RESTRICTED  
  
G/C/M/119  
 
31 October 2014  
(14-6356)  Page: 1/23  
Council for Trade in Goods    
 
MINUTES OF THE MEETING OF TH E COUNCIL FOR TRADE IN GOODS 
19 JUNE 2014 
CHAIRPERSON: H.E. AMBASSADOR JOAKIM REITER (SWEDEN) 
1   NOTIFICATION OF RE GIONAL TRADE AGREEMENTS .................................................... 2  
2   NOTIFICATIONS OF ACTIONS TAKEN UNDER THE 1999 WAIVER FOR 
PREFERENTIAL TARIFF TREATMENT FOR LEAST DEVELOPED COUNTRIES 
(WT/L/304 AND WT/L/759) ........................................................................................... 2  
3   GABON – SCHEDULE XLVII: RENEGO TIATIONS UNDER ARTICLE XXVIII:4 AND 
ARTICLE XXIV:6 OF  THE GATT 1994 ................................................................................. 2  
4   PHILIPPINES – REQUEST FOR A WAIVER RELATING TO SPECIAL TREATMENT 
FOR RICE OF THE PHILIPPI NES (G/C/W/665/ REV.4) ..................................................... 3  
5   JAPAN – WOOD USE POINTS PROGRAMME – REQUEST FROM CANADA, THE 
EUROPEAN UNION AND NORWAY .................................................................................... 4  
6   EUROPEAN UNION – AUTONOMOUS PREFERENTIAL MEASURES IN RESPECT 
OF UKRAINE – REQUEST FROM THE RUSSIAN FEDERATION ............................................. 6  
7   NORWAY – MEASURES AFFECTING TRADE IN FISH GOODS – REQUEST FROM 
THE RUSSIAN FEDERATION.............................................................................................. 8  
8   BRAZIL – IMPORT DUTIES ON DIAMMONIUM PHOSPHATE (DAP) – REQUEST 
FROM THE RUSSIAN FEDERATION .................................................................................... 8  
9   TRADE RESTRICTIVE MEASURES BY CERTAIN WTO MEMBERS – REQUEST 
FROM THE RUSSIAN FEDERATION .................................................................................... 9  
10   NIGERIA – RESTRICTIONS/BANS IMPOSED BY NIGERIA TO IMPORTS OF 
SEA PRODUCTS – REQUEST FROM IC ELAND, NORWAY AND URUGUAY ........................... 10  
11   NIGERIA – LOCAL CONTENT MEASURES IN OIL AND GAS – REQUEST FROM 
THE EUROPEAN UNION .................................................................................................. 12  
12   RUSSIAN FEDERATION – TRADE RESTRICTING MEASURES – STATEMENTS 
BY THE EUROPEAN UNION, JAPAN AND THE UNITED STATES OF AMERICA .................... 13  
13   INDONESIA'S IMPORT AND EXPORT RESTRICTING POLICIES AND 
PRACTICES – STATEMENTS BY THE EUROPEAN UNION, JAPAN AND THE UNITED STATES OF AMERIC A ...................................................................................................... 17
 
14   BRAZIL – INDIRECT TAXATION: COND ITIONS TO OBTAIN TAX BENEFITS IN 
VARIOUS SECTORS – STATEMENT BY JAPAN .................................................................. 20  
15   EUROPEAN UNION – UNFAVOURABLE PRACTICES AFFECTING PALM OIL – 
REQUEST FROM INDONESIA ........................................................................................... 21  
16   WORK PROGRAMME ON ELECTRONIC CO MMERCE ................................................... 22  
17   DRAFT DECISION DERESTRICTING THE HISTORICAL BILATERAL 
NEGOTIATING DOCUMENTATION OF THE KENNEDY ROUND (G/MA/W/113) ................. 23  
18   OTHER BU SINESS .................................................................................................... 23  
18.1   REQUEST BY SWITZERLAND – KINGDOM OF BAHRAIN – CUSTOMS DUTIES ON 
CIGARETTES ................................................................................................................... 23 G/C/M/119 
 
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  18.2   DATE OF TH E NEXT MEETING ................................................................................... 23 
 
When adopting the Agenda, the Chairperson informed the Council that the sponsors of agenda 
item 14 entitled: "Ukraine – Trade Policy and Measures – Statements by Japan and the United 
States" had requested the withdrawal of this item from the Agenda and that under "Other 
Business", he intended to raise the matter of the date  of the next meeting. In turn, the delegate of 
Switzerland informed the Council that under "Other Business" his delegation would raise an issue 
entitled "Bahrain's supply tariffs on cigarettes".  The Council 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 following regional trade agreement had been notified 
to the CRTA: 
 Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu on Economic Partnership (WT/REG350/N/1). 
 1.2.  The Council took note of the in formation and of the statements made. 
2  NOTIFICATIONS OF ACTIONS TAKEN UNDER THE 1999 WAIVER FOR PREFERENTIAL 
TARIFF TREATMENT FOR LEAST DEVELOPED COUNTRIES (WT/L/304 AND WT/L/759) 
2.1.  The Chairperson informed the Council that, under this agenda item, Chile had submitted 
document G/C/W/695, containing a notification on its duty-free quota-free scheme for least 
developed countries (LDCs). This notification had been made to the Committee on Trade and Development (CTD) under the provisions in the Transparency Mechanism for Preferential Trade 
Arrangements, and recalled that this Council, at its meeting in March 2001, agreed to a method for 
handling notifications under the 1999 Waiver on Preferential Trade Treatment for LDCs. 
Accordingly, such notifications shall be refe rred by the CTG to the Sub-Committee on Least 
Developed Countries for Members' consideration and advice. The Sub-Committee, if necessary, 
would then report back to the CTG on its discussi ons. It was clear that this approach did not 
preclude the CTG from engaging in discussions on any matter with regard to the 1999 Waiver for 
LDCs. 
2.2.  The delegate of Chile informed the Council that, in April 2014, Chile had notified the 
implementation of the benefits deriving from the elimination of its customs duties for LDCs; these 
were now operative and in force. Chile's Duty-Free Quota-Free Scheme (DFQF) was a unilateral 
preferential tariff scheme which established a zero per cent duty for imports of goods originating in 
LDCs, except imports of wheat, flour, and sugar.  According to the Chilean legislation the Scheme 
would be applied in three consecutive phases and, in order to benefit from it, LDCs were required to notify the certifying body or entity in the respective countries. With this Scheme Chile was 
complying with the Bali Ministerial Decision on DFQF market access for LDCs. 
2.3.  The Council took note of the no tification and of the statement made. 
3  GABON – SCHEDULE XL VII: RENEGOTIATIONS UN DER ARTICLE XXVIII:4 AND 
ARTICLE XXIV:6 OF THE GATT 1994 
3.1.  The Chairperson recalled that, at the last m eeting of the Council, the delegation of Gabon, in 
a communication dated 24 March 2014, had requested the Goods Council to extend the 
renegotiation period, initially granted by the CTG on 18 October 2014 until 16 April 2014, for an 
additional period of 60 days, or until 17 June 2014. 
                                               
1 See documents WT/REG16, WT/L/671, and G/C/M/88. G/C/M/119 
 
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  3.2.  The delegate of Gabon stated that th ere were ongoing and pending discussions with 
interested delegations on the renegotiation of its Schedule of Concessions; therefore, Gabon once 
again requested the Council to further extend, up until 15 September 2014 (or 60 days as from the last extension), the renegotiation period of its Schedule of Concessions. Gabon hoped to 
receive from Members a positive response to this request. 
3.3.  The Council agreed to further extend th e renegotiation period of Gabon's Schedule of 
Concessions until 15 September 2014. 
4  PHILIPPINES – REQUEST FOR A WAIVER  RELATING TO SPECIAL TREATMENT FOR 
RICE OF THE PHILIPPINES (G/C/W/665/REV.4) 
4.1.  The Chairperson drew the Council's attention to document G/C/W/665/Rev.4 submitted by 
the Philippines on 27 March 2014, containing a revised waiver request and a revised draft waiver 
decision concerning the special treatment for rice of the Philippines, an issue on which this Council 
had agreed to revert at its previous meeting. 
4.2.  The delegate of the Philippines stated that the issue of rice was of critical importance for his 
country as millions of small farmers directly depended on this product for their livelihood and rice 
was also the main source of food security for the majority of 100 million Filipinos. He recalled that, 
in November 2011, his delegation had launched negotiations within the WTO to continue the 
special treatment for rice. Since then, intense and extensive discussions had taken place and his 
delegation was pleased to report that bilateral agreements had now been reached; these were reflected in document G/C/W/665/Rev.4, issued on 27 March 2014. The Philippines believed that a multilateral deal could now be reached. Before  closing, he thanked the WTO membership, and 
particularly Australia, Canada, China, India, Indonesia, El Salvador, the European Union, Japan, 
the Republic of Korea, Pakistan, Thailand, the United States of America, and Viet Nam, for their flexibility and support. He also thanked the CTG Secretariat for the assistance provided. 
4.3.  The delegate of Australia informed the Council that his delegation had concluded the 
negotiations with the Philippines on this matter and fully supported the Philippines' waiver request. 
This outcome set an important precedent and showed that the WTO was helpful in solving trade 
problems amongst Members. 
4.4.  The delegate of Thailand recalled that her delegation had been engaged in discussions on this 
matter with the Philippines since early 2012 and, after much effort, had concluded its discussions 
with the Philippines on 10 June 2014. Some internal procedures we re still ongoing in Bangkok but 
since the results of the agreement reached had b een reflected in the draft waiver decision her 
delegation supported the waiver request. 
4.5.  The delegate of Indonesia recalled that, since 2012, the Council had been kept informed by 
the Philippines of the development of the negotiations of its waiver request, an issue crucial for 
millions of small farmers in the Philippines. Indonesia believed that the terms and conditions of the waiver, as stipulated in the draft decision, were fair for all Members concerned. Moreover, the 
whole WTO membership would be able to monitor annually the implementation of the waiver, 
including the provision of minimum market access  by the Philippines. Thus, Indonesia supported 
the adoption of the waiver request. 
4.6.  The delegate of the United States of Amer ica expressed the support of her delegation for the 
waiver and indicated that, in the understanding of her authorities, this waiver from the Philippines' 
tariffication obligations under the Agreement on Agriculture would only apply to rice, as specified in Annex A of document G/C/W/665/Rev.4, and that it would last until 30 June 2017 but also that, 
under certain circumstances enumerated in the draft waiver decision, it could end before that date. 
4.7.  The delegate of China stated that her delegation was pleased to see that all interested 
Members had achieved a WTO-consistent and a multilateral acceptable solution. 
4.8.  The delegate of Viet Nam thanked the Philippines for having reported regularly on the 
progress of the negotiations and consultations on this issue. Her delegation supported the waiver 
request and agreed that the draft waiver decision could be submitted to the General Council for adoption. G/C/M/119 
 
