RESTRICTED  
  
G/C/M/116  
 
11 March 2014  
(14-1491)  Page: 1/32  
Council for Trade in Goods    
 
 MINUTES OF THE MEETING OF TH E COUNCIL FOR TRADE IN GOODS 
18 OCTOBER 2013 
 
CHAIRPERSON: H.E. AMBASSADOR DACIO CASTILLO (HONDURAS) 
The meeting of the Council for Trade in Goods (CTG) was convened by airgram WTO/AIR/4205 and 
Corr. 1; the proposed agenda for the meeting was contained in document G/C/W/689. The 
meeting proceeded on the basis of the following agenda: 
 
1   NOTIFICATION OF RE GIONAL TRADE AGREEMENTS .................................................... 2  
2   COMMITTEE ON MARKET ACCESS ISSUES .................................................................... 3  
2.1 Introduction of Harmonized System 2002 Changes into WTO Schedules of Tariff 
Concessions – Collective Request for Waiver Extension (G/C/W/682) ........................................ 3  
2.2   Introduction of Harmonized System 2007 Changes into WTO Schedules of Tariff 
Concessions – Collective Request for Waiver Extension (G/C/W/683) ........................................ 3  
2.3   Introduction of Harmonized System 2012 Changes into WTO Schedules of Tariff 
Concessions – Collective Request for a Waiver Extension (G /C/W/684/Rev.1) ............................ 3  
3   GABON – SCHEDULE XLVII: RENEGO TIATIONS UNDER ARTICLE XXVIII:4 OF 
THE GATT 1994 ................................................................................................................ 4 
4   ENLARGEMENT OF THE EUROPEAN UNION: PROCEDURES UNDER 
ARTICLE XXVIII:3 OF THE GATT 1994 .............................................................................. 6  
4.1   Enlargement of the European Union on 1 January 2007 ................................................... 6  
4.2   Enlargement of the Euro pean Union on 1 July 2013 ........................................................ 6  
5   PHILIPPINES – REQUEST FOR A WAIVER RELATING TO SPECIAL TREATMENT 
FOR RICE OF THE PHILIPPI NES (G/C/W/665/ REV.2) ..................................................... 7  
6   BRAZIL – INDIRECT TAXATION: COND ITIONS TO OBTAIN TAX BENEFITS IN 
VARIOUS SECTORS – STATEMENTS BY THE EUROPEAN UNION AND JAPAN ..................... 8  
7   UKRAINE'S ARTICLE XXVIII NOTIFI CATION – STATEMENTS BY ASEAN; 
AUSTRALIA; CANADA; CHILE; THE EUROPEAN UNION; GUATEMALA; HONG KONG, CHINA; JAPAN; KORE A; MEXICO; NORWAY; AND THE UNITED STATES ............... 10
 
8   RUSSIAN FEDERATION – IMPLEMENTATION OF WTO ACCESSION 
COMMITMENTS – STATEMENTS BY THE EUROPEAN UNION, JAPAN, AND THE 
UNITED STATES ............................................................................................................. 12  
9   EUROPEAN UNION – THE EU RENEWABLE ENERGY DIRECTIVE – REQUEST 
FROM INDO NESIA .......................................................................................................... 14  
10   INDONESIA'S IMPORT RESTRICTING POLICIES AND PRACTICES – REQUEST 
FROM THE EUROPEAN UNION AND THE UNITED STATES ................................................ 16  
11   JAPAN – WOOD USE POINTS PROG RAMME – REQUEST FROM CANADA AND 
THE EUROPEAN UNION .................................................................................................. 20  
12   NIGERIA – LOCAL CONTENT MEASURES IN OIL AND GAS – REQUEST FROM THE EUROPEAN UNION AND THE UNITED STATES .......................................................... 23
 G/C/M/116 
 
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  13   UKRAINE'S COKING COAL IMPORT QUOTA – REQUEST FROM THE EUROPEAN 
UNION AND THE UNITED STATES ................................................................................... 24  
14   UKRAINE – IMPORT TARIFFS ON AU TOMOBILES – STATEMENT BY JAPAN .............. 25  
15   UKRAINE – RECYCLING FEES ON CARS – REQUEST FORM THE EUROPEAN 
UNION ......................................................................................................................... .. 27 
16   RUSSIAN FEDERATION – MEASURES AFFECTING EU IMPORTS INTO RUSSIA 
– REQUEST FROM THE EUROPEAN UNION ...................................................................... 27  
17   EUROPEAN UNION – REQUEST FOR AN EXTENSION OF THE WAIVER FOR 
THE APPLICATION OF AUTONOMOUS PR EFERENTIAL TREATMENT TO MOLDOVA 
(G/C/W/688) ................................................................................................................ 29  
18   NIGERIA – RESTRICTIONS/BAN IMPOSED BY NIGERIA TO IMPORTS OF SEA 
PRODUCTS – REQUEST BY ICEL AND, NORWAY, AND URUGUAY ...................................... 29  
19   CONSIDERATION OF ANNUAL REPO RTS OF THE SUBSIDIARY BODIES OF 
THE COUNCIL FOR TR ADE IN GOODS ............................................................................. 30  
20   ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE IN 
GOODS TO THE GENE RAL COUN CIL ................................................................................ 31  
21   WORK PROGRAMME ON ELECTRONIC  COMMERCE (FACTUAL REPORT TO 
GENERAL COUNCI L G/C/53)  .......................................................................................... 31  
22   OTHER BU SINESS .................................................................................................... 31  
22.1   Room Docu ment RD/CTG/1 ...................................................................................... 31 
22.2   Date of next meeting............................................................................................... 32 
 
When adopting the agenda the Chairperson indicated that, under the Agenda item "Other 
Business", he would update the Council on the informal consultations that had been carried out by 
the delegations of Australia and Japan in respect of room document RD/CTG/1, containing the 
revised format of the "Updating of the listing of notification obligations and the compliance 
therewith as set out in Annex III of the Report of  the Working Group on Notification Obligations 
and Procedures". He would also inform the Council of the date of the next meeting. 
 The European Union asked to be added to the list of sponsors under Agenda item 14: "Ukraine – 
Import Tariffs on Automobiles" and Japan requested to be added to the list of sponsors under 
Agenda item 15: "Ukraine – Recycling Fees on Cars". Chile and Mexico requested to be added to 
the list of co-sponsors under Agenda item 7: "Ukraine's Article XXVIII Notification".  
The agenda was so agreed. 
 
1  NOTIFICATION OF REGIONAL TRADE AGREEMENTS 
1.1.  The Chairperson recalled that, under the wo rking procedures agreed by the Committee on 
Regional Trade Agreements (CRTA), following ad option by the General Council (GC) of the 
Transparency Mechanism, the CTG was to be kept  informed of Members' notifications of new 
regional trade agreements.1 He informed the CTG that the foll owing regional trade agreements had 
been notified to the CRTA: 
 Free Trade Agreement between Mexico and Uruguay (WT/REG345/N/1); and 
 Free Trade Agreement between Costa Rica and Singapore (WT/REG347/N/1). 
 
1.2.  The Council took note of the information provided. 
                                               
1 See documents WT/REG16, WT/L/671, and G/C/M/88. G/C/M/116 
 
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  2   COMMITTEE ON MARKET ACCESS ISSUES 
2.1.  The Chairperson noted that the Committee on Market Access (CMA) had forwarded 
three items for consideration by the Council and suggested that they be taken up in the order in 
which they were listed in the Airgram. 
2.1 Introduction of Harmonized System 20 02 Changes into WTO Schedules of Tariff 
Concessions – Collective Request for Waiver Extension (G/C/W/682) 
2.2.  The Chairperson drew Members' attention to th e collective draft waiver decision circulated in 
document G/C/W/682, made in connection with the introduction of HS2002 changes into 
WTO schedules of tariff concessions. The current waiver decision was contained in document WT/L/873 and would expire on 31 December 2013. The proposed one year extension of the waiver decision contained in document G/C/W/682 was considered at the formal meeting of 
the Committee on Market Access that took place on 7 October 2013 and forwarded to the CTG for 
action. He proposed that the Council approve the draft waiver decision contained in G/C/W/682 and forward it to the General Council (GC) for adoption. 
2.3.  The Council approved the draft waiver decision contained in document G/C/W/682 and 
agreed to forward it to the GC for adoption. 
2.2  Introduction of Harmonized System 2007 Changes into WTO Schedules of Tariff 
Concessions – Collective Request for Waiver Extension (G/C/W/683) 
2.4.  The Chairperson drew Members' attention to th e collective draft waiver decision circulated in 
document G/C/W/683, made in connection with the introduction of HS2007 changes into 
WTO schedules of tariff concessions. The current waiver decision was contained in 
document WT/L/874 and would expire on 31 December 2013. The proposed one year extension of 
the waiver decision was considered at the formal meeting of the Committee on Market Access that took place on 7 October 2013 and forwarded to the CTG for action. He proposed that the Council 
approve the draft waiver decision contained in G/C/W/683 and forward it to the GC for adoption. 
2.5.  The Council approved the draft waiver decision contained in document G/C/W/683 and 
agreed to forward it to the General Council for adoption. 
2.3  Introduction of Harmonized System 2012 Changes into WTO Schedules of Tariff 
Concessions – Collective Request for a Waiver Extension (G/C/W/684/Rev.1) 
2.6.  The Chairperson drew Members' attention to the collective draft waiver decision circulated in 
document G/C/W/684/Rev.1, made in connection with the introduction of HS2012 changes into 
WTO schedules of tariff concessions. The current waiver decision was contained in 
document WT/L/875 and would expire on 31 December 2013. The proposed one year extension of the waiver decision was considered at the formal meeting of the Committee on Market Access that 
took place on 7 October 2013 and forwarded to the CTG for action. He proposed that the Council 
approve the draft waiver decision contained in G/C/W/684/Rev.1 and forward it to the General 
Council for adoption. 
2.7.  The Council approved the draft waiver deci sion contained in document G/C/W/684/Rev.1 and 
agreed to forward it to the GC for adoption. 
2.8.  In connection with the CMA, the Chairperson informed delegations that the CMA used to send 
to this Council two periodic reports concerning the activities it had carried out during the year. This 
practice had its origin in a number of exemptio ns which, at the beginning of the 1990s, were 
renewed almost automatically by the CMA; however, this was not any more the case. Therefore, based on a document prepared by the Secretar iat (JOB/MA/105) and duly considered by the 
CMA in December 2012, at the last meeting of the CMA which was held on 7 October 2013, it had 
agreed not to send any more such periodic repo rts to the Council. He proposed that the Council 
take note of this information. 
2.9.  The Council took note of the information provided. G/C/M/116 
 
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  3  GABON – SCHEDULE XLVI I: RENEGOTIATIONS UNDE R ARTICLE XXVIII:4 OF THE 
GATT 1994 
3.1.  The Chairperson drew the Council's attention to communication G/SECRET/36, dated 
3 October 2013, in which Gabon had requested the Council's authorization to enter into 
negotiations under Article XXVIII:4 of the GATT 1994 for the modification or withdrawal of the 
concessions in its Schedule of Concessions XLVII during a period of 120 days. 
3.2.  He reminded delegations that, according to the Notes and Supplementary Provisions 
Ad Article XXVIII , contained in Annex I to the GATT 1994, the determination for the request of 
authorization under paragraph 4 of that Article should be made within 30 days of the submission of the matter to Members. He invited Gabon to introduce this matter and, in particular, 
document G/SECRET/36 and its Annexes. 
3.3.  The representative of Gabon stated that, in line with Gabon's WTO commitments, his 
authorities were engaged in the process of re-structuring and diversifying the economy and 
improving the business environment through a number of socio-economic and commercial 
adjustments whose effects would soon be tangible. Gabon had consolidated, at the end of the 
Uruguay Round, 100% of its tariff lines; however,  at the trade policy review mechanisms (TPRM) 
that took place in 2001 and 2007, it had been noted that 2,131 of its tariff lines, which 
represented 38% of Gabon's total tariff lines, ha d applied duties above the bound rates. This was 
due to the application in Gabon of the Common Exte rnal Tariff (CTE) of the CEMAC. The average of 
the applied tariff rates for non-agricultural prod ucts was 17.37%, while the bound rates were of 
15.38%. 
3.4.  Therefore, in 2008 Gabon undertook a process to renegotiate its concessions under 
GATT Article XXVIII; however, this process had not been achieved due to the internal institutional changes that took place in 2009-2010. Thus, with the aim to demonstrate its good will and its 
attachment to the multilateral trading system, Gabon was requesting to enter into a re-negotiation 
process with interested Members, over a period of 120 days, under Paragraph 4 of GATT Article XXVIII. 
3.5.  Gabon's objective was to respect its WTO commitments without jeopardizing those efforts 
undertaken within the CEMAC, such that it could continue applying the CET. This was particularly important considering that two CEMAC members were Least-developed countries LDCs, and should not be affected negatively by such changes. Gabon had established a high level working group 
which had prepared two annexes to its request: Annex I contained detailed information about 
non-agricultural products, particularly the current bound rate, the proposed bound rates, and whether or not the bound rates would be increased;  Annex II provided the statistics available, by 
country of origin, for the last three years (2010 - 2012). 
3.6.  He also informed Members that the changes that Gabon intended to introduce to its Schedule 
of Concessions would lead to an increase in the bound rates of 2,159 tariff lines; to a reduction of 
the bound rates of 2,500 tariff lines; and, consequently, to a new bound average of 18.08% for 
non-agricultural products. However, the increase d bound rate of the 2,159 tariff lines proposed 
would not affect the tariff rates currently applied to those lines. In other words, there would be no additional impact upon its trading partners. Gabon's intention had been simply to solve the 
situation as described; its measures did not have any protectionist purpose. He asked the Council 
favourably to agree to this request. Gabon was ready to provide any further clarification and to engage in the renegotiation process with interested Members. 
3.7.  The delegate of the European Union welcomed Gabon's intention to comply with its 
WTO commitments, and indicated that his author ities were in the process of examining the 
document and annexes containing the details of Gabon's request to start renegotiations under 
Article XXVIII:4 of the GATT 1994. However, he asked Gabon about the possibility of extending 
the negotiation period for WTO Members from 120 to 180 days so as to ensure that all Members would have time carefully to revi ew the impact of the proposals. 
3.8.  The delegate of Japan referred to the special circumstances that Gabon had been facing for 
more than a decade and recalled that these were taken into account during the 
NAMA negotiations, where there was convergence among WTO Members to support Gabon to bring G/C/M/116 
 
