RESTRICTED  
  
G/C/M/123  
 
30 October 2015  
(15-5789)  Page: 1/25  
Council for Trade in Goods    
 
 MINUTES OF THE MEETING OF TH E COUNCIL FOR TRADE IN GOODS 
26 JUNE 2015 
CHAIRPERSON: H.E. MR. HÉ CTOR CASANUEVA (CHILE) 
The meeting of the Council for Trade in Goods (CTG, or the Council) was convened by 
Airgram WTO/AIR/CTG/2; the proposed agenda for the meeting was circulated in document G/C/W/712. The meeting proceeded on the basis of the following agenda. 
 
1  NOTIFICATION OF REGI ONAL TRADE AGREEMENTS: .................................................... 2
 
2  ENLARGEMENT OF THE EUROPEAN UNION: PROCEDURES UNDER 
ARTICLE XXVIII OF GATT 1994 – RE QUEST FROM BRAZIL ............................................... 2  
3  CANADA – REQUEST FOR AN EXTENSION OF THE WAIVER FOR THE 
CARIBBEAN INITIATIVE: CA RIBCAN (G/C/W/710) ......................................................... 3  
4  JORDAN – REQUEST FOR A WAIVER  RELATING TO THE TRANSITIONAL 
PERIOD FOR THE ELIMINATION OF THE EXPORT SUBSIDY PROGRAM FOR 
JORDAN (G/C/W/705 AND G/C/W/705/CORR.1) ........................................................... 4  
5  NIGERIA – LOCAL CONTENT MEASURES IN OIL AND GAS – REQUEST FROM 
THE EUROPEAN UNION AND THE UN ITED STATES OF AMERICA ....................................... 9  
6  INDONESIA'S IMPORT AND EXPORT RESTRICTING POLICIES AND PRACTICES 
– REQUEST FROM THE EUROPEAN UNION, JAPAN AND THE UNITED STATES OF AMERICA ........................................................................................................................ 11
 
7  PAKISTAN – DISCRIMINATORY TAXES – REQUEST FROM THE EUROPEAN 
UNION AND THE UNITED ST ATES OF AMERICA .............................................................. 14  
8  RUSSIAN FEDERATION – TRADE RESTRICTING MEASURES – REQUEST FROM 
JAPAN ......................................................................................................................... ... 16 
9  ECUADOR – IMPORT RESTRICTING ME ASURES – REQUEST FROM JAPAN ................... 18  
10  WORK PROGRAMME ON ELECTRONIC COMMERCE .................................................... 23  
11  OTHER BU SINESS ..................................................................................................... 24  
11.1  Philippines – Fostering Participation of Micro-, Small-, and Medium-Sized 
Enterprises (MSMEs) in Regi onal and Glob al Trade ................................................................ 24 
11.2  Japan – Status of the Election Process of the Permanent Group of Experts under the 
Committee on Subsidies and Count ervailing Meas ures (SCM) ................................................. 25 
11.3  Date of th e next meeting .......................................................................................... 25 
 
At the start of the meeting, the delegate of th e Philippines informed the Council that, under the 
agenda item "Other Business", her delegation intended to make a general statement about 
"Fostering Participation of Micro-, Small-, and Medium-Sized Enterprises (MSMEs) in Regional and 
Global Trade". The delegate of Japan indicated th at, under the same agenda item, his delegation 
intended to refer to the "Status of the Election  Process of the Permanent Group of Experts under 
the Committee on Subsidies and Countervailing Measures (SCM)".  G/C/M/123 
 
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  The delegate of the European Union expressed hi s delegation's intention to raise, under the 
agenda item "Other Business", the issue of the Brazilian Law of 19 June 2015, "PSI COFINS Tax on 
Imports". In this regard, the delegate of Brazil indicated Brazil's objection to the inclusion of this 
issue on the agenda, as requested by the EU, as it referred to an ongoing dispute between the EU 
and Brazil. Therefore, it was a substantive i ssue not appropriately discussed under the agenda 
item "Other Business", where the EU perhaps woul d make substantive comments on a very recent 
law to which his delegation would not be in a position to respond. Following bilateral consultations 
between the two delegations, the EU agreed to wi thdraw its request. The Chairperson thanked the 
delegation of the European Union for their flexibility and understanding. 
 The Chairperson indicated that, under the agenda item "Other Business", the Council would 
consider the requests made by the delegations of the Philippines and Japan and announced that, 
on his part, he would refer to the date of the next CTG meeting.  
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 adopti on by the General Council 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 Free Trade Agreement (FTA) between Chile and 
Viet Nam (WT/REG365/N/1) had been notified to the CRTA and proposed that the Council take 
note of the information provided. 
1.2.  The Council so agreed. 
2  ENLARGEMENT OF THE EUROPEAN UNIO N: PROCEDURES UNDER ARTICLE XXVIII OF 
GATT 1994 – REQUEST FROM BRAZIL 
2.1.  The Chairperson informed the Council that, in a communication dated 15 June 2015, the 
delegation of Brazil had requested the Secretariat to  include in the agenda of this meeting an item 
entitled: "Enlargement of the European Union:  Procedures under Article XXVIII of GATT 1994 – 
Request from Brazil". 
2.2.  The delegate of Brazil, with regard to the negotiation process with the EU following Croatia's 
EU accession, stated that the WTO rules implie d an assessment of whether Members' existing 
trade flows had been negatively affected after th is accession and that, in case of trade losses, 
according to GATT Article XXVIII compensation would then be due. In this regard, his county and 
the EU had been formally involved in bilateral negotiations pursuant to Croatia's accession to the 
EU, and a significant trade flow between Croatia and Brazil had existed across a vast range of products. In this vein, Brazil had informed the EU of its trade interests in the negotiation process 
begun in 2013. However, his delegation was concerned about the pace and content of those 
bilateral negotiations and remained interested in reaching a mutually satisfactory conclusion with the EU, and particularly as Brazil had committed tec hnical resources and political will to this end. 
2.3.  Detailed analyses had been carried forward, and Brazil had clarified its points of interest in 
technical meetings in several fora and in verbal notes. Notwithstanding Brazil's readiness to 
discuss and willingness to find a solution, Brazil's efforts had not been matched on the EU side. Only a few meetings had taken place, and Brazil was of the view that the EU had never shifted into 
negotiating mode. Brazil had not opposed extending the deadlines for the negotiations but at the 
same time had expressed its concerns, in previous CTG meetings, about the pace of the bilateral negotiations and their lack of substance. More over, his own and other delegations had expressed 
the same concerns, urging the EU to finalize promptly the negotiations. However, no progress had 
been made and no technical meeting had taken place since the last CTG meeting, on 26 March 2015. 
2.4.  Brazil had addressed a verbal note to the EU  in this regard but the EU had not replied. The 
situation of Brazilian exporters to the EU had wo rsened since the accession of Croatia to the EU 
                                               
1 See documents WT/REG16, WT/L/671, and G/C/M/88. G/C/M/123 
 
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  and no satisfactory compensation had been offere d. Consequently, the longer it takes to reach a 
solution, the bigger the losses for Brazilian exporters. 
2.5.  Brazil was also worried that the 30 months  mentioned in the document submitted by the EU 
at the last meeting were running out, and that the time had not been used fruitfully in order to 
reach an agreement. The deadline given to Members established the time-period during which a 
Member could withdraw equivalent concessions if no agreement had been reached, and it was therefore a matter of the utmost seriousness. He reiterated Brazil's interest in initiating, or 
re-initiating, the negotiations with the EU, and urged the EU to give priority to this issue. 
2.6.  The delegate of Argentina shared Brazil's view, as it had in the previous meeting; his 
authorities were also concerned about the pace of such negotiations given that very little or no 
progress at all had been made since the March meeting of the CTG. The deadline was approaching 
without there having been any technical bilateral discussion. 
2.7.  The delegate of Uruguay noted that his co untry was a trading partner of Croatia, and that 
Uruguay had been involved in bilateral discussions on this issue for the last two years. In fact, his 
authorities had met the EU four or five times, meetings at which Uruguayan interests and concerns 
had been raised, but without receiving any positive solution. 
2.8.  The delegate of Australia stated that his au thorities were also concerned about the length of 
time these negotiations were taking to reach conclusion. Croatia's accession to the EU should not 
raise barriers to trade for other WTO Members. Ho wever, Australia appreciated the constructive 
approach taken by the EU to date in relation to the enlargement process. 
2.9.  The delegate of New Zealand echoed the concerns of those delegations that had already 
spoken and indicated that his authorities would continue to engage with the EU with a view to 
identifying a resolution that would address Members' legitimate commercial interests in this negotiation. 
2.10.  The delegate of the European Union re sponded that his delegation attached great 
importance to these negotiations, and that at the last CTG meeting it had already reported on 
ongoing negotiations with Argentina, Australia,  Brazil, China, New Zealand, and Uruguay. The 
EU's intention had been to conclude these negotiations in a reasonable, equitable, and expeditious 
way, and in October 2014 it had submitted its offers to all WTO Members concerned; these offers were in conformity with WTO rules and practices and indicated what the EU considered reasonable and equitable in terms of compensatory adjustment s. Moreover, before the last CTG meeting, the 
EU had informally submitted draft agreements to all the partners concerned, except for Brazil. 
After that CTG meeting the EU formally transmitted those agreements to its partners, inviting them to react with a view to initiating the respective internal procedures for their entry into force. 
There were currently ongoing discussions with China and contacts with Uruguay, but reactions 
from Argentina, Australia, and New Zealand were still pending. 
2.11.  The negotiations with Brazil were taking longer since trade in certain products between 
Brazil and Croatia had triggered a number of complex issues, i.e. conflicting statistics and 
application of the methodology that had consistently been used by the EU in previous enlargements. Such complex issues needed theref ore to be thoroughly addressed, since the EU 
could not grant disproportionate compensation given WTO rules and practices. Brussels was 
confident that an agreement on reasonable comp ensation would eventually be reached, and the 
EU was working in that direction. The EU would soon transmit information to Brazil in this regard. 
2.12.  The Chairperson thanked delegations for th eir interventions and proposed that the Council 
took note of the statements made. 
2.13.  The Council so agreed. 
3  CANADA – REQUEST FOR AN EXTENSION OF THE WAIVER FOR THE CARIBBEAN 
INITIATIVE: CARIBCAN (G/C/W/710) 
3.1.  The Chairperson reminded delegations that, at the meeting of 26 March 2015, Canada had 
submitted for the Council's consideration document G/C/W/710, containing a request and draft G/C/M/123 
 
