RESTRICTED  
  
G/C/M/126  
 
28 October 2016  
(16-5928) Page: 1/36 
Council for Trade in Goods    
 
MINUTES OF THE MEETI NG OF THE COUNCIL FO R TRADE IN GOODS  
14 JULY  2016  
CHAIRPERSON:  HE MR HAMISH M cCORMICK  
The meeting of the Council for Trade in Goods (CTG, or the Council) was convened by 
Airgram  WTO/AIR/CTG/ 5; the proposed agenda for the meeting was cir culated in 
document  G/C/W/ 725. The meeting proceeded on the basis of the following agenda : 
1   NOTIFICATION OF REGI ONAL TRADE AGREEMENT S ................................ ....................  2 
2   ENLARGEMENT OF THE E UROPEAN UNION: PROCE DURES UNDE R 
ARTICLE  XXVIII:3 OF GATT  1994  ................................ ................................ .....................  2 
3   ACCESSION OF THE KYR GYZ REPUBLIC TO THE EURASIAN ECONOMIC UN ION 
(EAEU): PROCEDURES U NDER ARTICLE  XXVIII:3 OF GATT  1994 
(G/L/1137/ADD.1)  ................................ ................................ ................................ ..........  3 
4   ACCESSION OF THE  REPUBLIC OF ARMENIA TO THE EURASIAN ECON OMIC 
UNION: PROCEDURES UN DER ARTICLE  XXVIII:3 OF GATT  1994 – REQUEST 
FROM THE EUROPEAN UN ION ................................ ................................ ..........................  4 
5   UNITED STATES OF AME RICA – REQUEST FOR A WAIVER  EXTENSION – 
FORMER TRUST TERRITO RY OF THE PACIFIC ISLANDS (G/C/W/721)  .............................  6 
6   UNITED STATES OF AME RICA – REQUEST FOR A WAIVER : TRADE 
PREFERENCES GRANTED TO NEPAL (G/C/W/724)  ................................ ...........................  7 
7   EUROPEAN UNION – ANTI -DUMPING INVESTIGATIO N ON IMPORTS O F 
COLD -ROLLED FLAT STEEL PR ODUCTS ORIGINATING I N THE RUSSIAN 
FEDERATION AND CHINA  – REQUEST FROM THE RUS SIAN FEDERATION  .........................  8 
8   NIGERIA – IMPORT RESTRICTING P OLICIES AND MEASURES  – REQUEST 
FROM THE EUROPEAN UN ION, ICELAND, NORWA Y, THE UNITED STATES  OF 
AMERICA, AND URUGUAY  ................................ ................................ ...............................  10 
9   CHINA – ISSUES RELATED TO TR ADE IN SEAFOOD – REQUEST FROM 
NORWAY  ................................ ................................ ................................ ........................  12 
10   SRI LANKA – DAIRY TARIFFS – REQUEST FROM NEW ZEA LAND  ..............................  14 
11   INDONESIA'S IMPORT A ND EXPORT RESTRICTIN G POLICIES AND 
PRACTICES – STATEMENTS BY THE EU ROPEAN UNION, JAPAN,  AND THE UNITED 
STATES OF AMERICA  ................................ ................................ ................................ ...... 15 
12   ECUADOR – IMPORT RESTRICTING M EASURES – REQUEST FROM JAPA N 
AND THE UNITED STATE S OF AMERICA  ................................ ................................ ..........  20 
13   UKRAINE – ISSUES RELATED TO CU STOMS VALUATION - REQUEST FROM 
NORWAY  ................................ ................................ ................................ ........................  23 
14   CANADA – WINE RELATED POLICIE S AND MEASURES - REQUEST FROM NEW 
ZEALAND  ................................ ................................ ................................ ........................  24 
15   UNITED STATES OF AME RICA – MEASURES RELATED TO IMPORTS OF FISH 
AND SEAFOOD PRODUCTS  – REQUEST FROM THE RUS SIAN FEDERATION  ......................  26 
16   INDIA – IMPORT RESTRICTING M EASURES – REQUEST FROM JAPAN A ND 
NEW  ZEALAND  ................................ ................................ ................................ ...............  28 G/C/M/126  
 
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  17   WORK PROGRAMME ON EL ECTRONIC COMMERCE  ................................ ...................  31 
18   OTHER BUSINESS  ................................ ................................ ................................ .... 33 
18.1   China – Exploration of Section  15(a) Protocol of Accession  ................................ ............. 33 
18.2   Russian Federation's Trade Measures Affecting Ukrainian Transit of Products .................... 34 
18.3   China's Import Tax System on Personal Effects at the Border – Request from Japan  ......... 36 
18.4   Date of the next meeting  ................................ ................................ ........................... 36 
 
At the start of the meeting, the delegate of  China  informed the Council that, under agenda item  
"Other Business ", his delegation intended to  again  inform the Council of the expiry date of 
Sectio n 15(a)(ii) of the Protocol on the Accession of the People's Republic of China; the delegate of 
Ukraine  indicated that under the same agenda item his delegation intended to raise an issue 
concerning the Russian Federation's trade measures affecting Ukraini an transit of products ; and 
the delegate of Japan  indicated that his delegation would also raise an issue concerning China's 
import tax system on personal effects at the border.  
 
The Chairperson  announced that he would refer to the date of the next CTG  meeting. 
 
The agenda was so agreed . 
 
1  NOTIFICATION OF REGI ONAL TRADE AGREEMENT S 
1.1.  The Chairperson  recalled that, under the working procedures agreed by the Committee on 
Regional Trade Agreements (CRTA), and following adoption by the General Council of the 
Transp arency Mechanism, the CTG was to be kept informed of Members' notifications of new 
regional trade agreements.1 He informed the CTG that the following two  trade agreements had 
been notified to the CRTA : 
a. ECONOMIC PARTNERSHIP AGREEMENT BETWEEN JAPAN AND MONGO LIA 
(document  WT/REG373/N/1 ); and 
b. FREE TRADE AGREEMENT BETWEEN MEXICO AND PANAMA (document  WT/REG374/N/1 ). 
1.2.  The delegate of the United States  of America  thanked the parties to the previous agreements 
for their notifications , and took the opportunity to  again encourage those Members that had not 
yet notified Free Trade Agreements (FTAs) they had signed to do so as quickly as possible so that 
Members could all benefit from the transparency mandated under the WTO  Transparency 
Mechanism for Regional Trade Agreem ents. 
1.3.  The Chairperson  proposed that the Council take note of the statement made and of  the 
information provided . 
1.4.  The Council so agreed . 
2  ENLARGEMENT OF THE E UROPEAN UNION: PROCE DURES UNDER ARTICLE  XXVIII:3 OF 
GATT  1994  
2.1.  The Chairperson  informed the Council t hat, in a communication dated 1  July 2016, the 
European Union had  requested the Secretariat to include this issue on the agenda of this meeting  
in order to report  to the Council on the progress made on this issue.  
2.2.  The delegate of the European Union  informe d Members that the agreements with China and 
Uruguay had been signed ; that the internal procedures were advancing at the European 
Parliament  level and were expected to  be finalize d by September  2016; that negotiations with 
Brazil had  been finalized and tha t an agreement on compensatory adjustment had come into force . 
Negotiations with other Members were well advanced and the EU hoped to be in a position to 
inform the CTG , at its November meeting, of the conclusion of other agreements.  
                                                
1 See documents  WT/REG16, WT/L/671, and G/C/M/88.  G/C/M/126  
 
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2.3.  The delegate of Brazil  welcomed the conclusion of a compensatory agreement with the EU 
following Croatia's EU  accession. Three years of negotiations had resulted in the enlargement of 
tariff-rate quotas  (TRQs)  for sugar, poultry , and turkey that would be incorporated in to the E U's 
schedule. Brazil also welcomed the improved market access condition s for the sugarcane sector in 
the first  seven  years of these TRQs, with lower in -quota rates . This constituted a key factor in 
providing due compensation to Brazilian producers. Brazil looked forward to the definit ive 
implementation of these conditions by the EU  authorities , as soon as possible, so that Brazilian 
exporters c ould start benefitting from them already  in 2016.  
2.4.  The delegate of Australia  also welcome d the progress report from the EU on the negotiations 
following Croatia's accession to the EU, particularly with regard to compensation measures relating 
to changes in tariff and quota arrangements . Australia was  pleased in particular to hear  of the 
developments in relation to the negotiations with Brazil and how they were progressing,  and 
remained keen to ensure that this enlargement d id not raise barriers to trade for other 
WTO Members.  
2.5.  The Chairperson  thanked the European Union for its update on this issue and proposed that 
the Co uncil take note of the statements made.  
2.6.  The Council so agreed . 
3  ACCESSION OF THE KYR GYZ REPUBLIC TO THE EURASIAN ECONOMIC UN ION (EAEU): 
PROCEDURES UNDER ART ICLE  XXVIII:3 OF GATT  1994 (G/L/1137/ADD.1 ) 
3.1.  The Chairperson  drew Members' attention to document  G/L/1 137/Add.1 , dated 28 June 2016, 
and submitted by the delegation of the Kyrgyz Republic,  in which the Kyrgyz Republic had 
request ed a further extension of 12 months in order to preserve Members' rights to withdraw 
substantial concessions while the negotiatio n process continue d. In that document , the Kyrgyz 
Republic also clarif ied that the exact date of the ratification of its Protocol of Accession to the EAEU 
was 15 August  2015, and that all periods referred to in its communication should  consequently  run 
from 12  August  2015, and not from 9  May 2015 as indicated in its initial request 
(document  G/L/1137). He also reminded the Council that the Kyrgyz Republic had requested an 
initial extension on 15  November  2015.  
3.2.  The delegate of the Kyrgyz Republic  stated that , since the entry into force of its accession to 
the EAEU , the Kyrgyz Republic had been applying the E AEU's Customs Common External Tariff 
(СET).  Following its notification dated 16 April 2015, and circulated as document  G/SECRET/38 , 
various interested Mem bers ha d submitted their claims of interest . Consequently, her authorities 
had provided answers and clarifications to the questions and requests from Members for additional 
information with regard to document  G/SECRET/38.  
3.3.  Her delegation considered that additional time would be required to conduct the negotiation  
processes . Thus, in order to preserve Members ' rights to withdraw concessions pending the 
conclusion of Article  XXVIII negotiations , it had submitt ed a request to further exten d the period 
for Membe rs to withdraw concessions  for 12  months (or until 12  February  2018) in 
document  G/L/1137/Add.1 . Consequently , the Kyrgyz Republic would not assert that 
WTO Members who ha d submitted a claim pursuant to Article  XXIV:6 of the GATT  1994 were 
precluded from w ithdrawing substantially equivalent concessions under Article  XXVIII:3 of the 
GATT  1994 because this withdrawal occur red later than six  months after the Kyrgyz Republic's 
withdrawal of concessions (which occurred on  12 August  2015), provided that the claim ing 
WTO Member would withdraw concessions no later than 30  months after the Kyrgyz Republic's 
modification of concessions.  
3.4.  The delegate of  the European Union  supported the extension requested by the Kyrgyz 
Republic for the completion of the procedures unde r GATT  Article  XXIV:6. The EU looked forward 
to active engagement from the Kyrgyz Republic and its Eurasian partners  on this issue . 
3.5.  The delegate of China  appreciated the progress made and the engagement of the Kyrgyz 
Republic during the bilateral consultat ions on this issue and expected to continue working with it to 
advance further the renegotiation process.  G/C/M/126  
 
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  3.6.  The delegate of Switzerland  joined the EU in supporting the request for an extension of the 
period for Members to withdraw concessions. He underscored  that, under the principles and 
procedures of GATT  Article XXVIII , when a country enter ed into a customs union  (CU) any 
compensation should  be negotiated  by the entire CU, in this case by the EAEU  member States ; 
that the results of these negotiations w ould be legally binding on all members of the CU; and that 
the corresponding modifications in the ir schedules  of concessions  were not only  required  to be 
introduced but were also required to be  certified.  Switzerland looked forward to meeting  with the 
Kyrgyz R epublic and concluding the negotiations in a satisfactory way.  
3.7.  The delegate of Japan  reminded delegations that his authorities had submitted Japan's c laim 
of interest to the Kyrgyz Republic in July  2015. Japan ha d a systemic interest in this issue and ha d 
been waiting for a response to its claim from the Kyrgyz Republic.  He reiterated Japan's willingness 
to engage in the se negotiations and consultations with the Kyrgyz Republic and other interested 
Members for the purposes of appropriate compensation under GATT  Articles  XXIV and XXVIII.  
3.8.  The Chairperson  thanked delegations for their interventions and proposed that the Council 
take note of the statements made and approve the extension requested by the Kyrgyz Republic in 
document  G/L/1137/Add.1 until 12  Februar y 2018.  
3.9.  The Council so agreed . 
4  ACCESSION OF THE REP UBLIC OF ARMENIA TO THE EURASIAN ECONOMI C UNION: 
PROCEDURES UNDER ART ICLE  XXVIII:3 OF GATT  1994 – REQUEST FROM  THE EUROPEAN 
UNION  
4.1.  The Chairperson  informed the Council that , in a communication dated 1  July 2016, the 
delegation of the European Union had requested the Secretariat to include this item on the 
agenda . 
4.2.  The delegate of the European Union  thank ed Armenia and the other Members of the EAEU for 
the constructive meeting held on 21  June 2016 regarding th e EU's claims of interest made in 
accordance with GATT  Article  XXIV:6 negotiations with Armenia and with the Kyrgyz Republic. The 
practice being followed by the EU regarding its own enlargement procedures was to regularly 
update the CTG about progress in t he compensation negotiations with other Members , as her 
delegation had just done in  relation to  the previous agenda item of this meeting. She therefore 
invite d Armenia and other  Members  concerned to  follow the same  practice.  
4.3.  She reminded delegations that the EU ha d submitted claims of interest regarding all the tariff 
lines included in the notifications made by Armenia and the Kyrgyz Republic,  contained in 
document s G/SECRET/37 and G/SECRET/38 respectively , in which the EU could have negotiating 
rights.  The EU acknowledged  that the Art icle XXIV:6 negotiations of Armenia and the Kyrgyz 
Republic were separate procedures . However, for practical and  legal reasons it would like to 
negotiate a global compensation settlement with all members of the E AEU that were also 
WTO Members.  In this context, the EU submitted its initial requests for compensation to Armenia , 
the Kyrgyz Republic , Kazakhstan,  and the Russian Federation  on 2 March  2016, and expected to 
receive compensation from the said Members that, additionally,  would require  binding  these 
compensation s in their respective tariff schedules.  
4.4.  As follow -up to the meeting held on 21 June, and in line with the agreements reached at that 
meeting, the EU urge d Armenia  and the Kyrgyz Republic  to coordinate with their Eurasian 
partners , and hoped  to receiv e a joint counter -offer from Armenia, the Kyrgyz Republic, 
Kazakhstan, and the Russian Federation  to the EU  requests.  
4.5.  The delegate of Brazil  indicated that , given the possible systemic implications  of this issue, 
Brazil w as interest ed in following  the discussion of the issue s raised by the EU.  
4.6.  The delegate of Ukraine  stated that Armenia and the Kyrgyz Republic were traditional trading 
partners of Ukraine and that, in January  2015,  following their accession to the EAEU and the 
procedures under GATT  Article  XXVIII , Ukraine had submitted its claim of interest to Armenia , and 
to the Kyrgyz Republic on 2 July 2015, reserv ing its right to negotiate the modification of certain 
concession s with said Members , including  in relation t o compensatory adjustment.  However, no G/C/M/126  
 