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  its situation into conformity with its WTO binding commitments. He also thanked Gabon for having 
fulfilled the procedural requirement to its request, including the relevant detailed information in Annexes I and II and, as the EU had done, he as ked Gabon to consider extending the negotiation 
period to 180 days. 
3.9.  The delegate of Australia welcomed Gabon's efforts to bring its Schedule of concessions into 
conformity with its WTO obligations and to address this long-standing issue. Gabon had 
demonstrated transparency in circulating the pr oposed bound rates, the information on their 
increase or decrease, as well as the detailed import statistics. Like others, Australia not only 
supported the request to commence negotiations under GATT Article XXVIII:4 on an exceptional 
basis, but also to extend these from 120 to 180 days given the number of tariff lines involved and the time needed to analyse the proposed changes. 
3.10.  The delegate of the United States appreciated Gabon's efforts, so as to comply with its 
WTO commitments, to correct a long-standing situation concerning its tariff bindings and the 
situation vis-à-vis its CEMAC partners. The US was still reviewing the request and documentation 
provided by Gabon and, like the EU, it believed that extending the negotiation period from 120 to 
180 days would be more reasonable. 
3.11.  The delegate of Mexico recognized Gabon's efforts to implement a number of economic 
reforms and adjust its economy so as to be better prepared to face new global challenges. 
However, Mexico had systemic concerns over Gabon's intention to adjust its rates for almost 4,600 tariff lines in an attempt to increase Gabon's tariff rates and bring these into conformity with 
the CET of CEMAC. Such a broad spectrum contra dicted the spirit of GATT Article XXIV, as it 
referred to a modification of almost 80% of Gabon's tariff lines. This represented an increase of an 
average of 12% with respect to 2,158 tariff lines, while the average of the tariff reductions would only represent 5.3% for 2,500 tariff lines. This contradicted the fundamental WTO principle of 
gradually liberalizing trade. Indeed, the average of Gabon's tariff rate would be increased from 
15% up to 18%. She asked Gabon to clarify what would be the weighted average of the tariff lines before and after the modifications. Given the magnitude of the changes to be introduced, Mexico 
supported the EU request to extend the negotiation period from 120 to 180 days. 
3.12.  The delegate of Canada thanked Gabon for the information it had provided, which would 
ease Members' assessments of its request. Cana da welcomed the intention to respect Gabon's 
WTO commitments and to address a long-standing issue. Canada also supported the EU proposal 
to extend the negotiation period to 180 days. 
3.13.  The delegate of Switzerland thanked Gabon for the detailed information it had provided and 
supported the request to extend the negotiation period to 180 days. 
3.14.  The delegate of Pakistan joined the previous speakers in appreciating the efforts undertaken 
by Gabon to streamline this process and to extend the time-period to 180 days. 
3.15.  The delegate of Korea indicated that, from a systemic perspective, it was not desirable for 
the WTO system to have Members with overtake n binding commitments in their tariff schedule. 
Korea looked forward to Gabon's tariff schedule being in conformity with its WTO commitments and would continue to work together with other Members to solve this issue promptly. 
3.16.  The delegate of China acknowledged Gabon's special circumstances in requesting a 
renegotiation process under GATT Article XXVIII:4. Gabon's request involved more than 
4,000 tariff lines, and China, as a major trading partner of Gabon, was carefully reviewing and assessing it. China recognized the important role that trade played in Gabon's economy, 
particularly as a least-developed country (LDC). China hoped that Gabon's request could be dealt 
with in a WTO-consistent manner, while addressing Gabon's specific concerns. 
3.17.  The delegate of the Central African Repub lic echoed the previous speakers in supporting 
Gabon's request to renegotiate its Schedule of Concessions and thereby to bring it in line with the 
WTO and CEMAC's trade policy and instruments. He  also supported the request to extend the 
negotiation period to 180 days. G/C/M/116 
 
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  3.18.  The Chairperson asked Gabon if it could agree to extend the negotiating period from 120 to 
180 days. 
3.19.  The representative of Gabon thanked delegations for the support and comments they had 
made regarding its request, and indicated that Gabon had no objection to extending the 
time-period for the negotiations to 180 days. 
3.20.  In light of the above, the Chairperson proposed that the Council agree to authorize Gabon 
to start a renegotiation process of its Schedule of Concessions XLVII under Paragraph 4 of 
GATT Article XXVIII during a period of 180 days counted as from 18 October 2013. 
3.21.  The Council so agreed. 
4  ENLARGEMENT OF THE EUROPEAN UNION: PROCEDURES UNDER ARTICLE XXVIII:3 OF 
THE GATT 1994 
4.1.  The Chairperson informed Members that under this agenda item, the Council was to consider 
a request from the European Union with reference to the two enlargements of the European Union 
that took place on 1 January 2007 and 1 July 2013, respectively. 
4.1  Enlargement of the European Union on 1 January 2007 
4.2.  The Chairperson recalled that, at the Council's meeting of 25 March 2013, the EU had 
informed delegations that the negotiations fo llowing the EU's 2007 enlargement concerning the 
accession of Bulgaria and Romania had been fi nalized, that the agreement with the US had 
recently been concluded and would shortly enter into force, and that the agreement with China was at signature stage. Therefore, the EU, in order to finalize all procedures, had requested 
another extension to the period in which Members were allowed to withdraw substantially 
equivalent concessions. 
4.3.  The delegate of the European Union info rmed the Council that the last agreement for 
compensatory adjustment resulting from the EU enlargement of 2007 had been signed with China 
on 9 September 2013, and that once the European  Parliament gave its consent, the EU would 
submit the final report on this issue, as it had done in March 2013 for the EU enlargement of 2004. He also announced that, the day prior to the meeting, his delegation had submitted a request for a 
new extension of the period for the possible withdrawal of concessions, and had requested an 
extra meeting of this Council before the end of th e year to address its request for an extension. 
4.2  Enlargement of the European Union on 1 July 2013 4.4.  As regards the enlargement of the EU on  1 July 2013, and specifically concerning the 
accession of Croatia, the delegate of the European Union informed the Council that, within the 
90-day period following the EU notification circulated by the WTO on 15 April 2013, 12 WTO Members had submitted their claims of interest2. His delegation would hold meetings with 
those Members on 21 and 22 October 2013 with a view to identifying negotiating rights resulting 
from their claims and, where appropriate, to init iate negotiations on compensatory adjustments. 
The methodology applied would be the same as that  used in previous EU enlargements. He also 
indicated that one day prior to the meeting his de legation had not only submitted a request for the 
extension of the period for the possible withdrawal  of concessions but had also requested an extra 
meeting of the CTG before the end of the year to address its request for an extension. 
4.5.  The delegate of the United States confirme d that in July 2013 her delegation had submitted a 
claim of interest with respect to the modifications to the EU and Croatian Schedules of 
Concessions, adding that her authorities would need additional time to assess the likely impact on US trade of the modifications and what compensation requests the US might wish to pursue. The 
US supported a six-month extension of the deadline, i.e. 30 June 2014, for concluding 
compensation negotiations related to Croatia's accession to the EU. 
                                               
2 Argentina, Australia, Brazil, Canada, China, Cost a Rica, Ecuador, India, Japan, New Zealand, the 
United States and, Uruguay. G/C/M/116 
 
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  4.6.  The delegate of the Russian Federation indica ted that her authorities were ready to engage in 
negotiations with the EU on compensatory adjustments under Article XXIV:6 of the GATT 1994, as 
requested by the EU in its Communication dated 15 April 2013 concerning Croatia's accession to the EU. She also informed the Council that, in light of its principal and substantial supplying 
interest, the Russian Federation had officially informed the EU of its willingness to engage in the 
negotiations. 
4.7.  The delegate of Guatemala thanked the EU  for its notification about holding a bilateral 
meeting on this issue. 
4.8.  The delegate of the European Union confir med that his delegation had received a claim of 
interest from the Russian Federation just one day prior to the meeting, and after the 90-day 
period counted as from 15 April 2013, the date of the EU notification  of its enlargement. 
Nevertheless, the EU would contact the Russian delegation on this issue. 
4.9.  The Chairperson proposed that the Counc il take note of the statements and of the 
information provided. He indicated that delegations would be informed via fax of the date of the 
meeting of this Council to consider the EU requests for an extension of the period for the possible 
withdrawal of concessions with regard to the EU enlargements of 2007 and 2013. 
4.10.  The Council so agreed. 
5  PHILIPPINES – REQUEST FOR A WAIVER  RELATING TO SPECIAL TREATMENT FOR 
RICE OF THE PHILIPPINES (G/C/W/665/REV.2) 
5.1.  The Chairperson drew the Council's attention to document G/C/W/665/Rev.3, submitted by 
the Philippines the day before the meeting, which replaced the revised version circulated on 
7 October 20133, and which included a revised request for a waiver and a revised draft waiver 
decision relating to special treatment for rice of the Philippines. He also recalled that at the previous meeting it was agreed that the Council would revert to this issue insofar as the 
Philippines had indicated that it would continue its consultations with the Members that had 
expressed their interest in this matter. 
5.2.  The representative of the Philippines indica ted that the third revision of the request for its 
waiver was the result of extensive and intensive negotiations on this issue. It contained two core 
elements: the provisions included in the draft decision, and the concessions in the form of 
increased minimum market access for interested Members, including country-specific quotas and in-quota Schedules for rice until 30 July 2017. He thanked Australia, Canada, China, El Salvador, 
India, Indonesia, Thailand, the US, and Viet Nam, for having engaged constructively and positively 
in the negotiations, and the EU, Korea, and Japa n, for the support, patience, and understanding 
demonstrated throughout this process. He also thanked the Secretariat for its continued support 
and asked the Council to consider this request positively so as to allow the GC to adopt the waiver 
at its next meeting in November 2013. 
5.3.  The delegate of Indonesia highlighted th e importance and urgency for the Philippines of 
obtaining the requested waiver; it would help to ensure food security for millions of people, and 
particularly since the special treatment for rice of the Philippines under Section B of Annex 5 of the Agreement on Agriculture had expired in 13 June  2012. Indonesia supported this request which 
clearly specified both the exceptional circumstance s of the Philippines, and the conditions of the 
waiver, and urged the CTG to endorse the draft de cision and forward it to the GC for adoption. 
5.4.  The delegate of the United States stated that  her delegation was not in a position to join any 
consensus on this issue as her authorities continued to discuss this and related issues directly with 
the Philippines; the US hoped that Members would reach a prompt solution. 
5.5.  The delegate of India supported the Philippines' efforts in seeking a waiver from its 
obligations under Article IV:2 and section B of Annex 5 of the Agreement on Agriculture (AoA). 
India, as an interested party in this issue, bore  witness to the engagement and flexibility shown by 
the Philippines in finding a solution to this issue,  especially as rice was a commodity having direct 
                                               
3 G/C/W/665/Rev.2. G/C/M/116 
 
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  links to food security, livelihood security, an d the rural development needs of millions of 
developing countries. His authorities had reached an agreement with the Philippines on 23 November 2012 and urged other Members to do so, particularly since the Philippines had been very constructive, despite the urgency, to renego tiate and address this critical situation and to 
institute resilient programmes. India endorsed the waiver request. 
5.6.  The delegate of Australia thanked the Phil ippines for the updated version of the request and 
draft waiver decision and echoed the previous speakers that this issue had been discussed for 
some time in the Council. She noted that the recent version referred to a country specific 
quota (CSQ) which Australia was in the process of negotiating with the Philippines. Australia looked forward to the negotiations being finalized; however, it could not support the waiver request at this stage. 
5.7.  The delegate of Thailand informed delega tions that, in August 2013, Thailand had contacted 
the Philippines with a view to reaching an agreement on the outstanding bilateral issues prior to 
this meeting, but that the response from the Philippines was not satisfactory. Thailand had 
considered the Philippines' exceptionally difficult circumstances with a view to supporting the 
Philippines in pursuing a waiver for special treatment of rice; however, the importance of the unresolved bilateral issues still did not allow Thailand to support the request at this stage. Thailand 
believed it was still possible to conclude the bilateral negotiations, including, among other issues, 
that of Minimum Market Access in Annex A of  the draft waiver decision, contained in 
document G/C/665/Rev.3. Thailand looked forward to reaching a satisfactory conclusion in the near future. 
5.8.  The delegate of Canada thanked the Philippi nes for its engagement on this issue and for its 
openness to adopting comments from Members on  the draft waiver. However, Canada and the 
Philippines had been unable to conclude bilateral negotiations; thus, his delegation was not in a 
position to endorse the waiver request. From a systemic perspective, Canada was also concerned 
that this process went on without resolution, and that the previous extensions of special treatment 
for rice of the Philippines had expired over a year ago. Canada was ready to continue working 
constructively to conclude its negotiations with th e Philippines but, in the interest of transparency 
and considering the outstanding issues, asked the Philippines to show greater flexibility. 
5.9.  The delegate of China reiterated that Chin a shared the concerns of the Philippines regarding 
food security, livelihood, and rural development, and informed the Council that both parties had 
signed a mutually acceptable agreement some months before. He supported the latest version of 
the waiver request and the draft decision. These were the result of intensive consultations with interested parties and Members and provided further clarity on this issue. 
5.10.  The representative of the Philippines thanked Members for their statements and, addressing 
the delegations that had expressed outstanding concerns, indicated that the Philippines would 
continue to engage constructively with them with a view to achieving an acceptable outcome in the 
near future. He also expressed the gratitude of his authorities to those Members with whom an 
agreement had already been reached. His delegation had taken note of all the comments concerning the revised version of the waiver request and draft waiver decision and would give due consideration to all of them during the further consultations. 
5.11.  The Chairperson invited the Council to take note of the statements made and proposed to 
revert to this issue at the next meeting. 
5.12.  The Council so agreed. 
6  BRAZIL – INDIRECT TAXATION: CONDITIO NS TO OBTAIN TAX BENEFITS IN VARIOUS 
SECTORS – STATEMENTS BY THE EUROPEAN UNION AND JAPAN 
6.1.  The Chairperson informed the Council that, in a communication dated 7 October 2013, the 
delegations of the European Union and Japan had requested the Secretariat to include in the 
agenda of the meeting the following item: "Brazil – Indirect Taxation: Conditions to Obtain Tax Benefits in Various Sectors – Statements by the European Union and Japan". G/C/M/116 
 
