentation of reports on regional trade agreements to WTO Members; ensuring the provision ofconsistent information to the CRTA on developments in such agreements, which may be useful to the
Committee's work under its terms of reference; and making operational the implementation of
reporting requirements contained in WTO legal texts.
10. Following the adoption of these recommendations, and on the basis of an Informal Note by
the Secretariat distributed in March 1998, discussions were held on how to operationalize suchrecommendations, in particular regarding RTAs in the goods area.  Agreement on that by all Members
was secured at the Committee's nineteenth session in September.  The recommendations have been
transmitted to relevant bodies.  At its twentieth session, the Committee was due to consider a schedule
for the submission of the periodic reports.
V. PROCEDURES TO FACILITATE AND IMPROVE THE EXAMINATION PROCESS
11. Regarding item 1(c) of the Committee's Terms of Reference, the Committee acknowledged
that both the "Standard Format for Information on Regional Trade Agreements" used in the area of
goods and the "Standard Format for Information on Economic Integration Agreements" used in the
area of services had served in moving the examination process forward.WT/REG/W/32
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VI. SYSTEMIC IMPLICATIONS OF REGIONAL TRADE AGREEMENTS AND
INITIATIVES FOR THE MULTILATERAL TRADING SYSTEM AND THE
RELATIONSHIP BETWEEN THEM
12. Work on item 1(d) of the Committee's Terms of Reference progressed along three distinct
lines.  First, through RTA examinations, systemic discussions or written submissions, the Committee
updated and refined its identification of issues requiring consideration from a systemic viewpoint.
13. Second, the Secretariat prepared two informal papers, providing factual information on RTAs
to serve as a tool for the Committee's discussion on systemic issues (see Attachment 3).  At the
sixteenth session, a list was distributed showing the status of all RTAs notified to the GATT/WTO
(under Article XXIV, the Enabling Clause and Article V of the GATS) and in force.  At the
nineteenth session, the Secretariat circulated an informal note "mapping" RTAs, which includeddetails on historical developments, as well as the regional dimension, depth of integration and
frequency of RTAs.  In order to give a more accurate picture of what regional integration might mean
ten years from now, the note also included available information on RTAs which had not yet been
notified and regional initiatives under negotiation.
14. Third, the Committee considered  some of the issues identified as requiring consideration from
a systemic viewpoint through legal and economic analyses, as well as horizontal comparisons of
RTAs:
- Discussions on "substantially all the trade" (SAT) , in particular, whether SAT should
be interpreted in a quantitative or qualitative manner,  continued in 1998; written
contributions were made by the Secretariat and the delegations of Australia and HongKong, China.  The proposals that the SAT requirement be measured in terms of tariff
lines as well as trade flows and that preferential rules of origin be related to a
quantitative definition of SAT allowed the Committee to explore whether it would be
appropriate and practical to apply a specific standard or a formula to define the
concept.  While recognizing the contribution to the debate, not all delegations agreed
with the proposals put forw ard in these two papers.
- The Committee pursued its consideration of the scope of the term "other regulations
of commerce" (ORCs) as contained in GATT Article XXIV provisions, on the basis
of written contributions by the delegations of Australia; Hong Kong, China; Japan
and Korea, and by the Secretariat.  During the first part of 1998, consideration was
given mainly to the legal and economic  aspects of the term and discussions evolved
around the following topics: the relationship between the different parts of
Article XXIV, in particular paragraphs 4, 5 and 8;  the relationship between
Article XXIV and other GATT/WTO provisi ons; the identification and analysis of
measures or regulations covered by the term ORC; and the difference between
free-trade areas and customs unions.  In the second half of the year, the Committeebegan  to address ORCs also from an horizontal approach, on the basis of an inventory
prepared by the   Secretariat of non-tariff provisions governing trade in goods. This
document presented, in aggregate form and through statistical frequency tables (i.e.