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official replies had been received to date. Ukraine  looked forward to receiving responses  from 
Armenia and the Kyrgyz Republic in order  to engage in  constructive and mutually beneficial 
negotiations in accordance with  GATT Article  XXVIII.  
4.7.  The delegate of Japan  stated that Japan not only had a systemic interest in this issue but had 
also submitted a claim of interest to Armenia. Japan also appreciate d that, in June  2016, Armenia  
had held bilateral meetings with interest ed Members, including Japan, and  was considering the 
proposal made by Armenia at the last bilateral meeting.  Japan again express ed its willingness to 
engage in negotiations and consultations with Armenia and other interested Members for the 
purposes of app ropriate compensation under GATT  Articles  XXIV and XXVIII.  
4.8.  The delegate of Chinese Taipei  echoed the statement made by the EU on this issue and 
indicated that  his authorities had now received Armenia 's response to its request. His authorities 
were currentl y studying carefully  this response, and would  continue working closely with Armenia 
in search of a mutual ly satisfactory agreement.  
4.9.  The delegate of Canada  stated that Canada had also submitted a claim of interest to Armenia 
in relation to the GATT  Article  XXVIII process.  Canada supported the EU's suggestion to ensure 
transparency in th is process, including  by providing  regular update s to the C TG, and looked 
forward to continu e working with Armenia and its EAEU  partners towards a successful conclusion 
of the  process.  
4.10.   The delegate of China  recalled that , following Armenia 's accession to the EAEU , China had 
been working closely with Armenia on this issue  and appreciated the progress made . China 
expected to continue working with Armenia, and in  particular with r egard to  the clarification o f 
some technical questions, includi ng statistics and certain tariff lines , so as to be in a better position 
to conduct an internal assessment and analysis of the issue and to accelerate the renegotiation 
process.  
4.11.   The delegate of  the United States of America  welcomed the EU's suggestion to continue 
using the CTG to provide transparency.  He thanked Armenia for having sent its tariff concordance , 
which was fundamental for the United States in evaluating Armenia's data.  
4.12.   The delegate of Armenia  reminded the Council that , after completion of the notification 
procedures , Armenia had received claims of interests from the interested Members and had 
entered into GATT  Articles  XXIV and XXVIII procedures , including tariff negotiations and 
consultations , to address the compensatory adjustments provided  for under Article  XXIV.  Following 
the last CTG  meeting , Armenia had held useful and positive consultations and an exchange of 
communications and information  with representatives of interested Mem bers. 
4.13.   In this vein, an Armenian delegation , headed by the Vice -Minister of Economy and with the 
participation of responsible delegates from other EAEU member States , had  held a number of 
bilateral meetings in Geneva with representatives from almost all int erested Members , in 
June 2016. During this visit , thorough and constructive negotiations had taken place not only with 
the EU  delegation , where representatives from the DG Trade of the European Commission  were 
present , but also with the delegation s of Cana da, Japan, Chinese Taipei , Brazil, Ukraine, and 
Switzerland. An exchange of views, clarification of positions, checking  of various technical issues , 
and definition of further steps had taken place during those meetings. Armenia considered the 
meetings to have been positive and productive , and appreciate d delegation s' efforts , time, and 
interest.  
4.14.   The requests from interested Members concern ed technical issues with regard to the 
statistics provided by Armenia,  as well as on further clarification or adjustment  to certain tariff 
lines. Armenia had addressed most of these requests, including concordance tables and statistics 
adjustments, and would continue working on the remaining issues together with the Secretariat.  
4.15.   With regard to Ukraine 's intervention , he sta ted that , as explained to the delegation of 
Ukraine during a bilateral meeting in June  2016, Armenia could not formally accept the claim of 
interest and enter into GATT  Article  XXIV and XXVIII procedure s, including tariff negotiation s or 
consultation s toward compensatory adjustment , given that a Free Trade Agreement  existed  
between Armenia and Ukraine that established, without exclusion s, a zero tariff treatment. G/C/M/126  
 
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  Therefore, there would  be no sense in enter ing into tariff reduction s or compensatory adjustmen t 
negotiations with  another Member (Armenia) with whom the Member claiming an interest 
(Ukraine) had been trading at zero t ariffs for more than twenty  years . 
4.16.   Armenia hoped that future consultation s and negotiation s would be as constructive  and 
fruitful  as they had been to date. Armenia would do its utmost to  complete  the process as soon as 
possible in compliance wit h WTO  rules and procedures.  
4.17.   The Chairperson  thanked delegations for their interventions and proposed that the Council 
take note of the statement s made.  
4.18.   The Council so agreed . 
5  UNITED STATES OF AME RICA – REQUEST FOR A WAIVER  EXTENSION – FORMER 
TRUST TERRITORY OF T HE PACIFIC ISLANDS ( G/C/W/721)  
5.1.  The Chairperson  remind ed delegations that , in a communication dated 2  March  2016, the 
delegation of the Uni ted States of America had submitted document  G/C/W/721 containing a 
waiver request and a draft waiver decision to extend the preferences  the US had previously 
accorded  to the Former Trust Territory of the Pacific Islands. This request had been considered a t 
the last meeting of this Council , on 15  April 2016, when the delegation of the European Union 
indicated that it did not have any problem with the request but was not in a position formally to 
join the consensus on this issue since it needed first to go t hrough lengthy internal procedures. It 
was agreed that the CTG would  revert to this issue at this meeting.  
5.2.  The delegate of the United States of America  again thank ed delegations for considering its 
request for a waiver to permit the U S to provide duty -free treatment to eligible products from the 
Republic of the Marshall Islands, the Federated States of Micronesia, the Republic of Palau, and the 
Commonwealth of the Northern Mariana Islands, all formerly part of the Trust Territory of the 
Pacific Islands. He recalled that , in 1986, the entry into force of the Covenant establishing the 
Commonwealth of the Northern Mariana Islands, the Compacts of Free Association with the United 
States for the Republic of the Marshall Islands, the Federated States of Micronesia , and, in 1994, 
of the Compact of Free Association with the United States for the Republic of Palau, terminated the 
Trusteeship of the Pacific Islands, established on 2  April 1947. US law provide d for the extension 
of the preferential trade treatment to th ese entities , as granted  to these islands under the TTPI.  
5.3.  These preferences were similar to the historical preferences that the United States provide d 
to the US  Virgin Islands, Guam and American Samoa, which were US  possessions on 1  July 1939, 
and which were included in Annex  D to Article  I of the GATT  1994. The primary purpose of this 
preference system ha d been to promote the expansion of trade and the economic development of 
the beneficiaries in a manner consistent with the objectives of the GATT and with  the trade, 
financial , and development needs of the beneficiary countries.  
5.4.  A small volume of production and trade was involved in this program me. Taken together, 
US imports from the Republic of the Marshall Islands, the Republic of Palau, the Federated Sta tes 
of Micronesia, and the Commonwealth of the Northern Mariana Islands in 2015 represented about 
US$32.1  million  in total. The US was  committed to working in partnership with its friends in these 
areas to advance common interest s in increased trade and development . These preferences were a 
key element in US efforts to help these territories  participate more fully in the global economy, 
and complement ed work by other Members to promote growth and development.  
5.5.  The delegate of the European Union  recalled that , at the last  CTG meeting, her delegation 
had given its consent to this request  in principle.  The EU  regretted  that it was  not yet in a position 
to formally accept the request for this extension  at this meeting,  but would certainly be in a 
position to do s o at the next CTG  meeting . 
5.6.  The Chairperson  thank ed delegations for their interventio ns and propose d that the Council 
take note of the statements made and revert to this matter at its next meeting , in 
November  2016.  He also informed the Council that , since the 90  days for consideration of a waiver 
request, to which Article  IX:3(b) of the Marrakesh Agreement refer red, had elapsed on G/C/M/126  
 
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8 June 2016, he would make a factual report to the General Council on this issue at its meeting of 
27-28 July 2016.  
5.7.  The Council so agreed . 
6  UNITED STATES OF AME RICA – REQUEST FOR A WAIVER : TRADE PREFERENCES 
GRANTED TO NEPAL (G/ C/W/724)  
6.1.  The Chairperson  drew Members ' attention to document  G/C/W/724, dated 21  June 2016, 
containing a waiver request and a draft waiver decision submitted by the United States in respect 
of a new trade programme that would grant  preferences  to Nepal.  
6.2.  The delegate of the United States of America  thanked Members for the opportunity to 
introduce a new proposed trade preference program me for Nepal . The waiver re quest contained in 
document  G/C/W/724 sought  a waive r of the US ' Most Favoured Nation (MFN) obligations  in order 
to establish a new trade preference program me that would grant duty -free treatment to specified 
products from Nepal.  The purpose of th is new pr ogram me wa s to help Nepal in its ongoing 
economic recovery efforts following the April  2015 earthquakes.  
6.3.  In addition to a tremendous loss of life –9,000  deaths, and 23,000  injured –as a land -locked 
least developed country  (LLDC) , Nepal ha d faced severe chall enges in achieving economic 
recovery. According to the World Bank, e conomic growth ha d been stagnant  in Nepal  and export 
competitiveness ha d been declining.  In terms of bilateral trade, US  goods imports from Nepal 
totalled  only $87  million in 2015, which r epresented a drop of 22% from 2005.  
6.4.  In an effort to boost Nepal's exports, the US was  proposing a time -bound program me-limited 
in scope -granting duty -free access for 66  tariff lines of Nepal ese exports entering the U S. The 
program me include d certain carpet s, headgear, shawls, scarves , and travel goods , and would run  
until 2025.  Nepal currently export ed very modest quantities of goods under these tariff lines. Thus 
the proposed program me would not negatively affect other Members ' exports of these products to  
the United States.  Additional information on the programme was provided in the waiver request, 
and full details were set out in Section  915 of the US  Trade Facilitation and Trade Enforcement Act 
of 2016, which was annexed to document  G/C/W/724 . His author ities were currently completing 
the domestic implementation requirements concerning country and product eligibility, and hope d 
to implement the program me in the autumn  of 2016. The US believed that this preference 
program me would serve an important develop ment objective and hoped to obtain Members ' 
approval . 
6.5.  The delegate of the European Union  stated that her authorities had examined the request but 
were not yet in a position formally to approve it. She sought further information from the US on 
the rationale  behind the proposed ten -year duration of the programme.  
6.6.  The delegate of Nepal  thanked the US  Government for its generosity and gesture of goodwill , 
demonstrated by offering duty -free access for eligible Nepalese products comprising 66  tariff lines 
to the US market , an offer being made pursuant to Article  IX:3 of the Marrakesh Agreement. 
Nepal's trade capacity ha d remained quite low due to the structural weakness of the economy and 
supply side constraints. As an LDC and LLDC, Nepal also suffer ed from high trade costs; this also 
affect ed its competitiveness. Since 2005 , Nepal ese exports  had been on a downward spiral, and 
were standing at around US$650  million in 2016 . With economic growth plunging to less than 
one per cent in the aftermath of the devastating earthquake s that hit Nepal in April and May  2015, 
the export -import ratio widen ed during  the course of  2016 to an unsustainable  level. 
6.7.  2015's earthquakes affected 31 of the 75  districts of Nepal and caused severe damage in 
14 districts. A total of 9,000  people were killed , and 22,000  injured. The Post -Disaster Needs 
Assessment had shown that the total loss and damages caused by the earthquake was around 
US$7.07  billion, which was more than one  third of the GDP of the nation.  
6.8.  The private sector sustained abo ut 3.3  times the value of damages and losses compar ed to 
the public sector. Furthermore, the districts that were affected by the earthquakes together 
account ed for around 30  per cent of total cottage industries in th e country. The earthquakes also G/C/M/126  
 
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  crippled  Nepal 's connectivity network by damaging roads, bridges , and power stations, which 
further weakened its productive capacity.  
6.9.  Restoring e xports to pre -earthquake level s would take time because of the challenges of 
reconstruction and the priorities identifi ed with a view to providing  essential goods and services to 
the people. In this context, the US  proposal for granting preferential access to the 66  tariff lines 
was important to support the resurgence of  Nepal's  export base. It would also attract investmen t 
for rebuilding and  the expansion of microenterprises, SMEs, and larger companies in the future. 
Augment ing export s would support poverty alleviati on while promoting stability and sustainable 
economic growth in Nepal.  
6.10.   Given  structural constraints and limi ted supply side capacity, the preferential access of 
these 66 tariff items to the US  market would not pose any challenges to the export and 
competitive capacity of other Member s, including those in Nepal's peer group.  He therefore 
requested Members ' suppor t for the US  waiver request , which would help and assist Nepal in 
recover ing from the damage caused by the deadly earthquakes and  advancing  on the path of 
sustainable development.  He encouraged the EU promptly  to give its positive consideration to this 
request. 
6.11.   The delegate of the United States of America , in response to the question posed by the 
EU about the duration of the trade preference programme , indicated that it was so indicated in the 
legislation from US  Congress granting these preferences , and that the rationale was to grant a 
sufficient period of time to enable the economic benefits of the preferences to have full effect.  
Given that his authorities  were still in the process of implementing the preferences , the actual 
duration would therefore be closer to nine  years rather than to ten years if, as expect ed, the 
preferences could be  implemented later this year.  
6.12.   The delegate of the European Union  responded to Nepal that the EU  consideration of this 
request was certainly positive , but explained that it  was subject to internal procedures ; these 
would be accelerated to the extent possible . She also thanked the US for its response on the 
duration of the programme.  
6.13.   The Chairperson  thanked delegations for their interventions and propose d that the Council 
take note of the statements made and revert to this matter at its meeting in November  2016.  
6.14.   The Council so agreed . 
7  EUROPEAN UNION – ANTI -DUMPING INVESTIGATIO N ON IMPORTS OF COLD -ROLLED 
FLAT STEEL PRODUCTS ORIGINATING IN THE R USSIAN FEDERATION AN D CHINA – 
REQU EST FROM THE RUSSIAN  FEDERATION  
7.1.  The Chairperson  informed the Council that , in a communication dated 30  June 2016, the 
delegation of the Russian Federation requested the Secretariat to include this item on the agenda 
of this meeting.  
7.2.  The delegate of the Russian Federation  stated that , despite the numerous occasions on which 
the Russian Federation ha d raised  concerns about the European Union's conduct of anti -dumping 
investigations , including at the last meeting of the Committee on Anti -Dumping Practices in 
April 2016, the E U had started an anti-dumping investigation on cold -rolled flat steel products 
originating in the Russian Federation. The Russian Federation believe d that this investigation was 
being conducted in appar ent violation of the WTO  rules, partic ularly as the EU 's investigating 
authority had ignore d the data submitted by the Russian exporters and had relied on adverse facts 
available , ignoring that Article  6 of the Anti -Dumping Agreement (ADA) stated that the use of facts 
available  was accepted  only in cases where an interested party refuse d access to or otherwise d id 
not provide the necessary information within a reasonable period, or significantly impede d the 
investigation.  
7.3.  The Russian exporters had cooperated to the best of their ability , had provided 
comprehensive responses to the questionnaires , and had arranged for verification visits to be 
conducted. Nevertheless, the E U's investigating authority had rejected the data submitted on the 
basis of an alleged "failure " to cooperate. Remarkably, th e EU Commission officers insisted on G/C/M/126  
 
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confirmation and clarification of data that had never been requested before , dismissed the 
information from the electronic databases , and refused to consider the clarified data. Moreover, 
the EU  refused the request to r epeat the on -the-spot investigation of Russian exporters, although 
it did carry out another verification visit to domestic producers. Therefore, the  Russian Federation 
believed that this use of  the facts available instead of the information provided by the  Russian 
exporters was inconsistent with Article  6 of the ADA and with Annex  II thereto. This also led to 
inconsistency in determinations of dumping, injury, and causality , within the meaning of  Articles  2 
and 3 of the ADA. 
7.4.  The Russian Federation had also observe d problems with regard  to the determination of 
dumping by the European investigating authority. First, the European Commission included the 
alleged "expenses " relating to currency fluctuations in the calculation of constructed normal value. 
However,  the investigated companies had never incurred such costs, and the exchange rate 
fluctuat ions were reflected in their accounting records only in order to revalue the balances. As a 
result, the Commission constructed an inflated normal value, which was inco nsistent with Article  2 
of the A AD. Second, when constructing the export price, the EU investigators unjustifiably 
deducted the whole amount of the selling, general and administrative expenses , and profits of the 
affiliated foreign resellers , an amount that should ha d been deducted only in part, since these 
companies partly acted as foreign exporting branches of the Russian producers. Therefore, the 
determined export price was artificially low, contrary to the requirements of Article  2 of the AAD. 
Consequen tly, the dumping margins were exaggerated and the anti -dumping duty rates assigned 
to the Russian companies were erroneously high.  
7.5.  It seem ed that the E U was striving to close its market to Russian exporters by all means  
possible . Notably, in this particula r investigation the European Commission resorted to  the 
retroactive collection of the duty, which it had never done before. In the view of the Russian 
Federation,  the only possible sound reason for this was the intention  to bring relief to the domestic 
steel industry as provided for in the European Commission report of 16  March  2016, entitled 
"Steel: Preserving Sustain able Jobs and Growth in Europe ". 
7.6.  The Russian Federation was also concerned that the systemic approach adopted by the 
EU regarding the imposit ion of trade remedy measures had the intention to support its domestic 
industry by providing it with unfair relief from external competition , and that it particularly 
targeted imports from specific countries. The Russian Federation believed that the abuse of trade 
remedies for protection ist purposes seriously infringed  the commercial interests and legal rights of 
other WTO  Members , and would also provoke an outbreak of disputes within the WTO.  
7.7.  The Russian Federation urged the EU to bring its ongoing  investi gation on cold -rolled steel 
products originating in the Russian Federation in to conformity with both the letter and spirit of the 
AAD. The possibility to close the investigation without imposition of measures was still available to 
the EU. 
7.8.  The delegate of China  recalled the statement made by his delegation at the regular meeting 
of the Anti -Dumping Committee in April 2016, and share d the concerns raised by the Russian 
Federation with regard to  the EU's systemic AD  practices  and the methodology it was using in the 
EU's anti-dumping investigation against cold -rolled flat steel products from Russia and China.  
Serious concerns existed about the arbitrary manner in which the EU raised the target profit rate 
of the industry wh en it calculat ed the margin of injury at an unreasonabl y high level. Considering 
the background of global overcapacity in this industry, there was no reason for the investigating 
authority to accept the claim by domestic industry with regard to  significant ly raising the target 
profit rate.  This led directly to a considerable increase in the margin of injury and, consequently, 
the final anti -dumping duties levied seriously harmed the interests of Chinese producers and 
exporters.  He urged the EU to take the necessary steps to bring its measures i nto conformity with 
WTO rules.  
7.9.  The delegate of the European Union  indicated that the statements made by the Russian 
Federation and China referred to the cold -rolled steel products investigations initiated in 2015 
against both WTO  Members. In this regard , she stated that her authorities had imposed provisional 
measures on 12  February  2016, and that the deadline to impose definitive measures was 
12 August  2016. She recalled that this case had already been raised at the AD Committee in 
April 2016, when the EU provided detailed replies regarding the management of the case . 
Therefore , she would not enter into technical details but would limit herself to highlight ing some G/C/M/126  
 