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  6.2.  The delegate of the European Union reiterated  the concerns of the EU over Brazil's indirect 
taxes aimed at protecting and promoting domestic manufacturing through the use of domestic 
content conditions. The EU had raised the issue of Industrial Product Tax (IPI) applied by Brazil in 
the automotive sector at the last three meetin gs of this Council and of the TRIMs Committee 
meeting, as well as in the Committee on Market Access since October 2011. The issue had also 
been raised during Brazil's Trade Policy Review on 24-26 June 2013. 
6.3.  However, Brazil's policy to use indirect taxes to afford protection to domestic goods and to 
provide prohibited support to exporters had been extended beyond the automotive sector. Brazil 
should refrain from adopting or implementing discriminatory provisions against imported goods 
through indirect taxation. 
6.4.  The delegate of Japan reiterated the concer ns expressed by his delegation at the previous 
meetings of the TRIMs Committee and this Council regarding the assistance programme for the 
automobile sector in Brazil, INOVAR Auto, under which companies meeting certain conditions would benefit from tax reduction incentives for a number of industrial products. The measures 
under the programme were envisaged to protect do mestic industry and would provide advantages 
pertaining to internal taxes on products of specific countries; their implementation might be inconsistent with the relevant WTO provisions. Japan was also concerned by the proliferation of the 
use by Brazil of indirect taxes that extended to other sectors, such as communication network 
equipment and chemical fertilizers; this might impact negatively upon Brazil's business environment. 
6.5.  The delegate of Australia echoed the previous speakers' concerns over the measure affecting 
the automobile sector and recalled that Brazil had assured Members that this was a temporary 
measure. However, after almost two years sinc e Brazil announced the special tax regime, the 
specific details on how it operated were still unclear and were still being discussed internally in 
Brazil. This increased the lack of predictability  and clarity surrounding Brazil's import regime for 
the automobile sector and, as Australia stated at the last meeting of the TRIMs Committee, the use of indirect taxes was benefitting a widening range of goods and sectors. 
6.6.  Australia acknowledged Members' right to tax certain sectors with a view to providing 
assistance to industry; however, the mechanism Brazil had chosen appeared to be designed to entrench distortions in its domestic market and against imported goods. Australia called upon Brazil to refine its measures and to ensure that its market would remain open to fair competition 
from imported goods, consistent with its international obligations. 
6.7.  The delegate of the United States shared  many of the concerns previously expressed; a 
number of issues about Brazil's measures remained unclear. The US believed that more work 
needed to be undertaken at Committee level so  as to enable Members better to understand 
Brazil's tax programmes, and looked forward to working with Brazil and other Members to that 
end. 
6.8.  The delegate of Brazil thanked delegations for their comments on and interest in this issue, 
which had already been raised in previous CTG meetings, in other fora, and also bilaterally, where 
Brazil had provided extensive information on this matter. The Brazilian government was committed to gradually improve the business climate for domestic and foreign investors through the 
rationalization and simplification of its complex and burdensome fiscal system. This was taking 
place gradually and sector by sector through different incentive regimes aimed at fine-tuning some distortions that often and unintentionally surt axed investments and exports. Therefore, the 
measures mentioned at this meeting might be best understood in this context; they constituted an 
effort to align the Brazilian tax system with the practice adopted by most countries, in a transparent and non-discriminatory manner. Most of these measures were essentially neutral from 
a fiscal perspective as they simply displaced a credit along the value of production through tax 
credits to be used at the end of the value ch ain. They were designed to avoid surcharging 
domestic and foreign companies in order to improve Brazil's economic development while promoting technological innovation, protecting th e environment, and attracting a well-qualified 
workforce. Brazil considered these measures not only consistent with the multilateral trading 
system but also beneficial to both Brazilian and foreign companies. Indeed, the INOVAR Auto Programme illustrated how the measures had been benefiting companies from different countries, 
including from the Members that had made statements at this meeting. Brazil remained ready to 
provide additional information to interested delegations either in Geneva or in their capitals. G/C/M/116 
 
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  6.9.  The Council took note of the statements made. 
7  UKRAINE'S ARTICLE XXVIII NOTIFICATION – STATEMENTS BY ASEAN; AUSTRALIA; 
CANADA; CHILE; THE EUROPEAN UNION; GU ATEMALA; HONG KONG, CHINA; JAPAN; 
KOREA; MEXICO; NORWAY; AND THE UNITED STATES 
7.1.  The Chairperson informed the Council that, in a communication dated 7 October 2013, the 
European Union, on its own behalf and that of the delegations of ASEAN; Australia; Canada; the 
European Union; Guatemala; Hong Kong, China; Japan; Korea; Norway; and the United States, 
had requested the inclusion of this item on the ag enda of the present meeting. He recalled that at 
the start of the meeting the delegations of Chile and Mexico had requested to be added to the list 
of co-sponsors. 
7.2.  The delegate of the European Union recalled that, over the course of the previous 
nine months, a significant number of Members had taken the floor, including in this Council, to 
express concern about Ukraine's proposed action under Article XVIII. The message to Ukraine had 
been very clear: it would be in the interest of all WTO Members for Ukraine to withdraw its 
notification. His delegation did not want to continue repeating what it had stated on previous 
occasions; nonetheless, since no serious action ha d been taken by Ukraine, the EU reiterated that 
Ukraine's notification, covering over 300 tariff lines, entailed a serious challenge to the multilateral 
trading system, based on mutual confidence, and would endanger its legal certainty and the value 
of Members' WTO commitments. He reiterated the call to Ukraine to withdraw its notification. 
7.3.  The delegate of Japan endorsed what the EU  had already stated on this issue and reiterated 
the call to Ukraine to withdraw its notification under GATT Article XXVIII. 
7.4.  The delegate of the United States recalled that at every opportunity since September 2012 
an unprecedented number of Members had taken th e floor, including in this Council, to express 
concern about Ukraine's proposed action under Article XXVIII. The message from these meetings 
had been very clear. The US regretted the need to repeat itself but wished to highlight various 
points. 
7.5.  Ukraine had argued that its Article XXVIII noti fication only covered 3% of its tariff schedule; 
however, the 371 tariff lines listed were of critical  importance to Ukraine and those who exported 
there. So the issue was not just a quantitative  one, but a qualitative one. Ukraine had also 
repeatedly argued that it had not indicated intent to withdraw any concession and that it might not 
raise its bound duties to higher levels. However, Ukraine's actions in the course of 2013 had given 
Members good reasons to doubt this. 
7.6.  The US continued to question Ukraine's use of  Article XXVIII if it did not intend to raise its 
tariff bindings. Indeed Ukraine's actions and directions indicated to Members that it intended to 
use Article XXVIII to renegotiate the terms and cond itions of its recent WTO accession. Procedures 
under Article XXVIII plainly stated that "if a concession is to be modified, the proposed modification should be stated in the notification  or circulated as soon as possible thereafter." 
Notwithstanding the fact that Ukraine's notificati on had been filed nearly ten months before and 
that the US had submitted a claim of interest over six months before, Ukraine had yet to meet this most basic Article XXVIII requirement. The lack of respect for the provisions of Article XXVIII only 
added to the fundamental reservations alread y expressed by the US concerning Ukraine's 
proposed action. She urged Ukraine to address al l of the concerns raised by Members and to 
abandon its proposed action under Article XXVIII. 
7.7.  The delegate of Korea joined the previous speakers on this issue as his delegation considered 
that Ukraine's notification would severely undermine the credibility and predictability of the 
multilateral trading system. He asked Ukraine to consider and reflect on Members' different concerns, and to withdraw its notification under Article XXVIII. 
7.8.  The delegate of Canada considered it regrettable to be compelled to raise once again 
Canada's concerns with Ukraine's Article XXVIII notification and its intentions with regard to this 
process. Ukraine's opacity created uncertainty for traders and impacted negatively upon the multilateral trading system. Canada repeated its call to Ukraine to withdraw its notification. G/C/M/116 
 
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  7.9.  The delegate of Australia reiterated the concer ns of his delegation on this issue. Australia was 
disappointed that Ukraine continued to avoid recons idering its notification even when there were 
widespread expressions of concern voiced by the WTO membership. Australia's concerns were well 
known and had been raised in the General Council, in this Council, and in relevant subsidiary 
bodies, on a number of occasions since November 2012. After 10 months, Ukraine had failed to 
respond to Australia's claim of interest. He urged Ukraine to be clear with Members about its intended course of action. 
7.10.  The delegate of Mexico recalled that her delegation and a group of Members had 
persistently and in many WTO bodies expressed thei r concerns over Ukraine's intention to increase 
its tariffs on a number of products. Ukraine's la ck of response to the repeated request to 
reconsider its notification under Article XXVIII created confusion among Members, particularly as 
Ukraine was a Recently Acceded Member (RAM). The role of trade rules was to enhance the 
multilateral trading system through progressive liberalization, but not to weaken it. Mexico joined others in requesting Ukraine to reconsider  its decision to modify its bound tariffs. 
7.11.  The delegate of Malaysia, on behalf of ASEAN, joined the previous speakers regarding the 
systemic implications that could arise from Ukraine's notification to modify its Schedule of 
Concessions. As Ukraine had not initiated nor indicated how it would conduct consultations with 
Members, ASEAN members asked Ukraine to clarify this issue and to withdraw its notification. 
7.12.  The delegate of El Salvador reiterated the concerns of her delegation regarding the lack of 
clarity in respect of Ukraine's Article XXVIII notification, and urged Ukraine to provide more 
information and clarity on this process. 
7.13.  The delegate of Switzerland registered once again the concerns of his delegation about 
Ukraine's Article XXVIII notification and ur ged Ukraine to reconsider its request. 
7.14.  The delegate of Norway shared the concerns  raised by previous speakers on this issue. 
Norway was also interested in knowing what further actions Ukraine would undertake pursuant to 
the claim of interest that Norway had submi tted in December 2012. He urged Ukraine to 
reconsider its request. 
7.15.  The delegate of Iceland echoed the previo us statements on this matter and urged Ukraine 
to abandon its notification under Article XXVIII. 
7.16.  The delegate of Chile reiterated the systemic concerns about Ukraine's intention to 
renegotiate its Schedule of concessions which, in Chile's view, went beyond what was permitted 
under Article XXVIII. Such a request would undermine the predictability of the multilateral trading 
system overall, particularly in the case of deve loping countries. She urged Ukraine to withdraw its 
notification. 
7.17.  The delegate of Israel supported the previo us statements and indicated that Israel looked 
forward to finding a satisfactory solution to this issue in accordance with the WTO rules. 
7.18.  The delegate of Turkey recalled that his delegation had persistently voiced its concerns on 
Ukraine's request to negotiate 371 tariff lines of it s Schedule of Concessions, which impacted upon 
both bilateral and multilateral trade as, from a systemic point of view, it resulted in a "non-disguised" protectionism. In the WTO, tariff bindings ensured transparency and predictability with a view to facilitating trade flows; a reductio n in Members' applied tariffs was also permitted. 
However, Members' commitments did not allow raising these applied tariffs beyond the bound 
rates. 
7.19.  As such, the GATT allowed Members to introduce changes to the bound rates. However, 
GATT Article XXVIII contained detailed procedures to be followed by Members and was designed, 
as a whole, to protect the delicate balance between Members' rights and obligations. Consequently, if a Member wished to modify its obligations, it should also be ready to modify its 
rights through compensatory adjustments. This required a new round of negotiations with all 
Members having a substantial and/or principal supplying interest. G/C/M/116 
 
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  7.20.  Turkey's concerns on this issue were both  bilateral and systemic. Turkey had already raised 
its concerns bilaterally, and continued to believe that Ukraine's intention would damage bilateral trade. From the systemic perspective, Turkey be lieved that Ukraine could be using its proposed 
action in a protectionist manner. Therefore, it called upon Ukraine to withdraw its request. 
7.21.  The delegate of New Zealand echoed the requ est to Ukraine to withdraw its notification and 
shared the systemic concerns raised by other Memb ers on this issue. The lack of transparency on 
this process was in itself a problem and had made it difficult for his authorities to fully assess the 
notification. 
7.22.  The delegate of China echoed the concerns  expressed by other delegations at this meeting 
on Ukraine's Article XXVIII notification and reca lled that, in previous meetings, Ukraine had 
indicated that it would address Members' concerns in a prompt and proper manner. However, 
Ukraine had failed to so. China believed it was essential to preserve the market access 
commitments carefully negotiated by Members, which were essential to preserve the security and stability of the multilateral trading system. China joined other delegations in urging Ukraine to 
reconsider its proposed actions. 
7.23.  The delegate of Ukraine thanked delegations for the views expressed on this issue and 
stated that her country, as had been the case of many other RAMs, had contributed far more than 
many other GATT/WTO Members to trade liberalization. Indeed, Ukraine had liberalized its trade 
regime and allowed the rest of the WTO membership to benefit from this liberalization since 2008, when the economic crisis arrived. However, Ukraine had had to face the crisis and, at the same time, adjust its trade policy to the new agreed market access conditions. Further, Ukraine had, to 
date, been acting according to the WTO legal framework. GATT Article XXVIII was part of this 
framework and could not be considered as a separate rule of the multilateral trading system. Moreover, it was one of the legitimate instruments used by Members in the interests of their 
national trade policy. 
7.24.  The Council took note of the statements made. 
8  RUSSIAN FEDERATION – IMPLEMENTATION OF WTO ACCESSION COMMITMENTS – 
STATEMENTS BY THE EUROPEAN UNION, JAPAN, AND THE UNITED STATES 
8.1.  The Chairperson informed the Council that, in a communication dated 7 October 2013, the 
delegations of the European Union, Japan, and the United States, had requested that the item 
"Russian Federation – Implementation of WTO Accession Commitments – Statements from the 
European Union, Japan, and the United States" be included in the agenda of the present meeting. 
8.2.  The delegate of the United States regretted the need to have requested the inclusion of this 
item in the agenda of this meeting but concerns remained about how the Russian Federation was 
implementing some of its accession commitments. She recalled that, at the previous 
three CTG meetings, in November 2012, and March and July 2013, the US had raised concerns about Russia's automotive recycling fee and the possibly discriminatory treatment of imports. 
8.3.  Since the US still had not received a written response to the questions posed to Russia in 
November 2012 about the recycling programme, she emphasized that the WTO Committee system provided a forum to obtain a basic understanding of other Members' trade policies and to raise concerns outside the context of dispute settlement. In this vein, she expressed that energizing this 
system was a key objective of Members. Therefore,  capitals should understand the importance of 
providing their Geneva-based delegations with the necessary support and information fully to 
participate in the WTO Committee system, including the authority to answer basic factual 
questions. Consequently, her authorities looked forward to receiving answers to the questions 
posed to Russia. 
8.4.  She added that this Council was not the only WTO body in which Russia was not meeting its 
transparency commitments, and cited the cases of Russia's lack of responses to the Annual 
Questionnaire on its import licensing regime and to the questions raised in the TRIPS Committee, the lack of notification of all of its technical regulations, and the failure to provide full information on its Customs Union and Free Trade Agreements (FTAs), as required under the Regional Trade 
Agreements (RTAs) Transparency Mechanism. G/C/M/116 
 