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  4.9.  The delegate of India congratulated the Ph ilippines for concluding the negotiations on the 
extension of the rice treatment and supported the waiver. 
4.10.  The delegate of the Philippines, on behalf of millions of small Filipino farmers, thanked all 
the WTO Members and particularly those who had actively engaged with his authorities on this 
issue, for their patience, understanding, and su pport. He also thanked the previous CTG Chair2, 
the current Chair, and the Secretariat for the assistance provided to his delegation. 
4.11.  The Chairperson proposed that the Council ta ke note of the statements made and agreed to 
forward for the General Council's adoption the draft waiver decision contained in 
document G/C/W/665/Rev.4. 
4.12.  The Council so agreed. 
5  JAPAN – WOOD USE POINTS PROGRAMME – REQUEST FROM CANADA, THE EUROPEAN 
UNION AND NORWAY 
5.1.  The Chairperson informed the Council that, in a communication dated 4 June 2014, the 
delegations of Canada, the European Union, and Norway, had requested the Secretariat to include 
on the agenda of this meeting the following item : "Japan – Wood Use Points Programme". He also 
informed delegations that, on the day prior to th e meeting, the delegation of Japan had submitted 
its responses to the additional questions posed to it by Canada in document G/C/W/696. This new 
set of responses had been circulated in document G/C/W/700. 
5.2.  The delegate of Canada thanked Japan for its responses to the questions posed to it at the 
Council's meeting on 9 April 2014. Canada continued to be concerned that the Wood Use Points 
Programme ("WUPP", or the "Programme") might discriminate against imported wood products. 
The Programme appeared to be applied in a cons istent manner; however, there could nevertheless 
be a de facto  discrimination as there was no clarity about its administration, including with regard 
to the eligibility criteria and the timelines for approval of foreign species. In addition, the 
fourth growth criteria used to approve foreign species was not based on internationally agreed or 
science-based standards or indicators for sustainable forest management; as such, it created an undue administrative burden on foreign producers. 
5.3.  Canada recognized that in Japan a few foreign species had been approved at the national 
level; however, it was unclear how these approvals would be operationalized by the prefectures since the system was lengthy and complex and appear ed to be designed to exclude foreign species 
from being able to fully benefit from the programme. 
5.4.  Canada asked Japan to confirm that the WUPP would terminate in September 2014, and to 
assure Members that it would not be extended or replaced by a similar system. Canada would continue to monitor the programme closely, including in the post-application phase, and 
appreciated Japan's indication that it would soon notify the WUPP. 
5.5.  The delegate of the European Union, echoing Canada, recalled that in previous CTG meetings 
the EU had expressed similar concerns regarding the application of the WUPP. The EU had also 
made it clear that it did not question the general objective of the Programme, aimed at promoting 
the use of sustainably produced wood, but had concerns about its potentially discriminatory nature. The EU's concerns related in particular to the following aspects: (i) the use of the word "local wood"; (ii) the fact that most Japanese dome stic wood species were eligible by default, while 
imported species had to go through a cumbersome two-tier approval procedure; and (iii) the 
criteria for qualification. In this vein, the requirement to demonstrate that the wood species was originating from a 'growing forest'  went far beyond international standards, which only required 
that forests be managed according to the Forest Stewardship Council  and the Programme for the 
Endorsement of Forest Certification . Additionally, the requirement to  prove that the wood species 
should " have clear and synergetic effects on the local economy ", raised problems as it was vague 
and, in practice, especially complex for foreign producers. 
                                               
2 Ambassador Dacio Castillo from Honduras. G/C/M/119 
 
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  5.6.  The EU recognized that Japan had engaged bilaterally on this issue and that some progress 
had been made in the past few months when some member States' applications had received a positive answer. However, these few positive developments came really late after the entry into force of the Programme and only a few months before its possible expiration. Therefore, the 
EU would closely monitor the next implementation st eps as it expected that European applications 
would be dealt with in an expeditious and efficient way. 
5.7.  The EU sought clarification from Japan about the future of the Programme, in particular as to 
whether or not the points would only be granted to housing contracts concluded before 
30 September, and confirmation that companies would only have until 31 January 2015 to claim their points. When concluding, he stated that if the Programme were to be replaced by another programme in 2015, the EU should be duly consulted, and that fair, reasonable, and 
non-discriminatory criteria should apply to this new programme, if any. 
5.8.  The delegate of Norway associated her dele gation with the previous statements as Norway 
had similar concerns, in particular about the lack of transparency and Japan's obligations under the 
WTO Agreements. She thanked Japan for the bilate ral meeting that had taken place the day prior 
to the meeting and for its responses to the questi ons posed by Canada. Norway expected that the 
Programme would terminate in September 2014 and, if any similar scheme were then to be put in 
place, that Japan would consider the concerns that Members had expressed. 
5.9.  The delegate of the United States of America recalled that her delegation had already raised 
concerns about this Programme and the difficulti es faced by foreign wood producers seeking to 
qualify for it on an equal basis with domestic Japanese producers. The US acknowledged Japan's 
approval of the US Douglas fir wood products as  qualifying for the benefits of the Programme; 
however, this had only occurred after a demanding application process requiring US applicants to 
contract an academic analysis to demonstrate the value that US Douglas fir created for local 
Japanese economies. Despite these efforts, US Douglas fir products still remained ineligible under 
the Programme in five of Japan's prefectures. 
5.10.  With less than four months before the scheduled end of the Programme, the value of the 
benefits for the US Douglas fir w ood products might not compensate the sizeable cost of qualifying 
for benefits – a cost not imposed on most domestic Japanese producers. Considering that the Programme would terminate in September 2014, the US asked Japan if the US Douglas fir exporters, as well as exporters of other US spec ies, would substantially benefit from inclusion in 
the WUPP. 
5.11.  The US was also concerned that imported products might be required to go through an 
extensive application procedure, including individual applications specifically tailored for each of 
the 47 Japanese prefectures, a procedure not required for domestic products, most of which 
automatically qualified under the terms of the law establishing the WUPP. This impeded foreign products from competing equally with Japanese products. 
5.12.  The US had always supported the goal of increased use of wood products in residential 
construction. However, the Japanese housing industry would be better served by allowing competitive access to all wood products from all sources, domestic as well as foreign. Japan was a critically important export market for US wood products, and US products should be allowed to 
compete with Japanese products under similar conditions. 
5.13.  The delegate of Indonesia registered the syst emic concerns of his delegation on this issue; 
his authorities would monitor closely the developments of the Programme. 
5.14.  The delegate of New Zealand echoed the previous speakers and thanked Canada for the 
questions it had posed to Japan. His delegation would follow Japan's answers and looked forward 
to its answers to the questions posed at this m eeting. New Zealand also had concerns about any 
similar programme that could, by design or operation, discriminate against imported wood. 
5.15.  The delegate of Japan indicated that his delegation had taken note of the interests and 
concerns expressed by various Members at the la st three CTG meetings on the WUPP. Japan had 
held bilateral meetings with Canada, the EU, an d Norway, to exchange views on the Programme, G/C/M/119 
 
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  and had also submitted written answers to Canada; these would certainly help the WTO Members 
to understand the programme better. 
5.16.  On the concerns about the duration of th e WUPP, he emphasized that the Programme would 
only be granted for the construction works of wood en houses and interiors or exterior works using 
wood, and indicated that it would commence by the end of September 2014 and would not be 
extended beyond this time-frame. After the comp letion of the work, consumers could apply up 
until the end of January 2015 for the wood use points; however, the deadline for submitting 
applications might be anticipated or extended depending on how quickly the budget would be 
exhausted. 
5.17.  On the applications' approval for foreign and domestic companies, he informed the Council 
that, to date, ten applications had been submitted of which six were from foreign industry groups 
and four from domestic firms. Of these, four applications for foreign tree species had met the 
requirements, and two applications for Japane se tree species had not met the requirements. 
Detailed information could be found in Japan's responses circulated in document G/C/W/700. As to 
the application from the Canadian industry group, the pertinent Committee had found that the 
data and explanation were not sufficient and additional data had been requested. 
5.18.  The Programme required eligible wood to be certified as sustainable wood and, additionally, 
to be of tree species whose resources were increasing in volume on a country basis. These 
requirements were aimed at effectively and effici ently achieving the objective of the WUPP, which 
was to contribute to the proper management and co nservation of forests, the prevention of global 
warming, and the promotion of a recycling-orient ed society, including through promoting the use 
of tree species whose resources were increasing in volume. Thus, this requirement was consistent 
with internationally agreed principles. 
5.19.  The use of tree species should also have certain positive effects on the economy of rural 
areas in Japan. This requirement was aimed at effectively and efficiently achieving one of the 
objectives of the Programme, which was to contri bute to the development of rural areas in Japan 
through promoting wood use. The Guideline publis hed in October 2013 explained that applicants 
only needed to demonstrate objectively that, thro ugh transportation, lumber sawing, processing or 
house building of the tree species, there would be  an increase in employment in rural areas and 
sales in relevant industries. To date, some foreign tree species had been designated as tree species of eligible wood meeting these requirements. 
5.20.  Concerning the notification of the WUPP,  he indicated that Japan would notify it as 
appropriate, and clarified that, to date, there had been no decision taken as to whether or not a future similar plan would be designed and implemented. 
5.21.  The Council took note of the statements made. 
6  EUROPEAN UNION – AUTONOMOUS PREFERENTIAL MEASURES IN RESPECT OF 
UKRAINE – REQUEST FROM THE RUSSIAN FEDERATION 
6.1.  The Chairperson informed the Council that, in a communication dated 4 June 2014, the 
delegation of the Russian Federation had requeste d that the Secretariat include in the agenda of 
this meeting an item entitled "European Union – Autonomous Preferential Measures in Respect of 
Ukraine". 
6.2.  The delegate of the Russian Federation recalled that, at the April 2014 meeting of this 
Council, her delegation had already raised the issu e of the EU's trade preferential measures in 
respect of Ukraine, and registered the disappoi ntment of her authorities with the continuous 
neglect by the EU of both the fundamental prin ciples of the WTO and Members' concerns given 
that Members' rights had been impaired by the EU unilateral decision. 
6.3.  Despite the intentions expressed by both th e EU and Ukraine to sign by the end of June 2014 
the trade chapter of the Association Agreement, th ese actions were not an excuse not to follow 
WTO procedures, namely when the trade effects on Russia's trade were evident, and particularly given that, up until the entry into force of the Association Agreement, Ukraine would continue to benefit from illegal preferences with respect to mo re than 95% of its industrial exports and more G/C/M/119 
 