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  important elements  that might be considered , such as the fact that t he investigation had been  
conducted within the applicable legal framework , and  that the EU  had applie d the highest 
standard s of investigation, including the highest standards of transparency , and rights of defence , 
and that it had acted and w ould continue to act  in full compliance  with the WTO  rules.  
7.10.   The EU acknowledged that there ha d been disagreements with the Russian exporters , which 
had resulted in certain  verification visits  that were question ed by the Russian delegation . The 
verification was one step of the investigation proc ess carried out by the Commission , as the 
investigating authority , and the Commission fully respected the defence rights of the exporting 
producers  as these were informed about the particular issues in question , were given an 
opportunity to submit informat ion and comments , and were granted hearings and meetings.  The 
outcome of the hearings and the comments and information received w as not such as to alter the 
Commission's intention s to apply  the facts available in respect of  the assessment of dumping for 
certain Russian companies.  There were no other factors that could individually or jointly break the 
causal link between dumped imports and the injury suffered by the Union's industry.  
EU investigations were conducted in strict compliance with WTO  rules and t he EU's Basic 
Regulation, without any discrimination against any country or producer. Neither the Russian 
Federation, nor its steel or metallurgical sectors were treated differently , and all EU  investigations 
followed the same high standards with regard to  defence rights and transparency.  
7.11.   The delegate of China  asked the EU if it could comment on the target profit rate of the 
injury margin in this case.  
7.12.   The delegate of the European Union  responded that her delegation was not in a position to 
comment on this issue, but recalled the seriousness in which the EU  investigations were 
conducted.  
7.13.   The Chairperson  thanked delegations for their interventions and proposed that the Council 
take note of the statements made.  
7.14.   The Council so agreed . 
8  NIGERIA – IMPORT RESTRICTI NG POLICIES AND MEAS URES – REQUEST FROM THE 
EUROPEAN UNION, ICEL AND, NORWAY, THE UNI TED STATES OF AMERIC A, AND 
URUGUAY  
8.1.  The Chairperson  informed the Council that , in communications dated 30  June and 
1 July 2016, the delegations of the European Union, Icelan d, Norway, the United States of 
America, and Uruguay had requested the Secretariat to include this item on the agenda of this 
meeting . 
8.2.  The delegate of the United States of America  recalled that , at the last two  meetings of this 
Council, a number of governm ents had expressed concern with regard to trade barriers imposed 
by Nigeria, including restrictions on the use of foreign exchange for imports for a wide range of 
products , and local content requirements.  
8.3.  The Central Bank of Nigeria (CBN) had stated that a  key rationale for the foreign exchange 
restriction measure was to stimulate local production of the targeted products. The US would like 
Nigeria to clarify whether this  was the case , since Nigeria had not notified this measure to the 
WTO nor provided the WTO membership with any justification for the measure that would be 
consistent with WTO  rules.  
8.4.  The CBN had also indicated that it w ould maintain its policy of prohibiting importers from 
using official foreign exchange institutions, such as ba nks, for impor ts of 41  products  for the 
foreseeable future  but that, in the meanwhile, and as indicated by his delegation at the last 
CTG meeting, Nigeria had expan ded local content requirements in  certain  sectors , such as those 
implemented within the IT  industry , and its list of import bans had  grown over time.  The 
US praised the Nigerian government for recognizing that it need ed to diversify its exports away 
from a near exclusive reliance on petroleum products. To export successfully , competitive products 
would be required; however,  competitiveness was rarely gained through trade-restrictive policies.  
Therefore , the US  encouraged the Nigerian government to identify other policy tools and to work G/C/M/126  
 
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with its trading partners to address its diversification and job creation objectives  through the 
adoption of open trade policy measures that would foster  greater competitiveness for Nigerian 
producers and create an attractive investment climate.  
8.5.  The delegate of the European Union  echoed the previous statement and , with regard to the 
foreign exchange restrictions , indicated that the exchange rate policy seem ed to have positively 
evolved , with some flexibility recently  introduced . However, the EU sought clarification from 
Nigeria about the state of play and what other measures Niger ia was considering to open up the 
sectors that ha d previously  been prohibited from access ing foreign exchange.  
8.6.  With regard to  the local content requirement on oil and gas , which ha d been raised several 
times in the CTG and in the TRIMS  Committee, the EU  again asked Nigeria to respond to the 
questions posed to it, and to confirm that the National Assembly was going to approve the 
implementation of the Amendment Bill on the Local Content Act , pending  the President's consent.  
8.7.  The delegate of Iceland  stated tha t Iceland, like other Members, had repeatedly raised this 
matter in th is Council  and in other fora, and had also encouraged Nigeria to refrain from imposing 
restrictive measures on the importation of fish , and urge d full transparency in respect of  any 
changes made to Nigeria's import regime for fish products. Unfortunately, these calls had not been 
heeded . 
8.8.  Iceland also drew attention to Nigeria's  currency restrictions and said that it  would appreciate 
confirmation from Nigeria that there had been positive c hange , as mentioned previously by the EU, 
given that Nigeria had not notified the WTO of any change.  
8.9.  Nigeria introduced an import li censing regime on fish products  almost a year ago  although it 
was still unclear which requirements need ed to be fulfilled in  order to obtain  the import licence. 
8.10.   There had also been an increase in tariffs that was likewise still unclear . Nigeria 's lack of 
transparency about the precise content  of all these measures  had a significant  negative impact on 
import s of fish to Nigeria,  one of Iceland 's most import ant export markets  of certain  specific 
fisher y products . The Nigerian measures pose d a serious threat to a long-standing trade 
relationship  between Iceland and Nigeria . 
8.11.   Nigeria should provide the whole WTO  membership with detai led and precise information 
about the content of its import regime applied to fishery  products , including any currency  
restrictions, and likewise abide by its WTO  obligations, particularly its transparency obligations. 
Nigeria should also refrain from intr oducing any trade barriers that could negatively affect the 
trade between Iceland and Nigeria . 
8.12.   The delegate of Norway  stated that, like others, her delegation had concerns  about the 
currency restrictions imposed by the C BN last summer , and which affected trade between Nigeria 
and several of its trading partners.  The issue ha d been duly addressed by Norway and several 
other Members in the WTO  and other fora since July  2015. Norwegian reports indicate d that there 
had been an improvement in the situation. Howe ver, restrictions were still in place, limiting 
importers of specified goods access to currency. Norway question ed whether the restrictions were 
in line with Nigeria's WTO  obligations.  
8.13.   Apparently a new policy  for trade in fish  and fish products  had been in troduced, including a 
possible new "quota regime ". Given that t rade in fish and seafood between Norway and Nigeria 
had decreased since July  2015, affecting the sector in both countries , Nigeria should clarify its 
import restrictions, both in terms of curre ncy restrictions and the fish importation policy.  
8.14.   Concerns also continued to exist about local content requirements  in respect of oil and gas , 
a situation that Nigeria should rectify and clarify . 
8.15.   The delegate of Uruguay  stated that Uruguayan product access  to the Nigeria n market 
remained  a problem , and noted that Nigeria had still not responded to the questions that her 
delegation had posed to it  a long time ago. Indeed, exports of fish products had been affected by a 
series of measures, especially those relating  to the availability of currenc y for Nigerian importers in G/C/M/126  
 
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  the fish sector.  Uruguay reiterated all the concerns it had raised in this Council during the last 
two years.  
8.16.   The delegate of Thailand  registered the continued concern of his country with reg ard to this 
matter. Thailand had already raised such concerns and therefore supported the previous speakers 
in urging  Nigeria to provide justification and clarity for the imposition of such measures.  
8.17.   The delegate of Australia  again sought clarification fro m Nigeria with regard to the 
WTO-consistency of the preferential treatment accorded to local goods and services in the Nigerian 
Oil and Gas Industry Content Development Act of 2010  and, following  up on the comments made 
at the last CTG  meeting , asked Niger ia to indicate if the new government would address all the 
concerns raised by Members at previous CTG  meetings on the local content measures for the oil 
and gas sector.  
8.18.   The delegate of Argentina  shared the concerns raised by previous speakers with regard to 
the currency restriction measures adopted by the CBN , which affect ed exports of goods from 
Argentina, and particular ly exports from the fishing sector. He underlined that A rgentinian exports 
of fish products to Nigeria ha d dropped from 23 million dollars  in 2012 , to 20  million in 2013, 
7.5 million in 2014 , and 6  million in 2015.  
8.19.   The measure adopted by the CBN in June 2016 had not affected the 41 products that had 
been mentioned , but only fishing products . He therefore urged Nigeria to provide information 
about the measures recently adopted by the C BN, including their impact , and any possible 
flexibility or lifting of restrictions affecting the  fishing sector.  
8.20.   The delegate of Chile echoed previous speakers with regard to Nigerian restriction s on the 
import of fish products and on foreign currency.  Despite the various calls Chile had made to 
Nigeria,  the latter had not provide d any clarification or justification of its measures. The Chilean 
exporting sector  was facing many difficulties in accessing th e Nigerian market, the main market 
destination for Chilean exports of frozen "horse mackerel ". 
8.21.   The delegate of Chinese Taipei  joined previous speakers in their concerns on this matter , 
and referred to what had already been stated by his delegation at the previous CTG meeting.  
8.22.   The delegate of Japan  also shared the concerns raised by previous speakers , and stated that 
the measure adopted by the CBN constituted  a de facto  import restriction . It had a significant 
adverse impact on exports of all WTO Member s, including Japan.  Japan urged Nigeria to provide 
detailed information on the  measure and to implement the necessary amend ments so as to ensure 
that it would not adversely  affect  Members ' exports.  
8.23.   The delegate of Nigeria  thanked previous speakers for their interventio ns and recalled that 
these matters had been  raised at the CTG for quite some time now. At the last CTG  meeting , her 
delegation had referred to the efforts being made by her authorities to address these concerns, 
including consultations with the relevant mi nistries and governmental agencies. She reaffirmed 
that the current Government was engaged in various reforms and was doing everything possible to 
address various similar challenges. She therefore pleaded  with interested Members to show some 
patience to en able the new government to carefully look  at these concerns properly in order to 
remove some of the barriers . However, at this stage , her delegation was not yet in a position to 
indicate when this would happen.  
8.24.   The Chairperson  thanked delegations for their  interventions and proposed that the Council 
take note of the statements made.  
8.25.   The Council so agreed . 
9  CHINA – ISSUES RELATED TO TR ADE IN SEAFOOD – REQUEST FROM NORWAY  
9.1.  The Chairperson  informed the Council that , in a communication dated 30  June 2016, the 
delegation of Norway had requested the Secretariat to include this issue on the agenda.  G/C/M/126  
 
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9.2.  The delegate of Norway  recalled that i nformation about the Chinese measures affecting  the 
export of seafood  from Norway ha d already  been brought to the CTG's attention.  Those measures 
include d quarantine and testing procedures and the allocation of "import licences " for salmon. 
Furthermore, the list of Norwegian enterprises approved for export to China had not been updated.  
9.3.  All of these measures had severely affected export s of Norwegian seafood to China. Indeed, 
since 2010 , Norway ha d consistently asked China to present the risk analysis, as well as the 
justification, for the measures applied to Norwegian seafood. Despite several calls made to China 
through different channe ls to engage in technical consultations in order to look into the whole 
range of food safety issues , China had not yet made any move in this regard.  
9.4.  Norway had not observed any improvement in the situation since it voiced its concerns at 
previous Council m eetings. Despite two  bilateral meetings , held in June and April  2016, the 
situation had not improved and the  desired  technical level had not been reached. Norway urged 
China to address these issues  and to act in a transparent and predictable manner , and lo oked 
forward to cooperating with the Chinese authorities in order to normalize trade in seafood.  
9.5.  The delegate of the European Union  shared Norway's  concerns on this issue , as well as the 
view that import procedures should  be transparent, predictable, and i n line with international 
standards and WTO  requirements. Moreover, such procedures should not be more restrictive than 
was reasonable and necessary.  
9.6.  She indicated that , according to the European Economic Area Agreement (EEAA) , the EU and 
Norway share d the same sanitary standards. Norway was by far the biggest source of European 
seafood imports, followed by China, and a significant part of EU imports from China were indeed 
sourced from Norway. Given the interlinked trade, the EU wondered about where the iss ue of 
inconsistency lay, and sought  an explanation from China in this regard.  
9.7.  The delegate of China  recalled that , on this issue , her delegation had provided responses to 
Norway at the CTG  meetings of 10 November  2015 and 15  April 2016. She also informed t he 
Council that bilateral meetings had taken place between China and Norway in April and June  2016. 
9.8.  In recent years , and on several occasions , China' s entry and exit inspection and quarantine 
authorities ha d detected parasites, pathogenic micro -organisms and diseases in imported salmon , 
including chil led salmon. Such non-compliant products threatened consumers ' health ; particularly 
the pathogenic bacteria carried by instant chilled salmon , which led directly to consumers ' catching  
disease s that could also p ut their lives  at risk . China 's experts ha d carried out risk analys es, the 
results  of which  had shown that salmon, especially chilled cultured salmon, was a  high risk. 
Therefore, with a view to  protect  Chinese human health, the General Administration of Qu ality 
Supervision, Inspection and Quarantine of China (AQSIQ) had issued an announcement in 2011 to 
further strengthen the procedures for inspection and quarantine of salmon exported to China from 
all Members. All the relevant measures in the announcement were based on existing Chinese laws 
and regulations and were not new measures destined for certain WTO  Members , and hence no t 
subject to the respective WTO notifications.  
9.9.  She drew Norway 's attention to the following points: (i)  in recent years, there ha d been 
constant world reports about the existence of drug residues, parasites, pathogenic 
micro ­organisms, diseases , and other quality and safety problems in Norwegian salmon ; indeed, in 
recent years,  the ISA virus ha d been detected repeatedly in Norwegian sa lmon. China ha d sent 
several letters to Norway expressing  great concern on the ISA issues with regard to  Norwegian 
salmon ; (ii) regarding other seafood product s, in recent years there ha d been media reports about 
the quality and safety risks associated wit h Norwegian cod fish and other aquatic products. The 
Norwegian media had also reported that toxic substances such as dioxins and dioxin -like PCBs  had 
been detected in the livers of Norwegian cod fish that exceeded the maximum limits set by  the EU , 
suggest ing that consumer s should not eat the liver of cod ; (iii) to ensure the safety of imported 
aquatic products, China was monitoring imported aquatic products based on the risk levels of 
those products, and ha d strengthened the inspection and quaranti ne of tho se products with high 
risks; and (iv)  China ha d smoothly  exchanged communications with Norway through multiple 
channels, such as communications between the competent authorities, embassies, and  missions to 
the WTO. China w ould continue to maintain these contacts and communications with Norway.  G/C/M/126  
 