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  8.5.  The US also remained concerned about how the Russian Federation was implementing some 
of its sanitary and phytosanitary (SPS) obligations, such as harmonization with the relevant international standards, the adoption of inspection guidelines in accordance with the Codex 
Alimentarius , while ensuring that SPS measures that were more restrictive than international 
standards were based on scientific evidence and duly accompanied by a risk analysis, and the 
approval of establishments to export to Russia and the Customs Union territory. Some constructive discussion had taken place in this regard, and the US looked forward to continuing its engagement 
with Russia on these issues. 
8.6.  The delegate of Japan stated that since Russia's accession to the WTO, Japan, like other 
delegations, had carefully followed Russia's efforts to implement its accession commitments. Japan 
was particularly concerned about the imposition of recycling fees on vehicles, a measure which 
appeared to be discriminatory against foreign companies, and regarding which Japan, together 
with other Members, had expressed doubts as to  its consistency with WTO provisions. Japan had 
understood that a discussion about the non-discriminatory character of this measure had taken 
place in the Duma. Although Japan had been conducting bilateral consultations with Russia under 
the DSU, Japan hoped that Russia would revise its measure and redress the current discriminatory framework so that imported vehicles could be treated under equal conditions as those locally 
produced. The Japanese industry had also reported that Russia was imposing import tariffs on 
refrigerators which exceeded the bound rates, and that the Japanese producers had been forced to pay excessive charges when compared with Russia's tariff schedule. Japan urged Russia fully to meet and comply with its WTO obligations, including its Schedule of Concessions. 
8.7.  The delegate of the European Union also welcomed Russia's accession to the WTO, a process 
strongly supported by the EU as Russia's WTO membership would further promote the integration 
of its economy into world markets and push its modernization and diversification. However, the 
EU had witnessed a surge of protectionist measur es, which could be of a political nature but 
contradicted Russia's WTO commitments and WTO basic objectives. 
8.8.  After more than one year of continued consultations with Russia to solve these issues, the 
EU had been compelled to launch a request for consultations on the automobile recycling fee. The 
EU was also concerned about Russia's non-respect of its bound tariff, as mentioned by other speakers; this was unfortunate, and not the first time that the issue had been raised in this Council. The EU had been discussing this matter bilaterally with Russia since September 2012; 
some progress had been made with respect to some tariff lines, although on others not only had 
progress not been possible but also some new inconsistencies had appeared, particularly in the new CET published on 1 September 2013, where some tariff lines that should have been reduced 
after the second year of Russia's accession were seen not to have been reduced. This was the case 
for some apparently sensitive products for Russia, such as agricultural products, motor vehicles, and paper. The EU was still waiting for clear indications from Russia as to how it would correct 
these breaches of its WTO accession commitments. He therefore urged Russia to set its import 
tariffs in line with its commitments. 
8.9.  The EU was also concerned by the multiplication of SPS measures against EU products. Apart 
from the import ban of live animals that had been in place for more than a year, new bans had 
been introduced on dairy and meat-ready-to-eat products, potatoes, chilled meat, and potting 
material. The EU would continue to engage with Russia to find solutions to all of these issues, and expected Russia to take the necessary steps to ensure full compliance with its WTO obligations. 
8.10.  The delegate of Ukraine joined the previous  speakers on this issue and urged Russia to fully 
comply with its WTO commitments. 
8.11.  The delegate of New Zealand stated that hi s authorities had an established track record of 
positive and constructive engagement with Russia on veterinary issues, including a treaty-level 
agreement. New Zealand had respected its agreements with Russia, and animal products being exported there complied with these requirements. New Zealand was ready to work with the Customs Union (CU) as it was developing new certification requirements, a challenging process, in 
order to negotiate a robust and pragmatic outcome consistent with WTO obligations. 
8.12.  The delegate of the Russian Federation informed delegations that, since September 2013, 
her country had become a full member of the Agreement on Information Technology (ITA) and G/C/M/116 
 
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  continued building on the principles of the ITA. With regard to the recycling fee regulation, she 
indicated that this was a key step that her country had undertaken towards the implementation of a system for the disposal of out-of-service vehicles. Indeed, the federal budget, based on 
Article 24.1 of Federal Law No. 89-FZ of 24 June  1998, "On Production and Consumption Waste", 
and Governmental Decree No. 870, dated 30 August 2012, "On recycling of wheeled vehicles", 
collected revenues to compensate the costs of the disposal of vehicles, as well as the expenses originating in the measures to create a clean an d safe environment and minimize harm to human 
life and health. These policies were in line with Russia's obligations within the context of its 
accession to the OECD, and were also similar to  the ones applied by many other WTO Members, 
including the US, the EU, and Japan, for the past 20 years. 
8.13.  Following Members' concerns, in spring 2013 the Russian government introduced a draft law 
to the Duma in order to make the recycling fee payable by all companies producing or importing 
wheeled vehicles into its territory, including from the territories of the CU's member states. The calculation of the recycling fee depended on the production year of the vehicle, its weight, and 
other physical characteristics that might affect the costs associated with managing the waste. The 
new law, as approved by the Duma on 15 October 2013, would come into force on 1 January 2014. 
8.14.  As regards the implementation of its tariff rates, Russia had conducted a consistent policy to 
implement its accession commitments, the second step of which had taken place in September 2013 based on Decision No. 45 of the Board of the Eurasian Economic Commission, 
adopted on 2 July 2013. This decision provided for a reduction of import duties on nearly 
5,100 lines of the CTE of the CU. She added that, fo r a number of tariff lines combined duties had 
been replaced by ad valorem  duties. As a result of consultations with some of Russia's trading 
partners, a number of adjustments to the CET would come into effect on 21 October 2013. She 
hoped that these adjustments would address Members' concerns on this issue. 
8.15.  On SPS issues, her authorities were engaged in a process of bilateral consultations with the 
Members concerned; all of Russia's actions were within the WTO legal framework, principles and 
agreements, and based on international standards. Her delegation was ready to continue these 
consultations to address Members' concerns and reach a solution based on WTO rules. She assured Members that Russia had built its policy on the WTO rules and that it would consider all of the comments raised by Members at this Council. 
8.16.  The Council took note of the statements made. 
9  EUROPEAN UNION – THE EU RENEWABLE ENERGY DIRECTIVE – REQUEST FROM 
INDONESIA 
9.1.  The Chairperson informed the Council that, in a communication dated 2 October 2013, the 
delegation of Indonesia had requested that the item "European Union – The EU Renewable Energy 
Directive" be included in the agenda of the present meeting. 
9.2.  The representative of Indonesia highlighted the importance for Indonesia of its trade 
relations with the EU and indicated that Indo nesia-EU total trade in 2012 was USD32.1 billion 
which represented a decrease of 2.6% when comp ared to 2011. Indonesia exports to the EU in 
2012 reached USD18 billion, which represented a decrease of 12.1% when compared to 2011, 
while Indonesia's imports from the EU in 2012 amo unted to USD14.1 billion, or an increase of 
13.1% compared to 2011. However, some EU policies were of concern to Indonesia, among these the EU Directive 28 of 2009 and its amendment on  the promotion of the use of energy for 
renewable sources, which had the dual objective of increasing security of energy supply and 
reducing greenhouse gas (GHG) emission by replacing fossil fuel with renewable fuel. The sustainability criteria therein were aimed at co unting biofuel and "bio-liquids" among the share of 
renewable energy in overall consumption. 
9.3.  Article 17 of the amended Directive defined tw o sets of sustainability criteria for biofuels 
which might be fulfilled commutatively, GHG emissions savings and land-use requirements. Accordingly, the GHG emissions savings derived from  the use of biofuels and bio liquids should be 
at least 60% when produced in installations starting operation on 1 July 2014, and in the case of G/C/M/116 
 
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  installations that were in operation before 1 July 2014, the emissions savings should be at least 
35% until 31 December 2017, and 56% from 1 January 2018. 
9.4.  As regards the land from which the feedstock of biofuel originated, Article 17 of the Directive 
specified three criteria, determined by the status of the land in January 2008; namely, that biofuel 
should not be made from raw material obtained from land with high biodiversity value, nor from 
land with high carbon stock, nor from peat-land. 
9.5.  In Indonesia's view, the calculation and methodology of GHG emission savings threshold had 
been set arbitrarily, and the GHG emission saving  requirements discriminated against biofuel from 
Indonesia given that the transport sector emissions had been included in the calculation of emission savings. Indonesia considered the measure to be inconsistent with GATT Articles I and III and with Articles 2 and 5 of the Agreement on Technical Barriers to Trade (TBT). 
9.6.  Indonesia also considered that its palm oil was a clean and renewable energy for the future; 
in addition, palm oil plantations in Indonesia were efficient given the land usage and the high productivity of oil yields per hectare. Oil world data indicated that palm oil accounted for 4.8% of 
the global land use but produced 34.7% of global oils and fats output. In Indonesia, around 40% 
of palm oil production came from small farmers and provided a critical support to the livelihood of millions of farmers living in rural areas. Indonesia acknowledged the environmental intention 
behind the EU Directive. Nevertheless, it considered that this should not impose trade barriers to 
biofuel products from other Members outside the EU. 
9.7.  The delegate of Argentina supported Indonesia's statement and thanked it for having brought 
this matter to the Council's attention. Indonesian as well as Argentine and other producers and 
exporters of biofuels outside the EU had been re cently affected by the implementation of the 
EU Directive. Argentina had already raised this issue in the TBT Committee and also within the context of the DSU, under which it had engaged in consultations with the EU and other Members 
on EU Directives 28 and 30 of 2009, pertaining to the use of renewable energies. The 
consultations
4 had taken place in June 2012 in Brussels. 
9.8.  The various measures of concern were based on the criteria of sustainability that biofuels 
might comply with in order to fulfil EU member s' requirements on renewable energy and benefit 
from better incentives. Argentina did not object to the use of such criteria, nor with a methodology for calculating the savings and GHG reduction thereof. The biodiesel sector in Argentina had demonstrated environmental sustainability and social importance and welfare; however, Argentina 
found that the threshold of 35% reduction of GHG to consider biofuels as sustainable was 
arbitrary. Therefore, Argentina shared Indonesia' s view that this threshold was arbitrary, not 
scientifically justified, and not based on any recognized international standard. 
9.9.  Likewise, the Communitarian standard set by default a value 31% for soya biodiesel. This 
was even below the 35% threshold, and also required a certification process that would be administratively burdensome and costly for the Ar gentine producers of biodiesel. His authorities 
had called the EU to update this value, contained in the annexes of the Directive and as provided 
for by Article 19 of Directive 28 of 2009, and to correct it so as adequately to reflect recent technical and scientific progress. Indeed, the values for soya biodiesel reflected therein did not correspond to reality; they had not considered the Argentine production system in support of 
which some studies had been submitted. 
9.10.  Argentina had been arguing that both th e European standard framework, including the 
modification proposals as well as the investigations on possible dumping, and the alleged subsides 
encouraged by the European industry, were aimed at protecting an oversized industry that was 
unable to compete in an efficien t manner with similar industries from other countries, such as 
Argentina and Indonesia. The European industry la cked the vertical integration which could enable 
it to compete effectively; this had had an impact on the request to adopt measures that, in the 
WTO context, went beyond the EU commitments. 
9.11.  The delegate of Malaysia supported the previous statements and reiterated what his 
delegation had expressed at the last TBT Committee meeting in June 2013, namely that the 
                                               
4 DS459. G/C/M/116 
 
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  directive discriminated against palm oil and that his authorities supported the livelihood of 
Malaysian small farmers. 
9.12.  The delegate of the European Union than ked Members for having expressed their concerns 
on the Renewable Energy Directive, which set out sustainability criteria for biofuels and particularly 
on GHG emission savings (35% GHG savings by 2017) , land with high biodiversity value, and land 
w i t h  h i g h  c a r b o n  s t o c k s .  O n l y  b i o f u e l s  m e e t i n g these criteria could be considered for the 
EU targets of 20% of the share of renewable en ergy by 2020, and 10% in the transport sector, 
and could benefit from EU memb er States support schemes. 
9.13.  Compliance with these criteria was checked by EU member States, but alternatively the 
producers could use private certification schemes recognized by the Commission. To date, there were 14 such schemes recognized by the Commission, and the vast majority of EU and foreign 
operators had opted for these types of certificates. 
9.14.  The EU Commission was currently in the process of updating the GHG emission saving 
default values specified in the Directive so as to facilitate compliance with the saving criterion. This 
was being done in an objective and non-discrim inatory manner and based on the best available 
data, taking into account inputs from stakeholders. The Directive was also being amended to address GHG emissions from indirect land use changes (ILUC). The proposal was to limit the 
amount of first generation biofuels that could count towards the Renewable Energy Directive 
targets to 5% of overall energy consumption in transport. The Commission had also proposed to 
provide additional incentives for advanced biofuels from non-food crops that did not create an additional demand for land. The legislative proposal had not yet been adopted as it was being 
considered by the Council and the European Parliament. The 35% GHG saving threshold reflected 
the EU level of environmental protection to be pu rsued; biofuels did not need the emission savings 
threshold as they were considered as biofuels and could be marketed freely. 
9.15.  The Council took note of the statements made. 
10  INDONESIA'S IMPORT RESTRICTING POLICIES AND PRACTICES – REQUEST FROM 
THE EUROPEAN UNION AND THE UNITED STATES 
10.1.  The Chairperson informed the Council that, in a communication dated 7 October 2013, the 
delegations of the European Union and the United States had requested that the item "Indonesia's 
Import Restricting Policies and Practices – Requ est from the European Union and the United 
States" be included in the agenda of the present meeting. 
10.2.  The delegate of the United States regretted being compelled once again to express concerns 
about the trade policy trends in Indonesia. Indonesia's response to the US were disappointing. 
Indeed, Indonesia's government and legislature continued to adopt new trade and investment 
restrictions, including import licensing requirements, trading rights limitations, pre-shipment 
inspection requirements, standards requiremen ts, local content and domestic manufacturing 
requirements, and export restrictions, including taxes and prohibitions. These requirements 
affected a broad range of sectors, including agriculture, energy, information and communications 
technology, consumer goods, such as toys, and te lecommunications. Individually, each policy was 
a burden to traders; together, they created a co mplex web of approvals that were disruptive and 
made Indonesia's market impenetrable and less attractive to foreign investment. 
10.3.  The US had raised and would continue raising all of these concerns in the appropriate 
WTO committees, including the Import Licensing (IL), Agriculture, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS), Customs Valuation (CV), and Trade Related 
Investment Measures (TRIMS) committees. Rather  than addressing the concerns, Indonesia had 
continued to restrict and, in some cases, to close its market by making its regulations more complicated and disruptive. 
10.4.  The US was also concerned about the lack  of transparency in Indonesia's trade regime. 
Despite the US delegation's long-standing request for Indonesia to notify its pre-shipment inspection requirements, the country had so far failed to do so. Concerns also existed as to the number of instances where the authorities had failed to notify measures related to technical 
regulations, conformity assessment procedures, and sanitary and phytosanitary measures, as G/C/M/116 
 