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  decision concerning the extension of the waiver for the Caribbean Initiative CARIBCAN, and that 
the Council had agreed to revert to this issue at its subsequent meeting. 
3.2.  The delegate from Canada explained that his country sought approval from Members for the 
renewal of its waiver, which allowed Canada unilaterally to extend duty-free access for most 
commodities originating from 18 commonwealth Caribbean countries, under the Commonwealth 
Caribbean Countries Initiative, CARIBCAN. His delegation was ready to respond to any further 
questions from delegations. 
3.3.  The delegate of the European Union re called that, at the previous CTG meeting, his 
delegation had requested additional time in which to consider Canada's request; he informed the 
Council that the EU could now support the extension of the CARIBCAN waiver. 
3.4.  The delegate of Trinidad and Tobago expre ssed his delegation's support for Canada's request 
for the renewal of the CARIBCAN waiver until 31 December 2023, and reiterated its comments 
made at the CTG meeting of 26 March. In light of the suspension of negotiations between the 
Caribbean community and Canada the CARIBCAN initiative had become more significant and 
continued to offer an opportunity to the Caribbean community, including his own country, for 
further expansion and diversification of trade. His country appreciated Canada's support in prolonging its special relationship with the Caribbean and in supporting economic development and 
integration within the region. He urged other Members also to support Canada's request to extend 
this waiver. 
3.5.  The delegate of Jamaica referred to the stat ement already delivered by his delegation at the 
CTG meeting of 26 March and reiterated its support for an extension of the CARIBCAN waiver, 
which represented an important component in trade relations between his country and Canada. He 
encouraged other delegations to give their positive consideration to this request in order to obtain 
its final approval by the General Council at its meeting in July 2015. 
3.6.  The delegate of Canada thanked Trinidad  and Tobago and Jamaica for expressing their 
support for this important initiative. 
3.7.  The Chairperson thanked delegations for th eir interventions and proposed that the Council 
approve the draft request and draft waiver decision submitted by Canada in document G/C/W/710 
and forward the draft waiver decision to the Gene ral Council for adoption at its next meeting. 
3.8.  The Council so agreed. 
4  JORDAN – REQUEST FOR A WAIVER RELA TING TO THE TRANSI TIONAL PERIOD FOR 
THE ELIMINATION OF THE EXPORT SUBSIDY PROGRAM FOR JORDAN (G/C/W/705 AND 
G/C/W/705/CORR.1) 
4.1.  The Chairperson reminded delegations that, at the Council meeting of 17 November 2014, 
Jordan had submitted document G/C/W/705 containing a request for an extension of the 
transitional period for the elimination of its export subsidy programme. Subsequently, Jordan had submitted document G/C/W/705/Corr.1, clarifying the exact date of the extension of the 
transitional period. He also reminded delegati ons that, according to Article IX:3(b) of the 
Marrakesh Agreement, on 20 February 2015 his predecessor had made a factual report to the General Council informing it that this issue had been under the CTG's consideration for more than 90 days, and that the CTG would continue its consideration of this request. Finally, he informed 
delegations that, on 23 June 2015, Jordan had submitted document G/C/W/705/Rev.1, in which 
Jordan limited its request for an extension of the current programme to only four years, in order to undertake and establish a substitute programme that would be consistent with WTO rules and 
principles. On 26 March the Council had agreed to revert to this issue at its next meeting. 
4.2.  The delegate of Jordan thanked delegations for having provided an opportunity to continue 
the discussion of its waiver request to extend the tr ansitional period of the elimination of its export 
subsidy programme beyond 2015. He also thanked those delegations that had expressed their 
support for the waiver request, as well as those who had expressed their interest and concerns on this issue. G/C/M/123 
 
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  4.3.  Further to the comments made and questions raised at the last CTG meeting, Jordan had 
continued to work closely and extensively with the Secretariat in order to explore alternative 
programmes in line with the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement). Jordan had also conducted several meetings in Geneva with Members who had 
indicated their readiness to provide technical assist ance to facilitate Jordan's phasing out of its 
current subsidy programme; these meetings were convened with the intention of trying to identify alternative programmes to support Jordanian SMEs, compatible with the WTO legal framework. 
4.4.  He informed the Council that Jordan had also been working, at capital level, with 
stakeholders from both the public and private sectors on alternative programmes to support its local industries while taking into account the challenges being faced by the Jordanian economy, mainly with its growing budgetary deficit. Jordan was currently exploring several options as 
alternatives to the current export subsidy progra mme, in line with the SCM Agreement. Following 
extensive consultations concerning the time required to put a new programme in place, Jordan had decided to reduce the number of years indicated in its initial waiver request to only four years 
beyond 2015; thus, the deadline of the waiver would be 31 December 2019 instead of 
31 December 2022. He also recalled that the purpose of the requested waiver was to allow Jordan to continue to provide benefits under the programme to the present SME beneficiaries, while 
providing Jordan with the time necessary to  design and implement an entirely new and 
WTO-consistent subsidy programme. 
4.5.  When Jordan was initially granted an extension for its export subsidy programme, pursuant 
to the 2007 procedures adopted by the General Council, it was fully committed to bring the 
programme into compliance with its WTO obligations by the date foreseen in those procedures; 
indeed, the programme's expiry date was 31 December 2015. However, the exceptional and extraordinary challenges faced by the Jordanian economy had impeded the programme's 
beneficiaries from achieving a level of competitiveness that would allow them to survive without 
government support. His authorities were clear about the need to continue providing support to Jordanian SMEs after 2015 but the major challeng es and crisis being faced by the country had 
dominated the Government's agenda to such an extent that it had not yet been able to design and 
implement a WTO-compliant replacement programme. 
4.6.  As already stated in previous CTG meetings, the unprecedented geographical situation and 
the severe instability in the region continued ne gatively to affect the Jordanian economy and to 
hinder the industrial sector. The complete closure of the Jordanian–Syrian border since April 2015, 
Jordan's main gate for exports, had made the situation still harder. Moreover, the recent attacks on the Jordanian–Syrian free zone had forced  investors and traders to look for secure 
replacements for their goods in Jordan and, at the same time, to look for alternative routes for 
exports. However, in many cases no viable transp ortation alternatives existed, apart from sea and 
air freight, which resulted in longer and more costly transportation routes. In this context, Jordan's 
only feasible option at this point was to ask for the extension of the existing legislation for a 
modest period and then to establish during that time a new and WTO–consistent programme. 
4.7.  In light of the above, Jordan still needed the extension in order to phase out its current 
subsidy programme and to prepare alternative programmes, including their technical, budgetary, 
and legal framework. Hence, Jordan requeste d once again the Goods Council to consider 
expeditiously and favourably its waiver request. 
4.8.  The delegate of the Kingdom of Saudi Arabia , on behalf of the Arab Group, thanked Jordan 
for its thorough explanation and for the effort s it had undertaken to explore alternative 
programmes in line with the SCM Agreement. He also welcomed Jordan's revised request, following the comments made by Members at the previous meeting. He observed that SMEs played 
an important role in the world economy, contributing substantially to the economic development, 
social uplift, and political stability of every country, and most especially in the case of those countries facing major economic and political challenges. 
4.9.  Jordan had revised its waiver request and had limited its duration and scope in order to 
provide SMEs with a further opportunity to deal  with their unprecedentedly difficult regional 
situation, including challenges of a political and economic nature. The regional instability and the global financial and economic slowdown had had implications for Jordan in the form of various 
economic shocks. Moreover, the spillovers from conflicts in neighbouring countries continued to 
subdue Jordan's economic activities. Consequently, the Arab Group believed that favourable G/C/M/123 
 
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  consideration of the waiver request was essential to help Jordan overcome its current difficulties. 
To conclude, he said that the WTO existed as a means to an end, and that end was to enhance the welfare and living conditions of all, both within and across countries, developed and developing countries alike. This required policy coherence between trade policy and public policy goals, and in 
this context it was necessary to assist Jordan in its attempts to overcome the numerous challenges 
faced by its economy. Thus, the Arab Group supported Jordan's revised request. 
4.10.  The delegate of Egypt associated his delega tion with the statement made on behalf of the 
Arab Group and reiterated the points made by his delegation in statements delivered at previous 
CTG meetings. He confirmed the support of his delega tion for Jordan's request to extend its export 
subsidy programme. Egypt was of the view that such a programme would contribute to the development of the Jordanian economy, which was fully in line with Paragraph 1 of the Doha 
Ministerial Declaration confirming that growth and development should be at the core of the 
multilateral trading system under the WTO. Jordan's economy had been deeply affected by political tensions in surrounding countries, and the general instability of the Middle East region over the 
last few years had greatly increased the political, economic, and social burdens that challenged the 
Jordanian government and its ability to find ad equate and acceptable solutions. Egypt believed 
that the extension of Jordan's subsidy programme would certainly help the country to overcome its 
social burden and effectively continue its efforts to push forward growth and economic 
development. Egypt hoped that this matter would be settled promptly. 
4.11.  The delegate of Qatar also referred to the statements made by his delegation at previous 
CTG meetings, and reiterated Qatar's support for Jordan's request to extend the phase-out period 
of its programme. 
4.12.  The delegate of Switzerland appreciated the systemic concerns raised by other Members 
concerning Jordan's request; Switzerland was also mindful not to create situations that might 
gradually prejudice WTO disciplines and commitments. However, the challenging situation Jordan 
continued to face allowed Switzerland to accept Jordan's waiver request to further extend its export subsidy programme, although Switzerland encouraged Jordan to continue its efforts to 
phase out the programme in the near future. 
4.13.  The delegate of the Kingdom of Bahrain echo ed the statements made on behalf of the Arab 
Group and reaffirmed the support of Bahrain in fa vour of Jordan's waiver request. Undoubtedly, 
Jordan was facing several economic challenges and geopolitical instabilities. These extenuating 
circumstances, which were creating adverse effect s on the Jordanian economy, fully justified the 
need for the continuation of the export subsidy programme. 
4.14.  The Kingdom of Bahrain did not consider this programme to be trade-distorting. Jordan was 
a developing country with a share of less than 0. 1% of global export trade, and the programme 
excluded Jordan's largest industries and targeted  only SMEs. Indeed, the current export subsidy 
programme would have a positive effect overall on trade within the region. 
4.15.  The Kingdom of Bahrain was pleased to see that, after having held bilateral meetings and 
consultations with Members concerned, Jordan had revised its request and decided to reduce the requested extension to only four years; this demonstrated Jordan's flexibility and openness to negotiation. He hoped that the request would receive favourable and positive consideration at the 
CTG level. 
4.16.  The delegate of Oman thanked Jordan for ha ving outlined the reasons justifying its waiver 
request. His country associated itself with the statement made on behalf of the Arab Group and 
the GCC countries. Oman welcomed the efforts made by Jordan to accommodate the comments 
and concerns raised by Members; these demonstrated from Jordan a spirit of cooperation and good faith. 
4.17.  His delegation appreciated Jordan's decision to reduce the deadline of the extension from 
seven to only four years, or until 31 December 2019, by which time Jordan intended to have 
replaced its export subsidy programme for SMEs with a WTO-consistent alternative. Jordan's extenuating political and economic circumstances we re familiar to Members; there was no need to 
describe the urgency of this situation. Jordan’s industries had lost their market share in 
neighbouring countries, and without government support the very survival of SMEs was under G/C/M/123 
 