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  9.10.   With regard to Norway 's request to  updat e the seafood enterprises ' registration information, 
she indicated that the  relevant  Chinese authorities ha d received the relevant information. The 
Certification and Accreditati on Administration of China (CNCA) w ould update the enterprises ' 
registration information. However, the CNCA w ould only approve the certificates after having 
confirm ed that Norwegian enterprises could effectively prevent and control relev ant threat s of 
seafood. With regard to the ASC certification of Norwegian salmon , it had only been received the 
night prior to this meeting and had been forwarded to the Capital for the appropriate assessment.  
9.11.   The delegate of Norway  thanked China for its readiness to work on  this issue and stated 
that on many occasions, including at this meeting, China had explained the range of measures to 
which Norwegian seafood products were subject with regard to  safety concerns. In this vein, 
Norway was of the view that there was a need to cooperate at the technical level in order to clarify 
the issue in line with the  pertinent  WTO Agreements. Therefore, Norway had asked China to hold 
technical consultations.  She also underlined that, as pointed out by the EU  delegation , the 
Norwegian foo d safety regulations were fully harmonized with EU  regulations through the E EAA, 
and they reflect ed the relevant requirements of Codex, OIE , and IPPC. This implie d that seafood 
produced anywhere in the EU/EEA  Area, including Norway, ha d to comply with the same food 
safety requirements.  
9.12.   The Chairperson  thanked delegations for their interventions and proposed that the Council 
take note of the statements made.  
9.13.   The Council so agreed . 
10  SRI LANKA – DAIRY TARIFFS – REQUEST FROM NEW ZEA LAND  
10.1.   The Chairperson  informed the Council that , in a communication dated 1  July 2016, the 
delegation of New Zealand had requested the Secretariat to include this item on the agenda . 
10.2.   The delegate of New Zealand  stated that this issue related to Sri Lanka 's tariffs for skimmed 
milk and w hole milk powder which were well in excess of its ad valorem  binding of 20%.  Sri Lanka 
and New Zealand ha d been discussing this bilaterally and in the WTO  Committee on Agriculture 
(CoA) over the past three  years.  The bilateral engagements ha d been useful t o improve a common 
understanding , and Sri Lanka had acknowledged in the Co A that its tariffs were above their bound 
rates and pledged to address the issue.  
10.3.   This was followed  up during a bilateral engagement in early 2016, where Sri Lanka and New 
Zealand ag reed that the former would address this issue by reducing the applied tariffs on dairy 
products  to WTO -bound rates by mid -2016.  Accordingly, New Zealand had been encouraged to 
receive information  from Sri Lanka that it ha d indeed decided to reduce the tari ffs on milk -product 
imports.  New Zealand acknowledge d that changes in world prices ha d caused the fixed Rupee tariff 
to exceed the 20% ad valorem  equivalent.  Although this point ed to the need to adjust the tariff 
more quickly in response to price movements , or move to an ad valorem  tariff, New Zealand 
recognize d that the recent decision to make this change w ould reduce revenue for the Sri Lanka 
government.  New Zealand welcome d this decision as a step in the right direction  and would 
continue to look at it c arefully.  He asked Sri Lanka to confirm when this change w ould come into 
effect, and to confirm that this change w ould bring Sri Lanka 's applied tariffs for skimmed milk and 
whole milk powder within its WTO  bindings.  
10.4.   The delegate of Sri Lanka  appreciated t he continued interest shown by New Zealand on milk 
product imports into Sri Lanka and the applicable import duty structure. He informed the Council 
that his d elegation had held a meeting with the New Zealand delegation on 13  July 2016 where 
Sri Lanka had conveyed to New Zealand the decision taken by the Government to bring down the 
applicable import duty by 90 Rupees, as from 15  July 2016. 
10.5.   The revenue lost due to this decision  was to the value  of 7.85 billion Rupees per year  but, 
despite this loss, a signif icant one for a small economy such as Sri Lanka, the Government had 
made every effort to comply with its commitments.  In this vein , he emphasized that Sri Lanka's 
bound rate  for powdered milk products  was at 20% ; this was one of the lowest bound rate s when  
compared  to the bound rate s of many importing countries. He also mentioned that Sri Lanka had 
bound most of the agricultural products at a rate of 50% , except powdered milk. In order to G/C/M/126  
 
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minimize external vulnerabilities, the Government introduced  a flexib le applied duty of Rs.225/kg. 
This ha d now been reduced to Rs.135/ kg with an above -import -duty waiver of Rs.90, as previously 
indicated . This flexible import duty was maintained to minimize any negative consequences 
resulting from fluctuating global market  prices for milk products. The prevailing duty structure was 
merely a temporary phenomenon that had a transitory span , with adjustments made through 
general duty waivers from time to time.  
10.6.   His delegation had been informed that the authorities ha d concluded  an impact assessment 
on the importation of milk powder in relation to a review of the duty structure. The Sri Lankan 
dairy industry was socially, politically, and economically sensitive.  With regard to the market 
condition s for powdered milk products in Sri Lanka, he indicated that Sri Lanka imported  the 
majority of its require d powdered milk , and that New Zealand was one of the major sources of 
suppl y. Sri Lanka import ed around 70,000  metric tons of milk products annually , and in the year 
2015 imports ha d gone up to 81,000  metric tons , recording a 16% growth in imports. This 
situation reveal ed that application of the duty on the importation of milk powder d id not result in a 
decline in Sri Lankan imports of milk powder into the country.  
10.7.   Powdered milk produ cts were considered as essential and sensitive products in the domestic 
economy. The Government was making efforts to maintain  a maximum retail price , milk powder 
being  an essential product to consumers. At the same time, the Government need ed to safeguard  
the domestic industry from external vulnerabilities.  
10.8.   Indeed, as an infant industry, the local production of powdered milk products c ould only 
meet up to 10% of the domestic demand. The Government continue d to facilitate the 
transformation of the dairy ind ustry into a commercially viable industry. Compared to other major 
dairy producing countries, Sri Lanka's industry remain ed a labour intensive  cottage industry. A 
total of 2.2  million people were already involved in dairy farming in Sri Lanka. Some of thes e 
families had been  affected by the  prolonged internal conflict in the country until 2009. It was 
therefore vital that the means of  a basic livelihood, sustenance, and income to the families 
engaged in the industry were protected so as to become  a sustaina ble industry in the long run.  
10.9.   In the aftermath of the global financial crisis , and the resolution of the domestic conflict,  the 
Sri Lankan economy ha d shown resilience. However, the share of merchandise trade in GDP had 
declined markedly; it fell from arou nd 47% in 2011 to 36% in 2015. The trade gap widened to a 
substantial level due to increasing imports creating an  adverse effect on the balance of payment s. 
For example, the trade gap between Sri Lanka and New Zealand was heavily in favour of New 
Zealand. Sri Lanka 's exports to New Zealand were $23 million but the imports remain ed at 
$185 million. These were  the 2015 figures.  At the same time,  the fiscal deficit in the budget, due 
to the decline in tax revenue, ha d also had a negative impact on the economy.  The Government's 
economic programme therefore aim ed to realize  fundamental changes to the tax policy and 
administration so as to reverse a two -decade decline in tax revenues and place public finances on 
a sustainable footing.  
10.10.   With a view to reducing the c urrent fiscal deficit and trade gap, and to strengthening the 
capacity of its domestic industry, Sri Lanka require d a serious assessment of its economic 
requirements in line with its multilateral commitments. It  was engaged in this exercise, and looked 
forward to cooperat ing and collaborat ing with its major trading partners in order to overcome the 
short-term difficulties currently experienced by the country.  
10.11.   The Chairperson  thanked  delegations for the ir interventions and proposed that the Council 
take note  of the statements made.  
10.12.   The Council so agreed . 
11  INDONESIA'S IMPORT A ND EXPORT RESTRICTIN G POLICIES AND PRACT ICES – 
STATEMENTS BY THE EU ROPEAN UNION, JAPAN,  AND THE UNITED STATE S OF AMERICA  
11.1.   The Chairperson  informed the Council that , in communications dated 30 June and 
1 July 2016, the delegations of the European Union, Japan, and the United States of America 
requested the Secretariat to include this item on the agenda of t his meeting.  G/C/M/126  
 
- 16 - 
 
  11.2.   The delegate of Japan  stated that Japan appreciated that Indonesia had ado pted 
12 economic deregulation packages containing measures aimed at the relaxation of its regulations 
and the simplification of its administrative procedures. However, at previous meetings of this 
Council and other Committees, Japan, together with other WT O Members, ha d constantly raised 
significant  concerns with regard to  a protracted series of laws and regulations, namely, the Mining 
Law, the Law on Trade, the Law on Industry, restrictions in the retail sector, sales restrictions on 
4G mobile phones , and local content requirements for investment in the telecommunication sector. 
It was deplorable that these measures ha d not yet been rectified, despite most of them clearly 
running against WTO  rules.  
11.3.   Regarding the Mining Law, he indicated that some Japanese c ompanies ha d suffered 
significant  damages because of the export restrictions imposed by Indonesia on nickel and copper. 
Japan had closely monitored the domestic review process of Indonesia 's Mining Law and hope d 
that these  export restrictions would promptl y be removed. With regard to the importation and 
distribution of 4G  mobile phones, the third  amendment of the Trade Minister Regulation No.  82 
entered into force on 1  July 2016. However, under the new Regulation, in order for a foreign 
company to be appoin ted as a registered importer, it was required to  first obtain a 
recommendation from the Ministry of Industry aimed at proving that the foreign company ha d 
either made investments in Indonesia or had provided cooperation to a company in Indonesia. 
Japan con sidered that this new requirement negatively affect ed investment by foreign companies 
in the area of 4G  mobile phones in Indonesia.  
11.4.   At the last CTG meeting, when responding to Member's statements, Indonesia had 
explained that it need ed policy space in orde r to cope with global challenges and achieve 
development. Japan ha d no intention of denying  investment promotion and industrial development 
measures , but believe d that these measures should be implemented in a WTO-consistent manner. 
Therefore , Japan urge d Indonesia seriously to consider the concerns raised by WTO  Members , and 
to make a real effort to rectify this deplorable situation.  Additionally, Indonesia should share any 
updated information on the measures with WTO  Members , as Members had already reques ted 
Indonesia to do at the previous CTG and TRIMs  Committee meeting s. 
11.5.   The delegate of the European Union  regretted that this issue had been on the CTG 's agenda 
for a long time. Indonesia had engaged in a reform process; however, the reforms made had 
remain ed timid and lacked the necessary transparency to allow Members fully to understand them.  
11.6.   The EU continued  to be  concerned by the persist ently high number of restrictive and 
protectionist trade and investment measures, and although  these had already been h ighlighted on 
past occasions, she refer red again to the following : 
- There  were indications that certain procedures ha d been relaxed in some sectors ; 
examples of these were the product -specific licences in textile s, the postponement of 
duties payment , and the VAT exemption for certain goods . Some opening to foreign 
investment  had also taken place in cer tain sectors, but there was still a lack of clarity 
on how and when these measures would be implemented. Local content requirements 
persist ed in sectors such  as telecom munications , retail, and energy , or were even 
strengthened , for example  in public procurement for construction;  
 
- There were minimal capital requirements for foreign freight forwarders, which 
continue d to apply . A pre-paid corporate income tax to importers continue d to add  to 
generally  restrictive import measures and was discriminatory;  
 
- Entry port restrictions in Jakarta 's main port continue d to undermine the capacities of 
EU exporters of  food, in particular;  and export restrictions continue d to be applied to 
certain raw  materials;  
 
- A new matter of concern was the very far -reaching Halal law with regard to  food and 
beverages, pharmaceutical, cosmetic , and leather goods exports . These concerns had 
been raised at the TBT Committee . If this law  was fully implemented, it might  
substantially hamper trade and investment in numerous sectors. There also existed 
burdensome and discriminatory conformity assessment procedures  (CAPs) . 
 G/C/M/126  
 
- 17 - 
 
11.7.   Therefore, the EU once again reiterate d its calls to Indonesia to rem ove all of these barriers 
and sought from it a complete description not only of the measures already taken to eliminate 
these barriers but also on the implementation of the Law on Trade and Industry  in particular . 
11.8.   The delegate of the United States of Ameri ca stated that the CTG was well acquainted with 
the breadth of concerns that the US , together with other Members , had raised in recent  years with 
respect to Indonesia 's import and export restricting policies. The US had raised and w ould continue 
to raise its concerns in the appropriate WTO  Committees, including Import Licensing  (IL), 
Agriculture, Technical Barriers to Trade  (TBT) , Customs Valuation  (CV), and TRIMS.  
11.9.   Despite some positive changes, the fundamental direction of Indonesia's policies ha d 
become m ore restrictive and damaging to its trading partners.  Members continued to observe the 
issuance of regulations that restrict ed market access and impose d localization requirements. Many 
of these seem ed to be the continuation of policies first  advanced under  the previous government.  
11.10.   The US j oined Japan in expressing particular concerns with regard to requirements relating  
to 4G-enabled devices. In early July  2016, the Ministry of Trade implemented changes to its 
import licensing regime for mobile technology t hat would condition the issu e of import licen ces to 
firms meeting the local content requirements in place for 4G  LTE-enabled devices.  The US was 
concerned that the changes to these import licen ces would also prohibit the importation of finished 
mobile tech nology products , including  4G LTE. 
11.11.   Revisions to other import licensing requirements had also been observed, including those 
for agricultur al goods , which  were a continu ation of many of the trade -restrictive policies, and 
impose d quotas and domestic purchas ing requirements.  
11.12.   The US continued to evaluate the modifications made to the trade rights import licen ces 
about which it had raised its concerns almost four years ago , when they were first  adopted.  
11.13.   Concerns also remained about an overall lack of transparen cy in Indonesia's trade regime. 
The US had noted some minor improvements to transparency over the last several months and 
appreciated that the Ministry of Trade had created a draft regulations website and had issued a 
few regulations for public comment . However , concern s also existed about the very short comment 
periods.  
11.14.   The US hoped that Indonesia would submit notifications of its pre -shipment inspection 
requirements and subsidy program mes, and noted that Indonesia ha d not provided a notification 
of its su bsidy program mes since 1995.  
11.15.   The US also believed that the senior leadership in Indonesia would understand that 
Indonesia ha d to position itself to be competitive , and that this mean t taking steps to ensure that 
Indonesia was as attractive a place to do bu siness and to invest as were its neighbours . Although  
the reform process  was undoubtedly challenging, his delegation remain ed optimistic that Indonesia 
would be successful  and looked forward to continuing to work with Indonesia to support its reform 
agenda  and to address these long-standing concerns.  
11.16.   The delegate of Brazil  stated that, l ike other delegations, Brazil wished to make reference 
to its statement s already made  on this subject in the CTG of 15 April 2016, and in previous 
CTG meetings . Brazil share d the concerns voiced by previous speakers with regard to Indonesia's 
import restricting practices, which violate d a range of WTO  disciplines and particularly undermine d 
the access to the Indonesian market of Brazilian exporters of poultry and bovine meat.  After failed 
attempts to negotiate a solution with Indonesia, the Brazilian government had had no other option 
but to initiate two  proceedings in the WTO  Dispute Settlement Mechanism (DSM) in order to 
redress  Indonesia's policies: DS484, concerning chicke n meat and chicken products, presently in 
its panel phase ; and DS506, about bovine meat, still at consultation  phase . Brazil urged Indonesia 
to lift its trade -restrictive measures, which adversely affect ed Brazilian interests and those of other 
WTO Members . 
11.17.   The delegate of the Republic of Korea  echoed the concerns expressed by previous speakers  
and welcomed t he economic deregulation package adopted by the Indonesian Government. 
However, it was regrettable that there had been no  meaningful improvement with r egard to  a G/C/M/126  
 
- 18 - 
 
  number of trade and investment restrictive measures.  In particular, Korea reiterate d its concerns 
with regard to  the pre -paid corporate income tax on importers , which had been raised from 2.5% 
to 7.5% in 2014 , and raised again , to 10% , in 2015 . This measure placed an unfair and serious 
burden on importers by making it difficult for them to access cash flow  given that  importers should 
claim a tax refund at the end of the taxable year.  Korea believe d that this wa s a discriminatory 
measure on the import of goods , and not in in accordance with GATT  Article  3 on National 
Treatment. Therefore , Korea requested I ndonesia to address this issue in a WTO -consistent 
manner.  
11.18.   Korea was likewise still concerned about the Law on Trade and the Law on Industry  of 
Indonesia , which  included  many trade and investment restrictive articles. Korea asked Indonesia 
carefully to review these laws, noting that it would also appreciate it if Indonesia provide d relevant 
information on the  subordinate regulations of those rules, and to do so  in a transparent manner.  
11.19.   The delegate of New Zealand  echoe d the concerns raised by previous speakers. New 
Zealand believed that Indonesia's restrictions undermine d core WTO  principles and were 
inconsistent with key obligations in the WTO  Agreements.  Important  issues  also remained with 
regard to a number of import restrictions in Indonesia's laws and regulations that affect ed trade 
across a range of agricultural products , including horticultural and animal products.  
11.20.   As stated during previous me etings, Indonesia's restrictions hurt not only exporters  but 
also Indonesian consumers, producers, and processors . The measures  had also contributed to rises 
in food prices in Indonesia, including for basic foodstuffs.  In addition, the measures undermined 
the Indonesian Government's positive efforts to increase local capacity and jobs given their 
potential  impact on supply chains.  New Zealand hoped that Indonesia's reform plans would steer 
its policies back in a WTO -consistent direction.  
11.21.   The delegate of Australia shared the concerns of other WTO  Members with regard to  
Indonesia's import and export -restricting policies in recent years . Australia 's concerns referred 
particularly to the effect that the se measures might  have on agricultural trade , in particular 
Indonesia's import licensing regimes , which include d outright prohibitions on imports of certain 
animals and animal products, including ready -to-slaughter cattle and certain types of bovine offal 
and secondary cuts.  In addition, other types of bovine secon dary cuts and carcasses c ould only be 
imported by State -owned enterprises in limited circumstances.  
11.22.   With regard to secondary cuts and offal , Australia r emind ed Indonesia that Australian offal 
was produced for human consumption and was subject to  the same f ood health standards and 
legislation as meat for human consumption.  Australian beef and offal ha d a reputation around the 
world  for quality, safety, a nd reliability.  
11.23.   Additionally, Indonesia's import permit system for agricultural products, including live 
cattle, boxed beef, and horticultural goods , effectively impose d a quota on imports.  Furthermore, 
imports of certain horticultural products ha d been banned for certain periods of time to coincide 
with domestic production cycles, with citrus imports for the first half of 2016 only permitted 
between February and April , for example . 
11.24.   Indonesia had  continued to amend its regulations to impose further restrictions, such as 
explicit annual quota -setting processes for horticultural imports , and limits on how long me at 
products c ould be stored before they enter ed Indonesia.  Australia remained concerned about the 
effect that these and other measures imposed by Indonesia ha d had on the trade between the 
two countries and would welcome further information on how these re gulations could be 
considered  consistent with Indonesia's WTO  obligations.  
11.25.   With regard to the issue of Halal product assurance s, as raised by the EU, Australia had 
understood that Indonesia's Ministry of Religious Affairs ha d issued a draft decree concerni ng the 
implementation of  the Halal Product Assurance Bill , which w ould come into effect for food and food 
products  as of 1 November  2016.  Australia recognize d the importance of Halal product assurance s 
to many Indonesian consumers. However, concerns remain ed that some aspects of the proposed 
measures m ight be unnecessarily trade restrictive , and Australia wished  to work with Indonesia on 
their implementation to ensure that they did  not create unnecessary barriers to trade.  G/C/M/126  
 