- 17 - 
 
  required by the relevant agreements; for instance, the US had learned of new testing 
requirements for information technology products that had been adopted in May but applied retroactively to March 2013. This kind of situation was completely unacceptable. 
10.5.  The US had extensive questions about Indonesia's ILPs beyond those related to the 
measures already pursued through the DSU, and the whole IL regime's relationship to the 
Agreement. Such complicated system-wide licensing requirements indicated that Indonesia's market was closed for business. 
10.6.  Concerns also remained about local content requirements in a growing number of sectors, 
including telecommunications, mining, oil and ga s sectors. These had been expressed in the 
TRIMs, and in Indonesia's Trade Policy Review  (TPR). Instead of having addressed these 
measures, Indonesia had expanded their use to new sectors, including to the raw materials, 
equipment and merchandise for sale at restaurant , and retail franchises. Additionally, there were 
concerns about the implementation of the loca l data centres requirement in the Electronic 
Transactions Law and associated Presidential Regulation. 
10.7.  The US continued to monitor closely the implementation of the 2012 Food Law, which 
seemed to provide the legal framework to achi eve self-sufficiency through various means, 
including through various import and export regula t i o n s ,  a s  w e l l  a s  b y  m a n a g i n g  f o o d  s u p p l y ,  
reserves, and price. In particular, the Food Law appeared to allow food and agricultural imports 
into Indonesia only when national demand could not be met domestically. This law seemed to spread to all food products and included policies similar to those mentioned when the WTO membership had expressed concerns regarding horticulture and livestock. She urged 
Indonesia properly to notify these and any othe r implementing measures to the WTO, and to 
ensure their compliance with WTO obligations. 
10.8.  The draft Laws on Industry and Trade,  currently being discussed by the Indonesian 
Parliament, were also being monitored by her auth orities as these contained certain aspects whose 
implementation could lay the framework for further trade-restricting measures. For instance, the draft Trade Law included provisions to promote th e use of national standards over international 
standards, and potentially restricted or prohibited  trade in goods and services. In turn, the draft 
Industry Law included provisions for local content and technology transfer requirements. 
10.9.  Indonesian officials openly acknowledged th at the government's policies were intended to 
promote domestic production, create jobs, and mo ve the Indonesian economy up the value chain. 
The US acknowledged these objectives, but considered that closing the market, as had been 
demonstrated, was not an effective way to achieve them. Indonesia was a market of huge potential, with an economy of 240 million people and more than 60 million low-income Indonesian 
workers projected to join the middle class in the coming decade, significantly increasing already 
strong consumer demand. Indonesia had also sought a larger leadership role on the international stage; however, Indonesia's policies to restrict market access were not in line with those of a 
country seeking to take a global leadership role in trade. 
10.10.  She encouraged Indonesia to re-evaluate its laws and regulations with a view to ensuring 
that they were in line with its WTO commitmen ts, including those related to market access, 
non-discrimination, and transparency, and to eliminate its trade restrictions in all other areas of 
concern. 
10.11.  The delegate of the European Union expr essed the concerns of his delegation by the 
direction of overall Indonesian trade policies, which were becoming more restrictive and making it 
more difficult for European goods to be exported and enter into the Indonesian market. Many of 
the issues had already been raised at previous CTG meetings and also in other WTO committees where Indonesia had failed to provide satisfactory answers to Members' repeated concerns. 
WTO obligations implied that import conditions should meet the transparency and 
non-discrimination principles to prevent trade dist ortions. However, the new Indonesian legislation 
and regulations introduced several burdensome requirements that would have and were having a negative impact on trade flows. These had led the EU Industry to reconsider the Indonesian 
market and its potential as the existing EU expo rters were facing growing problems, and the new 
ones were simply avoiding the Indonesian market  as they found the regulatory environment too 
complex and cumbersome. This did not benefit either Indonesia or the EU, and went against the G/C/M/116 
 
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  G-20 pledge to keep trade as open as possible and refrain from introducing trade protectionist 
measures and rollback existing ones. 
10.12.  The EU also expressed concern in relation to Indonesia's extension of "emergency 
measures" or "food-safety" related policies into trade restrictions, and to the increased use of 
import restrictions to promote the use of national standards (SNI) over international standards, 
which imposed additional costs and delays both to  exporters and importers. Import restrictions 
could be imposed for general concerns, such as avoiding or preventing parallel trade, or for food 
and health safety issues; however, these should  not be cumbersome and complicated but rather 
automatic, preferably, and WTO-compliant. 
10.13.  The lack of transparency, consultations,  and information in the Indonesian regulations 
created uncertainty and ambiguity for exporters, importers, and investors, particularly as regarded 
the proposed draft Laws on Industry and on Trad e, which could impact and disrupt investment and 
trade if adopted in their current form. The EU had particular concerns on various trade issues such as pre-shipment inspection (PSI), ports restrictions, import licensing procedures (ILPs), 
horticultural products and sugar, cosmetics and to ys, and the impact of Food Law and draft laws 
on Industry and Trade. 
10.14.  As regards Ministry of Trade Regulation 83/2012 extending pre-shipment controls, port 
restrictions, and import licenses for over 500 categories of products, an "emergency measure" 
introduced three years ago, he asked Indonesia to explain why an "emergency measure" needed to be extended, and what the reasons were for no longer allowing European companies to benefit from priority lane status, as had been the case under the previous two regulations on these issues 
(Regulations 56 and 57 of 2008 and 2010, respectively). As regards Ministry of Trade 
Regulation 27/2012, which imposed new licences for imports related to production ("API-P"), and ILPs related to distribution ("API-U"), the EU aske d for clarification as to whether or not Indonesia 
had considered changing its licensing regime to an automatic one, which would involve less time 
and money for importers. 
10.15.  As regards Regulations 42 and 43, which restricted horticulture imports to a limited 
number of ports, excluding Jakarta, Indonesia wa s asked to clarify when the capacity of the 
Jakarta Tanjung Priok Port would once again be considered appropriate to import directly from Europe. Concerning sugar, salt, fats and the regulation on health warning on food packages, he indicated that this requirement would prove to be  onerous for food companies and not compatible 
with existing international standards on food labelling and packaging information, as Indonesia 
would be the sole country in the world to requ ire producers to affix health messages on food. 
10.16.  There were also complaints from companies producing and exporting cosmetics to 
Indonesia about the requirement to subject their im ports to pre-shipment inspections (PSI). This 
increased the administrative costs and delayed the shipments. It was understandable that Indonesian regulators required assertion of health and quality requirements; however, the EU did 
not consider that PSI would protect the Indonesian people, particularly as previous experiences 
abroad had demonstrated that PSI focused more on administrative aspects of the invoicing and packing list instead of on the qu alitative and regulatory aspects. 
10.17.  One specific concern in the Indonesian decree referred to the introduction of additional 
testing and approval requirements for imported  toys. Even though a toy had been produced 
following the internationally recognized standards (ISO, ICE), it still had to be tested through shipment sampling on every shipment of toys. This would not only delay customs clearance but 
also imply additional certification costs for every shipment, especially if certification for the same 
product category needed to be repeated. Indonesia was requested to clarify the guidelines relating to this Decree and to notify them, as the Decree was expected shortly to come into force. 
10.18.  The Indonesian Food Law and the draft Laws  on Industry and Trade were also of concern 
as these might impact trade. The Food Law cont ained provisions which might negatively impact 
EU exports of food products to Indonesia, such as  conditioning imports and exports of food to the 
national needs and labelling requirements "during entry". In turn, Article 33 of the draft Law on 
Industry would require mandatory use of national standards, whether to produce, import and/or 
disseminate industrial goods or services. Moreover, various articles related to issues which would directly or indirectly affect trade and investment, such as restrictive competition policy, restricting G/C/M/116 
 
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  public procurement, imposing local content requir ements, and the possibility for the government to 
take over strategic sectors. On the draft Law on Trade he expressed that it appeared to favour 
local products over foreign ones, in contradiction with GATT Article III, and that penalties therein for non-compliance appeared to be unusually severe. He asked Indonesia to clarify the legal 
process and the plans for adoption of these draft Laws. 
10.19.  The delegate of Australia reiterated the concerns expressed at previous meetings on 
Indonesia's import restricting policies and practices which were of significant interest to Australian 
exporters; his delegation looked forward to working with Indonesia to resolve these issues. 
10.20.  The delegate of Canada echoed the concer ns previously expressed by the US and the EU; 
Canada, as an exporter of high quality agriculture and agri-food products, such as horticultural 
products, animals and animal products, had a systemic interest in ensuring that measures do not 
impede or inhibit trade. Canada was concerned that Indonesia applied new ILPs to a continuously 
growing array of products. Indonesia should provide the list of HS tariff lines concerned in order to 
determine to what extent Canada's exports to Indonesia were affected, and abide by its 
WTO commitments, particularly with regards to ILPs. 
10.21.  The delegate of Thailand stated that Indonesia's import restricting policy adversely 
affected exports of Thai fruits, vegetables, and horticultural products to Indonesia. He sought 
confirmation from Indonesia on the announcement made by a local newspaper, that Indonesia had 
removed import quotas for 38 horticultural products, set reference prices to regulate imports of shallots and red chillies, and that it also intended to reduce the number of restricted products. He reminded Indonesia that any import restricting policy and practices should be in conformity with 
Members' WTO obligations, therefore transparent, predictable, and preventing trade distortions. 
Thailand would follow up this issue closely, and ho ped to find an appropriate solution to this matter 
in due course. 
10.22.  The delegate of Japan recalled that, at previous meetings of this Council, and of the 
Committee on ILPs, his delegation had repeatedly raised concerns on this matter. Japan continued 
to follow this issue and encouraged Indonesia to improve the procedures and to ensure their 
consistency with the relevant WTO Agreements. 
10.23.  The delegate of Uruguay also expressed the concerns of his delegation on this matter 
which affected mainly exports of  fresh fruits into Indonesia. 
10.24.  The delegate of New Zealand shared the concerns of the US and the EU regarding 
Indonesia's restrictive requirements for imports and, in particular, Indonesia's measures in relation 
to animal and horticultural products, which had had a substantial impact on New Zealand's (NZ) trade. Since their introduction, NZ exports to  Indonesia of beef and a range of horticultural 
products, including apples and onions, had fallen by up to 80%. Even though Indonesia had 
recently made changes to its ILPs for agricultural products, NZ noted that these had not fundamentally altered the regime's essence, which remained opaque, burdensome, and more 
trade-restrictive than necessary; he encourag ed Indonesia to undertake further reform. 
10.25.  In addition to the licensing scheme, NZ had also experienced difficulties with the manner in 
which Indonesia administered its PSI requirements. In particular, Indonesian authorities had accredited an insufficiently resourced entity exclus ively to undertake PSI activities in NZ, and this 
was causing further delays and difficulties for NZ's exports to Indonesia. His delegation would 
continue following Indonesia's responses to the questions raised at this meeting. 
10.26.  The delegate of Indonesia thanked Members for their continued interest in 
Indonesia's import policy on a range of products and, as an initial reaction, indicated that 
Indonesian Regulation 27/2012 on the importers' identification number was not an ILP but rather a PSI, and not intended to restrict imports but rather to establish a monitoring mechanism to ensure 
compliance of all imported products with Indonesian standards and technical regulations. In this 
regard, he highlighted Indonesia's authority to mo nitor the trade flows and to inspect all products 
imported into its territory. 
10.27.  Concerning Law No. 18/2012, he informed the Council that it was still being amended by 
the Parliament to reflect internal and external circumstances and indicated that, foreseeing the G/C/M/116 
 
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  development of food needs, in the next 20 years imports would be a very important source to fully 
achieve food security objectives. 
10.28.  As regards Members' concerns on Indonesi a's policy on oil and gas, he indicated that 
Law No. 22/2001 was still being revised in the Parliament to reflect the developmental needs in 
the sector and that, following a decision of the Constitutional Court, some parts of this Law had 
been revoked. On imports of horticultural products, meat and meat products, he stated that constructive discussions had taken place in Jakarta on these issues and that his authorities were 
committed to address Members' concerns. 
10.29.  He also indicated that, despite the concerns expressed by some Members regarding 
Indonesia's importation policy, current data showed that, during the last 3  years, Indonesia's trade balance had faced an increasing deficit. In this regard, he mentioned that imports from the 
US had increased by 8.2%, from Japan by 18.13%,  and from the EU by 13.1%. The increase in 
such exports proved that Indonesia did not restrict market access to imported products. 
10.30.  Finally, he reaffirmed Indonesia's commitment to work with other Members in the WTO, as 
well as in other fora, to address Members' concerns while taking into account 
Indonesia's' developmental needs. His country as  a developing country considered the WTO of 
utmost importance. This was why it had proposed to host the WTO MC9. 
10.31.  The Council took note of the statements made. 
11  JAPAN – WOOD USE POINTS PROGRAMME – REQUEST FROM CANADA AND THE 
EUROPEAN UNION 
11.1.  The Chairperson informed the Council that, in a communication dated 7 October 2014, the 
delegations of Canada, the European Union, and the United States, had requested the Secretariat 
to include in the agenda of this meeting an item entitled: "Japan – Wood Use Points Programme – Request from Canada, the European Union, and the United States". 
11.2.  The delegate of Canada thanked Japan for its responses to the questions circulated in 
document G/C/W/681, and indicated that, despite the information Japan had provided, Canada 
continued to have concerns about the structure and operation of the Wood Use Points 
Programme (WUPP) and its potential impact on Canadian exporters of forest products. He 
therefore posed further questions to Japan, partic ularly concerning the publication of the updated 
list of eligible products that Japan had announced, indicating whether or not foreign products were listed therein and, if not, the reasons for not including them. 
11.3.  Japan's explanations that the same criteria would be used to assess the eligibility of all 
wood products, whether local or foreign, had not clarified whether or not all the products that were currently on the list of eligible products were submitted by individual companies or industry 
associations in Japan, with all the required documentation (i.e. growing forest data, economic 
impact assessment, etc.). It was not clear why the Forestry Agency (FA) had created a separate Funding Management and Administration Committee (FMAC) to decide on eligibility of imported 
species under the WUPP. The mechanisms that ensured the uniformity of application of the criteria 
by the various local FMACs and the Prefecture Counc ils were also unclear. In this regard, he asked 
when Japan would publish a list of members of these local entities indicating the organization they represented. 
11.4.  Japan's responses had referred to a "clearer guidance" on criteria and procedures to be 
issued in October 2013; however, there was no clarity on the main differences with the previous guide and no explanation about the lack of publication of the new one. 
11.5.  One of the stated objectives of the WUPP was to contribute to proper management and 
sustainability of forests and the development of rural areas; Canada believed that the criteria relating to the growth of a forest applied mostly to planted forest but did not transmute to natural, 
mature, and bio-diverse forest. Japan should explain the rationale for having used "growing forest" 
as criteria for this programme, instead of having used internationally agreed criteria and indicators for sustainable forest management, such as the framework of the Montreal Process and the Santiago Declaration, to which Japan was a signatory. The information quantifying the economic G/C/M/116 
 