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  than 80% of its agricultural exports to the EU. Russia considered that such violations of the core 
GATT provisions constituted a serious challenge to the WTO and urged the EU to abide by its 
obligations and to develop bilateral and preferential relations with other Members in a WTO-consistent manner. 
6.4.  The delegate of Argentina reiterated the co ncerns of his delegation already expressed in the 
Committee on Market Access (CMA), particularly re garding the unilateral preferences of the EU in 
favour of Ukraine pursuant to Regulation 374/14, and other related regulations. Argentina was of 
the view that the EU had not respected the WTO procedures enshrined in GATT Article XXIV as well 
as in the Transparency Mechanism of the Regional Trade Agreements contained in 
document WT/L/671. There had been a lack of tran sparency and no notification had been made, a 
situation that would affect the legal security of international trade with the EU. 
6.5.  The delegate of Nicaragua indicated that , at the previous meeting of the Committee on 
Market Access (CMA), his delegation had stated that any unilateral liberalization applied by a 
WTO Member should be in compliance with WTO provisions and should not be to the detriment of 
the interests of other Members not benefi tting from the preferential treatment. 
6.6.  The delegate of the Bolivarian Republic of Venezuela recalled that his delegation had also 
raised a systemic concern with regard to this issue at the last meeting of the CMA, not only 
because of the facts highlighted by the Russian Fede ration but also because of the trade effects of 
such action. 
6.7.  The delegate of India stated that India was still analyzing whether or not the EU had followed 
the necessary procedures when adopting the unilateral measures in favour of Ukraine. India 
reserved its right to comment on this issue in the future. 
6.8.  The delegate of the European Union recalled that his delegation had already notified its 
intention to conclude a Free Trade Agreement with Ukraine in 2008; that announcement was made 
publicly available, on the WTO website, under  the Section "Early Announcement of RTAs". He 
emphasized that the so-called autonomous measures were merely an early provisional implementation of a broad and comprehensive Fr ee Trade Agreement with Ukraine that had been 
negotiated since 2008. This was not a stand-alone measure and could not be considered as 
discriminatory. The Free Trade Agreement was fully compatible with WTO Article XXIV and GATS Article V. 
6.9.  With regard to procedural aspects, and in  accordance with the provisions set out in point 
A.1.b) of the Transparency Mechanism Deci sion, the EU on 23 April 2014 had asked the 
WTO Secretariat to update its previous early announcement so as to inform Members that the EU had anticipated the implementation of the Agreement by means of autonomous trade 
preferences starting on 23 April 2014 with the reduction or elimination of customs union duties on 
goods originating in Ukraine. Such an approach was in accordance with the Schedule of Concessions set out in Annex I- А of the Association Agreement. The text was available on the 
WTO website on RTAs. 
6.10.  To conclude, he informed delegations that the parties would proceed with the formal 
notification in accordance with point B.3 of the Transparency Mechanism Decision, immediately 
after the signature of the Agreement, or on 27 June 2014, the date of Ukraine's signature 
following the adoption by the Ukrainian Foreign Affairs Council of the de cision on signature. 
6.11.  The delegate of Ukraine thanked the EU for its initiative to grant autonomous trade 
preferences to Ukraine and for understanding the current economic problems faced by his country. 
These measures would certainly contribute to Uk raine's economic growth and the creation of a 
sustainable business partnership with EU member States. 
6.12.  Ukraine also considered the measure as trade facilitation, even if introduced for only a short 
period, as it would help the Ukrainian industry and agricultural sector, as well as other spheres of 
its economy to accommodate the new trade conditions laid out in the Free Trade Agreement expected to be signed soon. Ukraine believed that the EU’s autonomous measures would have no distorting effects upon trade flows with other trade partners, nor competition conditions on the 
markets. G/C/M/119 
 
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  6.13.  Additionally, this was a demonstration of a strong support to Ukraine, a country which had 
found itself in 2014 in rather a diffic ult political and economic situation. 
6.14.  The Council took note of the statements made. 
7  NORWAY – MEASURES AFFECTING TRADE IN FISH GOODS – REQUEST FROM THE 
RUSSIAN FEDERATION 
7.1.  The Chairperson informed the Council that, in a communication dated 4 June 2014, the 
delegation of the Russian Federation had requeste d the Secretariat to include this item on the 
agenda of the present meeting. 
7.2.  The delegate of the Russian Federation in dicated that Norway had established a prohibition 
on sales or exports of wild living maritime resources when these did not take place through an 
authorized fisherman's own sales organization or without its authorization. The measure had not 
only imposed a first-hand sale obligation on catches of raw fish landed by the Russian Federation's 
vessels but also a charge on the vessels flying the Russian Federation's flag; these aimed at benefitting one of the Norwegian fisherman-owned sales organizations. 
7.3.  Despite the changes introduced to the Norwegian legislation to level the conditions set out for 
the Russian traders with those for traders from other WTO Members, the Russian Federation believed that the WTO inconsistencies of the Law remained, in particular with regard to 
GATT Articles II and V. She urged Norway to bring its measures into compliance with the 
WTO obligations. 
7.4.  The delegate of Norway stated that the Norwegian legislation relating to first-hand sales of 
fish was an issue that had been discussed several times with the Russian Federation, including in a 
meeting in Oslo the week prior to the meeting. According to the Fish Sales Organizations Act of 
21 June 2013, that entered into force on 1 January 2014, all first-hand sales of fish through or with the approval of a sales organization was mandatory in order to contribute to a sustainable 
and economically profitable management of wild living marine resources through facilitating a good 
framework for first-hand sales, and ensuring that  the exploitation of fish resources was well 
documented. In this vein, the sales organizations were responsible for controlling all landings of 
fish and for ensuring that the quantities la nded were deducted fr om applicable quotas. 
7.5.  Control activities included registration of la nded fish, indication of species and quantities, and 
catch area. These controls were applied to all vessels landing in a sales organizations' area of competence, whether foreign or Norwegian, as it was an integral component of Norway’s resource 
management. 
7.6.  The charge to which the Russian Federation  had referred was a remuneration for the services 
rendered by the sales organizations, such as th e settlement of transactions, managing of control 
activities, and collection of data for statistics. Moreover, it applied equally to foreign and domestic 
catches and, as the Russian Federation had po inted out, it was the same for Russian, EU, 
Norwegian, or any other catch. Thus, it was not a duty or a charge, nor import duties on fish 
imported into Norway. Her delegation would cont inue discussing the issue bilaterally with the 
Russian Federation. 
7.7.  The Council took note of the statements made. 
8  BRAZIL – IMPORT DUTIES ON DIAMMONIUM PHOSPHATE (DAP) – REQUEST FROM 
THE RUSSIAN FEDERATION 
8.1.  The Chairperson informed the Council that, in a communication dated 4 June 2014, the 
delegation of the Russian Federation had requeste d the Secretariat to include this item on the 
agenda of the meeting. 
8.2.  The delegate of the Russian Federation re gretted that her delegation had been obliged to 
raise again the concerns over different import duties on Diammonium Phosphate (DAP) applied by 
Brazil. The Russian Federation believed that the im position by Brazil of different duties on the G/C/M/119 
 
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  two types of DAP Brazil, depending on the level of arsenic content, was in breach of Brazil's bound 
duties, particularly GATT Article I. 
8.3.  Analysis of the physical and chemical char acteristics, end-use, and consumer preferences, 
confirmed that there was a competitive relationsh ip in the market place and likeness between the 
two types of DAP. Thus, the different duties applied by Brazil discriminated against goods 
originating in her country. She urged Brazil to revoke the application of different import duties on DAP and to abide by its WTO obligations and tariff commitments. 
8.4.  The delegate of Brazil indicated that, in bilateral meetings, Brazil had already provided the 
Russian Federation with detailed information on the matter and had expressed that there was no 
discrimination in the imposition of different import duties on the two distinct types of DAP. Brazil emphasized that DAP products were not like produc ts, and that the distinct physical characteristics 
of these products and their diverse end-use, pr ovided solid support to the different tariff 
specifications adopted for these products. 
8.5.  The inclusion of DAP with more than 6mg per kilo of arsenic content in the 
MERCOSUR exception list was a legitimate tool of trade policy, in conformity with multilateral 
trading rules, and not intended to benefit or ad versely affect any exporting country. However, if 
the Russian Federation considered it necessary, Brazil remained ready to engage in further 
bilateral talks to clarify the matter. 
8.6.  The Council took note of the statements made. 
9  TRADE RESTRICTIVE MEASURES BY CERTAIN WTO MEMBERS – REQUEST FROM THE 
RUSSIAN FEDERATION 
9.1.  The Chairperson informed the Council that, in a communication dated 4 June 2014, the 
delegation of the Russian Federation had requeste d the Secretariat to include this item on the 
agenda of the meeting. 
9.2.  The delegate of the Russian Federation reiterated the concerns of her delegation contained in 
the communications dated 23 April and 3 June 2014, respectively, in respect of the measures 
adopted by the United States of America and Canada to block the assets of certain persons and to 
prohibit any transactions with these persons, whether natural or judicial, included in a list prepared 
by the governmental authorities of the said Me mbers. The Russian Federation considered these 
measures to be inconsistent with a number of WTO Agreements, particularly the basic GATT/WTO principles of MFN treatment and pr ohibition of quantitative restrictions. 
9.3.  Those measures restricted, without any justification, the flow of goods, whether imported, 
exported, or in transit, between the US and Canada with the Russian Federation, and did not have any WTO-compatible explanation as to why they had been adopted and were still in place. The 
Russian Federation hoped that no internal politi cal motivation on the part of the two Members 
would dominate their trade relationship. Therefore, it requested Canada and the US to bring their measures into full WTO compliance so as not to impair trade with the Russian Federation. 
9.4.  In the view of the Russian Federation the WTO Agreement constituted a unique forum whose 
agenda, to the maximum extent possible, was free from political issues – an approach to be 
safeguarded by Members. This required Members not to sacrifice their WTO obligations for non-economic objectives that were not covered by the WTO Agreement. 
9.5.  The delegate of the United States of Am erica expressed the view that the US had always 
taken its WTO obligations seriously and that, prior to instituting the measures referenced in the 
Russian Federation's communication to the CTS and the CTG, as well as related measures 
announced on 28 April 2014, her authorities had carefully considered their consistency with 
WTO rules and were confident that all of these actions were WTO-compatible. 
9.6.  The delegate of Canada indicated that he  had taken note of the statement made by the 
Russian Federation and of document G/C/W/698. Canada considered itself to be a committed and 
responsible WTO Member, and one that had always taken its WTO obligations very seriously. G/C/M/119 
 