- 19 - 
 
11.26.   Australia also welcome d the clarification of a number of aspects of the regulations. In 
particular, the arrangements that would be put in place to ensure that trade would not be  
disrupted during the implementation of the bill. Nevertheless, Australia would appreciate it if 
Indonesia could clarify : if the Hal al standards applied by the new certifying body would be the 
same as those currently applied ; whether the non-Halal products would also require certifi cation ; if 
the consumer goods and other industrial goods that d id not contain animal p roducts would likewise 
be required to be certified and, if so, what  was the definition of "consumer goods ". Clarification 
would also be welcomed with regard to the standard by which a consumer product would be 
deemed "Halal"; and if services would also be required to be certified and, if so, what the standard 
for a Halal service  would be . Indonesia should also clarify if the relevant Halal Registration 
Authority would grant mutual recognition to Halal product certificate s issued by foreign Halal 
agencies an d, if so, what the process to be recognized  would be  for foreign agencies . 
11.27.   He also urged Indonesia to ensure that the draft regulations were notified to the WTO prior 
to being finalized in order to allow sufficient time to receive comments from all stakeho lders and to 
allow time for those comments to be taken into account , particularly noting  that the 
implementation date of 1  November  2016 was very close.  Clarification was also necessary 
concerning whether or not the implementation w ould be delayed  in respe ct of imports . 
11.28.   The delegate of Chinese  Taipei  associated his delegation with previous speakers and 
reiterate d Chinese Taipei 's concerns about Indonesia's trade policy and practice s, such as the 
requirements on imported fish and fish products, the import li cence regime for cell phones, 
handheld computers and tablets, local content requirements for 4G  mobile phones , and the 
restriction of entry port s. He welcomed  progress made by Indonesia , including the deregulation 
package , and encourage d Indonesia to conti nue its efforts to comply with WTO  rules.  
11.29.   The delegate of Norway  share d the concerns expressed by other speakers. Norwegian 
exporters ha d reported experiencing  difficulties with regard to the Indonesian import regime, and 
especially the import quotas, whic h serve d as a barrier to trade.  Norway was nevertheless 
optimistic that recent developments in Indonesia might lead to greater progress , and look ed 
forward to working together with Indonesia on these issues.  
11.30.   The delegate of Indonesia  thanked Members for th eir continued interest  in some of 
Indonesia 's export and import policies. Indonesia believed that it had addressed some of the 
concerns put forward by Members already at previous CTG  meetings. He therefore requested the 
Secretariat to incorporate Indonesia 's previous responses into the Council's minutes for the  
meeting .2 
11.31.   In the interest s of transparency, he informed the Council that Indonesia was currently 
undertaking vast economic reforms with the objective of better support ing economic activities and 
creating a better business environment. Through  the economic deregulation packages introduced 
in 2015 , the Indonesian Government had been continuously harmonizing various regulations, 
streamlining requirements, simplifying licenses and permits, and eliminating  unnecessary 
inspection processes. These decisions demonstrate d Indonesia's strong commitment to WTO  rules, 
while taking into account Indonesia's need to maintain its policy space as required to pursue its 
national development goals. Indonesia's policies w ere also justified on safety, health, 
environment al, social, cultur al, and moral hazard  grounds . Indonesia was fully committed to 
working to find an agreed solution  with other Members who held concerns with regard to  its 
national policy . 
11.32.   The Chairperson  thanked delegations for their interventions and proposed that the Council 
take note of the statements made.  
11.33.   The Council so agreed . 
                                                
2 See document  G/C/M/125, paragraphs 8 .21-8.23. G/C/M/126  
 
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  12  ECUADOR – IMPORT RESTRICTING M EASURES – REQUEST FROM JAPAN A ND THE 
UNITED STATES OF AME RICA  
12.1.   The Chairperson  informed the Counci l that , in communications dated 30  June and 
1 July 2016, the delegations of Japan and the United States of America requested the Secretariat 
to include this item on the agenda.  
12.2.   The delegate of the United States of America  welcome d Ecuador's decision to wit hdraw the 
so called "timbre cambiario " proposal, which raised concerns and questions regarding Ecuador's 
WTO commitments, including with regard to WTO prohibitions on import restrictions and their 
potential to disrupt trade.  
12.3.   He conveyed the United States'  sympathy for the tragedy in Ecuador following a  recent 
earthquake  that had certainly exacerbated Ecuador's existing balance of payment (BOP) 
challenges. However, concerns remained as to whether or not Ecuador was pursuing the most 
appropriate response –both to the earthquake and to its BOP  situation –in a WTO - consistent  
manner.  The United States continue d to seek the full elimination of Ecuador's tariff surcharge at 
the earliest possible date , and was worried that the proposed phase -out schedule in 2017 was too 
far off and possibly  subject to further extension.  
12.4.   His delegation was also interested in receiving any further explanation from Ecuador 
regarding how it might bring its BOP  measures into conformity with WTO  guidelines, so that the se 
were, among other t hings, price -based, administered in a transparent manner, and d id not make 
use of quantitative restrictions.  
12.5.   The delegate of Japan  referred first  to the import -restricting measures on automobiles  that 
Japan consider ed inconsistent with GATT  Article  XI. Ecuador had stated at the last meeting that 
these measures d id not restrict access to Ecuador's domestic market because the import quota in 
2016 was established based on the volume equivalent to the import volume of 2015 in order to 
meet import demand. Japan had not been convinced by this explanation. In fact, the measures in 
question ha d become increasingly restrictive to automobile imports since 2012 and the import 
volume ha d been decreasing along with the extension and strengthening of the measures since 
these introductions in 2012. For example, the import volume of automobiles from Japan in 2015 
under these restricti ve measures was decreased by around 60% when compared with the import 
volume in 2010. Accordingly, the import quota in 2016 was very limited when compared to the 
actual import volume in 2010. Indeed, the import quota for the first  quarter of 2016 was filled in 
February , and the import quota for the second  quarter was filled in April, which was the f irst 
month of this period . This clearly indicate d that these measures ha d had an adverse effect on 
imports of automobiles from Japan.  
12.6.   Japan was also concerned by Ecuador's explana tions at the last meeting that these 
measures were justified under GATT  Article  XX as their aim was to protect  the environmen t. Japan 
had not been convinced by th is explanation because these measures were more restrictive when 
applied to complete build -up (CBU) automobiles than when applied to comple te knockdown (CKD) 
automobiles; thus, they constitute d an unjustifiable discrimi nation against imported automobiles. 
As stated at the last CTG meeting, Japan believe d that there were other policy options available to 
achieve the same environmental policy objectives, which were less restrictive or less trade 
distortive than the measure s in question. Ecuador should at least treat complete build -up (CBU) 
and complete knockdown (CKD) automobiles in the same manner, since they ha d the same impact 
on the environment.  
12.7.   Japan also urged Ecuador to respond to the questions posed by Japan at the last 
CTG meeting, to remove the measures that were inconsistent with the WTO  Agreement, and to 
refrain from introducing any new measures. Since the import -restricting measures on automobiles 
were being addressed in trade agreement negotiations with other W TO Members, Japan indicated 
its interest in closely follow ing the relevant negotiations.  
12.8.   Japan also addressed the issue of the BOP measure s, again expressing concern about their 
consistency with the WTO  Agreement, and in particular with GATT  Article  XVIII.  It was regrettable 
that Ecuador had decided to extend the measure for an additional year  even if  Ecuador had 
committed to eliminate the measures in accordance with the timetable for their abolishment.  G/C/M/126  
 
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Japan recognize d the serious situation caused by the e arthquake and welcomed  the decision of the 
IMF to disburse about US$364  million for Ecuador. However, Japan requested  a further explanation 
of the clear and logical relationship between the earthquake and the one-year extension of the 
measure , as previousl y requested at the last BOP  Committee , held in June  2016; without such 
explanation,  Japan w ould have to request its prompt elimination.  
12.9.   The delegate of the Republic of Korea  stated that Korea was not convinced that , by 
extending the BOP safeguard measures , Ecuador would more quickly  restor e the damage caused 
by the  earthquake , and of the economic difficulties Ecuador was facing . These measures created 
concern not only from their negative impact on trade but also  because they might undermine the 
basic princi ple of the multilateral trading system.  Korea hoped that the Ecuadorean Government 
would abolish the safeguard measures in the near future and also consider adopting  alternative 
policy options consistent with Ecuador's WTO commitments.  
12.10.   Korea shared Japan's  concerns about the import quota system  on automobiles , and 
reiterate d its deep concern about  this long -standing issue , a measure  maintained by the 
Ecuadorean government since 2012.  The import quota was supposed to be terminated last year, 
but instead  was prolonged until the end of 2016. Korea believed that the import quota was not 
consistent with WTO  rules and seriously violate d the commercial interests of the Korean industry. 
Korea t herefore  requested Ecuador to abolish the import quota as soon as possibl e. Korea would 
continue to monitor the import quota issue and consult with Ecuador to seek a mutually acceptable 
solution.  
12.11.   The delegate of the European Union  recalled that her delegation had raised its concerns on 
the import quotas several times  at the CTG . The EU shared and supported the previous statements 
and was also not convinced that the Ecuadorean measures were WTO-compatible ; and nor did the 
EU find acceptable the environmental cri teria as a rationale for those import  restrictions. Regarding 
the BOP  measures, she reverted to the EU  statement at the June  2016 meeting of the 
BOP Committee.  
12.12.   The delegate of Peru reiterated the concerns expressed by his delegation at the 
BOP Committee, particularly regarding Ecuador's extended application of its BOP safeg uard until 
June 2017.  Peru was concerned and affected by the extension of these measures, as applied in a 
discriminatory manner by Ecuador for almost 15  months.  
12.13.   Peru recognized the difficulties Ecuador was experiencing due to the natural disasters it 
had suffered ; however, the safeguard measure being applied by Ecuador ran counter  to its 
transitional  nature because it exceed ed the necessary timeline allowing Ecuador t o correct its 
unfavourable BOP  situation. The measure, applied for a total of 28  months , endanger ed the trade 
interests of WTO Members , including Peru.  Indeed, as indicated by his delegation at the 
BOP Committee, in terms of exports towards Ecuador, 11  sectors ha d been seriously affected in 
2015. This was one of the main causes of the negative d evelopment in Pe ru and Ecuador's trade 
balance, and also decreased employment in Peru, in particular affecting exporting Micro and 
Small -Sized Enterprises ( MSMEs ). Peru reiterated its call to Ecuador to abolish as soon as possible 
the BOP safeguard as applied since March  2015.  
12.14.   The delegate of Canada  also expressed Canada's sympathy for the tragic natural disaster 
experienced by Ecuador. Canada shared the concerns raised by others  and in particular the 
application of an import restricting measure in the auto mobile sector that appeared to favour local 
content and national production. Like other Members , Canada believed that Ecuador's application 
of the BOP  measures was inconsisten t with GATT  Article  XVIII, and was also concerned about 
Ecuador's announcement that it would extend the measure for an additional year.  
12.15.   Canada welcomed the recent removal of the 5% import surcharge  but remain ed concerned 
with the manner in which Ecuador ha d applied the import measures and surcharges to specific 
sectors and products, as  well as for the exception applied to certain trading partners. Canada 
sought regular updates  from Ecuador  on this issue.  
12.16.   The delegate of Switzerland  recognized the challenging situation being faced by Ecuador , 
particular ly with respect to its BOP situatio n, and acknowledged Ecuador's efforts to do justice to 
the economic situation and its international commitments  equally . Switzerland also shared the G/C/M/126  
 
- 22 - 
 
  concerns raised by previous speakers with regard to the extensio n of the BOP  safeguard measures , 
and believ ed that this extension acted as a trade -restrictive measure rather than a monetary 
instrument. He therefore requested that Ecuador review this decision in light of its 
WTO compatibility.  
12.17.   The delegate of Mexico  expressed Mexico's solidarity with the Ecuador ian Government in 
light of the tragic natural disaster that had affected the country ; but he also echoed the concerns 
of other Members  with regard to the way in which Ecuador ha d been confronting this issue.  With 
regard to the Ecuadorean technical regulati ons intended to  control gas emissions , but which 
affected imports in the automobile sector, Mexico appreciated Ecuador's efforts to re-establish 
certification based on foreign standards.  Nevertheless, it was unclear if Ecuador ha d re-established 
the accept ance of self -declarations from car manufacturers, or not . 
12.18.   The delegate of Chile echoed the concerns raised by previous speakers , and in particular 
the lack of evidence to determine  the application  of such an unfavourable  safeguard mechanism  to 
confront the  critical  macroeconomic situation being faced by Ecuador. Concerns also existed with 
regard to the selective nature of the measure , both in terms of product  coverage and applied 
rates.  Chile believe d that the asymmetrical application of the safeguard measu re affect ed not only 
WTO Member s that export ed to Ecuador but also the industrial sector and Ecuador ean production 
as a whole.  
12.19.   Chile recognized the complex economic situation that Ecuador was experiencing but 
believed that the measures adopted by Ecuador, which should be abolished as soon as possible, 
needed to be monitored.  
12.20.   The delegate of Guatemala  also expressed solidarity with Ecuador regarding the natural 
disaster that had affected it, but expressed the concern of her authorities not only as to the 
BOP measure but also as to its extension. Guatemala called  on Ecuador to reconsider this measure 
and its WTO  compatibility.  
12.21.   The delegate of Colombia  recognized Ecuador's  efforts to mitigate the adverse effects of 
the very difficult economic situation it was experiencing, which ha d been aggravated by the recent 
natural catastrophe.  Colombia, like other Members, had nevertheless expressed serious concerns 
regarding the BOP measures adopted by Ecuador. As was well known, Ecuador was a key partner 
for Colombia. Th erefore, the Ecuadorean measures relating to vehicle imports , and especially 
quantitative restrictions on vehicles and parts thereof, as well as telephones and other goods , were 
a matter of concern for Colombia ; indeed, his delegation had already indicated  this at the 
BOP Committee meeting , when Colombia referred to these BOP  measures and their extension. 
Colombia hoped that Ecuador would minimize the trade distortions and adopt other , alternat ive 
measures.  
12.22.   The delegate of Ecuador  thanked Members for their solidarity with regard to the situation 
in his country following the earthquake.  Regarding the trade concerns expressed, he stated that 
the quantitative restrictions on imports of vehicles and CKDs fell under GATT  Article  XX, and that 
the quota distributio n had been made following GATT  Article  XIII:2(a), which referred to the 
non-discriminatory application of quotas. In this vein, for imports of vehicles for 2016 a global 
quota had been established  that was similar to that of 2015 , a year where 94% of the q uota was 
reached in terms of value , and 82% was reached in terms of units.  Given the current economic 
situation , imports would tend to be similar to 2015  levels ; therefore , Ecuador considered that the 
quantitative restriction for 2016 would satisfy interna l demand. Consequently, there was not a real 
limit on access to the Ecuadorean market as Ecuador 's market access conditions were in fact now 
more flexible, as established by GATT  Article  XIII:2 , which determined that when applying 
quantitative import restr ictions "[…] contracting parties shall aim at a distribution of trade in such 
product approaching as closely as possible the shares which the various contracting parties might 
be expected to obtain in the absence of such restrictions ". 
12.23.   The global fixed quota was based on free demand –first come , first served –and 
administered automatically through the IT system of the Ecuador ean customs . Consequently, the 
measure was not an import licence , and imports of vehicles were open to any importer whose 
economic activ ity involved  trade in these vehicles . Instead, the measure eliminate d assignation of 
quotas to a specific or reduced group of businesses.  In practical terms, imports of vehicles would G/C/M/126  
 