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  impact of local and foreign wood species and products in rural Japan was one of the criteria for 
eligibility; however, it was not clear how and why the domestic impact criteria was not a de facto discriminatory criterion for foreign wood products. 
11.6.  Japan had responded that all foreign goods were eligible for redemption with wood points, 
as long as they were selected as a result of the public application process. Japan should better 
explain how a foreign good could qualify as eligible and if the criterion was that the product might be regional. Additionally, Japan should indicate when it intended to notify its Programme to the 
WTO, confirming if, as suggested by some medi a, the total incentive amount that a consumer 
could receive was 600,000 Wood Use Points, equivalent to 600,000 yen, and indicate if it would extend the Programme beyond 31 March 2014. 
11.7.  Regarding the recognition of Canadian species under the WUPP that the Canadian wood 
industry would submit in the near future, Cana da expected that these would be treated and 
reviewed promptly and favourably. Canada would co ntinue working with Japan to ensure that the 
WUPP operated in a manner that would not disa dvantage Canadian companies and expected 
detailed responses from Japan to the questions posed. 
11.8.  The delegate of the European Union supported Canada and recalled that the EU had already 
expressed its concerns on the application of th e WUPP at the last CTG meeting in July 2013. The 
EU welcomed the initiatives aimed at promoting the use of sustainably produced goods and 
acknowledged the general objective of the programme. However, concerns existed about the possibly discriminatory nature of certain provisions therein. There was a particular concern with regard to the specific reference to "local wood pr oducts", which in the view of the EU could give 
the impression that the scheme was only targeting domestic wood products. Moreover, domestic 
wood was eligible for points under the programme by default, whereas non-Japanese wood could be included but only after application. This led to a discriminatory application of this programme 
against foreign producers. 
11.9.  The Japanese authorities required scientif ic proof of the sustainable development of the 
concerned species in the country of origin; howeve r, the Forest Stewardship Council (FSC) and the 
Programme for the Endorsement of Forest Certification, the EU systems according to which forests 
in Europe were managed, audited, and labelled, were not sufficient. Japan should specify the rationale of this requirement and provide guidance on how the "sustainable development" criterion for imported wood species could otherwise be fulfilled. In the case of Japanese species, the 
evidence was already available at the Forestry Agency; thus, local producers had a clear 
advantage. The programme also required the wood species to "have clear and synergetic effects on the local economy", a criterion difficult to interpret and satisfy for foreign producers without 
further guidance. 
11.10.  The Japanese Committee of the Forestry Agency (the so called Fund Management 
Committee) had decided on 9 October 2013 to reject 8 applications made by the Finnish, Swedish 
and Austrian wood industries, and asked for additional information allegedly necessary to make a 
decision. This rejection added to the existing co ncerns regarding the discriminatory nature of the 
WUPP, notably whether it would impact the Japanese wood market, and whether it represented a further loss of market share of EU wood products  in Japan. All these concerns had already been 
conveyed to Japan by the EU delegation, but unfortunately the information it had provided to date 
did not alleviate the situation. Japan should also clarify the implementation provisions of the WUPP, at the same time offering reassurance that it would not discriminate against EU wood 
exporters. Before its entry into force, Japan should also indicate whether or not this Programme 
had been notified to the WTO TBT Committee. 
11.11.  The delegate of the United States in dicated that Japan's implementation of its 
WUPP continued to concern her authorities. The US had posed questions about it to Japan on 
several occasions, including at its recent trade policy review in 2013. However, Japan had failed to address the specific concerns. She urged Japan to provide further information on this programme, particularly on how foreign wood products could qualify for it on an equal basis to domestic 
Japanese wood products. Japan should also indica te how a foreign supplier of foreign wood could 
become eligible for the Japanese WUPP, describing also the procedure whereby foreign suppliers could receive the "local wood (chiiki-zai)" designation that appeared to be the key criterion 
necessary to join the programme, and at the same time clarifying if, in order to qualify for the 
programme, foreign suppliers would be required to have a local presence in Japan or in specific G/C/M/116 
 
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  Prefectures, indicating the legal requirements in place to determine whether wood qualified as 
"local wood (chiiki-zai)", and describing which governments or organizations were able to determine whether wood qualified as "local wood (chiiki-zai)". 
11.12.  The delegate of Malaysia thanked Japan for its responses, circulated in 
document G/C/W/686, and echoed Canada's statement on this issue; the delegate of Indonesia 
expressed that his country, as one of the bigg est exporters of wood and wood products was 
concerned about the Japanese measures in the WU PP; and the delegate of New Zealand expressed 
the view that, as an exporter of wood, his country was concerned about any measures that would 
discriminate against imported wood, either by design or operation. He encouraged Japan to address Members concerns about the WUPP. 
11.13.  The delegate of Japan thanked delegations for their statements and recalled that at the 
July 2013 meeting of the Council Japan had take n note of the concerns on the WUPP. Japan 
believed that its responses5 to the questions posed by Canada had addressed many of these 
concerns. The objective of the WUPP was, through pr omoting wood use, to contribute to a proper 
management and forest conservation, prevention of global warming, and promotion of a 
recycling-oriented society; it would also contribute to the development of rural areas. The eligibility criteria for woods were set out in the Programme and the same criteria applied to both 
domestic and foreign wood. The operation of th e WUPP ensured that foreign and domestic woods 
would be treated in a non-discriminatory manner, consistent with WTO rules. 
11.14.  A criteria in the WUPP required that the wood should be of a tree species whose volume 
had increased on a country basis effectively and efficiently to achieve the objective of the 
programme. The "Guideline on Application of Tree Species of Eligible Woods and Eligible 
Construction Method", recently published, provided examples of how a tree species would meet the condition of "increasing in volume on a country basis". Such examples included the objective 
and scientific comparison of data on the annual amount of growth and the annual amount of 
logging of the wood species. If the former amo unt exceeded the latter, the wood species could 
clear the condition. 
11.15.  He reported that there were several applications for tree species that had already been 
submitted from both Japanese and foreign suppliers; these were currently under examination by the Committee on Fund Management and Administration. As to the information that several applications had been rejected, he indicated that this had not been the case, that applications 
continued to be examined and that there were  cases where some information was missing. 
11.16.  Referring to some of the comments made at this meeting, he indicated that any company 
or entity, whether Japanese or foreign, could apply to the WUPP in order for wood to become 
eligible under the programme. Indeed, upon app lication the Committee on Fund Management and 
Administration would examine the eligibility of wood  on the basis of the non-discriminatory criteria 
set out in the Guidelines. He clarified that foreign suppliers were not required to have or 
demonstrate local presence in Japan or within any specific Prefectures for its wood to be qualified 
as eligible. 
11.17.  As regards the legal requirements in pl ace to determine whether wood would qualify as 
eligible, he indicated that the legal nature of the requirement, as set out in the Guidelines, was not 
based on a specific Japanese Law but rather on the administrative notice of the Director-General of 
the Forestry Agency. Concerning the question of which governments or organizations could determine whether wood qualified as eligible, he responded that the Committee on Fund 
Management and Administration was responsible for the consideration and determination of 
eligibility, after consultation with the Forestry Agency. Of the concerns about the name "Chiiki-zai" for eligible wood, he clarified that this word meant "eligible wood" in the programme, and that it 
was not limited to domestic or local wood but included also foreign wood. 
11.18.  Regarding the concern on the "two track system" for the designation of the wood products 
eligible under the programme, and the number of designated woods to be automatically eligible under the WUPP, he explained that certain tree sp ecies and construction methods were illustrated 
as examples as, based on objective data, those tree species and construction methods had already 
been proven to meet the criteria. However, other tree species and/or construction methods 
                                               
5 Document G/C/W/686. G/C/M/116 
 
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  fulfilling the criteria and procedures could also be designated as eligible, regardless of their foreign 
or domestic origin. The approved tree species and/or construction methods would be published soon. 
11.19.  On the comment made about the criteria requiring demonstration that woods originated 
from countries whose forest resources were increasing in volume, he reiterated that this condition 
was required effectively and efficiently to achieve the specific objectives of the programme, such 
as to contribute to proper management and conserva tion of forests, prevention of global warming, 
and promotion of a recycling-oriented society. Japan believed these objectives were consistent 
with the internationally agreed principles and were part of Japan's contribution to face global environmental challenges. To conclude, he recalled that bilateral consultations had taken place between Japan's Forestry Agency and interested Members. Japan was ready to provide any further 
information required by Members. 
11.20.  The Council took note of the statements made. 
12  NIGERIA – LOCAL CONTENT MEASURES IN OIL AND GAS – REQUEST FROM THE 
EUROPEAN UNION AND THE UNITED STATES 
12.1.  The Chairperson informed the Council that, in a communication dated 7 October 2013, the 
delegations of the European Union and the United States had requested the inclusion in the 
agenda of the present meeting an item entitled "N igeria – Local Content Measures in Oil and Gas". 
12.2.  The delegate of the United States recalled that, for almost two years, the US, the EU, and 
other WTO Members had been attempting to engage with Nigeria in the WTO TRIMs Committee on 
certain measures which appeared to require the use of local content in Nigeria's oil and gas 
industry. In September 2011, in document G/TRIMS/W/89, the US had posed written questions to 
Nigeria, and at the October 2011 meeting of that Committee it had also described its understanding of the Nigerian measures. However, the delegation of Nigeria had indicated that it 
had neither received instructions from its capital, nor answers to the questions posed to it. Despite 
the repeated calls by the US at the Committee m eetings in May and October 2012, and in April and 
October 2013, Nigeria had not yet responded. The US believed that the WTO Committee system 
provided a forum to gain a basic understanding of other Members' trade policies and raise 
concerns outside the context of the dispute settl ement mechanism. Energizing this system was a 
key objective of Members. In this vein, capitals should provide their Geneva-based delegations with the necessary support and information fully to participate in the WTO Committee system, 
including the authority to answer basic factual questions about national trade policy regimes and 
measures. The US could understand that it might take time to compile replies to formal questions, particularly for smaller delegations. However, after two years of repeating the same questions and 
request, Nigeria was urged to participate fully as a Member of this Council and of the 
TRIMs Committee, and clarify any misunderstandings other Members might have about the measures in question. 
12.3.  In addition to the general requirements to  give "first consideration" to goods manufactured 
in Nigeria, the law established minimum local conten t requirements for specific goods such as steel 
plates and pipes, cables, valves, cement, an d pipes, and required the mandatory use of 
locally-manufactured welded and fabricated products. 
12.4.  The Local Content Act also directed the Minister of Petroleum Resources to develop "a fiscal 
framework and tax incentives" for companies that established facilities or operations in Nigeria "for purposes of carrying out production, manufacturing or for providing any services and goods 
otherwise imported into Nigeria"; this generate d concerns under the TRIMs Agreement. Nigeria 
should explain the process under the measure, th e participants, the standards by which findings 
were measured, the method of application of  any outcomes, and expected timeframes of 
implementation would also be welcomed by the US. 
12.5.  She also asked Nigeria to update Members on any developments with respect to the 
operation of this measure, and to inform them wh ether there were any plans to expand it, either 
by applying its requirements to additional good s and services, or by increasing local content 
requirements on goods and services already covered. Clarification and information as to the 
authority and conditions to grant waivers of the Act would also be necessary. G/C/M/116 
 