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  Canada had also performed due diligence when deve loping and adopting the measures in question 
and was confident that these complied with Canada's GATT and GATS obligations. 
9.7.  The Council took note of the statements made. 
10  NIGERIA – RESTRICTIONS/BANS IMPOSED BY NIGERIA TO IMPORTS OF SEA 
PRODUCTS – REQUEST FROM IC ELAND, NORWAY AND URUGUAY 
10.1.  The Chairperson informed the Council that, in a communication dated 4 June 2014, the 
delegations of Iceland, Norway, and Uruguay, had re quested the Secretariat to include this item on 
the agenda of the meeting. 
10.2.  The delegate of Uruguay recalled that, at the October 2013 meeting, Uruguay and other 
Members expressed their concern regarding some bans that Nigeria was intending to impose on 
frozen fish. Despite the bilateral meetings that had taken place and the explanations that Nigeria 
had provided, there remained some uncertainties regarding the new import scheme for fish being 
considered by Nigeria, which apparently would consist in the establishment of quotas and import licences. Nigeria had not provided full information and trading partners were uncertain as to 
whether or not the measures concerning the introduction of quotas and the practices already 
announced by the Ministry to increase fish farming would be permanent. Concerns related to the coherence and consistency of this measure with WTO rules and regulations, particularly as the 
information received from different sources was incomplete, contradictory, and lacked 
transparency. 
10.3.  The Nigerian market was one of the four main destinations for Uruguayan exports of frozen 
fish to the African continent. He therefore asked Nigeria to clarify the measures it intended to 
implement to regulate the imports of fish produc ts and to confirm that it would not implement 
import restrictions as had been indicated. 
10.4.  The delegate of Norway indicated that ex ports of fish and fish products were of great 
importance to his country and that Norwegian expo rts of fish to Nigeria had dropped significantly 
since 2012, in part due to the uncertainty regardin g the import conditions, an issue that Norway 
had been registering during a long period. Indeed , the issue had been brought to this Council's 
attention in October 2013, followed by a writte n communication sent to Nigeria. Two bilateral 
meetings had taken place in Geneva at Ambassador level, including with Iceland, Uruguay, and Norway, one in March and the other during the se cond week of June 2014. Norway looked forward 
to receiving written clarification from Nigeria and appreciated the actions Nigeria had taken. 
However, concerns remained about the lack of tr ansparency and predictability regarding the new 
import regime for fish. Many references had be en made by both economic operators and press 
concerning the establishment of a quota system but no official source had provided concrete 
information. He asked Nigeria to inform Members whether or not this information had been 
published and, if not, for Nigeria to do so promptly, and at the same time to clarify how the possible quotas might comply with Nigeria's obligations under the GATT and other 
WTO Agreements, particularly the general prohibition of import restrictions and quotas. 
10.5.  The delegate of Iceland recalled that Iceland had already raised its concern about the 
possible restrictions by Nigeria on the import of fish products, and had also urged Nigeria to show 
full transparency and to inform Members of any changes to its import regime on these products 
that might be under consideration. Iceland's expo rters had also been informed by the Nigerian 
authorities that they were planning to impose strict restrictions on the importation of a number of seafood products, including import licences and import quotas for artic species, including mackerel. 
These rumours already had had a chilling effect on the exporters of such products. 
10.6.  Nigeria was one of Iceland's most important trading partners. In 2012, Iceland had 
exported more than 130 million US dollars' wo rth of seafood products to Nigeria. Iceland's 
concerns had been dealt with bilaterally, and some information had been received from Nigeria; 
however, this official explanation was incomplete and inconsistent with the information provided to Iceland's exporters. He therefore urged Nigeria to  provide full and accurate information about any 
changes it might be considering regarding its import regime for seafood products, as well as 
assurances that these would be WTO-consistent. G/C/M/119 
 
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  10.7.  The delegate of the United States of Amer ica supported the call made by Iceland, Norway, 
and Uruguay, in requesting clarification from Nigeria about any new import restriction it already 
had in place or was contemplating for fish products. 
10.8.  The delegate of Chile recalled that at the CTG meeting in October 2013 her delegation had 
sought clarity on the measures currently applied by Nigeria for fish products. 10.9.  The delegate of the European Union expr essed concern that the Guidelines and Policy 
Directives applied by Nigeria to imports of frozen fish were trade restrictive, particularly as their 
objective was to reduce authorized imports by 25%. There was a lack of transparency and clarity 
as to the basis on which to select ground importers and with regard to precisely which importers were actually receiving licences. 
10.10.  The EU did not question Nigeria's goal of  supporting local production but believed that a 
progressive ban on imports was not the appropriate solution as it could put at risk food security 
and poverty concerns. To ensure that all imported frozen fish were handled according to best practices was not questioned either; however, he highlighted that the EU food safety regulations 
applied to all of its exported products, and that the EU had always been ready to co-operate with 
Nigeria on any other WTO-compatible measure aimed at ensuring an equivalent level of protection to Nigerian consumers. The EU hoped that the curre nt situation would soon be clarified by Nigeria. 
10.11.  The representative of Nigeria, in respon se to the statements made, informed the Council 
that the Federal Ministry of Agriculture and Rural Development was considering new regulations in 
the fishing industry in Nigeria, the objective of which would be to sanitize the fish sub-sector by eliminating the unwholesome and sharp practices of importers of frozen fish in Nigeria that could 
cause health hazards to the entire population. 
10.12.  The policy was also aimed at addressing Nigeria's economic development objectives since 
Nigeria was concerned with its high and increasing annual import bill on a number of agricultural 
products where it had comparative advantage in production, including fish, which was not only 
unsustainable but could resort in balance of paym ent deficits and a serious economic and financial 
crisis if some precautionary measures were not taken to stop the trend. 
10.13.  The proposed new fish policy was also aimed at stimulating domestic production, with a 
subsequent reduction on annual imports of fish, and the growth of the Nigerian fish industry which at present was still at an early stage in its development. Nigeria noted that GATT Article XVII recognized measures taken for developmental goals and it was in this vein that it encouraged fish 
importers to engage in fish famine enterprises. 
10.14.  When formulating the new fish import policy, Nigeria had considered its WTO obligations 
and commitments; before completing its new policy, it would also consider stakeholders' views and 
comments, including those of interested WTO Members. 
10.15.  In order to complete the process, as th e new policy was still at formulation stage and not 
yet in force, the Federal Ministry of Agriculture and Rural Development had been holding 
consultative meetings with the fish and fish prod ucts stakeholders, including importers, exporters, 
producers, consumers, the private sector, and representatives of the fish-exploiting countries, in Nigeria. The guidelines were being drafted in parallel with the new policy and would be notified to the WTO once finalized. 
10.16.  He highlighted that Nigeria, with its deregulation and privatization policies, was not 
introducing an import licensing regime, or planning to increase the import duties of fish and fish products to reduce imports, as had been speculated. Nevertheless, Nigeria wanted to place on 
record that it reserved the right to use its policy space to increase import tariffs within its bound 
rates if necessary. He also stated that the deregulation policy would not restrict the access of Nigerian companies to foreign currency in order to  pay for their imported fish and fish products. 
10.17.  He informed the Council that, upon arrival from capital, he had held a meeting with his 
peers from Iceland, Norway, and Uruguay, an d had updated them on the current situation 
concerning the new policy in Nigeria, including the ongoing efforts to address the specific concerns of their respective delegations. Therefore, there was no basis for the concerns that had been G/C/M/119 
 