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  threat. Moreover, Jordan was a developing coun try, a small and vulnerable economy, and a 
recently acceded Member. 
4.18.  It was encouraging to observe that a number of Members who had previously raised 
concerns had subsequently revised their positions so as to accommodate Jordan's request. He 
hoped that other Members would do the same and consider Jordan's request favourably. 
4.19.  The delegate of Turkey referred to the st atements made by his delegation at previous 
CTG meetings and reiterated Turkey's support of the waiver request. 
4.20.  The delegate of Norway recognized the ex ceptional and extraordinary challenges Jordan was 
facing and its consequences for the industrial sector, including the unprecedented geo-political 
situation and severe regional instability. 
4.21.  Norway had strong systemic interests in maintaining a well-functioning multilateral trade 
regime and, in principle, Norway was of the view that Members should refrain from introducing or 
maintaining measures that undermine WTO principles. However, in light of the exceptional circumstances, Norway could support the extension to Jordan's subsidy programme for four more 
years. However, this extension should not create a precedent. 
4.22.  The delegate of Japan praised Jordan's role in building peace and stability to the Middle 
East, and recognized the challenges that Jordan was facing, including those posed by the massive 
influx of refugees from neighbouring areas. In  this regard, Japan had provided assistance to 
Jordan in support of Jordan's efforts. 
4.23.  Regarding the waiver request, since the last CTG meeting Japan had been in close contact 
with Jordan and other interested Members. Th e detailed explanation Jordan had provided had 
allowed concerned Members more clearly to understand the background to the request. However, 
Japan wanted to see whether there could be a solution to sustain Jordan's economy besides that of granting a waiver with regard to the transitional period for the elimination of Jordan's export 
subsidy programme. 
4.24.  With regard to the revised request recently circulated by Jordan, Japan needed extra time to 
consider it in detail. However, as a preliminary reaction, Japan considered that reducing the 
phase-out period from seven to four years was a step in the right direction, although one that still 
did not remove Japan's systemic concerns. He therefore encouraged Jordan to continue making efforts to transform its export subsidy programme into a WTO-consistent programme, and to do so 
in an expeditious manner. Japan was willing to contribute to such efforts, together with other 
interested Members. 
4.25.  The delegate of Canada reiterated and reaffirmed Canada's support for Jordan's request, as 
expressed at the last Council meeting on 26 March 2015. The revised request was encouraging, 
and Canada continued to recognize the impact of regional conflicts on Jordan's economy, including 
a large influx of refugees that placed additional strain on Jordan's infrastructure, public services, and domestic labour market. Therefore, Canada again supported Jordan's request. 
4.26.  The delegate of China said that her country's position had not changed since the last 
CTG meeting; therefore, she reaffirmed Chin a's support for the revised waiver request. 
4.27.  The delegate of Pakistan said that his country, while firmly upholding the importance of the 
multilateral rules, reaffirmed its support for Jordan's request for an extension of the phase-out 
period of its export subsidy programme, as already expressed at the last CTG meeting. Jordan had 
now reduced the requested extension from seven to four years, a development that should encourage other Members also to support Jordan in times of need. 
4.28.  The delegate of the Republic of Korea ap preciated Jordan's revised request and reiterated 
Korea's support for the extension of its export subsidy programme. He hoped that Members would 
consider this request favourably. 
4.29.  The delegate of Australia thanked Jordan for explaining its revised waiver request, which 
reduced the extension period for the elimination of Jordan's export subsidy programme. Australia G/C/M/123 
 
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  acknowledged the importance of the issue, the ec onomic impact of regional developments on 
Jordan, and also that Jordan was looking for solutions that would address Members' concerns. Australia's views on Jordan's waiver request had already been elaborated at the March CTG meeting, were known to Members, and remained the same. Australia also 
acknowledged the value of continuing and constructive bilateral discussions aimed at finding 
alternative solutions to this issue. 
4.30.  The delegate of Chinese Taipei referred to her statement made at the March CTG meeting 
and, given the exceptional economic, financial, and political challenges Jordan was facing, she 
asked Members to consider favourably Jordan's revised request for a waiver to extend the phase-out period. 
4.31.  The delegate of the European Union stated  that, in light of the extraordinary and unique 
circumstances Jordan was facing, the EU was ready to express its support to Jordan's request, and 
invited Jordan to make use of the time ahead to am end its legislation, as the Jordanian delegate in 
his statement had indicated it would. Moreover, th e EU remained ready to work with Jordan and 
other interested Members towards achieving a consensual outcome in the near future. 
4.32.  The delegate of New Zealand thanked Jordan for the update it had provided on its request 
for a waiver. Jordan's statement and revised request indicated that it had acknowledged the 
concerns expressed by Members at previous CTG meetings and was considering ways in which to 
address them. Jordan was undoubtedly facing signif icant difficulties due to the challenges in the 
region. New Zealand was sympathetic to this si tuation and acknowledged the burden Jordan was 
shouldering in light of such a significant number of refugees. He recalled that New Zealand had 
recently provided support for Jordan, including assi stance to support refugees. However, as he had 
flagged in previous CTG meetings, New Zealand rema ined opposed to all export subsidies and thus 
had similar concerns with regard to Jordan's waiver request as those raised by Japan and 
Australia. 
4.33.  The bilateral discussions with Jordan and Jord an's report at this meeting were very helpful 
in understanding differing approaches to the waiver request. New Zealand looked forward to 
hearing of Jordan's efforts to explore options for redesigning a programme that would render its 
policies consistent with its WTO obligations. New Zealand was ready to continue working closely with Jordan in order to find WTO-consistent policy alternatives that did not require a waiver request. There was considerable time ahead in 2015, and the WTO membership should continue to 
accord due recognition to the challenges that Jordan was facing, but bearing always in mind the 
need for Jordan to work consistently towards eliminating its export subsidies. 
4.34.  The delegate of the United States of America expressed sympathy with the enormous 
challenges Jordan was currently facing as a result of broader events in its region, not least of 
which were the logistical challenges its exporters were facing to ship their products out of the country. The US had met Jordan on several occasions, on which the specifics of the programme at 
issue had been reviewed and where alternatives as to how the programme could be made 
WTO-consistent had been offered. 
4.35.  The US continued to be ready to meet Jord an and to offer any further assistance required. 
Her delegation had also taken note of the revised request and appreciated Jordan's efforts in 
looking for alternatives. The US would look closely at the revised request as it also had systemic 
concerns about it; however, the US would prefer a modification to the programme in order to make it consistent with Jordan's obligations under the SCM Agreement, even if this modification 
might take some time. The US did not support a waiver to cover this period; nonetheless, it 
expected that WTO Members would appropriately take into account the particular circumstances Jordan was facing in any follow-up work. 
4.36.  The delegate of Guatemala supported Jord an's revised waiver request and his authorities 
believed that the circumstances mentioned by Jordan  justified the waiver under Article IX of the 
Marrakesh Agreement. 
4.37.  The delegate of Jordan thanked delegation s that had expressed their support for Jordan's 
request, as well as Members who had shown in terest, raised questions, and made comments. 
Since Jordan's accession in 2000 and regardless of the high level of commitments imposed on G/C/M/123 
 
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  Jordan as a recently acceded Member (RAM), Jord an had managed fully to respect and fulfil its 
commitments under the WTO. Jordan would also fulfil all its obligations under the SCM Agreement, including the phase-out of the export subsidy programme in due time. However, Jordan's request was limited in scope to extending the transitional period for four years after 2015 so that the 
beneficiaries could continue to receive assistan ce to deal with the unprecedentedly difficult 
situation in the region, including challenges of a political and economic nature, while allowing Jordan the necessary time to design and implement a totally new and WTO-consistent subsidy 
programme to benefit SMEs. 
4.38.  His delegation was encouraged by the leve l of support for the request, and although some 
Members had said that changing a law or making a new programme was an easy task, this was not the case for Jordan. The limited resources an d the difficulties that the government and the 
country were facing due to the border blocks, and all the security issues, made it very difficult for 
Jordan to introduce such changes. Perhaps it would be easy were it not for Jordan's current circumstances, where the country received hug e waves of refugees, a unique situation where 
refugees represented 21% of the total population. Jo rdan needed support in all areas, not only in 
extending the waiver's phase-out period. However, the WTO was not the forum to address these other issues. 
4.39.  To conclude, he called on Members to consider Jordan's request favourably, especially 
taking into consideration the unique and unprecedented circumstances that Jordan was facing. Jordan would continue consultations with concerned Members with the aim of reaching a positive outcome that would address the economic, fi nancial, and development needs of Jordan. 
4.40.  The Chairperson thanked delegations for their statements and proposed that the Council 
take note and revert to this issue at its next meeting. 
4.41.  The Council so agreed. 
5  NIGERIA – LOCAL CONTENT MEASURES IN OIL AND GAS – REQUEST FROM THE 
EUROPEAN UNION AND THE UNITED STATES OF AMERICA 
5.1.  The Chairperson informed the Council that, in a communication dated 11 June 2015, the 
delegations of the European Union and the United States of America had requested the Secretariat 
to include this item in the agenda of the meeting. 
5.2.  The delegate of the European Union regrette d once again to have to take the floor on an 
issue that had been on the agenda of the CTG and of the TRIMs Committee for almost two years 
without clarification from Nigeria. The EU hoped that at this meeting Nigeria would answer all the 
questions raised, questions which would also and again be conveyed to the Nigerian delegation. The EU understood that an Amendment Bill had b een passed by the National Assembly but was 
still awaiting the assent of the President. The EU  hoped that the Nigerian Government had seized 
the opportunity provided by this amendment to review certain provisions of the Act, including Schedule A, and that it had also addressed the co ncerns about it that had been raised on many 
occasions. The EU would closely monitor the situation to see if the new legislative scheme, and 
particularly the local content requirements, prov ided the appropriate tool to achieve Nigeria's 
stated goal of enhancing domestic capacity in the oil and gas industry. His delegation would be 
grateful to receive additional informatio n on the content of the Amendment Bill. 
5.3.  The delegate of the United States of America reminded Members that it had now been almost 
five years since the US first drew Member attention to certain measures which appeared to require 
the use of local content in Nigeria's oil and gas industry. 
5.4.  Written questions had been addressed to Nigeria in September 2011, and the US had 
described its understanding of the measures in October 2011. At the time, Nigeria had indicated that they had not received any instructions from  capital, nor answers to the US questions. The 
issue had been raised by her delegation at each subsequent meeting of the TRIMs Committee, 
most recently in May 2015, but no formal response or substantive engagement had been provided by Nigeria. G/C/M/123 
 