- 23 - 
 
depend on demand , on the conditions of the Ecuador ean market , and on the  competitiveness o f 
such vehicles and their brands.  
12.24.   With the intention of  combat ting and reducing the greenhouse gas  emissions (GHGEs) , the 
Ecuadorean government, through the "Plan Nacional de Calidad del Aire ", and other specific plans, 
was developing oth er measures to mitigate the effect of the GHGs of vehicles  in different cities 
with a view  to protect ing human health in Ecuador . Furthermore, Ecuador was implementing 
incentive programmes for the use of electric vehicles to decrease CO2 emissions.  
12.25.   With re gard to the BOP safeguard measure, Ecuador reiterated that the appropriate and 
exclusive place to analy se this measure  was the BOP  Committee. The same approach applied to 
technical regulations , which  should only be addressed at the Committee on Technical B arriers to 
Trade  (TBT) . 
12.26.   With regard to Ecuador's explanation of its import -restricting measures in respect of  
automobiles, the delegate of Japan  stated that the import volume of automobiles in 2015 had 
decreased by 60% when compared to the import volume of  2010. Therefore, the import quota for 
2016 was very limited when compared to the actual import volume in 2010, leaving  Japan 
unconvinced by the explanations  provided  by Ecuador . 
12.27.   The Chairperson  thanked delegations for their interventions and proposed that  the Council 
take note of the statements made.  
12.28.   The Council so agreed . 
13  UKRAINE – ISSUES RELATED TO CU STOMS VALUATION - REQUEST FROM NORWAY  
13.1.   The Chairperson  informed the Council that , in a communication dated 1  July 2016, the 
delegation of Norway requested th e Secretariat to include this item on the agenda . 
13.2.   The delegate of Norway  recalled that this issue was raised first in this Council , by the 
EU and her delegation, in 2011. Norway hoped that the customs valuation problems in Ukraine had 
been normalized  since then; h owever, recent reports from its industry had obliged Norway to raise 
again the same issue at the CTG , at its  meeting s of November 2015 and April  2016.  
13.3.   In a number of cases the value which serve d as the basis for the calculation of customs 
value of pelagic fish imported to Ukraine was higher than the agreed price on the invoice. This 
represented additional dut ies and value added payments on imports  of such products . Norway had 
held a constructive bilateral meeting with Ukrainian representatives prior  to the CTG  meeting in 
April, where Ukrain e had suggested holding a meeting in Kiev in order to give Norwegian experts 
the possibility of explain ing the challenges faced by its industry. Norway hoped that this meeting 
would take place soon , but was still w aiting for confirmation from Ukraine. Norway look ed forward 
to working with the Ukrainian authorities in order to solve the issue.  
13.4.   Norway believed that a transparent and predictable trading system should be the basis for 
trade  between the two countries, an d reiterated its call to Ukraine promptly to solve the se 
problems relating to customs valuation . The Ukrainian authorities should ensure that, in all cases , 
the determination of customs value was in accordance with WTO  methodology.  
13.5.   The delegate of the United States of America  supported Norway's  statement. His authorities 
continued to be concern ed about the valuation methods of Ukraine's Customs Service, and 
specifically about Resolution  724 of Ukraine's legislation.  The US had raised its concerns bilaterall y 
with Ukraine and ha d appreciated the assurances from the Ukrainian Government that it w ould 
implement Resolution  724 in a WTO-consistent manner.  Moreover, at the April  2016 meeting of 
the CV  Committee, his delegation had posed detailed questions to Ukrai ne about Resolution  724. 
13.6.   The delegate of Switzerland  echoed the concerns raised by Norway on this issue . Various 
Swiss industries had also been affected by the customs valuation methodology being applied by 
Ukraine. Switzerland appreciated Ukraine's readin ess to discuss the adverse impact of Cabinet 
Resolution  724 and welcomed the announce ment made by the Ministry of Finance that some 
changes to the said Resolution were under way. Nevertheless , and d espite some improvements, G/C/M/126  
 
- 24 - 
 
  Swiss companies continue d to fac e a number of problems with the customs valuation  methods in 
Ukraine, such as the extensive documentation requirements and the adjustments made by the 
Customs administration to the customs value. Swiss companies also faced other problems , such as  
the recla ssification of goods , or the arrangement of temporary customs zone s. Nevertheless, the  
number of cases related to these problems had not increased since the beginning of 2016 ; 
Switzerland therefore believed that the problems were not a result of  the Ukrain ian customs code  
in itself , but of the way in which it was being implemented by the customs service. Switzerland 
requested clarification from Ukraine about the changes that had been introduced or were foreseen 
regarding Resolution  724, and invited Ukraine to bring the implementation of its customs valuation 
legislation  not only  into conformity with its WTO  commitments but also  to request its local customs 
authorities to conduct  themselves in a transparent, uniform , and consistent manner. Switzerland 
was rea dy to continue working with Ukraine towards a satisfactory solution . 
13.7.   The delegate of the European Union  recalled that the EU had raised similar concerns during 
Ukraine's recent Trade Policy Review (TPR) , and had taken note of the reply provided by Ukraine 
to the EU's advance d written questions . She asked Ukraine to provide an update on the 
implementation of the  elements mentioned in its reply to the EU, and particularly if customs 
valuation w ould be an integral part of Ukraine's plan to modernize its risk m anagement system.  
13.8.   The delegate of Ukraine  thanked Members  for their interventions and stated that the 
Ukrainian  customs administration system was undertaking  a considerable number of reforms. 
Customs reform was a top priority for the new government , and th e aim of th e reform  was the 
elimination of corruption, overcoming smuggling and customs rules violation s, automatization of 
the customs service process es, facilitation of customs procedures,  and improvement of customs 
relations with other countries.  
13.9.   The pr ocedure and customs valuation methods of goods were determined by Section  III of 
the new Customs Code of Ukraine,  adopted in 2012 , a code that in turn was based on the 
provisions of Article  VII of the GATT  1994 and the Agreement on Customs Valuation 
(CV Agreement ). According to the CV Agreement and Article  57:2 of the Customs Code , the basic 
method of determining customs valu ation was the transaction value of the imported goods.  
13.10.   Concerning Resolution  724, he underline d that its requirements had not introduc ed new 
methods for defining the customs value of goods , and that it did not endorse the use of benchmark 
prices as minimum declared values. According to the Resolution, benchmarks were used only 
within the risk management system and were required only for the analysis, identification , and risk 
assessment s that related to incomplete and/or inaccurate information about the customs value of 
the goods declared by the declarant or his authorized representative, and were not directly used to 
replace the customs v alue. The determination of customs value on the basis of minimum, arbitrary 
or fictitious values, including  indicative or reference prices , was not provided for under Ukrainian 
legislation , and Ukraine was not implementing this in practice.  
13.11.   On 16 December  2015 Ukraine ratified the WTO  Agreement on Trade Facilitation  (TFA), 
and expect ed that implementation of the TFA would  simplify customs procedures, stimulate foreign 
trade , and reduce trade costs.  Ukraine w ould make every effort to continue a constructive dialogue 
with interested Members  and to address any issue that might arise in the trade and economic 
sphere, in particular with regard to the facilitation  of customs control procedures.  
13.12.   In response to Norway's comment regarding a meeting at the technical l evel, he indicated 
that such a meeting would be organized during the week beginning 24 July 2016.  
13.13.   The Chairperson  thank ed delegations for their interventions and  propose d that the Council 
take note of the statements made.  
13.14.   The Council so agreed . 
14  CANADA – WINE RELATED POLICIES AND MEASURES - REQUEST FROM NEW 
ZEALAND  
14.1.   The Chairperson  informed the Council that , in a communication dated 1  July 2016, the 
delegation of New Zealand requested the Secretariat to include this issue on the agenda . G/C/M/126  
 
- 25 - 
 
14.2.   The delegate of New Ze aland  stated that New Zealand had various concerns about the 
provincial -level measures introduced by some Canadian provincial authorities.  These concerns had 
already been raised by his delegation in a number of fora, including in the Committee on 
Agricultu re, and bilaterally with Canada.  
14.3.   New Zealand's concerns referred to the wine regulations implemented in British 
Columbia (BC), which did not seem to be consistent with Canada's national treatment obligations 
under GATT  Article  III:4 as they allowed the s ales of B C wines on regular grocery store shelves, 
while excluding imported products.  The latter were therefore restricted to "stores within a store " 
which were also subject to restrictions that d id not apply to grocery store sales of B C wine.  
14.4.   Additional concerns existed about the implementation of several restrictions for wine and 
spirits in Ontario  such as the restrictions for shelf space . New Zealand believed that these 
restrictions were  inconsistent with the obligation on State Trading Enterprises ( STEs) under 
GATT  Article  XVII:1(a) on the restriction of licences for imported products.  
14.5.   New Zealand was also concerned about the l ack of transparency and predictability on the 
flexible mark -ups that could create discrimination. In this regard, t he Liquor Contro l Board of 
Ontario could have extended the deadline for competitive tendering . His delegation would welcome 
a further update from Canada on this  matter . New Zealand asked Canada, as a wine producing 
and exporting nation, to ensure that the measures impleme nted by its provinces were consistent 
with Canada's international obligations.  
14.6.   The delegate of the United States of America  recalled that his delegation, together with New 
Zealand, had raised concerns at the Committee on Agriculture with respect to the Bri tish Columbia 
regulations allowing BC  wines to be sold directly from regular grocery store shelves, while those 
stores could only sell imported wine if the store construct ed a so-called "store-within -a-store", with 
permanent barriers, controlled access, an d separate sales points.  These regulations appeared at 
face value to accord less favourable treatment to imported wine s than to B C wines, and the 
US wondered whether , as such, they  were consistent with Canada's national treatment obligations 
under GATT  Article III:4.  
14.7.   The US appreciated Canada's responses and its engagement at the Committee on 
Agriculture , and bilaterally , to address these concerns. However, Canada had not referred directly 
to the different requirements for BC  wines versus  imported wines, but had rather referred to 
grandfathering provisions under its FTAs, instead of addressing such concerns under the 
regulations and in connection with its WTO  commitments.  Imported wine should enjoy the same 
competitive opportunities as B C wine in grocery sto res. The US request ed that the regulations be 
amended to ensure that the sale of wine in such stores could take place on a non -discriminatory 
basis.  
14.8.   The delegate of Australia  echoed the previous speakers on the provincial -level restrictions 
on wine and oth er alcohol s in Canada.  Australia was following  wine-regulatory issues in Canada's 
provinces with great interest and look ed forward to further discuss ing its concerns with the 
Canadian Government.  
14.9.   The delegate of the European Union  shared the concerns of other Members with regard to 
Canada's provinces ' wine and liquor -related policies and measures. Canada's provincial liquor 
boards were adopting a n increasing number of trade -restricting measures , such as the 
establishment of new selling outlets , which did not allow for imported products to be sold (Bill 
No. 88 in Quebec) , or that establish ed flexible mark -ups that seem ed not to be calculated in a 
uniform manner (such as a recently adopted measure in Ontario ). 
14.10.   Her authorities had raised this issue at the Worki ng Party on State Trading Enterprises 
(WPSTE) , and had appreciated the replies submitted recently by Canada. The EU  would read them 
carefully . However , with regard to mark-ups (EU's question No. 3), the EU  believed that variable 
or flexible mark -ups, such as the ones recently put in practice in Ontario, contradict ed the notion 
of flat -rate and/or of uniform mark -ups mentioned in Canada's notification. This raise d some  
serious doubts about their compatibility with GATT  Article XVII:2, particularly when the p ractice of 
using variable or negotiated mark -ups was not applied to all products. While the Canadian 
notification referred to a concise determination of mark -ups for each STE and underline d, as a G/C/M/126  
 
- 26 - 
 
  general characteristic, that the se were  calculated in a unif orm, non -discriminatory manner, 
irrespective of the country of origin, in practice it could be observed that mark-ups were not 
applied in a uniform and transparent way and result ed in a discriminatory treatment for similar 
products. Variable mark -ups c ould therefore be considered as discriminatory ; by their very nature 
they treated similar products in a different way.  
14.11.   The delegate of Chile stated that the trade relations between Chile and Canada were close 
and based on strict compliance with international t rade rules, which enabled international trade to 
be fairer, more transparent, and more predictable . Chile h oped to continue working with the 
Canad ian government on the implementation of the measures adopted by its provincial authorities, 
particularly in th e wine sector , which was highly important for Chile's interests.  
14.12.   The delegate of Mexico  indicated the interest of her delegation in this issue. Mexico looked 
forward to follow ing the further developments of these concerns in other WTO  bodies.  
14.13.   The delegate of Canada  thanked delegations for their comments relat ing to some of the 
policy changes by certain provincial governments within Canada on the sale and distribution of 
alcohol.  He assured Members that the Canad ian government was engag ed bilaterally and in 
various fora to answer questions and better understand Members' concerns, and was also working 
closely with provinc ial governments  to ensure the consistency of their policies with Canada' s 
international trade obligations.  
14.14.   With regard to the concerns that related to the wine regulations in the BC province , he 
indicated that the exclusive sale of BC  wine at certain locations ha d existed for many decades and 
was grandfathered through many trade agreements to which Canada was a party.  No new licences 
were being  established in BC. 
14.15.   Regarding the measures adopted by the province of Ontario on wine sold in grocery stores, 
he indicated that , on 24 June 2016, the provincial g overnment of Ontario had announced that all 
new grocery store licen ces would immediately be av ailable to both domestic and foreign wine with 
specific requirements related to small producers.  Regarding the Liquor Control Board of Ontario's 
pilot competitive tendering process, Canada's government wa s engaged in consultations with the 
provincial g overnment of Ontario on a newly announced pilot programme from the LCBO  involving 
competitive tendering for certain wine and distilled spirit products.  Canada would share more 
information on the pilot project promptly.  
14.16.   Relating to the measures of the province of Quebec  on the sale of wine in grocery stores , 
he indicated that , in May 2016, the government of Quebec had introduced Bill  88, an act aimed at 
preserving the development of the small -scale alcoholic beverages industry, to permit the sale of 
craft wine i n Quebec grocery stores.  However, the implementation date had not yet been 
established by the government of Quebec. Canada look ed forward to working with WTO  Members 
on these issues.  
14.17.   The Chairperson  thanked all delegations for their interventions and propo sed that the 
Council take note of the statements  made.  
14.18.   The Council so agreed . 
15  UNITED STATES OF AME RICA – MEASURES RELATED TO IMPORTS OF FISH AND 
SEAFOOD PRODUCTS – REQUEST FROM THE RUS SIAN FEDERATION  
15.1.   The Chairperson  informed the Council that , in a communic ation dated 1  July 2016, the 
delegation of the Russian Federation had requested the Secretariat to include this issue on the 
agenda.  
15.2.   The delegate of the Russian Federation  stated that the US  Department of Commerce had 
published a proposed rule concerning a Seafood Import Monitoring Program (SIMP) in the Federal 
Regist ry on 5 February  2016. The final rule would be issued by August  2016 and w ould be made 
effective by September  2016. The main goal of th e SIMP was to combat illegal, unreported , and 
unregulated (IUU) fishing and seafood fraud by means of filing and record -keeping procedures 
with regard to the importation of certain fish and seafood products.  G/C/M/126  
 
- 27 - 
 
15.3.   At the previous meeting of the CTG her delegation had referred to  various concerns about  
the proposed SIMP , such as the lack of a complete list of documents that should be filed and kept 
for five  years, a lack of clarity about the consequences of minor errors in data submission in the 
Automated Commercial Environment (ACE), and certain confidentiality issues.  Regrettably , the US 
had not provided any clarity on these  issues . 
15.4.   The Russian Federation had additional concerns that it wished to place on the record , such 
as the responsibility for importers to ensure that s eafood products had not been caught by illegal  
IUU fishing , and the enforcement actions described in the proposed rule that could mainly apply to 
importers and only for data submission records. She sought clarification from the US as to whether 
or not these actions w ould be applied in such cases to exp orters or producers in third  countries.  
15.5.   One of the SIMP's main goals was to develop a system that c ould help to trace each import 
shipment from the point of harvest to entry in to US market  through each point in the chain of 
custody ; but according to some a vailable pieces of information , the same traceability requirement 
would not apply for seafood products caught or produced by national fishermen and only to  
imported products. It therefore appeared that in the case of  US fishermen and producers there 
was no  obligation  to keep documents that related to transportation, processing, storage, and 
distribution of seafood products for five  years ; rather, i t would be enough for them to submit a 
landing report to prove that their fish or seafood products were legally  caught.  
15.6.   Moreover, the Russian Federation believed that the verification of whether or not the fish 
had been caught by IUU  fishing could be performed without close cooperation with the competent 
authorities in third  countries, which could prove that the fish had been legally caught. 
Unfortunately, there were no corresponding provisions in the proposed rule. The Russian 
Federation sought clarification form the US as to whether  or not  they would cooperate with other 
countries for verification purposes , and ho w such verification would be carried out . 
15.7.   The Russian Federation supported Members' initiatives to combat IUU; however, they 
should ensure the compliance of such measures with the provisions set forth in the 
WTO Agreements, including GATT  Article  III, and in close cooperation with all other Members so as 
to ensure that the measures would not be more trade restrictive than necessary.  
15.8.   The delegate of Indonesia  indicated that his authorities were close ly monitoring the 
US measures that related to Imports and S eafood Products  and reserved the right of his delegation 
to come back to this issue in a future meeting.  
15.9.   The delegate of the United States of America thanked the Russian Federation for its 
continued interest in the proposed rules implementing sections of t he "US Marine Mammal 
Protection Act " and "Magnuson Stevens Fishery Co nservation and Management Act ". As stated by 
the Russian Federation,  the proposed rules had been published in the US  Federal Register , and 
seafood exporting nations had been notified of t he opportunity for them to provide comment s to 
the National Oceanic and Atmospheric Administration (NOAA), the regulating agency  for these 
requirements . Where requested, US  agencies had met with representatives of other countries to 
answer questions about the proposed rules.  In this context, on 7  June 2016 the Office of the 
US Trade Representative  and NOAA met in Washington with representatives of the Russian 
Government.  
15.10.   As Russia noted, the rules w ould be finalized in the coming months . His delegation had 
taken note of the additional questions and requests for clarification presented by the Russian 
Federation and would facilitate additional meetings with the relevant regulators, as appropriate.  
15.11.   The Chairperson  thanked delegations for their interventions and proposed that the Council 
take note of the statements made.  
15.12.   The Council so agreed . G/C/M/126  
 