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  raised at this meeting, since Nigeria had not impl emented any fiscal policy banning imports of fish 
and fish products. However, there was no offici al gazette or means through which the Federal 
Ministry of Finance could disseminate this information. Nevertheless, Nigeria was mindful of its WTO obligations and commitments and of the principles of the multilateral trading system. 
10.18.  The Council took note of the statements made. 
11  NIGERIA – LOCAL CONTENT MEASURES IN OIL AND GAS – REQUEST FROM THE 
EUROPEAN UNION 
11.1.  The Chairperson informed the Council that, in a communication dated 5 June 2014, the 
delegation of the European Union had requested the Secretariat to include this item on the agenda 
of this meeting. 
11.2.  The delegate of the European Union reca lled that his delegation, together with other 
Members, had already brought the issue of the Loca l Content Act of 2010 to the attention of this 
Council and to the TRIMs Committee; however, the EU had not received any responses to the questions it had posed on its compatibility with  the provisions in the TRIMs Agreement, the 
GATT 1994, and the GATS. Nigeria's statement at the CTG meeting of 9 April 2014, that the "Local 
content requirements as well as government procurement procedures are applied in the most transparent ways. All competitors including foreign operators are benefitting from the rules. We 
urge members to explore bilateral solutions with us", could not be considered as the answer to the 
questions posed to it by the EU. 
11.3.  Another concern to which his delegation had referred, in May 2012, related to the review of 
Schedule A of the Law which was meant to include a detailed list of local content requirements per 
good or service, and was foreseen to be applicable  as from spring 2012. However, two years later, 
the said review had not taken place. Nigeria should indicate the date of the review and how it would be carried out as it might then address not only the WTO compatibility issue but also at the 
same time consider whether it was the appropriate tool to achieve the stated goal of enhancing 
domestic capacity in the oil and gas industry. Issu es related to the productive capacity and supply 
possibilities of the relevant Nigerian sectors should  also be addressed, together with the apparent 
distortions introduced by the Law, notably the fact  that the requirements in Schedule A favoured 
pure agency/intermediation over genuine local investments. 
11.4.  The EU welcomed the bilateral discussions that had taken place recently and looked forward 
to receiving details of the review and detailed an swers to the questions it had posed to Nigeria. 
11.5.  The delegate of the United States of America recalled that almost three years ago her 
delegation had drawn Members' attention to certain measures which appeared to require the use 
of local content in Nigeria's oil and gas industry . Moreover, the US had posed written questions to 
Nigeria in September 2011, and referred to these measures in October 2011. At the time, Nigeria 
had informed the US that it had not received any instructions from capital, nor answers to the questions. Nigeria's failure to address factual ques tions had compelled the US to raise the issue in 
the CTG. 
11.6.  Her delegation was aware that responses to questions in WTO committees could be delayed, 
and that questions in this Council touched on technical issues and might require consultation with regulators. However, as had previously been noted, the WTO Committee system provided a forum 
to gain a basic understanding of the trade polies of other Members, and to raise concerns outside 
of the context of dispute settlement. She urged Nigeria to make use of the CTG to clear up any misunderstandings Members might have, and to explain the relationship of the measures with 
regard to Nigeria's obligations under the TRIMS Agreement. 
11.7.  The delegate of Australia sought once again to receive Nigeria's explanation as to how the 
preferential treatment accorded to local goods and services in the Local Content Act was consistent 
with Nigeria's national treatment obligations under the GATT 1994. In particular, Australia noted 
that Section 11.1 of the Act established minimum percentages of Nigerian content in goods, services, and investment, for any project in the Nige rian oil and gas industry, and that Section 7 of 
the Act required operators to submit a Nigerian Content Plan demonstrating compliance with the G/C/M/119 
 
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  Nigerian local content requirements. Australia looked forward to receiving Nigeria's responses to 
these questions. 
11.8.  The delegate of Japan reiterated the sy stemic concerns already expressed by Japan and 
requested again that Nigeria provide the Council with information that would clarify the 
long-standing questions posted by a number of Members in this Council and the TRIMs Committee. 
11.9.  The representative of Nigeria assured delegations that his country would abide by its 
WTO commitments and obligations, as already evidenced by the notifications it had submitted to 
enhance transparency. As indicated at the previo us meeting, the Act in question provided a 
framework for the utilization of services in the Nigerian Oil and Gas Industry. It encompassed activities connected with the exploration, developm ent, exploitation and sale of Nigerian oil and 
gas resources, including off-stream oil and gas operations. 
11.10.  The implementation of the Act provided fo r a competitive, transparent, non-discriminatory 
process and international standards while ensuring that all investors, whether local or foreign, would have equal opportunities. Consequently, all foreign oil and gas companies duly registered 
and operating in Nigeria fully benefited from the provisions of the Act. 
11.11.  To respond to the concerns relating to th e review of the schedule, he explained that the 
Act had two in-built mechanisms, and that Section 102 stated, inter alia , "subject to the approval 
of the Minister, the Board shall conduct a review of the schedule to this Act, at such intervals as it 
may determine, but no later than every two years". Section 104 of the Act also stated that, "notwithstanding the provisions of sub-section 1 of this Section, where there is inadequate capacity to any of the targets in the schedule to this Act, the Minister may authorize the continued 
importation of the relevant items and such approv al by the Minister shall not exceed three years 
from the commencement of this Act". 
11.12.  He also clarified that there had been consultations with the stakeholders and operators in 
the gas and oil industry in Nigeria, and that the assessments of productive capacity in Nigeria had 
been established so as to allow the country to evaluate whether or not the target for local content set in the schedule was feasible or should be reviewed. Indeed, Section 102 of the Act provided 
that the Nigeria Content Development and Monitoring Board might review the schedule every 
two years so as to enable the National Assembly to amend the Act as appropriate. 
11.13.  To conclude, he emphasized that Nigeria wo uld like to call on the EU delegation and all the 
concerned delegations to engage more in bilateral discussions and dialogues in order to address 
their concerns about the Nigerian Local Content Act and other trade-related matters. 
11.14.  The Council took note of the statements made. 
12  RUSSIAN FEDERATION – TRADE RESTRICTING MEASURES – STATEMENTS BY THE 
EUROPEAN UNION, JAPAN AND THE UNITED STATES OF AMERICA 
12.1.  The Chairperson informed the Council that, in a communication dated 5 June 2014, the 
delegations of the European Union, Japan, and the United States of America, had requested the 
Secretariat to include this item on the agenda of today's meeting. 
12.2.  The delegate of the European Union stated that the EU's concerns about the Russian 
Federation's trade measures had already been brought to the General Council's attention, on 
12 May 2014. However, the efforts of his delegation to solve these trade issues bilaterally had not 
resulted in a positive outcome. For almost two ye ars, the EU had been insisting that the Russian 
Federation redress its potential non-compliance with its WTO obligations, as the Russian Federation was not only a major economy but had also been constructing a Customs Union (CU) 
that might not be fully compatible with the Russian Federation's accession commitments. 
12.3.  In addition to the pending cases that the EU had filed against the Russian Federation in the 
WTO, his delegation was particularly concerned about the following: 
a. The Russian Federation's non-implementation of WTO bound rates for import duties 
since August 2012. The Russian Federation was still in breach of its WTO bound rates for G/C/M/119 
 
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  import duties on about 150 tariff lines, including paper, car bodies, palm oil, machinery, 
and crane lorries. Commitments on import duties were a basic WTO obligation, and its non-respect damaged the EU industry, i.e. th e EU exported more than 400 million euros 
of paper products to the Russian Federation in 2012 and on the most important tariff 
lines for the EU's exports the import duty  being applied by the CU was 15% or 10%, 
instead of the 5% included in the Russian Federation's Schedule of concessions. Consequently, importers of such goods originating in the EU were paying extra import 
duties and were losing market share in the Russian market. There were other tariff lines 
where the Russian Federation had changed the form of the tariff; however, in order to redress the situation the Russian Federation had introduced some corrections in the beginning of 2013. However, some new in compatibilities had unfortunately been 
introduced on 1 September 2013. 
b. Trade defence measures, in particular the safeguard measure applied to combine 
harvesters since 25 September 2013. The EU was concerned about the 
WTO-compatibility of some aspects of this measure. 
c. The reintroduction of a list of wood exporters on 29 April 2014, since creating specific 
channels for exports constituted a barrier to trade. This measure, which was originally 
introduced after the Russian Federation's WTO accession, and considering the EU's 
concerns, had been withdrawn in 2013. However, the reintroduction of the same measure generated the same concerns about its compatibility with the Russian Federation's WTO commitments. The Russian Federation should eliminate this measure 
definitively. 
12.4.  The EU expected the Russian Federation quickly to take the steps necessary to change 
direction, fully to comply with the fundamental WTO principles, and to make of its membership an 
asset for the entire Organization. This was an issue of systemic importance, as no WTO Member 
could serially fail to respect its obligations without undermining the rules-based multilateral trading system. 
12.5.  The delegate of the United States of America regretted to be compelled to raise once again 
concerns about the Russian Federation's record of implementing its WTO commitments. Rather 
than repeating these concerns, she referred Members to the past minutes of this Council. The US appreciated the recent bilateral engagements by  the Russian Federation and looked forward to 
continue these discussions, particularly as concerned safeguards. 
12.6.  At the April 2014 meeting of the Committee on Safeguards her delegation had raised a 
concern about the Russian Federation's failure to notify multiple safeguard measures which existed 
at the entry into force of the WTO Agreement on Safeguards. This was an obligation under 
Article 12.7 of the Agreement, under which the Russian Federation should have notified all measures that existed as of August 2012. Howeve r, it had notified only those measures put in 
place since becoming a Member in August 2012 and had not notified six measures that were in 
place before its WTO membership. This was particularly important because, as in other areas, other WTO Members as well as parties in the Eurasian Economic Union would be looking to the Russian Federation's actions for guidance. The Russian Federation should set an appropriate 
example and notify these measures to the Committee on Safeguards as soon as possible. 
12.7.  The delegate of Japan echoed the views of previous speakers and indicated that, as 
expressed in previous meetings, the Japanese indu stries had been forced to pay excessive duties, 
above the Russian Federation's bound tariffs, as in the case of refrigerators. There had also been 
an increase in the applied duties on television sets, a change applied since April 2013, which ran counter to the standstill commitment of the G-20 and APEC leaders. Japan called upon the Russian 
Federation to bring its measures into full conformity with its WTO commitments, and to respect 
these political commitments. 
12.8.  Concerns also existed about a number of re solutions adopted by the Russian authorities to 
provide financial support for certain types of expenses to the local automobile producers 
participating in the industrial assembly programme. Japan would raise this issue at the next 
meeting of the TRIMs Committee. Japan also shared  the concerns expressed by the US about the 
Russian Federation's lack of transparency in the area of safeguards. G/C/M/119 
 