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  5.5.  Nigeria had failed to address the factual questions addressed to it, and this created a 
systemic concern. The US had raised this issue several times in the CTG. The local content issue 
had also been raised bilaterally, including in the TRIMs Committee and at Ministerial level. 
5.6.  As already noted by the US, the WTO Committee system provided a forum in which to gain a 
basic understanding of the trade policies of ot her Members and to raise concerns outside the 
context of dispute settlement. However, the in formation gathered about Nigeria's investment 
measures came from external sources and not from Nigeria's government. She urged Nigeria to 
make use of the CTG to clarify an y possible misunderstanding on the part of Members and also to 
clarify how its measures related to its obligations under the TRIMs Agreement. 
5.7.  The US also noted that measures requiring local content appeared to be spreading to new 
sectors in Nigeria, such as the ICT sector. Such measures imposed a long-term cost to Nigeria, as 
investors questioned their ability to operate in the market and this led them to consider alternative 
locations boasting a more favourable investment climate. The US looked forward to working bilaterally and multilaterally with Nigeria to address these concerns and would welcome any 
engagement from Nigeria to work with Members through the Committee system. 
5.8.  The delegate of Australia thanked the US an d the EU for having placed this item once again 
on the CTG's agenda, and reiterated its call to Ni geria to explain how the preferential treatment 
accorded to local goods and services in the Nigerian Oil and Gas Industry Content Development 
Act of 2010 was consistent with Nigeria's WTO obligations on national treatment, and particularly Section 11.1 of the Act, which established minimum percentages of Nigerian content in goods, services, and investment for any project in the Nigerian oil and gas industry. Furthermore, 
Section 7 of the Act required operators to submit a Nigerian Content Plan demonstrating 
compliance with the Nigerian content requirements. Nigeria should explain these measures. 
5.9.  The delegate of Japan thanked the EU an d the US for having placed this issue on the 
CTG's agenda, and reiterated its systemic concern over Nigeria's measures. Nigeria should 
demonstrate transparency by promptly providing information to the Council and by responding to 
long-standing questions posed by Members in previous meetings of this Council and the 
TRIMs Committee. 
5.10.  The delegate of Norway echoed the conc erns expressed by previous speakers about the 
local content measures in the Nigerian Local Content Act of 2010, which had been a hindrance for 
Norwegian companies wishing to operate productively in the Nigerian oil and gas industry. Many 
projects were delayed or overburdened due to strict local content requirements and otherwise 
onerous regulations. Once projects were oper ative, monitoring and compliance regimes added 
considerable costs and time-consuming negotiations. Collectively, the measures and requirements 
of the Local Content Act made the operating regime for this industry unpredictable and vulnerable 
to arbitrary treatment. Norway believed that, by  remedying this, the sector would become more 
effective at including Nigerian workers and busine sses, boosting economic growth and making the 
sector more attractive to foreign investors. Nigeria should address all the concerns expressed. 
5.11.  The delegate of Nigeria thanked delegation s for their statements on the Nigerian Oil and 
Gas Industry Content Development Act of 2010 and assured the Council that Nigeria was 
respectful of its WTO obligations; a proof of this were the notifications submitted by Nigeria, which 
enhanced the WTO Transparency Mechanism. 
5.12.  She added that the Act maintained a good balance between national aspirations for local 
capacity development and participation of international investors in the Nigerian Oil and Gas 
Industry. Her delegation was in contact with Abuja and would provide the appropriate responses to 
the questions at the TRIMs Committee, hopefully before the October meeting. 
5.13.  The Chairperson proposed that the Council take note of the statements made. 
5.14.  The Council so agreed. G/C/M/123 
 
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  6  INDONESIA'S IMPORT AND EXPORT RE STRICTING POLICIES AND PRACTICES – 
REQUEST FROM THE EUROPEAN UNION, JAPAN AND THE UNITED STATES OF AMERICA 
6.1.  The Chairperson informed the Council that, in a communication dated 11 June 2015, the 
delegations of the United States of America, Japan, and the European Union had requested the 
Secretariat to include this item on the agenda of this meeting. 
6.2.  The delegate of the United States of America regretted once again to take the floor to 
express continuing concerns about trade policy trends in Indonesia–concerns very well known to 
the Council. Indonesia's market was full of trade and investment restrictions, including import 
licensing requirements, unique technical regulations, conformity assessment procedures–such as for toys, pre-shipment inspection requirements, export restrictions, and local content and domestic manufacturing requirements. Individually, each poli cy created burdens for traders; together, they 
created a complex web of approvals that made In donesia's market impenetrable and Indonesia a 
less attractive investment and business destination. 
6.3.  A major matter of concern was the trade regime's general lack of transparency given that 
Indonesia had not notified its subsidies programmes since 1995. There were long-standing 
requests for Indonesia to notify its pre-shipment inspection requirements and there had also been numerous instances when the government had failed to notify technical regulations, conformity 
assessment procedures, and SPS measures, as required by the relevant agreements. 
6.4.  Long-standing concerns also existed about Indonesia's import licensing regime. Over the last 
several years, Indonesia had introduced import licensing requirements on an ever expanding list of products, such as agriculture, information and communications technology, consumer goods, 
electronics, household appliances, food and beve rages. In practice, these licensing procedures 
were complex and non-automatic; there was no assurance that Indonesia was implementing them in a consistent and predictable manner. Moreover, the import licensing requirements appeared to 
be used to implement WTO-inconsistent measures . The Ministries of Trade and Industry were 
using the issuance of import permits and licenses for cell phones, tablets, and handheld computers to restrict the quantity of imports of these products and to force importers to commit to 
developing local manufacturing. 
6.5.  The US was also concerned by the expanded  use of localization requirements, including but 
not limited to local content requirements and domestic manufacturing, as being applied by Indonesia. These types of requirements were fo und across many sectors, including mining, oil, 
gas, franchising, retail, and telecommunications. Most recently, the Indonesian government was 
developing new local content regulations for equipment and devices that ran on the 4G LTE spectrum. Concerns also existed about the implementation of the local data centres 
requirement. 
6.6.  Many of these policies came from the previous government; however, there were an 
increasing number of statements from senior Indonesian officials of the current government 
indicating that the goal of new policies would be to reduce imports, increase exports, and balance 
both trade and current accounts. Such policies would not only burden foreign products, but also had the potential to distort patterns of investment, deprive Indonesia's neighbours and other developing countries of foreign direct investment, deprive Indonesia's consumers of the widest 
choice of products, and drive up costs throughout the Indonesian economy. 
6.7.  Indonesia's representative had noted at the last meeting that Indonesia was working to 
render operational its national single window, and to improve port infrastructure. These actions 
were welcomed; however, they did not address the concerns raised at the CTG on numerous 
occasions. 
6.8.  Her delegation had raised and would continue to raise its concerns in the appropriate 
WTO Committees, including in the Import Licensing, Agriculture, Technical Barriers to Trade, 
Customs Valuation, and TRIMS Committees. The US hoped that its interventions here at the WTO and the bilateral engagements would bring about positive change and a new direction in Indonesia's trade policy. G/C/M/123 
 
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  6.9.  The US acknowledged Indonesia's objectives of promoting domestic production, creating 
jobs, and moving the economy up the value chain to a higher level of development. However, 
closing the market to imports was not the best way to achieve those objectives. Instead of highlighting Indonesia's natural advantages as a place to do business, Indonesia appeared to be 
expanding the web of import restrictions, export restrictions, local manufacturing and content 
requirements, and foreign equity restrictions. Th ese and other policies reduced the transparency, 
predictability, and competitiveness of Indonesia's business and investment climate. Indonesia was 
rapidly developing a reputation as an unwelcoming place for foreign trade and investment. The 
US continued to encourage the new government to distance itself from the previous government's 
policies and to respond to its concerns by reviewing laws and regulations with a view to ensuring that they were supportive of Indonesia's economic goals and in conformity with its 
WTO commitments. 
6.10.  The delegate of the European Union reca lled that this issue had been brought on many 
occasions to this Council and to the Import Licensing, TBT, TRIMs, and SPS Committees. The 
EU concerns about the persisting restrictive and protectionist direction Indonesia's economic and 
trade policies had taken had not been addressed. The different economic operators continued to face different measures, such as: multiple layers of general and specific import licensing 
requirements negatively affecting trade flows; the legislation on distribution in the retail sector 
which had the potential to restrict considerably the possibility for non-locally produced goods and non-local marks actually to be sold; the imposition of pre-paid corporate income tax to importers, which added to the restrictive import measures and was discriminatory; and the entry port 
restrictions in the Jakarta main port, which continued to undermine the EU's capacity to export 
foods. Export restrictions also continued to be applied on certain raw materials, and the amendment of the law on export tariffs in 2014 had left unchanged the ban on exports of 
unprocessed minerals. These measures disrupted international markets, increased input costs for 
producers, and led to uncertainty in terms of supply. 
6.11.  He reiterated the call from the EU for mo re transparency on the implementation of the 
measures and, in general, on the lack of transp arency and consultation which created a climate of 
uncertainty and ambiguity for exporters, importers, and investors alike. This applied in particular, but not only, to the 2014 Laws on Industry and Trade, whose potential impact on trade and investment could be significant in terms of disrupting trade if fully implemented in their current 
form. 
6.12.  The delegate of Japan echoed previous speakers in expressing its concern with regard to the 
recent trade policy of Indonesia, which was increasingly restrictive and ran counter to the voices of 
alert raised by many Members in many WTO fora. The policies in question included various laws 
and regulations, such as laws and regulations on the following: mining; trade; industry; the restrictions in the retail sector; and the quantity restriction on alloy steel imports. Japan doubted 
the consistency of these laws and policies with the WTO Agreements, and continued to be greatly 
concerned by the increasingly restrictive trade policies of the Indonesian government. 
6.13.  Japan believed that an open, transparent, and stable trade and investment environment 
was key to promoting foreign direct investment and to the development of Indonesia. Many 
WTO Members, including Japan, had submitted written questions to Indonesia; however, most of 
Indonesia's answers were general and vague, wi th statements such as "trade policy is 
implemented in accordance with the WTO Agreements". 
6.14.  Japan regretted that it had received insufficient explanations from Indonesia, and 
explanations which did not directly respond to Members' questions. For instance, in response to a question on local content requirement, Indonesia answered that it did not differentiate treatment 
between local and foreign providers of services , when Article 2 of the TRIMS Agreement, and 
Article III of the GATT, clearly prohibit providing preferential treatment to domestic products as 
compared to foreign products. Japan required Indonesia to review again the consistency of all its measures with the WTO Agreements and then to bring its measures into conformity with the 
relevant provisions. 
6.15.  Japan continued to have concerns with regard to the Mining Law and had intended to solve 
this issue bilaterally. However, the lack of clarification from Indonesia had forced Japan to begin 
an internal consideration with regard to taking the steps available under the DSU, and urged the 
Indonesian government to respond to Japan in a satisfactory manner. G/C/M/123 
 