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  12.6.  The delegate of the European Union shared th e concerns raised by the US on this issue; his 
delegation had already expressed its views at past meetings of the CTG and the TRIMs Committee, 
where it had also posed questions to Nigeria. However, Nigeria had not yet responded to the questions on the compatibility of its law on local content with the provisions of the 
TRIMs Agreement, the GATT 1994, and the GATS. 
12.7.  A very specific question on the review of Schedule A of the Act had first been raised by the 
EU at the TRIMs meeting in May 2012, and reiterated in October 2012. The review was meant to 
comprise the list of detailed local content requirements per good or service, and was originally 
foreseen to take place in spring 2012. Since after almost a year the said review had not taken place, Nigeria should indicate and clarify when and how it would be carried out. 
12.8.  The EU believed that the Amendment Bill that was pending before the National Assembly 
could provide an opportunity to review certain provisions of the Act, including Schedule A, and also 
address questions relating to WTO compatibility. Nigeria should also use this opportunity to look at whether the legislative scheme, particularly the local content requirement, was the appropriate 
tool to achieve the goal of enhancing domestic capacity in the oil and gas industry. Other issues 
related to the productive capacity and supply possibilities of the relevant Nigerian sectors could be addressed within this context, as well as some a pparent distortions introduced by the law, notably 
the fact that the requirements in Schedule A favoured pure agency intermediation over genuine 
local investment. The EU looked forward to the re view and hoped that all the concerns expressed 
would be addressed by the Nigerian authorities in order to ensure full compliance with its commitments under the WTO Agreements. 
12.9.  The delegate of Australia recalled that this was an issue on which Australia had sought 
clarification from Nigeria, but where responses ha d not been received. As his delegation had done 
in the TRIMs Committee, he asked Nigeria to explain how the preferential treatment accorded in 
the Act to local goods and services was consistent with Nigeria's national treatment obligations 
under the GATS and the GATT 1994. In particular, Australia had noted that Section 11(1) of the 
Act established minimum percentages of Nigerian local content in goods, services and investment 
for any project in the Nigerian oil and gas indu stry, and that Section 7 of the Act required 
operators to submit a Nigerian Content Plan demonstrating compliance with the Nigerian content requirements. Australia looked forward to Nigeria's responses. 
12.10.  In response to the previous speakers, the delegate of Nigeria confirmed that the relevant 
authorities in his capital were meeting to discuss the issues raised by Members and would come up 
with a response soon. 
12.11.  The Council took note of the statements made. 
13  UKRAINE'S COKING COAL IMPORT QUOTA – REQUEST FROM THE EUROPEAN UNION 
AND THE UNITED STATES 
13.1.  The Chairperson informed the Council that, in a communication dated 7 October 2013, the 
European Union and the United States had requested the Secretariat to include in the agenda of 
the present meeting the issue of "Ukr aine's Coking Coal Import Quota". 
13.2.  The delegate of the European Union thanked Ukraine for its explanations on the introduction 
of quantitative restrictions on imports of coal and coke adopted on 13 March 2013, and the 
subsequent amendments. He requested Ukraine to further clarify the following aspects: (i) why it 
considered that the alleged risks had to be addressed through quantitative restrictions to trade; (ii) if it had envisaged alternatives, and if so why had these been discarded; and (iii) if it had 
adopted similar measures in respect of domestic pr oduction. The EU expected that the quantitative 
restrictions would not be extended beyond 2013. 
13.3.  The delegate of the United States thanked Ukraine for having responded to the questions it 
had posed on this issue, and for the notification of  its legislation on its coking coal import quota. 
However, the US remained unsatisfied with the justification provided in relation to Ukraine's licensing requirements and quotas, in particular with the quota of "0" tonnes for metallurgical coke, its basis and the ILPs. She also recalled that at the July 2013 meeting of this G/C/M/116 
 
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  Council, the US had posed additional questions to Ukraine6 and, in the absence of written 
responses, she asked when it intended to respond. 
13.4.  Ukraine had indicated that, since the time the import quotas were imposed in 2012, there 
had been a significant reduction in the accumulate d stocks of coking coal. She asked Ukraine when 
it would revoke the import licences and import quotas on coking coal and coke, particularly given 
that the safety and environmental problems that Ukraine sought to address had now apparently been addressed. 
13.5.  The delegate of Australia shared the concer ns on the imposition by Ukraine of an import 
quota on coking coal and thanked it for having notified its ILPs7. However, Australia considered 
that these regulations created uncertainty for foreign suppliers and domestic producers of coking coal. He asked Ukraine how restricting access to imported coal and forcing domestic producers to 
buy domestic coal would ease Ukraine's environmental concerns. 
13.6.  The delegate of the Russian Federation  expressed her agreement with the previous 
statements and stated that both the quotes th emselves and the procedures to allocate these 
restricted access to the Ukrainian market and appeared not to be in line with relevant 
WTO Agreements, particularly with GATT Articles XI and XX and the Agreement on ILPs. Russia called Ukraine to withdraw these measures and not to prolong them in 2014. 
13.7.  The delegate of Ukraine, in response to Members' statements and questions, informed the 
Council that Resolution N° 225 of 3 March 2013 had been in effect since June 2013; this had 
amended Decree 1201 of the Cabinet of Mini sters, as amended by Resolution 462 of 
7 March 2013, and setting the ILPs to administer coking coal quotas of 10,200,200 tonnes and 
coke quota of 210,000 tonnes. These regulations, plus Resolution No. 312 of 22 April 2013, "On 
Interdepartmental Commission for Allocation of Import Quotas on Goods subject to ILPs", and the amendments to Annex 8 of Resolution 1201, had b een notified by Ukraine under Article 5 of the 
Agreement on ILPs, and also in accordance with the Decision on Notification Procedures for 
Quantitative Restriction
8. 
13.8.  He noted that the measure complied with th e provisions of Article XX of the GATT 1994 as it 
aim was to protect life or health of humans, animals and plants. As a result, there had been a 
decrease in hazards and risks for human beings  in neighbouring areas, and a reduction of 
technological risks. Thus, his authorities were currently considering an increase of the quota amount for coke by 90,000 tonnes and for coking coal by 1,000,000 tonnes. Ukraine would provide 
written responses to the questions posed to it  at this meeting and at the meeting of the 
Committee on ILPs of October 2013. 
13.9.  The Council took note of the statements made. 
14  UKRAINE – IMPORT TARIFFS ON AUTOMOBILES – STATEMENT BY JAPAN 14.1.  The Chairperson informed the Council that, in a communication dated 7 October 2013, the 
delegation of Japan had requested the Secretariat to include in the agenda of this meeting the 
following item: "Ukraine – Import Tariffs on Automobiles" and recalled that, at the start of the 
meeting, the delegation of the European Union had requested to be added as a co-sponsor of this 
issue. 
14.2.  The delegate of Japan regretted to reiterate the concerns of his authorities regarding 
Ukraine's safeguard measures on motor cars, initiated on 13 April 2013. Despite repeated requests 
by his authorities for the immediate withdrawal of such measures, additional duties had been 
collected for the past 3 months on Japanese motor cars imported into Ukraine. These had 
negatively affected market access to Ukraine for Japanese car producers. As repeatedly expressed 
in the past, Japan believed that these safeguard measures were not WTO consistent, either in substance or procedurally. As to the substance, the total number of motor cars imported to 
Ukraine had decreased significantly during th e investigation period, 2008-2010. Ukraine had 
                                               
6 See G/C/M/114. 
7 See G/MA/QR/N/UKR/1/Add.2. 
8 See G/L/59/Rev.1. G/C/M/116 
 
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  argued that its actions were permissible given the increase in imports in relative terms; however, 
this required a strict causation analysis which had not been made. 
14.3.  Moreover, Ukraine had argued that Articl e 12.3 consultations of the Safeguards Agreement 
had taken place on 19 April 2012, and that theref ore it had fulfilled its obligation. However, 
Article 12.3 clearly stated that consultations shou ld be provided "with a view to reviewing the 
information" provided under Article 12.2 of the sa id Agreement. In turn, Article 12.2 obliged the 
Member "proposing" to apply a measure to provide all pertinent information in writing before the 
imposition of such measure. Therefore, the cons ultations that took place in April 2012, almost a 
year before the notification by Ukraine on 25 Ma rch 2013, could not be considered as such. As no 
consultations had taken place since the notification, Ukraine had not provided Members with an adequate opportunity for prior consultations, as re quired by Article 12.3. Finally, he urged Ukraine 
to withdraw such measures and informed the Council that, if Ukraine failed to do so, Japan would 
consider engaging in further steps under the DSU. 
14.4.  The delegate of the European Union shared the concerns expressed by Japan as the 
Ukrainian measures were being applied on the basis of a decision which had been adopted almost 
one year after the conclusion of the investigation, and which presented legal weaknesses as regards compliance with substantial procedural WTO requirements. He urged Ukraine to organize 
joint consultations with all Members having a substantial interest in this case. This was an issue 
about following basic and essential procedural requirements; thus, the EU hoped Ukraine would strictly conform to its obligations under the Safeguards Agreement. 
14.5.  The delegate of Australia shared the co ncerns raised by Japan and the EU over the 
safeguard action taken by Ukraine, and referred in  particular to the way in which the safeguard 
investigation had been initiated and conducted. Australia attached considerable importance to transparency in trade remedy actions, particularly in relation to global safeguard actions, and to 
the standards set down in the Safeguards Agreemen t to justify such actions. Therefore, it was 
crucial to understand the basis for such emergency actions. 
14.6.  He reiterated the concerns expressed at th e July Council meeting on the delays in notifying 
the findings and decisions in this proceeding, and sought clarification from Ukraine on further 
developments on this issue. As regards Ukraine's notification of 22 May 2013, that hybrid vehicles 
would be excluded from the application of the safeguards measures, his delegation found it unclear why there was an exclusion of a product and if it related to the scope of the investigation and the 
findings of serious injury. It was also unclear why the product exclusion was for a specific period of 
application of the safeguard measures, adding further doubt to the validity of Ukraine's measures. 
14.7.  The delegate of Korea echoed the concerns  expressed by previous speakers, that Ukraine 
had imposed tariffs in the form of safeguard measures without meeting the requirements set forth 
in the Safeguard Agreement. Contrary to anti-dumping or countervailing duties, which shared responses to dumping over subsidy, a safeguard measure did not require any fair trade action on 
the part of trading partners; thus, the latter should be taken up only in a most cautious manner. 
This explained why the Safeguards Agreement only allowed taking such measures under very specific circumstances, under full transparency conditions, and with a possible compensation. Therefore, it was not clear how Ukraine had concluded that all the conditions for implementing its 
measure had been met, as only limited informat ion had been provided. Indeed, the information 
provided was insufficient to meet Ukraine's obligation under the said Agreement. Ukraine had neglected its duty under Article 12.3 of the Agreem ent to hold prior consultation with Members; 
therefore, Korea had not been able to consult with Ukraine on issues such as adequate means of 
trade compensation, as stipulated in Article 8.1 of the Safeguards Agreement. Korea had already expressed these concerns at the previous meet ing of this Council on 25 March 2013 and in the 
Safeguards Committee meeting on 23 April 2013. Ukra ine was urged to resolve this issue in an 
urgent and adequate manner and considering the potential adverse implications for the multilateral trading system. 
14.8.  In response to the previous speakers, the delegate of Ukraine reiterated that the 
investigation of imports of motor cars into Ukraine had been conducted in compliance with the 
WTO Agreement on Safeguards, as well as the notifications under Articles 12.1(a), (b) and (c), which were submitted to the Committee on Safeguards on 11 July 2011 and 21 March 2013. He 
added that Article 7.4 of the Agreement stated that, "In order to facilitate adjustment in a 
situation where the expected duration of a safe guard measure […] is over one year, the Member G/C/M/116 
 
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  applying the measure shall progressively liberalize it at regular intervals during the period of 
application", and informed delegations that, consequently, Ukraine was finalizing the schedule of liberalization. Ukraine remained open to further discussions on this issue. 
14.9.  The Council took note of the statements made. 
15  UKRAINE – RECYCLING FEES ON CARS – REQUEST FORM THE EUROPEAN UNION 15.1.  The Chairperson informed the Council that, in a communication dated 7 October 2013, the 
delegation of the European Union had requested th e Secretariat to include in the agenda of this 
meeting the following item: "Ukraine – Recycling Fees on Cars", and recalled that, at the start of 
the meeting, the delegation of Japan had requeste d to be added as a co-sponsor on this issue. 
15.2.  The delegate of the European Union expressed concern about Ukraine's intention to 
implement a law establishing a utilization fee on cars and on the announcement by the President 
and the Cabinet of Ministers that governmental measures would be taken to revise some of the 
provisions which appeared to contradict Ukraine's WTO commitments. He expressed the view that 
the recycling activity was a profitable one in th e EU; however, there had been no need to take 
recourse to governmental measures or decisions for its development. As had been the case with 
the EU, Ukraine should hold consultations with other WTO Members to avoid de facto  or de jure  
discrimination against vehicles exported into its te rritory as a result of the implementation of the 
law on recycling fees. 
15.3.  The delegate of Japan indicated that the law introducing a recycling fee on motor vehicles 
would enter into force on 1 September 2013; this law contained provisions which exempted 
domestic vehicles from the fee. Japan was concerned that imported vehicles would be discriminated against and given treated less favourable than domestic vehicles. Information also 
existed that, in August, the President had issued a directive with provisions removing some 
elements that appeared to be WTO-inconsistent. Japan asked Ukraine to clarify the current legal status of the law and the removal of the WTO-inconsistent elements. 
15.4.  The delegate of the United States shared the previous concerns. The US would continue to 
monitor the issue closely. 
15.5.  The delegate of Ukraine informed Members that his authorities had already drafted 
amendments to the law, aimed at bringing it into full compliance with the WTO regarding its 
application to both domestic and imported vehicles and the coefficients applicable to different types of automobiles. The amendments should be  submitted and approved by the Parliament in 
the near future. 
15.6.  The Council took note of the statements made. 
16  RUSSIAN FEDERATION – MEASURES AFFECTING EU IMPORTS INTO RUSSIA – 
REQUEST FROM THE EUROPEAN UNION 
16.1.  The Chairperson informed the Council that, in a communication dated 7 October 2013, the 
delegation of Japan had requested the Secretariat to include in the agenda of this meeting the 
following item: "Russian Federation – Measures Affecting EU Imports Into Russia". 
16.2.  The delegate of the European Union stat ed that, in addition to the concerns already 
mentioned at this meeting on a number of Russian trade restrictive measures, there was a 
complete ban introduced by Russia on 7 October 2013 with respect to Lithuanian milk and dairy products. However, the respective notification to the SPS Committee had only been sent on 
11 October 2013. This contradicted Russia's transp arency obligations. Russia had not justified such 
a ban, which seemed to be neither proportionate nor scientifically justified. The EU had contacted the Russian authorities on this issue and hoped to find a prompt solution. 
16.3.  Additionally, since 12 September 2013, Russia had enhanced its customs control procedures 
for Lithuanian carrier companies. As a result, Lithuanian trucks had been stopped at customs clearance points and their cargo had been unloaded and subjected to a continuing full control, 
lasting several days. This had disrupted the Lithua nian export of goods and services, causing not G/C/M/116 
 