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  12.9.  The delegate of Canada echoed previous speakers and highlighted the two sets of Russian 
measures that Canada found inconsistent with the Russian Federation's WTO obligations. First, the 
import duties applied to a range of products , including paper products, which exceeded the 
Russian Federation's commitments on bound rates agreed as part of its accession commitments. 
These tariffs increased the cost for Canadian manufacturers exporting the affected products to the 
Russian Federation, in particular paper products. He asked that the Russian Federation reduce all 
duties to their bound rates or below, in accordance with its WTO accession commitments. Second, 
the lack of timely notifications relating to safeguard measures, an issue that had already been 
raised by several members at the Safeguards Committee and in the General Council. Article 12.1 of the Safeguards Agreement required Members immediately to notify the Committee when an investigation had been initiated, when a finding of serious injury had been made, and when a 
decision to apply or to extend a safeguard measure had been taken. Consequently, delayed or 
non-existent notifications affected the ability of exporters and other interested parties properly to defend their interests. He called upon the Russian Federation to ensure that the proper functioning 
of the Agreement on Safeguards would be respected to the benefit of the whole WTO membership. 
12.10.  The delegate of Australia reiterated the concerns of his delegation and called upon the 
Russian Federation to adhere to its WTO accession commitments and to avoid the use of 
trade-restrictive measures. The Russian Federation's use of trade-restricting measures was having 
a negative impact upon Australian trade. Australia has discussed these concerns bilaterally and looked forward to continued engagement with the relevant Russian authorities on these matters. 
12.11.  The delegate of Ukraine stated that the Russian Federation's trade policies and measures 
continued to raise concern over the issue of th eir compatibility with WTO principles and the 
Russian Federation's accession commitments; Ukraine had already provided some examples at the previous CTG meeting. He called upon the Russian Federation to respect international 
commitments and to ensure transparency and cooperation in good faith with the Ukrainian 
authorities in the TBT and SPS areas, and likewise with regard to any other border measure. 
12.12.  He indicated that at the last meeting of the TBT Committee his delegation had raised 
specific concerns about the excessive trade-restricting measures imposed by the Russian 
Federation, banning exports from Ukraine of dairy, confectionary, and light industrial products. However, the Russian Federation had only prov ided formal answers and these specific trade 
concerns (STCs) continued to float from one TBT or SPS Committee meeting to another, without 
proper consideration. There was some formal cooperation through the Enquiry Point but this was 
insufficient to address properly the Ukrainian concerns; the relevant Russian authorities lacked cooperation with the Ukrainian peers and did not provide official documentation. This blocked the 
solutions to the TBT and SPS issues. He urged the Russian Federation to engage constructively in 
resolving these issues and to eliminate discriminatory measures against Ukrainian products and to abandon trade-restricting policies and practices. 
12.13.  The delegate of the Republic of Korea recalled that his delegation had already raised 
concerns on this issue at the last meetings of the General Council and of this Council. Some 
bilateral technical consultations took place afterw ards, both in Geneva and Moscow. Nevertheless, 
no mutually satisfactory solution had been reached. Japan looked forward to continued cooperation 
with the Russian Federation. 
12.14.  The delegate of Chinese Taipei expressed that in general terms her delegation shared the 
views of previous speakers. However, Chinese Taipei recognized the challenges faced by any new 
Member in adapting to the multilateral trading system during the early stages of its 
WTO membership. She encouraged the Russian Federation fully to comply with its WTO obligations, especially in the areas of tariff commitments, notifications, and SPS measures. 
Regarding the latter, Chinese Taipei was concerned about the provisional measures applied by the 
Russian Federation since December 2013, and affecting fish products and exporters of such products, particularly of saury fish. This fish species accounted for 97% of Chinese Taipei's exports to member States of the Customs Union, repr esenting between 3,000 and 5,000 metric tonnes per 
year. She urged the Russian Federation to review these measures and to remove the restrictions 
without delay. 
12.15.  The delegate of New Zealand echoed the various concerns expressed with regard to 
SPS measures, and reiterated that his delegation stood ready to work with the Customs Union on 
new certification requirements in search of a pragmatic and WTO-consistent outcome. G/C/M/119 
 
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  12.16.  The delegate of the Russian Federation th anked delegations for their statements which to a 
large extent had repeated the interventions made at the previous CTG meeting. She indicated that 
throughout the last two months the Russian Federation had engaged in a series of bilateral consultations with interested Members, both in Geneva and in capitals. The Russian Federation had 
always been and continued to be engaged in a constructive dialogue with a view to finding 
solutions to the problems raised, if such problems existed. 
12.17.  Referring to some of the concerns raised, she expressed the surprise of her delegation with 
regard to import duties applied by the Russian Fe deration. Contrary to what had been stated, the 
Russian Federation believed that substantial prog ress had been made on this issue over several 
years. As to the application of mixed duties inst ead of ad valorem duties set out in the Russian 
Federation's Schedule of Concessions, her delegation believed that this was not unlawful in 
WTO terms. Moreover, detailed discussions that had taken place with some interested Members 
had proven that the specific component of the mixed duties was equivalent to the ad valorem component; thus, Russia had respected its bound rates. 
12.18.  When there had been arguments concerning such equivalence, her authorities had 
proposed the corrective amendments to the Customs Union Common Customs Tariff; furthermore, such amendments had been calculated jointly with the interested Members, particularly with the 
EU, which had raised the majority of these conc erns. A successful solution had been provided 
during the recent year. Solutions relating to the remaining lines would be implemented in the coming weeks by the Customs Union. However, th e Russian Federation remained ready to engage 
in bilateral consultations with any interested delegation on this matter. There were on-going 
bilateral discussions with Japan and the Republic of Korea. 
12.19.  Concerning the claim of the EU on the sa feguard measures applied to combine harvesters, 
she indicated that, despite the allegation by the EU that the level of the import quota had been 
less than the average volume of imports during the last three respective years, in its final report 
the Russian Federation's investigating authority, in accordance with Article 5.1 of the Agreement 
on Safeguards, had provided a clear justification for a different level. 
12.20.  On the import quota allocation, an issue re cently raised by the EU at the meeting of the 
Committee on Safeguards, the Russian Federation had explained that there had not been a sufficient amount of requests for import licenc es from historical importers; therefore, the 
remaining quota volume had been allocated to other suppliers in April 2014. On the concerns 
regarding the result of the investigation, she referred the EU to previous bilateral discussions and 
to the clarifications provided in the Committee on Safeguards, where the Russian Federation had indicated that it did not consider that the investigation and its results contradicted the relevant 
WTO provisions. 
12.21.  She stated that the EU concern about wood was an issue regulated by the bilateral 
agreement between the two countries; thus, the Russian Federation believed that any matter in 
this regard should be solved bilaterally. 
12.22.  Her delegation believed that the US and Canada, among other delegations, had 
misunderstood the issue of Russia's notification ob ligations, as they considered that the Russian 
Federation had not notified the reviews of safeguards measures not related to serious injuries. In 
the same vein, they wanted the Russian Federation to notify the decisions of the investigating 
authority on the non-application and non-extension of such measures and of investigations that had not been launched. The Russian Federation had not made commitments of this kind in its 
Protocol of Accession and nor were they  found in the Safeguards Agreement. 
12.23.  The Russian Federation believed that transparency obligations were essential for the 
functioning of the whole WTO system; however, it noted that the constant misinterpretation of the 
Russian Federation's transparency obligations generated systemic concerns over the Russian 
Federation as a Member that potentially discriminated against other WTO Members. 
12.24.  On SPS measures, she indicated that the Russian Federation remained convinced that its 
SPS measures fully complied with the WTO SP S Agreement; the Russian Federation would 
continue to engage in bilateral negotiations on new certificates, as mentioned by New Zealand. G/C/M/119 
 
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  12.25.  The Council took note of the statements made. 
13  INDONESIA'S IMPORT AND EXPORT RESTRICTING POLICIES AND PRACTICES – 
STATEMENTS BY THE EUROPEAN UNION, JAPAN AND THE UNITED STATES OF AMERICA 
13.1.  The Chairperson informed the Council that, in a communication dated 5 June 2014, the 
delegations of the European Union, Japan, and the United States of America, had requested the 
Secretariat to include this item on the agenda of this meeting. 
13.2.  The delegate of the European Union st ressed that this agenda item had often been 
discussed in this Council, regrettably without much evolution as Indonesia continued to adopt 
measures aimed at strengthening domestic production at the expense of foreign supply. Those measures had taken all forms, from import obstacles (i.e. import entry restrictions and non-automatic licensing) to export restrictions, discriminatory taxation, and local content 
requirements and non-transparent legislation. Th e EU would appreciate progress in all of the 
issues already discussed and, in particular, on the following: 
a. The Industry Law and the Trade Law, which constituted a trend towards protectionist 
measures and discouraged trade flows and businesses in Indonesia and contradicted 
Indonesia's pledges in the G-20 to keep trad e open and roll back protectionism. The 
Industry Law emphasized the use of domest ically produced goods and empowered the 
Government to impose export bans on biological and non-biological raw materials 
(Articles 32 and 33). It also encouraged loca l production, the increased use of national 
standards for products and services (including hefty sanctions for violations), and provided procedures for initiating trade measures if specific industry interests were hurt 
or under threat. All these elements were potentially restrictive measures. The Trade Law 
set out, inter alia , that the Government might impose restrictions on import and exports 
for goods of national interest (Article 54) or prohibition or restrictions on goods and 
services, out of national interest. It also emphasized the use of domestic goods. 
b. Import restrictions, including burdensome non-automatic import licensing and 
pre-shipment controls, constantly addressed by the EU without success in the Committee 
on Import Licensing and other Committees as well as during Indonesia's recent TPR. The 
EU reiterated the concerns already recorded in the minutes of the last CTG meeting which, unfortunately, had not yet been addressed by Indonesia. 
c. Local content requirements, while the trend in many Indonesian legislations, were 
inconsistent with WTO rules. An example was the Trade Ministry Regulation No. 70/2013 
imposing, inter alia , the obligation on shopping centres and modern retail units to sell 
80% domestic products in their outlets. Indonesia should clarify when this Regulation 
would enter into force, and the sectors covered. 
13.3.  In addition to the import measures, the EU had concerns about the export ban currently 
applied by Indonesia on raw minerals. The EU believed that fair and sustainable trade in raw 
materials on the global market, without export restrictions, was important to all WTO Members 
given the major differences in resource endowm ents across the globe and the global supply. 
13.4.  The delegate of the United States of America regretted to be compelled to repeat the 
concerns already raised in this Council and in other Committees at the WTO about the direction of 
Indonesia's trade policy. These should be addressed promptly, as they referred to a wide range of 
trade and investment restrictions, including import licensing requirements, trading rights limitations, local content and domestic manufacturing requirements, export restrictions, unique 
standards and conformity assessment requirem ents, and expanding use of pre-shipment 
inspection and safeguards. Additionally, at the la st meeting of the Council the US had expressed 
its concern about the new trade and industry laws  adopted by Indonesia in the first quarter of 
2014. These two Laws codified on a broad basis many of the sector-specific policies already 
highlighted by the US, including local prefer ences, unique standards requirements, import 
licensing, and export restraints. She urged Indone sia to update Members on the status of these 
two Laws, and the steps its authorities were taking for their implementation, specifically the status 
of any implementing regulations. G/C/M/119 
 