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  6.16.  In addition to the above-mentioned cases, Japan had received some information on local 
content requirements on 4G mobile phones an d the review of import licensing, and urged 
Indonesia to implement these measures in a WTO-consistent manner. Japan also asked Indonesia to improve transparency on the law-making and due process, including with regard to public 
comments and establishing a reasonable period of time before laws and regulations were enforced. 
Japan would continue to be engaged in the discussion of these issues, together with other interested Members. 
6.17.  The delegate of Australia shared the previous speakers' concerns about Indonesia's import 
and export-restricting policies in recent years, particularly insofar as these affected agricultural 
trade. He thanked the Indonesian government for the explanations provided about its measures in 
different WTO committee meetings and in bilateral discussions, both in Geneva and in Jakarta. 
However, concerns remained about the measures. 
6.18.  With regard to the specific agriculture issues, he reiterated Australia's concerns about the 
regulation of the Ministry of Agriculture concerning the Importation of Carcass Meat and/or 
Processed Meat Products into Indonesia, and its subsequent amendment. This regulation allowed 
only state-owned enterprises to import secondary beef cuts, and indicated that such imports could only be undertaken in limited circumstances and with ministerial approval. The regulation also 
limited the types of offal that could be imported. Furthermore, the additional packing, labelling, 
and purpose of use requirements were being imposed on imported meat products and not on domestic products. He added that beyond these particular measures, concerns existed about Indonesia's import permit system for agricultural  products, including live cattle, boxed beef, and 
horticultural products, which effectively acted as quotas on imports. 
6.19.  As these measures would affect trade between the two countries, Japan asked Indonesia to 
further clarify their consistency with Indonesia's WTO obligations. 
6.20.  The delegate of Brazil shared the concerns of previous speakers, in particular insofar as 
Indonesia's measures affected poultry. Consultations had taken place with Indonesia in the context 
of dispute DS484, Indonesia – Measures Concerning the Importation of Chicken Meat and Chicken 
Products . But Brazil's attention was not limited to these products, and Brazil remained concerned 
with the WTO consistency of the measures adopted by Indonesia also from a wider perspective. He 
invited Indonesia to bring its measures into conformity with the WTO rules. 
6.21.  The delegate of Canada stated that his country, as a significant exporter of high-quality 
agriculture and agri-food products, had a systemic interest in ensuring that the measures 
implemented by its trading partners did not restrict trade. However, Indonesia's numerous measures, especially those relating to agricultur al products, might negatively affect Canada's 
ability to compete in the Indonesian market. Canada shared the concerns expressed by others at 
this meeting, in particular with regard to Indonesia's persisting import-restriction policies and practices with respect to import licensing. He en couraged Indonesia to respect its WTO obligations 
in this regard. 
6.22.  The delegate of Chinese Taipei joined previous speakers and expressed particular concerns 
about Indonesia's new import licensing regime in respect of fish and fish products, an issue 
already voiced at the last CTG. These concerns related to whether or not approval of the 
application for a fishery product import permit from the competent authority in Indonesia was 
granted in all cases and within a feasible timeline; she also asked Indonesia to clarify the justification for limiting entry of these products. Serious concerns also existed about Indonesia's 
extension of its import licensing regime to a wide range of products; this negatively affected 
Chinese Taipei's products access into the Indonesian market. 
6.23.  Chinese Taipei would continue to monitor Indonesia's import licensing regime closely, 
including within the context of the DSU, and encouraged Indonesia to improve its import licensing 
procedures and to ensure their conformity with  the relevant provisions in the Agreement. 
6.24.  The delegate of New Zealand shared the significant concerns raised by a number of 
Members with regard to a range of import restrictions in Indonesia's laws and regulations. Like 
Australia, New Zealand had particular concerns regarding the measures that affected trade across 
a range of agricultural products, including horticultural and animal products, and with regard to G/C/M/123 
 
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  the recent promulgating of new Indonesian regulations that further restricted agricultural exports 
to Indonesia. 
6.25.  The delegate of Indonesia thanked the pr evious speakers for their ongoing interest in 
Indonesia's export and import policy. Indonesia acknowledged that this issue had become a 
long-standing CTG agenda item, but recalled that replies had also been provided at the last 
CTG meeting. She therefore referred Members to Indonesia's statement at the March 2015 CTG meeting, contained in paragraphs 12.32 to 12.36 of document G/C/M/122. 
6.26.  Indonesia was also fully aware that this issue had been mentioned in the relevant 
committee meetings, and, highlighted that the ge neral principle adopted by Indonesia for its 
import and export policies had been applied for such justifiable reasons as safety, health, environment, social, culture, and moral hazard reasons. 
6.27.  These policies were not intended to constitu te barriers to trade. Indeed, Indonesia's import 
trends from 2010 until 2014 showed an upward movement of 6.14% annually, while total trade increased by 3.53% in the same period; Indonesia's exports, however, did not enjoy a similar level 
of increase and had only registered, for the said period an increase of 1.14%. Indonesia was fully 
aware that this difference did not justify the application of unnecessary barriers to trade. 
6.28.  She also pointed out that some political statements should be taken by the new 
Government to fulfil its promises to the Indonesian people. Indonesia would always observe the 
transparency principle; indeed, during the drafti ng process of such regulations all stakeholders, 
including international operators and foreign missions had been invited to provide comments and recommendations. 
6.29.  She highlighted that all of Indonesia's polic ies were "living policies"; they evolved and were 
readjusted and recalibrated commensurate to the challenges that emanated from the global trade into which Indonesia was integrated. Indonesia was committed to continuing to work with 
interested Members, in the WTO and in other fora, to address Members' concerns and to reach a 
solution that would at the same time give consideration to Indonesia's developmental needs and challenges. She ensured delegations that any changes to the regulation, and its development, 
would be communicated to the relevant committee. 
6.30.  The Chairperson thanked delegations for th eir interventions and proposed that the Council 
take note of the statements made. 
6.31.  The Council so agreed. 
7  PAKISTAN – DISCRIMINATORY TAXES – REQUEST FROM THE EUROPEAN UNION AND 
THE UNITED STATES OF AMERICA 
7.1.  The Chairperson informed the Council that, in a communication dated 11 June 2015, the 
delegations of the European Union and the United States of America had requested the Secretariat 
to include this item on the agenda of this meeting. 
7.2.  The delegate of the European Union informed the Council that his delegation had already 
raised this item at the last meeting of the Committee on Market Access but that, having not 
received any answers; it had decided to bring th e matter to the CTG. In particular, the EU had 
concerns regarding what appeared to be a discriminatory taxation system between products imported into Pakistan and domestically manufactured products. Indeed, Pakistan's Statutory 
Regulatory Order (SRO) 1125 concerning domestic sales taxes covering a large number of 
products destined for both industrial use and retail sale had been amended several times in 2013 and 2014. The outcome of such amendments was that imported finished goods ready for use by 
the general public were charged with a sales tax of 17%, while like domestically manufactured 
goods in retail sales were instead charged with a tax of 5%. 
7.3.  EU companies complained that this discriminatory treatment and higher sales tax rate as 
applied to imported products negatively affected their exports to Pakistan, in particular in the area 
of leather, leather articles, and leather footwear . All of these products had seen their export G/C/M/123 
 
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  figures decrease between 2013 and 2014 in a situation where overall EU exports to Pakistan were 
increasing. 
7.4.  These concerns had been raised bilatera lly with Pakistan on a number of occasions but 
without receiving any meaningful response, incl uding at the Market Access Committee and during 
Pakistan's recent Trade Policy Review, where other WTO Members had also posed questions to 
Pakistan. At the Trade Policy Review meeting, the EU welcomed Pakistan's commitment to establish a simplified and broader tax regime that would eliminate SROs. This process was planned 
to last until June 2017, but despite numerous questions from the EU and other Members Pakistan 
had not provided any specific information on its plans and intentions. The EU noted that the reform of SROs might be a substantial undertaking, but that it was one that could not be used to justify continued discriminatory treatment of imports, an d a discriminatory treatment in conflict with 
WTO rules. 
7.5.  The EU requested Pakistan to provide detaile d information on the timely actions it would take 
to ensure the removal of any discriminatory treatment on imported finished goods in the 
application of its sales taxes. 
7.6.  The delegate of the United States of America expressed continued concern with regard to a 
series of SROs put in place by Pakistan, the most recent being SRO 420(I)/2014, that increased 
the sales tax on imported items like apparel, foot wear, leather, and sporting goods from five to 
17%. This kind of discriminatory tax regime required review under GATT Article III on national treatment relating to internal taxation and regulation. 
7.7.  The US had recently engaged bilaterally with Pakistan's Ministry of Finance and the Federal 
Board of Revenue on this issue. Both had assured the US that the sales tax on 
domestically produced items would eventually be equalized, but that to date no steps had been 
taken in this direction. 
7.8.  The US would welcome any updates from Pakistan on any steps taken or future plans 
established to remedy a tax policy that appeared to apply internal taxes to imported products in a manner contrary to the principles set forth in GATT Article III. The US would also welcome an 
update on Pakistan's progress towards eliminating all trade-distorting SROs. As noted by the 
Secretariat during Pakistan's TPR earlier this year, the use of SROs "severely undermines the predictability of the trade regime" and served as "a central source of deviation from MFN rates." 
7.9.  The delegate of Canada joined the EU and the US in sharing systemic and commercial 
concerns with regard to Pakistan's discriminatory taxes. These taxes applied to a range of goods, 
including Canadian exports like sports equipment an d textiles, carpet, leather, and surgical goods. 
Canada would appreciate greater clarity from Pakistan on this issue, and especially clarification as 
to how it intended to adhere to its WTO obligations, particularly with respect to GATT Article III. 
7.10.  The delegate of Norway expressed interest  in this case from a systemic viewpoint and 
echoed previous speakers in asking if there could be discrimination between imported and 
domestically manufactured goods. He urged Pakistan to eliminate any discriminatory taxes and 
looked forward to hearing from Pakistan on this issue. 
7.11.  The delegate of Chinese Taipei indicted th at Pakistan was among Chinese Taipei's important 
export markets; thus, her delegation would like clar ification from Pakistan as to how its differential 
treatment of sales tax applied to imported and do mestic products was justified under GATT 1994. 
Concerns also existed on Pakistan's non-transparent customs-related SROs. Canada urged Pakistan to quickly phase-out these concessions. 
7.12.  The delegate of Switzerland encouraged Pakistan to provide more information on this issue 
so as to help to improve Switzerland's understanding of the situation. 
7.13.  The delegate of Pakistan thanked delegation s for their statements on the issue of Pakistan's 
internal taxes and stated that Pakistan had been and would continue to be engaged in resolving 
the issue. In this vein, Pakistan would appreciate holding bilateral consultations with interested Members with a view to resolving the issue amicably. Pakistan was committed to strengthening the multilateral rules-based system. G/C/M/123 
 