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  16  INDIA – IMPORT RESTRICTING M EASURES – REQUEST FROM JAPAN A ND NEW 
ZEALAND  
16.1.   The Chairperson  informed the Council that , on 1 July 2016, the delegations of Japan and 
New Zealand  had requested the Secretariat to include this issue on the agenda.  
16.2.   The delegate of Japan  recalled that at the previous CTG  meeting his delegation had 
indicated that on 5 February  2016 the Government of India had introduced a minimum import 
price measure ( MIP) for 173  iron and steel products. It was regrettable that the Government of 
India maintain ed this measure and d id not allow the importation of those products at prices below 
the specified prices.  This measure  had an adverse impact  upon exports of Japan ese iron and steel 
products.  Japan consider ed this measure  to be inconsistent with GATT  Article  XI, and urged  India 
to remove it immediately and to refrain from extending its period  of application . 
16.3.   Japan also had concerns about India's imposition in March  2016 of safeguard (SG) 
measure s on hot-rolled flat products. As mentioned at the last meeting of the SG Committee, 
Japan considered that this SG measure d id not meet the requirement that the increase of imports 
should have a logical connection with "unfore seen developments " and "the effect " under GATT of 
Article  XIX:1(a). Japan request ed that India remove this SG measure as soon as possible.  
16.4.   The delegate of New Zealand  recalled that his authorities had continued  to be concerned 
over India's decision on 14  September  2015 to restrict the entry of imported apples to certain 
ports.  New Zealand welcomed the reopening of some of the ports  of Chennai, Kolkata, and Kochin 
to imports of apples  but remained concerned at the continued closure of the ports of 
Visakhapat nam and Tuticorin to imports of apples.  The decision to close these  ports surprised New 
Zealand and its apple exporters as it was taken without any prior consultation  and implemented 
with immediate effect.  Such limited access to ports was likely to cause u ndue delays and costs  and 
would affect the stability of supply and  consequently increase price volatility.  New Zealand 
believed that these closures were inconsistent with Article  4 of the Agreement on Agriculture, and 
more broadly with GATT  Article  XI. 
16.5.   Despite repeated calls made to India in various WTO  Committees, including the Committees 
on Agriculture, SPS, Import Licensing, and TBT, as well as in this Council to explain its measures, 
India had limited itself to inform ing these Committees and the CTG tha t the issue  was not 
relevant, even in the case of the Committee on Agriculture where the Chair had concluded 
otherwise.  India's failure to notify WTO  Members of this measure, and to provide any rationale for 
it, had forced New Zealand once again to raise i ts concerns at this Council . 
16.6.   New Zealand sought clarification from India on the following: (i)  the rationale and 
justification for the decision to close these ports; (ii) why apples had been treated differently to 
other imported produc ts; (iii) how long th e port closures would remain in place; (iv) when India 
would notify this measure ; and (v) an explanation of the consistency of these closures with 
GATT  Article  4.2 of the Agreement on Agriculture, which state d that "Members shall not maintain, 
resort to, o r revert to any measures of the kind which have been required to be converted into 
ordinary c ustoms duties ". 
16.7.   The delegate of the Republic of Korea  shared Japan 's concerns regarding India's import 
restricting measures , particularly with regard to India's sa feguard measure s on hot -rolled steel 
products.  Safeguard measures were one of the most trade -restrictive measures, thus Korea 
believed that the se should be adopted in adherence to the WTO  SG Agreement.  Korea also 
doubted that there had been a sudden sharp and significant increase in imports. In addition, many 
economic indicators d id not demonstrate the existence of serious injury to the Indian industry.  
16.8.   Korea believed that even if there were some indications that the industry was experiencing 
difficulty , not all of these difficulties could be attributed to an increase in imports.  Korea doubted 
that India 's safeguard measures had met the strict requirements of the S G Agreement , and again  
request ed India to withdraw its measures on hot -rolled steel products as  soon as possible.  
16.9.   The delegate of the United States of America  recalled that at the last CTG  meeting his 
delegation had recorded tariff increases, localized conformity assessment requirements, and 
continued confusion over new requirements in India followi ng an arbitrary application of notice and G/C/M/126  
 
- 29 - 
 
comment procedures.  His authorities continued to discuss these issues bilaterally with India but 
would appreciate it if India could clarify whether or not it was applying tariffs on products co vered 
by its commitme nts under the Information Technology Agreement  (ITA). An indication by India as 
to when it would respond to the written questions posed to it in April  2016 in the ITA and Market 
Access Committees would also be appreciated.  
16.10.   The United States encouraged Indi a to remove its tariffs on ITA expansion products as a 
result of India 's campaign to increase manufacturing and promote digital connectivity under "Make 
in India " and "Digital India " programmes. He urged India to reduce or eliminate its tariff increases 
imposed this year, to follow international best practices in conformity assessment, and to adopt 
transparent, predictable , and uniform notice and comment procedures.  
16.11.   The delegate of Chinese Taipei  recalled that at the last CTG meeting his delegation had 
invited India to provide further detail on the MIP  measure  on certain iron and steel, and had asked 
India if importation of a product below the minimum price would be allowed , and if the importation 
of a product would be allowed once the price was raised equal  to or more than the minimum price . 
Clarification was also sought with regard to the compliance of India 's MIP with GATT  Article  XI. 
16.12.   The delegate of Australia  joined other Members in expressing their concern over the recent 
trade -restrictive measures intro duced by India, and in particular the ir concern with regard to iron 
and steel products  and the introduction of an MIP in February  2016. Like other Members , Australia 
believed the measure to be WTO-inconsistent. Australia also observed that this measure c ame on 
top of other measures in place against steel imports introduced by India with a view to curb ing 
imports competing in India's markets.  Concerns also existed over the current global excess 
capacity and oversupply in the steel sector ; similar and ongoing  challenges were also being faced 
by the Australian steel industry.  Nevertheless, Members needed to ensure open, well -functioning, 
transparent , and competitive markets.  Government measures that led to further disruptions in 
global trade should be avoided.  
16.13.   The delegate of Canada  supported the concerns raised by previous delegations with regard 
to the measures  imposed by India on steel imports and on the port closures for imports of apples. 
He referred to Canada 's comments on this issue raised at the April  2016 CTG  meeting. Canada 
looked forward to receiving clarification from India on these matters.  
16.14.   The delegate of the European Union  shared the concerns expressed by New Zealand on the 
port closures for apple imports. The EU welcomed the relaxation of India 's policy introduced in 
January  2016; however, the EU continued to believe that any restriction of imports  adopted 
without clear justification and duly notified through the appropriate WTO  channels ran against the 
spirit of the WTO  and its rules.  She called upon India either to provide a WTO -compliant 
explanation of the restriction of imports of apples through specific ports or else to open imports of 
apples through all sea ports and airports.  
16.15.   Like the US, the EU looked forward to receiving India 's replies to  the questions posed to it 
in the ITA and Market Access committees  regarding the duties applied to ICT products, and in 
particular a 10% duty applied to products covered by the ITA.  
16.16.   The delegate of China  expressed China's concerns over the continued port r estriction 
measures on apple imports , which China considered to be barriers to trade unnecessarily imposed 
on exporters of apples. China looked forward to receiving India 's replies to the questions posed to 
it by various Members, including China,  and to se e prompt adjust ments made to the restricted 
measures.  
16.17.   The delegate of India thank ed delegations for their interest in certain trade measures of 
India as raised at this meeting , such as MIP for certain steel products, safeguard duty on 
hot-rolled flat produ cts, port restriction for import of apples, increase of tariffs on certain products, 
imposition of custom duty on certain ICT  goods, and conformity assessment  related matters . 
16.18.   Regarding the MIPs on certain steel products, he stated that this issue was rais ed for the 
first time at the WTO during the previous CTG  meeting , held on 15  April 2016. In that meeting, 
India had pointed out th at this matter needed first be discussed in the relevant WTO  Committee, 
which in this case  was the Committee on Market Access.  The matter was yet to be raised and G/C/M/126  
 
- 30 - 
 
  discussed in th at Committee. Nevert heless, India  wanted to indicate that it was well known that 
the steel sector was currently passing through a period of stress and uncertainty. As per World 
Steel Dynamics (WSD), many international manufacturers were exporting steel products below 
their cost of production. In fact, steel producers in some of the major steel -producing countries 
had adopted predatory pricing strateg ies and, as a result , world steel prices fell continuousl y from 
April 2014 to Dec ember  2015, with the steepest decline during April to Dec ember  2015. Due to 
predatory pricing by many international players, India had seen a surge in steel imports of about 
75.5% in 2014 —2015, a trend  which continued in 2015 -2016. In order to reduce the stress 
afflicting the domestic industry on account of these unprecedented imports, the government was 
constrained to resort to the temporary MIP measure on 173  steel products . Given that steel prices 
had fallen sharply over a short p eriod, and that the trade remedial measures on unfair trade 
practices would have taken some time to have materialize d, leading to irreversible injury to an 
already afflicted domestic industry, the Government of India had had to resort to MIP as a short -
term measure. A notification of the MIP  had been made and was valid for a period of six  months , 
with effect  as from 5  February  2016.  
16.19.   With regard  to the safeguard measures, India consider ed these to be in accordance with 
the SG Agreement and the procedures con tained therein. Some delegations  had raised  the issue of 
these Indian measures in recent times, and in particular the measures relating to  steel products 
that were notified to the WTO in April  2016. The matter was currently under discussion in the 
WTO Safeguards Committee , and at the last Committee meeting , held on 25  April 2016, India had 
stated the relevant provisions of the final findings. For example, on the issue of the causal link 
raised by Japan and some other delegations in that meeting, India infor med the Council  that 
Section  I of the Final Findings , available on the DG (Safeguards) 's website, as indicated in India' s 
WTO notification , detailed the surge in imports and the serious injury to the domestic industry.  
With regard to the  Safeguards Invest igation initiated on Hot -Rolled Flat Sheets and Plates, India 
stated that the investigation p rocess was ongoing , and urge d Members to cooperate with the 
investigating authority in the matter.  In case Members still held any concern on the issue of a 
causal link, India was ready to invite the concerned delegations to discuss the issue bilaterally.  
16.20.   With respect to the port restrictions on import s of apples , he reminded delegations that 
this was the third time that Members had raised the matter in this Council , and that at the 
April meeting his delegation had indicated that the port restriction ha d been removed from most of 
the customs ports as well as land customs borders. The revised provisions ha d been issued vi a 
DGFT  Notification No. 30/2015 -2020, dated 12  January 2016, which was available on 
DGFT 's website. The import of apples  was now being allowed through the specified enlarged list of 
ports, where the Food Safety and Standard s Authority of India ( or FSSAI) and the quarantine 
facilities were fully operatio nal. Since the import of apple s was now permitted through sea ports 
and airports in Kolkata, Chennai, Mumbai , and Cochin , and land port s and airport s in Delhi , and 
also through India' s land borders, India now consider ed that Members ' concerns on this issue  had 
been addr essed through the proper adjustments undertaken by the Indian g overnment , balancing 
the need for testing  and the free flow of imports.  
16.21.   With regard to the increase in customs duties on certain goods, an issue previously raised 
by the US at the  last CTG  meeting, his delegation believed that to respond to domestic policy 
objectives a WTO  Member was entitled from time to time to adjust its applied customs duties 
upwards or downwards, within its bound rates . 
16.22.   With regard to customs duties  imposed on certain ICT  products , he recalled that written 
questions had been posed to India in document  G/MA/W/120. On this matter , a few Members ha d 
sought clarification about the HS  classification of four  categories of ICT  products notified by India,  
imposing a 10% duty on them. India consider ed that these products were not covered under ITA1. 
Moreover, India had become a signatory to ITA1 in March  1997 and had undertaken then an 
obligation to provide zero  duty benefit on a list of specific products. However , over the years, 
several new technologies ha d evolved to address new functionalities, as for example in the telecom 
sector . One such example was new technology wireless products being used by telecom service 
providers. Such new items , which ha d been classified u nder the available HS  codes by the World 
Customs Organization , should not be considered for the purpose of the original ITA1  commitments. 
Thus, India consider ed that the tariff commitments under ITA1 should be restricted to the original 
commitment , which w as limited to the product "Carrier current line systems & digital line systems " 
and not the new technologies that had evolved over the years. Hence , for the new technologies 
and the products that were not in existence in 1997, a WTO  Member ha d a legitimate  right to G/C/M/126  
 
- 31 - 
 
impose dut ies. India was ready to discuss the matter further in case any Member still ha d any 
queries on this issue.  
16.23.   With regard to the  issue of conformity assessment, he indicated that queries ha d already 
received sufficient response in the TBT Committee . 
16.24.   The delegate of New Zealand  thanked India for its responses, including confirmation that 
some of its ports remain ed closed to apple imports. New Zealand's  understanding was that the 
ports that ha d been reopened ha d sufficient SPS  inspection regi mes in place , which would suggest 
that those  still closed  were closed for SPS  reasons. He asked India to confirm if this was indeed 
the reason for the continued closure of those two ports, and also when this  would be notified to 
the SPS  Committee.  
16.25.   The dele gate of India responded that he had clearly stated in his intervention that the 
ports that had been opened ha d sufficient FSSI and quarantine facilities, and were fully 
operational.  
16.26.   The Chairperson  thanked delegation s for their interventions and proposed t hat the Council 
take note of the statements made.  
16.27.   The Council so agreed . 
17  WORK PROGRAMME ON EL ECTRONIC COMMERCE  
17.1.   The Chairperson  reminded delegations that , at the last meeting of this Council, the then 
Chairperson recalled that Ministers in Nairobi adopted t he decision contained in 
document  WT/L/977 on the "Work Programme on Electronic Commerce ". In this Decision , 
Ministers reaffirmed not only the mandate of the "Work Programme on Electronic Commerce ", 
adopted on 25  September  1998 and contained in document  WT/L/274, but also reaffirmed 
subsequent Ministerial Declarations and Decisions on the Work Programme. Therefore, Ministers 
decided to continue the work under the Work Programme on Electronic Commerce (Work 
Programme , or WPEC) since the last session, based o n the existing mandate and guidelines and on 
the basis of proposals submitted by Members in the relevant WTO  bodies as set out in 
paragraphs  2 to 5 of the Work Programme. To this end, they instructed the General Council to hold 
periodic reviews in its sess ions of July and December  2016 and July  2017, based on the reports 
that might be submitted by those WTO  bodies entrusted with the implementation of the Work 
Programme, and to report to the next session of the Ministerial Conference. In this vein , and in 
order to fulfil the mandate, the former Chair invited delegations to express their opinions and to 
make suggestions as to how to work on the preparation of the periodic reviews to be held in the 
General Council at its sessions of July and December of 2016, a nd in July of 2017.  
17.2.   He invited delegations to express their views and suggestions in view of the next meeting of 
the General Council where, on his own responsibility, he intended to make a factual report on the 
discussions held in this Council.3 
17.3.   The delega te of Canada  encouraged Members to make more effective use of the Work 
Programme. Canada believed  that the WTO could  use the efforts being made to take advantage of 
the digital economy to promote inclusive economic growth, and that Members should explore h ow 
trade policy could contribute to this goal by addressing certain key challenges faced by Members, 
such as gaining access to the best technology.  
17.4.   Canada, like other Members, had recently submitted a communication to the General 
Council entitled "Trade Po licy, the WTO and Digital Economy ". This document explored existing 
and potential e -commerce -related WTO  commitments, mechanisms and frameworks, including 
tariff liberalization through the ITA, including its recent expansion. Canada encouraged Members to 
consider its paper and to provide their views at the upcoming Dedicated Discussion on 
E-Commerce.  
                                                