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  13.5.  The US asked Indonesia to commit itself to work with its trading partners and stakeholders 
in the implementing regulations and to ensure  that these would be consistent with its 
WTO commitments. Regrettably, it could be noted that Indonesia was adopting policies that favoured domestic products and, as noted by the EU, concerns existed about Regulation 70 
relating to shopping centres and modern shops. 
13.6.  Indonesia had issued a revised negative inve stment list which appeared to have introduced 
further investment restrictions in a number of areas, including the mining, oil, and gas sectors; the 
US had already expressed concern about the general policy trends. Concerns also existed with 
regard to Indonesia's export restrictions as applied to a wide range of mineral ore products. 
13.7.  The US believed that, individually, each po licy created burdens for traders and had negative 
commercial consequences and that, taken together, these requirements created a complex web of 
approvals and restrictions that threatened to make Indonesia's market more and more difficult to 
penetrate and less attractive to foreign investors, which would ultimately stymie economic growth. The US could understand the objective of promot ing domestic production, creating jobs, and 
moving the Indonesian economy up the value chain to a higher level of development; however, 
restricting or closing off the market was not the best way to achieve them. 
13.8.  Despite its impressive economic performance, which Indonesia itself had noted in meetings 
of this Council, the US were concerned that these policy trends could have systemic consequences 
for access to Indonesia's market, its attractiveness as a trade and investment partner, and its ability to fulfil its WTO commitments. All Members faced domestic pressures to adopt measures that favoured domestic over foreign producers, and to provide protection to domestic businesses, 
but WTO Members, especially the leaders, had to wo rk to resist these pressures. As an emerging 
leader of the trading system, especially one that  was a G-20 Member, and had hosted both APEC 
and the WTO Ministerial in 2013, it was important that Indonesia provide a positive model for the 
global trading system. The US looked forward to addressing these issues with the Indonesian 
Government, and hoped that Indonesia would re-evaluate the direction of its trade and investment policies. 
13.9.  The delegate of Japan endorsed the conc erns and disappointment expressed by previous 
speakers. Japan was particularly concerned about the implementation of the measures under the 
mining law, which effectively directed the Governme nt of Indonesia to prohibit the exportation of 
raw materials such as nickel ore. Japan recognized the policy objective to advance its industries 
through making the domestic production high valu e-added. However, such efforts might be sought 
by Indonesia in a manner fully consistent with the WTO Agreement. 
13.10.  Japan believed that the export restricting measures on raw materials implemented by 
Indonesia constituted a violation of GATT Article XI on the general elimination of quantitative 
restrictions on imports and exports. Since the es tablishment of the mining law, Japan, together 
with its industry, had urged the Indonesian authorities to reconsider these measures. However, 
after many efforts, including at the highest level, no satisfactory response had been obtained from 
Indonesia. 
13.11.  While looking for a WTO-consistent solution through bilateral dialogue with Indonesia, 
Japan would have to seriously consider taking further steps available, including at the DSU, if the 
current situation remained unchanged. 
13.12.  Japan was also concerned about Trade Ministry Regulation No. 78-20-13, which imposed 
an obligation on shopping centres and modern retail  shops to ensure that 80% of products in their 
outlets originated domestically. These new measures could further deteriorate Indonesia's 
business climate. 
13.13.  The delegate of Australia stated that Indonesia's import-restricting policies and practices 
were of significant interest to Australian exporter s, particularly the new trade law. His delegation 
was ready to cooperate with Indonesia to ensure that their implementation would not be trade-restricting. 
13.14.  The delegate of Canada stated that, after having witnessed the role played by Indonesia in 
Bali, in December 2013, which led to the success of MC9, it was discouraging to see this item G/C/M/119 
 
- 19 - 
 
  returning to the CTG agenda. Canada not only echoed the concerns raised by previous speakers 
but also reiterated its concerns over Indonesia's current policies, which affected horticultural products, animals and animal products. Being a significant exporter of high-quality agriculture and agri-food products, Canada had systemic and commercial interests in trade in this sector and had 
taken part in the third party consultations on these issues that took place in Jakarta. Indonesia's 
measures might negatively affect Canada and other Members' ability to compete in the Indonesian market. He encouraged Indonesia to respect its WTO obligations, in particular with regard to 
import licensing. 
13.15.  The delegate of New Zealand shared the previous concerns, and in particular those of 
Indonesia's measures affecting animal and horticultural products, which had had a substantial 
impact on New Zealand's trade. Indonesia had introduced changes to its measures; however, 
concerns remained over the import licensing scheme for agricultural products, which remained 
opaque, burdensome, and more trade-restrictive than necessary. Importers were uncertain about 
the implementation of these regulations; thus, Indonesia should envisage a further reform. 
13.16.  Difficulties also existed with the admini stration of Indonesia's pre-shipment inspection 
requirements, which were rigid. Additionally , Indonesian authorities had accredited an 
insufficiently resourced entity to exclusively under take pre-shipment inspection activities in New 
Zealand; this had caused further delays and difficulties for exports from New Zealand to Indonesia. 
13.17.  The new trade law, introduced in April 2014, also contained import and export restrictions 
whose WTO-consistency needed to be clarified by Indonesia. Canada also shared the concerns over the regulation requiring that 80% of what was sold in retail outlets should be domestically 
produced. His delegation looked forward to Indone sia's responses to the questions raised, and to 
continuing to consult with Indonesia over the implementation of its regulations. 
13.18.  The delegate of the Republic of Korea no t only shared the concerns expressed by others 
about Indonesia's trade and industry laws but also raised the issue of the withholding tax from 
taxpayers who conducted import activities under Article 22 of the Income Tax Law of Indonesia. Before 6 January 2014, the Income Tax Law and its implementing regulations provided that import 
licence holders should pay 2.5% of the total import value in advance, as their corporate tax. The 
Republic of Korea believed that this pre-payment had a negative influence on overall imports in 
Indonesia as the tax regime not only put pressure on the importers' cash flows, but also incurred significant costs in terms of lost interest. Furthermore, even though the taxpayers could claim a 
tax refund for excess payment at the end of the taxable year, in many cases taxpayers had 
difficulties in getting the refund. The Republic of Korea considered that this measure discriminated against imported products vis-à-vis local products, and therefore was not in conformity with the 
relevant rules and regulations under the WTO Agreements. 
13.19.  In addition, on 6 January 2014 the Indo nesian government increased the rate of 
withholding tax from 2.5% on the total import value to 7.5% on 502 consumer goods, such as 
TVs, PCs, and refrigerators, imported by the import  licence holders. This threefold increase had not 
only deteriorated the trading environment for th ose 502 consumer goods in the Indonesian market 
but also aggravated the financial burden as a result of the subsequent reduction in imports. It was also expected that more importers would have to resort to tax return claims at the end of the 
year, thereby leading to an increase in their administrative costs. The Republic of Korea hoped that 
the Indonesian government would carefully review its withholding tax regime and address its concerns relating to the discriminatory aspects of such a regime. 
13.20.  The delegate of Thailand joined the previous speakers in its continued concerns about 
Indonesia's import restricting policies and measures, which had also affected imports of Thai fruits 
and horticultural products into Indonesia. As already stated in this Council in April 2014, under 
Indonesia's import restrictions, the government could not set reference prices for horticultural 
products, but also permitted the importation of such products only if the market prices were higher than the reference prices; i.e. the current reference price of shallots was 25,700 rupiah per kilogram, while the market price was 15,000 rupiah per kilogram, thus the importation of shallots 
was not permitted. 
13.21.  Furthermore, reports indicated that, in the second half of this year, the Ministry of 
Agriculture of Indonesia would not allow the importation of several kinds of fruits, including G/C/M/119 
 
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  durians, mangoes, bananas, and pineapples. This would undoubtedly impact the Thai fruit market 
negatively. He urged Indonesia to address these trade concerns promptly. 
13.22.  The delegate of Chinese Taipei stated th at, as previously indicated at meetings of the 
Import Licensing Committee and of this Council, in April of 2014, Chinese Taipei was concerned 
about the complex, burdensome, and time-consuming Indonesian import licensing regime for 
agricultural products. This regime had negatively affected the market access conditions of Chinese 
Taipei's agricultural products to Indonesi a, such as fresh vegetables and fruit. 
13.23.  Since the last meeting of this Council, New Zealand and the US had separately filed 
requests for consultations under the DSU regarding certain measures imposed by Indonesia on the importation of horticultural products, animal and animal products. Chinese Taipei had been accepted as a third party in the consultations with Indonesia and hoped that these would ensure 
that Indonesia's import licensing procedures would be brought into line with the relevant 
WTO Agreements. 
13.24.  The delegate of Indonesia thanked Members for their continued interest in Indonesian 
trade policies and indicated that, every day and a ll the time, millions of tonnes of imported goods 
passed through all ports of entry into Indonesia. Indeed, in 2013, the value of imported goods into his country had reached US$171 billion; most of these originated in the EU, Japan, US, the 
Republic of Korea, Australia, and other ASEAN memb er countries. Imports of agricultural products 
had increased by around 43% for agricultural products, and 19.7% for industrial goods. Consequently, Indonesia did not find that the concerns expressed by Members corresponded to trade reality. 
13.25.  He noted that agriculture was a primary sector in Indonesia, which employed more than 
40% of the labour force but only contributed 12. 51% to the GDP. A population of more than 
247 million people to feed also represented a huge challenge for the Government with regard to 
establishing food security for the entire popula tion. Hence, efforts had been made to develop a 
policy which not only allowed imports of agricultural products but which also promoted the development of the agricultural sector. However, the challenge was to ensure that agricultural 
products provided remunerative incomes for farmers amidst increasing flows of cheaper or 
below-standard products. 
13.26.  The rationale of some of the applied im port policies included safety, security, health, 
environment, social, culture, and moral hazard objectives. The import policies were aimed at 
supporting the development of the agricultural sector s, mostly subsistent in nature, and in parallel 
allowing imports to satisfy the national demand but without severely harming domestic producers, especially in the case of dumped or highly subsidized products. Therefore, the current import 
policy was not intended to restrict imports and the SPS measures had been put in place to 
minimize the further spread of exotic organisms and very specific diseases alien to Indonesia, 
originating from imported agricultural products. 
13.27.  Nevertheless, the policies adopted by Indonesia in recent years were living policies and 
would be adjusted commensurate with the challenges emanating from global trade in relation to which Indonesia was integrated. Furthermore, some of the implementing regulations were still in the preparation process; as regarded the others, the concerns expressed at this meeting would be 
conveyed to his Capital as bilateral consultations with concerned Members were also being 
prepared at the capital. Indonesia was committed to working with other Members towards a satisfactory solution which would address both Members' concerns as well as Indonesia's need to 
address its development challenges. 
13.28.  The Council took note of the statements made. 
14  BRAZIL – INDIRECT TAXATION: COND ITIONS TO OBTAIN TAX BENEFITS IN 
VARIOUS SECTORS – STATEMENT BY JAPAN 
14.1.  The Chairperson informed the Council that, in a communication dated 5 June 2014, the 
delegation of Japan had requested the Secretaria t to include this item on the agenda of the 
meeting. G/C/M/119 
 