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  7.14.  At the meetings held with the EU and other Members, Pakistan had taken cogent steps and, 
as indicated at its TPR, was eliminating many SROs altogether so as to bring greater transparency to its entire trade regime. Pakistan had taken note of all the statements and would update the CTG at its next meeting. 
7.15.  The Chairperson proposed that the Council take note of the statements made. 
7.16.  The Council so agreed. 
8  RUSSIAN FEDERATION – TRADE RESTRICTING MEASURES – REQUEST FROM JAPAN 8.1.  The Chairperson informed the Council that, in a communication dated 15 June 2015, the 
delegation of Japan had requested that the Secret ariat include this item on the agenda of this 
meeting. 
8.2.  The delegate of Japan stated that Japan continued to have serious systemic and commercial 
concerns with regard to the trade restricting measures implemented by the Russian Federation. 
Indeed, Japan had been monitoring the Russian Fe deration's implementation of WTO commitments 
in the automotive sector and remained worried about the local content requirement in the 
industrial assembly programme to obtain preferential treatment imposed on companies that 
engaged in automobile production and assembly. 
8.3.  In January 2014 the Russian Federation had adopted a number of resolutions providing 
subsidies to automobile producers in Russia in four specific areas, relating to energy consumption, 
the production of ecologically-friendly vehicl es, employment, and research and development. 
Consequently, vehicle producers in the Russian Federation received subsidies in exchange for ensuring that production occurred in the industrial assembly mode. Japan considered that these 
measures were inconsistent with the relevant provisions of the WTO Agreements, such as 
Article 3.1(b) of the SCM Agreement, Articl e III.4 of the GATT, an d Article 2.1 of the 
TRIMs Agreement, because the conditions stipulat ed by the Russian Federation might constitute 
local content requirements. Japan also doubted the consistency of these measures with the 
Russian Federation's commitment under paragraph 2 of the Protocol of Accession to the WTO, 
particularly with regard to paragraphs 1450 and 1090 of the Working Party Report of the 
Accession. 
8.4.  At the last CTG meeting, the Russian Fede ration had explained that, according to the terms 
of its Protocol of Accession to the WTO, the in dustrial assembly programme had been granted a 
transition period until 1 July 2018. However, the exemption from the relevant WTO Agreement had 
only been allowed for the treatments listed in paragraph 1072 to 1086 of the Working Party 
Report. And the automobile programme was not listed there. He therefore asked the Russian Federation to clarify and to justify this programme. Japan had submitted questions to the Russian 
Federation in the TRIMS Committee and looked fo rward to receiving a response from Russia. 
8.5.  To respond to the Russian Federation's stat ement at the last meeting, he reiterated that 
Japan had raised this issue at the "Trade and Investment Subcommittee of Japan-Russia 
Intergovernmental Committee on Trade and Econom ic Issues", where Japan discussed the issue in 
depth at the December 2013 meeting, and where, at the last meeting, it reiterated its concern and urged the Russian Federation to address this issue faithfully. 
8.6.  The delegate of Ukraine shared Japan's co ncerns and recalled that Ukraine had repeatedly 
raised similar concerns in various WTO bodies . Regrettably, the Russian Federation had not 
addressed these concerns; to the contrary, there had been further negative developments in Russia's trade regulations that created unnecessary obstacles on and deteriorated trade, as 
reported by Ukrainian business operators and authorities. 
8.7.  An unjustifiable and discriminatory ban on imports of certain Ukrainian products, introduced 
by the Russian Federation since July 2013, had b een neither lifted nor properly explained, and 
furthermore had been expanded to some new prod ucts. Ukraine believed that there was a lack of 
interest on the side of the Russian authorities to address Ukraine's comments or enquiries concerning the above-mentioned trade-restrictive measures. Indeed, the Russian Federation had taken about eight months to respond to some of Ukraine's enquiries and, more regrettably, the G/C/M/123 
 
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  responses provided had contained vague and cont radictory information that triggered further 
doubts and questions. He therefore urged th e Russian Federation fully to abide by its 
WTO commitments so as to ensure predictable and transparent conditions for trade and to remove 
unjustifiable bans and discriminatory barriers to trade. 
8.8.  The delegate of Australia reiterated the concerns of his delegation and asked the Russian 
Federation to abide by its WTO accession commitments and to avoid the use of trade-restrictive 
measures. Australia was particularly concerned by the use of certain restrictive measures that 
were having a tangible negative impact upon Australia's trade. These concerns had been raised 
directly with the Russian Federation, and Australi a looked forward to continued engagement with 
the relevant Russian authorities on these issues. 
8.9.  The delegate of the European Union shared  Japan's concerns about the measures adopted by 
the Russian Government in support of its automoti ve industry. The EU had submitted questions in 
this regard in the relevant Committees and would continue to closely monitor developments in this area. 
8.10.  The delegate of the United States of America also expressed concerns over the new 
direction of the Russian Federation's economic policies. After years of the Russian Federation's 
accession negotiations, the US had seen significant steps taken by Russia to integrate itself into 
the global economy. Unfortunately, what could be observed now was a revers al of that strategy. 
8.11.  As stated at the last CTG meeting, the Russian Federation appeared to be adopting policies 
that, rather than taking advantage of the global marketplace, were instead turning inward and rejecting the trade liberalizing policies that were at the heart of the WTO. In short, the Russian 
Federation was blatantly adopting industrial policies that favoured Russian products at the expense 
of competition and providing the best product for the application. The most recent example was a 
draft resolution published by MINPROPMTORG that differentiated Russian industrial products from 
imported industrial products. Some reports on the draft resolution indicated that products that met 
the "Russian products" criteria would be given priority in government procurement. 
8.12.  The US had understood that the Russian Federation was framing many of these measures 
as government procurement and would give particular attention to recent amendments concerning 
state-owned enterprises so as to ensure that the "buy Russia" requirements would be implemented consistently with the Russian Federation's WTO commitments. 
8.13.  The delegate of Canada echoed the conc erns of previous speakers and encouraged the 
Russian Federation to respect its trade obligations; Canada's interest in this regard was boosted by 
Russia's leadership role in the Eurasian Economic Union (EAEU), with other countries seeking accession to the WTO. 
8.14.  The delegate of New Zealand shared some  of the systemic concerns raised by other 
Members. Nevertheless, New Zealand had an establ ished track record of constructive engagement 
with the Russian Federation on veterinary issu es, including a treatment-level agreement. New 
Zealand attached great value to its agreements wi th Russia. All of New Zealand’s animal products 
exported to Russia complied with these requirements. His authorities were ready to work with the EAEU on new certification requirements, and were mindful of the challenges this process presented. He assured the EAEU partners of New Zealand's wish to secure a robust and pragmatic 
outcome, consistent with WTO obligations. 
8.15.  The delegate of the Russian Federation stated that, at previous meetings of the CTG and the 
TRIMs Committee, Russia had clarified Members' concerns about its industrial assembly 
programme and its relation with subsidies in the automotive sector. The relevant answers to the 
written questions would be provided in due course . The Russian Federation regretted to note that 
interested Members continued to force this Council to spend additional time listening to Russia's 
reconfirmation of its position. 
8.16.  The Russian Federation was of the view th at, according to the terms of its Protocol of 
Accession to the WTO, the "industrial assembly " programme had been granted a transitional 
period until 1 July 2018; this meant that Members had agreed that, until this date, the investment 
programme was not subject to relevant provisions  of the WTO Agreement. Additionally, relevant G/C/M/123 
 
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  provisions of the WTO Accession Protocol did no t contain any limitations for granting, under the 
WTO, any specific subsidies to any industrial producers, including those participating in the "industrial assembly" programme. Therefore, Russia's support to these measures was fully WTO-compliant. 
8.17.  At the previous CTG meeting, her delegation had invited interested Members to approach 
the Russian Federation bilaterally on the issue of subsidies in the automotive sector. Her delegation had recently engaged in bilateral contacts with Japan. The Russian Federation believed 
that such contacts would clarify all concerns and looked forward to discussing this matter with 
Japan in more detail. 
8.18.  The Russian Federation also considered that the other measures mentioned by Ukraine, 
Australia, the EU, the US, Canada, and New Zealand were fully compliant with WTO rules. Most of 
the interventions made today had repeated what ha d already been said by the same delegations at 
previous CTG meetings. Russia had engaged in dial ogue with some delegations and was therefore 
surprised that, since the last meeting, some of the interested Members had not engaged with the 
Russian Federation in a constructive discussion, disregarding Russia's calls and readiness for such 
contacts. This brought Russia to the conclusion that there were no real commercial problems underlying this agenda item. However, Russia invited delegations to choose the bilateral track so 
as to settle the existing issues, if any, instead of occupying the Council's agenda with the same 
broad interventions. 
8.19.  The delegate of Japan said that pe rhaps he had not fully understood the Russian 
Federation's explanations, but that certainly Japan did not hold the same position on these issues. 
In his statement he had indicated that these measures were not in the list of the Protocol of 
Accession. The Russian Federation had a different view, and Japan would like to engage in a discussion with Russia, bilaterally and/or in other fora, such as the TRIMS Committee. 
8.20.  The Chairperson proposed that the Council take note of the statements made. 
8.21.  The Council so agreed. 
9  ECUADOR – IMPORT RESTRICTING MEASURES – REQUEST FROM JAPAN 9.1.  The Chairperson informed the Council that, in a communication dated 15 June 2015, the 
delegation of Japan had requested the Secretaria t to include this item on the agenda of the 
meeting. 
9.2.  The delegate of Japan indicated that his delegation continued to have serious concerns over 
Ecuador's import restricting measures, as stated at the last Council's meeting. These measures 
applied to the automobile sector, implemented since 2012, were meant to end in December 2014. However, Ecuador had adopted Resolution No. 49 in December 2014, which had not only tightened 
the measure but also extended it until the end of 2015. Japan considered that such restrictive 
measures violated Article XI of the GATT on ge neral elimination of quantitative restrictions. 
Ecuador had claimed that its measures were justified under GATT Article XX(b), General Exception 
to protect human, animal, and plant life or health . Japan doubted this justification and considered 
that it was not necessary to achieve the policy ob jective of reducing greenhouse gas emissions, as 
upheld by Ecuador. Furthermore, the measure no t only provided different treatment between a 
complete build-up unit (CBU) and complete kn ockdown (CKD), but also provided different 
treatment between cars in circulation in Ecuador and imported cars. Such differentiation was not 
justifiable under the policy objective, and led to doubts over the applicability of GATT Article XX(b). 
9.3.  Ecuador's answers at the last CTG meeting had not convinced Japan. Indeed, Ecuador 
responded that Resolution 65 and Resolution No. 66 of 2012 were consistent with the 
WTO Agreements as the measures were not discriminatory and were applied equally to all WTO Members. In Japan's view, applying the measure equally to all WTO Members did not make 
the resolution consistent with GATT Article XI. Thus, for the same reason, Resolution 49 of 2014, 
which had extended and strengthened previous resolutions, was also inconsistent with the WTO Agreements. G/C/M/123 
 
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  9.4.  He urged Ecuador to provide further explanat ion of the justification of such measures and on 
how it considered the measures to be justified by GATT Article XX(b). In the absence of a justifiable explanation Ecuador should abolish such measures as soon as possible. 
9.5.  With regard to transparency, Japan also doubted that this import restricting measure had 
been appropriately and sufficiently notified to the WTO, thus causing more confusion among 
Members. 
9.6.  Japan was also concerned by the introduc tion of import surcharges by Ecuador. On 
11 March 2015, in Resolution No. 11, Ecuador had invoked GATT Article XVIII(b) to implement an 
import surcharge. Japan considered that these Balance-of-Payment Measures (BOP measures) had a significant adverse impact on its industry, and requested Ecuador to provide a justifiable explanation, including with regard to the consistency of the measures with WTO rules. Japan 
looked forward to discussing these issues with Ecuador. 
9.7.  The delegate of the United States of America also expressed continuing and deepening 
concern regarding the various measures imposed by Ecuador, which were adversely affecting 
imports from the US and other WTO Members. Her authorities had been raising concerns about 
these measures with the Government of Ecuador since 2013, both bilaterally and in the TBT Committee. However, to date Ecuador had declin ed to engage meaningfully with the US in an 
attempt to resolve these issues. 
9.8.  The measures at issue included, among others, Resolution No. 116, which was issued in 
December 2013, and that required exporters to obtain a Certificate of Recognition in order to sell to Ecuador. Resolution No. 116 encompassed dozens of new technical regulations that prohibited 
the importation and sale of products not complying with these technical requirements. Over 
300 products were affected by these measures. Ecuador had also implemented other measures, such as: new labelling requirements for alcoholic beverages, processed foods for human 
consumption, and auto parts; new auto safety standards; and new requirements applicable to the 
sanitary food registration process. 
9.9.  Ecuador had asserted that many of these measures were necessary to address legitimate 
health and safety concerns. In fact, these measures appeared to be aimed at reducing imports in 
an effort to balance trade, and Ecuadorean government officials had been quoted in the press as explicitly saying that these measures were intended to promote import substitution and balance trade. 
9.10.  Concerns also existed about the lack of tr ansparency on the part of Ecuador in properly 
notifying these measures, as required under the TBT Agreement, and allowing the US and other WTO Members to comment on these measures before  implementing them, as also required by the 
TBT Agreement. In some instances, Ecuador had failed to notify a measure or had made 
emergency notifications with no period for comments before their implementation; and, as Members were aware, claiming an unspecified urgency required immediate implementation of the 
measure. 
9.11.  The US had been closely following developments with respect to these measures, and 
continued to gather information on how Ecuador was implementing them, as well as on their impact on US exports. The US and several Memb ers had raised these and other issues in the 
TBT Committee but there had not been any indication from Ecuador of its willingness to address 
the concerns raised. 
9.12.  Ecuador's tariff surcharge, imposed as from 11 March 2015 for balance of payments 
purposes, was another matter of concern to the US. These tariff surcharges not only ranged from 
5 to 45% on 2800 tariff lines, representing approxim ately one third of all imports, but were also 
applied on top of normal duties and taxes. The United States would participate in the formal 
WTO review process of this measure in the Committee on Balance of Payments in June 2015 but 
wanted to record its concern that the measure appeared to be applied selectively in terms of the goods covered, discriminately in that certain countries were exempt from the measure, and inconsistently in that the tariff surcharge rates varied significantly, from 5 to 45%. G/C/M/123 
 