without identification of individual agreements), the results of analysis made on 69
RTAs notified to the GATT/WTO concerning the way these agreements made use ofdifferent non-tariff measures.  For presenting the information, the Secretariat grouped
RTAs according to a number of descriptive parameters so as to highlight trends,
recurrent features or patterns. The Secretariat has been requested to conduct further
analysis on rules of origin, contingency instruments and standards along similar lines.WT/REG/W/32
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VII. FINAL REMARKS
15. During 1998, the Committee completed all the formal steps for the system of reporting on the
operation of agreements to become fully operational in 1999.  Despite its heavy workload and delays
in the submission of relevant material, the Committee also made progress in examining RTAs.
Although some delegations indicated their willingness  to move forward to the adoption of reports on
the basis of the existing rules, the examinations were impeded, inter alia , by a lack of consensus on
the interpretation of  the WTO rules relating to RTAs.5  On systemic issues, the Committee held
discussions on some important topics and identified different approaches to these subjects.
16. During 1999,  the CRTA will continue  its work on the examination of individual agreements.
It will also  continue to examine systemic issues, and, as appropriate, make  recommendations to the
General Council on issues that may need to be clarified, in order to provide a clear er understanding on
the rules with which regional trade agreements should comply, both in goods and services.
                                                     
5 In order to help the consensus-building process, the Chairman of the CRTA made a statement at the
General Council meeting held on 15 July.WT/REG/W/32
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ATTACHMENT 1
Minutes of the Meetings held in 1998
Sixteenth Session - 16-18 and 20 February
WT/REG/M/16
WT/REG11/M/2 CEFTA
WT/REG33/M/2 Slovenia-Bulgaria
WT/REG41/M/2 Czech-Bulgaria
WT/REG42/M/2 Slovak-BulgariaWT/REG32/M/1 EC-Slovenia
WT/REG50/M/2 EC-Hungary, Services
WT/REG51/M/2 EC-Poland, Services
WT/REG52/M/2 EC-Slovak, Services
Seventeenth Session - 4-5 and 7-8 May 1998
WT/REG/M/17
WT/REG3/M/7 EC Enlargement
WT/REG11/M/3 CEFTA
WT/REG33/M/3 Slovenia-Bulgaria
WT/REG38/M/1 Canada-Chile
WT/REG39/M/2 European Union, Services
WT/REG41/M/3 Czech-BulgariaWT/REG42/M/3 Slovak-Bulgaria
WT/REG50/M/3 EC-Hungary, Services
WT/REG51/M/3 EC-Poland, Services
WT/REG52/M/3 EC-Slovak, Services
Eighteenth Session - 6-7 and 10 July
WT/REG/M/18WT/REG3/M/8 EC Enlargement
WT/REG32/M/2 EC-Slovenia
WT/REG38/M/2 Canada-ChileWT/REG39/M/3 European Union, Services
WT/REG50/M/4 EC-Hungary, Services
WT/REG51/M/4 EC-Poland, Services
WT/REG52/M/4 EC-Slovak, Services
Nineteenth Session - 23-25 September 1998
WT/REG/M/19
WT/REG38/M/3 Canada-Chile
WT/REG39/M/4 European Union, Services
WT/REG44/M/1 Romania-Moldova
WT/REG/GEN/M/1 Pan-Eu ropean System of
Cumulation of OriginWT/REG/W/32
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ATTACHMENT 2
RTAs for which draft reports on the examination are currently under consideration:
ANZCERTA (Services) Canada-Israel FTA
EC-Bulgaria IA EC-Czech Republic IA
EC-Enlargement (Goods) EC-Enlargement (Services)
EC-Estonia FTA EC-Hungary IA