3 See document  G/C/57.  G/C/M/126  
 
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  17.5.   The delegate of Japan  referred to  a proposal on e-commerce submitted by Japan together 
with the Russian Federation, Singapore, and Chinese Taipei. The purpose of this proposal was to 
reinvigorate discussions on electronic commerce under the Work Programme, an issue that had 
been discussed in this Council for years  and so not a "brand  new issue " for Members. Throughout 
those discussions Members had focused on sev eral traditional issues, such as moratorium and 
classification. Japan believed that it was important not to stick only to the traditional issues but 
also to re-start discussions from a broad perspective, including new topics surrounding electronic 
commerce . Therefore, the proponents of this document had set out to table an effective course of 
action, suggesting gathering first a broad range of views, including topics of interest to each 
Member, and then identifying the matters to be further addressed at the  WTO in discussions, 
workshops , and by other means. Given the various submissions on this issue, Japan looked 
forward to a fruitful and active discussion on e -commerce.  
17.6.   The delegate of the United States of America  drew Members' attention to 
document  JOB/GC /94, a non -paper distributed not as a negotiating proposal but as an 
informational discussion document. In this document the United States had no preconceived views 
on best approaches or on whether or not negotiations on specific aspects of e -commerce shou ld be 
pursued, and if so on what basis. The US believed that in this as in other aspects of the 
post-Nairobi work, it was critically important to consider all issues carefully, deliberatively, and 
through a wide variety of conversations.  
17.7.   The United States had acquired experience over some years in negotiating 
e-commerce -related provisions, and the elements laid out in the non -paper represented what the 
US considered important policies that could encourage the continued growth of a flourishing digital 
econom y. These policies reinforced the openness that had allowed the internet to be a dynamic 
force for economic growth, and to bolster the internet's ability to facilitate commerce in digital 
products, services, and physical goods. The United States looked forw ard to discussing these and 
other ideas so as to advance the WTO's WPEC and to provide a foundation for a 21st century global 
digital economy.  
17.8.   The delegate of the European Union  stated that the EU was a long -standing supporter of the 
WPEC , which it conside red an important topic that touched upon a broad number of areas, from 
trade in goods, to trade in services , and intellectual property, and where common rules could 
deliver significant benefits to all WTO  Members.  
17.9.   In Nairobi , Ministers had indicated that t he next steps under the Work Programme should be 
based on concrete proposals by Members. The EU had co -sponsored one of the papers mentioned 
by Canada; in that document the EU foresaw an extensive mapping exercise that could constitute 
a useful starting po int from which to evaluate various e -commerce elements, both in terms of 
substance and Members' positions. Undoubtedly, more technical work and information -sharing 
among Members would be necessary in the coming months. The EU looked forward to further 
discussion on this issue and to a consider ation of  the different submissions, including in the 
Dedicated Discussion on e -commerce in July.  
17.10.   The delegate of the Republic of Korea  thanked all Members for their broad support and 
active engagement in the MIKTA  E-Commerce Workshop held on 5  July 2016. As a follow -up to 
that Workshop, the five MIKTA  countries were preparing the summary of the measures considered 
during the Workshop and would report to the next E-Commerce Dedicated Discussion. Korea 
hoped that further discussions would take place on the various issues and elements raised at the 
Workshop . In this context , Korea welcomed the proposals and non -papers submitted by Members.  
17.11.   The delegate of Switzerland  thanked all Members that had submitted or intended to sub mit 
proposals on this issue. Switzerland was supportive of these initiatives as it believed that the 
digitalization of the economy and the phenomenon of electronic commerce were two  unavoidable 
aspects of today's trade realities. However, the WTO had had little experience in dealing with 
e-commerce despite past discussions and the relevance and growing importance of this topic in 
terms of global trade flows. Members should look at these issues with greater attention.  
17.12.   As already mentioned by his delegation a t the beginning of 2016, the first steps would be 
to clarify the scope of the issues akin to e -commerce, and to explore which of these issues could 
be improved by the WTO in terms of trade conditions. All these initiatives made up the initial steps G/C/M/126  
 
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towards  dealing with this topic in a constructive manner. Switzerland remained ready to engage in 
these discussions and to contribute to a successful process.  
17.13.   The delegate of China  thanked Canada, Japan, the US, and Korea,  for having introduced 
proposals on e -commerce. China's relevant agencies were considering how to push forward work 
on crafting international rules on e-commerce with a view to creating a sound and friendly 
environment for business communities. China was ready to participate actively in the upcom ing 
discussions.  
17.14.   The Chairperson  thanked delegations for their interventions and proposed that the Council 
take note of the statements made. He also proposed that , in order to fulfil the Nairobi mandate, he 
would make, on his own responsibility, a factual report to the General Council on 27 -28 July, 
based on the discussions held in this Council in April and July  2016.  
17.15.   The Council so agreed . 
18  OTHER BUSINESS  
18.1.   The Chairperson  reminded delegations that at the start of the meeting the delegations of 
China, Ukraine , and Japan, had requested the inclusion of items under "Other Business ". 
18.1  China – Exploration of Section  15(a) Protocol of Accession  
18.2.   The delegate of China  recalled the statement made at previous CTG  meetings 
(10 November  2015 and 15  April 2016) regarding t he expiration of Section  15(a) of China's 
Protocol Accession. As China had pointed out, this Section would expire on 11  December  2016. 
Therefore, after that date, Members should refrain from using the surrogate or analogue country 
methodology in anti -dumpi ng investigations against imports from China, and determine instead 
the dumping margins on the basis of the prices and costs of the Chinese companies; this pursuant 
to the ADA. This was a right to which China was entitled as a WTO  Member but also an obliga tion 
to be fulfilled by WTO  Members. Therefore, China repeated its call to Members to strictly fulfil their 
obligations under Section  15 of the Protocol of Accession of China and timely abandon the 
surrogate or analogue country methodology in anti -dumping investigations against China.  
18.3.   The delegate of the United States of America  noted that China had repeatedly raised the 
issue of its market economy status in this Council and in a number of other WTO  fora. In this 
regard, his delegation wanted to address som e of the comments made by China in its 
interventions, and share the US  perspective that might differ in key aspects.  
18.4.   First, the expiration of subparagraph  (a)(ii) of China's Protocol of Accession on 
11 December  2016 did not require Members automatically to grant China market economy status. 
The Protocol in fact made clear that the question of China's market economy status was based 
solely on an assessment of the facts on the ground in China in light of each Member's domestic 
rules for making such an assessm ent. More specifically, subparagraph  (d) of the Protocol stated 
that, only if China established under a Member's domestic law that it was a market economy would  
subparagraph  (a) expire in its entirety. This differed from the expiration of subparagraph  (a)(ii) on 
11 December. It was therefore clear that the upcoming expiration of this single provision of 
China's Protocol did not automatically entitle China to market economy status.  
18.5.   Second, there were concerns that China's market reforms had fallen short of t he 
expectations that were held by many Members when China joined the WTO. This was particularly 
evident in the steel and aluminium industries , where China's pervasive interventions had led to a 
significant overcapacity of global supply that was threatening  the viability of competitive firms in 
these industries around the world.  
18.6.   The United States looked forward to continuing to engage with China to help accelerate its 
progress toward s an economy that would be more  market -oriented.  
18.7.   The delegate of China  respo nded that the expiration of Article 15(a)(ii) of the Protocol would 
eliminate the legal basis for Members to use a discriminatory methodology against China in their 
anti-dumping investigations. Members would therefore be obliged to do their anti -dumping G/C/M/126  
 
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  investigations against China according to the general rules provided for in the ADA. Accordingly, 
China repeated its call to  Members who were still using the analogue or surrogate country 
methodology against China to bring their investigating activities into  conformity with the ADA, as 
required. China emphasized that the analogue country methodology was outdated and constituted 
a discriminatory methodology that must be stopped before 11  December  2016; otherwise, 
Members who continue d using this methodology af ter that date would  do so in  violat ion of the 
ADA. China explained that this issue was irrelevant  with regard to  the over -capacity question or 
the MES  issue, and hoped that Members would fulfil their obligations under Article  15 of China's 
Accession Protoc ol. This obligation was clear as it was also clearly stated in China's Protocol that in 
any event Article  15(a)(ii), which allowed Members to use analogue methodology , would expire 
15 years after China's accession.  
18.8.   The Chairperson  thanked delegations for t heir interventions and proposed that the Council 
take note of the statements made.  
18.9.   The Council so agreed . 
18.2  Russian Federation's Trade Measures Affecting Ukrainian Transit of Products  
18.10.   The delegate of Ukraine  referred to the concerns of Ukraine with regard to  the Russian 
Federation's punitive obstacles to trade, an issue well known in the WTO since Ukraine had raised 
concerns on this issue in at least three  Committees under the CTG. The factual bas es of these 
concerns could be found in document  G/C/W/726 of 11  July 2016, circulated at Ukraine's request . 
18.11.   In particular, Ukraine wished to place on record that the Russian Federation had continued 
to expand targeted trade -restrictive measures against Ukrainian goods. A recent  Act of the  Russian 
Federation had extend ed import prohibitions of certain agricultural goods  by 18  additional months . 
This new restriction also extended the scope of the Russian restrictive transit measures to the 
Kyrgyz Republic, a member of the EAEU. Indeed, the new act banned the transit of g oods from the 
territory of Ukraine to the Republic of Kazakhstan and the Kyrgyz Republic , not only for those 
goods to which the Russian Federation applied non -zero import duties set by the Common 
Customs Tariff of the EAEU but also for those goods that com e under the import prohibition 
contained in Resolution No.  778 of 7  August  2014 of the Russian government.  
18.12.   Such sudden and unannounced changes in regulations greatly impacted  upon the transit of 
goods, increased uncertainty , and reduced trust in the tradin g system. Moreover, by simply adding 
new destinations through a Resolution, the negative trade and economic impact of the Russian 
Federation's transit measures affected both the countries of origin and the countries of destination 
of such goods. In short, such impromptu actions , which suddenly expanded the scope of existing 
measures , were in nature highly  undesirable and trade -disrupting.  
18.13.   Ukraine had tried repeatedly to seek clarification from Russia with regard to the facts 
justifying its measures. However , it had been impossible for Ukraine to obtain reliable and clear 
information about how the new, and also the previous measures ( those of January  2016), would 
apply. This not only increased commercial costs but also undermined the trading system , which 
should be  built upon transparency and predictability. Despite the efforts it had made to obtain 
such important information from the Russian Federation,  it had been impossible for Ukraine to 
obtain such information and clarification. The measures listed by Ukr aine in document  G/C/W/726 
constituted significant trade obstacles that negatively impacted upon trade and demonstrated 
Russia's non -compliance with basic WTO  principles.  
18.14.   Ukraine believed that the WTO  Membership had an interest in upholding core 
trade -enabling principles. However, the Russian Federation's disruptive transit restrictions ran 
counter to GATT  Article  V. Ukraine noted that over 75% of Members had ratified the Trade 
Facilitation Agreement (TFA), which promoted strong trade -enabling rules specifi c to goods in 
transit. Unfortunately, the current transit measures applied by the Russian Federation appeared 
also to run counter to the WTO's  TFA. 
18.15.   During the period January -April 2016, Ukrain ian exports to Kazakhstan,  compared to the 
same period in 2015, had decreased on average by more than 48%. Exports to other destinations 
in the region (Armenia, Azerbaijan, Georgia, Kyrgyzstan, Tajikistan, Turkmenistan, and G/C/M/126  
 
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Uzbekistan) had decreased by 40%. Ukraine requested the Russian Federation to provide clear, 
accurate , and complete answers to the important and legitimate written questions raised by 
Ukraine in document  G/C/W/726.  
18.16.   The delegate of the European Union  reiterated the EU's significant concerns with regard to  
the recently introduced trade -restrictive meas ures by the Russian Federation in Presidential Decree 
No. 1, now modified and extended until the end of 2017 by Presidential Decree  319 of 1  July 2016.  
18.17.   With regard to the points and concerns raised by Ukraine she recalled that , at the last 
CTG meeting , the EU had referred to Russia's transit restrictions , which were a matter of concern, 
a concern further increased by the new Russian measures affecting a large group of products for 
which eastbound land trade from Ukraine had  become impossible. These trade re strictions 
appeared to be in violation of important WTO  rules, in particular the freedom of transit provided 
for in GATT  Article  V. Moreover, they appeared also to have a direct economic impact on other 
WTO Members, including the EU, by impeding the transi t of EU  goods to Kazakhstan and the 
Kyrgyz Republic.  
18.18.   The EU called  upon the Russian Federation to abide by the provisions of the multilateral 
legal framework and to allow for non-discriminatory treatment of transit (via the most convenient 
routes) without unnecessary delays, costs, and restrictions, as mandated by GATT  Article  V. The 
EU would monitor the situation very closely and reserved its right to address these measures 
further in the appropriate WTO  fora. 
18.19.   The delegate of Canada  recalled that , during p revious meetings of this Council and the 
General Council , Canada, following the concerns expressed by Ukraine in document  G/C/W/726, 
had indicated that all Members must abide by their WTO  obligations. Canada recognized that the 
Russian Federation's measure s had had an impact on several WTO  Members in addition to Ukraine, 
and therefore that there were systemic implications about which all WTO  Members should be 
aware.  
18.20.   The further broadening of transit restrictions adopted by the Russian Federation 
heightened Canada's concern. He underscored the importance of all Members respecting the ir 
WTO obligations and encouraged Ukraine and the Russian Federation to resolve these issues 
promptly and in line with their respective WTO  obligations.  
18.21.   The delegate of the United  States of America  stated that the additional information 
provided by Ukraine about the further expansion of the Russian transit restrictions intensified the 
concerns expressed by the United States on this issue in past meetings of this Council. Apparently  
the Russian Federation, without credible justification, had cut off virtually all of Ukraine's 
land-based trade to the East. Given the GATT/WTO  provisions governing the freedom of transit, 
the United States considered these measures to be a systemic issue  that was of relevance to all 
Members. He encouraged a thorough discussion of these issues at the next CTG  meeting , 
including, especially, detailed explanations as to why and how these measures were necessary and 
justifiable under WTO  rules.  
18.22.   The delegate o f Turkey  reiterated the concerns of his delegation about the Russian 
Federation's transit restrictions, and urged it to remove those restrictions and enable the 
establishment of the normal course of free transit of goods to and from neighbouring countries.  
18.23.   The delegate of Australia  reiterate d Australia's concerns on this issue. Russia should 
adhere to its WTO  accession commitments and avoid the use of trade -restrictive measures. The 
continued use by Russia of transit restrictive measures might also have a t angible negative impact 
on the trade of many Members, including Australia. Australia had raised these concerns directly 
with Russia and looked forward to continued engagement on these issues with the relevant 
Russian authorities.  
18.24.   The delegate of Japan  joined previous speakers in expressing Japan's systemic concern on 
this issue. The situation should be repealed as soon as possible.  
18.25.   The delegate of the Republic of Korea  also shared the systemic concern expressed by other 
delegations on this issue.  G/C/M/126  
 
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  18.26.   The delega te of Norway  joined previous speakers and likewise expressed its systemic 
concern with regard to this issue. All WTO  Members had the responsibility to act in a transparent 
and predictable manner and to ensure that the ir trade practices  conformed to WTO  rules and  
complied with their WTO obligations.  
18.27.   The delegate of the Russian Federation  indicated that the Russian Federation measures 
were specified in the Presidential Decree, adopted in order to fulfil the Federal Law No.  281 of 
30 December  2006 on Special E conomic Measures. Russia believed that these measures were fully 
WTO-compliant.  
18.28.   The Chairperson  tanked delegations for their interventions and proposed that the Council 
take note of the interventions made.  
18.29.   The Council so agreed . 
18.3  China's Import Tax System o n Personal Effects at the Border – Request from Japan  
18.30.   The delegate of Japan , when registering Japan's interest in China's simplified import tax 
system on personal effects at the border , indicated that China had increased the rate of import tax 
on personal effects on 8  April 2016. Japan recognized that this import tax on personal effects was 
composed of customs duty, import value added tax, and consumption tax. However, in the case of 
certain products , the new rates of import tax on personal effects imposed by China appeared to 
exceed the aggregate amount of customs duty, import value added tax, and consumption tax.  
18.31.   Japan acknowledged that this simplified import tax system on personal effects was 
introduced to facilitate customs procedures relating to hand lu ggage and personal belongings, and 
the laws relating to customs procedures appeared to allow importers to choose this simplified tax 
system or normal customs procedures. Japan asked China if there were any cases where the 
amount of the simplified import ta x on specific products was higher than the aggregate amount of 
ordinary customs duty and other internal taxes for the same product, and whether it was possible 
and straightforward  for importer s to apply for normal customs procedures.  
18.32.   Japan looked forward t o receiving detailed information from China on China's import tax on 
personal effects and to further discussing this system with China. Japan would also address this 
issue at the upcoming TPR of China.  
18.33.   The delegate of China  stated that her delegation would  convey Japan's statement to her 
Capital for consideration.  
18.34.   The Chairperson  thanked delegations for their interventions and proposed that the Council 
take note of the statements made . 
18.35.   The Council so agreed . 
18.4  Date of the next meeting  
18.36.   The Chairperson  informed  the Council that the next meeting of the Council was scheduled 
to take place on Thursday, 17  November  2016. The Agenda would close on Friday, 
4 November  2016.  
18.37.   With regard to closure of the CTG  Agenda he reminded delegations that , according to the 
Rules of  Procedure, meetings of WTO  bodies were convened by a meeting notice (Airgram) issued 
not less than ten  calendar days prior to the date set for the meeting. The agenda itself therefore 
closed one WTO  working day prior to circulation of the meeting notice; in other words, 11  calendar 
days before the date set for the meeting (or, if the date fell on a weekend, the p revious Friday).  
18.38.   The meeting was closed . 
__________