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  9.13.  She urged Ecuador to address US concerns by terminating these import-restrictive 
measures and practices. If, however, Ecuador continued to maintain them, then the US believed that Ecuador should provide a detailed written explanation of how and why, in its view, these measures were consistent with WTO rules. 
9.14.  The delegate of the European Union shared the concerns of previous speakers and indicated 
that the EU remained concerned with the continuous application of quotas by Ecuador. The EU was 
of the view that the same set of objectives, namely of reducing emissions, could be achieved 
through internal policy initiatives that would not distort trade flows. The EU asked Ecuador to 
clarify if it was considering alternative ways of achieving these objectives. 
9.15.  The delegate of Canada echoed the concerns of previous speakers and stated that Canada 
remained concerned about Ecuador's import restri ctions applied to the automotive sector, in 
particular the application of a tariff regime that ap peared to favour local content. He recalled that 
his delegation had raised its concerns at the TBT Committee, specifically with regard to Ecuador's decision no longer to accept imported vehicles built according to the US Federal Motor Vehicle 
Safety Standards, or FMVSS, in favour of those built according to the UN Economic Commission for 
Europe, or UNECE safety standards. 
9.16.  The US Vehicle Safety Standards and, by extension, Canadian safety standards, provided 
the most stringent performance and outcomes with respect to vehicle safety. Canada encouraged 
Ecuador to continue to allow for the use of US FMVSS standards. 
9.17.  The delegate of Chile also expressed conc erns over the Ecuadorian measures, particularly 
the safeguards under the BOP Agreement applied since 6 March 2011 to imported products. Chile 
was significantly affected in terms of the percentage of its exports to Ecuador, which were affected 
by various surcharges and by their extent and coverage. Indeed, Chile's shipments to Ecuador had declined approximately 50% since the measures were implemented and, unless there was a 
fundamental change in the circumstances described, it could be expected that the situation would 
worsen. 
9.18.  Chile and Ecuador had a long-standing and very positive bilateral relationship, were 
privileged trading partners, and had a long tradition of cooperation at international level; 
therefore, Chile hoped that Ecuador would reconsider the application of its BOP safeguard measures and would also consider alternative ways of dealing with the macroeconomic issues that motivated the use of such measures. Chile would hold consultations with Ecuador on these issues 
on 29 June 2015. 
9.19.  The delegate of Chinese Taipei echoed the concerns of previous speakers with regard to 
Ecuador's BOP safeguard measures, intended to last for 15 months, affecting about 2800 tariff 
lines, and levelling import surcharges ranging from 5 to 45%. These unfavourable circumstances 
would negatively affect exports from Chinese Taipei to Ecuador. 
9.20.  Chinese Taipei recognized Members' rights to adopt BOP measures if they met the 
requirements and provisions set out in the WTO Agreements, including the relevant 
Understanding, but that these should also be the least trade disruptive. She therefore urged Ecuador to lower the surcharge rates and to shorten the implementation period. Her delegation was ready to engage in further discussions and consultations in the Committee on BOP. 
9.21.  The delegate of Colombia informed the Council that Colombia's statement would not address 
a systemic concern. Both countries had links in trade, investment, tourism, and many other areas 
that went beyond the strictly economic. They we re neighbouring countries and both members of 
the Andean Community and, for Colombia, it was good news when Ecuador's economy was doing 
well and a cause for concern when this was not the case. In 2009, in similar circumstances, their respective countries had cooperated to find ways of supporting each other. All this explained 
Colombia's concerns about the new measures applied by Ecuador as of March 2015, which resulted 
in a significant drop in exports to Ecuador between March and April. 
9.22.  At the next meeting of the BOP Committee, on Monday 29 June 2015, where there would be 
consultations, Colombia would have the opportunity to study in detail Ecuador's economy, 
safeguard measures, and other measures that could be used to re-establish a balance in their G/C/M/123 
 
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  balance of payments. In order to contribute to these consultations, Ecuador had handed-out a 
questionnaire, in document RD/BOP/6, containing questions that it hoped would assist delegations in this review. Colombia looked forward to these consultations and hoped that Members would have an opportunity to better understand the developments over the last few months in Ecuador. 
He also reiterated Colombia's concerns expressed at the last CTG meeting over Ecuador's 
quantitative restrictions on imports of vehicles. 
9.23.  The delegate of Costa Rica recognized the difficult situation of Ecuador but also the impact 
that the BOP measures adopted by Ecuador would have on the multilateral trading system. Costa 
Rica also hoped that Ecuador would reconsider these safeguard measures and envisage less trade restricting measures in order to deal with their macroeconomic situation. Costa Rica would continue to monitor closely the situation at the next BOP Committee. 
9.24.  The delegate of Panama also expressed concerns about the adoption by Ecuador of 
safeguard measures aimed at addressing the imba lance in the balance of payments and affecting 
almost 2949 tariff lines, and which consisted of tariffs ranging between 15 and 45%. In addition to 
the systemic concerns, Panama also had concerns relating to the impact of the measure on 
Panama's trade, which was among the five countries most affected by it. Panama acknowledged Ecuador's difficulties due to the unfavourable situat ion prevailing in the oil sector, but because of 
the dollarized economy, Panama did not share Ecuador's point of view on the effects on its balance 
of payments, nor with respect to the relevance of this measure to redress that imbalance. 
9.25.  At the CTG level, Panama wanted to highlight the unnecessary damage that this measure 
had had on its trade interests, its impact on the re-exportation of goods, and to the 
US$450 million that represented 90% of the transactions from the Colon-Free Zone area to 
Ecuador's market. Details of this impact had been shared bilaterally with Ecuador at a meeting held in Quito by trade authorities from both countries on 21 May. 
9.26.  Particular concerns also existed with rega rd to the impact of the measure on clothing and 
footwear. In 2009, as part of the previous measure taken by Ecuador for balance of payment purposes, Ecuador had introduced a specific surcharge on these goods of 10 dollars per pair of 
footwear and 12 dollars per net kilo of textiles and clothing. In 2010, Ecuador had adopted mixed 
tariffs for the same goods, consisting of 10% ad valorem and a specific component of US$6 per pair of footwear and 5.5 per kilo of textiles and clothing, without a cap mechanism. These measures were still in place and had resulted in a fall of exports in these areas from Panama to 
Ecuador. 
9.27.  Ecuador had now imposed a surcharge of 25 % that resulted in an annulment of Panama's 
access to Ecuador's market. Moreover, the trade restrictions imposed by Ecuador in the past had 
not been efficient in re-establishing the BOP situation in a healthy and lasting way; thus, Ecuador 
should reconsider its additional measure in order to avoid the negative consequences and unnecessary negative consequences on its trading partners, which ran counter to WTO principles 
and objectives. Like others, Panama would also  express its concerns at the BOP Committee. 
9.28.  The delegate of the Republic of Korea shar ed the views expressed in previous interventions; 
Korea had trade and systemic concerns in relation to this matter. Korea believed that, for the 
successful functioning of the multilateral system, th is kind of measure should only be adopted in 
exceptional circumstances. Korea would monitor the situation closely to see if the measures were 
consistent with GATT Article XVIII. Korea expected the BOP Committee to discuss this issue at its next meeting. 
9.29.  The delegate of Israel expressed Israeli concerns about the measures introduced by Ecuador 
in Resolution No. 011-2015 of 11 March 2015, affecting almost 3000 10-digit subheadings (38% of 
its total subheadings) and consisting of an ad valorem surcharge ranging from 5 to 45% on these 
tariff lines. Israel believed that this caused unnecessary harm to the commercial interests of 
Ecuador's trading partners, its own consumers, and its industry. In the case of Israel, this measure had effectively brought about deal cancellations for a number of companies for whom Ecuador had been among their most important markets, as in the case of an exporting company of protection 
and detection systems, which had lost millions of dollars. G/C/M/123 
 
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  9.30.  Systemic concerns also existed regarding th e use of this type of trade restrictive measure, 
which Ecuador had adopted for the second time in five years. Israel was of the view that this measure seriously affected the WTO Agreements on gods. 
9.31.  Israel acknowledged Ecuador's difficult balance-of-payments situation but called on it to 
consider measures that would not have an undesirable impact on its trading partners; it also 
invited Ecuador to reflect on these and other messages expressed at this CTG meeting. 
9.32.  The delegate of Uruguay expressed Uruguay's sympathy with regard to Ecuador's 
BOP situation and its reserves; the issue would be further discussed at the BOP Committee 
meeting, as Uruguay was also concerned about the impact of the measure. As indicated by other delegations, it was the second time in a very short period that Ecuador had resorted to this type of 
measure. There was a short-term effect, already described by some delegations, with a fall in 
sales, but there was also a long-term impact, which would damage trade in the future. 
9.33.  The delegate of Peru indicated that his co untry was looking forward to receiving the reports 
from Ecuador, together with tangible results th at Peru hoped would emerge from the discussions 
to be held in the BOP Committee on Monday, 29 June 2015. 
9.34.  The delegate of Mexico shared the views expr essed in previous statements on this issue. In 
particular, Ecuador's measures were having a significant impact on the Mexican automotive sector, 
for the reasons already explained by Canada. Indeed, in order to fulfil the technical regulations in 
Ecuador designed for automobiles, it was necessary to follow the UNECE Technical Regulation for Europe; this contradicted Article 24 of the TBT Ag reement, as the Ecuadorian technical regulation 
disregarded other existing technical regulations such as the US, Japanese, or Korean regulations. 
9.35.  As part of the conformity assessment procedures (CAPs), it was necessary to have a 
third party evaluation. Mexico believed that the "third party" evaluation in the automobile sector should only be required in exceptional circumstances as this sector was already internationally 
regulated, with all vehicles certified at origin. 
9.36.  With respect to the transitional period for the entry into force of the regulation, a deadline 
of 180 days or six months had been established to fulfil the safety mandatory devices. This period 
was not sufficient for the implementation by automobile producers of Ecuador's requirements. 
9.37.  Based on the above, Mexico requested Ecuador: (i) to extend the transitional period to 
two years as from the date of their publication so as to allow car producers to meet the new requirements; (ii) to accept conformity assessments not only from UNECE but also from the 
US (FMVSS), Japan (SRRV), Korea (KMVSS), and/or Brazil (CONTRAN), so that the measures were 
then consistent with Article 2.4 of the TBT Agre ement; and (iii) to admit as an alternative the 
suppliers' declaration of conformity to assess conformity with the Ecuadorian technical regulation, 
and as the automobile sector was already regulated internationally the recognition of all such 
reports and tests by the car producers should be possible. 
9.38.  On the BOP measures, Mexico would express it s specific concerns at the next meeting of the 
BOP Committee, where Mexico expected Ecuador to provide responses to all the questions asked. 
9.39.  The representative of the Dominican Republic considered it necessary to take into account a 
Member's real situation so as better to understand whether or not it was responding in a way that 
ran counter to the trend or whether it had indeed to take measures to defend its population and 
economy. Indeed, in 2009, Ecuador adopted similar measures when facing the financial crisis and 
at a time when its exports of oil fell by 44%. Ecuador had now resorted once again to such measures and, precisely thanks to these measures, Ecuador was able to remain integrated into 
world trade. Additionally, Ecuador had problems that most of the WTO membership did not have, 
such as lack of a Central Bank, and a dollarized economy. As a result, Ecuador did not have the 
foreign exchange and monetary instruments available to it with which to confront macroeconomic 
problems when these arose externally. 
9.40.  In a situation of deficit in the current account and balance of payments, Ecuador's domestic 
liquidity would be reduced and there would also be less money circulating and less capacity to grow and as a result to demand domestic and foreign goods. In other words, Ecuador was not in a G/C/M/123 
 