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  14.2.  The delegate of Japan recalled that his delegation had repeatedly raised concerns on this 
item in previous meetings of the Council and the TRIMS Committee; thus, he would not repeat all 
the explanations already provided about the Br azilian assistance programme INOVAR-AUTO. The 
explanations provided by Brazil at the previous  CTG meeting on the overall objectives of the 
programme had not convinced Japan about its consistency with the relevant provisions under the 
WTO, including GATT Article III and Article 2 of the TRIMs Agreement. 
14.3.  Moreover, Japan was deeply concerned ab out the proliferation of the use by Brazil of 
indirect taxes to various other sectors aimed at supporting domestic manufacturing and exports. 
Concerns also existed about extending the use of indirect taxes to sectors such as communication network equipment. Japan would continue monitoring this issue closely and asked Brazil not to adopt or implement indirect tax measures inconsistent with the relevant WTO provisions. 
14.4.  The delegate of the United States of America thanked Japan for having raised this issue and 
recalled the concerns expressed by various Members about Brazil's tax measures. Brazil should 
clarify how it would address those concerns. 
14.5.  The delegate of the European Union also said that his delegation had repeatedly raised its 
concerns about Brazil's tax programmes in this Council and in other WTO committees, as recorded 
in the respective minutes. For this reason, on 19 December 2013, the EU had requested 
consultations with Brazil under the DSU on a number of problematic tax measures and hoped that 
these would lead to a positive solution to this serious matter. 
14.6.  The delegate of Canada stated that, as indicated at previous CTG meetings, Canada 
continued to have both systemic and commercial concerns regarding Brazil's taxation or indirect 
taxation measures, which appeared to be incompatible with the WTO non-discrimination principles. 
In particular, Canada was concerned about the lengthy period of application of these measures, which were supposedly temporary; however, many of them were in effect for numerous years and 
therefore, even with the termination of the programme, they could have irreversible and negative 
impacts for other trading partners. The possible expansion of these measures into further sectors also worried Canada. 
14.7.  The delegate of Brazil in its response assured Japan and other delegations that Brazil had 
been giving its utmost attention to this issue and was ready to provide any further clarification on 
the technical aspects of the measures it had adopted. He recalled that on previous occasions in this Council or in other WTO fora, Brazil had explained that the taxation measures that had been 
mentioned were part of an effort by the Brazilian Government to implement a modern industrial 
policy within the boundaries granted by the mult ilateral trading rules and were designed to 
improve Brazil's economic development while promoting technological innovation, protecting the 
environment, creating opportunities for a well-qualified workforce, and helping its industries 
integrate into global value chains. Brazil was committed to improve the business environment for 
domestic and foreign investors alike and, in this vein, one main focus was the attempt to gradually 
rationalize and simplify its complex tax system. 
14.8.  Many of the measures mentioned today were  to be understood against this background, as 
they constituted an effort to align the Brazilian tax system with the practice of most countries, in a transparent and non-discriminatory manner. This was illustrated by the 
INOVAR-AUTO programme, which had been concre tely benefitting companies from different 
countries, including from Japan, and other countries that had intervened at this meeting. 
14.9.  The Council took note of the statements made. 
15  EUROPEAN UNION – UNFAVOURABLE PRACTICES AFFECTING PALM OIL – REQUEST 
FROM INDONESIA 
15.1.  The Chairperson informed the Council that, in a communication dated 5 June 2014, the 
delegation of Indonesia had requested the Secretaria t to include this item in the agenda of this 
meeting. 
15.2.  The delegate of Indonesia recalled that, at the last Council meeting, his delegation had 
expressed its concern about the EU's unfavourable treatment of Indonesian palm oil and palm oil G/C/M/119 
 
- 22 - 
 
  products. Indonesia believed that the imposition of  anti-dumping duties on imports of biodiesel 
from Indonesia would have exceeded the margin of dumping had it been correctly calculated, 
following the rules and procedures in the WTO An ti-dumping Agreement. Indeed, the anti-dumping 
duties had been set in such a way as to constitute a punitive tool to exporters of Indonesian 
biodiesel to the EU and, consequently, exports of such products had been cut to more than 66%. 
Therefore, Indonesia requested the EU to ensure conformity of its law and procedures with the provision of the GATS and th e Agreement on Anti-Dumping. 
15.3.  Indonesia was also seriously concerned wi th the systematic campaign in the EU market 
against food containing oil derived from palm oil by, inter alia , attaching a label indicating "no 
palm oil" or "palm oil free". This campaign, conducted jointly by the EU public institutions, the private sector, and NGOs, portrayed that palm oi l was harmful and dangerous to human life. This 
was not only unnecessary but also constituted a discriminatory treatment against palm oil as it 
turned consumers and buyers against the palm oil industries. The labelling practice should respect non-discrimination and, if based on positive co ntent, should indicate all the vegetable oils 
contained; if based on a negative indication, a description of the content should list all the 
vegetable oils not contained. Millions of small farmers depended on oil palm production; therefore, Indonesia hoped that their livelihood would not be threatened by a negative campaign. 
15.4.  Indonesia believed that the EU, as a strong  proponent of free and fair trade, would address 
these concerns seriously. 
15.5.  The delegate of the European Union stated that the EU market was not closed to palm oil. 
Indonesia represented the largest share of EU tota l imports of crude and refined palm oil, with 
51.3% in 2013, and EU imports of Indonesian origin had increased by 70% over the past 
six years. Moreover, in the EU there were no restrictions on imports of palm oil as such, and the majority of imports of palm oil from Indonesia, more than 1.2 billion euros in 2013, entered at a 
duty of zero. 
15.6.  Palm oil was used in thousands of produc ts, especially for food, cosmetics, soaps, and 
detergents. Palm oil used for production of biod iesel in the EU represented a relatively smaller 
proportion of EU palm oil imports; still, pa lm oil based biodiesel imported from Indonesia 
represented about 30% of total EU imports of biodiesel. 
15.7.  The Council took note of the statements made. 
16  WORK PROGRAMME ON  ELECTRONIC COMMERCE 
16.1.  The Chairperson recalled that, at the last meeting of this Council, the then Chairperson had 
recalled to delegations that Ministers in Bali agreed, first, 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 proposals submitted by Members in the respective WTO bodies; and second, 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 technologies; and third, that any rele vant body of the Work Programme might explore 
appropriate mechanisms to address the relationship between electronic commerce and development in a focused and comprehensive manner. 
16.2.  In this vein, and in order to fulfil the mandate, at the April meeting delegations had been 
invited to express their opinions and to make suggestions as to how to work on the preparations of 
the periodic reviews to be held in the General Council at its sessions in July and December of 2014, and in July of 2015. 
16.3.  In order to prepare his factual report to the General Council on the discussions that had 
taken place in this Council, he invited delegations to make further comments on this issue. 
16.4.  In the absence of further comments on this  issue he indicated that he would prepare his 
factual report to the General Council at its meeting on the 24
th and 25th of July. 
16.5.  The Council so agreed. G/C/M/119 
 
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  17  DRAFT DECISION DERESTRICTING TH E HISTORICAL BILATERAL NEGOTIATING 
DOCUMENTATION OF THE KENNEDY ROUND (G/MA/W/113) 
17.1.  The Chairperson drew Members' attention to document G/MA/W/113, which contained the 
draft decision concerning the "Derestriction of the Historical Bilateral Negotiating Documentation of 
the Kennedy Round". He informed delegations that th is draft decision had been elaborated in light 
of the procedures contained in document G/MA /287, and approved by the Committee on Market 
Access at its meeting on 15 May 2014. It had been  forwarded to this Council for transmittal to the 
General Council for adoption at its meeting on 24th, 25th July 2014. 
17.2.  The Council took note of the draft decision  on the derestriction of the historical bilateral 
material of the Kennedy Round and agreed to fo rward it to the General Council for adoption. 
18  OTHER BUSINESS 
18.1.  The Chairperson recalled that under this ag enda item there were two points: a request by 
Switzerland to address the issue of the Kingdom of  Bahrain's customs duties on cigarettes, and the 
information about the date of the next meeting of this Council. 
18.1  REQUEST BY SWITZERLAND – KINGDOM OF BAHRAIN – CUSTOMS DUTIES ON 
CIGARETTES 
18.2.  The Chairperson recalled that, at the start of  the meeting, the delegation of Switzerland had 
requested the inclusion of this agenda item. 
18.3.  The delegate of Switzerland stated that the customs duty currently applied by the Kingdom 
of Bahrain on cigarettes consisted of a mixed duty of 100% ad valorem  with a minimum charge of 
10 Bahraini dinars per 1,000 cigarettes. In its Schedule of Concessions the Kingdom of Bahrain 
had a bound rate on cigarettes of 35%, thus, the duties being levied at the border by Customs 
were significantly higher than those in the Kingdom of Bahrain's WTO commitments. Since WTO duties represented the maximum level that a Member was entitled to levy, Switzerland 
considered that the Kingdom of Bahrain was not complying with its WTO obligations. Since 
January 2013, Switzerland had been raising this is sue with the Kingdom of Bahrain; however, the 
Kingdom of Bahrain had not provided any response  to the questions posed to it. He therefore 
urged the Kingdom of Bahrain to address this issue promptly. 
18.4.  The Council took note of the statement made. 
18.2  DATE OF THE NEXT MEETING 18.5.  The Chairperson informed the Council that its meeting was scheduled to take place on 
Monday, 17 November 2014. The agenda would close on Thursday, 6 November 2014. 18.6.  The meeting was closed. 
__________