EC-Latvia FTA EC- Lithuania FTA
EC-Poland IA EC-Romania IA
EC-Slovak Republic IA EFTA-Bulgaria FTAEFTA-Estonia FTA EFTA-Hungary FTA
EFTA-Israel FTA EFTA-Latvia FTA
EFTA-Lithuania FTA EFTA-Poland FTA
EFTA-Romania FTA EFTA-Slovenia FTA
Iceland-Faroe Islands NAFTA (Goods)NAFTA (Services) Norway-Faroe Islands
Switzerland-Faroe Islands
RTAs for which reports are being drafted or factual examinations are well engaged:
Bulgaria-Czech Republic FTA Bulgaria-Slovak Republic FTA
Bulgaria-Slovenia FTA CEFTA
Canada-Chile FTA EC-Hungary EA (Services)
EC-Poland EA (Services) EC-Slovak Republic EA (Services)EC-Slovenia IA EC-Turkey CU
European Union (Services) EC-Faroe Islands
MERCOSUR Romania-Moldova FTA
RTAs for which factual examination has not yet commenced:
Czech Republic-Estonia FTA Czech Republic-Latvia FTA
Czech Republic-Lithuania FTA EC-Palestinian Authority FTA
EC-P. of Andorra CU Israel-Czech Republic FTA
Israel-Hungary FTA Israel-Slovak Republic FTA
Poland-Lithuania FTA Slovak Republic-Estonia FTASlovak Republic-Latvia FTA Slovak Republic-Lithuania FTA
Slovenia-Estonia FTA Slovenia-Latvia FTA
Slovenia-Lithuania FTA Slovenia-F.Y.R.O.M. FTA
Slovenia-Croatia FTA Turkey-Hungary FTA
Turkey-Israel FTA Turkey-Lithuania FTATurkey-Romania FTAWT/REG/W/32
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ATTACHMENT 3
List of Documents on Systemic Issues
WT/REG/W/17/Add.1 Note by the Secretariat on "Other Regulations of Commerce"
WT/REG/W/17/Corr.1 Note by the Secretariat on "Other Regulations of Commerce"
WT/REG/W/17/Rev.1 Note by the Secretariat on "Systemic Issues Related to Other
Regulations of Commerce"
WT/REG/W/18 Communication from Australia on "Substantially all the Trade and
Other Regulations of Commerce"
WT/REG/W/19 Communication from Hong K ong, China on "Other Regulations of
Commerce and Substantially all the Trade"
WT/REG/W/21/Add.1 Note by the Secret ariat on "Substantially all the Trade"
WT/REG/W/21/Rev.1 Note by the Secretariat on "Systemic Issues Related to Substantially
all the Trade"
WT/REG/W/22&Add.1 Communication from Austra lia on "Substantially All the Trade"
WT/REG/W/24 Communication from Hong Kong , China: "An Analysis of the Term
Substantially all the Trade Pursuant to the Customary Rules of
Interpretation of Public International Law (VCTL Art.31)"
WT/REG/W/25 Communication from Australia on "Other Regulations of Commerce
and Other Restrictive Regulations of Commerce"
WT/REG/W/26 Note by the Secretariat on "Inventory of Non-Tariff Provisions in
Regional Trade Agreements"
WT/REG/W27 Statement by Hong Kong, China:  "Comments on Secretariat
Inventory of NTMs in WT/REG/W/26"
WT/REG/W/28 Communication from Japan on "Other Regulations of Commerce in
Article XXIV:5"
WT/REG/W/29 Communication from Japan on "Other Regulations of Commerce"
WT/REG/W/31 Communication from Hong K ong, China: "An Illustrative List of
Elements in Article XXIV Requiring Clarification"
Non papers
- Non-paper by the Republic of Korea on "Preferential Rules of Origin and Other Regulations
of Commerce", 8.7.98
- Informal Paper by the Secretariat "Mapping on Regional Trade Agreements", updated on
19.11.988, Job No. 6240
- Informal Paper by the Secretariat "Basic Information on Regional Trade Agreements Notified
to the GATT/WTO and in Force", updated on 19.11.98, Job No. 6239
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