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  position to count upon a Central Bank to re-injec t liquidity into its economy. Therefore, the only 
way for Ecuador to respond in such a situation, which was affecting more than 50% of its oil exports, was either to run into debt or else to apply restrictions. 
9.41.  Ecuador, not to further restrict trade, ran partially into debt and increased it by 18% to 
avoid a possible future external shock; in other wo rds, Ecuador took a decision partially to avoid 
further restrictions in its current account from the capital account. This had certainly affected its trading partners. Ecuador had also indicated that these measures responded not only to the 
BOP situation due to the increase in oil goods, but also to its dollarized economy and the 
depreciation of currencies in neighbouring countries, which also affected Ecuador's exports to those markets. To conclude, he emphasized that Ecuador's situation was unlike that of economies with a Central Bank, observing that Ecuador had fewer instruments with which to stabilize its 
macroeconomic situation. 
9.42.  The delegate of Ecuador indicated that his intervention would be divided into two parts: 
first, the request made by Japan; and second, the safeguards measures taken for BOP purposes. 
With regard to the issues raised by Japan, he  expressed Ecuador's disagreement with the wording 
of the agenda item as it pre-judged the measures that had been taken by Ecuador, which responded to the existing national, regional, and mu ltilateral rules. In addition, Japan's concerns 
with regard to the automobile sector were repetitive, and Ecuador had indicated that 
COMEX Resolution 29 of 2014 on quotas for automobiles had been extended until December 2015 and were applied by Ecuador in a non-discriminatory manner to all WTO Members, and also applied to cars and vehicles produced domestically. 
9.43.  He referred to the statement made at the previous CTG meeting, where it was explained 
that Ecuador, for a few years, had had serious problems linked to an increase in greenhouse gases (GHG), and that some countries had asked what measures had been taken in this regard. Ecuador 
had taken internal measures and also put in place a plan to reduce the effects of GHG emitted 
from cars. Other measures referred to improvement in the quality of gasoline so as to reduce air emissions, improve air quality in vari ous cities, and preserve human health. 
9.44.  Ecuador was also implementing another measure so as to incentivize the use of electric cars 
and mitigate the noxious effects of greenhouse ga ses. Ecuador was thus aware of the problem and 
was working on the measures in question. Moreover, Resolution No. 49 of COMEX had been adopted in order to protect human health and life, and was covered by the general exceptions 
contained in Article XX(b) of GATT 1994. 
9.45.  On the issue of the BOP measures he than ked the representative of the Dominican Republic 
for his statement, which described Ecuador's situation in terms of the external conditions that had 
led Ecuador to adopt the BOP measures. As expr essed by various speakers, the purpose of the 
safeguard measure was to redress the balance of payment situation. Ecuador would ask delegations to raise concerns in the pertinent and appropriate forum where they would be duly 
addressed, namely the BOP Committee. Indeed, the BOP measures were an instrument within the 
scope of the Understanding on Balance of Payments of 1994, which stated that the competent forum in which to deal with these matters was the BOP Committee. The agenda of that meeting already contained an item entitled "Consultations with the Government of Ecuador", where 
discussions on the measure implemented by Ecuador would take place. 
9.46.  Ecuador was acting consistently with its WTO commitments and the WTO disciplines, 
including on transparency. With regard to the interventions made by the US, Canada, and others, 
which referred to other measures, he invited them to raise their points at the relevant Committee. 
9.47.  The Chairperson proposed that the Council take note of the statements made. 
9.48.  The Council so agreed. 
10  WORK PROGRAMME ON  ELECTRONIC COMMERCE 
10.1.  The Chairperson recalled that, at the last meeting of this Council, he had reminded 
delegations that Ministers in Bali had agreed: (i) to continue with the positive work under the Work 
Programme on E-Commerce based on its existing mandate and guidelines and on the basis of G/C/M/123 
 
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  proposals submitted by Members in the respective WTO bodies; (ii) to instruct the General Council 
and its relevant bodies, including this Council, to continue to reinvigorate this work, especially under the initiatives taken in relation to commercial issues, development, and evolving technology; and (iii) that any relevant body of the Work Programme might explore appropriate 
mechanisms to address the relationship betw een electronic commerce and development in a 
focused and comprehensive manner. In this vein and in order to fulfil the mandate, he had invited delegations to express their opinions and to take suggestions as to how to work on the preparation 
of the periodic reviews to be held in the General Council at its meetings of July 2015. 
10.2.  He opened the floor for delegations to express their views and suggestions, namely in view 
of the next meeting of the General Council where he, on his own responsibility, would make a factual report on the discussions held in this Council on the Work Programme and with a view to 
preparing the possible outcomes on this issue at MC10. 
10.3.  In the absence of any comments he proposed that the Council take note of the information 
he had presented. 
10.4.  The Council so agreed. 
11  OTHER BUSINESS 
11.1.  The Chairperson reminded delegations that, at the start of the meeting, the delegations of 
the Philippines and Japan had requested, respecti vely, to include two issues under this agenda 
item. 
11.1  Philippines – Fostering Participatio n of Micro-, Small-, and Medium-Sized 
Enterprises (MSMEs) in Regional and Global Trade 
11.2.  The representative of the Philippines stated that Micro, Small- and Medium-Sized 
Enterprises -(MSMEs) were critical components of national economies across all countries, 
regardless of their level of development. In most countries, MSMEs contributed significantly to GDP 
and to job generation. The levelling effect of new technologies had been a key element in the 
participation of MSMEs in regional and global trad e. Likewise, the existence of global value chains 
made it easier for relatively small firms to internationalize. However, challenges remained to the 
internationalization of MSMEs, and these included tariffs, non-tariff measures, lack of intellectual 
property rights (IPR) protection, lack of informatio n, and a lack of capital or finance. The WTO was 
at the forefront of addressing global  issues as they related to MSMEs. 
11.3.  He noted also that, in the context of the CTG, the Work Programme on E-commerce, 
including the Declaration on Global Electronic Commerce, and the extension of the moratorium, 
had been instrumental policy tools that fostered the development of MSMEs. Equally notable were the various substantive initiatives to the benefit of MSMEs developed in CTG subsidiary bodies 
including strengthening the benefit of transparency provisions such as those incorporated in the 
development of trade repository tools on tariffs and non-tariff measures. In the same vein, the initiatives of other international institutions, like the ITC, UNCTAD, and the World Bank, among 
others, were likewise notable insofar as they linked to the delivery of assistance that addressed 
the constraints and challenges faced by MSMEs. 
11.4.  He informed the Council that in the "Ministers Responsible for Trade Meeting" of APEC that 
took place in the Philippines, Ministers had adopte d the Boracki Action Agenda to globalize MSMEs. 
There were examples of numerous studies and init iatives on MSMEs, both within the WTO, and 
from such collaborators as the ITC and UNCTAD. 
11.5.  He added that a stocktake of these initiatives indicated that: (i) much work needed to be 
done fully to bring this vast reservoir of economic  activity into the global trade agenda; (ii) there 
were cross-cutting measures that affected the integration of MSMEs in regional and global markets; (iii) the discussions had been quite diffuse; and (iv) a critical element in the sector was 
often not specifically identified in policy discussions: the micro-enterprises. 
11.6.  At the national level, MSMEs could be the prism through which light was shed on policies 
and actions that affected global trade. Therefor e, the Philippines believed that there was ample G/C/M/123 
 
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  space in the WTO for horizontal discussions that would increase Members' understanding of policy 
developments for MSMEs, and reflect a collective determination to widen and deepen the involvement of MSMEs in global trade. 
11.7.  The representative of Malaysia, on behalf of ASEAN, thanked the Philippines for bringing the 
issue of MSMEs to the WTO. Malaysia supported this initiative. 
11.8.  The Chairperson proposed that the Council take note of the statements made. 
11.9.  The Council so agreed. 
11.2  Japan – Status of the Election Proce ss of the Permanent Group of Experts under 
the Committee on Subsidies and Countervailing Measures (SCM) 
11.10.  The delegate of Japan expressed the concerns of his delegation about the current status of 
election process of a Member of the PGE under the SCM Committee. Indeed, each year a Member 
of the PGE was elected by the SCM Committee through a selection process conducted by the 
Chairperson. At the beginning of 2015 the former  Chairperson conducted consultations; however, 
after the extension of the period for consultations for comments from Members, his assessment 
was that one candidate had gained more support th an others. Despite expectation of an emerging 
convergence, the decision had to date not been taken and the post remained vacant. Japan hoped that this situation would be solved promptly and adequately. 
11.11.  The delegate of Turkey said that the fo rmer chairperson of the SCM Committee held the 
consultations on the vacancy on the PGE on 10 an d 11 March 2015, and that Turley was one of the 
Members who supported one specific candidate, even as unfortunately the vacancy had not yet been filled. The matter should be resolved promptly. 
11.12.  The delegate of Thailand indicated that  his delegation was among those who supported 
one of the candidates for the post of the PGE; Thailand hoped to see a prompt solution to this 
matter. 
11.13.  The Chairperson thanked delegations for their interventions and proposed that the Council 
take note of the statements made. 
11.14.  The Council so agreed. 
11.3  Date of the next meeting 11.15.  The Chairperson informed delegations that , in light of MC10, the CTG's autumn meeting 
was scheduled to take place on Tuesday, 10 November 2015. The agenda for the 
November meeting would close on Friday, 30 October 2015. 
11.16.  The meeting was closed. 
__________