- 28 - 
 
  only important damages, including a 30 to 40% loss in revenues, but also a loss of reputation. 
Despite the existence of bilateral mechanisms, Russia neither provided any prior information nor the rationale or justification for such a measure. Even though the ban was lifted on 10 October 2013, the EU hoped that such customs control be stopped and not applied anymore in 
relation to Lithuania or any other EU member State. 
16.4.  The delegate of the United States indicate d that her delegation had been monitoring this 
issue closely and asked Russia to provide a justification for the late notice and the scientific 
justification of the SPS measure. 
16.5.  The delegate of Ukraine shared the EU's concerns on this issue and indicated that Ukraine 
had faced a similar situation in mid-August 201 3, when practically all imports of Ukrainian 
products were subjected to unexpected and groundless and complex customs clearance 
procedures, including withdrawal of certificates of origin for an alleged verification, unloading of 
cargoes for additional inspections and testing procedures, and deposit payment requirements. 
These were unjustified and discriminatory country-specific customs measures inconsistent with 
various international obligations of the Russian Federation, such as the International Convention 
on the Simplification and Harmonization of Customs Procedures (Kyoto Convention), the CIS Free Trade Agreement, the WTO non-discrimination and transparency principles, and Russia's 
obligations under its Protocol of Accession. Despite numerous official requests, Ukraine had not 
received any clear explanation or justification from the Russian authorities. He urged Russia to remove its measures and to provide an official response with the pertinent explanations. Ukraine 
would revert to this issue in all relevant WTO bodies. 
16.6.  The delegate of the Russian Federation  expressed the view that her delegation was 
disappointed by the attempt on the part of the European Commission to present the customs 
control of Lithuanian goods in a political and speculative manner. The Russian customs controls, 
aimed at combating the international smuggling business, were consistent with Russia's 
WTO commitments and with the Kyoto Convention. 
16.7.  Due to its geographical situation, Lithuania had been used by logistics operators for 
trans-shipment of goods with the Russian market  as their destination. For many years, the 
Lithuanian warehousing and trucking industry had been involved in illicit schemes, particularly for operators whose business was the so-called "duties and tax optimization", which consisted in providing fictitious documents, including contracts and transport documents, in order to help their 
Russian counterparts to declare minimal customs value to the Russian customs. Thus, the 
trans-Lithuanian route via consignment warehouses had served for many years to minimize customs payments in Russia, a widespread activity with advertising in Internet, social media, 
thematic forums, and on operators' official webpages. 
16.8.  Russian customs had been doing their utmost  to limit controls to the extent necessary to 
ensure effective law enforcement without having ne gative effects on transit. However, the amount 
of trans-Lithuanian deceptive shipments had increased far beyond from the customary level of 
some other neighbouring countries, where logistic operators had also been involved in such operations. This had forced the Russian customs to ac t so as effectively to limit the scope of illicit 
activities. The controls had respected the WTO provisions, and not a single item had been refused 
entry to the customs territory of the Customs Unio n, or had not been released under the customs 
procedures, including transit, unless the customs legislation had been violated. 
16.9.  There was no reason to consider a law enforcement measure as one having a political or 
anti-Lithuanian character. Russia believed that, with the aim of obtaining the highest profits from 
transit flows, Lithuania could have cooperated with the Russian customs in providing the latter with the necessary data and allowing it to improv e its selective approach to customs control. This 
would have been the most effective manner to deal with the high criminal risks relating to goods 
brought to Russia via Lithuania, while producing only a minimal negative impact upon bilateral trade. 
16.10.  He confirmed that supplies of dairy products from Lithuania had been suspended since 
7 October 2013 due to complaints about the possible damages to human health, and that a 
bilateral meeting with the Lithuanian authorities took place on 11 October 2013. As a result of this, G/C/M/116 
 
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  the competent authorities had agreed on the step s to follow and to be implemented by both 
parties. 
16.11.  The Council took note of the statements made. 
17  EUROPEAN UNION – REQUEST FOR AN EXTENSION OF THE WAIVER FOR THE 
APPLICATION OF AUTONOMOUS PREFERENTIAL TREATMENT TO MOLDOVA 
(G/C/W/688) 
17.1.  The Chairperson drew the Council's attent ion to document G/C/W/688, submitted by the 
European Union and containing the request and the draft waiver extension for the Application of 
Autonomous Preferential Treatment to Moldova. 
17.2.  When introducing document G/C/W/688, the delegate of the European Union stated that the 
reasons that had justified the initial waiver request in 2008 to afford autonomous preferential 
treatment to products from Moldova continued to exist. The current waiver had allowed Moldova to 
continue its economic and trade-related reforms; however, Moldova continued to face a difficult economic situation, and relied strongly on exports to the EU. Therefore, the EU was requesting an 
extension of this waiver for a limited time-period of 2 years, or until 31 December 2015. According 
to the IMF-World Bank's latest data, Moldova continued to be the most vulnerable economy in Europe and the EU believed that this extension wo uld protect the progress achieved by Moldova so 
far in the on-going process of economic reform in trade-related areas. 
17.3.  The Chairperson proposed that the Council take note of the statement made, approve the 
draft waiver decision contained in Annex I of do cument G/C/W/688, and agree to forward it to the 
GC for adoption. 
17.4.  The Council approved the draft waiver decision contained in Annex I of 
document G/C/W/688 and agreed to forward it to the General Council for adoption. 
18  NIGERIA – RESTRICTIONS/BAN IMPOSED BY NIGERIA TO IMPORTS OF SEA 
PRODUCTS – REQUEST BY ICEL AND, NORWAY, AND URUGUAY 
18.1.  The Chairperson informed the Council that, in a communication dated 7 October 2013, the 
delegations of Iceland, Norway, and Uruguay, ha d requested the Secretariat to include in the 
agenda of this meeting the following item: "Nigeria – Restrictions/Ban Imposed by Nigeria to 
Imports of Sea Products". 
18.2.  The delegate of Norway asked Nigeria if it was considering establishing a new import regime 
for fish and fish products intended to restrict imports of these products. Norwegian exporters had 
been informed by their counterparts that Nigerian authorities would impose import quotas for 
certain fish species or considering a reduction of imported fish by 25% a year, during a four-year period, until all fish imports would be forbidden. An import ban had apparently been put in place in 
early October 2013. Unconfirmed information also indicated that Nigeria would restrict access to 
foreign currency, making it difficult, if not impossible, for Nigerian companies to obtain access to foreign currencies to pay imports of fish and fish products. 
18.3.  All this conflicting information from different sources in Nigeria was of concern. WTO rules 
prohibited the use of import restrictions and quotas and Members were committed to maintain a transparent and predictable trading regime. Therefore, Nigeria should clarify if it intended to regulate imports of fish products, and confirm th at there were no plans to put in place import 
restrictions. 
18.4.  The delegate of Iceland also expressed co ncerns about the reports from the industry and 
the press that the Nigerian government intended to reduce fish imports significantly over the 
coming years, by up to 25% per annum via quota restrictions, or by significantly increasing the 
duties so as to reduce imports. He asked Nigeria to clarify whether this information was correct, and to further inform the Council about the actions that the federal government was considering 
regarding fish imports. Nigeria was a key trading partner for Iceland, as in 2012 it had exported 
more than USD 38 million of fishery products to Nigeria, Iceland's fourth biggest market in the G/C/M/116 
 
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  world. Iceland sought clarification on these issues, and asked Nigeria to comply with its 
WTO obligations. 
18.5.  The delegate of Uruguay expressed the concerns of his authorities not only about the recent 
statement of Nigeria's Minister of Agriculture indica ting that imports of fish and sea products might 
soon be prohibited, but also by the Guide limiting imports of sea products distributed recently to 
fish importers; this would affect a sensitive sector of Uruguay's exports. In 2012 Nigeria had received the most important volume of Uruguaya n exports of frozen fish, both in volume and 
quantity, representing 34% of total exports of sea products or an increase of Uruguayan exports of 
59% per year between 2010 and 2012. However, the current restrictions would affect 12 companies in the fisheries industry, 33 fishing vessels, more than 1,200 artisanal fishing boats, 
and 1,800 employees. 
18.6.  Uruguay believed that the restrictive measure, aimed at increasing Nigeria's national 
production, contradicted GATT Article XI and would not serve Nigeria's supply needs as this goal would require a relatively long period of time to  be reached. Uruguay sought clarification on the 
changes being introduced by Nigeria to its import regime of sea products and asked it to maintain 
the Uruguayan sea bass within the list of sea products excepted from the restrictive measures. 
18.7.  The delegate of Chile shared the concerns  previously expressed on the new measures that 
Nigeria intended to impose. These were systemic and also commercial since the restrictions would 
affect major Chilean export products. In 2012, 98% of Chile's exports to Nigeria were sea products and, throughout 2013, USD 75 million had been exported to Nigeria, of which 96% corresponded to jack mackerel. Up to date, 58% of Chilean export s of this species had been exported to Nigeria. 
She asked Nigeria to provide clarification concerni ng the new measures it was seeking to adopt to 
regulate imports of sea products, and not to restrict or undermine trade but rather to preserve transparency when establishing any kind of measures. 
18.8.  The delegate of Nigeria noted that she had taken note of the concerns raised by previous 
speakers. She would convey these to her capital so as to provide the pertinent responses. Nigeria 
had always tried to be consistent with its WTO obligations. 
18.9.  The Council took note of the statements made. 
19   CONSIDERATION OF ANNUAL REPORT S OF THE SUBSIDIARY  BODIES OF THE 
COUNCIL FOR TRADE IN GOODS 
19.1.  The Chairperson recalled that, pursuant to the "Procedures for an Annual Overview of 
WTO Activities and for Reporting Under the WTO," (WT/L/105), which were adopted by the 
General Council on 15 November 1995, all bodies constituted under Agreements in Annex 1A of the WTO Agreement were required annually to submit a factual report to the Council for Trade in 
Goods, and the Council was to take note of these reports. 
19.2.  The Chairperson proposed that the Council take note of the following annual 
reports9: (i) Committee on Agriculture, document G/L/1044; (ii) Committee on Trade Related 
Investment Measures, document G/L/1045; (iii) Working Party on State Trading Enterprises, 
document G/L/1046; (iv) Committee on Market Access, document G/L/1049; (v) Committee on Import Licensing, document G/L/1048; (vi) Committee on Customs Valuation, document G/L/1043; (vii) (viii) Committee on Sanitary and Phyto-sanitary Measures, document G/L/1039; 
(ix) Committee of Participants on the Expansion of Trade in Information Technology Products, 
document G/L/1050; (x) Preshipment Inspection – Independent Entity, document G/L/1042; and 
(xi) Committee on Rules of Origin, document G/L/1047. 
19.3.  The Council so agreed. 
                                               
9 Given that the Committees on Technical Barriers to Trade, Subsidies and Countervailing Measures, 
Antidumping Practices, and Sa feguards, held their meetings  after the date of this Council, their annual reports 
were submitted directly to the General Council (s ee documents G/L/1056, G/L/1052 and G/L/1052/Corr.1, 
G/L/1053, and G/L/1054, respectively). G/C/M/116 
 
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  20  ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE IN GOODS TO THE 
GENERAL COUNCIL 
20.1.  The Chairperson recalled that the draft Annua l Report of the Council had been circulated in 
document G/C/W/687. In accordance with the "Procedures for an annual overview of 
WTO Activities and for Reporting under the WTO"  (WT/L/105), which was adopted by the General 
Council on 15 November 1995, it was agreed that "The respective sectoral Councils should report in November each year to the General Council on the activities in the Council as well as in the 
subsidiary bodies" and that the reports of the sectoral Councils should be "factual in nature, 
containing an indication of actions and decisions taken, with cross references to reports of subordinate bodies and could follow the mo del of the GATT 1947 Council reports to the 
CONTRACTING PARTIES". He noted that the draft repo rt would be updated in light of this meeting. 
20.2.  The Chairperson proposed that the Council agree to adopt the report, subject to the update 
and revision to take into account the Council's work at this meeting.10 
20.3.  The Council so agreed. 
21  WORK PROGRAMME ON ELECTRONIC COMMERCE (FACTUAL REPORT TO GENERAL 
COUNCIL G/C/53) 
21.1.  The Chairperson recalled that at the last meeting of the Council it had been agreed to 
include the issue of the Work Programme on Elec tronic Commerce on the agenda of the present 
meeting in order to inform delegations that this Council had fulfilled the mandate of the Ministerial Decision contained in document WT/L/843, where Ministers had decided: 
21.2.  "To further instruct the General Council to hold periodic reviews in its sessions of July and 
December 2012 and July 2013, based on the report s submitted by the WTO bodies entrusted with 
the implementation of the Work Programme, to assess its progress and consider any recommendations on possible measures related to electronic commerce in the next session of the 
Ministerial Conference". 
21.3.  He further noted that the interim Chairperson of this Council had submitted, under his own 
responsibility, a factual report on the discussions that had taken place in the CTG
11, whose main 
features were incorporated into the Draft Report of the Dedicated Discussions on E-commerce to 
the General Council (document JOB/GC/57). 
21.4.  The delegate of the European Union expr essed his delegation's satisfaction with the 
reinvigoration of the Work Programme and welcomed the various initiatives in this regard. The 
two workshops had been a success. From the EU pers pective, the conditions were met to report to 
the MC9 that progress had been made under the Work Programme. Members should proceed as usual and renew the e-commerce moratorium at the MC9. 
21.5.  The delegate of Ecuador invited Members to look in greater detail at the developmental 
aspects of E-Commerce, the Small and medium Size Enterprises (SMEs) and developing countries, 
including the work of other actors such as international organizations. 
21.6.  The Council took note of the statements made. 
22  OTHER BUSINESS 
22.1  Room Document RD/CTG/1 22.1.  The Chairperson recalled that, as announced at the start of the meeting, under this agenda 
item the delegations of Australia and Japan would inform Members of the discussions they had held 
concerning Room Document RD/CTG/1, which contained the revised format of the "Updating of the listing of notification obligations and the compliance therewith as set out in Annex III of the Report 
of the Working Group on Notification Obligations and Procedures". 
                                               
10 The Annual Report to the General Council  was circulated in document G/L/1057. 
11 Circulated under document symbol G/C/53. G/C/M/116 
 
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  22.2.  The delegate of Australia recalled that his delegation, together with Japan, had been 
exploring and discussing ideas with a view to su ggesting some changes to the CTG document on 
the "Status of Notifications" (G/L/223/Rev.20), in order to find a balance between compliance with 
transparency obligations across relevant WTO committees and documentation cost savings. 
Discussions had focused on the notifications on agriculture since these accounted for over half of 
the current document. In this regard, joint discussions with the Market Access and Agriculture Divisions had taken place. As a result, these two Divisions would explore how to incorporate the 
existing format of the Committee on Agriculture on notification compliance, contained in 
G/AG/GEN/86/Rev.15, into the CTG document. He thanked the Secretariat for its efforts and was ready to continue discussing the issue in the future. 
22.3.  The delegate of Japan echoed Australia and thanked the Secretariat for the efforts it had 
made on this issue. Japan hoped that a solution could be found under the current approach. 22.4.  The Council took note of the statements made. 
22.2  Date of next meeting 
22.5.  The Chairperson informed the Council that the next meeting of the Council was scheduled to 
take place on Thursday, 20 March 201412, and that the agenda would close on Friday 7 March. 
Additional meetings would be convened if necessary. 
22.6.  The meeting was adjourned. 
__________  
  
                                               
12 Postponed to Wednesday, 9 April 2014.